IC BU · M,.A.R.W.C. are as follows: Lewis M. Robinson, Chairman, Arkansas Public Service Commis- ... a resume of amounts requested by the applicant. Listed below are the copies of

" ,

0

S T A T E OF ARKANSAS

J UST IC E BU ILDI NG

LITTLE ROCK, ARKANSAS

TH1RTY-F I F T H ANNUAL REPORT

YEAH ENDING CEC EMBER 3?,19G9

P. 1

STATE OF ARKANSAS

PUBLIC SERVICE C m f S S f O N

L i t t l e Rack, Arkansas

January 31, 19TO

Hoporable Winthrop Rockefellez Governor of the State of Arkansas State Cagitol Little Rock, Arkansas 72201

Dear Governor RockefeIler :

In compliance w i t h Section 14 of A c t 324 of the A c t s of Arkansas for the year 1935, the Utilities Division of the P u b 1 i c Service Comission submits to you the Thirty-Fifth Annual Report.

~e spec t fu 1 ly ,

Robert C . D o w n i e , commissioner

P. 2

INTRQDUCT ION

ARKANSAS PUBLIC SERVICE CUMMISSION TEIRTY-FIE'TH m L REPORT

ORGAN fZAT1ONAL CHART

TABflE OF CONTENTS

SCHE3XJU NUMBER NUMBER OF PAGES

STATEMENT OF AGENCY RECEIPTS AND DISBURSEMENTS

SUMMARY OF MAJOR RATE CHANGES I a '

'S-Y OF DISPOSAL OF APPLI~TICWS 8 :

SUMMARY OF APPROVED FINAHCING APPLICATIONS

SUMMARY OF FORMAL ORflERS XSSUED

EIXCTRIC COMPANIES - TOTAL STATEMEEJT OF LfABILTTIES, OTHER CREDITS, AND PROPRIETARY CAPITAL

EI;ECTRIC CQPlPAEaIES - PRIVATELY OWNED STATEMENT OF L W I L I T I E S , OTHER C-DITS, AND PROPRIETARY CAPITAL

EI;ECTRIC CQMPANIES - COOPERATIVES STATEMENT OF LIABILITIES, OTmR CREDITS, AND PROPaIETARY CAPITAL

c 34

1 1

2 I

3 1

4 1

5 1

6 41

7 2

7A I

7B 1

ELECTRIC CmPANIES - TOTAL INVESTMEEJT IN PLANT AND OPERATING STATISTICS 8 2

ELECTRIC COMPANIES - PRIVATELY OWNED INVESTMENT IN PLANT AND OPERATING STATISTICS 8A 1

ELECTRIC COMPANIES - COOPERATIVES INVESTMENT IN PLANT AND OPERATING STATISTICS 83 2

GAS CQMPAEJIES STATEMENT OF LIABILITIES, OTmR CREDITS, AND PROPRIETARY CAPITAL 9 1

INVESTMFAT IN PLANT AND OPERATING STATISTICS 10 1

P. 3

ARKANSAS PUBLIC SERVICE COMMISSION THLRTY-FIFTH AXKUAL REPORT

TA3I;E OF CONTENTS (Continued)

SCEEDWLE NUMBER NUMBER OF PAGES

WATER COMPANIES STATEMEXT OF LIABILITfES, OTRER CREDITS, AND PFtOPRIETARY CAPITAL

IWESTmNT IN PfLABpT AND OPERATING STATISTICS

TEmPHONE CmPANIES STATEMENT OF LI-ILITIES, OTHER CREDITS, AND PROPRIETARY CAPITAL

INVESTMENT IN PLpANT

OPERATING STATIST XCS

11 1

12 1

13 1

14 2

15 1

P. 4

STATE OF ARKANSAS PUBLIC SERVICE C W I S S I M

THIRTY-FIFTH ANNUAL REPORT CALEWDAR YEAR 1969

INTRODUCTION

During 1969, the P u b l i c Service commission pursued its statutory responsibilities in regard to the regulation of the u t i l - ity companies under the jurisdiction of the Comission which consist of a total of ninety-seven (97) utility companies; seven (7) privately owned electric companies, f ive ( 5 ) municipally owned electric companies, nineteen (19) electric cooperatives, s ix - (6) gas companies, thirteen (13) water companies and forty-seven { 47) telephone companies. I

The Commission actively pursued its 'obligation to review the rates and practices of the utility com.pani@s, a c t i v i t i e s f e l l w i t h i n tradit ional areas of concern in some cases, and in others, broke new ground, efforts to ensure that the public of the State of Arkansas have adequate utility senrice at the lowest reasonable rates.

The Comission's

The Commission continued its

The Comission is composed of three ( 3 ) Commissioners, appointed by t h e Governor to serve s i x ( 6 ) year terns, on a staggered term basis , one term expiring every t w o years, and a staff of twenty-two ( 2 2 ) employees. An organizational chart is shown at schedule ''1'' herein, T h i s chart is updated to show the chain o€ authority and func t iona l division of th is agency as is in operation at the present time and has been subsequent to November I, 1968.

The primary difference between this and the previous organiza- tion is as follqkrs:

A. Prior to Noverrber I, 1968 the Utilities Division of the P u b l i c Service Commission operated with one (1) Administrator whose responsibility it was to co-ordinate the functions of the Accounting Section and the Engineering Section in the i r respective endeavors and who was accountable d i r e c t l y to the Commission fur the overall operations of the utilities Division.

B , Due to the increasing coqplexities of the opsrations, and the required specialized t r a i n i n g and qualifications of the respective sections, Accounting and Engineering, and i n order to provide for better regulation of the u t i l i t i e s under the jurisdiction of th is Commission, it is deemed advisable to provide f o r two ( 2 ) Adrnhistrators: One of which administers all engineering matters,

P. 5

- Page 2 - including rates, construction, standards of semice, service complaints, a l loca t ion of territories, safety and any other related operations; and one of which would administer a l l accounting and f inancia l matters, including maintenance of Uniform Systems of Accounts for a l l utility companies, surveillance of conforrdty w i t h same, issuance of securities by the u t i l i t y companies, reorganiza- tion of corporate entities, mergers, etc., determination of actual cost of services of the utility companies, and any other related matter.

C . The two ( 2 ) Administrators w i l l j o i n t l y coardihate their efforts and make recormendations to the Comissioners in regard to a l l matters coming before the omission, either written or verbal, as circumstances dictate.

L . - - " The Cohiss ion is a member of the National Association of Regulatory Utility Commissioners ( N . A . R . U . C . ) and the Midwest Association of Regulatory Utility Commissioners (M.A.R.U.C.) . Arkansas Public Service Commission Commissioners and Staff members appointed to serve in various capacities in the N.A.R.U,C, and M,.A.R.W.C. are as follows:

Lewis M. Robinson, Chairman, Arkansas Public Service Commis- sion N.A.R.U.C. - cornittee on public Relations

Robert C. Downie, Commissioner, Arkansas Public Service Corn- mission M.A.R.U.C. - Executive Committee: M . A . R . U . C . - Secretary-Treasurer

Don S . Smith, Conmissioner, Arkansas Public Service C o m F s - sion N.A.R.U.C. - Cornittee on Administration and Personnel

Edward W. Davis, Director of Engineering, Arkansas P u b l i c Service Commission M.A,R,U.C, - Subcornittee on Depreciation of the Cornittee of Engineering, Depreciation and Valuation

Corbon A. C u r r y , Director of Accounting and Finance, Arkmsas P u b l i c Service Comission N.A.R.U.C. - Subcommittee of Skzf f Experts on Accounting of the Committee on Accounts.

P. 6

- Page 3 - FORMAL CASES

During the year 1969 there was a total of seventy-eight ( 7 8 ) formal applications disposed of as shown by subject matter at

of the more significant cases are shown below by incorporat ing a copy of the Conmission's O r d e r within this report by sribject matter.

Schedule "4" herein and further summarized at Schedule ''6'' r some

APPROVAL OF S E ~ I T Y rssms

During the year 1969 there were sixteen (16) applications f i l e d w i t h the Conmission requesting authority to issue securities in an aggregate amount of $151,712,000 .OO which are summarized as follows :

TYPE OF SECURITIES C m o n Stock: .

Preferred Stock:

Bonds :

2 . .

A l l i e d - Telephone co. of Arkansas Allied Utilities Colt,poration

Mountain Home Telephone Co.

Oklahoma Gas & Electric Co. E m p i r e District Electric Co. Arkansas Louisiana Gas Co. Arkansas Power & L i g h t Co. Southwest Electr ic Power Co. Oklahoma Gas & Electr ic Co.

Allied Telephone Co. of Arkansas Arkansas Telephone Co.

Western Arkansas Telephone Co. Walnut Hill Telephone Co. . Lmerty Telephone Co. Liberty Telephone & Communications Arkansas Western Gas Co. Rice B e l t Telephone Co.

R . E . A . Loans:

Commercial Loans:

TOTAL

co .

DUCrnT NO.

*i' U-2198 U-2231

U-2142

U-2176 V-2190 u-2212 U-2219 U-2225 U-2230

U-2198 U-2215

V-2 188 U-2186 * i

U-2205 U-2204 u-2209 u-2210

The proceeds from the $151,712,000 were to 'be used fo r

AMOUNT

$ 3OO,OOO 650,000

8 5 , 0 0 0

12,500,000 11,000,000 30,000,000 25,000,000 35 , OG2,OOO 30,000,000

I, 140,000 772,000

1,000,000 200,000 425,000

I, f80,OOO 2,000,000

60,000 $151,712.000

of refinancing in the amount of $50,346,000 and new c i i s t r u c t i o n in the amount o f $101,366,000.

P. 7

- Page 4 - MTES AND TARIFFS

During the year 1969 there was a t o t a l of f i f t e e n orders issued in regard to rates and tariffs. Of these f i f t e e n orders eleven (11) were of a minor nature and four (4 ) represented significant changes. issued by the commission in the four major rate cases together w i t h a resume of amounts requested by the applicant.

Listed below are the copies of formal orders

DOCKET NO. U-2168 - Western Arkansas Telephone Company The company f i l e d w i t h this Commission on January 14, 1969 Exhibit " 3 "

$493,600. On April 11, 1969 the Commission approwd a rate increase in the amount of $83,000 with cer tain stipulations as shown in the Comiss ion Order as follows:

in which the company's proposed l oca l service rate increase was

ARKANSAS PUBLIC SERVICE COMMISSION

PRESENT : A t a session of the Public Service Lewis M. Robinson, C h a i r m a n omm mission held in its offices, Robert C. Downie, Commissioner Justice Building, Capitol Grounds, Don S. Smith, Conmissioner L i t t l e Rock, Arkansas, April 10,

1969.

IN THE MATTER OF WESTERN ARKANSAS) T E L E P H m CopfPANY LOCAL EXCHANGE 1 DOC-T NO. U-2168 U T E S . 1

FINDINGS AND ORDER

On October 31, 1968, 'the Western Arkansas Telephone Company, ~

hereinafter referred to as Petitioner, f i l e d copies of revised' local exchange tariffs, revised miscellaneous rate schedules, and revised rules and regulations for future charges. The rates proposed in the local exchange t a r i f f s reflect general increases for present and future telephone subscribers in some 20 Arkansas towns and cit ies ' and their surrounding areas. Supporting data purporting to show the reasonableness and necessity f o r such increases were submitted by Petitioner. Objections to the rate increase w e r e made by hundreds of telephone subscribers. On October 10, 1968, the Arkansas Public Service Comission suspended the revised l oca l exchange t a r i f f s for a period of 90 days in order to give the s t a f f and others concerned an opportunity to investigate the reasonableness of such rates. On October 30, 1968, after the suspension of the schedules , the Petitioner filed its Petition requesting that

P. 8

- Page 5 - the exchange tariffs be pu t i n t o effect under bond as provided in Section 73-217 of the Arkansas Statutes of 1947, as amended.

The P e t i t i o n w a s s e t for hearing on Novenber 18, 1968, then continued on the motion of the C i t y of Booneville to Deceher 12, 1968. The issue at the December 12, 1968 hearing was whether there was an immediate and impelling necessity that the increased rates be placed into effect under bond. Commission concluded that no such &mediate and irrtpelling necessity exis'ted, and the P e t i t i o n was denied.

A f t e r hearing testimony the

On January 21, 1969, t he Petition for the rate increase came on for hearing on i t s merits. The hearing occupied three days. Ten witnesses were heard, numerous exhibits introduced, and the transcript of the proceedings amounted tu 469 pages.

Pet i t ioner is a wholly-&ed 'subsidiary of Continental T e l e - phone Corporation, serving some 20 cit ies and towns in Western Arkansas, and adjacent rural areas, w i t h some 22,000 subscribers. The Continental Telephone Corporation, hereinafter referred to as Continental, operates in 40 states and has in excess of 1,300,000 subscribers.

RATE BASE

This Commission has fo r many years followed t h e or ig ina l cost less depreciation method of fixing the sate base of utilities in this Sta te . There is no evidence in this case that would just i fy the Commission in abandoning this method.

In fixing a rate base and the earnings that a u t i l i t y is entitled to receive the primary objective is the resukt to.be reached. If the result is fair and reasonable to customers, assures cmfi: dence in the financial i n t e g r i t y of the utility, allows the utility s u f f i c i e n t earnings to compete in the money markets, and allows reasonable earnings on the common equity, after paying a l l operating expenses, then the method used in determining the rate base and the rate of return loses significance. considering a l l of the factors involved in a rate determination, then the method was appropriate to the case.

If the earnings are adequate,

T h i s Comission staff uses end of test period as per books after annualization and using this method found a net operating income of $530,898.00. The Petitioner's computation of income d i d not d i f f e r materially from the staff's and this income used by the Commission in dec id ing this case is $530,898.00.

P. 9

- Page 6 -

In some cases this Conmission has refused to allow cash working capital as- a camponent of the rate 'base. upon the Federal income tax l a w s , which permitted a utility to have on hand sizeable sums representing tax accruals. no longer permit these accruals, For that reason, the sum of $155,000.00 has been allowed in the rate base as appropriate f o r cash working capital. The sum of $121,000.00 has been allowed as a comwnent of the rate base as being a reasonable amount for materi- a l s and supplies during the test year. T h i s sum is allowed because sound f inancial practices require that materials and supplies be financed by permanent capi ta l supplied by the u t i l i t y investors.

This refusal was based

IRS regulations

It is' apparent from the testimony that a large factor in P e t i - tioner's relatively low earnings is the high investment in plant per station'gained in'the last half of 1967'. This investment amounted to $J863,00 per s ta t ion gained in the last half of 1967, as compared to $205.00 per-station gained in the first half of 1,968.

The high investment in p lan t is commendable and as soon as this great potential for growth is utilized, the earnings of the P e t i - t ioner should improve.

There has been no serious objection by the applicant to the use of t h i s method if fixing the rate base by the Commission.

The rate base on November 30, 1968, by Petitioner's cmputa- tion was, for the test year, $10,232,041. The s taf f made cer tain adjustments in computing the rate base and by virtue of these adjustments, arrived at the sum of $10,000,000.00. The Commission considers the s taf f adjustments proper. Acceptance of the s ta f f adjustments to Petitioner's method of computing t he rate base has lead the Commission to accept the staff's determination of the rate base as of Moverriber 30, 1968, set out in Exhibit 6 , at page 8 , as '

follows:

I tern Line NO. - 1 Telephone Plant in Service 2 Held for Future U s e 3 Materials and Supplies 4 Cash Requirements - 45. days

expenses other than depreciation and t a x e s

5 Total 6 Less Depreciation Reserve 7 N e t 8 Less Deferred ITC 9 RATE EASE

0 $12,717,000

3,000 121,000

155,000 $12,996,000 2,837 000

$10,159,000 159,000

$10,000,000

P. 10

- Page 7 -

In considering the rate of r e tu rn Pe t i t ioner should have on its rate base the Commission turned to i t s own precedents and the many decisions of the Courts, both State and Federal. sion's objective is to determine the amount of money the Petitioner must have to accomplish certain things. fairness to its customers, it must have a sufficient return to: (1) pay a l l of its operating expenses, ( 2 ) maintain the company's

The Cornis-

Within the context of

f inancial integrity, (3 ) maintain reasonable equity, and (4 ) compete in the money markets quirements. When this determination has been of rate of return becomes only a mathematical this case is 6%.

OPERATING EXPENSES

Petitioner argues t ha t if the Commission

earnings on i t s common for its capital re- made, the percentage deduction, which in

accepts the staff's approach to the development of the operating expenses for the t e s t year, ce r t a in adjustments should be made. These adjustments, if accepted, would perhaps not accidentally produce the same r e su l t as that derived by Petitionerls method. The Commission considers that the s ta f f has given effect to a l l known changes in the preparation of Exhibit No, 6, and this approach presents to t he Commission a more conservative result than that of Petitioner. The differences are matters of amount, and not those involving regulatory princi- ples. For example, at Exhibit 6, page 1, line 6 , the s t a f f gives effect to a l l known wage increases in the category of maintenance and then adds 3%, a reasonable judgment figure, while Peti t ioner urges this figure should be 7%. At Exhibit 6, gage 1, the s taf f gives effect to a l l known changes in traffic expenses, such as in- '

creased salaries, while Petiti,oner requests an increase in the staff's computation in the amount of $20,000.00, which is 5% of the t o t a l i t e m , $31,800.00 had already been known salary increases in this category, excessive.

There are several other adjustments quested, which if allowed would increase deficiency.

added to giye effect to the and Petikionests request is

FINANCIAL INTEGRITY,

of similar nature re- Petitioner ' s earnings

The financial i n t e g r i t y of Petitioner depends almost entirely upon i t s parent company. T h e re la t ionship between Western and Cont inen ta l is comparatively new. No one could t e l l what the

P. 11

- Page 8 -

future holds for either company, but s b i l a r relationships between companies in the past have been salutary and it is reasonable to expect from Western and Continental continued financial growth and service improvements.

If the earnings requirement s e t out at Exhibit 6, page 1, line 17, is a t ta ined , Pe t i t ioner may realize from 11% to 12% on cQmcm equity. ings are the debt-equity ratio, which is 70% to 30% and the i n t e r e s t rate on Petitioner's debt. $4 million of the long t e r m debt carries an interest rate of 2%# the imbedded cost of capital. Is steadily increasing.

Some of the factors influencing these common equity earn-

It is worthy of note t h a t while about

Petitioner is in a reasonably good competitive position in the From the testhony it is evident that Petitioner can money market.

acquire long term debt money at or slightly over prime rates, and that is about'what 'other companies have. to pay. quirements are served by Continental , the stock of which trades on the basis of about 25 times earnings.' The cost of equity capi ta l to Continental is about 5%, according to ~oody's W l i c Utility Manual.

its equity re-

From the evidence in t h i s case, w i t h o u t considering the recent effectiveness of certain miscellaneous rates, the C o d s s i o n concludes that Petitioner should have a r e t u r n of $60O,OUU.O0. 3:s present si tuation indicates a return deficiency of $64,000.00, or a rate deficiency of $143,000.00. However, to give effect to the known changes in the company's earnings, effect must be given to earnings from miscellaneous rates that became effective in Movenber, 1968. These miscellaneous rates are producing $60,000.00 per year, leaving a total rate def ic iency of $83,000.00 a year.

From the testimony in t h i s case, it is the view of the C o r n i s - sion that w i t h these addit ional earnings Petit ioner will be able to pay a l l of i ts operating expenses, maintain the company's f i n a x i a l integrity, maintain reasonable earnings on i t s common equity, compete in the money markets €or i t s capital requirements, and as the company's great po ten t i a l fo r growth is utilized even under i t s present t a r i f f s i t s rate of re turn should increase,

The Commission concludes that Western should be directed to file a t a r i f f , conditioned as s e t out in the Order, ante, to produce an additional $83,000 * 00.

P. 1 2

- Page 9 - RELATIONSHIP BETWEEN PETITIONER - AHD CONTINENTAL TWSMISSZON CORF'ORATION

C o n t i n e n t a l Transmission Corporation is a Community Antenna Television Company and a wholly owned subsidiary of Cont inenta l Systems Corporation which, in turn, is a wholly owned subsidiary of Continental Telephone Corporation. Con-tinental Transmission Corpo- ration serves the same area as does Petitioner. Western performs through its employees and managerial staff considerable work for Continental Transmission Corporation (hereinafter referred to as the CATV Company), which includes i n s t a l l a t i o n of equipment, repair and maintenance, storage of equipment, commercial service, and b i l l - ing and collection. the services performed by Western for the CATV Company and a settle- ment is made. tention of Western management to establish, as nearly as possible, a relationship in which one company compensates the other on the basis of cost. For example, Western w i l l typically b i l l the CATV Company for the monthly construction labor at the same rate used by Western in r@cording construction labor for telephone service. A charge i s assessed against the CATV Company in the same manner for vehicle expense and billing and collection services. An estimate was made, prior to the t e s t period, of the cost to Western of the managerial services extended, on an annual basis. A l l such cornpu- t a t ions are made on the bas i s of cost and no profit is intend@? to be achieved.

