STIPvSET.docx

Donald L. Howell, II
Deputy Attorney General
Idaho Public Utilities Commission
472 W. Washington
PO Box 83720
Boise, ID 83720-0074
Telephone:  [phone]
FAX:  [phone]
Attorney for Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE PETITION OF CUSTOMERS OF THE FREMONT TELCOM COMPANY REQUEST­ING EXTENDED AREA SERVICE (EAS) TO THE U S WEST EASTERN IDAHO CALLING REGION.
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CASE NO.  GNR-T-97-14

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STIPULATION AND SETTLEMENT
COME NOW Fremont Telcom, U S WEST Communications, and the 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, 274-76.  The parties urge the Commission to approve this Stipulation and Settlement and to authorize Fremont and U S WEST to implement extended area service (EAS) in their respective service areas.
This matter is before the Commission as a result of a Petition for EAS from Fremont’s customers in the Ashton, Island Park and St. Anthony exchanges.  The Petition generally requested EAS local calling to the U S WEST eastern Idaho calling region established in Case No. USW-S-96-4, Order No. 26672.  By this Stipulation and Settlement, the parties recommend that the Commission consider authorizing EAS in conformance with the settled issues outlined below.
Fremont and the Staff are prepared to testify that EAS is warranted from the three affected exchanges to the U S WEST calling region.  U S WEST will not oppose EAS if the Commission finds EAS is in the public interest. Staff’s investigation into the costs to Fremont of providing EAS for the Fremont customers reveals that the rates proposed herein are just and reasonable and do not produce excessive earnings for Fremont.  In fact, current projections indicate that even if the Commission approves EAS, Fremont will receive less than its currently projected return. This Stipulation and Settlement is intended to resolve the EAS Petition except as noted below.  Accordingly, the signatory parties hereby stipulate as follows:
1.Fremont and the Staff agree that the calling data and the community of interest standards set out in Order No. 26311 support the granting of EAS between the affected exchanges and the U S WEST eastern Idaho calling region.  As discussed below, they suggest that the Commission convene a public hearing for the purpose of determining whether Fremont customers are willing to pay the proposed rates contained in this Stipulation.
2.If ordered by the Commission, Fremont and U S WEST will implement EAS for their respective local exchange customers as soon as reasonably practical following the Commission’s entry of a final order in this case and Case No. USW-T-98-3.  In the event additional U S WEST or independent company exchanges are added to this calling area, EAS will also be provided between the Fremont exchanges and the additional exchanges that have been or may be added to the eastern Idaho EAS region.
3.Fremont and Staff  agree that the appropriate stimulation factor to be used for calculating EAS traffic and the necessary facility improvements should be at a “three times” (3x) rate.
4.Fremont will not include in its revenue requirements any “lost growth potential” resulting from Fremont’s purchase of the three exchanges from U S WEST in Case Nos. FRE-T-94-1 and USW-S-94-4.
5.Fremont will not seek further rate relief or disbursements from the Idaho Universal Service Fund (USF) until such time as the Staff completes an audit of the Company’s operations or when the Company has 1998 financials available, whichever occurs first.  Staff anticipates that it will complete its audit of Fremont’s 1997 annual report no later than July 30, 1998.  Upon completion of the Staff audit or the receipt of 1998 financial data, Fremont may seek an annual disbursement of at least $108,000 from the USF or other rate relief.  This commitment will not bar an earlier request for rate relief in the event Fremont’s revenues are substantially reduced by federal or state legislation or regulatory actions not related to these dockets or by a significantly underestimated buy-up of measured service by Fremont customers.
6.This Stipulation does not limit Fremont from filing for changes in access rates or to recover deficiencies in access revenues.
7.Fremont’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.  Existing zone charges will be eliminated.  Fremont will offer a measured service option to residential customers only at the rate of $16.00 per month, including 90 free minutes of local use, plus $.03 per minute for all usage in excess of 90 free minutes.  Mixing or combining of flat and measured service at a single customer premises shall not be allowed.  Finally, Fremont and the Staff agree to the rate for vacation (suspension) service at 50% of the local service rate for non-measured residential or business service.
8.The Staff and Fremont agree that the rates and charges established by this Stipulation and Settlement are just and reasonable and produce revenues that are less than Fremont’s projected revenue requirement.  U S WEST takes no position on this issue.
9.Acceptance and adoption by the Commission of this Stipulation and Settlement shall terminate any prior rate level or revenue requirement commitments by Fremont except such as are expressly stated in this Stipulation and Settlement with EAS.
10.The parties acknowledge that the Commission has recently instituted Case No. USW-T-98-3 to determine U S WEST’s EAS costs in this and other cases.  The parties agree that processing this case without first resolving the methodology for determining U S WEST’s EAS costs will not result in the denial of U S WEST’s EAS cost issue in this case.  At such time as the Commission determines the appropriate methodology for calculating U S WEST’s EAS costs, that methodology will be applied to U S WEST costs in this case.  The parties further recognize that the Commission may not render its final decision in this case until such time as it determines the U S WEST costs for granting this EAS Petition.  U S WEST will not be required to implement EAS in connection with this case until the Commission enters its final Order in Case No. USW-T-98-3.
11.The parties recommend that the Commission adopt the following schedule to consider this case:
May 18, 1998prefiled testimony supporting the Stipulation.  
June 2, 1998 public hearing in this matter.
The signatory parties strongly believe that this Stipulation and Settlement represents a reasonable resolution of  issues encompassed herein.  The 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.  The parties urge the Commission to adopt this Stipulation and issue its final order in accordance with its terms.
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, U S WEST, and Fremont each reserve their rights to fully litigate the issues encompassed in this settlement.
Respectfully submitted this                 day of May 1998.

Michael C. Creamer
GIVENS PURSLEY
Attorneys for Fremont Telcom, Inc.

Donald L. Howell, II
Deputy Attorney General
Attorney for Commission Staff

Mary S. Hobson
Robin L. Denison
STOEL RIVES LLP
Attorneys for U S WEST Communications, Inc.
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