US WEST Communications, formerly Mountain Bell, is on its way to earning more than $22 million in excess profits this year, and state utility regulators may be powerless to lower the earnings.
The Utah Public Service Commission says it is unsure whether it has the authority to impose an interim rate decrease before a full hearing on US WEST Communications' profits and rates is held in January.Under state statute, the PSC has authority to allow interim rate increases. But no statute exists addressing interim rate decreases.
"I don't know what our authority is," PSC Chairman Ted Stewart said. "We can't allow them to earn $22 million above their authorized rate-of-return without doing something."
US WEST Communications contends the commission only has the authority to increase rates on an interim basis, company spokesman Ken Hill said.
Utilities' profits are regulated by the PSC.
US WEST Communications is allowed to earn a 14.2 percent return on its stockholders' investment. The company earned an 18.04 percent return for the first four months of 1988. Each percentage point equals roughly $5 million in profits.