*1 testimony appellee’s of one of exclude being prejudicial
underwriters as and self-
serving. There is no assertion that testifying per- from either
witness was not properly knowledge
sonal introduced
business records. The fact that such testi-
mony may damaging be considered as
appellant’s grounds its ex- cause
clusion.
Appellant’s points final of error as
sert there support is no evidence to
finding appellant accepted appel- provide
lee’s offer to insurance under the 26, 1974, 1,
July policy rather the June than
1974, policy and there is no evidence to
support finding appellant ratified appellee treating actions of the June
1, 1974, policy being as not in force. These points
no evidence are without merit. appellant
There is evidence that was noti 1, 1974, policy
fied that the dated June had canceled;
been policy July dated
26, 1974, was issued in lieu of the canceled
policy; appellant retained the second
policy objection without to its effective
date; paid subsequent premium policy’s
the later fully schedule. The record
supports jury findings. of the trial court is af-
firmed.
RAILROAD COMMISSION OF
TEXAS, Appellant,
v. COMPANY, A
LONE STAR GAS Corporation,
Division of Enserch
Appellee.
No. 13135. Appeals
Court of Civil
Austin. 23,
April 1980.
Rehearing Denied June
660
Railroad Commission of Texas in Gas Utili- ties No. 1020 in the district court of Docket County. Travis The Commission’s order set gas for service to residential rates natural cities and commercial customers within the Dallas, Celeste, Gainesville, Lake McGre- gor, Quitman, Seymour. After hear- ing, judgment the district court entered set- order, it ting agency aside the insofar as pertained the cities to the rate of return for Celeste, Quitman, Seym- McGregor, The our. further ordered Commission to determine the rate of return adjusted value of in- predicated upon the vested as defined Tex.Rev.Civ. 1446c, 41(a), the Public Stat.Ann. art. Sec. Utility Regulatory Act.
A on its investment utility’s return multiplied by product is the of the rate base Bell a fair rate Southwestern Telephone Company Utility v. Public Com mission, (Tex.1978). 571 503 “Rate S.W.2d represents base” that sum that is defined as capital or of quantum the total of invested property utility on which the “values” compensa rate of entitled to a reasonable Fields, tion. Rate Base Under Nichols and PURA; Foundation, Firm 28 How Is Baylor L.Rev. 862 Tex. legislature, by 1446c, 41(a), has art. Sec. Rev.Civ.Stat.Ann. the “rate components determined the rate-making. purposes utility for base” Telephone Company v. Southwestern Bell Commission, supra. Section 41(a) provides “[ujtility rates shall be property upon based value of utility in public used and useful to the ” (Emphasis providing . . . service supplied). provides that That section consist property value of such shall (1) original of a reasonable balance between (2) current cost depreciation cost less White, Gen., Wilson, Atty. Mark J. Scott cost) adjustment for (reproduction less an Gen., Austin, Atty. appellant. Asst. for regulatory age both and condition. Clark, Thomas, Barry Bishop, Winters & determine agency given the discretion to Austin, Shapiro, appellee. that reflects not less a reasonable balance cost- nor than 75% than 60% more SHANNON, Justice. than 25% nor less and not less (reproduction cost Appellee filed an more than 40% current Company Lone Star Gas cost) present adjustment less an for both administrative from the order of age and determining condition. In “rea- ease. The debt with relative cost of balance,” sonable agency may contractually agreed consider is the interest rate inflation, deflation, quality being utility. of service upon by the investor and the Like- provided, the service growth wise, rate of the preferred cost of is the divi- stock areas, and for the attract the need agreed percentage upon dend new capital. pre- costs are and the investor. Both such *3 and, accordingly, contractually determined After the deter- regulatory agency has The cost of common stock do not fluctuate. base, to fix mined the rate its next task is however, capital, is more controversial be- the rate is of return. The rate of return stock, there is no con- cause with common money the sum of that a allowed utility is rate fixed-dividend rate. tractual interest earn, op- an opportunity to over and above The of cost of common stock determination erating depreciation, taxes. expenses, and subject a matter to capital is of expressed per- The rate is a of return as expert varying opinion. Butler, centage utility’s of the rate base. Neglect- The in Rate of Return Texas-The currently by methods are Several used Issue, (1976). ed Baylor 28 L.Rev. 938 experts rate of return to estimate the cost capital. of stock Two methods common return, course, speci- The rate of of is not (1) earnings comparable are: rates of of as any percentage. fied in Art. 1446c exact (2) price and earn- companies past other the Rather, two back-to-back sections of the ings of the common stock. Act, utility’s ratio 40(a), provide 39 and rate § that the § of return shall of consist at least a reasona- bar, respect to the case at the With ble capital, return on invested more but not adopted Commission in its order Railroad than adjusted a fair on the return value of hearing for deci proposal the examiner’s capital. invested See Southwestern Bell proposal shows that sion. The for decision Telephone Company v. Public Com- the the examiner made a determination of mission, supra. depre upon original rate of return cost-less the To achieve rate of return that a judged he sufficient to attract ciation which earn, regu should allowed be to the capital. examiner then translated that The latory agency the utili considers cost to the percentage figure sum into a of monetary ty capital expressed (1) of its as interest on (§ so that adjusted 41(a)) value base