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I submit, as the Examiner discovered, that the allowance of this million and a half in the cost foundation is erroneous. Indeed it had not solely determined the price to Phillips however had formulated the standards governing its fee of return and calculated its allowable return thereunder. If applied there it will have made a difference in opposition to Phillips of some $8,000,000 in its 1954 rate base. Under this requirement if the next price of service did improve and was not offset by elevated revenues the company could recoup itself with § four price will increase. The mandatory knowledge might have been quickly obtained from Phillips which, in fact, had its complete revenues readily accessible and, I'm certain, had its cost foundation for every § four enhance likewise calculated. Increases by means of computerized escalator clauses-which effect the identical outcome-usually are not permitted because not based mostly on any improve in cost of production. In addition, assuming, as I do not, that the 1954 price is right the Commission should not be permitted to increase that value and the 1954 revenue into subsequent years via 1958 and hold that they too are deficit years.

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