Court Opinion

ID: 7820766
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:54:00.763542+00
Date Added: 2024-06-11T16:30:43.989650
License: Public Domain

Conley Byrd, Justice, dissenting in part. The $404,500 bank balances that Arkansas Western wishes to place in its rate base were broken down by the witnesses to include $150,000 for “float requirements” and $120,000 for “bank service costs.” With respect to the latter two items, John M. Lewis, president of First National Bank of Fayetteville, testified that “float” represents the number of days from the date of the deposit of a check to a customer’s account that it takes for the check to reach the drawee bank, be paid by the drawee bank, and the proceeds therefrom returned to the bank of deposit to be available for withdrawal or checking by the customer. Based upon an average daily deposit of $60,000 per day he stated that it would take $150,000 spread out among the 32 collecting banks used by Arkansas Western to cover the “float requirements.” With respect to “bank service costs” Mr. Lewis testified that the First National Bank of Fayetteville had made cost studies and found that it cost more than $0.04 to handle each check run through its bank. When the “float requirements” of $150,000 are added to the $120,000 necessary to cover “bank service costs,” the total amount equals $270,000 that I contend should have been added to the rate base. By multiplying the 12.33%, Cost of Capital allowed by the Commission, against the $270,000, supra, I arrive at an annual cost to the rate payer of $33,291. When the annual cost is divided by the number of collecting banks (32), I find that the monthly return to each of the collecting banks to be something like $86.70 for its total services to the customer and Arkansas Western. Calculated another way, the average monthly costs to the 56,963 customers of Arkansas Western amounts to less than five cents per month — i.e. $0.0483 per month per customer. Since the only testimony in the record is that it costs a bank more than four cents per check to handle it, I must conclude that there is no substantial testimony in the record to support the Commission’s refusal to allow the “float requirements” of $150,000 and the “bank service costs” of $120,000 in the rate base. For the reason stated I respectfully dissent from that portion of the majority opinion that disallows those items.