THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Saturday, February 24, 1996 TAG: 9602240340
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: ASSOCIATED PRESS
DATELINE: RICHMOND LENGTH: Short : 39 lines
A difference in accounting methods is at the heart of a dispute between Bell Atlantic-Virginia and the State Corporation Commission staff, which believes the company owes ratepayers $14 million in refunds.
In a public statement, the company played down the dispute as a difference of opinion over ``two technical accounting issues'' that the SCC will resolve later this year.
But in a document filed with the commission Thursday, Bell Atlantic accused the staff of attempting to manipulate the company's financial results to force refunds and prevent the recovery of legitimate expenses.
Under current regulations, phone companies are limited to 14 percent return on investment for their local phone service. If a company earned above 14 percent, the SCC would require refunds to customers.
Last month, the SCC's staff reported that for 1992, Bell Atlantic's return on investment was 14.87 percent, or $14.3 million in excess earnings. Bell Atlantic took a different accounting approach, which showed the company's rate of return at 13.68 percent.
The dispute centers around a 1991 proposal by the company to amortize more than $70 million in depreciation reserves over three years.
The SCC's staff wanted the expenses amortized over two years, but with a condition that they would not be allowed if the result were a rate increase or avoidance of a refund.
Bell Atlantic argued Thursday that the condition is not appropriate because competition in the local telephone business prevents the company from being assured of recovering reasonable expenses. by CNB