ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Saturday, February 24, 1996 TAG: 9602260015
SECTION: BUSINESS PAGE: A-8 EDITION: METRO
DATELINE: RICHMOND
SOURCE: Associated Press
A difference in accounting methods is at the heart of a dispute between Bell Atlantic-Virginia and the State Corporation Commission staff, which believes the company owes customers $14 million in refunds.
In a public statement Friday, the company played down the dispute as a difference of opinion over ``two technical accounting issues'' that the SCC will resolve later this year.
But in a document filed with the commission Thursday, Bell Atlantic accused the staff of attempting to manipulate the company's financial results to force refunds and prevent the recovery of legitimate expenses.
Phone companies are limited to 14 percent return on investment for their local phone service. If a company earned more than 14 percent, the SCC would require refunds to customers.
Last month, the SCC's staff reported that for 1992, Bell Atlantic's return on investment was 14.87 percent, or $14.3 million in excess earnings. Bell Atlantic took a different accounting approach, which showed the company's rate of return at 13.68 percent for the year.
The dispute centers on a 1991 proposal by the company to amortize more than $70 million in depreciation reserves over three years. The SCC's staff
Bell Atlantic argued Thursday that the condition is not appropriate because competition in the local telephone business prevents the company from being assured of recovering reasonable expenses. Such an approach ``penalizes the company and hurts customers in the long run,'' the company argued.
The second issue involved how to recover the cost of refinancing $300 million in debt in 1992. The company wanted to account for $11.6 million in after-tax losses as an expense against 1992 revenue, rather than over the life of the debt.
LENGTH: Short : 41 linesby CNB