Pa. Code tit. 52, pt. I, subpt. C, ch. 53, INFORMATION FURNISHED WITH THE FILING OF RATE CHANGES, exh. B

Current through Register Vol. 54, No. 44, November 2, 2024

Exhibit B

I.VALUATION

A.ALL TELEPHONE UTILITIES

1. Provide a corporate history (include the dates of original incorporation, subsequent mergers and/or acquisitions). Indicate all counties and cities and other governmental subdivisions to which service is provided (including service areas outside the state), and the total customer accounts or access lines in areas served.

2. Provide a schedule showing the measures of value and the rates of return under present rates, pro forma at present rates, and at proposed rates on the original cost rate base. All claims made on this exhibit should be cross-referenced to appropriate exhibits. Provide a schedule similar to the one listed above, reflecting respondent's final claim in its previous rate case.

3. Provide a description of the depreciation methods utilized in calculating annual depreciation amounts and depreciation reserves together with a discussion of factors which were considered in arriving at estimates of service life and dispersion by account. Provide dates of all field inspections and indicate facilities visited.

4. For each account where the retirement rate method of analysis is utilized, set forth, in exhibit form, charts depicting the original and estimated survivor curves and a tabular presentation of the original life table plotted on the chart.

a. If any utility plant included in the "plant in service" accounts is excluded from the measures of value because it is deemed not to be "used and useful" in the public service, supply a description of each item of property.

5. Provide the surviving original cost at test year end by vintage by account and include applicable depreciation reserves and annuities.

a. These calculations should be provided for plant in service as well as other categories of plant, including, but not limited, to contributions in aid of construction, customers' advance for construction, and anticipated retirements associated with any construction work in progress claims (if applicable).

6. Provide a comparison of respondent's calculated depreciation reserve v. book reserve at the measure of value calculation date. Provide this comparison by depreciable group, if available.

7. Supply a schedule by account or by depreciable group showing the survivor curve or interim survivor curve and annual accrual rate estimated to be appropriate:

a. For the purposes of this filing.

b. For the purposes of the most recent rate increase filing prior to the current proceedings.

(i) Supply a comprehensive statement of any changes made in method of depreciation and major changes in the selection of average service lives and dispersion.

8. Provide a table, showing the cumulative depreciated original cost by year of installation for utility plant in service at the end of the test year (depreciable plant only) as claimed in the measures of value, in the following form:

a. Year installed.

b. Original cost-the total surviving cost associated with each installation year from all plant accounts.

c. Calculated depreciation reserve-the calculated depreciation reserve associated with each installation year from all plant accounts.

d. Depreciated original cost-(Column b minus Column c).

e. Total-cumulation year by year of the figures from Column d.

f. Column e divided by the total of the figure in Column d.

9. If a claim is made for Construction Work-In-Progress (CWIP), supply the following on an historical basis:

a. A description of the project, including start and completion dates.

b. Amount expended at the end of the historical test year.

c. Authorized expenditure.

d. In service date (actual or anticipated).

e. Associated retirement of existing facilities, if any.

f. Updated information before the close of the record.

10. If a claim is made for plant held for future use, supply the following:

a. A description of the plant or land site and its cost.

b. Expected date of use for each item claimed.

c. Explanation as to why it is necessary to acquire each item in advance of its date of use.

d. Date when each item was acquired.

e. Date when each item was placed in plant held for future use.

11. If a claim is made for materials and supplies, attach an exhibit showing the actual balances for materials and supplies by month for the thirteen months prior to the end of the historical test year. Explain any unusual changes in monthly balances. (Explain method of determining claim if other than already described.)

12. Regardless of whether or not a claim is made for net salvage, provide an exhibit showing gross salvage, cost of removal, and net salvage for the most recent five calendar years. All information should be shown by account whenever possible.

a. If a claim for net salvage is made on a basis other than the most recent five calendar years, provide, in addition, representative backup calculations (gross salvage, cost or removal, and net salvage should be shown separately). All information should be shown by account whenever possible.

13. Explain in detail by statement or exhibit the appropriateness of claiming any additional items, not previously mentioned, in the measures of value.

14. Provide, with respect to the scope of operations of the utility, a description of property, including an explanation of the system's operation, and plans for any significant future expansion, modification, or other alteration of facilities.

