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Interest expense net of interest income is considered a pass- <br />through cost for rate-making purposes. Because the Company is a <br />wholly-owned subsidiary of Browning Ferris Industries, Inc. and <br />cash flow is managed by the corporate offices, the Company has <br />very little control over their interest income or expense. <br />Therefore, we developed a model to impute an interest income or <br />expense for rate purposes. This model is shown in Exhibit VI. <br />The interest calculation is divided into three sections: <br /> <br /> - interest on beginning balance of balancing account, <br /> <br /> - interest on current year excess earnings, and <br /> <br /> - interest on current year cash flow. <br /> <br /> <br />