Opinion
No. 51,292
Opinion filed March 21, 1980
SYLLABUS BY THE COURT
PUBLIC UTILITIES — Rate Schedule — Rate Base — Rate of Return — Declining Block Rate Schedule — Fixed Customer or Minimum Charge Schedule. On judicial review of an order of the Kansas Corporation Commission in a utility rate case it is held:
1. The order did not exclude part of the utility's equity capital from its rate base.
2. A utility's rate of return need not be large enough to repay long term debt.
3. The Commission was justified in rejecting the utility's proposed declining block rate schedule and in ordering a schedule with a fixed customer or minimum charge, augmented by a flat per kilowatt hour energy charge.
Review of decision of Kansas Corporation Commission. Opinion filed March 21, 1980. Affirmed.
James M. Caplinger, of James M. Caplinger, Chartered, of Topeka, for the applicant.
Curtis M. Irby, assistant general counsel, Kansas Corporation Commission, for the respondent.
Before FOTH, C.J., ABBOTT and PARKS, JJ.
The Sekan Electric Cooperative Association, Inc., is a non-profit corporation engaged in the distribution of electricity to some 3900 member-customers in southeast Kansas. In November, 1978, it filed an application with the Kansas Corporation Commission for a rate increase to produce an additional $248,379 in operating revenues. The Commission fixed a rate of return which would produce only an additional $18,751. Sekan has sought judicial review, contending that the Commission's order (1) excluded a portion of its equity capital from its rate base; (2) improperly prevents it from recovering its capital costs; and (3) arbitrarily rejected its proposed rate structure.
In examining these contentions we must bear in mind the limitations on our scope of review, recently recapitulated in Midwest Gas Users Ass'n v. Kansas Corporation Commission, 3 Kan. App. 2d 376, 380-81, 595 P.2d 735, rev. denied 226 Kan. 792 (1979):
"K.S.A. 1978 Supp. 66-118d limits judicial review of an order by the commission to determining whether the order is `lawful' or `reasonable.' Kansas Gas Electric Co. v. State Corporation Commission, 218 Kan. 670, Syl. ¶ 1, 544 P.2d