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Expert witness defends use of Iowa survivor curves in Yankee Gas depreciation analysis
Summary
At the late-file hearing, the company’s depreciation expert explained use of Iowa curves and curve-fitting practices described in the 1996 NARUC Public Utilities Depreciation Practices Manual after OCC questioned the methodology.
Yankee Gas’s depreciation panel answered detailed technical questioning from the Office of Consumer Counsel about the company’s use of survivor-curve methods to estimate asset service lives.
Ned Allis, a vice president with Gannett Fleming Valuation and Rate Consultants and one of the company’s depreciation witnesses, told the authority the industry widely uses the empirically derived ‘‘Iowa curves’’ (commonly labeled R, S, L, O etc.) to represent retirement patterns for utility plant. He said the 1996 NARUC Public Utilities Depreciation Practices Manual describes curve-fitting and visual matching techniques that analysts use to select an…
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