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On March 30, 1984, Virginia Electric and Power Company (hereinafter "Vepco") filed an application with the State Corporation Commission for an increase in rates. On April 6, 1984, Vepco filed an amendment to its initial application which made several changes necessitated by Commission orders of March 27, 1984, in Case Nos. PUE830041 and PUE840006, which were related to the cancellation of North Anna Unit 3 and Vepco's annual fuel factor respectively. The application, as amended, seeks an increase in annual revenues of $25,296,000 to be allocated equally among the various customer classes based upon present non-fuel revenues. This allocation results in a 2 percent increase In base rates. The proposed increase was filed in conjunction with the annual Financial Operating Review (hereinafter "FOR") data submitted by Vepco ancf based upon a test period ending December 31, 1983. Pursuant to the Commission's revised FOR procedure, Vepco requested that the increase be allowed to go into effect, on an interim basis and subject to refund, 30 days after the application was filed. The proposed increase is based upon test period adjustments and ratemaking allowances as prescribed in the Commission's FOR guidelines for electric utilities. Vepco also filed with its Application proposed changes to its rates, terms and conditions applicable to Parallel, Relay and Breakdown customers with a requested effective date as determined in the final order in this proceeding.
On April 25, 1984, the Commission staff filed a preliminary evaluation of Vepco's application. The Staff advised the Commission that the accounting adjustments in Vepco's application appeared to be in compliance with the Commission's FOR guidelines but that the requested increase in annual revenues should be reduced by $740,000 to $24,556,000 to account for the reduction in the Special Revenue Tax rate for the tax year 1984. The Staff noted that information on the tax rate reduction was unavailable in time to be included in Vepco's application. The Staff also noted that the amount of the proposed increase will be reduced further by an Internal Revenue Service (hereinafter "IRS") ruling which Vepco received on April 11,1984, concerning the amortization of Investment Tax Credits.
By order entered April 27, 1984, the Commission determined, pursuant to §56-240 of the Virginia Code, that there was a reasonable probability that the requested increase in annual revenues of $24,556,000 will be justified after a full investigation and hearing. As provided by the FOR procedure guidelines, the Commission therefore authorized Vepco to place that increase into effect for service rendered on and after April 30, 1984. The Increased revenues received by
80.0%