Opinion ID: 2363714
Heading Depth: 3
Heading Rank: 3

Heading: Average Cash

Text: When the company submitted its request for a working capital allowance, it included an adjustment designed to ensure the availability of what it labels average cash. The term average cash has been defined for us by the company as the relatively modest cash required to provide for day-to-day contingencies. That modest amount adds $515,819 to the company's working capital requirement and thus to its rate base, upon which it earns a return. So far as we can tell, the only meaningful reference to the problem of average cash is contained in the company's response to a commission data request, the key to which is the company's assertion that [t]here is, of course, in any business the need to maintain cash balances. [6] The commission, over the division's objection, granted the company's request for an allowance, stating only that [i]n the absence of record evidence, we are unable to make a factual determination as to the reasonableness of excluding average cash. We decline to do so in the absence of    testimonial support. The Legislature has placed upon the public utilitynot upon the division the burden to prove the necessity and reasonableness of proposed rate hikes. General Laws 1956 (1977 Reenactment) § 39-3-12. The commission's brief comments leave us uncertain whether the commission was in fact shifting the burden of proof or whether it reached its decision because it was for specific reasons satisfied with the company's position and because of an absence of contradictory evidence from the division. We remand in order to give the commission an opportunity to clarify this portion of its report and order.