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To the Editor:
In “Rate-Base Cleansings: Rolling Over Ratepayers” (November 2005, p.58), Michael Majoros urges state public utility commissions to recognize a refundable regulatory liability for past charges to ratepayers for non-legal asset retirement costs. “Unless the state PUCs specifically recognize the liabilities, the utilities will have the opportunity to institute a rate-base ‘cleansing’ by transferring ratepayer-fronted money into income.” The author’s criticism of the prescribed accounting for discontinuation of FASB Statement No. 71 (euphemistically labeled “rate–base cleansing”) is grossly misplaced.
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