1. The commission shall have power, after hearing, to require any or all telecommunications companies to carry a proper and adequate depreciation account in accordance with such rules and regulations and in the forms of account as the commission shall prescribe. The commission may, from time to time on its own motion or upon the application of the telecommunications company or the office of the public counsel, ascertain and determine and by order fix the proper and adequate rates of depreciation of the several classes of property of such public utility. Each telecommunications company shall conform its depreciation accounts to the rates so ascertained, determined and fixed. Upon filing the application for a change in depreciation rates, the applicant must file with the commission all information in justification of the depreciation rate changes. The commission shall rule upon any request for a change in depreciation rates within twelve months of such request, unless a general rate proceeding is pending at the time set for decision, in which case the commission may rule upon the request for a change in depreciation rates at the same time it rules upon the general rate case proceeding.

2. Notwithstanding the provisions of subsection 1 of this section, a telecommunications company may request the commission to authorize minimum depreciation rates in lieu of fixed rates, and to record depreciation expense on the basis of depreciation rates in excess of such minimum rates. The reasonableness of any request for an increase in the tariffed rates for noncompetitive telecommunications service shall be considered on the basis of the minimum authorized depreciation rates, and the depreciation expense attributed to any test period shall be calculated on the basis of the company’s minimum depreciation rates regardless of the depreciation expense actually recorded by the telecommunications company. Where minimum depreciation rates have been authorized pursuant to this subsection, the commission may prescribe new minimum depreciation rates in a general rate proceeding and use those new minimum depreciation rates to determine the reasonableness of tariffed rates for telecommunications service in that general rate proceeding. In any proceeding to consider a request for an increase in the tariffed rates for telecommunications service, the telecommunications company shall utilize for the purposes of such proceeding the depreciation reserve levels which have occurred on the basis of the recorded depreciation expenses.