PETRECON.docx

DONALD L. HOWELL, II
Deputy Attorney General
IDAHO PUBLIC UTILITIES COMMISSION
PO Box 83720
Boise, ID  83720-0074
Tele:  [phone]
FAX: [phone]
Street Address for Express Mail:
472 W Washington
Boise, ID  83702-5983
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE PETITION FROM RESIDENTS OF TETON COUNTY REQUESTING EXTENDED AREA SERVICE (EAS) TO THE GREATER IDAHO FALLS AREA.
)
)
)
)
)
)
)
CASE NO. GNR-T-97-8
STAFF ANSWER TO PETITION FOR RECONSIDERATION
COMES now the Staff of the Idaho Public Utilities Commission by and through its attorney of record and submits this answer to David B. McCoy’s Petition for Reconsideration in the above-referenced case.  Mr. McCoy filed his Petition via facsimile on May 4, 1998.  The Petitioner seeks reconsideration of the Commission’s Order No. 27456 which adopted a Stipulation and Settlement entered into between Teton Telcom and the Commission Staff.  This Order adopted the Stipulation but found that another public hearing was necessary before ruling on the Driggs petition for extended area service (EAS).  The Commission’s subsequent hearing was to determine customers’ willingness to pay the higher proposed local rates for EAS.  As explained in greater detail below, the Staff maintains that this Petition for Reconsideration should be dismissed because it seeks reconsideration of a non-final, interlocutory Order.
THE PETITION
The Petition states that it is “not clear to Petitioner whether acceptance of the Stipulation and Settlement agreement was subject to the interlocutory aspect of [Order No. 27456].  Petitioner desires to preserve his rights with respect to appeal the Stipulation and Settlement agreement.”  Petition at 1.  The Petitioner contends that the Commission’s acceptance of the Stipulation and Settlement entered into between the Staff and Teton Telecom is “unreasonable, arbitrary, and capricious as a matter of law and fact and should be reconsidered.”  Id.  For example, the Petitioner alleges that:  (1) “[c]osts for the proposed EAS are far in excess of the costs originally proposed”; (2) no factual data was included in the Stipulation and Settlement to justify the proposed rate increases; and (3) no factual data was presented to substantiate adoption of the “3x” stimulation factor for EAS traffic.
DISCUSSION
The Petitioner indicates that he is seeking “reconsideration under Rule 331 et seq. of IPUC Rules of Procedure. . . .”  Petition at 1.  This rule provides that within 21 days “after the service date of issuance of any final order or rule, any person interested in a final order or rule of the Commission may petition for reconsideration.”  IDAPA 31.01.01.331 (emphasis added).  As previously quoted, this rule contemplates that petitions for reconsideration will pertain to final orders issued by the Commission.  Order No. 27456 states that the Commission was unable to conclude that Teton customers in the Driggs exchange were willing to pay a monthly increase of $12.85 for EAS.  Order No. 27456 at 10.  The Order recites that an additional public hearing was necessary “before we can rule on the Driggs EAS petition.”  Id. at 11.  Order No. 27456 stated that it “IS A PARTIAL FINAL ORDER” because the Commission had not completed its review of the Driggs petition.  Id. at 15.  Consequently, the Staff asserts that the Commission has not yet issued a final order regarding the Driggs EAS petition.
The Commission’s Order No. 27456 is in fact an interlocutory order as it pertains to the Driggs petition.  The Commission’s Procedural Rule 321 defines an interlocutory order as one that does “not finally decide all previously undecided issues presented in a proceeding. . . .  [T]he Commission may by order decide some of the issues presented in a proceeding and provide in that order that its order decision on those issues is final and subject to review by reconsideration and appeal, but is not final on other issues.”  IDAPA 31.01.01.321.01.  This is exactly what the Commission did in Order No. 27456 — it finally decided the 96-6 and 97-3 cases but continued the Driggs case (97-8 case) for an additional hearing.(footnote: 1)
Although the Staff asserts that Order No. 27456 is an interlocutory order and therefore not subject to reconsideration, Staff believes that addressing some of the Petitioner’s allegations may be pertinent.  For example, the Petitioner claims that the “cost” for the proposed EAS are far in excess of the cost originally proposed by the parties at the November 1997 hearings.  Staff maintains that it is not the cost of EAS which has increased from the time evidence was submitted at the November hearings, but that it was the proposed rates that have increased.  See Order No. 27456 at 6.  There is a clear distinction between the regulatory concepts of “costs” and “rates.”
The Petitioner also insists that there is no factual data included in the Stipulation and Settlement that justify the proposed increase in rates from the November hearings to the February Stipulation.  However, the record clearly indicates otherwise.  The Motion accompanying the Stipulation briefly summarized the reasons the stipulated “rates are higher than those originally proposed.”  Joint Motion to Adopt Stipulation and Settlement Agreement at 2.  In their Motion, the Staff and Teton maintained
that the higher rates are justified by: (1) adoption of the “3x” traffic stimulation factor; (2) recovery of EAS costs; (3) elimination of any additional USF disbursements; (4) suspension of any rate case until 1999; (5) recognition of the jurisdictional shift in allocation of costs caused by the sale of Columbine’s(footnote: 2) Colorado property and the purchase of the Driggs exchange; and (6) accommodation of the intrastate revenue and traffic shifts when converting toll routes to local EAS routes.
Id. (footnote added).
Paragraph No. 6 of the parties’ Stipulation and Settlement provides that “neither Silver Star no Teton shall increase Idaho USF draws as a result of implementing EAS. . . .”  Stipulation and Settlement at 3, ¶ 6.  As explained in the Commission’s Proposed Order issued February 27, 1998 and again in Order No. 27456, Teton initially calculated that USF disbursements would be necessary to make up the Company’s revenue deficiency.  This deficiency was to be satisfied by disbursements from the Idaho USF ranging between $61,500 to approximately $200,000, depending upon the Commission’s selection of rates for business and residential customers.  See Proposed Order at 5; Order No. 27456 at 8.  The parties’ decision not to seek USF revenues contributed to the increase in the proposed rates as contained in the Stipulation and Settlement agreement.
Finally, the Staff maintains that there is ample evidence in the record to support the Commission’s adoption of the “3x” stimulation factor.  As noted in Order No. 27456 at 6-7, the Staff and Teton each argued that the Commission utilize their respective stimulation factors of “2x” and “4x.”  For purposes of settlement, the parties adopted a “3x” rate.  There is substantial and competent evidence to support the Commission’s adoption of the “3x” stimulation factor.  Tr. at 64, 74-76; 70-72; 163-66; Exhibits 6-10.
SUMMARY
As set out above, the Staff asserts that the Commission’s Order No. 27456 as it pertains to the Driggs EAS petition was not a final order subject to reconsideration.  Consequently, the Staff urges the Commission to dismiss this Petition for Reconsideration.  Dismissal does not prejudice the Petitioner because he will still have a later opportunity to file a Petition for Reconsideration once the Commission has issued a final order pertaining to the Driggs petition.
RESPECTFULLY submitted this                  day of May 1998.

Donald L. Howell, II
Deputy Attorney General
vld/N:GNR-T-97-8.dh2
FOOTNOTES
1:
Rule 321 does provide that any party may petition “to review any interlocutory order.”  IDAPA 31.01.01.321.03.  However, the Commission’s review of an interlocutory order only extends to determine whether an interlocutory order should be designated as a final order, stayed, or clarified in some fashion.  IDAPA 31.01.01.321.03.
2:
Columbine is Teton’s parent company.  With the sale of the Colorado property, overhead expenses assigned to Colorado were reallocated to the Idaho jurisdiction.