Opinion ID: 1239709
Heading Depth: 1
Heading Rank: 2

Heading: Accelerated Depreciation for Book and Rate Making Purposes

Text: The Internal Revenue Code in § 167( l ) (3)(G)(i) and (ii) permits a utility to report accelerated depreciation using a normalization method of accounting. Under sub-section (i) both a company's books and its tax rate reflect the accelerated depreciation. Under sub-section (ii) a company may report the accelerated method on its tax return but retain straight line on its books, i. e., it has two sets of books in this particular, one for income tax purposes and one for other financial purposes. In denying Mountain Bell's motion to change its bookkeeping method to that described in § 167( l )(3)(G)(i), the Commission found that there was a lack of evidence to show that the proposed change was essential for proper and adequate rendition of intra-state telephone service. It found that this change would result in higher rates to Mountain Bell's customers. We, however, are more favorably impressed with the showing of Mountain Bell in this respect than with the showing of the League. Were we the Commission, we would have granted the motion. However, there is evidence to support the Commission's ruling and we cannot say it was arbitrary or capricious. There is no alternative, therefore, but to affirm. B.D.C. Corporation of Colorado v. Public Utilities Commission, 167 Colo. 472, 448 P.2d 615 (1968). We point out the fact that the thrust of our former opinion was directed to the flow-through method of accounting, which is now prohibited to Mountain Bell for tax purposes by the Tax Reform Act of 1969.