A request for an interim $8.6 million rate reduction for US WEST Communications has been taken under advisement by the Utah Public Service Commission.
Commissioners may take several weeks to decide on the interim reduction, which was requested by the Utah Division of Public Utilities. Utilities consultants say a review of US WEST financial statements for the first two months of 1990 indicates the company will exceed its authorized 11.8 percent profit margin by the $8.6 million.US WEST officials conceded during two days of public hearings that the company is exceeding the authorized profit rate, but contend the overearnings are in the range of $1.5 million to $5 million, an amount that does not justify the requested interim rate reduction.
Both US WEST and Division of Public Utilities arguments were based on the available 1990 data and the company's proposed budget. The Utah Committee of Consumer Services, which used final 1989 figures, claimed the company's excess earnings are close to $17 million and called for a $16.9 million interim reduction.
A full rate hearing is scheduled for December in conjunction with the company's request for an incentive rate plan that would freeze telephone rates for four years and allow the company to keep a portion of any overearnings within a specified range, in return for a $100 million investment to up-grade rural switching offices and install a backbone fiber optic network in the areas of the state served by US WEST.
If the commission grants an interim reduction, that amount would be subtracted from any additional reduction granted following the full hearing. If the interim amount proves excessive, the company would be allowed to put a surcharge on bills to recoup its loss.
The commission agreed to give US WEST time to file a brief outlining its position on interim rate standards. The division and committee will have until Friday, June 1, to respond.
Officials refused to speculate on when a final decision would be forthcoming.