Opinion ID: 1833875
Heading Depth: 1
Heading Rank: 2

Heading: regarding point b:

Text: In both cases Petitioner makes the assertion that the Commission should have deducted from the rate base 50% of the utility's federal income tax accruals for the test period. Instead, complains the Petitioner, the Commission arbitrarily deducted only 20% of such taxes from the rate bases of both companies. We find no support for Petitioner's pronouncement that the Commission arbitrarily deducted only 20% of federal income tax accruals. Our examination of the records leads us to conclude that the Respondents logically, legally and successfully counter this contention by the following arguments in their briefs: Prior to the investigation of this case, the Commission did deduct 50% of federal income tax accruals. The 50% deduction was the result of a study by the Commission prior to 1964 and before the income tax rate was reduced and the method of payment accelerated. There is nothing in this record, except custom, which would support a deduction of 50% of such tax accruals. The 20% deduction was developed in the light of currently effective requirements concerning the payment of federal income taxes. The Commission's deduction of 20% of the test year    accruals    is supported by substantial competent evidence in the record. More than that, the City's position on this matter can not stand the `end result' test.