Opinion ID: 373874
Heading Depth: 4
Heading Rank: 1

Heading: Basis for Revenue Crediting

Text: 77 The Commission's theory for attaching the certificate condition is that (1) Panhandle's extant configuration of rates was designed to recover its full cost of service; (2) consequently, any uncontemplated revenues, such as those obtained through the transportation services in question, would permit double recovery of certain of Panhandle's items of cost and would Pro tanto raise Panhandle's rate of return, and consequently rates charged, above the just and reasonable level. 88 If the state of the world were as the Commission assumes it to be, the challenged condition in fact may have been reasonable. But, as Panhandle is at pains to emphasize throughout its brief, there is no reason to assume that existing revenues are adequate. The Commission's argument depends on the justness and reasonableness of the rates prescribed in Panhandle's 1975 ratemaking case. 89 Although the rates may have been just and reasonable in 1975 it is plain that they need not be so at present. If Panhandle's revenues do not presently recover the full cost of service, then the Commission's argument is substantively incorrect and works rather harshly. 78 It is not without significance that the Commission at no point made an express finding that Panhandle's rates continued to recover its full cost of service. The Commission merely assumed that they did. This seems to us a rather precarious assumption to make in view of the rising costs 90 in almost all aspects of society between the time the rate case was filed and the instant order entered. The validity of the assumption is also undermined by increases in need for and costs of transportation services, as evidenced in No. 78-1960. Further, as the Commission observed, the general rate level for Panhandle is presently the subject of another proceeding. 91 79 We do not think that the Commission's dubious assumption as to the continuing adequacy of the 1975 rates qualifies as a soundly based finding( ) in the record upon which section 7(e) conditions must be founded. In the absence of such support, the order must be set aside. 92 80