California to Reconsider PBOP Rulings
The California Public Utilities Commission (CPUC) has reaffirmed an earlier ruling permitting telecommunications utilities subject to price-cap regulation to use accrual accounting for post-retirement benefits other than pensions (PBOPs) under SFAS 106. It also warned that it may change its existing policy, which allows recovery of the costs of the accounting change as an exogenous cost under the price-cap form of regulation. The CPUC explained that "strong arguments can be made" that PBOP costs are within the utilities' control and simply normal costs of doing business. It said it would formally reconsider the issue of PBOP cost recovery in separate proceedings. Re Post-retirement Benefits Other Than Pensions, Decision 94-10-037, I.90-07-037 et al., (Oct. 12, 1994).
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