DR 98-059
Hollis Telephone Company
Overearnings
Order Approving Procedural Schedule
O R D E R N O. 22,961
June 23, 1998
On April 20, 1998 the New Hampshire Public
Utilities Commission (Commission) issued an Order of Notice
pursuant to RSA 365:5 and 378:7, opening an investigation
into the level of earnings of Hollis Telephone Company
(Hollis). The Order of Notice scheduled a prehearing
conference for May 27, 1998 to address the issue of
temporary rates, to consider motions to intervene, and to
establish a procedural schedule to govern the Commission's
investigation into the reasonableness of Hollis's earnings.
By letter dated May 18, 1998, the Commission postponed the
hearing on temporary rates to June 19, 1998.
At the duly noticed Prehearing Conference on May
27, 1998, there were no intervenors. Hollis, the Office of
the Consumer Advocate (OCA), and the Commission Staff
(Staff) agreed upon the following procedural schedule:
Staff Audit July 15 - August 12,1998
Staff Data Requests August 7, 1998
Company Data Responses August 25, 1998
Staff Testimony September 16, 1998
Company Data Requests September 30, 1998
Staff Data Responses October 14, 1998
Settlement Discussions October 21, 1998
(10:00 a.m.)
Company Testimony November 4, 1998
Staff Data Requests November 10, 1998
Company Data Responses November 18, 1998
Settlement Discussions November 23, 1998
Stipulation, if any,
to Commissioners December 2, 1998
Hearings December 15-16, 1998
Also at the prehearing conference, in accordance
with the Order of Notice, the parties and Staff stated their
initial positions. Hollis agreed that it is in a position
of overearning and proposed that current rates should be set
as temporary rates. Hollis further stated its belief that
the above lengthy procedural schedule could be considerably
shortened by working with Staff and the OCA toward a
negotiated settlement. The OCA asserted that Hollis had
overcharged ratepayers by about $293,000 in revenue and
$180,000 in net earnings in 1997. Therefore, the OCA
recommended that temporary rates should be reduced to the
level of the Company's overearnings in keeping with the
Staff's recommended methodology. Staff stated that
significant overearnings exist and recommended that the
Commission set temporary rates below current levels. Staff
suggested temporary rates which would reduce Hollis'
revenues by 19%, an amount which would decrease the rate of
return to the Hollis' authorized rate of return. Staff
asserted that the Commission's investigation and audit will
answer questions regarding Hollis' accounting for its
decision to enter the toll market as it affects the
company's earnings. Staff's position is that the company's
entry into the toll market, which may have improved its
overearnings position, benefitted only certain target
customers rather than the entire customer base which created
the overearnings position.
We find the stipulated procedural schedule just
and reasonable. We encourage Staff and the parties to work
together to reach resolution of the disputed issues, if
possible.
Based upon the foregoing, it is hereby
ORDERED, that the procedural schedule outlined
above is adopted to govern our investigation in this
proceeding.
By order of the Public Utilities Commission of New
Hampshire this twenty-third day of June, 1998.
Douglas L. Patch Bruce B. Ellsworth Susan S. Geiger
Chairman Commissioner Commissioner
Attested by:
Claire D. DiCicco
Assistant Secretary