upr000283 196

\ used by the Commission as the test year in determining the rates of the Water Company. The rates which the Commission prescribed in this decision became effective on September 1, 1951 and the rates ^vhich are ultimately determined by the Commission will un­doubtedly be the rates which will govern until some substantial change in the earning power of the utility takes place. There­fore, the Commission should use a rate base which reflects the capital expenditures of the utility during the period in which the rates will be in effect. To fail to do so deprives the utility of any earning whatsoever upon the capital required to furnish the service during the period in which the rates apply. This is plainly erroneous. It is a well recognized principle that in fixing rates for a utility, a Commission should consider not only results of operation in the past, but current happenings and what may be expected to happen in the future. Prescribed rates should be based upon conditions which may reasonably be expected to obtain in the immediate future. Re Northwestern Bell Telephone Co. (Nebraska) P.U.R. “— r^T'B" p. 112. ----- *------- Rolio v. Miller Ditch Co. (Utah) P.U.R. 1925 E p. 125. Re Ohio Bell Telephone Co. (Ohio 1934) 2 P.U.R. (NS) 113. Re New England Bell Tel. & Tel Co. (R.I. 194$) 77 P.U.R. (NS) 469. Following the above principle it is customary for pub­lic service commissions to include in the rate base capital ad­dition made and to be made in the test year and where the revenue -42-