Section 407-210-8 - Part 32 Implementation RequirementsThis Section establishes the accounting and implementation requirements.
A. Initial Notice of Intent - No later than 4 months after the effective date of this rule, all telephone utilities shall file an Initial Notice of Intent (Initial Notice) with the Commission concerning the implementation of the Part 32 USOA. the change in USOA shall automatically take effect according to the information contained in the Initial notice. The Initial Notice shall contain a statement concerning the following information and practices:
(1) The effective date of implementation of Part 32 for intrastate purposes (see section 1.E. ) and the class of company (see sections 1.A. and 1.B. ).(2) The accounting methods adhered to when GAAP or Part 32 requires or allows and option. Where GAAP permits more than one accounting method, the telephone utility shall include a statement as to which method it shall adhere to. For intrastate purposes, a telephone utility must petition for any change from the methods set forth in the Initial Notice.(3) A representation of the utility's continued adherence to prior Commission ratemaking policies, including a statement that no accounting and ratemaking requirements instituted by the Commission, of which the utility is aware, will be negated by the adoption of Part 32 and that separate accounts shall be established to account for any difference. A list of those policies which would otherwise be overridden by the adoption of Part 32 and the account number in which jurisdictional differences shall be recorded. A statement listing the amount of any embedded liability which results from adopting Part 32.(4) A description of the procedures for recording affiliate transactions, and transactions between the utility and its affiliated interests, as defined by 35-A M.R.S.A. §707.(5) An estimate of the costs associated with implementing Part 32. Future changes to any of the provisions set out in the Initial Notice require prior written notice to and approval by the Commission or the Director of Finance.
B. Adoption of GAAP - Any utility desiring to implement an accounting change to reflect a GAAP pronouncement for intrastate purposes shall notify the Director of Finance 90 days prior to the proposed date of implementation or the filing of its annual report, whichever is sooner. Such notice shall contain an estimate of the effect on revenue requirements. If the Director of Finance does not respond within 81 days of the filing of the Notice, the utility may implement the change until subsequently required to do otherwise by rule or order.
C. Retention of Records Books and records shall be retained on an intrastate basis for as long as they may be material in establishing the utility's revenue requirement. The utility shall adopt a reasonable retention policy, which shall be at least 7 years. Property records shall be available for at least three (3) years after the physical retirement of the property.
D. Auditor's Attestation Function - With the utility's first auditor's report, in accordance with Chapter 710, following adoption of Part 32, each Company's Independent Auditor shall attest to the accuracy of the opening journal entries, and that prior balances have been transferred in conformity with Part 32 requirements.
E. Comparative Reporting - 1. No later than 4 months after the effective date of this rule, each telephone utility following the Class A USOA shall provide a report to the Commission which restates 1987 financial data according to the new Part 32 USOA, using best estimates, if necessary. Each utility following the Class A system of accounts shall include with its annual report for fiscal years 1988 and 9189 its balance sheet and income statement for those years based on its previous chart of accounts. Only items of a material nature need be considered, and each utility may use its best estimate or use a special study to complete the required comparison.2. Each utility adhering to the Class B system of accounts shall provide the above-specified comparative financial information for the first fiscal year in which it adopts the new Part 32 Class B USOA and for the fiscal year immediately preceding the year of adoption. as in Section E.1, best estimates may be utilized.F. Accounting methods and practices required in place of certain provisions of Part 32. The following accounting methods and practices are required for intrastate accounting and the necessary jurisdictional accounts shall be established in order to properly account for such differences:
1. The flow-through method of treatment of tax timing differences shall be used unless specifically prohibited by provisions of the Internal Revenue Code.2. Class A utilities may charge the costs of short-term projects estimated to cost less than $100,000, or such lesser amount as a utility may select, directly to plant accounts. class B utilities may charge the costs of short-term projects estimated to cost less than $25,000, or such lesser amount as a utility may select, directly to plant accounts. Interest during construction shall be accrued on all amounts of telephone plant under construction, both short-term and long-term.3. Pension cost shall be accounted for on a funded (cash) basis.4. Post-retirement benefits shall be accounted for on a funded (cash) basis.65- 407 C.M.R. ch. 210, § 8