15. Submit maps of any changes in individual exchange boundary and zone rate areas or mileage rate areas, as the case may be.

B.FOR THOSE TELEPHONE UTILITIES ELECTING TO FILE TRENDED MEASURES OF VALUE, PROVIDE, IN ADDITION TO THE INFORMATION REQUESTED IN I.A. ABOVE, THE FOLLOWING:

1. Provide a schedule showing the rates of return under present rates, pro forma at present rates, and at proposed rates on the trended original cost rate base. Trended original cost should be computed at spot or one-year average, three-year average and five-year average price levels. All claims made on this exhibit should be cross-referenced to appropriate exhibits. Provide a schedule similar to the one listed above, reflecting respondent's final claim in its previous rate case.

2. Provide a description of the trending methodology which was utilized. Identify all indexes which were used (include representative backup workpapers) and the reasons particular indexes were chosen.

a. Supply a comprehensive statement of major changes made in the selection of indexes or in the methodology used in the current rate filing as compared to the most recent previous rate filing.

3. Provide an exhibit indicating the spot or one year average trended original cost at the measure of value calculation date by vintage by account or functional property group and include applicable depreciation reserves. Include totals by account or appropriate group for all other trended measures of value. In the case of depreciable accounts for which depreciation is calculated at a more detailed level, it will be sufficient for the company to provide this data at the more detailed level. (To the extent that a future test year is utilized, provide historical data in the manner requested and provide projected data in a manner consistent with the projection.)

4. Supply an exhibit indicating the percentages of undepreciated original cost at historical test year end which were trended with the following indexes:

a. Boeckh

b. Handy-Whitman

c. Indexes developed from suppliers' prices.

d. Indexes developed from company records and company price histories.

e. Construction equipment.

f. Governmental statistical releases.

g. Other.

5. Provide a table, showing the cumulative trended calculated depreciated original cost (at the spot or one year average price level) by year of installation for total depreciable utility plant in service at the measure of value calculation date, or as of an available date not more than one year prior to the historic test year, in the following form:

a. Year installed.

b. Trended original cost (at the spot or one year average price level)-the total surviving cost associated with each installation year from all plant accounts combined.

c. Trended calculated depreciation reserve-the calculated depreciation reserve associated with the trended original cost for each installation year from all plant accounts combined.

d. Calculated d depreciated trended original cost-(Column b minus Column c).

e. Cumulative calculated depreciated trended original cost-cumulation year by year of the figures from Column d.

f. Column e divided by the total of the figures in Column d.

Provide the following financial data for the five most recent calendar year periods:

II.RATE OF RETURN

a. Capitilization and capitalization ratios (Company and System consolidated) and projected data through the next two calendar years (Company and System consolidated, if available). (Show data with funded debt and short-term debt separately and excluding short-term debt.)

b. Interest coverages before and after taxes (as appropriate) (Indenture and SEC bases) and for the historical test year (Indenture basis), and for latest quarter (SEC basis). (Company and System consolidated.)

c. Fixed charge coverages and for the historical test year.

2. Provide latest public quarterly financial report (Company and System consolidated).

3. Provide latest Stockholder's Annual Report (Company and System consolidated).

4. Provide latest Prospectus (Company and Parent).

5. Supply amounts, uses and sources of projected capital requirements for the Company for each of the three future calendar years.

6. Provide a schedule of debt and preferred stock of Company as of the end of the historical test year and at the latest available date, supporting the cost of debt claimed. (If the claimed cost is on a consolidated basis, provide the same data for the System consolidated.)

a. Date of issue

b. Date of maturity

c. Amount issued

d. Amount outstanding

e. Amount retired

f. Amount reacquired

g. Gain on reacquisition

h. Coupon rate

i. Discount or premium at issuance

j. Issuance expenses

k. Net proceeds

l. Sinking Fund requirements

m. Effective interest rate

n. Dividend rate

o. Effective cost rate

p. Total average weighted effective Cost Rate.

