Hanley Reb Ex 19 Sch3 - p1.xls

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Sheet1
United Water Idaho, Inc.
Ms. Carlock's Comparable Earnings Analysis Corrected to Properly Reflect
the Adjustment of Only the Equity Risk Premium by Beta
Consistent with the Financial Literature
Line No.
1.
Ms. Carlock's range of industrial total returns
15.50
-
16.50
% (1)
2.
Less: prospective yield on 30-Year Treasury Bonds
6.20
6.20
(2)

3.
Equity risk premium on the market
9.30
-
10.30
(3)
4.
Beta of United Water Resources, Inc.
0.60
0.60
(4)
5.
Beta adjusted equity risk premium
5.58
2.00
-
6.18
2.00
(5)
6.
Corrected Comparable Earnings Result applicable
to United Water Idaho, Inc.
11.78
-
12.38
(6)
Notes:
(1)
See page 16, lines 6 and 7 of Ms. Carlock's direct testimony.
(2)
Average forecast based upon six quarterly estimates of the yield on 30-year Treasury bonds per the consensus of nearly 50 economists reported in Blue Chip Financial Forecasts dated June 1, 2000 (see page 2 of this Schedule). The estimates are detailed be
Second Quarter 1000
6.10
%
Third Quarter 2000
6.30
Fourth Quarter 2000
6.30
First Quarter 2001
6.20
Third Quarter 2001
6.10
Fourth Quarter 2001
6.10
Average
6.20
1.00
%
(3)
Line No. 1 - Line No. 2.
(4)
See page 16, line 7 of Ms. Carlock's direct testimony.
(5)
Line No. 4 * Line No. 3.
(6)
Line No. 5 + Line No. 2.