A monthly computation is made of the value of

Te,stirnoQy. e l i c i t e d at the hearing reflects the in-

The CATV Company is no t , in Arkansas, a public u t i l i t y subject to the jurisdiction of this Commission. While not technically a subsidiary of Western, it is a "sister a f f i l i a t e , " both companies having common ownership. Arkansas cases have held that this Cornis- sion cqnnot regulatea private businesses carr ied on by public u t i l i - t ies , except . insofar a s such'bushess affects the rate base. See Associated Mechanical Contractors of Arkansas, etc. v. Arkansas Louisiana Gas Company, 225 Ark. 424, 283 S.W. 2d 123 (1955): - City of El Dorado v- Arkansas Public Service Commission, 235 Ark. 813, 362 S.W. 2d 680 (1962). The latter case established the proposition that public utilities wishing to eliminate the income of affiliates from its revenue for rate purposes have the duty of keeping books in such a manner as 'to be able to show the Commission that the u t i l i t y customers are not being charged with an expense attributzble to t h e a f f i l i a t e . Under these cases and under commonly accepted regulatory practices it is the responsibility of the Comiss ion to determine whether the operation of a f f i l i a t e s jeopardizes the finan- c i a l integrity of the utility, and whether the relationship is detrimental to the utility customers.

P. 13

- Page 10 - A t the hearing, intervenors on behalf of the consumers raised

the question of whether the CATV Company was being operated to the detriment of Western, that the cost of the services provided the CATV Company were not being adequately compensated for, and that the rate payers were being assessed, through their telephone b i l l s , for the benefit of the CATV Company.

The evidence presented by the Company at the hearing was not adequate to permit the Commission to determine whether Western ex- periences a profit or a loss from its participation in CATV opera- t i ons . Consequently the commission held open this question for subsequent investigation by i t s staff. The evidence at the hearing, as supplemented by this subsequent investigation, indicated t h a t dur ing the test period a total of $71,583 was billed the CAW Company, con- s i s t i n g of the following:

Maintenance $14,109

Comercia1 $14,109

Construction Loaded Labor $31,430

Material and Other Specific Items

$11,935

It is apparent that the monetary value represented in the p r o f i t or loss element would no t be s u f f i c i e n t to greatly distort the actual cost of services to the telephone subscribers. The s u b sequent investigation further revealed t ha t the amounts as charged were the results of averaging the labor charges, and loading this average on an identical basis with the telephone operations. The commercial charges, consisting of commercial, general, and adrnini- strative and -other expenses, in a total amount of $14,109, and t h e ’

maintenance charges in the total mount of $14r109, were derived after industry-wide surveys made by Western, and applied on the basis of 75$ per month per connect in each instance, It was a l so determined that the rate base contained l i t t l e if any investment in plant tha t would be a-pplied to the CATV operations, since the primary element in such investment would have been storage and the vehicle and work equipment involved. This equipent is now handled (and has been for the last three or four years) through a leasing agreement with Nedusa Leasing Company, a subsidiary of Continental Systems, and thereby eliminates investments for such equipment as a factor determining the rate base.

P. 14

- Page 11 - It is the opinion of the Conmission that the records are not

kept in a manner suff ic ient to enable it to make the necessary determination as to the complete effect of the relationship on rate payers. actual cost figures can lead to error.

Western's practices of averaging cost rather than utilizing

The Commission finds, however, as expressed by Mr. Honaker, its own expert witness, that any error in reporting would not e n t a i l a monetary amount suf f i c i ent to affect its determining an allowable tariff for Western. In other words, it is highly doubtful that Petitioner's figures and method of computing charges against the CAW Company err by more than a&. If Peti t ioner were actually underestimating its cost attributable to the CATV Company by 2094, the error would be only $148000. The rate-making determination which the Commission must make in th i s instance is not delicate

It is the opinion of the C m d s s h n tha t the effect of the CATV operation on t he present case is negligible, As the CATV operation expands it will become a factor to be considered in future cases, and the accounting procedures to be €allowed by Petitioner are s e t out in the Order.

, '&nough to reflect an amount of this size.'

QUALITY OF SERVICE

The quality of services rendered by Petitioner has, from the outset, been an extremely important factor in its request for 7.

rate increase. large rider of people wholly dependent upon Petitioner to provide them w i t h adequate telephone communication service. The Hunorable Van Pennington, Mayor and businessman of Paris, Arkansas, tes t i f ied as to the consensus among elected o f f i c i a l s and other leaders of the other communities in Petitioner's service area. The consensus was that service w a s inadequate for the area's needs. He specifically cited failure to contact the dialed party and excessive outages as problems. The outage problem was confirmed by Ray M I Wade, ,representing the chamber of Commerce of Paris, Arkansas, and also speaking for large n d e r s of other users. The outage problem, according to M r . Wade, was so severe t ha t a detrimental effect on the a b i l i t y of subscribers in the areas tu trans- act their businesses had been felt, Robert A. Young, business man- ager fo r Arkansas Polytechnic College, one of the largest users of Petitioner's telephone service, testified t ha t the telephone service was so lacking in quality as eo adversely affect the college's en- rolhnent and operation. C o l . Edward W. Davis, Principal Engineer of the Commission s ta f f , conducted a f i e l d examination of the telephone service. The t e s t log introduced by col, Davis shows a high inci- dence of equipment error, phant& r ing ing followed by echoes,

The question of adequate service was raised by a

A t the hearing,

P. 15

- Page 12 - background noises and other fau l t s . No evidence presented by Peti- t ioner contravened t h i s overwhelming evidence brought forth by pro- testants and the Comission's s t a f f .

The Commission, therefore, finds that the service offered by Petitioner is substandard

Pe t i t i one r argues in i ts brief that the quality of service . rendered by telephone company should have no bearing on what i t s

rates and earnings should be, and points. ou t that the quality of service has never been considered by t h i s Commission to be a deter- rnin.hg factor in setting rates which are ' "reasonable. ''

Synthesis of j u d i c i a l and Commission opinions in other juris- d ic t ions is dif f icul t because of varying statutory provisions. The leading case for Retitioneras position is Elyria:.Tel. Co. v. Public

158 Ohio St. 441, 110 NE 2d 59 (1953), in which the O h i o Supreme Court had before it f o r review an Ohio P u b l i c Utility Commission ru l ing in which the commission found that the telephone company's rates were inadequate, and that a reasonable return was not being y ie lded. It conditioned the rate increase on service improvements. In reversing the ~ornmission, the court deemed on review of the record that "fairly adequate service'' existed and pointed out t ha t the Ohio Commission had authority under other statutes to require t h a t service be improved. This Conmission pre- fers the approach taken by many others with similar statutory authority regarding the reasonableness of rates to be a function not only of the mathematics of computing a rate of return, but of the adequacy of services rendered. The f ix ing of just and reasonable rates involves a balancing of investor and consumer interest, P e t i t i o n of Mew Enqland T e l . & Tel. C o . , 66 A 2d 135 (19491, and requires a-balancing of investor and consumer-interests, and a fa ir return to investor is not necessarily fair td hnsurhei. Federal Power C m . v. Natural Gas P i p e l i n e Co,, 315 U . S . 575, 6 2 S . Ct. ,

736, 86 L.Ed, 1037,

If Petitioner's argument that the quality of service could not be considered i n fixing rates were projected, no d i f f e r e n t i a l could be established between single-party service, two-party service, four-party service or multi-party service I The statutory powers conferred upon this Commission are broad, and the statutory language chosen by the legislature places i t s jurisdiction wer rates and service in juxtaposition in several instances, e . g . 8 'I.. .make.. . reasonable rules pertaining to the . .* service and rates of public . utilities.. . ' I , Section 8 (c), A c t 324 of 1935; "NO public utility

P. 1 6

- Page 13 - shal l , as to rates or services, make . * . any unreasonable preference . . - 'I, Id. Sect ion 13; "Whenever the Department shall believe t h a t any rate. . may be unreasonable . . . or that any service Fs inadequate . * ' I , - s., Section 1S(a), reflecting that the Legislature intended a relationship between the services rendered by a u t i l i t y to the rates charged therefor. The Arkansas Supreme Court, in dictum, recognized th is relationship in Dent. of Public U t i l i t i e s v. McConnell, 198 Ark. 502, 130 S.W. 2d 9 (1939), where it notea that the Commission's powers extended to *'the quality and extent of service in relation to rates'1.

Under the broad statutory powers granted this Commission, it finds that rates should reflect service and t ha t a substandard service may afford a basis for denial of a request for higher rates, and t h a t - r a t e increases may be conditioned on service improvement.' As the Missouri p u b l i c -Service Commission stated, ."It is'the duty of the utility to furnish the required service to i t s subscribers and when such service is adequate it then becomes the duty of the Comission to allow rates to allow a reasonable return on its investment", K.L.M. Telephone C o m p a n y , 13 PUR 3d 112 (Mo. P . S . C . 1956)

Petitioner points o u t that service has not been regarded as a factor in making rates in Arkansas in the past. It is now, and w i l l be in the future,

ORDER

IT IS, THEREFORE, ORDERED:

(1) tha t Petitioner has failed to maintain its plant in a high state of efficiency and to make additions, tg the extegt,necessary to keep pace with modern standards of service, resulting 'in sub-. scribers receiving unsatisfactory service, Petitioner therefore cannot expect a-rate of return which will compensate it at the same rate allowed u t i l i t i e s which have made the ne'cessary investments to achieve and maintain a high standard of service.

( 2 ) tha t service is being improved and it is necessary that some hcrease in revenues be available to Petitioner when the improvements are effectuated. rest of Petitioner's customers require that increased revenues be achievable to attract the capital necessary to mzke the bprovements.

The public interest and the best inte-

( 3 ) that Pe t i t i one r is e n t i t l e d , on improvement of services, to net revenues in the sum of $600,000, and Petitioner's rate deficiency was $83,000 as of November 30, 1968.

P. 17

- Page 14 - (4) that the construction projects of Petitioner are designed

to and will improve services and that it is e n t i t l e d to additional revenues when the improvements are completed.

( 5 ) tha t on acceptance by the Commission of evidence t h a t Peti- t ioner has expended the sum of $487,000 for upgrading services on the projects identified at Staff Exhibit 4, p. 15, col. 2, a copy of which is attached to this order as Appendix I, Petitioner may put into effect new exchange tariffs which will produce an addi t ional $50,000.

(61 t ha t on acceptance by the commission of Certificates of Completion on a l l projects i den t i f i ed at Staff E x h i b i t 4, p. 15, Pe t i t i one r may put into effect new exchange tariffs which w i l l produce an addi t ional $33,000.

( 7 ) that Pet i t ioner is hereby directed to file new exchange t a r i f f s which will be consistent w i t h items 5 and 6 of this O r d e r . Petitioner shall file these tariffs at l east 30 days prior to f i l - ing w i t h the Carmnission with evidence of the expenditures required in item 5 of this Order and at least 30 days prior to f i l i n g w i t h the Comission w i t h the Certificates of Completion referred to in Item 6 of this Order,

( 8 ) that the exchange t a r i f f s f i l e d on October 31, 1968, Le, and the same are, hereby held far naught.

(9) tha t the case be held open to permit Petitioner to f i l e a p e t i t i o n for acceleration of the effectiveness of the tariffs on a showing satisfactory to the Commission t h a t adequate service has been achieved more rapidly than the schedules set out in items ( 6 ) and ( 7 ) of this Order; or that, on completion of the construction projects, a high level of service has been achieved entitling Peti- t ioner to receive higher revenues than those contemplated herein.

(10) the books and records of Petitioner sha l l be kept in accordance w i t h the Uniform System of Accounts for Telephone Com- panies operating under the jurisdiction of t h i s Cormnission.

Petitioner shall utilize account 316 -- "Miscellaneous Income'! -- €or its intended purposes, one of which is f o r determination of profits realized from custom work not incident to the Company's telephone operations performed for others

The actual amounts in regard to such custom work as the CAW operations or any other work not incident to the Petitioner

P. 18

- Page 15 - telephone operations shall be accumulated by means of a work-order system or any other procedure tha t w i l l furnish accurately and expeditiously statements of a l l transactions pertinent to such ac t iv i ty .

Petitioner shall furnish the Commission a resume of their proposed procedures for determination of actual cast of such custom work w i t h i n sixty (60) days from the date of this order, which procedures are subjec t to the approval of the d om mission.

Petitioner shall furnish the Commission w i t h a sumary of a l l transactions related to such custom work covering each three months period ending March 31, June 30, Septenber 30, and December 31 until the Cornpany is advised 'in writing +bat such reports m a y be d i s - continued. Such quarte'rly reports' shall r e f l e c t actual amounts by type of charges;- i . e . , Labor, Materials, Vehicle and work equipment charges, Overhead, Loading of labor charges, and any other per t inen t information.

.. '

BY ORDER OF THE CUMMISSION

This 11th day of April, 1969.

I s / Lewis M. Robinson, Chairman

/ s / Robert C. D m i e , Commissioner

/s/ c on S . s m i t h , Commissioner

/s/ Tommie Castillow, Secretary

P. 1 9

- Page 36 - APPENDIX I

WFSTERN ARKANSAS TEIZPHME COMPANY

Including Carry Forward to 1970 Summary of 1969 Construction Budcfet by Exchanges

Name of Exchanqe

Atkins

Booneville

C e n t e n i l k

C 1 arksv il le

Dardanelle

Dover

Hartman

H e c t o r

London

P a r i s

Pottsvi l le

Ratcliff

Russellville

Salus

Scranton

Subfaco

(21 h t . Far Upgrade 1969

$17,000

20,000

1,000

51,000

88,000

62,000

39 * 000

22 J 000

38,000

16,000

10,000

30,000

8,000

74 # 000

3,000

3,000

5 ,000

Blanket Project

13) Gross Add it ions

1969

$121,000

89,000

12,000

200,000

212,000

130,000

73,000

55 , 000

79* 000

69,000

~ n , o o o

50,000

18,000

700,000

9,000

18,000

21,000

231,000

(4 ) (51 ( 6 ) Percent Carry upgrade Forward of Gross Retirements to 1970

14% $5000 $18,000

2 2 7000 23,000

8 2000 0

25 15000 60,000

4 2 7000 29,000

48 10000 0

53 2000 16,000

40 1000 15,000

48 0 45,000

23 7000 0

9 7000 40,000

60 1000 10 * 000

44 - 3 , o m

11 14000 14 # 000

0 - 33

17 1000 0

24 1000 18 , 000

TOTALS $487,000 $2,198,000 22% $80,000 $291,000

N o t e : $180,000 of the above is for the purchase of SW B e l l T o l l L i n e s , if treated as upgradin producing revenue apart from new stations, the above 15% becomes 3W. P. 20

- Page 17 -

DOCKET NO. U-2180 - Arkansas Pover & Light Company On November 27, 1968 the Company filed a t a r i f f titled "Gross-Net B i l l i n g R i d e r , R a t e Schedule M-15*" The tariff provided for pen- alties f o r delinquencies that would mount to 10% on t h e f i r s t $15,00 plus 2% of the net bill amount in excess of $15.00. Commission's order dated May 9, 1969 amended t h e t a r i f f as follows: The Company may co l l ec t 8% of t h e first $15.00 plus 2% of t h e net b i l l in excess of $15.00, to determine t h e propriety thereof after accumulation of cost, andl forfeited discounts received by t h e company. order follows:

The

T h i s mat te r is still under surveillance da ta

A copy of the

PRESENT: - A t a session of t h e P u b l i c Service '' Lewis 'a* Rsbinson, -Chairman tommission 'he ld in it-s off ices ,

Robert C. Do7wnie, 'Commissioner Justice Building, Capitol Grounds, Don 5. S m i t h , Commissioner Little Rock, Ark., May 6 , 1969.

IN TEE MATTER OF THE APPLICATION OF 1 ODELL SMITH FOR HIMSELF AND AS 1 REPRESENTATIVE OF A CLASS OF PERSONS 1 WEIO ARE MEMBERS OF TEAMSTERS LOCAL 8 7 8 , ) A VOLUNTARY URINCORPOMTED ASSOCIATION 1 AFFILIATED WITH THE INTERMATIOEJAL ) DOCKET NO. U-2180 BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, 1 WAREEOUSEMEN AND HEI;PERS OF IWERICR; 1 COMSTITGTING IN EXCESS OF 25 PUBLIC UTILITY USEXS FOR AN IbWE§TfGATION OF 1 GROSS-NET BILLING RIDER, RATE 1 SCHEDULE H15. 1

O R D E R

On November 2 5 , 1968, Arkansas Power and L i g h t Company, referred to hereinafter as "Company", f i l e d a t a r i f f titled " G r o s s - N e t Billing Rider, Rate Schedule M-15". The t a r i f f would apply to pract i ca l ly a l l customers except sales to customers for resale and would provide a penalty against each customer whose hill h a s not been paid w i t h i n 14 calendar days af ter the date of t h e Company's billing, $15.00 plus 2% of t h e net bill amount in excess of $15.00,

The penalty proposed would amount to 10% of the f i r s t

Intenrentions were filed by Ode11 Smith fo r himself and as representative of persons who are members of Teamsters Local 878, a d by the Legal Aid Bureau of Ptllaski Corznty, Arkansas. requested that t h e Commission reject t h e tariff as f i l e d by t h e Company.

The lattej:

P. 2 1

- Page 18 - The Commission suspended t h e tariff and the matter was heard

before t h e f u l l Commission on January 31, 1969, and February 10, 1969. Numerous exhibits were introduced and 339 pages of testimony were presented. testimony tended to show that the expenses of the Company related to past due accounts amount to $696,185.00.

The exhibits introduced in support of the Company's

Mr, M i l l i a m McCollam, Sr., vice president of the Company, t e s t i f i e d that t h e present administrative prac t i ce of t h e Company Was to consider a bill. delinquent if not paid w i t h i n t h i r t y days, even though the rate schedules presently on file prescribe that t h e bill is due upon receipt (T-51); that before service is extended to a customer, the customer is required to make a deposit of money equal to the estimated charge f o r service for a period of t w o months (T-53); t h a t he believes the standard period before ser- Vice .. is. . disconnected for non-payment is less than s i x t y days {T-57-81 : that a s a' requirement for reconnection t h e , delinquent bill must be paid together w i t h a reconnection charge; t h a t if a customer moves f r o m town leaving an unpaid b i l l the Company applies t h e deposit to t h e delinquent account and that t h e deposit would cover t h e amount of the delinquent account in s a t e cases and not in others (T-55).

Mr. Jerry L. Maulden, the comptroller in the treasusy department of the Company, t e s t i f i e d that Company's Exhibit 3 was prepared under h i s supervision and that it was prepared to show expenses related to past due accounts for the year 1968.

In support of t h e expenses allocated to the var ious items contained in Company's Exhib i t 3 , M r . Maulden s t a t e d that t h e cost of f inanc ing i n the sum of $101,731.00 was calculated by charging interest d a i l y on each account remaining unpaid after the 10th business day until such account was paid; that the s& of $29,685.00 represented by transportation costs incarred by collectors; that materials and supplies, consisting of forms, notices, stationeF1, and other miscellaneous supplies, cost the Company $4,951.00- The item of computer rental devoted to the processing of forms and reports related to past due accounts and the "other expense" shown in Company's Exhibit 3 for postage of past due and disconnect notices w e r e $5,073,00 and $26,463.00 respectively.

The witness went i n t o detail a s to the operations of the Corn- pany in handling p a s t due accounts. After an account remains unpaid after ten business days, t h e d a t a processing section produces a report cal led the ''Open Balance L i s t " . This report is prepared solely for the purpose of showing which customers have not paid t h e i r bills within t e n days. The accounting clerk in the various local off ices ver i f i e s non-payment of such accoun t s and mails a

P. 22

- Page 19 - past due notice to t h e customer, customer, but, if t h e bill is not paid by t h e t h e of the next b i l l i n g cycle, which would be thirty days after its da te , a second bill is sent with a disconnect notice attached. FiSteen days there- after a collector goes to the customer and e i t h e r collects the amount due or disconnects the service, Approximately lO.z9% Of t h e Company’s customers either pay at t h i s t i m e or are disconnected. T h i s Company has never had a gross-net billing rider and, conse- quent ly , has had no experience to support t h e figures contained in Company Exhib i t 3 .

Later a collector goes to the

The Company does not maintain its books and records in such a manner as to separately reflect expenses related to past due acComts, and, w i t h some exceptions, the amounts s e t O u t in Con- pany’s Exhibit 3 were allocations from accounts containing expense of u n r e l a t e d a c t i v i t i e s . + - These allocations were based on t h e jydg- merit of Mr. Maulden {T-126-7).

It was pointed or-zt 5 y t h e Company that some 32 utilities under the jurisdiction of t h i s Commission and operating in the State of Arkansas assess penal t ies on delinquent accounts and that this practice was s p e c i f i c a l l y approved by the Commission in t h e case of Allied Telephone Company v. C i t y of Fordyce, 36 PUR 3rd 103 (October 1960), consistent w i t h Rule 10 of t h e Rules and Regulations governing utility services under t h i s Commission. The Commission further initiated a survey of all other Commissi~fl regulating utilities in the United States. 29 states permit the imposition of such a penalty. Of the 16 s t a t e s which responded t h a t such a practice was not in effect, some of these permit much the same thing in t h e form of a “prompt payment discount”.

Of those responding

The genesis of such a penalty is the strong policy of rate regulation against discrimination. Rates and other charges must be designed as nearly as possible to assess costs on t h e class of customers which creates them, In t h i s case t h e application of this policy to the question before t h e Clommission means t h a t costs created by late paying customers should be borne by those very customers rather than distribute? in the rates charged all consumers. is excessive as compared to t h e costs created, then the late payers are bearing costs of company operation not properly attributable to them. In the l a t t e r instance this c las s becomes the class discrim- inated against,

The other s ide of t h e proposition is t h a t i€ the penalty

The Company has conclusively demonstrated t h a t it is p u t to considerable expense in collecting past due accounts. We are not convinced, however, that the proposed t a r i f f is t h e only answer to

P. 23

- Page 20 - the question, The d i f f i c u l t y in determining t h e costs caused to t h e Company migh t well indicate t h a t t h e penalty provis ions in all t a r i f f s on file w i t h this Commission should be re-evaluated.

