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Qualitative Aspects of Accounting Practices <br />Management is responsible for the selection and use of appropriate accounting policies. The significant accounting <br />policies used by the Utilitiesare described in Note 1 to the financial statements. No new accounting policies were <br />adopted and the application of existing policies were not changed during the year ended December 31, 2021. We noted no <br />transactions entered into by the Utilitiesduring the year for which there is a lack of authoritative guidance or consensus. <br />All significant transactions have been recognized in the financial statements in the proper period. <br />Accounting estimates are an integral part of the financial statements prepared by management and are based on <br />managements knowledge and experience about past and current events and assumptions about future events. Certain <br />accounting estimates are particularly sensitive because of their significance to the financial statements and because of <br />the possibility that future events affecting them may differ significantly from those expected. The most sensitive <br />estimates affecting the financial statements were depreciation on capital assets, payroll related expenses, and the liability <br />for the U <br />calculated using the straight-line method. <br />Allocations of gross wages and payroll benefits are approved by the Commissionwithin <br />Utilities. <br />These allocations are also used in allocating accrued compensated absences payable. <br />nsion liability is based on several factors including, but not limited to, anticipated <br />investment return rate, retirement age for active employees, life expectancy, salary increases and form of annuity <br />payment upon retirement. <br />We evaluated the key factors and assumptions used to develop these accounting estimates in determining that it is <br />reasonable in relation to the financial statements taken as a whole.The disclosures in the financial statements are <br />neutral, consistent, and clear. Certain financial statement disclosures are particularly sensitive because of their <br />significanceto financial statement users. <br />Difficulties Encountered in Performing the Audit <br />We encountered no significant difficulties in dealing with management in performing and completing our audit. <br />Corrected and Uncorrected Misstatements <br />Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than <br />those that are trivial, and communicate them to the appropriate level of management. Management has corrected all such <br />misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by <br />ial statements taken as a <br />whole. <br />Management Representations <br />We have requested certain representations from management that are included in the management representation letter <br />dated April 7, 2022. <br />Disagreements with Management <br />For purposes of this letter, professional standards define a disagreement with management as a financial accounting, <br />reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial <br />d to report that no such disagreements arose during the course of our <br />audit. <br />3 <br />63 <br />