STIPvSET.docx

CHERI C. COPSEY
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 INVESTIGATIONINTO THE METHODOLOGY FORDETERMINING U S WEST COMMUNICATIONS, INC.’S COST OF EXTENDED AREA SERVICE
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CASE NO. USW-T-98-3

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STIPULATION AND SETTLEMENT
COME NOW U S WEST Communications, Inc. 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 request the Commission approve this Stipulation and Settlement.
This matter is before the Commission as a result of a Stipulation between U S WEST and the Staff, filed on March 31, 1998, in Case Nos. GNR-T-96-6, GNR-T-97-3, GNR-T-97-8, GNR-T-96-5, GNR-T-97-7 and ROK-T-97-1.  In the Stipulation, U S WEST and the Staff agreed that a hearing should be held to determine U S WEST’s cost for providing extended area services (EAS) in those proceedings, as well as, to adopt a methodology to determine U S WEST’s costs in future EAS cases.  On April 10, 1998, the Commission issued an Order in Case Nos. GNR-T-96-5, GNR-T-97-7 and ROK-T-97-1 establishing this case to resolve all issues pertaining to EAS cost compensation for U S WEST.  Order No. 27450.  On April 10, 1998, U S WEST and the Commission Staff filed a Stipulation pursuant to that Order submitting a proposed schedule for the hearing and related proceedings in this case.  On April 14, 1998, the Commission adopted the Stipulation and scheduled a technical hearing to begin September 15, 1998.  Order No.  27465.
By this Stipulation and Settlement, the parties recommend that the Commission adopt the methodology set forth below to determine U S WEST’s costs for providing EAS in future cases.  The parties further recommend that the Commission apply this methodology to determine U S WEST’s costs for providing EAS in Case Nos. GNR-T-96-6, GNR-T-97-3, GNR-T-97-8, GNR-T-96-5, and GNR-T-97-7.
U S WEST and the Staff are prepared to testify that the proposed method for determining the cost to U S WEST for providing EAS is fair, reasonable and in the public interest.  Accordingly, the parties hereby stipulate as follows:
1.U S WEST and the Staff agree that U S WEST’s costs for providing EAS for a U S WEST exchange to another U S WEST exchange or group of exchanges are $0.0861 per toll minute of use.  Toll minutes of use are to be adjusted to reflect dial around at an agreed rate of thirty-eight percent (38%), [i.e., toll minutes of use x 1.38 x $0.0861].
2.U S WEST and the Staff agree that U S WEST’s costs for providing EAS between an independent telephone company exchange and a U S WEST EAS region, including EAS previously approved in GNR-T-96-6, GNR-T-97-3, GNR-T-97-8, GNR-T-96-5 and GNR-T-97-7, are $0.0818 per toll minute of use.  Toll minutes of use are to be adjusted to reflect dial around at an agreed rate of thirty-eight percent (38%), [i.e., toll minutes of use x 1.38 x $0.0818].
3.U S WEST and Staff agree that U S WEST’s costs calculated in paragraphs 1 and 2 reflect a stimulation factor of “three times” (3x) for calculating anticipated EAS traffic.
4.U S WEST and Staff agree that this Stipulation does not affect previous Commission decisions ordering that U S WEST’s reasonable and prudent capital investments for network facilities or improvements specifically needed to provide EAS, as established by competent evidence, be recovered from remaining Revenue Sharing Funds.
5.Subject to paragraph 6 of this Stipulation, the costs calculated pursuant to paragraphs 1 and 2, shall be recovered through a uniform increase to business and residential local exchange rates for customers within U S WEST’s EAS regions.
6.U S WEST and Staff agree that if the Commission orders inclusion of a U S WEST exchange in a U S WEST EAS region, rates in the affected exchange will be moved to the EAS region rates ordered in Case No. USW-S-96-5.  This complies with Idaho Code  § 61-315.  The increase in revenue caused by any rate group changes shall be an offset against the costs of EAS as determined in paragraphs 1 and 2.  U S WEST and Staff agree that this is a fair and reasonable method for recouping U S WEST’s costs for providing EAS to those routes, including shifts in costs from interstate to intrastate jurisdictions and from Title 62 to Title 61 services, and is consistent with Commission orders in Case No. USW-S-96-5.
7.U S WEST and Staff agree that the method for calculating U S WEST’s EAScosts, as established by this Stipulation and Settlement, and the proposed increases in U S WEST customer rates where EAS is granted are just and reasonable and consistent with the Commission’s decision in Case No. USW-S-96-5.  U S WEST and Staff further agree that this Stipulation and the methodology adopted by it do not change previous Commission decisions regarding U S WEST non-traffic sensitive cost allocations.
U S WEST and Staff will file testimony in support of this Stipulation and Settlement with their Joint Motion recommending Commission approval.
U S WEST and Staff 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 implementation of this methodology in future EAS cases in which U S WEST is a party and then it only applies to determining U S WEST’s costs.  In the event that the Commission does not adopt this Stipulation, the Staff and U S WEST each reserve their rights to fully litigate the issues encompassed in this settlement.  If the Commission does not approve this Stipulation and Settlement, the parties will move the Commission to revise the existing schedule.
Respectfully submitted this                 day of June 1998.

Cheri C. Copsey
Deputy Attorney General
Attorney for Commission Staff

Mary S. Hobson
Robin L. Denison
STOEL RIVES LLP
Attorneys for U S WEST Communications, Inc.
N:uswt983.stp