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HEARING ON US WEST PLANS IS POSTPONED

SHARE HEARING ON US WEST PLANS IS POSTPONED

A hearing concerning a US WEST Communications proposal for an incentive rate plan has been postponed to April 27.

At that time the Utah Public Service Commission will also hear a request from the Utah Division of Public Utilities to impose an interim $5.7 million rate reduction on US WEST.US WEST officials say the incentive plan is needed to convince shareholders to invest an additional $100 million to finance planned upgrades of 48 central switching offices in the state and the installation of a statewide fiber optic transmission network.

PSC Chairman Ted Stewart said the April 27 hearing will allow the commission to decide what approach should be taken in handling both the incentive plan request and the proposed rate reduction.

The division previously asked the PSC to consider dividing the incentive hearings into two parts, one to look at the plan itself and the second to determine whether the proposed system up-grades should be included in the incentive plan or handled separately.

The call for the interim rate reduction is based on the division's review of US WEST's 1989 earnings, the company's 1990 budget and the company's earnings since an October PSC order that set the allowed rate of return on equity at 11.8 percent.

The division filing said that, if left unchecked, the company's 1990 earnings would reach about 13.64 percent. That rate is above the allowed rate but would be below the 14 percent limit requested in the incentive plan. The incentive plan calls for excess earnings up to 14 percent to be shared equally among customers and shareholders.

US WEST spokeswoman Carol Dunlap said the company is disappointed with the division request. She said officials believe the incentive plan would provide a reasonable approach in that both the customers and the shareholders would benefit from improved technology.

She said the US WEST plan, which would freeze phone rates at their current level through 1994, benefits both the urban customers in the Wasatch Front area and the rural customers where the upgrades are being made.

Dunlap said economic development officials from around the state have also indicated support for the incentive plan.

"They have told us that modernizing the rural call switching equipment and installing enhanced digital networks are two of the most important contributions we at US WEST can make," Dunlap said.