4. Litigated Issues

4.1. Litigated Issues

Based upon our review of prepared testimony, the evidentiary hearings, and a comprehensive briefing of litigated issues, we find that Suburban met its burden of proof in this proceeding. On an issue-by-issue basis we determine whether Suburban or DRA was the most persuasive in the disposition of individual disputed issues which were litigated and excluded from the proposed partial settlement.

Suburban and DRA identified six individual disputed issues which were litigated and excluded from the proposed partial settlement. We therefore review and resolve the following issues in the reminder of this decision:

_ Treatment of State Taxes in Determining the Federal Income Tax Expense (Section 5.)

_ Whether to Include a Domestic Production Activities Deduction in Determining the Federal Income Tax Expense (Section 6.)

_ Determining the Appropriate Rate Allowance for Rate Case Expense in Test Year Rates (Section 7.)

_ The Correct Four-Factor Allocation For Indirect Costs (Sections 8 and 9.)

_ Whether to Assess any Fines for Four Specific Allegations (Section 10.)

_ Whether to Order a Specific Audit Related to Allocated Corporate Costs and the Determination of a Four-Factor Allocation (Section 11.)