7. If common stock securities are held by the public, supply the following financial data of Company and/or System consolidated for each of the five most recent calendar years:

a. Earnings-price ratio (average)

b. Earnings-book value ratio (per share basis) (avg. book value)

c. Dividend yield (average)

d. Earnings per share (dollars)

e. Dividends per share (dollars)

f. Average book value per share yearly

g. Average yearly market price per share (monthly high-low basis)

h. Pre-tax funded debt interest coverage

i. Post-tax funded debt interest coverage

j. Market price-book value ratio.

8. State amount of, and provide details of computation of, interest on debt utilized for income tax calculations, under each of the following rate case bases:

a. Unadjusted test year under present rates

b. Adjusted test year under present rates

c. Adjusted test year under proposed rates

9. Under section 1552 of the Internal Revenue Code and Regulations 1.1552 -1 thereunder, the common Parent Company, in filing a consolidated income tax return must choose one of four options by which it must allocate total income tax liability of the group to the participating members to determine each member's earnings and profits. (If this is not applicable, so state.)

a. State what option has been chosen by the group

b. Provide a schedule which includes the taxable income or loss of each member of the group and the tax liability that has been allocated to each of the participating members in the consolidated income tax return for the latest calendar year for which the consolidated tax return has been filed and the preceding four years.

c. Provide a schedule, in summary form, of contributions, which were determined on the basis of separate tax return calculations, made by each of the participating members to the tax liability indicated in the consolidated group tax return for the latest calendar year for which the consolidated tax return has been filed. Provide total amounts of actual payments to the tax depository for the tax year, as computed on the basis of separate returns of members.

d. Provide the summary report (I.R.S. Form 1120) of the most recent annual income tax return for group, and if income tax return shows net operating loss, provide details of amount of net operating loss allocated to the income tax returns of each of the members of the consolidated group.

10. Provide AFUDC rate charged by company during the test year and explain method used to determine the rate.

11. Set forth provisions of Company's and Parent's charter and indentures (if applicable) which describe coverage requirements, limits on proportions of types of capital outstanding, and restrictions on dividend payouts.

12. Provide summaries of the Company's revenue and expense budgets for the two calendar years subsequent to the historical test year.

13. Describe the Company's accounting treatment for gains or losses for income tax and book purposes on reacquisitions of intermediate or long-term debt and preferred stock and provide the additional information requested below:

a. Reacquisitions by issue by year.

b. Total gain on reacquisitions by issue by year.

14. Provide the following information concerning compensating bank balance requirements for the historical test year:

a. Name of each bank

b. Address of each bank

c. Types of accounts with each bank (checking, savings, escrow, other services, etc.)

d. Average daily or monthly, as appropriate, balance in each account

e. Amount and percentage requirements for compensating bank balance at each bank

f. Average minimum compensating bank balance required at each bank

g. Documents from each bank explaining compensating bank balance requirements

h. Interest earned on each type of account (where applicable).

15. Provide the following information concerning short-term debt (e.g., bank notes payable) for the historical test year:

a. Line of Credit at each bank or other institution

b. Average daily or monthly, as appropriate, balances of notes payable to each bank or other institution

c. Interest rate charged on each note payable (Prime rate, formula rate, or other)

d. Purpose of each note payable (e.g., construction, working capital, debt retirement)

e. Prospective future need for this type of financing.

16. Submit details on Company and/or Parent public offerings of common stock (past five years to present) as follows:

a. Date of Prospectus

b. Date of offering

c. Record date

d. Offering period-dates and number of days

e. Amount and number of shares of offering

f. Offering ratio (if rights offering)

g. Per cent subscribed

h. Offering price

i. Gross proceeds per share

j. Expenses per share

k. Net proceeds per share (i-j)

l. Market price per share

1. At record date

2. At offering date

3. One month after close of offering

m. Average market price during offering

1. Price per share

2. Rights per share-average value of rights

n. Latest reported earnings per share at time of offering

o. Latest reported dividends at time of offering.

17. Provide latest available balance sheet and income statement for Company and System consolidated.

18. Provide Rate of Return on Original Cost and Fair Value (if claimed) for:

a. Unadjusted test year under present rates

b. Adjusted test year under present rates

c. Adjusted test year under proposed rates.

