Opinion ID: 396140
Heading Depth: 3
Heading Rank: 2

Heading: The West Virginia Losses

Text: 40 The losses incurred by Columbia of West Virginia during the test period on which the rates at issue were based were the result of a temporary rate moratorium imposed by state regulators. The Commission found, based upon substantial evidence, that the losses would be non-recurring and that the West Virginia affiliate would not generate tax benefits during the term of the prospective rate order. The Commission adjusted the base-period expenses by ignoring the losses and their associated tax benefits before estimating future tax liabilities. 41 This aspect of the contested rate order is affirmed. The Commission's treatment of losses of the West Virginia affiliate was a wholly sensible solution to a problem that frequently arises in ratemaking. Ratemakers must project future expenses from past expenses. 36 When there is evidence that past expenses are inaccurate predictors, the Commission may ignore them. 37 The Commission is affirmed on its treatment of the one-time losses incurred by Columbia of West Virginia.