DR 98-160
Contoocook Valley Telephone Company
Overearnings Investigation
Order Approving Temporary Rates and Revising Procedural Schedule
O R D E R N O. 23,069
November 30, 1998
APPEARANCES: Devine, Millimet & Branch by Frederick J.
Coolbroth, Esq., for Contoocook Valley Telephone Company;
William Homeyer for the Office of the Consumer Advocate; and,
Larry S. Eckhaus, Esq., for the Staff of the New Hampshire Public
Utilities Commission.
On September 22, 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 Contoocook Valley Telephone Company (CVT).
The Order of Notice scheduled a prehearing conference for October
26, 1998 to consider motions to intervene and to establish the
remainder of the procedural schedule. A hearing was scheduled for
November 20, 1998 to address the issue of temporary rates. The
Order of Notice also recognized that, in addition to the question
of overearnings, CVT, and its affiliate Merrimack County
Telephone Company (MCT) (collectively, the Companies), would be
petitioning the Commission to merge the two companies.
At the Prehearing Conference held on October 26, 1998,
CVT informed the Commission that the Companies had filed a
petition for authority to average each company's residential and
business basic local rates to arrive at local rates for the
surviving entity and to include a revenue loss recovery plan for
provision of expansion of Extended Area Service (EAS), since
docketed as DR 98-189. On November 13, 1998, the Commission
issued Order No. 23,064 approving the procedural schedule
proposed by Parties and Staff.
Rather than filing testimony on the issue of Temporary
Rates, Staff, by letter dated November 19, 1998, submitted a
Stipulation and Agreement Regarding Temporary Rates
(Stipulation), approved by the Parties and Staff, proposing to
establish the existing retail rates of CVT as temporary rates to
go into effect as of the date of issuance of this order. 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. The Stipulation
was presented at the hearing on November 20, 1998.
At a Technical Session subsequent to the Prehearing
Conference, the parties and Staff agreed upon certain changes to
the Procedural Schedule previously approved by Order No 23,064,
as modified by Secretarial Letter dated November 23, 1998. The
changes provide additional time for CVT to respond to the Staff's
initial set of interrogatories and for Staff and OCA's second set
of interrogatories, provide the OCA with an opportunity to issue
data requests as a result of the Staff Audit and, accordingly,
delay the dates for Staff and OCA Testimony, data requests and
responses one week. It also provides for the filing of Rebuttal
Testimony in the event a Stipulation is not reached. In
addition, in order to coordinate this proceeding with Docket
DR 98-189, Merrimack and Contoocook Valley Telephone Companies'
Petition for Authority to Merge, a second hearing date has been
added and the two Dockets will be heard, one after the other. The
revised procedural schedule is as follows:
Staff Audit November 9, 1998 -
January 8, 1999
Staff & OCA Data Requests November 18, 1998
- 1st Set
Company Data Responses December 15, 1998
- 1st Set
Staff & OCA Data Requests December 21, 1998
- 2nd Set
Company Data Responses January 8, 1999
- 2nd Set
Draft Audit Report January 15, 1999
Final Audit Report January 29, 1999
OCA Data Requests re:
Staff Audit February 5, 1999
Responses to OCA Data
Requests February 12, 1999
Staff & OCA Testimony February 19, 1999
All Parties Data Requests February 26, 1999
- 1st Set
Staff & OCA Data Responses March 5, 1999
- 1st Set
All Parties Data Requests March 12, 1999
- 2nd Set
Staff & OCA Data Responses March 18, 1999
- 2nd Set
Settlement Discussions March 19, 1999
Company Testimony March 26, 1999
Staff & OCA Data Requests April 9, 1999
- 3rd Set
Company Data Responses April 16, 1999
- 3rd Set
Staff & OCA Data Requests April 23, 1999
- 4th Set (if needed)
Company Data Responses April 30, 1999
- 4th Set (if needed)
Settlement Discussions May 5, 1999
Stipulation (if any) May 11, 1999
or Rebuttal Testimony
Hearings May 18-19, 1999
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 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 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 378:28, Pennichuck, 78 NHPUC 197, 200.
In the instant case, the parties and Staff propose
temporary rates at current levels. We find that the proposed
temporary rates are consistent with the public interest and
sufficient to yield a reasonable return on the cost of CVT's
property. Staff will be conducting an audit of CVT, which will
provide the information needed to determine the company's
permanent rate level and the difference between temporary and
permanent rates.
We also find the proposed changes to the procedural
schedule to be reasonable and just, for the reasons suggested by
the Parties and Staff.
Based upon the foregoing, it is hereby
ORDERED, that temporary rates for CVT shall be set at
current levels to go into effect as of the date of issuance of
this order; and it is
FURTHER ORDERED, that the amended procedural schedule
stipulated to by the parties and Staff is adopted to govern our
investigation in this proceeding.
By order of the Public Utilities Commission of New
Hampshire this thirtieth day of November, 1998.
Douglas L. Patch Susan S. Geiger Nancy Brockway
Chairman Commissioner Commissioner
Attested by:
Thomas B. Getz
Executive Director and Secretary