Opinion ID: 1305149
Heading Depth: 2
Heading Rank: 2

Heading: net operating income issue:

Text: Intermountain claims that the Commission understated its revenue deficiency because it found Intermoutain's net operating income during the test year to be $117,249 greater than it actually was. (See footnote 3, supra, for the effect of this determination upon the requested rate increase.) The Commission and Intermountain have differently determined Intermountain's net operating income because Intermountain relied upon the figures it submitted in a second revision to an exhibit which had originally been introduced at the December 11, 1973, hearing, while the Commission adopted the figures that Intermountain had submitted in its first revision to that exhibit. The figures in the first and second revised exhibits differ by a $188,195 reduction of net taxable income and a $117,249 reduction in net operating income (after tax income). Intermountain claims this represented the final adjustments to earlier data caused by (1) reduced net receipts from sale of gas, and (2) reduced interest deductions for income taxes because of sale of bonds at a lower interest rate than originally anticipated. Intermountain argues that the Commission, by basing its finding of the revenue deficiency on the information contained in the first revised exhibit rather than the second revised exhibit, has ignored the evidence before it and has entered a finding contrary to the evidence, an arbitrary finding which violates Intermountain's right to a fair hearing under due process of law. However, the record supports the Commission's assertion that it did not refuse to consider this exhibit; rather, it found that the adjustments made between the first and second revised exhibits had not been adequately explained and ruled that it was not bound to adopt or accept the second revised exhibit for the following reason, which was given in its order denying Intermountain's petition for rehearing: The supporting testimony with respect to these adjustments was incomplete and left numerous questions in the Commission's mind as to the derivation of some of the figures, and their accuracy. One of the major adjustments relates to normalization for lost and unaccounted-for gas, which adjustment was an issue at a previous tracking increase hearing. Commission staff attempted through cross examination to clarify these items, but the Applicant's witness was either unwilling or unable to substantiate or explain said adjustments to the satisfaction of the Commission. Order No. 11572, August 14, 1974, p. 8. Sec. Tr., Vol. II, p. 410. The Commission did not refuse to consider the second revised exhibit. After examining that exhibit and the testimony regarding it, the Commission determined that the adjustments between it and the first revised exhibit had not been adequately explained and chose instead to rely upon the figures in the first revised exhibit. The Commission's findings upon issues of fact is conclusive upon appeal if supported by substantial competent evidence. Washington Water Power Co. v. Idaho Public Utilities Commission, 84 Idaho 341, 372 P.2d 409 (1962). We uphold the Commission's determination of the utility's net operating income for the test year.