28091.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF U S WEST COMMUNICATIONS RECOVERY OF ITS CAPITAL COSTS FOR IMPLEMENTING EAS IN EASTERN IDAHO. )
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CASE NO. USW-T-99-9

ORDER NO. 28091

On May 21, 1999, U S WEST Communications filed a request seeking recovery of its one-time capital costs associated with providing extended area service (EAS) in eastern Idaho. More specifically, the Company seeks to recover $145,968 for implementing EAS between the U S WEST eastern Idaho calling region and the Fremont Telephone exchanges of Ashton, Island Park, and St. Anthony. Based upon our review of the Application and Staff’s recommendation we find it is reasonable to reimburse the Company for its one-time capital costs from remaining revenue sharing funds.

BACKGROUND
In Order No. 26672 issued November 1, 1996, the Commission authorized U S WEST to implement three regional calling areas in its southern Idaho service territory. In implementing these regional calling areas, the Commission authorized U S WEST to recover its necessary capital investments for network facilities or improvements to implement EAS from funds remaining in the revenue sharing plan. Order Nos. 26672 and 27100. In Order No. 27633, the Commission reaffirmed its prior decision authorizing U S WEST to recover its reasonable and prudent capital investments for implementing EAS from the remaining revenue sharing funds.
THE APPLICATION
U S WEST has calculated that the construction jobs and capital costs necessary to implement EAS between the eastern Idaho calling region and the Fremont exchanges total $145,968. As part of its Application, the Company has supplied spreadsheets identifying allocated costs associated with these EAS projects. In addition, the Company has also outlined its procedures for segregating the costs associated with implementing EAS. U S WEST observed that reimbursing the Company for its capital costs results in no additional capital costs being included in Title 61 rate base because the installed plant is “fully expensed.” The Company noted that its original estimate for capital expenditures in this matter was approximately $120,000.

STAFF ANALYSIS
The Staff has reviewed the Company’s Application and believes that U S WEST’s request is reasonable. The Company seeks reimbursements for its capital costs associated with implementing EAS in a manner consistent with prior Commission Orders. U S WEST calculated its EAS capital costs as a percentage or portion of upgrading its facilities to accommodate increased EAS local traffic. Staff believes that such calculation is reasonable based upon the specific facts of this case but suggests that in the future the Company provide better tracking data and the underlying bases for its allocation assumptions. After reimbursing U S WEST its current request, there is approximately $4.2 million remaining in revenue sharing funds.

COMMISSION FINDINGS
Based upon our review of the Company’s Application and the Staff’s recommendation, we find that it is reasonable to reimburse the Company for its capital costs associated with implementing EAS. As mentioned above, prior Commission Orders have consistently noted that remaining revenue sharing funds would be used to reimburse the Company for its capital costs associated with implementing EAS. In Order No. 27657, the Commission ordered U S WEST to implement EAS and recover its capital costs from the revenue sharing fund. Order No. 27657 at 8, citing Order No. 27633 at 2 ¶ 4. In this particular case, U S WEST was required to add additional plant to accommodate the increased EAS traffic from the Fremont exchanges Accordingly, the Commission directs that our USF Administrator reimburse U S WEST $145,968 from the remaining revenue sharing fund balance.
O R D E R
IT IS HEREBY ORDERED that U S WEST Communications’ Application for EAS reimbursement is granted. The Company shall receive reimbursement of its capital costs for implementing EAS between the eastern Idaho calling region and the Fremont exchanges in the amount of $145,968.
IT IS FURTHER ORDERED that the USF Administrator reimburse U S WEST the amount of $145,968 from the remaining revenue sharing fund in her custody.
THIS IS A FINAL ORDER. Any person interested in this Order (or in issues finally decided by this Order) or in interlocutory Orders previously issued in this Case No. USW-T999 may petition for reconsideration within twenty-one (21) days of the service date of this Order with regard to any matter decided in this order or in interlocutory Orders previously issued in this Case No. USW-T999. 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 July 1999.

DENNIS S. HANSEN, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

PAUL KJELLANDER, COMMISSIONER

ATTEST:

Myrna J. Walters
Commission Secretary

vld/USW-T-99-9_dh
The revenue sharing plan was a multi-year program, which was terminated in 1996. See Order No. 26355 at 1-3. At the termination of the revenue sharing program, there was a balance in ratepayer sharing funds of approximately $7 million. In Order No. 27100, the Commission authorized U S WEST to use remaining revenue sharing funds to defray its capital costs in implementing EAS between its own exchanges or among EAS routes with other local exchange companies. At the time, the Commission anticipated that the remaining sharing funds would be depleted through the process of implementing EAS. The remaining sharing funds were deposited with the Commission’s Universal Service Fund (USF) Administrator. Order No. 27100 at 53. In this matter, U S WEST requests that the Commission direct its USF Administrator to reimburse the Company for its EAS capital costs.

ORDER NO. 28091 1

Office of the Secretary
Service Date
July 8, 1999