Docket UT-951072                                           Page 1 
BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION

In the Matter of the Petition  )
of GTE NORTHWEST INCORPORATED  ) DOCKET UT-951072
to Adopt FCC Part 32 Accounting  )
Treatment for Telephone Plant  ) ORDER GRANTING PETITION
Under Construction and Allowance  )
for Funds Used During Construction )
. . . . . . . . . . . . . . . . . .)

  On September 15, 1995, GTE Northwest Incorporated (GTE-NW) filed a petition 
pursuant to WAC 480-120-031 and the Commission’s rules, to adopt a change in 
its state accounting standards to conform to FCC Part 32 Uniform System of 
Accounts (USOA), effective on September 1, 1995.

  Two accounting changes are proposed in GTE-NW’s petition.  The first would be 
that GTE would utilize its average cost of debt, as opposed to the prime 
lending rate, as its capitalization rate for Allowance for Funds Used During 
Construction (AFUDC).  The second change would be to eliminate Account 
2004,Long-Term Telephone Plant Under Construction, and to include all telephone 
plant under construction in Account 2003, renamed Telephone Plant Under 
Construction (TPUC)

  GTE’s petition states that it is seeking to conform its accounting for state 
purposes with its accounting for FCC purposes for these two items.  
Furthermore, the change in interest rates for AFUDC will bring GTE-NW into 
compliance with Generally Accepted Accounting Principles (GAAP).

  The Commission observes that the FCC Report and Order in CC Docket 93-50 
amended both its accounting rules and its ratemaking rules for AFUDC and TPUC.  
However, GTE-NW is not requesting WUTC approval for state ratemaking treatment 
in its petition.  In granting approval of the change in accounting procedure 
requested by GTE, the Commission reserves the right to review and determine the 
ratemaking treatment of GTE-NW’s AFUDC and TPUC in a future rate proceeding.  
GTE-NW will be required to maintain existing side records required under WAC 
480-120-031(3) sufficient to allow the Commission to determine the appropriate 
ratemaking treatment for AFUDC and TPUC in a future rate proceeding.

FINDINGS

 THE COMMISSION FINDS:

  1.  GTE Northwest Incorporated, a Washington corporation, is a public service 
company subject to the jurisdiction of this Commission under the provisions of 
chapter 80.36 RCW.

  2.  As to form, the application filed herein meets the requirements of WAC 
480-120-031.  

  3.  After review and for good cause shown, the petition filed by GTE-NW to 
adopt a change in its state accounting standards to conform to FCC Part 32 
Uniform System of Accounts (USOA), effective on September 1, 1995, should be 
granted.


O R D E R 

  THE COMMISSION ORDERS:

  1.  Subject to the conditions of this order, GTE Northwest Incorporated’s 
petition to adopt a change in its state accounting standards to conform to FCC 
Part 32 Uniform System of Accounts (USOA), effective on September 1, 1995, is 
granted.

  2.  GTE Northwest Incorporated is ordered to maintain existing side records 
required under WAC 480-120-031(3) sufficient to allow the Commission to 
determine the appropriate ratemaking treatment for Allowance for Funds Used 
During Construction and for Telephone Plant Under Construction in a future rate 
proceeding.

  3.  This order shall in no way affect the authority of this Commission over 
rates, service, or accounts, evaluations, estimates, or determination of cost 
or any matters whatsoever that may come before it, nor shall anything herein be 
construed as an acquiescence in any estimate or determination of cost or any 
valuation of property claimed or asserted.

  DATED at Olympia Washington and effective this   th day of July, 1998.

  WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION



                               CAROLE J. WASHBURN
       Secretary