PROCEEDINGS OF THE EIGHTEENTH ANNUAL IOWA STATE UNIVERSITY REGULATORY CONFERENCE ON PUBLIC UTILITY VALUATION AND THE RATE MAKING PROCESS

Transcription

1 PROCEEDINGS OF THE EIGHTEENTH ANNUAL IOWA STATE UNIVERSITY REGULATORY CONFERENCE ON PUBLIC UTILITY VALUATION AND THE RATE MAKING PROCESS May 23, 24, 25, 1979 Sponsored by the Engineering Extension Service and the Industrial Engineering Department Iowa State University Conference Director Harold A. Cowles Industrial Engineering Department Scheman Continuing Education Building Iowa State University, Ames, Iowa Library of Congress Catalog Card Number

2 TABLE OF CONTENTS FIRST SESSION - National Energy Act 1 THE NATIONAL ENERGY ACT: IMPLICATIONS FOR STATE REGULATIONS Paul Rodgers 3 THE NATIONAL ENERGY ACT Edward Berlin 11 SECOND SESSION - Regulatory Management Efficiency: The Proper Organization and Management of a State Regulatory Commission 21 ORGANIZATIONAL AND OPERATIONAL EFFICIENCY IN A NEW REGULATORY BODY: THE TEXAS PUBLIC UTILITY COMMISSION Alan R. Erwin 23 THIRD SESSION - Training in Engineering Economy 29 BELL SYSTEM ENGINEERING ECONOMIC TRAINING W. C. Cowing 31 ENGINEERING ECONOMICS TRAINING AT PHILADELPHIA ELECTRIC COMPANY R. N. Rau 36 FOURTH SESSION - POWER POOLS: ARENA FOR INTERSECTION OF STATE AND FEDERAL REGULATION 55 Maurice Van Nostrand 57 POWER POOLS: ARENA FOR INTERSECTION OF STATE AND FEDERAL REGULATION T. J. Nagel 64 A LAWYER'S LOOK AT POWER I'COLS: ARENA FOR INTERSECTION OF STATE AND FEDERAL REGULATIONS Richard Littell 70

3 FIFTH SESSION - Pricing Telecommunications Services Under Competition 85 PRICING TELECOMMUNICATIONS SERVICES UNDER COMPETITION: CAN IT BE CONSISTENT WITH REGULATION? Frank J. Alessio 87 MAKING ECONOMIC THEORY WORK R. A. Ryerson 90 SIXTH SESSION - CWIP in the Rate Base for Cash Returns 111 INCLUSION IN RATE BASE OF CONSTRUCTION WORK IN PROGRESS Joseph F. Brennan 113 IS PLACING CWIP IN THE RATE BASE EFFICACIOUS? Charles M. Studness 130 SEVENTH SESSION - Vice Presidents' Concerns about Depreciation 141 CAPITAL RECOVERY - FINANCIAL CONCERNS H. A. Offutt 143 DEPRECIATION - WHO CARES? Arend J. Sandbulte 148 EIGHTH SESSION - Does or Should Public Utility Accounting Follow Generally Accepted Accounting Principles 155 DOES OR SHOULD PUBLIC UTILITY ACCOUNTING FOLLOW GENERALLY ACCEPTED ACCOUNTING PRINCIPLES? William D. Hall 157 NINTH SESSION - State Commissions' Concerns about Depreciation 161 STATE COMMISSIONS' CONCERNS ABOUT DEPRECIATION Alfred E. Ueberroth 163 STATE COMMISSIONS' CONCERNS ABOUT DEPRECIATION Walter G. D'Haeseleer 171 TENTH SESSION - Annual Finance Panel - Current Views on the Capital Market 177 THE PURPOSE OF A REGULATORY FINANCIAL POLICY Eric A. Leighton 179

