20210714FLS to Staff 12.pdf

Rates & Regulatory Affairs
FLS-W-21-01
Falls Water Company Application for Approval of Three Capital Projects
Data Request Response

Request No.: FLS-W-21-01 IPUC DR 12

REQUEST NO. 12: Please describe the process by which amounts are posted to the
Plant Reserve Account created by Order No. 32663. Please include within your
response a recent accounting entry that includes the date posted, accounts posted, and
both the debit and credit amounts in the transaction.

Response:
Based on Order No. 32663, the Commission found it “reasonable and appropriate for
the Company to reinvest the MXU-related depreciation and the annual savings of
$8,315 over 25 years into a special plant reserve fund.” Within Order No. 33863,
Commission Staff “recommended that interest be calculated and deposits treated as if
made on a monthly basis regardless of when deposits are actually made.” Monthly
MXU-related depreciation and monthly labor savings are as follows, with February
adjusted for the end date of February 16, 2021 per Order No. 34925:
January February
Monthly Depreciation: $2,030.49 $1,087.76 ($2,030.49*(15/28))
Monthly Labor Savings: $692.92 $371.21 ($692.92*(15/28))
Total: $2,723.41 $1,458.97
Based on the above monthly calculation, the following entry was posted to move funds to the
Plant Reserve Account on March 5, 2021:
Debit Credit
127.1 – MXU Project Depr Savings $1,458.97
129 – FWC-BofCommerce $1,458.97
FLS-W-21-01 IPUC DR 12
NWN Response
Page 2 of 2

The depreciation expense portion is part of the monthly depreciation expense transaction.
February 2021 plant reserve portion of depreciation was booked February 28, 2021 as follows:

Debit Credit
403 - Depreciation Expense $1,087.76
108 – Plant Depreciation $1,087.76

The entry to book the Meter Reading Savings was booked on February 28, 2021 as follows:

Debit Credit
675.9 - 2012 Mtr Rdg Lbr $371.21
271.4 - CIAC for 2012 MXU's $371.21