We do not believe that the Company has met the burden 05 proof necessary to obtain a12 of the relief sought. According to its own testimony, the Company seerns to be pretty well protected against loss. T h i s is true because t h e Company is allowed to and does require a deposit of an amount of money equal to an estimated charge for two months' service, which estimate is made by t h e Corn- pany, and, if the bill is not paid w i t h i n t h e two months' period, t h e Company has t h e r i g h t to disconnect senrice. Should a person whose service has been disconnected require that service be re- stored, he is required to pay t h e amount due for previous service plus a reconnection charge. Such person can obtain e lec t r ic service from t h e Company only;

The Company is presently paying i n t e r e s t of 7.375% on s h o r t - term borrowings and a p a r t of current borrowings is used to meet t h e cost of financing past due accounts which amounts to t h e sum of $101,731-00, according to Company's E x h i b i t 3. Another i t e m of expense is that of computer renta l in t h e sum of $5,073.00, which is that portion of computer r e n t a l attributed by t h e Company to past due accounts,

O t h e r items contained in Company's E x h i b i t 3 a t t r ibu ted to past due accounts are:

. Payroll $398,853.00 Payrol l t a x e s 15,156.00 Life and Hospitalization

Re e: i remen t m n u i t y 12,763 .OO Transportation 29,685-00 M a t e r i a l and Supplies 4,951.00 Other Expense 26,463.00

Insurance 15,954-00

The first four of these items are questionable, but there was no evidence offered to r e b u t thenn, Apparently, t h e r e would be no change in personnel costs related to these four i t e m s if the proposed t a r i f f was approved. The witnesses t e s t i f i e d that in t h e event of approval the energies of t h o s e employees whose time is n w devoted to delinquent accounts would he used where it could he better utilized.

Conpany's Exhibit 3 also inc ludes an i t e m of $85,556.00 for "uncollectable accounts", We see no relation betxeen uncollectable accounts and expenses related to the past due accounts and

P. 24

- Page 21 - this item will be disallowed, Deduction of t h i s amount from the total sought to be r e a l i z e d from t h e proposed tar i f f leaves a f i g u r e of $610,549.00-

In order to recover the expenses related to p a s t due a,L --om LS

in t h e s u i of $510,629.00, it appears t h a t such can be accomplished by a charge of 8% on the f i r s t $15.00 plas 2% of the net bill in excess of $15.00, and Gross-Net Billing Rider, Rate Schedule M-15, in its present form, m u s t be disallowed.

It cannot be gainsaid that those consumers who are responsible for these expenses to t h e Company should pay them. It is note- wor thy that those consumers who in the past have not paid t h e i r bills w i t h i n t-do weeks of bi l l i i lg d a t e inc lude persons in all income brackets and are in no way confined to those who awe in t h e lower income groups.

The fact that the Company has had ~-IQ experience to support this filing leads t h e commission to t h e belief that, while the Company is e n t i t l e d to re l ief , such re l ie f s h o u l d be granted on an interim basis so that experience w i l l demonstrate to the a m - mission the propriety of the amounts allowed.


That Gross-Wet B i l l i n g Rider, Rate Schedule M-1sr he, and it is hereby amended as follows: The Company may collect 8% of the first $15.00 plus 2% of t h e net h i l l in excess of $15-00 to become effect ive immediately.

IT IS FURTHER ORDERED:

That t h e Company maintain separate records which accurately re f lec t the results of any suck approved amended schedules and that i t s h a l l file w r i t t e n reports to t h e Commission each sixty (60) days setting forth t h e information contained in such records.

BY ORDER OF THE COMMXSSLON

T h i s 9th day of Flay, 1969,

/SI L e w i s M. Robinson, Chairman

/s/ Robert C, Downie, Commissioner

/s/ Don S. Smith, Commissioner

/s/ Tommie Castillow, Secretary

P. 25

- Page 22 - DOCKET NO, W-2193 - General Waterworks Corporation, Pine B l u f f , Ark. The Company filed rate s-hedules on Hay 7, 1969 designed to y ie ld a 50% increase in revenues over and above the Applicant's existing rates, or $501,000 per year which were rejected by t h e Commission. The Commission found that the applicant was e n t i t l e d to an increase in i t s rates which would increase its gross revenues on an annual basis in t h e amoant of $388,847. A copy of t h e Commission Order is as follows:

AFXANS AS PTDLPC SERVICE COMMISSION

PRESENT : A t a session of t h e Public Service Lewis 14. Robinson, Chairman Conmission held in i t s of f ices , Robert C, D o w n ' i ~ , Commissioner Justice Building, Capitol Groundsr Don S-. Smith, - Comissioner L i t t l e Rock, .Arkansas, October

15, 1969.

IN THE MATTER OF REVISED WATER 1 RATE SCHEDULES FOR GENERAL WATER- 1 WQORB* CORPORATIOM, PINE BLUFF, 1 DOCKET NO. U-2193 ARKANSAS. 1

FINDINGS AND ORDER

Or. March 20, 1969, General Waterworks Corporation (hereafter called "Applicant"), a public utility owning and opera t ing a water system in and near t h e City of Pine B l u f f , f i l e d new schedules of rates designed to increase the charges for w a t e r serviz'e to its customers in Pine B l u f f and areas adjacent t h e r e t o . Prior to fi1- ing t h e sa id schedules w i t h t h e Commission the Applicant had proposed the new rate s c h e d u l e s to the C i t y of Pine 3luff pursuant to an understanding' between Applicant and the City that because of substantial improvements and extensions to its system made at the request or direction of t h e C i t y that upward rate adjustments would be necessary. On February 3 , 1969, t h e City Council adopted a resolution which found, i n t e r alia, that t h e Applicant had already expended substantial sums for "making necessary improvements to t h e h e a l t h , safety and living conditions of t h e residents of Pine Bluff" and f u r t h e r directed t h e Applicant "to forthwith construct, make and improve a l l such improvements w h i c h have not heretofore been completed. I' The r e so lu t ion {Sta f f Exhibit 9 ) also contained t h e following:

"The City Council recognizes t h e necessity and reasonableness of a reqilest for an increase in the rates of General Waterworks Corporation to be charged i t s customers in Pine Bluff, Arkansas, f inds that it is possible that the rates set f o r t h in Exhibit ' A ' are equitable, and does n o t oppose

P. 26

- Page 23 - General Watemorks Corporation's request provided that if after an analysis and evaluation of t h e request has been made, by t h e P u b l i c Service Commission, it is deemed j u s t i - fied by s a i d Publ i c Service Commission."

In addition to the city Councib reso lu t ion requesting the Commission to examine the facts and make a determination of the appropriate rates for t h e Applicant, t h e C i t y disclaimed any j u r i s - d i c t i o n over the filing of t h e new rate schedules, and the Commis- sion assumed complete j u r i s d i c t i o n over the March 20, 1969, filing and suspended the effect ive d a t e thereof to allow time for an investigation into t h e reasonableness of the proposed rates.

On May 7, 1969, Appl icant f i l e d new schedules of rates, w i t h .

t h e required exhibits, stating that these new rate schedules super- "

seded t h e prior f i l i n g of March 20, 1963, The May 3 , 1969, f i l i r ig increased t h e amount of t h e upward rate adjustment because, accord- i n g to the Applicant, of substantial changes in circumstances since t h e earl ier schedules were designed. On May 21, 1969, the Commis- sion suspended t h e effect ive date of t h e new filing to provide time far an investigation into t h e reasonableness of t he proposed new rates.

Subsequently t h e Commission employed an independent rate expert, Mr. James M. Honaker, of Frankfort , Kentucky, to a s s i r t the S t a f f in t h e investigation of Applicant's records and t h e season- ableness of the proposed new rate schedules. During the months of May and June and t h e first half of July, 1969, t h e Staff and Mr. Honaker requested and received from t h e Company deta i l ed f inanc ia l , Property and operating data and made a c a r e f u l examination and analysis of Applicant's property records, operating statements, construction work orders and okher per t inent records.

By order of t h e Commission a formal hearing on the reasonableness of the May 7, 1969, rate schedules was set f o r July 24, 1969;. at which time Applicant appeared and presented testimony and ex- h i b i t s in support of its request fo r approval of t h e new sate schedules. Appearing for the S t a f f were the Comission's attorney, Chie f Engineer and C h i e f Accountant. The Commission's independent expert, Mr. Honaker, was also present to a s s i s t t h e Staff. Mayor Franks of the city o f pine B l u f f was also present. Appearing for t h e intervenor, Jefferson County Trades & Labor Council , was Mr. T. J. Humphrey. Following presentation of the Applicant's d i rec t evidence, Applicant's witness was sukmitted for cross-examination. The hear ing was t h e n continued until September 8, 1969, to allow t h e S t a f f and Mr, Bonaker to prepare and submit exhibits and tes t i - mony on behalf of t h e S t a f f . The hearing date was later changed by agreement of a l l part ies to September 12, 1969, a t which t i n e the staff presented t h e testimoay of Mr- Honaker and many exhibits

P. 27

- Page 24 - r e f l ec t ing Mr, Honaker I s findings. As representative of t h e i n t e r - venor, Mr. T. J. Humpbrey made a statement for t h e record0 as d id Mr. Clarence A. Zehnder also on bebalf of the i n t e n e x o r . Appli- cant a l s o presented r ebc t t a l testimony. Upon being advised by Appli-ant, t h e Staff and intervenor that no party had any f u r t h e r , evidence to offer, t h e exh ib i t s w h i c h bad keen i den t i f i ed by a11 part ies were introduced as a part of t h e record, t h e hearing was closed and t h e case was formally submitted to the Commission for i t s consideration

The Commission has carefully reviewed t h e voluminous record of t h e testimony, t h e pleadings and t h e many exhibits introduced, f r o m a l l of which the Commission f i n d s :

The Commission had j u r i s d i c t i o n Over t h e Applicant, i t s rates and service, and over the sukject matter of t h i s proceeding.

The testimony and exhibits of both t h e Applicant and the S t a f f show that t h e existing rates of t h e Applicant are grossly inadequate and t h a t rate increases are necessary in order to allow t h e Applicant to earn a reasonable re turn. The testimony and exh ib i t s introduced by both the Applicant's witness and by t h e S t a f f are in agreement in many substant ia l areas. Both the Staff and t h e Com- pany used a t e s t period for the year ending December 31, 1968, pro forma, as adjlzsted for known changes, and t h e Commission find:, that such test period is reasonable, Minor disagreements between Appli- cant's and S t a f f s exhibits zoneerning revenues and operat ing expenses exist, but t h e evidence is in s d x t a n t i a l agreement, except f o r several items which will he discussed l a t e r .

On behalf of the in te rvenor , Mr. T. J. Humphrey and Mr. Clarence A, Zehnder: made statements which raised a number 0f.qaes- tions concerning t h e methods of investigation and analysis of t h e Company records which t h e witcesses felt s h o u l d %e followed. A ca re fu l analysis of the statements of both of t h e s e witnesses re- f lects that they d i d n o t actua l ly produce any substantial factual evidence or opinions in conflict w i t h any o f the evidence of the Applicant or the Staff. he statements on behalf of in te rvenor merely raised questions rather than in t roducing evidence. Mra Zehnder candidly conceded t h a t he had spent very l i t t l e time study- i ng t h e e x h i b i t s and t h e testimony and that he d i d not have s u f f i - cient facts or infomatiol? upon v h i c h to base 3 judgment on any p a r t i c u l a r exhibit or issue. Althotlgh Mr. Zehnder was apparently unaware of it, all of h i s pert inent suggestions for investigations and procedures of Applicant's records were in f a c t conducted by the Staff and by Mr. Honakes pr ior to the hearing, and a great mass of detailed information had been careful ly reviewed and analyzed by t h e S t a f f , Mr. Honakes stated in t h e record, that, in addit ion to t h e information already available to the Commission through var ious

P. 28

- Page 25 - annual and special reports made by t h e Applicant mder t h e U n i f o r m System of Accounts prescrihed by t h e Commission, he had made fifty to Sixty specif ic requests Zor additional data and information, a l l of wSich had been supplied by t h e Applicant prior to the hearing and upon which Mr. Eionaker had based h i s testimony ar.d exhibits. The statements of the intervenor's witnesses, while welcome, added l i t t l e to t h e body o f evidence before t h e Commission.

The pr inc ipal areas of disagreement betveen the Appl icant and t h e Staff were (1) the composition of the rate base and the amount thereof , (2) t h e proper rate of return, and (3) the proper rate of depreciat ion,

In computing its rate base, t h e Applicant arrived at a figure of $6,174,107,00, In.zluded was a f i g u r e of $304,211.00 f o r Con- struction w o r k i n progress at t h e end of t h e t e s t period. Honaker adjusted t h i s amount by eliminating items not listed as unusual capital expendi tures , b u t w h i c h appeared to be usual re- placement costs in t h e normal mwse of opera t ion , As adjusted, t h e sum allowed f o r construction xork in progress is $187,143.00, which t h e Commission finds az.ceptable.

Mr.

Applicant also incltlded in its rate base contributions in aid of construction in the s*m of $268,296,00. These contributions axe not refundable to t h e customers who made them, The CommissioL h a s never allowed t h i s i t e m to be inclrtded in a ra te base and, in the absence of any convincing reason tu allow it h e ~ e , it must be deducted -

No deduction was made by the Applicant f o r deferred income taxes. Since these taxes, in t h e szm of $57,450-00, are not payable , they represent available c a p i t a l to t h e Applicant and must be deducted.

Giving e f fec t to the foregoing adjustments, and, after careful consideration of a l l of the evidence, t h e Cornmission finds that a fair and reasonahle rate base for t h e Applicant is $5,731,300.00.

With regard to the question of depreciation, t h e Commission f i n d s that the weight of the evidence re f lec ts that t h e 1.5% per year depredat ion w l ~ i c h has been used in t h e past by t h e Applicant may not be adequate under present circumstances. Mr. Bonaker used 1.5% depreciation in h i s exhibits . However, he did not make any study and expressed no opinion as to t h e proper depreciation, b u t simply used t h e h i s t o r i c a l depreciation rate. On t h e o t h e r hand, t h e Company sabrnitted Exhibit K, which was a computation of a composite r a t e of depreciation and which reflects t h a t 1.94% was an appropriate overall composite sate. The Commission finds that

P. 29

- Page 26 -

Exhibit K more clearly reflects an appropriate depreciation rate and that an annual rate of 2% per year for depreciation should be used.

A f t e r having considered a l l of the testhony and the exhibits and the various factors w h i c h the evidence reflects should be considered in allowing a fair re turn to the applicant, the Commission finds that the earnings deficiency of the company for the test period, pro forma, is $172,821.00 and that the rates deficiency of the Applicant is $388,847.00.

IT IS, ZTBREFORE, ORDERED:

1. The Applicant is entitled to an increase in, i t s rates which will increase i t s gross revenues on an annual basis in the amount of $388,847.00,

2. T h e rate schedules f i l e d May 7, 1969, are designed to yie ld a 50% increase in revenues over and above t he Applicant's existing rates, or $501,000.00 per gear, and such rate schedules are rejected.

3. Applicant s h a l l file rate schedules designed to increase i t s gross revenues on an annual basis in the amount of $388,847.00. Upon appswal thereof, such schedules shall become effective fosth- w i t h and shall be applied to the first b i l l i n g to a l l customers following such approval, with the provision t h a t the Applicant w i t h - draw PSC Schedules N o s . 5, 6 and 7 which are presently applicable to the Watson Chapel area only.

4. The C o ~ i s s i o n retainlj! jurisdiction of t h i s proceeding for such fur ther orders as 'may be"de&ed necessaGy.

This Order shall be in f u l l force and effect from and after '

the date hereof.

BY ORDER OF THE COMMISSION

T h i s 16th day of October, 1969.

/s/ Lewis M- Robinson, Chairman

/s/ Robert C, Downie, Conmissioner

/s/ Don S. Smith, Commissioner /s/ Tommie Castillow, Secretary

P. 30

- Page 27 - DOCKET NO. U-2213 - Arkansas Western Gas Company The Company f i l e d f i n a n c i a l exhibits w i t h the Commission on Ju ly 23, 1969, one of which being Exhibit No. 13 which revealed that the Company requested an annual increase in revenues in the amount of $1,062,877. The Commission found t h a t the Company was e n t i t l e d to an annual increase in gross revenues in the amount of $794,719. A copy of the Comission's Order dated Deceniber 3 , 1969 is as follows:

ARKANSAS PUI3LfC SERVICE COMMISSIclN

PRESENT : A t a session of.the Public Service Lewis M. Robinson, Chairman Commission held in i t s offices, Robert C. Downie, Conmissioner Justice Building, Capi to l Grounds, Don S; Smith, Commissioner L i t t l e Rodk, Ark., October 1, 1969.

. 'IN TH~'MATTER OF- MEW ~ T E S C H E D U ~ S 1 PROPOSED BY ARKANSAS WESTERN GAS ) DOCKET NO. U-2213 COplPANY 1

APPEARANCES

Charles E. Scharlau, Attorney for Arkansas Western Gas

Lewis Epley, C i t y Attorney €or the City of Eureka Springs,

For the Commission: Ben M C M ~ Y U I , Attorney

Company

Arkansas

Edward W. Davis, Chief Engineer Corbon A. Curry, Chief Accountant J. E. Flanders, Consultant

On May 29, 1969, Arkansas Western Gas Company f i l e d new proposed rate schedules w i t h the Commission. These new proposed ra te schedules would be applicable to Arkansas Western Gas Company's customers receiving natural gas service under rate schedules G.S-1, PH-1 and IND-A.

On June 19, 1969, the Commission entered an order suspending the Arkansas Western Gas Company's proposed new rate schedules for a period of ninety (90) days f r o m June 29, 1969, which was the proposed e f f e c t i v e dates of said rates.

On July 25, 1969, the Cornmission entered an order setting the matter for hearing at 9:OO a.m., September 2, 1969, at which time

P. 31

- Page 28 -

Applicant appeared and presented eight witnesses and thirteen ex- hibi ts in support of its application. Upon completion of the direct testimony Applicant's witnesses were submitted for cross-examination and the hearing was adjourned to Wednesday, October 1, 1969, fo r presentation of testimony of the Commission's staf€;.

The Commission had previously retained Mr. J. E. Flanders of Mountain Horn&, Arkansas, an Independent Utility Consultant, to work with t h e Commission's staff and, with the assistance of the staff, to prepare any exhibits necessary to fully inform the Commission in the matter, Working w i t h the s t a f f , M r . Flanders prepared E x h i b i t "A" which was submitted to the Company pr ior to the adjourned hearing. -

On October 1, 1'969, the hearing was'resumed and Mf. Flanders presented Exhibit "A" t i t l e d "1968 cost and Income Study" and cross- examination w a s conducted by the Company Attorney and the Attorney for the C i t y of Siloam Springs, Arkansas, cross-examination, the Company presented i t s Exhibit No. 5, revised Schedules N o s . 1 and 7, along w i t h a new exhibit which was numbered 14. Upon conclusion of the presentation of the revised schedules ~ q d the new exhibit, the case was submitted on the Record.

Upon completion of the

The Arkansas Western Gas Company is a public u t i l i t y 0peratir.g wholly within the State of Arkansas and the Conmission has jurisdiction over i t s rates, service and the sub jec t matter of this proceeding. T h e Company's e n t i r e gas supply is obtained from f i e l d s in the Arkansas River Valley Basin. The Company has both produc- t i o n and purchase contracts and produced in excess of 5Pk of i t s requirements in 1968. Mr. C . B. Keplinger, a petroleum consul tan t .. w i t h many years experience in the estimation of reserves, t e s t i f i e d t h a t , based ugon the gas withdrawn in the year 1968, the Company has a reserve-life ratio of 23.3 years which compares to a reserve- life ratio of 14.8 years for the natural gas industry as a whole. Be further stated t ha t the Arkansas f i e l d price law has had a stim- ulating effect on the exploration for gas and tha t , in his opinion, the reasonable market f i e l d price should be at least 17c' per 1000 cubic feet for the gas produced by Arkansas Western Gas Company. This Commission adopted the'same price in this Company's 1963 rate case and will so do in th is case.

The'Company has used 1968 as the test year in this case and had adjusted its actual book figures for presentation of its case in the following particulars:

P. 32

- Page 29 -

- .

It has excluded i ts Mountain Home D i s t r i c t from consideration on t he grounds that i t s original projection was for a period of f i v e years from 1966 and that t he present rates for that district are now higher than those sought in t h i s proceeding and it does not now seek to change them. The Cormnission concurs in this,exclusion.

It has excluded items of plant , revenues and expenses as they pertain to the field price of gas, the sale to Arkansas Electric Co-operative and non system well head sales, The Commission concurs in these exclusions.

It has adjusted its Residential and Commercial MCF sales and revenues for the excess over normal of DDD in the year 1968,' In addit ion, it has adjusted for customer growth to bring the revenues to the year end basis,

It has annualized payroll increases and associated taxes for hcreaszs which occurred in 1968 and, in addition, has increased payroll expenses to cover additional expense due to customer growth calculated to bring expenses to a year end basis ,

It has provided for increases in the cost of outside services and insurance, provided for the amortization of its rate case expense and seeks to include interest on customer deposits as an expense item.