19. Attach chart explaining Company's corporate relationship to its affiliates (System Structure).

20. If the Company plans to make a formal claim for a specific allowable rate of return, provide the following data in statement or exhibit form:

a. Claimed capitalization and capitalization ratios

b. Claimed cost of long-term debt with supporting data

c. Claimed cost of short-term debt with supporting data

d. Claimed cost of total debt with supporting data

e. Claimed cost of preferred stock with supporting data

f. Claimed cost of common equity with supporting data.

21. Provide the following income tax data:

a. Consolidated income tax adjustments, if applicable

b. Interest for tax purposes (basis for the claim.)

22. Submit schedules on inter-company profits within the corporate system for the last three calendar years as follows:

a. Manufacturing and/or supply affiliates' sales to the company

b. Manufacturing and/or supply affiliates' profit before and after taxes, on such sales

c. Income tax refunds to the Company due to such sales

d. Breakdown as to amounts capitalized and expensed by Company with respect to such sales

e. Detailed explanation of the income tax deferral on such sales, and how it is handled on the books of the Company, and on the books of the manufacturing and/or supply affiliates.

23. Submit schedules on inter-company profits for the last 3 calendar years as follows, to the extent the data are available:

a. Manufacturing and/or supply affiliates' income available for common equity, after debt interest, but before income taxes

b. Manufacturing and/or supply affiliates' average amount of common equity

c. Manufacturing and/or supply affiliates' rate of return on average common equity

d. Manufacturing and/or supply affiliates' rate of return on average net investment.

24. Provide the following for the latest available calendar year:

a. Manufacturing and/or supply affiliates' sales to:

(i) Other Parent Company operating telephone subsidiaries

b. Income statement of manufacturing and/or supply affiliates.

c. Balance Sheet of manufacturing and/or supply affiliates at year end

d. Net investment of manufacturing and/or supply affiliates and details of its computation.

e. Latest annual and quarterly reports of manufacturing and/or supply affiliates.

f. Summary of total sales of manufacturing and/or supply affiliates to each of the operating telephone subsidiaries, showing amount of sales and profit ratios thereon by the following categories:

(i) Apparatus and Equipment

(ii) Cable and Wire

(iii) Supplies

g. Price comparison analyses comparing the prices of manufacturing and/or supply affiliates with the prices of other manufacturers and/or suppliers for each of the categories in (f) above.

25. Submit the following data for service affiliates (directory, computer, management, or other) during the test year:

a. Balance Sheet, detailing individual debt issues outstanding, preferred stock issues outstanding, and common equity for the latest available calendar year.

b. Income statement, detailing debt interest expense, preferred stock dividends, and net income available for common equity for the latest available calendar year.

c. Dollar total for each of the services provided during the latest available calendar year.

d. Latest annual and quarterly reports.

26. Supply a copy of each of the service contracts which define the contractual agreements as to revenues, expenses and profits apportionments.

III. BALANCE SHEET AND OPERATING STATEMENT

The responses to the items contained in Section III shall be provided for the historical test year claimed by the telephone utility. If, however, the telephone utility elects to file on a future test year basis, the additional data relative to that claim must be provided in response to the following requests.

BALANCE SHEET

1. Provide a comparative balance sheet for the test year and the preceding year which corresponds with the date at the test year end.

2. Provide a list of the major items of Other Physical Property, Investments in Affiliated Companies and Other Investments.

3. Provide a list of and an explanation of Special Cash Accounts of all types, such as:

a. Interest and Dividend Special Deposits.

b. Working Funds other than general operating cash accounts.

c. Other special cash accounts and amounts (Temporary cash investments).

4. Describe the nature and/or origin and amounts of notes receivable, accounts receivable from associated companies, and any other significant receivables, other than customer accounts, which appear on balance sheet.

5. Provide the amount of accumulated reserve for uncollectible accounts, method and rate of accrual, amounts accrued and amounts written-off for the test year and two previous years.

6. Provide a list of and an explanation of prepayments.

7. Provide a list of and an explanation of any other major (in terms of amount of dollars) current assets listed on balance sheet.

8. Provide a list of and an explanation of the deferred asset accounts that currently operate to affect or will at a later date affect the operating account supplying:

a. Origin of these accounts

b. Balance in account at the end of the test year

c. Probably changes to these accounts in the near future

d. Amortization of these accounts currently charged to operations or to be charged in the near future

e. Method of determining yearly amortization for the following accounts:

-Temporary Facilities

-Miscellaneous Deferred Debits

-Research and Development

-Property Losses

-Any other deferred accounts that affect operating results.

