4 Colo. Code Regs. § 723-2-2465
Current through Register Vol. 47, No. 20, October 25, 2024
Section 4 CCR 723-2-2465 - Cost Studies to be provided to the Commission(a) Contents. (I) The cost study results submitted by a provider must specify the type of costs being estimated, irrespective of any legitimate simplification and/or approximation incorporated into the studies.(II) Cost studies must be produced in accordance with the definition of the type of costs being estimated.(III) The provider shall identify all instances in which its estimate deviates from the definitions of the cost type. A written explanation justifying each such deviation on the basis of data limitations, methodological simplicity, or other practical considerations shall be provided. The explanation shall be sufficiently clear and detailed to allow interested parties to determine whether the deviation is justified and to understand its potential significance. The Commission has discretion to grant or deny each proposed deviation.(IV) The provider shall identify the costs and elements of the production process it considers to be fixed within the specified planning horizon and the costs it considers to be variable.(V) The provider shall identify any included sunk costs and shall calculate the cost reduction that results from the exclusion of such sunk costs.(VI) The provider shall identify all shared and overhead costs and specify those included in or excluded from the cost study. The provider shall separately quantify the reduction in the cost estimates that would result if shared and overhead costs were to be excluded. This subparagraph does not apply to FDC studies.(VII) Nothing in this paragraph shall be construed to limit the Commission's authority to accomplish its statutory duties.(b) Cost estimate requirements. (I) In any incremental cost estimate submitted, the increment of output analyzed must be relevant to the issues under consideration.(II) In any incremental cost estimate submitted, the estimated change in costs must approximate the cost difference between a "business as usual" scenario accommodating existing and future demand and a scenario assuming output levels that are higher (lower) by the relevant increment (decrement).(III) A cost estimate for a service that uses or displaces another service offered by the provider shall reflect the revenue that would have been derived from the other service. For example, the cost estimate for message toll service shall reflect the access revenues that are foregone when the customer purchases toll service from the provider instead of from a competitor.(c) Required work papers.(I) A cost estimate submitted to the Commission shall be accompanied by a complete set of supporting work papers and source documents.(II) Work papers shall clearly and logically present all data used in developing the estimate and provide a narrative explanation of all formulas or algorithms applied to such data. They shall also allow others to replicate the methodology and calculate equivalent or alternative results using equivalent or alternative assumptions.(III) Work papers shall clearly set forth all significant assumptions and identify all source documents used in preparing the cost estimate.(IV) Work papers shall be organized so that a person unfamiliar with the study will be able to work from the initial investment, expense, and demand data in order to calculate the final cost estimate. The significance of each number used in developing the estimate shall be clearly identified in the work papers and the source of each number not included within the work papers shall be clearly identifiable and readily available.(V) Any input expressed as a "dollars per minute," "dollars per foot," "dollars per loop," dollars per port," or similar units must be traceable to the original source documents including without limitation the dollars, minutes, feet, loops, and ports from which such figures are calculated.(VI) Unless impracticable, all data and work papers shall be provided in electronic format using standard, commercially-available spreadsheet or database software formats. Data and work papers shall be accompanied by files or internal comments that define the contents of each data set or work paper, and shall include an explanation of the definitions, formulae, equations, and data provided.(VII) An index or detailed table of contents of the work papers and source documents shall be provided. In addition, to the extent practicable, a cross index shall be included that allows others to track key numbers through the various source documents, work papers, and exhibits.39 CR 21, November 10, 2016, effective 12/1/201640 CR 15, August 10, 2017, effective 9/1/201741 CR 03, February 10, 2018, effective 3/2/201842 CR 02, January 25, 2019, effective 2/14/201942 CR 07, April 10, 2019, effective 4/30/201943 CR 02, January 25, 2020, effective 2/14/202043 CR 17, September 10, 2020, effective 8/17/202044 CR 17, September 10, 2021, effective 8/11/202144 CR 18, September 25, 2021, effective 10/15/202145 CR 03, February 10, 2022, effective 12/29/202145 CR 01, January 10, 2022, effective 1/30/202246 CR 05, March 10, 2023, effective 3/30/2023