DR 98-059
HOLLIS TELEPHONE COMPANY
Overearnings Investigation
Order Approving Temporary Rates
O R D E R N O. 22,969
June 30, 1998
APPEARANCES: Devine, Millimet & Branch by
Frederick J. Coolbroth, Esq. for Hollis Telephone Company;
the Office of the Consumer Advocate by William P. Homeyer
for residential ratepayers, and E. Barclay Jackson, Esq. for
the Staff of the New Hampshire Public Utilities Commission.
I. PROCEDURAL HISTORY
Pursuant to New Hampshire Public Utilities
Commission (Commission) Order No. 22,823 in DR 97-187, the
Staff of the Commission (Staff) conducted and prepared for
the Commission a review of the earnings of Hollis Telephone
Company (Hollis) and the relationship of those earnings to
Hollis's toll rates. On April 20, 1998, the Commission
issued an Order of Notice opening this docket. The Order of
Notice scheduled a prehearing conference for May 27, 1998,
to consider motions to intervene, establish a procedural
schedule and to address the issue of temporary rates. The
Order of Notice required Hollis, Staff, and all parties to
prefile testimony on the issue of temporary rates by May 20,
1998.
By motion filed April 29, 1998, the Office of the
Consumer Advocate (OCA) requested that the Commission amend
the schedule for temporary rate hearing or, in the
alternative, permit the OCA to file rebuttal testimony on
that issue. Hollis objected to the OCA's motion on
procedural grounds. By letter dated May 18, 1998, the
Commission rescheduled the date for hearing evidence on the
issue of temporary rates to June 19, 1998. Staff and Hollis
filed testimony on temporary rates on May 22, 1998. After
discussions, Staff and Hollis reached agreement regarding
the level of temporary rates. The OCA concurred in the
agreement.
After the duly noticed prehearing conference on
May 27, 1998, the Commission issued an order approving a
procedural schedule for the permanent rate case, Order No.
22,960.
At the hearing on temporary rates, June 19, 1998,
the parties and Staff presented a Stipulation solely with
regard to the issue of temporary rates in this docket.
II. POSITIONS OF THE PARTIES AND STAFF
Staff and the parties agreed that the Hollis's
existing retail rates should go into effect as temporary
rates as of the date of issuance of this order, subject to
the following specific reductions:
1. A reduction entitled "local credit" in the amount
of $3.72 per month will be included on each customer bill
for local service. The effect of this local credit is an
estimated annual revenue reduction of $134,902.
2. A reduction in the charge for new installation from
$47.70 to $39.00. The effect of this reduction is an
estimated annual revenue reduction of $5,072.
3. Reductions in access rates
a. Reducing originating CCL from $0.015859 per
minute to $0.013759.
b. Reducing terminating CCL from $0.03058 to
$0.02908.
c. Reducing local switching from $0.024 to
$0.0225.
The effect of temporary rates is to permit
reconciliation of any overearnings or underearnings by the
company, pursuant to RSA 378:27, retroactive to the date of
this order.
III. COMMISSION ANALYSIS
Our authority to set temporary rates is explicitly
authorized by RSA 328:27, conditioned on a finding that such
rates are in the public interest. Temporary rates are
established without the extensive investigation as is
required for the determination of permanent rates. Re New
England Telephone & Telegraph Company v. State, 95 N.H. 515
(1949); Pennichuck Water Works, Inc., 78 NH PUC 197 (1993).
The standard for determining temporary and permanent rates
requires that rates must be sufficient to yield not less
than a reasonable return on the cost of utility property
that is used and useful in the public service less accrued
depreciation. RSA 378:38, Pennichuck, 78 NHPUC 197, 200.
In the instant case the parties and Staff propose
temporary rates lower than current levels. We approved the
existing rates of GTE NH, Hollis's corporate predecessor, as
permanent rates for Hollis in Docket DF 94-021, Order No.
21,251 (dated June 6, 1994). In view of Hollis' changed
corporate structure and the reasonable anticipation of
permanent rate reductions, we find that the proposed
temporary rates are consistent with the public interest and
sufficient to yield a reasonable return on the cost of
Hollis's property. Staff will be conducting an audit of
Hollis, which will provide the information needed to
determine the company's permanent rate level.
Based upon the foregoing, it is hereby
ORDERED, that temporary rates for Hollis shall be
set at the levels proposed, as outlined above.
By order of the Public Utilities Commission of New
Hampshire this thirtieth day of June, 1998.
Douglas L. Patch Bruce B. Ellsworth Susan S. Geiger
Chairman Commissioner Commissioner
Attested by:
Thomas B. Getz
Executive Director and Secretary