VII. Electrical Equipment Repair and Maintenance

We noted in the OIR that electric equipment problems may be identified in the process of installing a BPL system. The OIR goes on to propose that "costs directly related to the repair and maintenance of existing electrical equipment for the purposes of electric service reliability (e.g., cracked insulators) be allocated to electricity operations. Costs directly related to BPL installation or operation should be allocated to the BPL operator." (OIR, p.11.) We adopt the OIR's approach. Costs should be allocated on a cost causation basis.

We expect that this form of cost allocation will not pose any problems for mischaracterization of the nature of the work done. If BPL services are provided by a utility affiliate, it could create an incentive for mischaracterizing the work in order to attain cross-subsidization of BPL by utility ratepayers, but our utility affiliate rules safeguard against such possible abuses. Such issues do not arise in cases where BPL services are provided by a third party.