Opinion ID: 1059654
Heading Depth: 2
Heading Rank: 1

Heading: Affiliate Charges

Text: The Commission required that the charges to GTE for goods and services provided by two of its affiliates, GTE Data Services and GTE Supply, be based on the affiliates' actual cost of those goods and services, including a reasonable return, rather than on the prices these affiliates charged GTE. GTE claims that this adjustment is in error because the prices charged by the affiliates were at market rates or lower and that in applying these adjustments, the Commission was 6 adopting a new policy for determining affiliate charges which had not been applied to GTE's purchases from affiliates in prior proceedings. The Commission's adjustments were based on its conclusion that there was no true market price for these goods and services. GTE introduced evidence that the prices paid to affiliates were no higher than those paid to non-affiliates. There was also evidence that a high percentage of the affiliates' sales were to other affiliates and that some of these sales were made at cost rather than market price. While there was evidence that the prices charged GTE were competitive and reflective of the market, it was not uncontradicted. The Commission was entitled to weigh and reject GTE's evidence. Apartment House Council, Inc. v. Potomac Elec. Power Co., 215 Va. 291, 297, 208 S.E.2d 764, 768 (1974). Furthermore, the adjustments chosen by the Commission represent an accounting adjustment, not a retroactively applied change in a rule or administrative interpretation of a statute as GTE contends. Roanoke Gas Co. v. State Corp. Comm'n, 225 Va. 186, 190, 300 S.E.2d 785, 788 (1983). Accordingly, there is no error in the Commission's adjustment to the charges by the affiliates.