the debt; long-term (2) dividends preferred exactly prede dollar would the equal return stock; (3) earnings on common stock. original upon dollar return cost termined Each of the elements of the struc capital words, depreciation. less In different al given ture of the weighting is a gas the though company the established based upon company’s capital the structure base, adjusted value rate the ex statutory composite arrive at a return. rate of return, aminer, of offsetting an rate composite applied The of rate return is then exactly the same annual dollar re allowed to the utility’s base to at the rate arrive have been company turn to which would proper Love amount of Garfield & gen The original an cost basis. entitled on joy, Utility Economics, 116 is esis of the examiner’s determination return, calculating colloquy the rate between examiner of found in the witness, pre- Hopper, costs long-term capital of debt and the cities’ Jack opinion.1 capital may appears margin ferred stock be ascertained No, (Mr. Examiner) “Q Hopper, (Dr. Hopper) ignoring “A sir. I’m not Dr. you recommending just develop are didn’t a of return for the Railroad that. I rate ignore requirement adjusted base. Commission of sec- value of rate So, words, public you you regulatory “Q are are tion 41 of the utilities act other —in you’ve saying that a rate base be selected would that the rate base devel- which designed applied portion oped statutorily include of the rate to this invested to be portion base and a base? of the current cost rate dictated rate base? 662 contended, gas adjusted
The no what company and the dis- matter value rate base concluded, trict court Commission may facts, No except be established. those offsetting in fixing erred an rate of return cost-less need proving original same exactly that allowed annual dollar facts hearing be adduced in the because company return to have which the would component proving the other basis, original been cost all in entitled on an any value make in the will not difference 41(a). violation of § company. amount of revenue allowed the argument parties In briefs and in oral The value com- determination appeal to this agreed the identical 41(a) thereby to a manded shrunk § problem was at issue in Railroad Commis ritual, expensive paid lip meaningless and Entex, Inc., a l. v. 599 sion et homage by solely pur- the Commission (Tex.), a direct from the S.W.2d poses judicial review. County. district court of Travis The Su advantages of an cost rate *4 opinion its preme Court delivered in that base, base, against as a current cost rate majority 1980. The of April legislature the by doubtless were considered the the Court in Entex took view that so true prior 41(a). It is to the enactment § long adjusted as the agency determines an concept is original cost rate the base base, may value rate it consider the “return Commission, espoused by the Federal Power to book in its equity” common consideration commissions, eminent most state and applied the rate of return to be to the Principles of adjusted Bonbright, economists. value rate base. Nevertheless, Rates it Surely proper, majority is as the in 41(a) to the chose legislature enacting in § states, agency Entex to for the consider the the rely upon the cost nor neither equity rate to book in common the formula- base, instead, struck current cost rate but the composite tion of rate of return to be two. balance between the to applied statutory the rate base. What majority failed appreci- of the Court to agencies, not for It is administrative Commission, through ate is its ex- courts, weigh legisla or to wisdom aminer, only not considered the return to ignore parts tion those the statute and to equity, book common but made that consid- Rather, duty is to thought totally eration determinative of the rate of sound. their Original cost-less carry statutes. forward directives of in dressed borrowed robes as “return to circum Entex, deliberately the Commission equity,” gained day. book common Jus- in expressed legislative vented the will as Pope in knowledgeable dissenting tice his 41(a). § opinion graphically illustrated this truth. to in review of orders agency Courts sit stratagem, The Commission’s as condoned enforced, not insure statutes are Entex, agency hearing reduces to thwarted. adjusted value determine the rate base to a as As views Entex apparent, writer examiner, tableau where the wit- vivant decided; nonetheless, this Court is wrongly nesses, wind, words, attorneys expend precedent. judg- bound to heed that naught. naught and wisdom For be- ment court is reversed of the district equity cause return to book common affirming the is here rendered in will have been ascertained advance and be, end, fact, will order Railroad Commission. all-determinative in the of the Well, it, going I didn’t “A The of return that I “A if I were to do rate recommended it, directly adjusted going applied not to be to do if to I would deter- I were do it earnings requirement on the invest- value of invested rate mine the ed base. base, “Q you convert What what rate and I would method are method— your earnings requirement
recommending rate be identical of return that —that a value, applied value rate to the so called fair rate of return on value rate base? base.”
SMITH, Justice, concurring. strongly opinion
I concur ex- in the
pressed.
Josephine SANDERS, Appellant,
v.
Wynell JEFFERSON, Robbie Bennett Sanders, Appellees.
and Asa
No. 8676. Appeals
Court of Civil
Texarkana.
April 29, 1980.
Rehearing May Denied Weitzel,
Douglas Ingram, Long- David view, appellant. for Whitehead, Jr.,
R. L. Longview, Charles Allen, Marshall, appellees. A.
CORNELIUS, Chief Justice. brought this suit Josephine
Mrs. Sanders equitable as an bill of review to set aside a suit was judgment. divorce The divorce husband, filed James Ed- by Mrs. Sanders’ Sanders, County, but was ward in Harrison