19990924Order No 28166.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE MOTION OF FREMONT TELCOM COMPANY FOR FUNDING FROM THE IDAHO UNIVERSAL SERVICE FUND. )
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CASE NO. FRE-T-99-1

ORDER NO. 28166

On September 3, 1999, a Stipulation was filed in this case by Fremont Telcom Company (Fremont) and the Commission Staff. The Stipulation resolves differences between the parties relating to an audit conducted by Staff, and provides for Fremont to receive additional funding from the state Universal Service Fund (USF) during 1999 and 2000. On September 13, 1999, Staff and the Company filed a Joint Motion asking the Commission to approve the Stipulation. With a modification to the schedule by which Fremont will receive the USF funds, the Commission by this Order approves the Stipulation as filed.
This case was initiated by a Motion filed April 9, 1999, by Fremont requesting an Order from the Commission for funding from the Idaho USF. The Company asked the Commission to issue an Order authorizing the Company to receive $52,165 from the USF per calendar year beginning November 1998, and also asked the Commission to schedule a proceeding to consider its claim to an additional $400,000 in USF funding. Fremont’s Motion was premised on an audit conducted by Staff using a 1997 test year. On June 30, 1999, the Commission issued Order No. 28085 approving Fremont’s request for $52,165 from the state USF, and also approved the Company’s request for a proceeding to determine whether it is entitled to additional rate relief. The Commission directed Fremont and Staff to work together to provide a procedural schedule to resolve the remaining issues arising from the Staff audit. The Stipulation subsequently was filed by the parties to resolve Fremont’s request for additional USF funds based on the Staff audit.
The significant provisions of the Stipulation are the following:
Fremont is entitled to additional funds from the Idaho USF in the amount of $298,393 per year, but only for the calendar years 1999 and 2000. The figure represents an adjustment to the Staff’s audit results in order to accelerate Fremont’s depreciation rate for air core cable.

For calendar years 1999 and 2000, Fremont will increase its depreciation expense in accounts 2421 and 2423 in the amount of $298,383 per year, and increase its depreciation account reserve in the same amount. Beginning January 1, 2001, Fremont’s depreciation rate for accounts 2421 and 2423 shall be reduced to the rate then applicable for non air core cable, and Fremont shall make no further claims for accelerated depreciation of any remaining air core cable investment.

On January 1, 2001, Fremont’s draw from the state USF for the amount of $298,393 per year will terminate, and Fremont’s annual USF draw will be reduced to the previously approved amount of $52,165 per year. Fremont will not be entitled to additional state USF support or rate relief unless and until it files and successfully pursues a rate case with the Commission.

We find the provisions of the Stipulation to be just, fair and reasonable, and in the public interest. The final audit report prepared by Staff was disputed on significant points by Fremont, and the Stipulation is a reasonable compromise to resolve the dispute and limit the amount of additional USF funds Fremont will receive. We also find it necessary, however, to adjust the payment schedule by which Fremont will receive the additional funds. The Stipulation provides for payments during the calendar years 1999 and 2000. It is now nearly October 1999, and paying the stipulated amount for the first nine months of 1999 in a single lump sum simply is not feasible. Accordingly, although we approve the payment of $596,786 (representing $298,393 per year for two years) to Fremont from the state USF, the account is to be paid in 14 equal monthly payments of $42,627.57, commencing November 1999 and ending December 2000.

O R D E R
IT IS HEREBY ORDERED that the Stipulation filed September 3, 1999 by the parties is approved, with modification to the schedule by which additional state USF funds shall be dispersed to Fremont. Commencing November 1999 and ending December 2000, Fremont will receive $42,627.57 per month for 14 months from the state USF, in addition to the amount of $52,165 per year previously approved.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7) days after any person has petitioned for reconsideration, any other person may cross-petition for reconsideration. See Idaho Code § 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this _______ day of April 2003.

DENNIS S. HANSEN, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

PAUL KJELLANDER, COMMISSIONER

ATTEST:

Myrna J. Walters
Commission Secretary

vld/O:FRE-T-99-1_ws2

ORDER NO. 28166 1

Office of the Secretary
Service Date
September 24, 1999