20140905notice_of_modified_procedure_order_no_33115.pdf

Office of the Secretary
Service Date
September 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-O1
INCREASE ITS MONTHLY RESIDENTIAL )
RATE FOR TELEPHONE SERVICE )NOTICE OF
)MODIFIED PROCEDURE
)
____________________________
ORDER NO.33115
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 over a four-year period.The Company requests that the rate increase be phased-in to
coincide with the increase in the federal universal service threshold established by the Federal
Communications Commission (FCC).Application at I.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 1990.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.Id.at 3.
BACKGROUND
A.Connect America Funding
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
program.Id.at 3.In 2011,the FCC set out to reform the federal USF and created the Connect
America Fund (CAF).’In the Transformalion Order,the FCC 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
USE/ICC Transformation Order Connect America Fund;National Broadband Plan/or Our Future,et seq.,Report
and Order and Further Notice ofProposed Rulemaking,26 FCC Rcd 1 7663 (2011)(the “Transformation Order”).
NOTICE OF MODIFIED PROCEDURE
ORDERNO.33115 1
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 cAF-JI 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 ¶J 75,80,85 (excludes Lifeline customers (n.156)).Carriers that do not have
monthly rates that meet or exceed the rate floor will have their federal funds reduced
proportionally on a dollar-for-dollar basis.Id.at ¶75;Application at 5.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 ¶J 80-81.
B.The Company’s Application
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%
Junel,2016 $18.00 12.5%
June 1,2017 $20.00 11%
Application at 5,Exh.No.3.
Oregon-Idaho states 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 its proposed rates are also reasonable and in the
public interest.
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
2 In the Matter ofConnect 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”).
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ORDERNO.33115 2
increase is fully implemented in 2018.Id.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.Id.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 has notified each of its customers about the proposed rate increase.
See Exh.No.3.The Company requests that this Application be processed under Modified
Procedure.
NOTICE OF MODIFIED PROCEDURE
YOU ARE HEREBY NOTIFIED that the Commission has determined that the public
interest may not require a formal hearing in this matter and will proceed under Modified
Procedure pursuant to Rules 201 through 204 of the Idaho Public Utilities Commission’s Rules
of Procedure,IDAPA 31.01.01.201 through .204.The Commission notes that Modified
Procedure and written comments have proven to be an effective means for obtaining public input
and participation.
YOU ARE FURTI-IER NOTIFIED that based upon the agreement of the parties,the
Commission adopts the schedule proposed by the parties.Any person desiring to state a position
on this Application may file a written comment in support or opposition with the Commission on
or before October 9,2014.The comment must contain a statement of reasons supporting the
comment.Persons desiring a hearing must specifically request a hearing in their written
comments.Written comments concerning this Application shall be mailed to the Commission
and the Applicant at the addresses reflected below:
Commission Secretary Dean J.Miller
Idaho Public Utilities Commission McDevitt &Miller LLP
P0 Box 83720 420 W.Bannock Street
Boise,ID 83720-0074 Boise,ID 83702
E-Mail:joe’i:mcdevitt-miller,corn
Street Address for Express Mail:
Kenneth R.McClure
472 W.Washington Street Michael C.Creamer
Boise,ID 83702-5918 Givens Pursley LLP
601 W.Bannock Street
Boise,ID 83702
E-mail:krmiii)givenspurslev.com
mcc(dgivenspursley.com
NOTICE OF MODIFIED PROCEDURE
ORDERNO.33115 3
These comments should contain the case caption and case number shown on the first page of this
document.Persons desiring to submit comments via e-mail may do so by accessing the
Commission*s home page located at www.puc.idaho..tov.Click the “Case Comment or Question
Form”under the “Consumers”tab.and complete the comment form using the case number as it
appears on the front of this document.These comments must also be sent to Oregon-Idaho at the
e-mail addresses listed above.
YOU ARE FURTHER NOTIFIED that if Oregon-Idaho desires to submit rebuttal
comments,it must do so no later than October 20,2014.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the time limit set,the Commission will consider this matter on its merits and
enter its Order without a formal hearing.If written comments are received within the time limit
set,the Commission will consider them and,in its discretion,may set the same for formal
hearing.
YOU ARE FURTHER NOTIFIED that the Company has agreed and shall issue a
subsequent customer notice to all Idaho customers advising them of the comment deadline and
the proposed schedule of the rate increases.
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 Commission’s 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 §61-502,61-503 and 61-622.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 3 1.01.01.000 etseq.
NOTICE OF MODIFIED PROCEDURE
ORDERNO.33115 4
ORDER
iT IS HEREBY ORDERED that this matter be processed under Modified Procedure.
Interested persons must file comments in opposition or in support of Oregon4daho’s Application
no later than October 9,2014.The Company may file reply comments,if necessary,no later
than October 20.2014.
IT IS FURTHER ORDERED that the Company individually notify its customers that
they may submit written comments no later than October 9.2014.
DONE by Order of the Idaho Public Utilities Commission at Boise.Idaho this
day of September 2014.
PAUL KJELLANDER,PRESIDENT
MACK A.REDFORD,COMMISSIONER
Out of the Office on this Date
MARSHA H.SMITH,COMMISSIONER
ATTEST:
Jean D.JewelI
Commission Secretary
bis/O:ORE-T-1 4-0 ldh2
NOTICE OF MODIFIED PROCEDURE
ORDERNO.33115 5