20030612Audit Letter.pdf

IDAHO
PUBLIC UTiliTIEScommiSSion
Dirk Kempthome, Governor
O. Box 83720, Boise, Idaho 83720-0074
Paul Kjellander, President
Marsha H. Smith, Commissioner
Dennis S. Hansen , Commissioner
June 11 2003
Chad Turner
Colmnbine Telephone Compan,y, Inc.
dba Teton Telecom
PO Box 226
Freedom, VVJ( 83120
RE: Case No. COL-03-
Dear Mr. Turner:
In Order No. 29245, the Commission directed the Staff to conduct an audit to verify the
2002 "gross operating intrastate revenues" of Columbine Telephone Company. Columbine
asserted that it had over-reported its gross intrastate revenues and that the correct revenue
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for 2002 should be $3 705 876 (see attached workpaper).
Staff agrees that Wyoming revenues where included in Columbine s original reported
gross operating intrastate revenues." Staff also found that Columbine had netted revenues and
expenses in Account 5010 Public Telephone Revenue. Staff finds that the nettirig of expenses
and revenue in a revenue account does not meet the FCC, NECA or this Commission s definition
of revenues. The Company has provided Staff with the revenue amount of $3 060. Staff accepts
this amount for the year 2002. Staff recommends that in future years the Company set up
expense accounts and records revenues and expenses as two separate items.
Columbine excluded from its reported revenues the Idaho share ofNECA USF funds in
the amount of$1 742 218. Staff has included this amount as Idaho "gross operating intrastaterevenues." NECA USF funds and Idaho State USF funds are traditionally used by the Idaho
Public Utilities Commission as rate case revenues to support local basic rates. . NECA USF funds
are also included in gross intrastate revenues to determine the need for Idaho State USF funds.
NECA states "High Cost Loop Support provides intrastate support for the cost of the 'last mile
of connection primarily for rural companies in service areas where the cost to provide this
service exceeds 115 percent of the national average." (NECA Presentation for NARUC Staff
Subcommittee on Accounts, March 25 2003 , page 107). Because the NECA USF funds are
recognized as revenue by both this state and the federal regulators, it should be reported as Idaho
gross operating intrastate revenues.
Located at 472 West Washington Street, Boise , Idaho 83702
Telephone: [phone] Facsimile: [phone]
Chad Tumer
Columbine Telephone Company, Inc.
June 2003
Page 2
Staff finds that with the above two adjustments your 2002 "gross operating intrastate
revenues" were $3 705 876. Based on the assessment rate for the 2003 regulatory fee of .2384
percent (.002384), Columbine s regulatory fee for 2003 should be $8 834.81. Given that
Columbine has already submitted a check in the amount of $4 500., Columbine will need to
submit the additional $4 334.81 for the 2003 regulatory fee no later than November 15, 2003.
Please make the check or money order payable to the Idaho Public Utilities Commission.
Please contact me at your earliest convenience if the Company disagrees with the Staff's
determination or if you have any questions. I can be reached at 208-334-0356. If the Company
and Staff cannot agree on the amount of the 2002 intrastate gross operating revenue, I must
notify the Commission so that it may schedule a hearing in this matter.
Sincerely
J~ Ccv&ocR
Terri Carlock
Audit Section Supervisor
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