Illinois Administrative Code › Title 83 - PUBLIC UTILITIES › Part 791 - COST OF SERVICE › Section 791.20 - Terminology

Current through Register Vol. 48, No. 28, July 12, 2024
a) The long-run service
			 incremental cost of a service ("LRSIC") is the forward-looking additional costs
			 incurred by the telecommunications carrier ("carrier") to provide the entire output
			 of a service, including additional resources such as labor, plant, and equipment.
			 Long-run service incremental cost excludes any costs, including common costs, that
			 would be incurred if the service is not produced.
b) Long-run costs are the economic costs over a
			 planning horizon long enough so that there are no sunk inputs or costs.
c) Forward-looking costs are the costs to be
			 incurred by a carrier in the provision of a service. These costs shall be calculated
			 as if the service were being provided for the first time and shall reflect planned
			 adjustments in the firm's plant and equipment. Forward-looking costs ignore embedded
			 or historical costs; rather, they are based on the least cost technology currently
			 available whose cost can be reasonably estimated based on available data, as such
			 forward-looking cost estimates must reflect assumptions and technologies that are
			 currently operational, that is, able to be used and available in the
			 marketplace.
d) Volume-insensitive costs
			 are costs that do not vary with changes in output.
e) Volume-sensitive costs are costs that vary with
			 changes in output of a particular service.
f) A group of services that is referenced in this
			 Part consists of those services that share a common network technology, element, or
			 business function that is necessary and unique to the provision of all services in
			 the group, and where that common network technology, element, or business function
			 cannot be attributed to any one service or subgroup of services in the
			 group.
g) LRSIC of a group of services:
			 Where additional resources are used in common and are necessary to provide a group
			 of services, the long-run service incremental cost of that group of services
			 includes the cost caused by the portion of such additional resources used solely by
			 that group of services, including the LRSIC's of the individual services. Resources
			 include labor, plant, and equipment.
h)
			 Common costs are those costs that a carrier must incur in order to operate that are
			 not directly attributable to any particular service or to any group of services
			 smaller than the group of services consisting of all the services of the carrier.
			 Common costs shall not be included in the LRSIC for a service.
i) Ad valorem taxes are those which are levied on
			 the value of plant as determined by a governmental taxing authority (e.g., local
			 property taxes levied against telephone plant).
j) Capital costs are the recurring costs that
			 result from expenditures that are capitalized. These annual capital costs include
			 depreciation, cost of capital (return), and income taxes.
k) Expenses are the cost or resources consumed in
			 the production of revenue that are expensed rather than capitalized in accordance
			 with the Uniform System of Accounts applicable to the carrier (83 Ill. Adm. Code
			 710).
l) Investment is a long-term
			 capital asset (normally with a life exceeding one year) which is depreciated rather
			 than expensed in accordance with the Uniform System of Accounts applicable to the
			 carrier (83 Ill. Adm. Code 710).
m)
			 Recurring costs are costs which will continue throughout the revenue producing life
			 of the service. They include capital costs and expenses.
n) Usable capacity is the maximum physical
			 capacity of the equipment or resource less any capacity required for maintenance,
			 testing or administrative purposes.