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 Cal-Ore's Net-to-Gross Multiplier. The Net-to-Gross Multiplier of 1.6621 means that $1.6621 change in gross revenues before taxes would be required to produce $1.00 in net revenues. For Cal-Ore, based on a recommended intrastate rate base of $4,910,875 and a rate of return of 10%, the recommended gross intrastate revenue requirement change required is an increase of <$588,323 >.