In the determination of the rate base, the Company submitted one exhibit dealing with the fair value approach and one an the or ig ina l cost basis. the original'cost basis -for determining the rate base and w i l l do so in t h i s case.

In- past cases, this commission has used ohl'y

The Commission's consultant, Flanders, and the Commission staff based their exhibit on the year 1968, the same as the Company b u t d i d not use the year end basis. justments to provide for annualization. The Commission is of the opinion that the year end basis is proper in this case and will therefore adopt same, The following is a comparison of the Corn- pany ' s adjusted income statement w i t h Flanders I income statement on the year end basis .

fn general, they made the same ad-

P. 33

- Page 30 -

1 OPERATING REVENUES 2 Total

3 OPERATING REvEEatJE DEDUCTXONS 4

5

6 7 8 9 10 11 12

13

14 1s

16

17

18

7,073,873 7,075,592 I, 719

(443) Production and Gathering

Exploration and DevelOpent

Other Gas Supply Expenses 2,239,737 Underground Storage Expenses 28,015 Transmission Expenses . Distribution Expenses Customer Accounts Expenses 367,294 343,107 '(24,187) Sales Expenses Administrative and General

Expenses Depreciation, Depletion,

Taxes O t h e r than Income 398,460 396,513 ( 1,947) TOTAL OPERATING m N U E

Expenses 107,407 106,964

Expenses - I - 2 , 2 3 9 , 7 3 7 -

28,015 . - 124,820 124,820 I

563,660 563,660 - 275,603 275,603 -

523,525 523,525 I

Amortization 676,418 670,902 ( 5,516)

DEDUCTIONS 5,304,939 5,272,846 { 32, C33 1 AVAILABLE FOR INCOME T-S

FEDERAL AND STATE INCOME 1,768,934 1,802,746 AND RETURN

TAXES 740,102 751,853 NET OPERATING I N C m 1,028,382 1,050,893

T h e major differences between the two statements is due to: (a) N o t including Interest on customers' deposits OD line 10. (b) Depreciation and T a x e s on investment in amount of $194,706

Mountain Home investment not excluded by Company.

The Company's adjusted R a t e B a s e , reflecting the changes set O u t in E x h i b i t No. 5, Schedule No. 1 (Revised) is shown in Column ( 2 ) and the revision of the Flanders' R a t e Base to the year end basis is shown in Column ( 3 ) of the Tabulation s e t out below. The differences are shown in Column ( 4 ) .

P. 34

- Page 31 -

ITEM COMPANY

1 2 3 4 5

6 7 8 9

10

11 12

(1) $ ( 2 1 Gas Plant in Service 22,850,106 Less Depreciation Reserve (7,145,897) Construction Work in Progress 45,787 ~udgeted Construction 921,768 G a s Stored Underground -

Materials and Supplies 183,549 Prepayments 157,710 Working Capital 235,365 M h i m u m Bank Deposit Require-

rnents 404,000 Contributions in A i d of

Const-quction (292,802) Cumulative Investment Tax Cred i t -

TOTAL 18,469,920

Non Current I, 110,334

FLANDERS DIFFEFLF,NCE

22,655,400 (194,706) (7,140,381) 5,516

I ( 45,787)

$ ( 3 ) $ (4 )

921,768 -

lfl1O, 334 - 183,549 - 157,710 - 245,712 10,347

c (404,000)

{ 292,802) I

' (297,613) (297+613) 17,543,677 (926,243)

The f irst difference is in the net G a s plant in Service on lines (1) and ( 2 ) . In th i s instance, the Company first f a i l e d to eliminate a l l of the Mountain H m e Transmission Costs in the amount of $ 194,706 and did n o t decrease the depreication reserve by the amount of depreciation on same. the amounts shown in column ( 3 ) for lines 1 and 2 are correct 2nd proper.

In the opinion of the Comission,

The next difference is on line 3 , t i t l e d Construction Work in Progress, and covers construction w o r k which is normally in progress each year and is closed to plant as it is completed and is not a proper i t e m to be included.

Di.sregarding the difference in Working Capital on l i n e 8, "< the next difference is an.-.amount of $ 404,000 t i t l e d M i n i m u m Bank Deposit Requirements on l i n e 9. that the amount provided by taking one eighth of the expenses, ex- cluding other gas supply expense, depreciation, deple t ion , amortiza- t i o n and taxes, provides a sufficient amount for cash working capital and the inc lus ion of the Bank Deposit Requirements is not allowable.

The Commission is of the opinion

The f i n a l i t e m of difference is on line 11, t i t l e d Cumulative Investment Tax Credit in the amount of a credit h Column ( 3 ) in the amount of $ 297,613. This amount comes from page 13, Column 5 of Flanders Exhibit I1A" w i t h a correction for a minor error. It reflects the totak savings in Federal Income Taxes applicable to

P. 35

- Page 32 -

the Gas Plant used in the rate base. As stated in Commission's order in Case No. U-2193 "Since these taxes, ---, are not payable they represent available capital to the Applicant and must be deducted. ''

The Company presented Dr. Eerbert B. Dorau, a distinguished economist, who presented voluminous testimony and exhibits on the rate of return, Dr. Dorau concluded with the statement that "since, by every test, a f a i r rate of return would be 8.574 and in fact more, the 8,056 requested is obviously less than a fair rate of return and should be alllowed. 'I

A f t e r considering a l l of t h e testimony, giving consideration to the Company's excellent gas reserves the commission is of the

- ' " dpinion that-,the. company should be allowed to increase its rates as set out in the following section.


1. T h e rate schedules filed on May 29, 1969 are hereby rejected.

2. That Applicant shall f i l e schedules designed to increase i t s gross revenues on an annual basis ili the amount of $794,713. Said schedules shall be based upon the volumes shown in Exhibit No. 13, Upon approval thereof, such schedules shall become effective forthwith and shall be applied to the first billing to a11 customers following such approval,

3 . The Commission retains jurisdictiori of this proceeding for such further orders ag may be deemed necessary.

' . . . , , . . .- . >.

This Order shall be in f u l l force and effect from and a f t e r the date hereof.

This 3rd day of December, 1969.

/s/ Lewis M. Robirkon, Chairman

I s / R o b e r t C. D o w n i e , Conmissioner

/s/ Don S, S m i t h , cornmissioner /s/ Tomfe Castillow, Secretary

P. 36

- page 33 - SELECTED PROJECTS AND PROGRAMS - 1969

The Commission i n i t i a t e d and ptrrsued a number of projects and programs designed to produce hoth immediate and long range bene- f i t s for t h e general public.

RURAL TELEPHONE UTILITIES ACCELERATE CONVEFtSION FROM 8-PARTY TELEPHONE SERVICE TO 4-PARTY OR BETTER.

The telephone utilities reacted positively to the Commission’s announcement of its desire for faster progress by zompanies in providing better grades of service for rural customers in t h e s t a t e . During 1969, several thousand 8 , 9 or 10-party services w e r e re- placed w i t h 4-pasty service and greater availability of one and two-party service in small rt;ral gommities was inaugura ted- addi t ion , a greater proport ion of the netJ telephone lines buils ,to extend service to previously unserved r u r a l localities provided f o r a m a x i m u m of f o u r parties on one line and were placed underground f o r improved reliability,

In

HEM RULES PROMULGATED FUR TELEPHONE UTILITIES. The f irst general study of S p e c i a l Rules f o r Telephone Com-

panies since 1955 was undertaken w i t b t h e objective of determining the necessary revisions, addit ions and deletions to o p e r a t i n g . rules which would r e s u l t in improving t h e overall standards of telephone company performance in the S t a t e . The Commission retained Aubrey Carroll tampany as t e c h n i c a l consultants to assist t h e s taf f in t h e strzdy. The f i n a l draft of t h e staff’s proposed new r u l e s re ta ins anchanged, only t w o of t h e Commission’s old rules and incorporates many revisions and additions i n keeping w i t h t h e present s t a t e of t h e telephone art and t h e contenporary and fore- cast demands of t h e public, t i o n Of t h e new rules is anticipated by February, 1970-

Final public hearing and formal adop-

THE PLACEMENT OF ELECTRIC AEID TELEPHONE DISTRIBUTION LINES UMDERGROTBQ W E MANDATORY,

its jurisdiction to b u r y a l l new lines v k i c h d i s t r i b u t e such ser- v ices w i t h i n new residential devel-opments in the S t a t e - order t h e Commission a l s o required all t h e effected utilities to file underground service policies showing t h e method of col lec t ing t h e d i f f e r e n t i a l in costs between overhead and undergroand in- stallations where such difference occurs. Underground services for new indiv idual residences, t r a i l e r parks, apartment buildings and commercial premises are also provided for,

The Commission ordered electric and telephone utilities under

In i t s

PROMOTIONAL TARIFFS OF UTILITIES STUDIED. A’number of electr ic and gas company rate tar i f f s came under

P. 37

- Page 34 - scrutiny of the commission qvith regard to some of the spec-ial con- d i t i o n s t h e y impose before a customer can qualify for a more favor- able rate schedule. The Commission was concerned w h e t h e r some of these conditions might be unjust ly discriminatory. Some specific areas of concern have been zited to t h e companies involved and they have been ordered to show cause vhy certain elements of their rate tariffs shoald ke retained, A puhlic hearing and judgment in the matter is anticipated in t h e first quarter of 1970.

PUBLIC SAFETY PROGRAM TO BE VITALIZED,

was undertaken by the Commission in the l i g h t of the accelerated growth of utilities in t h e State and par t i cu la r ly t h e impact of t h e provisions of Public Law 90-481, otherwise known as the Natura l Gas Pipeline Safety A c t of 1968. The Commission concluded that t h e requirements for an effective Regulaibry.Safety Program exceeds its c u r r e n t l y authorized reso!~rces in s t a f f and funds . Legislative re- l i e f is believed to be necessary for t h i s i nc reas ing ly v i t a l aspect of the Commission's responsibilities and it will be sought at t h e earliest opportunity.

A review of its public safety responsibilities and activities

P. 3%

O R G A N I Z A T I O N A L C H A R T

CUMMISS IONER c m r w COMMISSIONER

r I t Administrative Asst, T Secretary 111

(Secretary of t h e commission: (Seer etari e s to C ommj. ssi oner s )

t L 1

f

tl . Mot Included in This Operational Unit

t I -i

I 1

A I t ’ i I Attorney I11 I (Accounting & Financia l ) I I (Chief Legal Counsel)

Pubsjc Service Ut,j.fi.ty Administrator

k----l Secretary If Secretary 1x1 I

I Public Service U t i l i t y Administra

Enginaeri ng )

Secretary 11

I h b ~ c U t i l i t y Accounting Supvr.

Public U t i l i t y Auditor 12

Public U t i l i t y Auditor X

Bookkeeper If Secretary 11 n

J 1 3 3

I

Public UtZUty Engineering Supvr.

Public U t i l i t y Engineer

Public Ut iUty Rate Consultant

khinistrative Assistant 11

Cartographer 11

Schedule " 2 "

ARKANSAS PUBLIC SERVICE COMMISSION THIRTY-FIFTH ANNUAL REPORT

Statement of Receipts and Disbursements Calendar Y e a r 1969

mount RECEIPTS : Assessment Fees $ 347,257.19 Securities Approval F e e s 23,129,35 Annual Report F i l i n g Fees 495.00 Other Filing Fees I, 300.80 Miscellaneous Sales and Refunds 225 .a9

TOTAL REZE1PFS $ 372,408.23

DISBURSEMENTS : Regular Salaries Travel Expense

Qffice Su,pplies and P r i n t i n g Communication Expense Dues and Subscr ip t ions Automobile Expense Treasury Charges on Deposits Social Security Matching S t a t e Retirement Matching Quasi-Judicial Retirement Fund Social Security and State Retirement

Equipment Maintenance and Repairs Insurance and Bond Premiums Education and Seminar Profess iona 1 Services Refunds to Expenditures - Credit Press Clipping Semice O f f i c e Remodeling and Redecoration

Off ice Rent

Administrative Fund

TOTAL OPERATING DISBURS-TS

CAPITAL DISBURSEMENTS : Automobiles Furnituse and Equi,pent Books

TOTAL CAPITAL DISBURSEMENTS

!$ 174,506.86 5 ,432.02 25,361.00 4,562 -48 7,238.04 1,115.23

6,291.68 8,195.42 8,947,99 25,000.00

2 I 288.28

135 e 00 350.68 902.00

32,664.80 ( 4,105.05)

78.78 2 2 ,8 76.06

I, 580.00

$ 323,421.27

$ 4,188.68 4,673.98 628.51

$ 9,491.17

TOTAL DISBURSF&BNTS S 332,912.44

EXCESS RECEIPTS OVER DISBURSEMENTS $ 39,495.79

P. 40

Schedule 3

ZlRKANSAS PUBLIC SERVICE C-ISSION THIRTY-FIFTH ANN'WAL REPORT

Summary of Major Rate Changes in the Y e a r 1969

ARKAHSAS WESTEW GAS C a P A N Y - Docket NO. U-2213 Annual Increase in Revenues

Increase in Residential, Commercial and Industr ia l Rates Authorized by Arkansas P u b l i c Sesvice Coxnmiss~on Order dated Decenber 3 , 1969

$ 806,860

GENERAL WATERWORKS C U R P O R A T I ~ - Docket No. U-2193 Annual Increase in Revenues $ 388,847

.. Authorized by -Arkansas Public. Service Corwnission Order dated October 16, 1969

WESTERN ARKANSAS TELEPHCNE COMPANY - Docket NO. U-2168 Annual Increase in Revenues $ 83,000

Authorized by Arkansas P u b l i c Service commission Order dated April 11, 1969

Rate changes not included in t h i s schedule are: Rate changes authorized by city resolution t h a t would affect only a certain incorporated area:

Rate changes automatically invoked due to increases or decreases in fue l costs to gas and electric companies:

Authorized increases or decreases by telephone companies due to changes in total. telephone Stations- within, a cer tain calling scope I

P. 41

Schedule 4

ARKANSAS PUBLIC SERVICE COMMISSION THIRTY-FIFTH ANWAL REPORT

SUMMARY OF DISPOSAL OF APPLICATIONS From January 1, 1969 through December 31, 1969

SUBJECT MATTER

Financing

New Construction

Mew Contrac ta

R i v e r Crossings

T@rri tory Allocations

Sales, Mergers and

ELECTRIC WaTER TELEPHONE GENERAL TOTAL

5 2 9 16

16 3 19

3 1 4

3 3 6

1 2 3

Pur chas e s o f Uti 1 i ty property

Revision of Rates

A d m h i s t r a t i v e Orders

Misce 1 landous

TOTAL

1

6 4 2

I

2

3

3

15

1

1 6 1 11 - 3

17 3 23 1 78 - 34 -

P. 4 2

Schedule 5

ARKANSAS PUBLIC SERVICE COMMISSION THIRTY-FIFTH ANEJUAL REPORT

SUMMARY OF APPRUVED FINANCING APPLICATIaS JANUARY 1, 1969 THROUGH DECEMBER 31, 1969

TYPE OF SECURITIES:

C m o n Stock

Preferred Stock

Bonds

REA Loans

Other Long Term N o t e s

TOTAL

PURPOSE :

Refinanchg

New Construction

Acquisition of Mew Property

TOTlhL

AMOUElT

$ 950,000.00

85,000.00

143,500,000.00

5,265,000 .OO

$ 50,346,000.00

101,366,000.00

N o l l e

$15 I, 712,000.00

P. 43

Schedule "6 It Page 1. of 41 Pages

ARKANSAS PUBLIC SERVICE COMMfSSIUEl THIRTY-FIFTH ANNUAL REPORT

SUMMARY OF FORMAL ORDERS

In the matter of the application and pet i t ion of Oklahoma Gas and Electric company for an order authorizing petitioner: (1) to execute, deliver and record a new supplemental indenture to be dated as of January 1, 1969, supplemental to indenture dated February I, 1945, as supplemented, from petit ioner to The First National Bank and Trust Company of Oklahoma C i t y , Trustee; and (2) to issue and sell $12,500,000 princi,pal amount of petitioner's first mortgage bonds, series due January 1, 1999, secured by said indenture, as supplemented, by invi t ing , receiving and accepting a cmpetitive b i d therefor I

Order dated January 3 , 1969 granted authority.

DOCKET NLTMBER U-2178

In the matter of petition filed by The Woodruff Electric Co- qperative Corporation for an increase in rates.

Order dated January 8 , 1969 dismissed petition.

DOCKET NUMBER U-2163

In the matter of the application of Boom C o u n t y Telephone Compa- ny and Northern Arkansas Telephone Company, Inc. for authority fo r the abandonmen$ of toll service by Bwne County+.Telephone Company and for the issuance of a certificate d'f convenience and necessity authorizing Northern Arkansas Telephone Company, Inc. to provide toll service.

Order dated January 8 , 1969 granted authority.


In the matter of the ap,plicatiun of Boone County Telephone Com- pany for authority to lease plant facilities from Lease Invest- ment Financial Enter,prises, Inc.

Order dated January 9, 1969 granted authority.

P. 44

Schedule ''6" Page 2 of 41 Pages

DOCKET NUPiBER U-1939

General Telephone Company of the Southwest (successor to the Southwestern States Telephone Company), Complainant, vs. The City of De Witt, Arkansas, Defendant.

IT fS, THEMFORE, ORDERED THAT:

The application for rehearing f i l e d by the City of Dewftt, Arkansas on January 2, 1969, be, and the same is hereby, wer- ruled.

Order dated January 9 , 1969.


B the matter of the application of the Arkansas Power & Light Company for a certificate of convenience and necessity to construct, maintain and qperats a 500,000 volt transmission l ine from the El Dorado EHV Substation located north of El Dorado on Highway No. 167, in Union County, south and southwest to the Louisiana State order at a point east of mnction city, in Union County, and terminal facilities.

Order dated January 18, 1969 granted a certificate of convenience and necessity.

DDOCmT NUMBER U-2179

In the matter of the application of Riceland Electr ic Coopera- t ive , Inc. for a certificate of convenience and necessity, to construct certain distribution f a c i l i t i e s Sn Jefferson'bd Arkansas Counties, Arkansas.

O r d e r dated Febmary 3, 1969 granted a certificate of convenience and necessity.


In the matter of the application of Arkansas Power & Light Com- pany for a certificate of convenience and necessity to construct, maintain and operate a 161,000 volt transmission l i n e f,rm the Russellville Nuclear Generating Unit, sasterly to the existing Morrilton Substation, all in Pope and Conway Counties.

Order dated February 18, 1969 granted a certificate of convenience and necessity.

P. 4 5 -

Schedule " 6 'I Page 3 of 41 Pages

DOCKE3T NUPllBER U-2182

In the matter of the application of North Arkansas Electric Co- operative, Inc. for a certificate of convenience and necessity to construct certain transmission faci l i t ies in Baxter county, Arkansas - Order dated March 11, 1969 granted a certificate of convenience and necessity,


In the matter of the ap,plication of P e t i t Jean Electric Coopera- t ive Corporation for a certificate of convenience and necessity to construct cer tain distribution facilities in Searcy, Newton and Pope Counties, Arkansas, and for the reallocation of certain t e r r i t o r y .

O r d e r dated March 11, 1969 granted a certificate of convenience and necessity and approved reallocation of t e r r i to ry .


In the matter of adoption of statewide rules for t he under- grounding of e lec t r ic and c m u n i c a t i o n service facilities for new residential construction.


1. Electric and cormmication underground service for new resi- dent ia l construction will be installed by electric and cormrmnica- t i o n s&vice utilities except where nbt feasible from' enginee?ing, operational and economic standpoints.

2 . Every electric and ' comnica t ioh service u t i l i t y subject to the jurisdiction of the Commission shall , unless it already has an acceptable policy on file, within 120 days from the adqption of this rule, file a written policy w i t h the Commission to become a part of the utility's rules and regulations. Said policy shall be subject to review and approval of the Commission and shal l become effective in accordance w i t h the provisions of Sec- tion 18 of A c t 324 of 1935, as amended.

Order dated March 18, 1969.

P. 46

schedule #*6 If

Page 4 of 41 Pages


In the matter of the application of The Empire District Electric company, a corporation organized and existing under the laws of the S t a t e of Kansas, to issue under its existing indenture of mortgage, dated as of Septerrber 1, 1944, and indentures supplemental thereto, a new series of its first mortgage bunds in the aggregate principal amount of $ll,OOO,OOO, and to execute and deliver a supplemental indenture to provide for t h e terms of said series of bonds.

Order dated April 1, 1969 granted authority.

DOCKET NUMBER W-2188

In the matter of the application of Western Arkansas Telephone Company to borrow a sum not to exceed $1,000,000 from Wachavia Bank and Trust Company, ashevi l le , North Carolina.

Order dated April 3 , 1969 granted authority.

DOCIU3T NUMBER U-2189

In the matter of the application of Arkansas Western Gas Company for certificate of convenience and necessity to construct, operate and maintain certain natural gas pipelines and to construct, qperate and maintain addit ional compressor facilities as a part of its gas transmission system,

Order dated April 7 , 1969 granted a certificate of public convenience and.. necessity.

DO- NUMBER U-2168

In the matter of Western-Arkansas Telephone Company local exchange rates.


