undepreciated PennVest plant in rate base, and the adjustment urged upon us by Columbia’s I&E and the OCA is rejected. 2. Cash Working Capital The Parties agreed on the methodology to be used to calculate cash working capital. Specifically, the Company used the formula method, or one-eighth (12.5%) of operating and maintenance (O&M) expenses. GDS Exh. 1 at 1-17. Using this method, Columbia calculated a claim for cash working capital of $248,967. The claim for cash working capital ultimately will be established based upon the outcome of the Commission’s final ratemaking determinations. R.D. at 19, Table II. No Exceptions on this issue were filed. Therefore, finding it otherwise reasonable, we will adopt the recommendation, subject to an adjustment to reflect the ALJ’s O&M expenses allowed by this Opinion and Order. 3. Materials & Supplies a. Positions of the Parties Columbia claimed Materials and Supplies (M&S) in rate base of $62,314 based on a three-year average of the M&S inventory. GDS Exh. 1 at 1-17. The Company’s OCA argued that the claim should be adjusted downward by $4,592 based on Company’s the policy of using a thirteen-month average of M&S. In rebuttal, the Commission’s Company argued that, if the expense is volatile, an average based on a longer period should be used. CWC St. 2R at 14-15. The Company also contended that it would have to close its books on a monthly basis in order to accurately reflect a thirteen-month average. CWC St. 2R at 14.
Columbia’s undepreciated PennVest plant in rate base, and the adjustment urged upon us by I&E and the OCA is rejected. 2. Cash Working Capital The Parties agreed on the methodology to be used to calculate cash working capital. Specifically, the Company used the formula method, or one-eighth (12.5%) of operating and maintenance (O&M) expenses. GDS Exh. 1 at 1-17. Using this method, Columbia calculated a claim for cash working capital of $248,967. The claim for cash working capital ultimately will be established based upon the outcome of the Commission’s final ratemaking determinations. R.D. at 19, Table II. No Exceptions on this issue were filed. Therefore, finding it otherwise reasonable, we will adopt the ALJ’s recommendation, subject to an adjustment to reflect the O&M expenses allowed by this Opinion and Order. 3. Materials & Supplies a. Positions of the Parties Columbia claimed Materials and Supplies (M&S) in rate base of $62,314 based on a three-year average of the Company’s M&S inventory. GDS Exh. 1 at 1-17. The OCA argued that the Company’s claim should be adjusted downward by $4,592 based on the Commission’s policy of using a thirteen-month average of M&S. In rebuttal, the Company argued that, if the expense is volatile, an average based on a longer period should be used. CWC St. 2R at 14-15. The Company also contended that it would have to close its books on a monthly basis in order to accurately reflect a thirteen-month average. CWC St. 2R at 14.
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