(a) Each and every telegraph corporation, telephone corporation and telegraph and telephone corporation holding subscriber deposits shall allow to each depositor simple interest on the amount deposited. The interest rate to be applied to the amount deposited shall be a composite yield of intermediate term, A-rated corporate bonds, as reported in financial publications, less costs of administering deposits of 1.75 per centum per annum. The rate shall be updated effective January 1st each year, based upon yield information available on the first Friday of October of the preceding year. The commission will issue an advisory letter which publicizes the information to assure consistency. Each corporation shall credit such interest to each depositor, by paying such interest in cash or deducting it from the amount of a bill for service at the time prescribed by law or more frequently.

(b) The prudent period of deposit retention referred to in Public Service Law section 117 may not exceed two years of nondelinquency in payment of bills rendered.