US WEST Communications customers are likely to see an $8 million rate reduction in January with a second rate reduction expected to follow in the spring.
The $8 million reduction requires Utah Public Service Commission approval of a stipulation agreement between US WEST and the Utah Division of Public Utilities, the Utah Committee of Consumer Services and AT&T. The agreement was hammered out as part of an ongoing rate hearing for US WEST that began in October, will continue in December and conclude in March.Lawyers representing the groups told commissioners Friday that, barring a major upheaval in the world economy, an additional $4 million to $6 million would likely be trimmed from rates when the hearing concludes.
In addition to the general rate case, the commission is hearing a US WEST proposal to freeze telephone rates for four years while allowing the company to keep 50 percent of any earnings above its approved profit margin up to a specified limit. In return, the company proposes to use the excess money to speed up a $103 million program to upgrade 41 local switching offices and install a fiber optic trunk system during that period.
During Friday's proceedings, US WEST won commission approval to delay hearings on a proposed incentive rate plan until the March talks. The committee objected to the delay, noting US WEST had objected to a similar request by the committee and division last August.
US WEST attorney Ted Smith admitted the company's request appeared contradictory, but argued events since the August hearing had changed substantially. He said the division has submitted an alternative incentive plan that is significantly different from the US WEST proposal and needs to be reviewed.
He said witnesses for the division and committee have submitted written testimony that also needs additional scrutiny before the company can respond.
Commission chairman Ted Stewart said that while the fairness argument had merit, other elements in the case favored granting the delay.
The commission also set a Jan. 18 deadline for the committee, division, US WEST and any other interested utility provider to respond to a petition by attorney James L. Barker asking that the law granting the commission authority to consider an incentive rate plan unconstitutional.
Barker will have until Feb. 8 to respond and the commission will issue a ruling prior to the commencement of the March hearings.
Barker filed a petition seeking declaratory judgment from the commission on Oct. 31. Commission rules mandate a decision from the commission within 60 days unless a waiver is granted by the petitioner. Barker at first refused to waive the time limit and would file an appeal immediately with the Utah Supreme Court on Dec. 30 if no decision was forthcoming. The commission's failure to respond is considered a denial of the petition, permitting direct appeal to the court.
Stewart told Barker the commission wanted to hear the case but time constraints involving major rate cases for US WEST, Utah Power & Light Co. and Mountain Fuel Supply Co. made it impossible to respond by the Dec. 30 deadline.
After conferring with his clients, a group composed of people actively involved with advocacy groups for the elderly and low income, Barker relented and agreed to the proposed timetable.
Stewart asked the written briefs to focus on whether the commission has authority to declare any stature, including those applicable to the agency, unconstitutional and whether the specific law dealing with incentive rate making should be declared unconstitutional.