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<br />11 <br /> <br />commercial and large volume classes, indicating that these classes <br />are subsidizing the residential class. This data would imply that <br />the entire increase should be applied to the residential class. <br /> <br />I <br /> <br />The Company has requested that the increase be spread to both the <br />residential and small commercial classes. Since our review in thi s <br />area has been limited and factors other than Cost of Service ma;T be <br />considered in setting rates, the Company should have some input in <br />the rate design. One approach is to have the Company submit rates <br />at the level of total rate relief, such rates to be reviewed and <br />approved by the City. <br /> <br />Conclusion <br /> <br />Our scope was limited to reviewing Entex I s. filing with the City of <br />San Marcos and evaluating the reasonableness thereof. It is under- <br />stood that the findings and conclusions in this report are solely <br />for the use of the City of San Marcos in its deliberations concerning <br />the rate filing of Entex, Inc. <br /> <br />I <br /> <br />Because the above procedures were not sufficient to constitute an <br />examination made in accordance with generally accepted auditine; <br />standards, we do not express an opinion on the financial staterlents <br />of Entex, Inc. <br /> <br />. <br />