9. Explain the nature of accounts payable to associated companies, and note amounts of significant items.

10. Provide details of other deferred credits as to their origin and disposition policy (e.g.-amortization).

11. Supply basis for Injury and Damages reserve and amortization.

12. Provide details of any significant reserves, other than depreciation, bad debt, or injury and damages, appearing on balance sheet.

13. Provide an analysis of retained earnings for the test year and the two preceding years.

Cash Working Capital

14. Supply an exhibit supporting the claim for working capital requirement based on the lead-lag method.

a. Pro forma expenses and revenues are to be used in lieu of book data for computing lead lag days.

b. Settlements amounts with other communication companies should be treated as both revenues and expenses when developing lead and lag days.

15. Provide schedules and data in support of the following working capital items:

a. Prepayments-List and identify all items

b. Federal Excise Tax accrued or prepaid

c. Federal Income Tax accrued or prepaid

d. Pa. State Income Tax accrued or prepaid

e. Pa. Gross Receipts Tax accrued or prepaid

f. Pa. Capital Stock Tax accrued or prepaid

g. Pa. Public Utility Realty Tax accrued or prepaid

h. State sales tax accrued or prepaid

i. Payroll taxes accrued or prepaid

j. Interest on funded debt and other debt accrued or prepaid

k. Average customer deposits and annual interest thereon.

l. Any pro forma adjustment related to the above items under proposed rates.

16. Provide detailed calculations showing the derivation of the tax liability offset against gross cash working capital requirements.

INCOME STATEMENT

17. Prepare a Statement of Income and supporting adjustments for the various time frames of the rate proceeding including:

Col. 1-Unadjusted income statement for the test year.

2-Adjustments made to annualize and normalize unadjusted revenues, expenses and taxes under proposed rates.

3-Income statement under present rates after adjustment in Col. 2.

4-Adjustment to reflect the revenue increase requested.

5-Income statement under requested rates.

a. Expenses may be summarized by the following expense classifications for purposes of this statement:

Operating Expenses (by category)

Depreciation

Amortization

Taxes, Other than Income Taxes

Total Operating Expense

Operating Income Before Taxes

Federal Taxes

State Taxes

Deferred Federal

Deferred State

Income Tax Credits

Other Credits

Other Credits and Charges, etc.

Total Income Taxes

Net Utility Operating Income

Other Income & Deductions

Other Income

Detailed listing of Other Income used in Tax

Calculation

Other Income Deduction

Detailed Listing

Taxes Applicable to Other Income and Deductions

Listing

Income Before Interest Charges

Listing of all types of Interest Charges and all amortization of Premiums and/or Discounts and Expenses on Debt issues

Total Interest

Net Income After Interest Charges

b. Submit a statement explaining the derivation of the amounts used for projecting future test year level of operations and submit appropriate schedules supporting the projected test year level of operations.

c. Adjustments which are estimated shall be fully supported by basic information reasonably necessary.

d. Ratios, percentages, allocations and averages used in adjustments must be fully supported and identified as to source.

e. List all and explain significant non-recurring abnormal or extraordinary expenses incurred in the test year which will not be present in future years.

f. List all and explain major expenses included in the test year which do not occur yearly but are of a nature that they do occur over an extended period of years. (e.g.-Non-yearly maintenance programs, etc.)

18. Provide clarifying detail for any expense adjustments listed in Item 17 above that are due to changes in accounting procedure, such as charging a particular expense to a different account than was used previously. Explain any extraordinary declines in expenses due to such change of account use.

19. Provide comparative operating statements for the test year and the immediately preceding 12 months showing increases and decreases between the two periods. These statements should supply detailed explanation of the causes of the major variances between the test year and preceding year by detailed account number.

Operating Expenses

20. Prepare a 3-column schedule of operating expenses, as described below, for the following periods:

a. Columns 1 and 2-list two prior years relative to the test year period.

b. Column 3-Test Year

(Supply sub-accounts, if significant, to clarify basic accounts.)

