20140805notice_of_application_order_no_33087.pdf

Office of the Secretary
Service Date
August 5,2014
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF OREGON-IDAHO UTILITIES,INC.TO )CASE NO.ORE-T-14-0l
INCREASE ITS MONTHLY RESIDENTIAL )
RATE FOR TELEPHONE SERVICE )NOTICE OF APPLICATION
)
)NOTICE OF
)INTERVENTION DEADLINE
)
______________________________
)ORDER NO.33087
On July 17,2014,Oregon-Idaho Utilities,Inc.filed an Application for authority to
increase its residential rates for telephone service from the current monthly rate of $15.77 to
$20.00.The Company requests that the rate increase be phased in over four years to coincide
with the increase in the federal universal service threshold as required by the Federal
Communications Commission (FCC).Application at 1.The FCC has set the rate floor for the
Connect America Fund (CAF)at $20.46 per month (for local service plus state regulated fees).
Oregon-Idaho serves four telephone exchanges in southeastern Oregon and
southwestern Idaho that it purchased from Contel of the West in i 990.More specifically,the
Company serves a total of 81 access lines in its Idaho service territory designated as the South
Mountain exchange.This exchange covers 2,126 square miles.The Company maintains that
approximately 30%of its Idaho customers have “no access to commercial power,rely on gas
lamps,lanterns and/or low-grade solar for lighting and obtain heat via wood or oil burning
stoves.”Id.at 2.The Company has not increased its Idaho residential rate since 1990.
Application at 3.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that Oregon-Idaho currently receives federal high-
cost support from the federal Universal Service Fund (USF —now known as the CAF)but does
not participate in the Idaho USF.Id.at 3.In 2011,the FCC set out to reform the federal USF
and created the Connect America Fund ‘In the Transformation Order,the FCC
USF/JCC Transformation Order Connect America Fund,National Broadband Plan Jar Our Future,et seq.,Report
and Order and Further Notice of Proposed Rulemaking,26 FCC Rcd 17663 (2011)(the “Transformation Order”).
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO.33087 1
established a monthly rate floor “to ensure that States are contributing to support an advanced
universal service and that consumers are not contributing to the fund to support customers whose
rates are below a reasonable level.”Transformation Order at ¶238.The FCC concluded that
the rate floor would be based upon “stand-alone voice service.”
On June 10,2014,the FCC issued its Connect America Fund —Phase II Order (cAF
II Order)2 which established the basis for providing federal high-cost support to rate-of-return
carriers (such as Oregon-Idaho)and established a local monthly rate floor for carriers in order to
maintain their eligibility for CAF-Il funding.In its C’AF-II Order,the FCC established the
monthly rate floor for CAF-Il funding at a rate of $20.46 per month for local service as of June
1,2017.Id.at ¶91 75,80,85 (excludes Lifeline customers (n.156)).Rather than immediately
implement this new eligibility rate,the FCC chose a four-year transition period starting with a
$14.00 per month rate floor that went into effect on July 1,2013.Id.at ¶91 80-8 1.Carriers that
do not have monthly rates that meet or exceed the rate floor will have their federal funds reduced
proportionally.Id.at ¶75.
To maintain its future eligibility for federal high-cost support from the Connect
America Fund,Oregon-Idaho is proposing to increase its single-party residential monthly rate.
The proposed increase in the monthly residential rate is set out below:
DATE RATE PERCENTAGE INCREASE
Current Rate $15.77
December 1,2014 $16.00 1.5%
June 1,2016 $18.00 12.5%
June 1,2017 $20.00 11%
Application at 5,Exh.No.3.
The Company maintains that its proposed rate increases are “just and reasonable as
contemplated by Idaho Code §61-302.”Application at 6.The Company notes that the
Commission recently found the 2013 statewide average residential rate to be $21.73 in Order No.
32883.Consequently,the Company maintains that its proposed rates are also reasonable and in
the public interest.
2 In the Matter of Connect America Fund,Report and Order,Declaratory Ruling,Memorandum Opinion and Order,
Seventh Order on Reconsideration,and Further Notice of Rulemaking,FCC 14-54,2014 WL 2599362 (June 10,
2014)(the “CAF-Il Order”).
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO.33087 2
Based on the current number of residential lines.Oregon-idaho projects that the
proposed rate increase would generate approximately $2,800 in annual revenues when the rate
increase is fully implemented in 2018.Application at 6.Since Oregon-Idaho acquired its South
Mountain exchange from Contel,it has moved many of its customers from multi-party service to
single-party service.Id.at 3.The Company also states that it has upgraded its facilities and
invested about $8.4 million in its network.hi.The Company currently has 143.3 miles of cable
in Idaho,of which 29.1 miles are fiber optic and 114.2 are metallic cable.
The Company states that it is notifying each of its customers about the proposed rate
increase.See Exh.No.3.The Company requests that this Application he processed under
Modified Procedure.
NOTICE OF INTERVENTION DEADLINE
YOU ARE FURTHER NOTIFIED that persons desiring to intervene in this matter
must file a Petition to Intervene with the Commission pursuant to this Commission’s Rules of
Procedure 72 and 73.IDAPA 3 1.01.01.072 and -.073.All Petitions to Intervene must be filed
within 14 days of the service date of this Order.Persons desiring to present their views
without parties rights of participation are not required to intervene and may present their
comments without prior notification to the Commission or the parties.
YOU ARE FURTHER NOTIFIED that the following persons are designated as
Oregon-Idaho’s representatives in this matter:
Doug Musgrave Dean J.Miller
Oregon-Idaho Utilities,Inc.McDevitt &Miller,LLP
P0 Box 1880 420 W.Bannock Street
Nampa,ID 83653 Boise,ID 83702
E—mail:E—mail:
Kenneth R.McClure
Michael C.Creamer
Givens Pursley,LLP
601 W.Bannock Street
Boise,ID 83702
E—mail:knu(’t pursecn
n
.[*c.Ii:H
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO.33087 3
YOU ARE FURTHER NOTIFIED that once the deadline for intervention has passed,
the Commission Secretary shall prepare a Notice of Parties.Staff counsel will then convene an
informal scheduling conference.
YOU ARE FURTHER NOTIFIED that the Application and exhibits have been filed
with the Commission and are available for public inspection during regular business hours at the
Commission offices.The Application and exhibits are also available on the Commissions web
site at www.puc,idaho.gov.Click on the “File Room”tab at the top of the page,scroll down to
“Open Telephone Cases,”and then click on the case number as shown on the front of this
document.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission’s jurisdiction under Title 61 of the Idaho Code and specifically
Idaho Code §sS 61-503 and 61-336.The Commission may enter any final Order consistent with
its authority under Title 61.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be
conducted pursuant to the Commission’s Rules of Procedure,IDAPA 31.01.01.000 et seq.
ORDER
IT IS HEREBY ORDERED that persons desiring to intervene in this matter shall file
a Petition to Intervene no later than 14 days from the service date of this Order.Once the
deadline for Petitions to Intervene has passed,the Commission Secretary shall prepare and issue
a Notice of Parties.
IT IS FURTHER ORDERED that Staff counsel shall convene an informal scheduling
conference so the parties may discuss how this case will be processed and other case
management issues.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO.33087 4
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of August 2014.
ATTEST:
Jean D.JewelV
dommission Secretary
bls/O:ORE-T-I4O1dh
MACK A.REDFO1D,COMMISSIONER
MARSHA H.SMITH,COMMISSIONER
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO.33087
PAUL