Ord 1978-053 - Laserfiche WebLink

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5 I Customer Deposits, like Customer Advances, are a source of capital provided by the ratepayer. Hmlever, it is not cost free since the Company pays interest of 6% on these deposits. Therefore, we have deducted the balance of Customer Deposits at December 31, 1977 of $34,339 but have included interest expense of $2,060 in the cost of service. Deferred Federal Income Taxes totaling $58,443 are cost free funds. The Railroad Commission of Texas has followed the procedure of off- setting cash working capital by deferred tax reserves. Where deferred federal income taxes exceed the working capital allowEcnce, a zero amount is included in the rate base for working capital. Tax reserves exceed the cash working capital provision in the ~\an Marcos system and we have reduced rate base by $37,351, the requested working capital allowance to reflect this policy. After making these adjustments we have an adjusted fair value :"ate base of $1,213,017 and an original cost rate base of $569,526. Net Operating Income I The calendar year 1977 was used as the test period by the Company. The actual 1977 revenues, expenses, depreciation, and taxes were taken from the Company 's records and adjusted to recognize various changes occurring during or subsequent to the test year in an attempt to reflect the conditions that will exist when the rates are in effect. During the test year, maintenance expenses were abnormally hit~ because of expenses incurred by the Company for relocations that occurred due to the city's remodeling and renovating of streets and drainage systems, and a leakage detection and repair survey conducted by Southern Cross, Inc. We agree that these expenses are proper, but it does not appear that they will occur at this .