MAINTENANCE EXPENSES

602.1	Repairs of pole lines
602.2	Repairs of aerial cable
602.3	Repairs of underground cable
602.4	Repairs of buried cable
602.5	Repairs of submarine cable
602.6	Repairs of aerial wire
602.7	Repairs of underground conduit
602.8	Shop repairs and salvage adjustments
602	Subtotal-Repairs of outside plant
603	Test desk work
604	Repairs of central office equipment
605	Repairs of station equipment
606	Repairs of buildings and grounds
610	Maintaining transmission power
611	Employment stabilization
612	Other maintenance expenses
Total
TRAFFIC EXPENSES
621	General traffic supervision
622	Service inspection and customer instruction
624	Operators' wages
626	Rest and lunchrooms
627	Operators' employment and training
629	Central office stationery and printing
630	Central office house service
631	Miscellaneous central office expense
632	Public telephone expenses
633	Other traffic expenses
634	Joint traffic expenses-Dr.
635	Joint traffic expenses-Cr.
Total
COMMERCIAL EXPENSES
640	General commercial administration
642	Advertising
643	Sales expense
644	Connecting company relations
645	Local commercial operations
648	Public telephone commissions
649	Directory expenses
650	Other commercial expenses
Total
GENERAL OFFICE SALARIES AND EXPENSES
661	Executive department
662	Accounting department
663	Treasury department
664	Law department
665	Other general office salaries and expenses
Total
OTHER OPERATING EXPENSES
668	Insurance
669	Accidents and damages
671	Operating rents
672	Relief and pensions
673	Telephone franchise requirements
674	General services and licenses
675	Other expenses
676	Telephone franchise requirements-Cr.
677	Expenses charged construction-Cr.
Total

21. List extraordinary property losses included in operating expenses or depreciation and amortization as a separate item. Sufficient supporting data must be provided.

22. Supply detailed calculations of amortization of rate case expense, including supporting data for outside services rendered. Provide the items comprising the rate case expense claim, the items comprising the actual expenses of prior rate cases and any unamortized balances.

23. Submit detailed computation of adjustments to operating expenses for salary, wage and fringe benefit increases (nonmanagement and management) granted or planned to become effective during the test year. Supply data for the historical test year and for the future test year, as available:

a. Total annualized payroll increases included in the test year broken down between amounts capitalized and amounts expensed.

b. Total annualized payroll expense increase claimed in the test year by categories of operating expense, i.e., maintenance, operating transmission, distribution and the like.

c. For each payroll increase included in the test year supply the following:

i. Nature of payroll increase

ii. Effective date of payroll increase

iii. Average percentage increase

iv. Annualized increase in payroll amount

v. Annualized increase in payroll expense

d. For each wage increase provide the increase to wage related cost added to annualized wages. Itemize the amounts between overtime, social security taxes, Pension and death benefits, company contributed savings, group life insurance, and any other. Any benefits included in these amounts paid to officers only should be itemized separately.

e. State whether the pension cost figures include any unfunded pension cost. Explain.

f. If any of the amount claimed in the test year for annualized payroll increase includes deferred income and/or consultant fees to corporate officers or employes, submit a schedule listing the amounts.

24. Supply an exhibit showing an analysis if the charges by service affiliates for services rendered included in the operating expenses of the filing company for the test year and for the 12-month period ending prior to the test year:

a. Supply a copy of contracts, if applicable.

b. Explain the nature of the services provided.

c. Explain basis on which charges are made.

d. If charges allocated, identify allocation factors used.

e. Supply the components and amounts comprising the expense in this account.

25. Describe costs relative to leasing equipment, computer rentals, and office space, including terms and conditions of the lease. State method for calculating monthly or annual payment.

26. Submit detailed calculations (or best estimates) of the cost resulting from major storm damage.

27. Provide a schedule of advertising expense for the classifications and for the media categories as specified in the Uniform System of Accounts for the test year and the two prior comparable years.

28. Prepare a detailed schedule for the test year showing types of social and service organization memberships paid for by the Company and the cost thereof.

29. Submit a schedule showing the major expenditures associated with Outside Services Employed and Regulatory Commission Expenses, for the test year and prior two comparable years or calendar years.

30. Submit details of information covering research and development expenditures including major projects within the company and forecasted company programs.

