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.
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.