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Virginia Administrative Code
Title 20. Public Utilities And Telecommunications
Agency 5. State Corporation Commission
Chapter 200. Public Utility Accounting
12/3/2024

20VAC5-200-50. Rules governing ratemaking treatment of employee post-retirement benefits other than pensions.

For public utilities providing electric, natural gas, telephone and water service, employee post retirement benefits other than pensions (OPEB), as defined in Financial Accounting Board Statement 106, shall be subject to the following accounting and ratemaking treatment:

1. OPEB costs shall be accrued during the active employment of the employee. A portion of OPEB costs so accrued shall be capitalized as appropriate.

2. OPEB transition obligations, as defined if SFAS 106 shall be amortized over 40 years, except that capitalized amounts may be amortized over 20 years. Telephone companies participating in the experimental plan may use a shorter amortization period for the OPEB transition obligation if the increased accruals do not place the company in a position which cause it to seek rate relief.

3. Recovery of OPEB cost accruals in rates shall not be permitted unless such accruals are fully funded. Any unfunded OPEB liability shall be deducted from rate base unless deferred for regulatory purposes.

4. Deferred income taxes shall reflect differences in OPEB cost recognition for ratemaking and tax purposes.

5. A regulatory asset may be recorded to recognize booking and ratemaking differences in the implementation of accrual accounting of OPEB expenses for reporting and ratemaking purposes.

6. Differences in implementation of accrual accounting for expenses for reporting and ratemaking purposes may be deferred only if (i) the company is earning below its authorized range of return on equity and will file for a change in rates within two years of implementing SFAS 106 or two years from the date of this order, whichever is later and (ii) the deferral is recognized in the transition obligation, amortized beginning with the effective date of the change in rates.

7. In the event of any conflict between this section and any other rule or regulation of the Commission, this section shall control.

Statutory Authority

§§ 12.1-13, 56-36, 56-235.2, 56-249 and 56-249.2 of the Code of Virginia.

Historical Notes

Derived from Case No. PUE920003, eff. December 30, 1992.

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