31. Provide a schedule lising all charitable and civic contributions by recipient for those amounts claimed in the test year operating expenses.

32. Provide a labor productivity schedule.

33. Indicate the expenses that are included in the test year, which are due to the placement in operating service of major plant additions or the removal of major plant from operating service, and estimate the expense that will be incurred on a full-year's operation.

34. Submit a statement of changes in major accounting procedures since the previous rate case and any anticipated changes.

35. Explain the internal auditing program and provide a listing of the audits performed during the year preceding the filing.

Taxes, Other than Income Taxes

36. Provide a copy of the latest capital stock tax report and the latest capital stock tax settlement.

37. Provide a schedule of Federal and Pennsylvania taxes, other than income taxes, calculated for the unadjusted test year under present rates, the adjusted test year under present rates and the adjusted test year under proposed rates, to include the following categories:

a. social security

b. unemployment

c. capital stock

d. public utility realty

e. assessments-P.U.C. and Office of the Consumer Advocate

f. other property

g. any other appropriate categories Income taxes

38. Submit a schedule showing for the last five calendar years the Federal income tax refunds, or other payments plus interest (net of taxes), paid to the Company as a result of prior years' claims.

39. Provide detailed computations showing the deferred income taxes resulting from the use of: accelerated tax depreciation associated with post-1969 public utility property as provided by Internal Revenue Code Section 167 Asset Depreciation Range (ADR) lives; and, accelerated tax depreciation associated with post-1980 public utility property under the Accelerated Cost Recovery System (ACRS) as provided by Internal Revenue Code Section 168.

a. Separate the state and federal computations and provide the tax rates used in calculating the deferrals.

b. State whether tax depreciation is based on all depreciable telephone plant in service claimed in the measure(s) of value and whether it is the tax depreciation for the test year.

c. Reconcile any difference between the deferred tax balance, shown as a reduction to the measure(s) of value, and the deferred tax balance as shown on the balance sheet.

40. Submit a schedule showing a breakdown of the deferred income taxes by State and Federal for the unadjusted test year under present rates, the adjusted test year under present rates and the adjusted test year under proposed rates.

41. Submit a schedule showing a breakdown of accumulated and unamortized investment tax credits (3 percent, 4 percent, 7 percent, 10 percent and 11 percent), as of the end of the historical test year, together with a description of methods used to write-off the unamortized balances if changed since previous rate proceeding.

42. Submit detailed calculations showing the derivation of deferred income taxes due to amortization of repair allowance if such policy is followed.

(Note: Submit additional schedules if the company has more than one accounting area.)

43. Provide details of the Federal Surtax Exemption allocated to the Pennsylvania jurisdictional area, if applicable.

44. Explain the use of cost of removal of any retired plant figures in the income tax calculations.

45. Provide the method used to calculate test year income tax deferrals associated with tax depreciation in amounts segregated as follows:

a. Property installed prior to 1970

b. Property installed subsequent to 1969

46. State whether all tax effects due to accelerated depreciation on property installed prior to 1970 have been passed through to income. (If not, explain.)

47. Show any income tax loss/gain carryovers from previous years that may affect test year income taxes or future year income taxes. Show loss/gain carryovers by years of origin and amounts remaining by years at the end of the test year.

48. Provide a detailed analysis of Taxes Accrued on the basis of the unadjusted test year under present rates.

49. For the test year as recorded on test year operating statement:

a. Supply the amount of current Federal income tax expense.

b. Supply the amount of the net deferred Federal income tax expense resulting from the excess of accelerated tax depreciation over book depreciation.

c. Supply the amount of investment credit realized during the test year due to the 10% Job Development Credit during test year.

d. Provide the amount of the reduction in Federal income taxes due to the amortization of the 10% Job Development Credit.

e. Provide the amount of the reduction in Federal income taxes for the amortization of any 3% Investment Tax Credit that may remain on the utility books.

f. Provide the Federal income tax actually paid, net of all tax credits, for the latest tax return filed.

50. Provide the debit and credit in the test year to the Deferred Taxes due to Accelerated Depreciation for Federal income tax, and provide the debit and credit for the Job Development Credits (whatever account) for the test year.

