Nature of the Case
To access this section all you need to do is click here and register.
Facts
The Commission made an adjustment in rates because interest rates had fallen and stock prices had risen. They took the interest rate in 10-year T-bills and used it to calculate the rate of return. It also took bond yields from a recent yield period and subtracted their rates from the base T-bill rate and got a rate spread which in turn was subtracted from the rate of return that they had calculated in 1985. This presumes that the returns utility investors would insist upon declined just as did Treasury bond returns. Thus, the cost of utility equity capital would have also declined by this same amount of points. The Commission then made a further determination that this new rate was lower than it should be, and thus it jacked up the rate. Boston appealed.
Support@ bsmsphd.com
Casebriefs Co