Ord 1978-053 - Laserfiche WebLink

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10 return. The Company has stated that it has found the clause to function very well in many of the cities it serves and also that it will provide assurance that residential and small commercial rates will not have to be increased for at least two years; perhaps much longer. I The rates that the City approves at this time will be effective only for 1979 and subsequent years. The cost levels upon whicl1 these rates will be set is the year-end 1977, adjusted for selected, known and measurable changes to occur in 1978 and 1979. These proforma adjustments are limited to certain specific areas where the changes can be measured with a reasonable degree of accuracy but does not encompass all of the cost increases that have already occurred in 1978 or will occur in the future. As inflation continues many, if not all, expenses will continue to increase and, to the extent not recognized in the test period will not be covered by the rates in use. I The Cost of Service clause will adjust rates to recognize the increases or decreases in cost levels per customer. This has the advantage of smaller, but more frequent, rate increases which pro- vide the customer with better price signals than large increases every two or three years. Additionally, it 'ITill mean less frequent filings to the City Council and will save time and expenses of both the Company and the City. Rate Design We have determined a revenue deficiency of $34,000 for the Sa.n Marcos distribution system. We have attempted to evaluate the cost of service by customer class for San Marcos based on the limited information available. Our study indicates that earnings in the residential class are deficient by more than $50,000. It further indicates that earnings are excessive in both the small .