(1) that Petitioner has failed to maintain its plant in a high state of efficiency and to make additions to the extent necessary to keep pace w i t h modern standards of service, resultkg in subscribers receiving unsatisfactory service. therefore cannot expect a rate of return which will campensate it at the same ra te allowed utilities which have made the necessary investments to achieve and maintain a high standard of service.

Petitioner

P. 47

Schedule 6 'I Page 5 of 41 Pages

( 2 ) that service is being improved and it is necessary t h a t some increase in revenues be available to Petitioner when the improvements are effectuated. The public interest and the best interest of Petitioner's customers require t ha t increased revenues be achievable to attract the capi ta l necessary to make the improvements.

( 3 ) that Petit ioner is entitled, on improvement of services, to net revenues in the sum of $600,000, and Petitioner's rate deficiency w a s $83,000 as of Noverriber 30, 1968.

(4) and will improve services and that it is e n t i t l e d to additional revenues when the improvements are completed.

t ha t the constmction projects of Petitioner are designed to

(5) that on acceptance by the Commission of evidence t ha t Petitioner has expended the s u m of $487,000 for upgrading services on the projects identified at Staff E x h i b i t 4, p. 15, col. 2 , a copy of which is attached to t h i s order as Appendix I, Petitioner m a y put into effect new exchange tar i f f s which will produce an addi t ional $50,000.

( 6 ) Completion on a l l projects i d e n t i f i e d at Staff E x h i b i t 4, p . 15, Petitioner may put i n t o effect new exchange tariffs which will produce an additional $33,000.

that on acceptance by the Commission of Certificates of

(7) that Petitioner is hereby directed to file new exchange tariffs which will be consistent with i t e m s 5 and 6 of this Order. Petitioner shall file these tariffs at least 30 days prior to filing with the Commission with evidence of the expenditures required in item 5 of this Order and at least 30 days prior to filing with the Comission w i t h the Certificates of Completion referred to h Item 6 of t h i s Order.

( 8 ) t ha t the exchange tariffs f i l e d on October 31, 1968, be, and the same are, hereby held for naught.

(9) that the case be held open to permit Petit ioner to file a petition for acceleration of the effectiveness of the t a r i f f s on a shawing satisfactory to the comission t h a t adequate service has been achieved more rapidly than the schedules s e t out in items (6) and (71 of this Order; or that, on completion of the construction projects, a high level of service has been achieved entitling Petitioner to receive higher revenues than those contemplated herein.

P. 48

Schedule "6 *I Page 6 of 41 Pages

(lo) the books and records of Pe t i t i one r shall be kept in accordance with the Uniform System of Accounts fo r Telephone Companies operating under the jurisdiction of this Commission.

Petitioner shal l u t i l i z e account 316 -- "Miscellaneous Income '' -- for its htended purposes, one of which is fo r determination of profits realized from c u s t o m work not incident to the Company's telephone operations performed for others.

The actual amounts in regard to such custom work as the CATV operations or any other work not incident to the Petitioner telephone operations shall be accumulated by m e a n s of a work-order s y s t e m or any other groceduce that w i l l furnish accurately and expeditiously statemeits of a l l transactions pertinent t6 such act iv i ty . P e t i t i o n e r shall furnish the Commission a resume of their proposed procedures for determination of actual cost of such custom work w i t h i n sixty (60) days from the date of this order, which procedures are subject to the approval of the Conmission.

Petitioner shal l furnish the Commission with a sumnary of a11 transactions related to such custom work covering each three months period ending March 31, June 308 septeder 308 and Decenber 31 until t h e Company is advised in writing that such reports may be discontinued, Such quarterly reports shall re-' flect actual amounts by type of charges, i.e.8 Labor, Materials, Vehicle and work equipment charges, Gverhead, Loading of labor charges, and any other pertinent information.

BY ORDER OF THE COMMISSIOES



In the matter of p e t i t i o n of residents of Swifton, Arkansas, concerning telephone service rendered by Allied Telephone Company of Arkansas, Inc.

IT IS, TmREFORE, ORDERED:

Allied Telephone Company of Arkansas, Xnc,, is hereby directed to proceed immediately to umrade its services in and around Swifton, Arkansas, and to file a report w i t h the Commission, de- tailing a l l act ions taken by them to date which have or will improve the quality of subscriber service rendered by the present plant, equipment and €acilit ies in use in the Swifton exchange,

P. 4 9

Schedule "6 Page 7 of 41 Pages

Further, the Company will report in detail the current status of acquisition or installation of new central. office and outside plant equipment intended for umrading, expansion or other modernization of the S w i f t o n service, and give therein the estimated date for completion of the service improve,ment. reports, every sixty ( 6 0 ) days, shal l be filed w i t h the Commission by the Company, reporting the status and prqress until a l l construction and other actions are complete.

Subsequent




In the matter of the a.pplication of A l l i e d Telephone Company of Arkansas, Inc., Allied Telephone Company of DeQueen, Inc. , and Rural Telephone Company, for the approval of and authority for the acquisition by Allied Telephone Company of Arkansas, Inc., of a l l the stock of A l l i e d Telephone Company of DeQueen, Inc., and Rural Telephone Company, and for the approval of and authority for the merger of Rural Telephone Company and A l l i e d Telephone Company of DeQueen, Inc., i n t o Allied Telephone Company of Arkansas, Inc.

IT IS THEREFORE, ORDERED:

A, That Paragraph 3 05 the commissionts O r d e r o€ Decerdber 3 0 , 1968, be amended to' read a s follows:

"The Boards of Directors of A l l i e d of Arkansas and Allied T e l e - phone Company have appoved the tramfer of a l l of A l l i e d of DeQue@n and Rural stock in exchange for A l l i e d of Arkansas stock in the amount of 170,000 shares of Allied of Arkansas $10 par value common stock for a13 outstanding A l l i e d of DeQueen common stock and 1,500 shares of A l l i e d of Arkansas $10 par value common stock for all outstanding Rural cormnun stock."

B. December 308 1968 which authorizes and a,pproved the acquisition of a l l of the stock of A l l i e d of DeQueen and Rural by Allied of &kansas be amended to read as follows:

That the Paragraph on Page 2 of the Commission's Order of

"The acquisition of a11 of the outstanding stock of Allied of DeQueen and Rural by A l l i e d of Arkansas in exchange for 171,500

P. 5 0

Schedule "6 'I Page 8 of 41 Pages

shares of Allied of Arkansas common stock, $10 par value, is hereby authorized and approved."

C. That the Order of December 30, 1968, as amended hereby, continue in full force and effect .

BY ORDER OF THE C W f S S I O N

TMS 1st day of May, 1969.

DOCKET NUMBER U-2194 I

In the.,matter ,of the application of Arkansas -Power & Light C o w - pany for a certificate of convenience and necessity to construct, -maintain ad .opera te a' 161,000 volt- tr&srnission- line from t h e existing Dardanelle Substation, northwesterly to the United States Government owned Dardanelle Dam Substation and from said substa- I

t i o n northeasterly to the company's existing Russellville South Substation, a l l in Y e l l and pope counties.

Order dated May 2, 1969 granted a certificate of convenience and necessity.


In the matter of rate schedule filed by the C & L Electr ic Co- qperative Corporation.

O R D E R

On September 22, 1968, c & L Electric Cooperative Corporation filed a schedule of rates covering grain drying and cotton ginning services.

On October 7, 1968, the Comission suspended the rate schedule for a period of ninety days.

On October 23, 1968, Delton E. Stratton f i l e d a formal complaint against C & L Electric cooperative Corporation alleging t h a t the prqposed schedule of rates is unreasonable.

On Nmeniber I, 1968, the C & L Electric Cooperative Corporation filed a pe t i t i on w i t h the Commission stating that the proposed schedule was the only schedule of rates it had on Eile w i t h the Commission t ha t ap,plied to services rendered to cotton gins and asked that it be permitted to chaege the rates proposed s&ject to the order of this commission. ,

P. 51

Schedule "6 I' Page 9 of 41 Pages

On the 18th of March, 1969, the case was se t for hearing at 9 ~ 3 0 a.m., on May 13, 1969, in the hearing room of the Commission.

On May 5, 1969, t h i s Commission received a letter from Gssgory & Claycomb, attorneys f o r Delton E. Stratton, stating tha t he wishes to withdraw h i s complaint in this case,

That the complaint f i l e d in t h i s case be, and the same is hereby dismissed at the request of the complainant and a11 tariffs suspended by this Commission are hereby made effective as of October 23, 1968.

BY ORDER OF THE COMMISSIm

This 5th day of May, 1969.


In the m a t t e r of the application of Walnut Hill Telephone Company for authority to borrow the sum of $200,000.00 from Bankers National L i f e Insurance Company and for authority to lease f r o m Lease Investment Financia l Enterprise, Inc., plant facilities for an aggregate rental of $100,000.00.

Order dated May 6 , 1969 granted authority.

DOCKET NO. U-2187

In the matter of complaint of Ed Warmack and Jane warmack concerning rules and regulations governing electric f a c i l i t i e s and services.

IT IS, TEjEREFW ORDERED:

T h a t the defendant, Oklahoma Gas & Electric Company, be and it is hereby ordered and directed to provide the electrical services requested by complainants by i n s t a l l i n g separate meters for the spaces specified by complainants and by ins ta l l ing a single meter for measuring service to the remainder of the shops, stores, and office space located within said center.

I

BY ORDER OF TEE COMMISSION

T h i s 6th day of May, 1969.

P. 5 2

Schedule 116" Page lo of 41 Pages

DOCKET MUMBER U-2180

In the matter of the application of Ode11 S m i t h for himself and as representative of a class of persons who are rneders of Team- sters Local 878, a voluntary unincorporated association aff il- iated with the International Brotherhood of Teamsters , Chauffeurs, Warehousemen and Helpers of America, constituting in excess of 25 public utility users for an investigation of gross-net billing rider, Rate Schedule 1415.

O R D E R

On November 27, 1968, Arkansas Power and Light Company, referred to hereinafter as "Company", f i l e d a tar i f f t i t l e d "GrOSs-Net B i l l i n g Rider, R a t e Schedule M-15". The tariff would apply to practically a l l customerg except s a l e s to 'customers for resale and would provide a penalty against each customer whose bill has not been paid w i t h i n 14 calendar days after the date of the Com- pany's b i l l i n g . The penal ty prqposed would amount to 1% of the first $15.00 plus 2% of the net b i l l amount in excess of $15.00.


That Gross-Net Billing Rider , R a t e Schedule M-15, be, and it fs hereby amended as follows: The Company may collect 8% of the first $15 .OO plus 2% of the net b i l l in excess of $15 - 0 0 to become effective immediately.

IT IS FURTHER ORDERED:

That the Corn-pany maintain separate recqrds wbich accurately reflect the results of any such approved amended -schedules and that it shal l file written reports to the Commission each sixty (60) days set t ing forth the information contained in such records.


This 9th day of May, 1969.

In the matter of the application of Western Arkansas Telephone Company requesting that local exchange rates for new suburban service become effective immediately.

P. 53

Schedule "6 'I Page I1 of 41 Pages


Local Exchange Tariff Schedules filed on April 21, 1969 and April 24, 1969, by Western Arkansas Telephone Corrtpany are hereby suspended €or a period of ninety (90) days.

BY ORDER OF TRE COMMISSION

T h i s 20th day of May, 1969.

In the matter of the application of Western Arkansas Telephone Company requesting t h a t local exchange rates for new suburban service become effective immediately.

T h a t the revised Local Exchange Rate Schedules f i l e d on May 21, 1969, by Western Arkansas Telephone Company be and they are hereby approved, and shal l be in effect as of the date of t h i s order.

It is further ordered t ha t the company be, and it is hereby, authorized and directed to discontinue the offering of multi- party service (in excess of four-party service) as fac i l i t i e s fo r the upgraded service become available in i t s exchange areas oc portions thereof.

BY ORDER OF THE COMMISSLOM

This 22nd day of May, 1969,

DOCKE;T NUMBER U-2193

In the m a t t e r of revised water rate schedules for General Water- works Corporation, Pine B l u f f , Arkansas.

The revised t a r i f f rate schedules f i l e d by General Waterworks Corporation on March 20, 1969, be s e t aside and wi thou t effect by reason of being superseded by the rate schedules subsequently f i l e d on May 7, 1969.

The rate schedules filed by General Waterworks Corporation on May 7, 1969, are suspended for a p e r i o d of ninety (90) days f r o m the prqposed effective date of said rates.


This 21st day of May, 1969. I

P. 54 I



In the matter of the application of Arkansas Valley Electric Cooperative Cedarville Substation for certificate of convenience and necessity for the construction, operations, and maintenance of an electric transmission l i n e and transmission line fac i l i t ies .

I t is in the public interest to grant the application.

IT IS, THEMFORE, ORDERED:

Arkansas Valley Electric Cooperative Corporation be, and it is hereby, granted a certificate of convenience and necessity to construct, maintain and operate a substation and 1 1/2 m i l e s of transmission electric line and faci l i t ies in and through'- area previously allotted it in' Crawford county, Arkansas, ge'nerally known as Cedarvflle Substation.

I

Within sixty (60) days from the completion of the construction herein authorized, the Company shall file w i t h the Commission a report showing the date the project was completed, cost of construction, and a l l substantial changes, if any, in ac tua l con- s t ruc t ion from that originally proposed.

This order shall be in f u l l force and effect f r o m and after date of issuance.

BY ORDER OF THE COMJ%ISSXM

This 22nd day of May, 1969.

DOCmT NUMBER U-2195

In the matter o€ the filing of Munfciap Adjustment Rider, Rate Schedule Ml6, by the Arkansas Power & Light company.


1, Arkansas Power & Light Company's Municipal Adjustment Rider Rate Schedule M16, Eiled on April 18, 1969, is hereby approved, and good cause has been shown to make sa id Schedule effective immediately.

2. customers in any municipality, the company shall subnit to the Comiss ion a written report advising the Commission of the

Prior to any i n i t i a l b i l l i n g s under R a t e Schedule M16 to

P. 55

Schedule "6 " Page 13 of 41 Pages

i d e n t i t y of the municipality in which R a t e Schedule M16 w i l l be applied and set t ing forth the amount of the excess municipal tax or imposition, the additional expenses associated thsrewith, and the method of calculating the adjustment on the customer's b i l l s to enable the C o d s s i o n to review such calculations. T h e Com- pany shall also provide any additional information w h i c h the Staff or the commission may request.

3 . municipality involved . The information required in I t e m ( 2 ) shal l be supplied the

4. (30) days after any change in the initial billing adjustments under Rate Schedule M16 in any municipality. contain'the same information and be subject to the same requirements as any i n i t i a l report provided for above.

The-Company shall also submit a written report w i t h i n t h i r t y

These reports shall

5 . The amount of addit ional charges to customers affected shall be c lear ly identified on each bi l l .


This 23rd day of May, 1969.

DOC= NUMBER U-2206

In the matter of the a,p,plication of Arkansas Power & Ligh t Corn- pany for a certificate of convenience and necessity to construct, maintain and operate a single-phase, 7620 v o l t distribution l i n e from a point in the NW&, Sect ion 1, T-2-S, R-24-W, southeasterly to a point in the S&, Section 18,. T-24, R-23-W, a11 h , - Montgomery County, Arkansas.

Order dated May 26, 1969 granted authority.

DOCKBT NUMBERS U-2200 and U-2201, Consolidated

In the matter of the application of First Elec t r ic Cooperative Corporation for a certificate of convenience and necessity to construct transmission l i n e s in Perry and Conway Counties, and to construct switching l o t facil it ies, a transmission l i n e and sub- s t a t i o n facilities in Lanoke County, Arkansas.

Order dated May 26, 1969 granted a certificate of convenience and necessity.

P. 5 6

Schedule ''6'' Page 14 of 41 Pages


In the matter of the application of Al l i ed Tehphone Company of Arkansas, Inc. (a ) for authority to enter into an agreement amending the consolidating tele,phone loan contract between Allied Telephone Company of Arkansas, Inc. and United S t a t e s of America dated December 30, 1967; (b) for authority to borrow f r o m the United States of America a s u m n o t in excess Df $1,140,000 and to execute and deliver notes in evidence of such loan; (c) and f o r other purposes.

Order dated May 2 9 , 1969 granted authority.

DOCKET NUMBER U-2180 I

Tn the m a t t e r of the application of Odell Smith for himself and as representative of a class of persons who are members of Teamsters Local 8 7 8 , a voluntary unincorporated association a f f i l i a t e d w i t h the International Brotherhood of Teamsters, Chauffeurs, Ware- housemen and Helpers of America, constituting in excess of 25 public u t i l i t y users for an investigation of Gross-Net Bi l l ing Rider, R a t e Schedule M15.

O R D E R

On Movember 2 7 , 1968, Arkansas Power and Light Company, referred to hereinafter as "Company", filed a tar i f f titled "Gross-Net Billing Rider, Rate Schedule M-15". The tariff would apply to practically a11 customers except sales to customers f o r resale and would provide a penalty against each customer whose b i l l has not been paid within 14 calendar days after the date of the Company's billing. The penalty proposed was 10% of the f irs t $15.00 plus 2% of the net bill amount in excess of $15.00.

Interventions were filed by Odell S m i t h for himself and as representative of persons who a r e members of Teamsters Local 878, and by the Legal A i d Bureau of Pulaski County, Arkansas. The latter requested that the Commission reject the t a r i f f as filed by the Company.

The Commission suspended the tar i f f and the matter was heard before the f u l l Commission on January 31, 1969, and February 10, 1969. Numerous exhibits were introduced and 339 pages of t e s t i - mony were presented.

P. 57

Schedule "6 " Page 15 of 41 Pages

On May 9 , 1969, the Commission entered an order approving the Gross-Net B i l l i n g Rider filed herein, but reduced the 10% to 8% on the first $15.00, and required written reports,

On June 2, 1969, the Petitioner filed a ''Petition for Review, Re- consideration, and Notice of Ap-peal. ''

After considering the p e t i t i o n to review, the Commission is of the opinion that same should be denied.


That the P e t i t i o n for Review and Reconsideration is hereby denied.


This 2nd day of June, 1969.


In the matter of the application of Liberty Telephone Company to borrow f r o m Stroderg-Carlson Corporation a sum not to exceed $425,000.00.

Order dated June 4, 1969 granted a,pprwal.


In the matter of the a,pplication of Liberty Telephone and Commiznications;".~~Inc. to bok*& f r o m Stromberg-Carlson Corporation a sum not'to exceed $1,580,000.00.

Order dated June 4, 1969 granted approval.


In the matter of service by Arkansas Louisiana Gas Company to Sromet Company under PSC Schedule 3-IND (41).

IT IS, THEFSFORE, ORDERED:

Arkansas Louisiana Gas Company PSC Schedule 3-IpJD (411, consisting of a Contract between Arkansas Louisiana Gas Company and Brmet Company, dated January 27, 1969, be and the same is hereby

P. 5%


a,pproved; and said Contract in its entirety be, and it is hereby, ap.proved, and in accordance with the terms of *e Contract , f o r the duration thereof, Arkansas Louisiana Gas Company will sell and Brornet Company w i l l purchase gas as set forth therein.

This Order shall be in f u l l force and effect from and after the d a t e of its issuance.

BY ORDER OF 'EE COMMISSION

This 9th day of June, 1969.


Xn the matter of the applicatibn' of Southwest '*Arkansas Electric Cooperative Corporation for a certificate of public convenience and necessity authorizing it to construct, own, operate and maintain a certain 69 KV transmission line in LaFayette County, Arkansas.

Order dated June 13, 1969 granted a certificate of convenience and necessity.


In the matter of the application of the Town of Cash, Arkansas and Arkansas Louisiana Gas Company for authori ty for said town to construct , maintain, and operate a natural gas transmission line and faci l i t ies for the distribution of natural gas w i t h i n said town and rural areas adjacent thereto-and d j a c e n t to said transmission l i n e , and fo r authority fpr Arkansas Louisiana Gas Com- pany to lease, aperate and purchase said natural gas transmission l i n e and distribution facilities

.

Order dated June 13, 1969 granted authority.


The rate schedules f i l e d by Arkansas Western Gas Company, with the Conmission on May 2 9 , 1969, b.e and are hereby, suspended f o r a period of ninety (90) days f r o m June 29, 1969.

f i l e d

P. 5 9

Schedule “6 Page 17 of 41 Pages

BY ORDER OF THE COMMlSSfON

. -


DOCKET WUMBER U-2209

In the matter of the application of Arkansas Western Gas Company for authority to issue securities.

IT IS, THEREFORE, ORDMiED:

Arkansas Western w as Company be, and it is hereby, authorized to borrow up to $2,OQQ,000.00, and to issue its promissory note or notes therefor, said notes to mature not later than 36 months from the date of Issuance, a l l as described in the aforesaid application.

Within t h i r t y (30) days after the consmat ion of the issuance of securities herein authorized, Arkansas Western Gas Company shall f i le with the commission its verified report showing the e n t r y or entries on i t s books that reflect such issuance of the securities authorized herein, together w i t h such other information relevant thereto as the cormnission may require.

Nothing herein shall be construed as a f inding of values of prqperty fo r rate making purposes and the Company shall continue to render gas service at the rates now approved and on file with the Commission u n t i l changed by l a w f u l authority.

This ,order shall be in f u l l fprce and effect f r o m and after i date of issuance.




In the matter of the application of R i c e B e l t Telephone Co., Inc. , for authority to borrow $60,000.00 f r o m Stroderg-Carlson Corpora- tion.

Order dated June 3 0 , 1969 granted authority.

