Opinion ID: 1720472
Heading Depth: 1
Heading Rank: 8

Heading: Amortization of Rate Case Expense

Text: The cities ruled that the company must amortize its expenses associated with the hearing on the rate increase over a three year period. The company contends that it should be allowed to amortize those expenses over a one and one-half year period, arguing that because of the more frequent need to file rate increases in the wake of recent inflationary cost increases in the utility industry, rate hearing expenses should be amortized over that time span related to the period during which the asked-for rates will be in effect. The company has cited a number of regulatory decisions that have permitted one and two year amortization periods for such expenses. See, e.g., Central Vermont Public Service Corp., 7 PUR 4th 67 (Vt.1974); Southern Connecticut Gas Co., 12 PUR 4th 355 (Conn. 1975); Connecticut Natural Gas Corp., 11 PUR 4th 66 (Conn.1975); Midstate Telephone Co., Inc., 10 PUR 4th 88 (N.Y.1975). The cities point to those decisions that support their claim that amortization periods of from three to four years are still common. See, e.g., Sierra Pacific Power Co., 7 PUR 4th 209 (Cal.1974); Potomac Edison Co., 6 PUR 4th 183 (W.Va.1974). We conclude that the fixing of the amortization period was a matter within the discretion of the cities and that the company has not established that the cities abused their discretion in deciding upon the three year period.