Opinion ID: 1059654
Heading Depth: 2
Heading Rank: 4

Heading: Rate Base and Depreciation

Text: 2 In 1994, Contel of Virginia, Inc. and GTE Southwest merged to form GTE South. The 1988 study was of GTE Southwest's service territory and the 1990 study covered Contel's service territory. 10 GTE's final assignments of error are also without merit. GTE complains that its application was based on a December 31, 1994 rate base, but that the Commission erroneously adopted a rate base as of September 30, 1995. GTE's primary complaint is that, although the rate base was adjusted by increased revenues reflecting increased customer levels, no adjustments were made for the expenses necessary to support those increased customer levels. However, GTE offered no evidence of its increased expenses. The Commission's decision to rely on a current, updated rate base is consistent with this Court's determination that the Commission, in exercising its legislative function of fixing utility rates for the future, should not be blind to the future. It may adjust the results of the test year by allowing for known changes to make the test year representative of the future. Virginia Power, 211 Va. at 771, 180 S.E.2d at 685. Finally, GTE asserts that the Commission erred in refusing to consider GTE's new depreciation rates. These rates were offered in the rebuttal testimony of a GTE witness. The Hearing Examiner granted the Attorney General's motion to exclude this testimony because the GTE witness admitted he was not an expert on GTE's depreciation rates, and that while he could not support those rates in this proceeding, they would be supported by experts from other GTE departments in a 11 companion proceeding. The Hearing Officer also determined that the depreciation testimony was untimely and did not rebut any issues raised by the Commission staff or any other party. In fact, neither GTE, the Commission staff, nor any other party in this proceeding had previously raised the issue of depreciation rates. Similarly, the Hearing Examiner refused to adopt GTE's January 1997 suggestion to take judicial notice of new depreciation rates that had been approved pursuant to another Commission procedure. 3 The Commission adopted the Hearing Examiner's decision to refuse evidence of new depreciation rates. Based on this record, the Commission's order was not an abuse of discretion. GTE's attempt to have the Commission incorporate new depreciation rates at that point in the proceeding was untimely. For the above reasons, the judgment of the Commission is affirmed. Affirmed. 3 The new depreciation rates had been filed with the Commission's Communications Division Director two days before they were included in the rebuttal testimony in this case. The new rates were approved by the Director effective January 1, 1996, in accordance with the Commission's Rules of Procedure. 12