Current through Register Vol. 63, No. 9, September 1, 2024
(1) As used in this
rule:
(a) "Affiliate Transaction" means a
transfer of assets, a sale of supplies, or a sale of services between accounts
for regulated activities of a large telecommunications utility and accounts for
nonregulated activities of a separate entity that is either an affiliated
interest or another company in which the large telecommunications utility owns
a controlling interest. The term also means a transfer of assets, a sale of
supplies, or a sale of services between accounts for the regulated and
nonregulated activities of a single large telecommunications utility;
(b) "Asset" means any tangible or intangible
property of a large telecommunications utility or other right, entitlement,
business opportunity, or other thing of value to which a large
telecommunications utility holds claim;
(c) "Cost" means fully distributed cost,
including the large telecommunications utility's authorized rate of return and
all overheads;
(d) "Fair Market
Value" means the potential sales price that could be obtained by selling an
asset in an arm's-length transaction to a nonaffiliated entity, as determined
by commonly accepted valuation principles;
(e) "Market Rate" means the lowest price that
is available from nonaffiliated suppliers for comparable services or
supplies;
(f) "Net Book Value"
means original cost less accumulated depreciation; and
(g) "Nonregulated Service" means a service
that is not a telecommunications service as defined by ORS
759.005(2)(g),
or a service that the Commission has determined to be exempt from
regulation.
(2) A large
telecommunications utility that provides both regulated and nonregulated
intrastate service shall:
(a) Allocate
intrastate investments, expenses, and revenues between regulated activities and
nonregulated activities according to principles, procedures, and accounting
requirements, which the Federal Communications Commission (FCC) adopted
December 23, 1986, and amended on reconsideration September 17, 1987, in CC
Docket No. 86-111, except as otherwise provided in this rule;
(b) Part 64, Subpart I, Allocation of Costs,
adopted by the Federal Communications Commission on October 11, 2001, is hereby
adopted and prescribed.
(3) A large telecommunications utility, which
is subject to price caps under ORS
759.405, may account for its
regulated and nonregulated intrastate activities in accordance with FCC Part
32, Section 32.27. For all other large telecommunications utilities, Section
32.27 is replaced as follows for intrastate purposes:
(a) When an asset is transferred to regulated
accounts from nonregulated accounts:
(A) If
the asset has an original cost of more than $100,000, the transfer shall be
recorded in regulated accounts at the lower of net book value or fair market
value.
(B) If the asset has an
original cost of $100,000 or less, the transfer shall be recorded in compliance
with Section 32.27.
(b)
When an asset is transferred from regulated accounts to nonregulated accounts:
(A) If the asset has an original cost of more
than $100,000, the transfer shall be recorded in regulated accounts at the
tariff or price-listed rate if an appropriate tariff or price list is on file
with the Commission. If no tariff or price list is applicable, proceeds from
the transfer shall be recorded in regulated accounts at the higher of net book
value or fair market value.
(B) If
the asset has an original cost of $100,000 or less, the transfer shall be
recorded in compliance with Section 32.27.
(c) When an asset is transferred from a
regulated account to a nonregulated account at a fair market value that is
greater than net book value, the difference shall be considered a gain to the
regulated activity. The large telecommunications utility shall record the gain
so the Commission can determine the proper disposition of the gain in a
subsequent rate proceeding.
(d)
When services or supplies are sold by a regulated activity to a nonregulated
activity:
(A) If the annual value exceeds
$100,000, sales shall be recorded in regulated revenue accounts at tariffed or
price-listed rates if an applicable tariff or price list is on file with the
Commission. Tariffed or price-listed rates shall be established whenever
possible. If services or supplies are not sold pursuant to a tariff or price
list, sales shall be recorded in regulated revenue accounts at the large
telecommunications utility's cost.
(B) If the annual value is $100,000 or less,
the sales shall be recorded in compliance with Section 32.27.
(e) When services or supplies are
sold to a regulated activity by a nonregulated activity:
(A) If the annual value exceeds $100,000,
sales shall be recorded in regulated accounts at the nonregulated activity's
cost or the market rate, whichever is lower. The nonregulated activity's cost
shall be calculated using the large telecommunications utility's most recently
authorized rate of return.
(B) If
the annual value is $100,000 or less, the sales shall be recorded in compliance
with Section 32.27.
(f)
Income taxes shall be allocated among the regulated activities of the large
telecommunications utility, its nonregulated divisions, and members of an
affiliated group. When income taxes are determined on a consolidated basis, the
large telecommunications utility shall record income tax expense as if it were
determined for the large telecommunications utility separately for all time
periods.
(4) If a large
telecommunications utility:
(a) Is subject to
ORS 759.100 through
759.115 and provides both
regulated and nonregulated intrastate service, the utility shall maintain a
current intrastate cost allocation manual on file with the Commission. If the
FCC requires the large telecommunications utility to file an interstate cost
allocation manual, the utility shall also maintain a current copy of its
interstate manual with the Commission.
(b) Is subject to price caps under ORS
759.405, the large
telecommunications utility is not required to file an intrastate cost
allocation manual with the Commission. A large telecommunications utility that
is subject to price caps must file a copy of its annual 254(k) compliance
filing and make information available to the Commission as needed to review the
utility's intrastate cost allocations to ensure that services included in the
definition of universal service bear no more than a reasonable share of the
joint and common costs of facilities used to provide those services.
(5) An intrastate cost allocation
manual, if required under subsection (4) of this rule, shall contain the
following:
(a) A description of each of the
large telecommunications utility's nonregulated intrastate
activities;
(b) A list of all
intrastate activities to which the large telecommunications utility now accords
incidental accounting treatment, and the justification for treating each as
incidental;
(c) A chart showing the
large telecommunications utility's affiliates;
(d) A statement identifying affiliates that
engage in or will engage in transactions with the large telecommunications
utility for the purpose of providing nonregulated intrastate service and
describing the nature, terms, and frequency of such transactions; and
(e) A detailed specification of the cost
categories to which amounts in each account and subaccount of Part 32 will be
assigned, and a detailed specification of the basis on which each cost category
will be apportioned between regulated and nonregulated activities.
(6) Unless specifically allowed by
the Commission, a cost allocation manual cannot be used to satisfy any other
reporting requirement established by the Commission.
(7) The initial cost allocation manual filed
by a large telecommunications utility pursuant to this rule must be filed with
the Commission no less than 90 days before the manual's effective date. The
manual shall go into effect unless rejected by the Commission before the
manual's effective date.
(8) When a
large telecommunications utility proposes any change to a cost allocation
manual previously filed with the Commission, the utility shall file the
proposed change with the Commission no less than 45 days before the effective
date of the change. The changes shall go into effect unless rejected by the
Commission before the effective date of the change.
(9) After the Commission has issued an order
to exempt from regulation a telecommunications service provided by a large
telecommunications utility that is subject to ORS
759.100 through
759.115, the affected utility
shall file with the Commission either an initial cost allocation manual or a
change to its previously filed manual.
(10) A large telecommunications utility that
is required to file annual independent cost allocation audits with the FCC
shall at the same time file copies of the annual audits with the
Commission.
Publications: Publications referenced are available from the
agency.
Stat. Auth.: ORS 183, ORS 756 & ORS 759
Stats. Implemented: ORS
756.105, ORS
759.120, ORS
759.125 & ORS
759.130