4 ELEVENTH SESSION - Anti-Trust and the Regulated Utility 187 ANTITRUST AND THE REGULATED UTILITY Harold S. Levy 189 TWELFTH SESSION - Accounting for the Back End of the Nuclear Cycle 217 ACCOUNTING AND RATEMAKING CONCERNS RELATING TO THE BACK END OF THE NUCLEAR FUEL CYCLE Morris R. Fitzgerald 219 THE NUCLEAR FUEL CYCLE AND RELATED COST AND ACCOUNTING CONSIDERATIONS E. R. Johnson 225 ACCOUNTING FOR THE BACK END COSTS OF THE NUCLEAR FUEL CYCLE Robert L. Hahne 238 THIRTEENTH SESSION - Implications of Obsolescence in Life and Salvage Analysis 245 DEVELOPMENTS IN DEPRECIATION IN THE TELE- COMMUNICATIONS INDUSTRY IN CANADA Robert S. Bleackley Aly Elfar 247 WHAT REALLY IS OBSOLETE? Barnard H. Bissinger 267 FOURTEENTH SESSION - Proper Role and Function of the Commission Staff 279 PROPER ROLE- OF THE COMMISSION STAFF Vernon L. Sturgeon 281 THE PROPER FUNCTION, DUTY AND RESPONSIBILITY OF REGULATORY COMMISSION STAFFS Howard P. Allen 285 THE PROPER ROLE AND FUNCTION OF COMMISSION STAFF A COMMISSION STAFF MEMBER'S VIEWPOINT Ronald L. Coy 291

5 FIFTEENTH SESSION - Price Squeeze - Who Will Be Squeezed? 295 "PRICE SQUEEZE" WHO IS SQUEEZED AND WHAT CAN THEY DO ABOUT IT? Sandra J. Strebel 297 "PRICE SQUEEZE" AND UTILITY RATES George A. Avery 305 PRICE SQUEEZE: A COMMISSION STAFF ATTORNEY'S VIEW David A. Leckie 319 SIXTEENTH SESSION - Sale of Telecommunications Terminal Equipment by Common Carriers and Others 331 Neil Swift 333 SALE OF TELECOMMUNICATIONS TERMINAL EQUIPMENT BY COMMON CARRIERS AND OTHERS J. Stephen Vanderwoude 349 SEVENTEENTH SESSION - Price Trending - Theory and Practice 359 HOW TO USE A CONSTRUCTION COST INDEX John B. Gillett 361 THE PREPARATION OF CUSTOM CONSTRUCTION COST INDEXES Harold T. Waddlngton 368 EIGHTEENTH SESSION - Internal Accounting Controls and the Foreign Corrupt Practices Act 373 NINETEENTH SESSION - Depreciation in Reproduction Cost Studies 375 CALCULATION OF REPLACEMENT COST DATA AND ASSOCIATED DEPRECIATION EXPENSE AND RESERVE AMOUNTS FOR SEC FORM 10-K REPORTING John F. Cannon 377 DESCRIPTION OF A METHODOLOGY USED FOR CALCULATION OF REPLACEMENT COST DATA REPORTED IN FORM 10-K OF THE ANNUAL REPORT TO THE S.E.C. John Lamparello, Jr. 392

6 TWENTIETH SESSION - Load Management 399 LOAD MANAGEMENT Richard D. Cudahy 4Q1 LOAD MANAGEMENT: MAKING SOME DISTINCTIONS Jay B. Kennedy 403 ERA ACTIVITIES IN IMPLEMENTING LOAD MANAGEMENT Jeffrey A. Serfass 410 TWENTY-FIRST SESSION - Load Forecasting: A Utility or a Regulatory Function 419 LOAD FORECASTING: A UTILITY OR A REGULATORY FUNCTION David C. Sweet 421 LOAD FORECASTING: A UTILITY OR A REGULATORY FUNCTION Paul Dragoumis 433 TWENTY-SECOND SESSION - Implications of Usage Sensitive Pricing for Local Telephone Service 443 IMPLICATIONS OF USAGE SENSITIVE PRICING FOR LOCAL TELEPHONE SERVICE L. W. Schmidt 445 IMPLICATIONS OF USAGE-SENSITIVE PRICING FOR LOCAL TELEPHONE SERVICE C. Burton Nelson 453 TWENTY-THIRD SESSION - Nuclear Decommissioning 459 FINANCIAL, ACCOUNTING AND RATE MAKING PROBLEMS ASSOCIATED WITH RECOGNITION OF NUCLEAR POWER DECOMMISSIONG COSTS IN DEPRECIATION RATES F. C. Huebner 461 REVENUE REQUIREMENTS OF VARIOUS METHODS FOR ACCUMULATING FUNDS FOR NUCLEAR PLANT DECOMMISSIONING James T. Selecky 469