990115.docx

WELDON B. STUTZMAN
Deputy Attorney General
IDAHO PUBLIC UTILITIES COMMISSION
472 W. Washington St.
PO Box 83720
Boise, ID  83720-0074
Tele:  [phone]
FAX: [phone]
Attorney for the Idaho Public Utilities Commission Staff
CONLEY WARD
GIVENS PURSLEY & HUNTLEY LLP
277 North 6th Street, Suite 200
PO Box 2720
Boise, ID   83701
Tele:  [phone]
FAX: [phone]
Attorney for Albion Telephone Company and Westel, Inc.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE PETITIONS FOR EXTENDED AREA SERVICE (EAS) BETWEEN BURLEY, IDAHO AND SURROUNDING COMMUNITIES IN CASSIA COUNTY.

IN THE MATTER OF THE PETITION FOR EXTENDED AREA SERVICE (EAS)
BETWEEN MALAD CITY AND REXBURG AND SURROUNDING AREAS, AND BETWEEN LOST RIVERS VALLEY AND OTHER SOUTHEAST IDAHO COMMUNITIES
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CASE NO. GNR-T-96-9
CASE NO. GNR-T-97-6
STIPULATION AND
SETTLEMENT
COME NOW Albion Telephone Company and Westel, Inc. (Albion and Westel) and the Staff of the Idaho Public Utilities Commission (Staff), by and through their respective attorneys of record and submit the following Stipulation and Settlement for the Commission’s consideration pursuant to Procedural Rules 272, 274-76.  IDAPA 31.01.01.272, 274-276.  The Staff, Albion and Westel urge the Commission to incorporate this Stipulation and Settlement in its final order in this case.
STIPULATION AND SETTLEMENT
This matter is before the Commission as a result of petitions for extended area service (EAS) (1) between Albion’s Cassia County exchanges and U S WEST Communications, Inc.’s Cassia County exchanges and (2) between Albion’s Holbrook exchange and Westel’s exchanges, on the one hand, and the eastern Idaho EAS region established in Case No. USW-S-96-4, Order No. 26672, on the other.  By this Stipulation and Settlement, Albion, Westel, and Staff intend to resolve all issues between the signatory parties in each of these pending cases.  Now therefore, the signatory parties hereby stipulate as follows:
1.Albion will implement extended area service for its local exchange customers to U S WEST’s Cassia County exchanges and to Project Mutual Telephone Cooperative’s exchanges in Minidoka and Cassia counties as soon as reasonably practical following the Commission’s entry of a final order approving this Stipulation and Settlement.  Westel will implement extended area service for its local exchange customers to U S WEST’s eastern Idaho EAS region as soon as reasonably practical following the Commission’s entry of a final order approving this Stipulation and Settlement.  In the event additional U S WEST or independent company exchanges are added to the eastern Idaho calling area, EAS may also be provided between the Westel exchanges and the additional exchanges subsequently added to the eastern Idaho EAS region.
2.The parties jointly recommend the Commission approve the Application for an order authorizing the merger of Albion and Westel now pending in Case No. ALB-T-98-3.  Subsequent to approval of the merger, Albion and Westel will merge their custom calling and CLASS rates on a revenue neutral basis.  The merged companies will also adopt a uniform intrastate access charge rate of $.062635 per minute.  Finally, the merged companies will eliminate service charges for PIC changes from their tariffs.
3.Albion and Westel withdraw their requests for additional revenues in the above described EAS cases upon Commission acceptance of this Stipulation and Settlement.  Future requests for rate relief will be filed on a combined basis for Albion and Westel, but the combined companies will not seek further rate relief until the year 2001, at the earliest.  This commitment will not bar an earlier request for rate relief in the event the combined companies’ revenues are substantially reduced by federal or state legislation, regulatory actions not related to these dockets, or by a buy up of measured service in excess of 10% of access lines for Albion and Westel customers on a combined company basis.
4.Albion and Westel’s flat rates for local exchange service, including EAS costs, shall be fixed at $24.10 per month for residential service and $42.00 per month for business service, with no zone charges allowed.  Albion and Westel will offer a measured service option to residential customers only at the rate of $16 per month, including 90 free minutes of use, plus 3 cents per minute for all usage in excess of 90 minutes.  Mixing or combining of flat and measured service at a single customer premises shall not be allowed.
5.Except as provided in Paragraph 3 above, neither Albion nor Westel shall increase Idaho USF draws as a result of implementing EAS, but Albion shall continue to receive disbursements from the Idaho USF at existing 1997 levels.  In the event the Commission orders an alteration to Albion or Westel’s access charges beyond that provided in this Stipulation, resulting revenue losses, if any, will be compensated through increased disbursements from the Idaho USF in accordance with Commission rules.
6.Albion and Westel shall, beginning January 1, 1999, adopt the depre­cia­tion rates approved for Albion in Order No. 26788 or, in cases where Albion has no approved rate for a specific account, the average of rates approved in Order No. 26788 for other independent telephone companies in Idaho shall be used.  In addition, Westel shall book the switch replacement credit authorized in Order No. 26353 as follows:  The credit shall first be reduced by an amount equal to the intrastate portion of the book value of the switching facilities removed from service in calendar year 1997, with the balance amortized over eight years at the rate of 12.5% per year beginning January 1, 1997.  If the Commission subsequently authorizes a higher depreciation rate for Account No. 2210, the percentage amortization of the switch replace­ment credit will be revised to match the revised depreciation rate.
7.The rates and charges established by this Stipulation and Settlement are just and reasonable and produce revenues that are not more than Albion and Westel’s full revenue requirement on a combined company basis.
8.The parties recommend that the Commission order that acceptance and adoption by the Commission of this Stipulation and Settlement shall terminate any prior rate level or revenue requirement commitments by Albion and Westel except such as are expressly stated in this Stipulation and Settlement.
The signatory parties strongly believe that this Stipulation and Settlement represents a reasonable resolution of disputed issues encompassed herein.  The signatory parties recognize the complexity of the issues presented in this case and the amount of effort and resources that would be expended by all parties in litigation if settlement does not occur.  Staff investigations reveal that the rates proposed herein are just and reasonable and do not produce excessive earnings for the affected companies regardless of the disposition of the disputed issues.  As reflected herein, the settlement of issues in this Stipulation carries no precedential value beyond this particular case.  In the event that the Commission does not adopt this Stipulation, the Staff, Albion and Westel each reserve their rights to fully litigate the issues encompassed in this settlement.
The signatory parties do not believe that a hearing on this settlement is warranted but are ready to provide evidentiary support if necessary.  We urge the Commission to adopt this Stipulation and issue its final order in accordance with its terms.
Respectfully submitted this                 day of January  1999.

Conley E. Ward
GIVENS PURSLEY & HUNTLEY LLP
Attorneys for Albion Telephone Company, Inc.
and Westel, Inc.

Weldon B. Stutzman
Deputy Attorney General
IDAHO PUBLIC UTILITIES COMMISSION
Attorney for Commission Staff
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