17.11.3.12

COST STUDY

1. A. The affected local exchange company or companies may be ordered by the Commission to initiate a Total Service Long Run Incremental Cost ("TSLRIC") or other appropriate cost study approved for such purpose by the Commission, to determine changes in rates which may result from the EAS; provided however, that lost toll revenue shall not automatically be considered a cost of providing EAS. Such cost study shall consider and develop, for each route, relevant revenues and costs over a one year period immediately following the potential date for initiation of the EAS, and for a one year period, three years subsequent to the potential initiation of the EAS.

2. B. The cost study shall include the following information, unless otherwise ordered by the Commission:

   (1) Net increases in capital costs resulting from required additions to network capacity, less reduction in required quantities of facilities and equipment utilized for toll services between the exchanges. The added investment will be based upon the additional switching and trunking needs necessary to accommodate the incremental usage at prescribed levels of service, as may be determined from estimates of call stimulation factors and holding time effects due to EAS. Annual charge factors will be applied to the added investment to obtain the additional annual cost attributable to this source.

   (2) Analysis of increases and decreases in expenses and the net effect on operating expenses.

   (3) A separate schedule showing local revenue increases resulting from exchange regrouping, as applicable.

   (4) Analysis, by exchange, of changes in intrastate toll revenues, intrastate access charges, and intrastate access revenues.

3. C. On or before a date ordered by the Commission, the local exchange company or companies shall file with the Commission a summary of the results of the cost study, together with supporting schedules and such detail as will be sufficient to permit identification of study components and verification of study results.

4. D. The Commission may also require the local exchange company or companies to submit recommendations for rate additives, by class of service for each affected exchange.

   [2-28-97; Recompiled 12/31/01]