P. 6 0



In the matter of the joint application of Barl ing Water Com,pany, an Arkansas corporation, for au thor i ty to sell and transfer and purchase public utility properties.

Order dated July 8 , 1969 granted authority.


In the matter of the petition of Granveilb Westfall and eleven others to reallocate telephone service area.

In February, 1969, twelve residents of Howard County, Ukansas, ' . "all r e s i d i n g - i n territory allocated by this Commission to A l l i e d

Telephone Company of Arkansas, Inc. (hereinafter referred to as Allied), f i l e d a petition asking for service from Southwestern Be11 Telephone Company (hereinafter referred to as B e l l ) .


That the prayer of the petition be, and it is hereby denied and the petition is dismissed.

BY ORDER OF THE COPIFIISSION

This 9th day of July, 1969.

DOCKET NUMBER V-2191

Application of Southwestern Electric Power Company {€ormerly Southwestern Gas and Electric Company) for Commission authori ty to pass on a certain portion of street rental tax imposed by the C i t y of Wilton, Arkansas, on Southwestern Electric Power Company, and appeal by sa id company from Ordinance No. 1969-3, passed and ap,prwed by the C i t y council of the city of Wilton, Arkansas, March 6, 1969.


1. Southwestern Electric Power Company should be, and is h e r e y , ordered and directed to pass on proportionately to i t s electric consumers, domestic and commercial, residing within the corporate limits of the c i t y of Wilton, Arkansas, any additional street rental or franchise tax in excess of 299 h p s e d b y s a i d City.

P. 6 1

Schedule “ 6 ” Page 19 of 41 Pages

2 . Southwestern Electric Power Company should be, and it is hereby directed to s e t up as a separate item on each monthly b i l l i n g for service to its domestic and commercial customers residing w i t h i n the city limits of the City of Wilton, Arkansas, any addit ional street rental or franchise t a x mer and above 2% imposed on the Company by said C i t y .

3 , should be and is hereby validated and authorized by the Commis- sion and said Company should report to this Conmission w i t h i n a period of s ixty days f r o m the effective date hereof its actions taken pursuant to this order.

The procedure outlined above is in the public interest and

This order sha l l be in f u l l force and effect from and after date of its issuance.

BY ORDER OF THE COMMlSSfm



In the matter of the application of Arkansas Val ley Electric Co- operative Oak Grove Substation and transmission l i n e , for certificate of convenience and necessity for the construction, operations, and maintenance of an electric transmission line and transmission l i n e facil it ies.

Order dated July 18, 1969 granted cer t i f icate of convenience and necessity. ,

DOCKET NUM3ER U-2212

In the matter of the application of Arkansas Louisiana Gas Com- pany, a corporation organized and existing under the l aws of the S t a t e of D e l a w a r e , to execute and deliver a t en th sup,plemental indenture supplemental to its existing indenture of mortgage and deed of trust dated as of Septeniber 1, 1953, and to create a lien upon ita property in the State of Arkansas, a l l h connection w i t h the issuance and sale of $30,000,000 principal amount of i t s first mortgage bonds.

Order dated July 22 , 1969 granted authority,

P. 6 2

Schedule "6 I' Page 20 of 4 1 Pages

DOCH3T NUMBER U-2185

In the matter of an investigation of Walnut H i l l Telephone Cmpany .

SHOW CAUSE ORDER

This Commission has, over a long period of time, received numerous complaints and petitions concerning the lack of tele,phone service in areas in and around the Mars Hill Comuni ty t the Saratoga Community, the Arkinda Comunity, the Alleene Cornunity and the M c K a m i e Comunity, a l l located in t e r r i t o r y allocated to the Walnut Hill Telephone Company, and if these complaints are meritorious the Public's interest would seem to warrant Commis- sion action.

IT IS, THEREFORE, ORDERED THAT:

Walnut Hill Telephone Company be, and it is hereby ordered to appear before this Commission at 9:30 a,m., Tuesday, March 18, 1969 in the hearing room of the Commission, Justice Building, Little Rock, Arkansas and show cause, if any it has, why i t s certificate of convenience and necessity should no t be revoked for a l l or part of the territory presently allocated to it for service, or other appropriate action by the Commission.

I

BY ORDER OF T m COMMISSIa

This 13th day of February, 3969.

IT IS, TIXRBFORE, ORDERED:

T h e Walnut Hill Tele-phone Company will offer to the customers in and around Alleene four-pasty telephone service w i t h i n two weeks from the 15th of July, 1969.

The Walnut Hi13 Telephone Company will offer single-party service in the initial rate areas and four-party service outside of the i n i t i a l rate areas of Saratoga, Millwood Dam, south of Saratoga on Highway 32 by Deceaer 1, 1969.

The Walnut Hill Telephone Company is directed to begin the ex- tension of service to the customers south of Saratoga on Highway 355 immediately following December 1, 1969 or before if possible.

P. 63


T h i s case is s t i l l pending before the Commission and this Order shall be considered by the commission as an Interim Order and m a y be changed in any manner by the Commission upon the final determination of the case.

BY ORDER OF TEE3 CCMMISSION


D0C-T WMBER U-2197

In the matter of petition of Granville Westfall and eleven others to reallocate telephone service area.

O R D E R

Now, on this day is presented to the Cammission the Petition fo r Rehearing filed in this docket J u l y 29, 1969.

A f t e r due consideration the Commission is of the opinion tha t said Petition for Rehearing should be denied.


Pe t i t ion for Rehearing filed in th is docket July 29, 1969 be, and the same is hereby, denied,


This, the 30th day of July, 1969.

DOCKET NUM3ER W-2215

In the matter of the application of Arkansas Telephone Company, Inc. to boxrow $772,000.00 from United States of America.


The Arkansas Telephone Com,pany, Inc, is hereby authorized to borrow from the United States of America a sum not in excess of $772,000.00, which is to be advanced under the terns and conditions set for th in the Amendment to Telephone Loan Contract and it is authorized to execute the said Amendment to Telephone Loan Contract, the Mortgage Mote and the Supplemental Mortgage and Security Agreement in substantially the form as introduced in

P. 64

Schedule “6 ‘I Page 2 2 of 41 Pages

th is proceeding other documents such borrowing.

as as

Exhibits 3, 4 and 5 , respectively, and such may be reasonably required in connection w i t h

The proceeds aris ing from the borrowing shall be used and applied f o r the purposes hereinabove set out.

The Company is hereby directed to furnish the Commission w i t h a copy of each Financial Requirement Statement - Form 481 - together with a copy of the supporting data at the t i m e such form and mpporting data are f i l e d w i t h the Rural Electrification Adminis- tration.

Nothing herein shall be construed as a finding of t h e value of the.Oompanyts properties for rate making purposes, pany shall provide service at its approved rates until changed by lawful authority.

and the Cam-

T h i s Order shall be in full force and effect from and after the d a t e of i t s issuance.

Order dated August 25, 1969.

DOCKET FdUMBER V-2214

In the matter of the application of Southwestern Electric Power Company €or a certificate of public convenience and necessity authorizing said company to rebuild and reconductor two certain existing electric transmission l i n e s , which sa id l i n e s and the Work to be done on them are described w i t h par t icular i ty herein.

Order dated Septeder 23, 1969 granted certificate of public convenience and necessity.

In the matter of the application of Arkansas Power & Light Com- pany for a certificate of convenience and necessity to construct, maintain and operate a 161,000 volt transmission l ine from the exist ing Dardanelle Substation, northwesterly to the United S t a t e s Government owned Dardanelle Dam Substation and from said substa- t i o n northeasterly to the company’s existing Bussellville South Substation, a l l in Y e l l and Pope Counties.

Order dated September 25, 1969 granted a certificate of convenience and necessity.

P. 65

Schedule "6 '' Page 23 of 41 Pages

DOCKET HLM3ER U-2207

In the matter of providing service in the area of Southwest Arkansas Electric Cooperative Corporation,

On May 28, 1969 Southwest Arkansas Electric Cooperative Corpora- tion f i l e d its response to the commission's Show Cause Order, stating that it w a s opposed to the reallocating of the above described territory and that it was ready, willing and financially able to serve the involved t e r r i t o r y .

On June 24, 1969 a hearing was held in the Hearing Room of the Arkansas P u b l i c Service Commission and Southwest Arkansas Elec- t r i c Cooperative Corporation stated that it was ready, willing and f inanc ia l ly able to serve a11 parties requesting service within the above described t e r r i to ry and that it would so serve a l l parties.

*.'

The Commission has carefully reviewed the Show Cause Order, t h e Response, and the testimony of the hearing held on June 24, 1969, and being well and suff ic ient ly advised in the premises finds that a dismissal of the Show Cause proceedings would be in the public interest.

IT IS, THEREFORE, OWERED THAT:

The Show Cause Order proceedings h this Docket are dismissed.



In the matter of revised water rate schedules for General Water- works Corporation, Pine Bluff, Arkansas.

The Commission employed an inde-pendent rate expert, Mr- James M, Honaker, of Frankfort, Kentucky, to assist the S t a f f in the in - vestigation of Ap,plicant's records and t h e reasonableness of the proposed new rate schedules, During the months of May and June and the €irst hal€ of July, 1969) the S t a f f and Mr. H m a k e r requested and received €ran the Company detai led financial, property and operating data and made a careful examination and analysis of Applicant's property records, operating statements, construction work orders and other pertinent records.

P. 66

Schedule "6 I' Page 24 of 41 Pages

A f t e r having considered a11 of the testimony and the exhibits and the various €actors w h i c h the evidence reflects should be considered in allowing a fair re turn to the applicant, the Camis- sion finds that t he earrhgsdeficiency of the Company for the test period, pro forma, is $192,821.00 and that the rates deficiency of the Applicant is $388,847.00,


1. T h e Applicant is e n t i t l e d to an increase in i t s rates which will increase its gross revenues on an annual basis in the amount of $388,847.00 ,

.2. The rate schedules filed May 7, 1969, are designed to y i e l d 'a 5%. increase fn revhnue's- over' and 'above the Applicant #--s exist- I

ing rates, or $501,000.00 per year, and such rate schedules are re-jected. I

3 . Applicant shall f i l e rate schedules designed to increase its gross revenues on an annual basis in the amount of $388,847.00. Upon approval thereof, such schedules shall become effective forthwith and shall be applied to the first b i l l i ng to a l l customers following such approval, with the provis ion that the Applicant withdraw PSC Schedules Nos, 5, 6 and 7 which are presently applicable to the Watson Chapel area only.

4. The Commission retains jurisdiction of this proceeding for such further orders as may be deemed necessary.

This Order shall be in f u l l force and effect from and after the date hereo€.

BY ORDER OF THE COMMISSIm

This 16th day of October, 1969.

On October 15, 1969, the Commission entered i t s order finding t h a t General Waterworks Corporation (hereafter ca l led "Applicant ' I ) was experiencing an earnings deficiency and ordered the Applicant to file new rate schedules designed to increase i t s annual gross revenues in the amount of $388,847.00.

On October 20, 1969, the Applicant complied by f i l i n g new rate schedules purporting to meet the revenues deficiency cited The

P. 67

Schedule "6 It Page 25 of 41 Pages

Commission's S t a f f has reviewed these schedules and f i l e d a report w i t h the commission.

A f t e r consideration, the Comiss ion f inds that Applicant's new rate schedules are in compliance with its Order.


Applicant's rate schedules f i l e d on October 20, 1969 be, and they are hereby ap,proved.


This 22nd day of October, 1969.


In the matter of application of Arkansas Power & L i g h t Company for authority to issue and sell $25,000,000 principal amount of first mortgage bonds under the terms of its mortgage and deed of t r u s t dated as of October 1, 1944, and seventeen supplemental indentures previously executed and delivered and an addi t iona l sup,plemental indenture thereto to Be executed and delivered as of December 1, 1969.

IT IS, THERF,FORE, ORDERED:

Arkansas Power & Light Company be, and it is hereby, authorized, upon obta in ing an appropriate order from the Securities and Exchange Commission authorizing the proposed transaction, (a) to $ssue and sell at competitive bidding a new series of First Mortgage Bonds' in the aggregate principal -amount of $25 , 000, 000,OO to be secured by i t s presently existing Mortgage, as supplemented, to mature December 1, 1999, to be so ld at no t less than the .princi,pal amount thereof, and to bear interest at a r a t e and redemption prices to be determined by the accepted b id f o r the bonds under the rules and regulations relat ing to competitive bidding promulgated by the Securities and Exchange Cormnission under the provisions of the P u b l i c Utility Holding Company A c t of 1935; and (b) to execute and deliver to the Trustees under sa id Mortgage an Eighteenth Su.p,plemental Indenture to be dated as of December 1, 1969, in substantially the form on file with this Commission.

The proceeds realized from the sale and issuance of t he said First Mortgage B o n d s , a s herein authorized, sha l l be used €OK the purposes set out above in this order.

I I P. 68


Within s i x t y ( 6 0 ) days after the c o n s m a t i o n of the foregoing transactions, the Company shall file with this Comission verf- f ied copies of the journal entries recording said t ransact ions upon i t s books, and such other information as the Commission may require a

Nothing herein contained shall be in any wise construed as a finding of value of the properties of the Arkansas Power & Light Com- pany or as a determination of income or expenses of the Company for rate making purposes.

The Commission hereby retains jurisdiction in this matter and of the party hereto for the purpose of issuing such €urther orders as m a y be deemed appropriate.

This order s h a l l be in f u l l force and effect f r o m and a f te r date of its issuance.

BY ORDER OF THE: COMMISSION

This 27th day of October, 1969.


In the matter of the agplication of Arkansas Power & Light Com- pany for a certificate of convenience and necessity to construct, maintain and operate a I15,OOO volt double circuit transmission l i n e from a p o i n t on the existing Lynch-Newpost 115 IN line, southeasterly to the proposed Jacksonville South Substat ion s i t e , and one. substat ion, in Pulaski county.

.. .

Order dated October 31, 1969 granted a certificate of convenience and necessity.


In the matter of the ap-plication of Arkansas Power & L i g h t Com- pany for a certificate of convenience and necessity to construct, maintain and operate a 115,000 volt transmission l i n e from the existing El Dorado EHV Substation north and east to a point of connection w i t h existing line which extends north and east to the existing Warren Substation, a l l in Union, Calhoun and Bradley counties.

Order dated October 31, 1969 granted a cer t i f icate of convenience and necessity.

P. 6 9

Schedule " 6 Page 27 of 41 Pages


In the matter of the merger o€ Arkansas S t a t e Telephone company, Bald Knob Telephone Company, Benton County Telephone Company and Pea Ridge Telephone Company i n t o Western Arkansas Telephone Com- P m Y

On October 10, 1969, a joint Application was filed w i t h the commission by Arkansas State Telephone Company (Arkansas S t a t e ) , Bald Knob Telephone Company (Bald Knob), Benton County Telephone Company (Benton County), Pea Ridge Telephone Company ( P e a Ridge) and Western Arkansas Telephone Company (Western) requesting authority to merge Arkansas Sta te , Bald Knob, Benton County, and Pea Ridge into Western.

On October 2 0 , 1969, an Amendment to Application was f i l e d requesting that the Application be amended to delete the request t h a t Bald Knob be merged into Western.

IT IS, THEREFORX, ORDEflED THAT:

The merger of Arkansas S t a t e , Benton County and Pea Ridge into Western, the latter being the surviving corporation, is hereby authorized and approved to become effective at the close of business on December 31, 1969.

The surviving corporation, Western, is hereby granted a C e r t i f i - ca te of Convenience and Necessity authorizing it to provide telephone service within the service areas heretofore al located to Arkamas State, Benton County and Pea Ridge, and AEkansas State, Benton County and Pea Ridge are relieved of the obligation. to provide telephone service therein.

The surviving cor~ioration is hereby directed to keep a l l records of the original costs o€ the properties of the companies herein merged until fur ther orders of this Commission.

Within t h i r t y (30) days after the effective date of the merger herein authorized, Western shall f i l e w i t h this Commission a verified report setting for th a l l of the entries upon its books and accounts reflecting the c o n s m a t i o n of the merger.

Nothing herein shall be construed as a f inding of value for rate making purposes or for the issuance 01: exchange of any security

P. 70

schedule "6 *I Page 28 of 41 Pages

not specifically authorized and Western shall continue to charge the rates now on file and approved by this Comission for Arkansas State, Benton Coun ty , Pea Ridge and Western until changed by law- f u l authority.

This order shall be in f u l l force and effect f r o m date of issuance.

BY ORDER OF TKE COMMISSION

This 31st day of October, 1969.


In the matter df .a -show cause order against Arkansas Plissouri Power Company, et al.

O R D E R

The Arkansas Public Service Commission has historically followed the policy that a utility may charge but one rate for a particu- l a r service, and that any unreasonable discrimination between customers as to the rate charged for the same service under l ike conditions is improper. A corollary of this policy against a i s - crimination is t h a t no special rate should y ie ld a greater or less compensation for service rendered than the utility receives for a like service to other rate payers unless a strong showing is made for a different classification. The Commission's S t a f f , in a comprehensive review of tariffs filed w i t h the Commission, has found a number of tar i f fs with features which m a y produce an unreasonable discrimination against customers using the same amount of power but who, because of their failure tu meet the specific qualifications or possess the specific equipment s e t out in the tariff, must pay more f o r the same or similar service. It appears that legitimate rate design objectives, such as level- ing loads and encouraging off-peak consumption, can be obtained by the substitution of nondiscriminatory t a r i f f s .

IT IS, THEREFORE, ORD-D:

T h e Companies l i s t e d below show cause why the designated tariffs should not be ordered withdrawn as unreasonably discriminatory by the Arkansas Public Service Commission.

P. 71

Schedule "6" Page 29 of 41 Pages

ELECTRIC COMPANY

Arkansas-Missouri Power Co.

Arkansas Power & Light Co.

Arka Valley E l e c , Coop.

( P . S . C . 2 0 ) - Availability contingent on heat pump or re- sistance heating

( M - 4 ) - Application cont ingent on customer possessing special equi,pment

(M-3) - Availability contingent on i n s t a l l a t i o n of special equipment

(A-1) - Avaflability o o n t h g e n t on customer's exclusive use of electric space heating equipment

(A-2) - Availability requires customer to i n s t a l l space heating equipment, and is lower than the rate under Schedule A-1

( A m ) - Conditions of service require the customer have an electric water heater and not have non-electric water heating devices

(OHC-1) - Special conditions .. , in- elude certain eqqipnent

(OR-1) - Special r a t e f o r elec- t r i c water heating service

(OHC-3) - S i m i l a r to ( O X - 1 ) conditioning off-peak rates on the customer's possession of specif ic equipment

(SR-11) - Special rate for customers using s.pecific equipment

(SR-3) - Availability of rider cont ingent on customer posses- s ion of special equipment

P. 7 2

Schedule "6 LI

Page 30 of 41 Pages

ELECTRIC COMPANY

Ashley Chicot E l e c . Coop., Inc.

(SHC-1) - Availability conditioned on special equipment and separate meters

(SHC-11) - Availability con- t ingent on customers having spec ia l equi,pent

(SHC-2) - Availability contingent on customers possessing special equipment operated on a special circuit

( P . S . C . 2 ) - Availability contingent on use of a water heater and a prohibi t ion in condi t ions of service against non-electric water heating devices

(P.S.C. 3 ) - Availability con- t ingent on customers having an installed specif ic electric heating device

N o t e : T h e challenged portions of the tariffs l i s t e d below for all companies are illustrated by those feature i d e n t i f i e d in the tariffs listed above.

C & L . E l e c . Coop. corp. ( P . S . C . 3 ) ( P . S . C . 4)

Carroll Elec. Coop. corp. ( P . S . C . 1-A) (P.S.C. 1-B)

Citizens Light & Power CO. ( P . S . C . 1-B) ( P . S . C , R - 1 )

C l a y Cty. E l e c . Coop. corp. (P.S.C. 2 ) ( P . S . C . 3 )

Empire D i s t . Elec. Co. (3 -3 ) (1-10)

Farmers Electric Coop. C o r p . Gard-a-Lite Service Promotion-Electric Heat

P. 73


ELECTRIC COMPANY TARIFF

First E l e c . Coop. Corp. (P.S.C. 1) (P.S.C- 2 ) ( P . S . C . 3 ) ( P . S . C . 4) ( P . S . C . 7 )

Mississippi Cty. E l e c . Coop., Inc. { P . S . C . 1)

North Arkansas E l e c , Coop, ( P . S . C . 1) (P,S.C. 2-A) ( P . S . C - 3 )

Oklahoma Gas & Electric Co. (PW-3) (PW-2) (HC-3) (PW-1) (P-1) (HC-1)

Ozark Electric coop. Corp. ( P . S . C . 1) ( P . S . C . 2 ) ( P . S . C . 4-A) ( P . S . C . 3) (P.S.C. 9)

Riceland Elec t r ic coop. (P.S.C. rn] (P,S,C. 4)

Rich Mountain Elec. coop. ( P . S . C . 2 )

South Centra l Ark. Elec. Coop. (A-1) (WH)

Southwestern E l e c , Power Co. ( P . S . C . 4-A) ( P . S , C . 30) (P.S.C. 29) (P.S,C. 1) ( P . S . C . 2 ) ( P . S . C . 3)

WoodFuff Elec. Coop. Corp. (P.S.C. 1-A)

GAS COMPANY TARIFF

Arkansas Louisiana Gas Co. (G-18) (Rider 463-AC) { 2-AC) [Rider G-563-AC) (Rider 13-163) (Rider 263) (G-18M) ( R i d e r 363-ACJ ( P . S . C . 10)

Arkansas-Missouri Power Co. ( P . S . C . 9) (P .S .C. 3 ) ( P . S . C . 1A) (P .S .C . 2 & 4) { P . S . C . 1)

P. 74

Schedule '16" Page 32 of 41 Pages

GAS COMPANY

Fort Smith Gas Corp. ( P . S . C . 5) ( P . S . C . EA-2) (P.S.C. 4) ( P . S . C . EA-3)

It is furkher ordered:

A preliminary hearing on the above captioned matter is hereby s e t at 9:30 a.m., Tuesday, Noveniber 2 5 , 1969, in the hearing room of the Commission, Justice Building, L i t t l e Rock, Arkansas. An examiner designated by the Commission will preside and enter ta in motions for severance, for setting the hearing date, for the Commission's S t a f f to m a k e its objections more de f in i t e and certain, and other procedural matters.

