The Utah Public Service Commission will not decide the constitutionality of a law that allows public utilities to seek alternative rate plans.
In an order released Thursday, the commission said issues of state constitutionality should be determined by the Utah Supreme Court and not the agency affected by the legislation.Attorney James L. Barker Jr. had filed a petition on behalf of several telephone customers asking the commission to use its declaratory judgment powers to declare the law passed last year unconstitutional.
The commission is scheduled to begin hearing an incentive rate case proposed by US WEST Communications next Thursday.
The commission cited a 1990 case involving the commission and the Utah Associated Municipal Power Systems as the basis for its refusal.
"In accord with the principles that legislative enactments are entitled to a presumption of constitutionality and that administrative agencies are not forums for the disposition of constitutional challenges, we elected not to treat that issue and left it to UAMPS to bring it before the court," the order states. "We believe that common sense and the pronouncements of the court require that we do the same thing here."
The commission further stated that its declaratory judgment powers are "intended to be merely a mechanism for determining the applicability (and not the constitutionality) of statutes and agency rules to the particular circumstances of those who appear before the agency."
Barker's group has 30 days to file for a rehearing on the request. If an application for rehearing is denied, the group will have 30 days from the date of that denial to file a petition with the Utah Supreme Court.
Last year, the Utah Legislature passed a statute allowing the commission to consider alternative rate plans. Traditionally, public utility rates are designed to allow the company to recover costs involved in providing service plus a set profit margin or rate of return on equity.
US WEST says the incentive plan is needed to entice investors into providing $103 million to help the company speed up modernization of its present system, including installation of fiber-optic trunk lines and improvements to some 40 central switching facilities. The company says the plan will substantially improve service to rural areas of the state and will allow colleges and school districts to enjoy vastly improved telecommunications services.
If approved, the company promises to freeze rates for four years if it is allowed to retain a share of excess profits over its authorized profit level up to a specified limit if those excess earnings are the result of improved company efficiency.
Next week's hearings are the final phase of a major rate case involving US WEST. That case has resulted in rate reductions totaling $18.9 million since last March. The companies rate of return has also been lowered to 11.8 percent, the lowest for any of the Bell companies formed following the AT&T divestiture.