Ord 1978-053 - Laserfiche WebLink

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4 I rate base consists or 60% original cost and 40% current cost which is within the Texas statutory range or 25% to 40% ror current cost. The current cost estimate was derived by trending the original cost or plant on the books at December 31, 1977. The Company used a set of construction price indexes compiled by Whitman Requardt and Associates to develop the trend ractors. The adjustment for age and condition was developed by taking a flat 10% for most accounts in Distribution Plant and a flat 50% ror most accounts in General Plant. The Company has added to the adjusted value or plant an allowance ror cash working capital, materials and supplies and prepayments to arrive at $1,335,270. To this amount we have deducted certain items which represent sources of cost free funds which are not provided by the investor and upon which the company should not earn a return. I Contributions in Aid or Construction, totaling $41,185, includes donations or contributions, in cash, services, or property from states, municipalities or governmental agencies, individuals mld others ror construction purposes. Such donations or contributions are orten in the rorm or cash and generally are to offset in ps'rt or in total the cost of property or racility specifically required by a customer. This is a cost rree source or capital upon which the investor should not be allowed to earn a. return and thererore we have deducted it rrom the rate base. Customer Advances are advances by customers which are to be refunded either wholly or in part under specified conditions. Although the balance at any particular point in time may be considered temporary since they are sUbject to refund, additional advances will occur in the future so that the Company has a long- term cost free source of capital in this account. Thererore, we have deducted the balance at December 31, 1977 of $9,378 from rate base. .