BY ORDER OF THE CONMISSIOM

This 5th day of Noveniber, 1969.

DOCKET NUmE8 U-2225

In the matter of the application of Southwestern Electric Power Company for permission and a u t h o r i t y to issue and sel l $35,000,000.00 principal amount of i t s first mortgage bonds, Series K. %, to be dated December 1, 1969, and to mature December 1, 1999.

Order dated November 6, 1969 granted authority.


In the matter of revisions to the Commission's Rules and Regula- tions in order to establish standards and service objectives for telephone companies.

O R D E R

On November 1, 1969, the C~mmission~s Staff filed proposed standards and objectives for telephone service rendered tu the public in the State of Arkansas.

This proposal is in the form of additions, revisions and deletions to the Commission's current Rules and Regulations on telephone service which were adopted on March 8, 1956.

P. 75

Schedule "6" Page 33 of 41 Pages

A f t e r consideration the Commission finds that a l l telephone companies over which it has jurisdiction should be afforded the opportunity to review the rules proposed and file reports thereon with the Commission. Subsequently the public interest requires t ha t upon due notice a public hearing be held where a l l parties who have interest in the matter may be heard.

IT IS, TmREFORE, ORDERED:

The Secretary to the Commission will forward to each telephone company who renders or offers telephone service in the state, a copy of the staff's proposed rules.

All telephone companies desiring to file reports on these rules w i l l do so not later than November 25, 1969.

A public hearing will be held at 9:30 a.m., Wednesday, January 7, 1970, in the hearing m o m of the Conmission, Justice Building, L i t t l e Rock, Arkansas.

BY ORDER OF TIHE COMMISSION

This 6th day of November, 1969.


Tn the matter of the application of Mountain H m e Telephone Co., Inc., for authority to borrow $600,000.00 from Bankers National Life Insurance Company and Home L i f e Insurance Company; f o r authority to issue and sell to the public in Arkansas 1,000 shares of 6%- cumulatjve preferred .stock: for authority to issue and .sell $100,000.00 aggregate par' value of 6% convertale de- bentures; and for authority to issue and deliver to the corn-pany's common stock holders a stock dividend equal to one share of cornon stock for each ten shares outstanding.

Mountain Home Telephone Company, Inc., be, and it is hereby, authorized to issue and sell to the public in Arkansas 850 shares of 8 3/4% cumulative preferred stock callable after notice as set aut in the Articles of Incorporation of the Company, and in order to consummate said sale, pay a sales commission equal. to 5% of- the sales price.

The s a i d 850 shares herein authorized is in lieu of the 850 shares of authorized, but unsold, 6% cumulative preferred stock,

P. 76

Schedule " 6 tl Page 34 of 41 Pages

the sale of which was authorized by Order of this Commission in th is Docket, dated as of July 16, 1968.

T h e proceeds aris ing from the sale of sa id stock shall be used for the purposes set forth in the findings of the Order of this Conmission dated as of July 16, 1968.

Nothing herein contained shall be construed as a determination of the value of the Company's properties or its earnings for rate making purposes or for the issuance of securities other than those herein authorized.

This order shall be in f u l l force and effect from date of issuance.


This 24th day of November, 1969.


In the m a t t e r of natural gas service rates in Garland County, Arkansas.

IT IS, THEREFORE, ORDEmD:

The prayer of the petitions dated June 5, 1944, and May 7, 1968, be, and the same are hereby denied and the petitions dismissed.

No reduction in the existing rates should be made at t h i s t h e .

The company shal l file annual reports within sixty days following the close of each f iscal year reflecting the rate of return received by it in these areas. for any accumulated deficiency.

Such reports shall make no provisior,

BY ORDER OF THE COMMISSfON


POCKET NUMBER U-2216

In the matter of the application of Arkansas Mobile Telephone Company for a certificate of public convenience and necessity authorizing it to begin to offer, render, furnish, or supply service to the public in and around L i t t l e Rock, Arkansas.

P. 77


IT IS, TEFAEFORE, ORDERED

That the application f i l e d on August 20, 1969 in t h i s case be, and the same is hereby dismissed at the request of the Company.

BY ORDER OF THE CWISSION


DOCKET 'NUMBER U-2213

Tn the matter of the new rate schedules proposed by Arkansas Western Gas Company.

IT 'IS, THEREFORE, ORDERED:

The rate schedules designated as GS-1, PH-1 and IND-A f i l e d w i t h the Commission by Arkansas Western Gas Company on December 3, 1969, are found to be just and reasonable and they are hereby approved effective on the date of t h i s Order.

BY ORDER OF TI33 COMMISSION


In the matter of the application of O t i s L. Hale and South- western B e l l Telephone Company for a u t h o r i t y to provide inter- connected service to the public in and around Pine B l u f f , Arkansas.

Order dated December 4, 1969 granted authority.

DOCKET NUMB= u-2221

In the matter of service by Arkansas Louisiana Gas Company to Olinkraft, Inc., under PSC Schedule 3-IND ( 4 2 ) .


Arkansas Iaufsiana Gas Company Schedule 3-IND (421, consisting of a Contract between Arkansas Louisiana Gas Company and Olin- kraft, fnc. , dated June 25, 1969, be, and the same is hereby approved; and said contract in its e n t i r e t y be, and it is hereby,

P. 78

Schedule "6 ** Page 36 of 41 Pages

approved, and in accordance w i t h the t e r m s of the Contract , for the duration thereof, Arkansas Louisiana Gas company will se l l and Olinkraft, Inc. w i l l p u r c h a s e gas as set forth therein.

This Order shall be in f u l l force and effect from and after date of its- issuance.


This 5th day of December, 1969.


In the matter of service by Arkansas LouisianaCas Company to I '

' I ' RGington ArirtS Cmpany, Inc. , under PkC- Schedule 3-iND ( 4 3 ) .


Arkansas Louisiana Gas Company Schedule 3 I N D ($31, consisting of a Contract between Arkansas Louisiana Gas Company and R@mington Arms Company, Inc., dated June 4, 1969, be, and the same is hereby a.ppsoved; and said Contract in its e n t i r e t y be, and it is hereby, a.pproved, and in accordance w i t h the terms of the Con- tract, for the duration thereof, Arkansas Louisiana G a s C o m p a n y w i l l sell and Remington A r m s Coqpany, Inc. will purchase gas as s e t for th therein.

This Order shall be in f u l l force and effect from and after date of its issuance.

BY ORDER OF THE C0MMISST:oN

This 5th day of Decenfber, 1969.


In the matter of service by Arkansas muisiana Gas company to Dierks Forests, Inc., under PSC Schedule 3-1paD (44 ) .

IT IS, TEEREFORE, ORDERED THAT:

Arkansas Louisiana Gas company Schedule 3-mD (44), consisting of a Contract between Arkansas Louisiana Gas Company and Dierks Forests, fnc. , dated July 10, 1969, be, and the same is hereby ap,proved; and said Contract in its ent irety be, and it is hereby,

P. 79


approved, and in accordance with the terms of the Contract, for t he duration thereof, Arkansas Louiaiana Gas Conpany will sell and Dierks Forests, Inc. will purchase gas as s e t forth therein.

This Order shall be in full force and effect from and af te r date of i t s issuance.

BY ORDER OF THE CoMEIrssIoN

This 5th day of December, 1969.


In the matter of the applicition of Arkqsas Western. Gas Company for a i3'ertificate of convehisnce and ngcessity tb construct, operat@ and maintain a certain natural gas pipeline in Benton County, Arkansas, and to construct , operate and maintain a natural gas distribution system in the Town of Avoca, Arkansas.

Order dated December 12, 1969 granted a certificate of convenience and necessity.


In the matter of the application and petition of Oklahoma Gas and Electric Company for an order authorizing petitioner: (1) to execute, deliver and record a new supplemental indenture to be dated as of January 1, 1970, supplemental to indenture dated February 1, 1945, as supplemented, f r o m petitioner to The F i r s t N a t i o n a l Bank and T r u s t Company of Oklahoma City,,Trustee; and (2) &o issue and sell $30,0OO,bUO principal amount of petitioner's first mortgage bonds, series due January 1, 2000, secured by said indenture, as supplemented, to a group of underwriters at a price which will be not less than 99jj and no t more than 102.75% of the principal amount thereof and at an annual interest rate to be determined by agreement with the underwriters.

Order dated December 19, 1969 g r a n t e d authority.


Application of Carroll Electric Cooperative Corporation for Corn- mission authority to pass on a certain portion of street rental tax imposed by the C i t y of Eureka Springs on Carrol l Electric Co- qperative Corporation, and appeal by said cooperative from Ordinance No. 886 passed and apprwed by the City Commission of the City of Eureka Springs, Arkansas, May 7th, 1968.

P. 80

Schedule ”6 I’ Page 38 of 41 Pages

O R D E R

On July 8 , 1968 an Application was f i l e d with this Conmission by Carroll Electric Cooperative Corporation praying that this Com- mission issue an order preventing unlawful discrimination which ex is ts by virtue of Ordinance 886 passed by the City of Eureka Springs, and that said order pass on proportionately to the members 05 the cooperative within the c i ty limits of the City of Eureka Springs the addi t iona l tax imposed by said ordinance.

On December 17, 1969 the Connnission received a le t ter from J. E. S h p s o n , Attorney for Carroll Elec t r ic Coo-perative Corporation, s t a t ing t h a t the company wishes to w i t h d r a w its application.

IT IS, TEBREFURE, ORDERED

That the application filed on July 8 , 1968 in t h i s case be, and the same is hereby dismissed at the request of the company.

BY ORDER OF T m COMPSISSLOM

This 22nd day of December, 1969.

DOCKET BUM3ER U-2231

In the matter of the application of A l l i e d Utilities Corporation for approval of and authority for (1) the amendment of its Arti-. cles of Incorporation to increase the nuder of authorized shares of cornon stock; ( 2 ) the issuance of additional shares of its common- stock: ( 3 ) the sale of .up to 130,000 shares of, # i t s common stock to Allied Telephone Company; and for other”purposes.


Allied Utilities Corporation be, and it is hereby, authorized to amend i t s Articles of Incorporation to increase the total number of authorized shares of c ~ m m ~ n stock to 300,000 shares, having a par value of $5.00 per share; to issue up to 130,000 addi t iona l shares of i t s comon stock and to sel l such stock to Allied T e l e - phone Company at $ 5 . 0 0 per share par value.

Nothing in this Order shall be construed as a finding by the Con- mission of the value of Allied Utilities Corporation properties for rate-making purposes.

P. 81


This Order shall be in f u l l force and effect from and after date of issuance.

BY ORDER OF THB COMMISSION

T h i s 23rd day of December, 1969.

ADMINISTRATIVE ORDERS

In the matter of revision of Rules and Regulations governing con- s truc thn apd maintendn,&e of pjpelines by gas companies qperating in Rrkansas.

* - .

ADMINISTRATIVE ORDER

On April 11, 1967, the Commission ordered that USA Standard Code for Pressure Pi-ping, USAS B31.8, be establ i shed and prescribed as the "Arkansas Gas Pipeline Code". A t the t h e of issuance of the order the code provisions were set forth in the 1967 ed i t ion of USAS €331.8 as published by the American Soc ie t y of Mechanical Engineers.

Subsequently the American Society of Mechanical Engineers published a 1968 e d i t i o n of USAS 133.8 containing revisions which made the 1967 edition obsolete. Instructional seminars on the new code were held +nd attended by.a repyesentative - of - . th is Corn- mission and by representatives of the gas c&npank operathg i h Arkansas.

The staff of the Commission has conducted an investigation and having determined that the gas companies under the jurisdiction of the Commission are applying the provisions of the latest edi- t i o n of the code, proposes that this latest edition be formally approved.

The Cormnission finds that approval of the 1968 edi t ion of'USAS 331.8 as current standards for design, construction and opera t ion of gas pipe l ines in Arkansas is in the public interest.

IT IS THEREF- ORDERED:

1. That United S t a t e s of America Standards €331-8 - 1968 edi t ion be, and hereby is, approved.

P. 82

Schedule "6 tl Page 40 of 41 Pages

2 . scribed as the standards of the ''Arkansas Gas Pipeline Code", h place of the USAS B31.8 - 1967 edition which w i l l be w i t h o u t effect from the date of this order.

That i t s provisions be and are hereby established and pre-

BY ORDER OF THE CMMISSION this 11th day of March, 1969.

RIVER CROSSINGS

DOCKET NUMBER ' RC-55

In the matter of the petit ion of Texas Gas Transmission Corpora- tion for recognition of the legality of proposed navigable w a t e r cross ing

Order dated March 17, 1969 granted authority.

DOCKET NUIJIBER RC-56

In the matter of the petition of Gulf Central Pipeline Company for authority and approval to construct an overhead or aerial 10 314 inch pipeline crossing Over the Arkansas River at a point near Redfield, Jefferson Countyp Arkansas, approximately 138.5 m i l e s above

Order d8ted

DOC-T NUMBER

the mouth of the Rrkansas River.

April 17, 1969 granted authority.

RC-5 7

In the matter of the application of OMR Pipe Line Company.

Order dated July 22, 1969 granted authority.

DOCKET NUMBER RC-58

In the mattes of the petition of Arkansas Power & Light Company for authority and approval to' construct a 161 KV aerial power transmission l i n e across Arkansas River (Dardanelle Reservoir) at Navigation Mile 201.5 (formerly Arkansas River Mile 258 . O ) , Pope and Yell Counties, Arkansas.

Order dated September 15, 1969 granted authority.

P. 8 3


DOCKET NUMBER RC-59

In the matter of the p e t i t i o n of Arkansas Power & Light company for authority and approval to construct a 110 ACSR conductor, single phase 8 KV aerial tower distribution l i n e across L i t t l e Red River, River M i l e 5.3, Section 31, T 7 N, R 4 W, Whi te County, Arkansas

Order dated October 30, 1969 granted authority.

DOCKET NUMBER RC-60

In the matter of the petition of Arkansas Power & Light Company for authority and approval to construct a 8 .0 EN aerial power distribution l ine- across LittlL Red River a t approximate River M i l e 2.65, White County, Arkansas.

Order dated Decenibsr 12, 1969 granted authority.

P. a4

Schedule "7 It Page 1 of 2 pages .

Long-Tern Debt: Bonds R ,E .A, b a n s (Cooperatives) Other

Current and Accrued Liabiliues: Total Long Term Debt

Notes and Accounts Payable Customer Deposits Taxes Accrued

. Interest Accrued Dividends Declared4ot Paid Okher Current and Accrued bLabi l i ths Total Current and Accrued @abil i t ies

Deferred Credits: fFnammtieed & d m on Debt Customers Advances for Construction Customers Energy Prepayments (Cooperattves 1 Deferred. Income T a x Inveshent Tax Great Other &€erred Credits

T o t a l Deferred Credits

Reseme for Depreciation Reserve for &collectable Accounts Other Resemes (Operating 1

Reserves:

Total Reserves

Gontribukion in Aid of Construction

. .

Proprietary Capital: Preferred Stock Issued G m o n Stock Issued Other Paid In Capital Installment received on Capital Stock Premium on Capital Stock C a p i t a l Stock Expense Hemb er ships (C o opera tivea ) Patronage Capi ta l (Cooperatives 1 Special Equity Items (Cooperatives) Operating k r ~ n s - ~ o r Year (Cooperatives 1

erating Margins-Current Y e a r (Coo eratives) h e n s (Cooperatives 7

(Rounded) Percent Amount of T o t a l

$ 605,650,050 33 .k6% 112,964,631 6-21r 3,241,880 .lF

b 721,856,56'1

3,560,741 .20 8,632,223 $

893,804 ,059 616,117 .03 171,617 .03

69,980,811 3.87 11,873,732 .66

$b

$ 383,915,832 21.2G

$! 386,358,478

816,047 .Os 1,626,599 -09

$ L24,&lJ8O0 6.07% 229,502,215 12.68

k,?13 ,a2 .26 81,285 .01

P. 8 5

Schedule "7 I' Page 2 of 2 pages

Proprjetary Capital (Continued) other mgins (Cooperatives) surplus (Privately h e d )

T o t a l Proprietaq Capital or pllembership E q d t y Total Ltabi l i t i es , Other Credits and

Proprietary C a p i t a l

(Rounded) Percent Amount of T o t a l

$1,809,821,062 lOO.OO%

hformatian used in t h i s statement is based on the entire a l l operations of the companies operating in Arkansas.

system in a l l states of I

P. 86

Schedule It7A I1

ARKclplSAs PUBLIC S m c E CaWISSIoN THZFEPYSIFTH ANNUL REPoFll

ELIXATeU OWNED ZLEXTRIC COM€!UKES STATEXENT OF U 3 I I . J T D S , OTHER C€BDES, A D PRDFRDTARY GAETAL

END OF YEAR - 1968 (Rounded) Percent Amount of T o t a l

Bonds @ 605,650,050 37.11% LOng-Tem Debt:

Other 3,240,oso .20 T o t a l Long-Term Debt 8 408,89O,l30

Current and Accrued Liabil i t ies: Notes and Accounts Payable $ 29,224,200 1.79% C u s t a e r Deposits 8,696,692 -53 Taxes Accrued 293604,964 1-81

Dividends DeclaredAot Paid 5 3 17 539 18 32 In te res t Accrued 8,917,883 0.55

2,9 10,569 18 3 84,530,224

other Current and Accrued UaeiEties

Unamortized Premib on Debt $ 893,804 -6% Deferred Income Tax 69,980,811 4 29

T o t a l Current and Accrued Liabilities Deferred Credits:

Customer Advances f o r Construction 9 5 , W -03

Investment Tax Credit 11,8733 732 13 Other Deferred Credits 734,535 -05

Total Deferred Credits 8 83,988,038 - 3 Z T Re semes:

Reserve f o r DepreciaUon $6 346,487,306 21.23% Reserve for Collection Loss 582,722 .04 Other Reserves (Operating) l3 606,402 .IO

T o t a l Resemes $ 348,676,430 6,625,638 Contribution in Aid of Construction

Proprietary Capital: Preferred Stock Issued $ 124,341,800 7.62% Comon Stock Issued 229,502,215 14.04

Installment Received on Capital Stock 81,285 . :01 Premium on capi ta l Stock 45,6333 547 2480 Capital Stock B p e n s e (423,413) ( . 0 3 ) Surplus 95,310,057 5 - 8 3

Other Paid In capital 4,713,az a 2 9

Tot& Proprietary Capital $ 499,158,633 T o t a l Liabilit ies, Other Credits and

Proprietary Gapikal 81,631,869,093 100.00%

P. 87

STATE"T DE' LUBTLCTIES, OI'FER C m n S , AND EDFRIGfARp GLEJ!kX, EHD D' - 1968

(Rounded) Percent

Bonds # -0- .OM Amount Qf T O k Z

Long-Term Debts :

112,964,631 63 47 Long-Term Debt (R.E 9.) other Long-Term Debt

T o k l Long-Term Debt

Notes and Accounts Payable # 1,685,627 .95% Customer Deposits l47,788 .08'

650 172 .37 Other Current and Accrued bLabiLities

1 800 BTTZ&m*

Current and Accrued Liabtlities:

Taxes Accrued 1,413,607 0 7 9

. . 7.4 . % .- Interest Accrued 204,805

m m T o t a l Cuprent, and Accrued Liabi l i t i es Deferred and Other Credits:

Customer Advances for Construction $ 1 ~ 4 6 1 .06% Gammer k e r ~ Prepaymen6s 171,677 -10 Other Deferred Credits

Reseme f o r Depreciation $ 37,L28,526 21.038

Other Reserrres (Operating 1

340 986 $7&7z+h-

$-* w m ? , l r 4 2

Total Dderred a d Other Credits Re s em e s' :

Reserve for Uncollectable Accounts 233,325 013 20 197

Total Reserves Contribution i n Aid of Gonstructim Membership Q ~ t y :

Mmber ship s $ 1,471,532 -03% Patronage Capital 18,?38,42 10.53 Special %.its Items 140,368 .Os Operating Margin-Mor Y e a r s (95,719) - ( b O s )

Mon-@erating -gin 796,762 -45 0 ther b r g i n 405,476 022

Operating Margin-Current Year 158,754 *og

T o t a l Membership Equity $ 21,625,3g Total LLabiEties, Other Credits and

M a b e r a p E@ty $ 117,951,969 l m = O ~

P. 88

S che dul e 8 Page 1 of 2 pages

ARKIIEAS RBUC SERVICE COMMISSION

ELECTRIC CMXNIBS-ARXBNSCIS Opafg THIRTY-FIE'TH ANNUL REWRT

~ m m m IN m~m-19a O P E R A T ~ G STATISTES Balan z?2be Additions Retirements 12-31-88

Arkansas Electric Co-op. 8 24,6163897 $ 597,545 $6 79,720 # 25,134~722

Arkansas Potrep and L i g h t Go. 548,&7,357 48,498,679 5,321,656 59L984,380 Arkansas Valley Electric Co-op. 10,902,567 1,030,902 464557 2 n, 468 3 897 A s h l e y d h i c o t E lec t r ic Co-op. 2,895,671 115,279 42,789 2,9@,161 I

C. and L. Electric Co-op. 7,925,641 762,577 488,357 8,199,861

Citizens Light and Power Co. 274,074 20,Y 29 I, 350 293,655 Clay County Electr ic Co-op. 5,740,208 72Ll-42 516,235 5,945,115

, lO,O77,213 536,183 ' 221,861 lo,, 391,529 -' CrosseTt Qec i r i c Co. 660,639 61,906 56,741 665,804

Clraighead Electric Co-op.

