Response to Bench Request 1.

The “adjusted projected lives” shown in column (d) on page 2 of the bench 
request are mathematically correct but do not represent the lives that staff 
recommended in the case.  Staff is recommending that the lives shown in column 
(a) of page 2 be used in the cost models except for the typographical error for 
digital switches which is shown as 6.5 but should be 16.5.

During cross-examination by Mr. Butler, Mr. Spinks responded to a question 
about how lives, curve shapes, and salvage are used in the model stating:

 “Well, it’s my testimony, my recommendation, that they not use a survivor 
curve in the calculation or salvage. Similarly, if we’re going to determine 
economic lives to use in the cost models on a forward-looking basis, I don’t 
think that survivor curves are all that relevant, nor are they all that easy to 
know on a forward-looking basis, nor that on a forward-looking basis do I see 
competitive firms out there today using or incorporating salvage parameters 
into the depreciation rates that they use.” (Tr.1616)

Hence, with the exception of the typographical error in the digital switch 
life, staff would simply use the lives shown in column (a) as inputs without 
adjustment for salvage.

Response to Bench Request 2.

The table shown on page 3 of the bench request does not correctly calculate 
“adjusted projection life” for U S WEST.  The average service lives shown on 
page 4 of 4 of Mr. Spinks’ Supplemental Rebuttal Testimony in Docket UT-951425 
are not the same thing as projection lives. Average service lives are 
calculated using both historic experience as well as current estimates of 
projection lives.  Projection lives, on the other hand, are purely 
forward-looking estimates of plant life. U S WEST provides specific 
calculations of average service life such as those shown on page 4 of 4, but 
GTE does not distinguish between the two concepts so the projection life and 
average service life are the considered the same.  The correct projection lives 
are shown on page 1 of 4 of Mr. Spinks’ Supplemental Rebuttal Testimony in 
Docket UT-951425 and are labeled as such. Note that the Motor Vehicles account 
has three investment categories that are weighted together using direct 
weighting of the investment and projection life for each category. 

Also, the discussion in Staff’s response to the first question in the bench 
request applies to this question.

Response to Bench Request 3.

The depreciation lives used on pages 3 and 7 of TLS-3 in this proceeding were 
used with the understanding that revised lives would be available for the 
Commission to use as is now being requested. Pages 3 and 7 of TLS-3 in this 
docket should be updated to reflect the subsequent Commission decisions by 
replacing the values for GTE with the lives shown in column (a) on page 2 of 
the bench request, and for U S WEST, by substituting in the lives shown on page 
1 of 4 in Mr. Spinks’ Supplemental Rebuttal Testimony in Docket UT-951425.