Our task in this proceeding is to establish reasonable and fair depreciation rates for GTE's Oregon assets. Looking at depreciation rates of other companies can be helpful. However, as is frequently the case, the companies presented for comparison are quite different from the company under study. There are differences in capital structure between companies, sometimes even when they are performing similar services. Some companies in a similar business are far more capital-intensive than others.
Additional differences are apparent for companies whose depreciation rates are unregulated.
The information about the depreciation rates of other companies submitted by GTE is relevant, but not persuasive. We believe that Staff's estimates of the lives of GTE's assets will be closer to what actually occurs than GTE's estimates. Staff's estimates therefore more closely match depreciation expense with the customers benefiting from the reduction in value of those assets. Staff's estimates of appropriate depreciation rates for GTE's assets are the most persuasive evidence presented in this proceeding, and should be adopted. The revised depreciation rates should be considered effective as of January 1, 1997.