A formula used to allocate overhead costs of a parent to its affiliates. This method deviates from the "Mass Formula" by replacing the gross revenue factor with a factor that is computed based on net operating revenues (operating income before interest and federal taxes). This modification to the "Mass Formula" was the result of the Commission's concern, that the gross revenue factor would be distorted when allocating costs from an unregulated entity because of the inclusion of purchase gas costs in gross revenue for regulated pipelines. See MASSACHUSETTS (MASS) FORMULA.