Net-to-Gross Multiplier

The Net-to-Gross Multiplier indicates the unit change in gross revenues required to produce a unit change in net revenues. It is a factor that accounts for the additional revenue required to pay taxes and achieve a given revenue requirement after taxes.

Appendix D shows CD's computation of Ponderosa's Net-to-Gross Multiplier. The Net-to-Gross Multiplier of 1.6621 means that an increase of $1.6621 in gross revenues, before taxes, is required to produce each additional $1.00 in net revenues. For Ponderosa, based on a recommended intrastate rate base of $20,719,889 and a rate of return of 10%, the recommended gross intrastate revenue requirement change required is an increase of $1,847,041. The gross revenue change requirement amount of $1,847,041 plus the 2009 CHCF-A support at present rates of $2,254,710, equals the 2009 CHCF-A support estimated of $4,101,751. The 2009 CHCF-A support estimated of $4,101,751, minus the proposed net rate increase of $401,963, equals the 2009 CHCF-A adopted amount of $3,699,788. The CHCF-A support amount is further explained below.