BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION


In the Matter of the Investigation into )
the Propriety and Adequacy of Certain )
Depreciation Rates of   ) DOCKET NO. UT-990075
      )
CENTURYTEL    )
      )
And the Changes, if any, That Should ) ORDER AUTHORIZING REVISED
Be Ordered to Such Depreciation Rates ) DEPRECIATION RATES
.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . )


BACKGROUND

  On January 19, 1999, in Docket No. UT-990075, CenturyTel (Century) filed with 
the Commission a depreciation rate accrual rate study for its Washington State 
plant and equipment for CenturyTel of Washington, Inc., and CenturyTel of 
Inter-Island, Inc.  Century requests a January 1, 1999 effective date for the 
revised depreciation rates.  The depreciation rate revisions, as proposed by 
Century, would result in an increase in depreciation accruals from $21.8 
million to $30.8 million annually.

MEMORANDUM

  The Century study proposes depreciation parameters for cable and switching 
plant that are based on studies developed by Technology Futures, Inc. (TFI). 
The TFI depreciation life studies were also used in the 1996 Washington State 
depreciation studies of U S WEST Communications, Inc., (U S WEST), and GTE 
Northwest Incorporated (GTE), and in both instances were subsequently rejected 
by the Commission.

  Staff examined the TFI depreciation study data for Century and developed 
recommendations similar to the lives recommended for U S WEST and GTE.  Staff 
and company met on several occasions to discuss those recommendations. As a 
result of those meetings, Staff and Century are now in full agreement as to the 
future depreciation parameters and rates for Century’s Washington State plant 
and equipment.
  
 Under the agreement between Staff and Century, the company will now use the 
equal life group (ELG) methodology, beginning with 1998 plant additions, for 
calculating depreciation lives and rates.  The Commission previously has 
approved use of the ELG methodology for both U S WEST and GTE.

  Under the depreciation rates jointly supported by Century and Staff, 
depreciation accruals will increase annually by $0.8 million, from the 
currently authorized $21.8 million to $22.6 million annually.  Attachment 1.  
In addition, the depreciation reserve deficiency in the Circuit Equipment - 
Digital and Buried Cable Metallic accounts will be amortized over a three year 
period, resulting in an annual amortization expense of $3.5 million.  
Attachment 2. 

  The total annual depreciation accruals of $0.8 million and the three year 
annual amortization expense of $3.5 million results in an overall 
depreciation-amortization increase of $4.3 million, or a rate of 6.0%.  Staff 
recommends that the Commission authorize the revised depreciation and 
amortization parameters, rates, and expenses to be effective January 1, 1999.  
The Commission finds that the proposed depreciation rates are appropriate and 
should be adopted.

ORDER

  THE COMMISSION ORDERS That the authorized parameters and the depreciation 
rates in Attachment 1 to the instant Order, and the amortization of reserve 
deficiency in Attachment 2 to the instant Order, are approved, to be effective 
January 1, 1999.

  DATED at Olympia, Washington, and effective this 29th day of
September 1999.

WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION



      MARILYN SHOWALTER, Chairwoman



      RICHARD HEMSTAD, Commissioner