Separations

Ponderosa provides both intrastate and interstate telecommunications services, subject to the regulation of the CPUC and FCC, respectively. Because Ponderosa's property serves both jurisdictions, the utility's expenses, taxes, investments, and reserves are allocated between interstate and intrastate services. Likewise, Ponderosa's revenues are derived from both intrastate and interstate sources as well.

"Separations" is a process of apportioning a telephone company's property costs, related reserves, operating expenses, taxes, and rate base between the intrastate and interstate jurisdictions. It is a method by which a telephone company can separately identify the amount of expenses and investments associated with the production of a given service. These apportionments are made on the basis of relative usage and direct assignment whenever possible. The costs to be apportioned are identified in the FCC's Part 36 Separations Manual, according to the classification of accounts as prescribed by the FCC's Part 32, Uniform System of Accounts (USOA) for Telecommunications Companies.

Ponderosa used separation factors developed under the FCC's Part 36 to apportion its interstate and intrastate services. CD reviewed Ponderosa's separation factors and found them reasonable, and used these separation factors to estimate Ponderosa's Intrastate Results of Operations.

Appendix B to this resolution compares Ponderosa's and CD's test year 2009 interstate and intrastate results of operations, after separations, at present rates without any CHCF-A funding change.