51. Reconcile income taxes on the test year operating statement with regard to current portion of income tax, income taxes deferred currently due to tax timing differences and current taxes due resulting from past years' income tax deferrals, and from adjustment of investment tax and job development credits for both State and Federal income taxes.

52. With respect to determination of Federal and State income taxes, submit the following schedules:

a. Income tax results of the adjustments to the test year under present rates.

b. Income taxes for the adjusted test year under present rates.

c. Income tax effect of the rate increase requested.

d. Income taxes for the adjusted test year under proposed rates.

e. Adjustments for taxable net income for the unadjusted test year under present rates and the adjusted test year under present rates, together with an explanation of any difference between the adjustments. Indicate charitable donations and contributions in the tax calculation for rate making purposes, if claimed.

53. Each independent telephone company shall provide copies of Bell of Pennsylvania toll settlement sheets for each month of the historical test year as well as each month subsequent to the test year, prior to the effective date of the filing.

IV.RATE STRUCTURE

Each telephone utility shall submit the following simultaneously with any rate increase filing:

1. A fully allocated cost-of-service study derived from the apportionment of the total costs of operating a telephone company, by distributing this total cost among all of the various equipment units and classes of service in such a manner that the sum of the costs imputed to each unit or class of service is made to equal the total costs for the most recent year available.

2. Submit a summary of the detailed cost studies upon which respondent supports the proposed rates.

a. For every cost study provided, submit a thorough explanation of the cost methodology used in deriving such cost studies.

3. Show a comparison of proposed revenue to a fully allocated cost for any charge change in equipment or service. Indicate the deficiencies or excesses in proposed revenue.

4. Provide a schedule that compares present and proposed tariff charges, along with the percentage increase or decrease for each change, increase, or decrease in the tariff. Also, set forth the revenue anticipated from these changes.

5. Provide a detailed revenue analysis displaying, by category of service, revenues resulting from test year under present rates and test year under proposed rates.

6. Submit a summary of the number and type of customers or billed units affected by each proposed increase, decrease or change in the tariff.

7. Submit a study that states the number of customers or billed units receiving individual, two-party, four-party and multi-party service in each exchange area for the total Company. Classify according to residence and business customers or billed units.

8. Provide a list of the various exchanges and show the number of terminals each exchange can call without incurring a toll charge. Accompany this with the present and proposed basic monthly exchange charges by rate band if applicable and percentage increase. Delineate according to business and residential customers or billed units.

If a change from mileage charges to zones is proposed, explain how zones were chosen and what criteria were used in choosing the geographical locations of these zones.

9. Submit a schedule listing the following information for each central office.

a. Number of lines installed at the end of test year.

b. Number of lines utilized at end of test year.

10. Provide the rationale, method of determination and cost justification for any change in rate band widths.

11. Provide growth patterns of usage in messages or hundred call seconds per main station and billed units, by business and residence classes of service for each rate class for three preceding years.

12. Provide a schedule showing unfilled requests for upgrades.

13. Provide a schedule showing outstanding service orders for new telephones at the end of the test year.

Pa. Code tit. 52, pt. I, subpt. C, ch. 53, INFORMATION FURNISHED WITH THE FILING OF RATE CHANGES, exh. B

The provisions of this § 53.53 adopted September 2, 1977, 7 Pa.B. 2527; amended through March 29, 1985, effective for rate increase requests filed on and after July 1, 1985. Those utilities in a position to meet the filing requirements in the new regulations may, upon request, file under these new regulations at an earlier date, 15 Pa.B. 1178; amended October 23, 1987, effective 11/23/1987, 17 Pa.B. 4221; corrected May 13, 1994, effective 12/3/1983, 24 Pa.B. 2533; amended May 20, 2005, effective 5/21/2005, 35 Pa.B. 3024.

The provisions of this § 53.53 issued under the Public Utility Code, 66 Pa.C.S. § § 315, 332, 501, 504-506, 1301, 1302, 1308 and 1311.

This section cited in 52 Pa. Code § 5.412a (relating to electronic submission of pre-served testimony); 52 Pa. Code § 53.10 (relating to letter of transmittal); 52 Pa. Code § 53.52 (relating to applicability; public utilities other than canal, turnpike, tunnel, bridge and wharf companies); and 52 Pa. Code § 53.103 (relating to concurrently furnished information).