33,359 1,307,186 ;%;Z 180,665 3,428,137 b p i r e Di s t r i c t E l e c t r i c Go,

f'Li ssi ssippi County Electr ic Co-op, 2,515,666 226,100 195,965 2,5&,801 Worth Arkansas E l e c t r i c Co-op. 8,471,121 1,494,633 8G, 176 S,lSO, 578 Oklahoma Gas and Electr ic Co. 34,869,686 2,494,390 229,907 37,134,169

Ozmk Elec t r ic co-op. 7,990,423 1,680,663 173,162 9,497,924 Petit Jean Electr ic Co-op, 3,906,615 39097 19 80,406 4,296,P 28

South Central Ark. Elec Co-op. 2,831,786 217,005 44,679 3,0Qh,L12 Southwest Ark. Electr ic CO-OP. 8,564,621 I, 367,988 164,125 9,7a,484

woodruff E l e c t r i c Co-op. 12,374,648 473,508 138,850 32,709,308

Arkansas Missouri Power co. 19, L l l , 866 I, 031,781 203,518 20,240,129

Carroll Electr ic Co-op. 11,127,355 9L4,447 208,473 11,833,329

.I, 189,480 Farmers Electric Co-op. 3,334,788 Fimt E l e c t r i c Co-op 12,091,773 2,174,513 1,@4,UO 13,1823a6

Ouachita Elec t r ic Co-op. 3,748,764 917,763 116,112 4,550,415

Ricehnd Electric Co-op. 2,866,242 183,8fi 45,758 3,004,299 Rich % ~ ~ t a i n ELectrjc CO-OP. 2, S4,648 L97,526 Sa, 062 2,293,112

Southwestern Power Go, 413m,40S 5 , Ox, 4.41 572,287 46,0Q2,559

T ~ t a l

Number of Customers Residential C omercial Industrial Other

Tota l

OPERATING STATISTICS Percent

1968 1967 Qlange

54L, 542 533,196 2 13% 67,487 66,281 1.82 6,333 6,045 4.76

P. 89

Schedule '*a *' Page 2 of 2 pages

ARKANSAS m L I c SERVICE C O ~ S S I O N THIRTY-FIFTH AWML WipOFtT

ELEGTXC COMPAWIES4RKAlGAS ONLY INVESTMENT IN fLAEJT-1968 OPE3ATIMG STATETICS

Percent 1968 1$6? Change

OERATING STATISTICS (Continued)

M.K.W.H. Sold Residential C m e r c i a l hdus t ri a 1 Other

Total

C m e r c i a l Industrial Other

T o t a l

Average Revenue Per Customer Per Year Rasjdential Comer cial Industr ia l Other

Average K.W.H. Per Customer Per Year He si d enti a1 C m e r c i a l Industrial . , .

Other

2,833,818 2,390,4lO 18 55% I. 698 + 26 1 I, 517,!%2 l l . 9 1

47; 822; 609 43; 330; 513 10.37 31,699 U3 26 723 090 B.62 -972Tmm5 11.72%

123.00 $ 112.23 9 60% 5t9 0 00

5,186-00 3,703.31 40.04%

516. J-0 6.38 ?,!%LOO 7,168.00 5.34

$6

5,204 4,483 16. o8k

85O,lh? . 820,639 2 A0 721,850 449,125 ' 62.%%

25,164 22,896 9 m91

P. 90

Schedule "8A ''

Balance 3alanc e

Arkansas Missouri power Co. Arkansas Power and Light Go, Citizens Power and L'ight Go. Crossett E lec t r ic Co, Ehpire District Electr ic co, 0kWm-w Gas and Electric co. Southwestern Power Co.

T o t a l

Nunber of Customers: Re si denti a 1 Commercial Industrial other

T o t a l

M ,K.W JI. Soldr Residential Commercial Industrial Other

T o t a l

Commercial Must r ia l Other

Total

1-1-68 Additions fletirernents 12-31-68 1,031,781 8 203,518 $ 20,2,$0,129

1968 STATISTICS Percent

Average Revenue Per Customer For Year: Hesidential Commercial Industr ia l Other

Average K.W.H. Par Custmer For Year: Re si d enti a1 Commer cia1 Industria1 Other

1968 19 67 Change I

4m,m 393,198 1.97% 59,683 58,856 1.41

5,926 59a4 4.26 2' 237 2; 190 2.15 -T&m b59 ,9 28 1493%

. .. .

122.00 $ u2.00 8 *93$

7,618.00 7,223.00 5.47 ll,Og3.00 8,866.00 25.12%

4.38 $

584.00 549 00

51 237 4,542 15 30% 26,795 24,373 9.94

I, 573,403 1,031,666 52 5 s 874,751 851,007 2479

P. 91

Schedule W3'' Page 1 of 2 pages ABKANSAS PUBLIC SERVICE CCMNISSION

THIXTYSIFTH ANNUAL REmW EUCTRIC COOPERATIIBS - ARKAWS ONLY

lNF,STMENT IN FIANT - A N D OPEF1ATING STATISTICS

Bahnce Balance 1-1-68 A ddi ti ons Re ti rements 12-3 1-68

Arkansas Electrh Co-op. $ 24,616,897 $ 597,545 19,120 $ 253134,722 Arkansas valley Elecfr i c b o p . 10,902,567 1,030,902 464,572 u,L68,893

C , & L. Elec t r ic Co-op. 7,925, m 762,577 488,357 8 3 19 9,861 C a r r o l l Electric Co-op. 31,127,355 sa, 447 208,473 11,833,329

Ashley-Chicot E l e c t r i c Co-op. 2,895,671 115,279 42,789 2,968,161

clay County Electr ic Co-op, 5,740,208 121,42 516,235 5,945, Craighead Elec t r ic co-op. ' 10,077,2U 5 3 6 3 3 221,867 10,391,529 Farmers Elec t r ic co-op . 3,334,788 2 7 4 , a 180,665 3,428,137 F i r s t E l e c t r i c Co-op. 12,091,713 2,174,513 1,084,140 U,D2,a6 Mississippi Coun ty Elec t r ic Co-op. 2, ss, 666 226,100 195,965 2,545,801 North Arkansas Electric c 0-op. ' 8,471,121 I, 494,633 8 43 17 6 9 150,57 8 Ouachita Electr ic CO-OP. 3,148,7& 917,763 116,112 4,550,415

, 7,990,423- 1,680,663 173,162 9,497,924 80,406 - 4,298,928

Ozark Elec t r ic Co-op.

Rich Momtain E l e c t r i c Co-op. 2, G4,648 197,526 59,042 2,293,112 South cent ra l Electric Co-up. 2,831,706 2 1 7 , W 44,679 3,004,112

Woodruff E l e c t r i c Co-op, 473,508 138,850 12,709,3M

Petit Jean E l e c t r i c Co-op. 3,986,615 390,719 R i c e h d Electr ic Co-op. 2,a&,w 183,815 45,758 3,004,299

Southwest Arkansas Elec t r ic Co-op. 8,564,621 I, 357,988 164,125 9,768,484

Total

briber of Custmers: Re si. dential Commer c i a 1 Industrial . - Other

, >

Total

M.K.W.H. Sold: Residential b m e r c i a l Industrial Other

T o t a l

SPAT IST ICs Percent

19 63 1967 Change

L43,584 l39,998 2.56% 7,804 7,425 510

12.74

P. 9 2

Schedule '!8Bt1 Page 2 of 2 pages

Percent 1960 19 67 Change

STATISTICS (Continued)

Operating Revenues: He sident ia l Commercial fndustr ia l Ofher

Total

Average Revenue Per Customer For Year: JksidentiaL $ 125.00 $ 113.07 10 55% C oamnercial 275.00 253 49 8.49 Industrial 6393.00 63297.85 4 -53 Qthw 1,776.00 1,444.93 2 2 . 9 G

Average K.W.H. Per Customer For Year: Jk si d enti a1 Commercial Industrial Other

492; 219 239,720

47 6,462 195,293

3.31 22.75%

P. 93

Sch e&le It 9 ''

Long-Term Debt: Bonds Advances from Associated Companies Other bng-l'erm Debt

Notes and Accounts Fayable C ustm er Deposit 8 T a m s Accrued Interest Accrued DividGds D e c k e d Other Current and Accrued Liab i l i t i e s

Total Long-Tern Debt Current and Accrued =abilities:

T o t a l Current and Accrued Liabilit ies Deferred Credits:

Unamortized PrexDim on Debt customer Advaslcea for Construction Deferred Income T a x Imesbent Tax Credit Other Deferred Credits

Total Deferred Credits

Reserve for Depreciation Reseme for Uncollec-hble Accounts Other Resemes

Reserves:

Tota l h e m e s

Contribution in Aid of Construction

Proprietary Capital: Preferred Stock Issued Common Stock Issued Rher Paid In Capital Premim m Capital Stock Reacquired Capital Stock Capital Stock Eqense S q l u s

T o t a l Proprietary Capital T o t a l LiabiUties, other Credits and

Proprietary C a p i t a l

(Rounded ) Perc a t Amount of Tota l

$ 129,192,000 22.44% 42,629 a 01

3,510,186 161 $ 102,110,632 =$

i$ -0- .m 593,917 .xo

11,029,477 1-91 -0- 00

435,419 a 0 8 f 12,058,813

8 4,454,125 *?7$

Information used in t h i s schedule is based on the ent i re s y s t m in all s ta tes of a l l operations of the Companies operating in Arkansas.

P. 94

Balance Balance

Arkansas Loujsiana &s Go. Arkansas Kssouri Power Co. Arkansas Oklahoma Gas Go. Arkansas Western Gas Co. Louisiana Nevada Transit GO. bnsfield Gas c o . Union Gas Co.

T o t a l s

Nmber of customers; Re si den tial Commercial Indus t r i a l A l l Others

Tota l s

M.C.F. Sold: Rmidential Commercial Industrial ,

A l l Others Totals

Operating Revenues= k s i d e n t i a l Cmerc ia l Indus t r ia l A l l Other

Totals

Average Revenue Per Customer F,or Year: Residential Comer cia1 Industri a1 A l l Others

Average M.C .F . per Custmer For Year : ksidential Commercial Indus t r i a l All others

STATISTICS Perc en%

-. 1968 1967 ' Change

340,688 1.22% (3.41)

3u, 8 60 44,058 45,560

2,482 2,4lr3

391,412 388,767 ma$ 1.60

62 66 (6.06)

5,493- 567 2 340,737 U4.69 $ z G z & m R 7 18.78%

P. 95

Long-?: e m Debt: Bonds advances f FW Associated cmpaniss Other Iong-Term Debt

T o t a l Long-Tem Debt -

Current and Accrued Liabilities: Motes and Accounts Payable

' Customer Depos i t s Taxes Accrued '

I n t e r es t Accrued 'Other C ~ y e n t and Acc&d'-Liabilitiee

Total Current and Accrued Liabi l i t i es Deferred Credits:

c ust mer Advances f o r c onstruc ti on Other Deferred Credits


&serve for Depreciation %serve f o r Uncollectable Accounts Other Resemes

Re Beme E:

Total Resemes

ContribulLon in Aid of Construction

Proprietary Capital: Preferred Stock Issued C m o n Stock Issued Sllrplus Total f ropr i et- Capital Total Liabi l i t ies , Other Credits and

Proprietary Capital

@ 1,059,927 107.202

$ 6,946,742 3.27% 1,152 01

254; 435 .12 $ 7,202,309 ---mw $ 3,216,937 1*5%

$ 23,426,600 11.05% 21,2L9,438 10.03 87; 806; 89 6 41.43 132,482,934 -* '

Information used in this schedule is based on t h e entire system in a l l states of all operations of the Cmpanies operating in Arkansas. refer to privately-owned Water Utilities only. Host of the Water Utilities in Arkansas a r e municipally owned and are not under the $misdic t ion of the Arkansas public Service Gomission.

The anounts noted above

I

P. 9.6

Schedule lt12"

&rung Water Co. Benton County Water Goe Blythedlle Water Go. Crossett Water Co. Dardaneue water Go. D e l l Water Go. Fordycs Watex Co. General Waterworks COT Hambmg Water Go, k r r i l t o n Water Go. Quapaw Water Go. Russenvine Water Go. Shmaker public Service Go. 64-71 Highmy Water Cmpq

, .

T o t a l

Balance Balance 1-1-68 Additions Retirements 12-31-68

33,354 9 -0- $ -0- # 73,354 24,004 -0- 24,004 -0-

2 I 196.738 67,459 2,221,429 * 969; 4% 292,532 34,833 633,680

5,948,357 357,785 890,627 887,042

1,865,012 -0-

121,367

982,260 -0- 6,232 300,556 -0- 34,833

26,855 657,375 834,895 6,551,399

51,305 941,795 -0- I, 133,7 64

' 14,273 2,b25,025 -0- 320,740 -0- 123,528

6,649 364,083

STATISTICS Perc ent Nmber of Customers: 1968 1967 Ck-nge

Metered Sales to General Gustanera 36,161 37,814 ( 44371%

Total 31,685 33 9 862 3 -03%

Flat Rate Sales to General Customers I> 132 994 13.88 A l l Other 392 54 625.93

Operating Revenues: %bred Sales to General qF,stomers _ . $6 2,025,957 1,971,215 2.78% Flat Rates Sales to General Custamers SL, 432 '' ( 38 -56 1

3.98% A l l Other

T o t a l 44 64

Average Revenue Per Custmer For Year: Pfetered Sales t o kneral~ustcaners Fla t Rates to General Customws A l l Other

7.48%

P. 97

Schedule "U" ARKANSAS PUBLIC SERVICE CCBMSSIOM THIRTY2'IFTH ANNUL RXTORT

Long-Term Debt: Bonds Advances from Associated Companies Other Long Term Debt

Total Long-Term Debt Current and Accrued Liabilities: Notes and Accounts Payable Gust mer Deposits Taxes Accrued Interest Accrued Dividends Declared Other Current and Accrued Liabilities

T & , d -Cmrent - and Accrued G a b l l i U e s Deferred Credits :

Unamortized Premim on Debt Investment Tax Credit Other Defermd Credits


Reserve f o r Depreciation Reserve for Uncollectable Accoufits Other Reserves (Operating)

Reserves :

T o t a l Reserves

-35,965; 600 . 70 $ 360,763,216 7

565,885 .Dl P 960,219,679

Contribution in Aid of Construction 161,255' .Ol%

b o p ri e tar y Capi t a l : Proprietary Capital Preferred Stock Issued Common Stock Issued Other Paid-In Capital .. Installments Received on Capital Stock Capital Stock 'Xxpense S q l s r s

T o t a l Prop~etary Capital

T o t a l LiabiEties, Other Credits and P r q r i e t a r y capital

936,881,545 17-80 $6 2,577,7=,833 --F3r

Information used in t h i s statement is based on the entire system in a U states of all operations of t h e Companies operating in Arkansas.

P. 98

Sche dule I' 14 '' Page 'I of 2 pages

Balance Balance 1-1-68 Additions Retiremanfs 12-31-68

$ 9,741,501 # 2,8803377 8 1,663,745 $ 10,958,133 - A l l i e d Telephone Go. Allied Telephone, DeQueen 941,324 I, 821,373 166,655 2,586,042 A l l i e d U t i E t i e s cow. 3,259,786 901,332 596,981 3,%h,137 Arkansas Telephone CD. 825,894 57,097 24,962 858,029 Arkansas S t a t e Telephone Go. 4,980,730 3,310,316 142,660 6, US, 386 Bald Knob Telephone Go. 7 U A 9 47 J 164 7,260 751,153

, Benton County Telephone Go. 1,221,341 178,137 37,468 1,362,033 bone Gowhy Tele hone Co. 2,1523693 226,858 317,755 2, Ml> 796

16,619 7,246 444,868 435,495 Decatur Telephone Go. 200,368 19,372 7,318 220,422

bmpton Telephone Go, 862,883 8 1,190 -0- 944,013 Lavaca Telephone Co. 242,897 7,043 -0- 249,940

h a m i Telephone ha 52,788 UJ 929 5,328 59,389 &*son County Telephone Go. 767,015 57 J 553 810,567

295,768 82,580 . 9,015 '"369,333 Cleveknd Countg*Telqhone Go,

General Telephone co. of the S.W. 18,900,524 21,207,438 l,!%5,273 383542,490 Green Forrest Telephone Co, 58039 00 43,219 3,969 620,lSQ

Liberty Telephone Co, 1,l92,627 217,499 87,770 1,322,356 Liberty Telephone & Cornmications 1,427,065 I, 057,880 122,074 2,362,871

central Arkansas P el-hone Co-op.

Four States Telephone Co. 3,919,686 350,764 56,057 4 9 zuJ 393

Lincoln-Desha Telephone Go, 1,451,252 479,8 s4 203 3P5 1,910j 671

Magazine T elephons Go a b 8 2 4 11, u2 -0- 1s9,936 Missouri States Telephone C o . a21730 33,196 5,381 170,545

Mobfxone Sereice ( ~ t . smith) 25,677 346 -0- 26,023 M o u n t a h Home Telephone Go. 2,373,645 834,217 25,517 3,18%3b5 Mountain V i e w Telephone Co. 389,991 65,024 11,327 443 ,w Northern Arkansas Telephone Co. P 51,418 187,895 40,916 1,098,397 Pea Ridge Telqhone Co. La, 375 38,043 1L, 770 537,648 Perco Telephone co, 663,707 170,7n -0- 834,418

5,343 ' 122,987 Redfield Telephone Co. 115,856 12,474 Ricebelt Telephone c o o 3% 917 35,885 4 7,411 417,391

R u r a l Telephone C o . 639,687 32,973 35,831 636,B 29 Southwest Ark. Telephone Go -9. 1,676,823 401,861 7,C13 2,070,871 Southwestern Bell Telephone Co. 246,805,725 29,702,115 6,795',551 269,712,189

T r i County Telephone Go. 1,4IO,sSS 99,063 2,160 1,507,883

%bilfone Cmmunications 34,672 2,026 -0- 36,698

Pra i r ie Grove Telephone co . I, 420,393 266,633 ..22t!13 98 2 1,462904L

E, Ritter Telephone Go. 2,273,124 237 J wl 91,317 234BJ898

Southwestern States Tel. Co G, 958,913 -0- 15,858,913 -0-

h i o n Telephone co,, JmctionCity 376,831 53,646 29,893 4 400,584 United Telephone of Arkansas 433l7 J 9h8 603,910 132 3 469 4,789 389 Walnut Hill Telephone co. 1,37 1,118 337,851 1,854 1j5'57 U.5 Western Arkansas Telephone co , 12,179, @O I, 260,584 335,627 U, 104,441

P. 99

c

Schedule lll-blf Page 2 of 2 pages

Balance Balance 1-1-68 Additions Retirements 12-31-68

2,980 $ 1,028,251

Yell County Telephone Go. 922,460 115,159 8,480 1,029,139 Yelco t Telephone Go. 565,856 103,881 16,810 652,927

White River Telephone Go. 931,663 $ 99,468 Mckes Telephone Co. 7 17,69 1 31,391 19,042 790,040

Total $3!% 440,165 $65,752,210 $28,630,479 $388,561,896

P. 100

S ch e dule ''15 ['

Fer c ent

Operating Revenue (Rounded Off 1 : Subscriber s Revenue public Telephone Serrrice Service Station Revenue Local m p a t e Line Revenue other Local Service Message Toll Toll Private Line SerdLce other T o l l Service Telephone and Telegraph Commissions D i r e c t o r y Advertising and Sales b n t Revenue Gemra'l Services and Licenses other Operating Revenue h c o l l e c tab le Revenue

. :.

Total Operating %venues

Nmber .of Statjons: Business stations Business Extensions Pay Stati 011s.

Residence b i n Sf;akions Residence Extensions

R u r a l k i n Stations Rural Extensions

P .B .X. Sta t i o m All Other S t a t i m 3

Total Stations

42,347 57,337 8 -74% 62,017 55,893 10.96 11,193 10,643 5.17

3% 8 1 9 313,170 12.34 . 122,435 m5,2lh 16 - 36

97,441 92,374 5.48 8,U7 7,469 . 13.09

12,790 64,793 12.34 3 162 2 686 17 a72 - - m i k z m , 11.56%

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P. 101

Documents

IC BU · M,.A.R.W.C. are as follows: Lewis M. Robinson, Chairman, Arkansas Public Service Commis- ... a resume of amounts requested by the applicant. Listed below are the copies of