HomeMy WebLinkAboutAgenda Report - July 24, 1985 (114)-L ME9MG,
CITY
JUL, X1, 1985
NOTICE OF AMENDMENT
TO APPLICATION OF
PACIFIC BELL
FOR GENERAL RATE
INCREASE RECEIVED
City Clerk Re1whe presented a Notice of Amendment to
application of Pacific Bell for general rate increase
advising that the proposed increase has been reduced.
Thenotice advises that, in February and April of this
Kpear, Pacific Bell informed its customers of its
Plication No. 85-01-034 to the California Public
Utilities Commission for an overall increase in rates of
$1,362 million per year. Approval of this request would
have increased Pacific's total intrastate revenues by
about 20.4%. on June 17, 1985 Pacific Bell formally
amended its application and lowered the amount of its
request by $427.5 million. The amount of the proposed
increase is now approximately $934.5 million per year.
As a consequence of this reduction, full approval of
Pacific's request would now increase Pacific's
intrastate revenues by about 14%.
NOTICE OF AMENDMENT TO APPLICATION OF PACIFIC BELL FOR GENERAL RATE INCREASE
In February and April of this year, Pacific Bell (Pacific) informed its
customers of its application (PIo. 85-01-034) to the California Public Utilities
Commission (CPUC) for an overall increase in rates of $1,362 million per year.
Approval of this request would have increased Pacific's total intrastate
revenues by about 20.4%. On June 17, 1985, Pacific Bell formally amended its
application and 2gdered the mount of its request by $427.5 million. The amount
of the proposed increase is now approximately $934.5 million per year. As a
consequence of this reduction, full approval of Pacific's rPauest would nnw
increase Pacific's intrastate revenues by about 14%.
Pacific's original application was based upon forecasts of 1986 expense and
revenue levels prepared last sumer. Although that information was the most
current available at the time the application was prepared, utilization of more
recent economic information has enabled Pacific to.reduce its rate increase
request.
A FINAL RATE DESIGN HAS BEEN PROPOSED
The CPUC is evaluating Pacific's application -in two phases. The first phase, in
which the CPUC considers the need for the requested rate increase, began in
April and is still in progress. The CPUC has directed that: any rate increases
found necessary will occur through an interim surcharge whiciz will remain in
effect until replaced by a final rate design. The June 17th amendment decreases
Pacific Bell's proposed interim surcharge from about 30% to about 22%. The CPUC
has also instructed Pacific Bell to propose a final rate design to replace the
interim surcharge. Pacific Bell's June 17th amendment complies with this
direction.
The changes in rate design which Pacific proposes are necessary for several
iT vortant reasons • Pacific is ^�.�e muted t^. .aLa-i ^.t 1a.ing high q ul ity, aftl:rdui
c
basic telephone service. At present, some of Pacific's services are priced far
above what it costs Pacific to provide them. Others are priced far below
Pacific's costs. Orofits from the higher -priced, lower-cost services help
Pacific to provide basic telephone services at prices far below cost.
Therefore, Pacific is proposing rates which are more balanced and will tend to
encourage use of its most profitable services so that Pacific can continue to
provide basic services that are widely affordable.
Under this newly proposed rate design sane rates would be lower than they would
have been with the originally -proposed interim surcharge of about 30% described
in the February and April bill inserts. Some rates, however, would be higher.
The estimated impact on the average residence customer's monthly bill would. be
approximately $4.84.
The following charts summarize the rate changes which Pacific has proposed. The
present rates shown are the tariff rates and do not include the federally -
imposed customer access line charge. In addition, these rates do not reflect
the surcharge requested or the decision issued in Pacific Bell's Amended
Application on Intrastate Access Charges filed August 17, 1984, or the impact of
negative surcharges presently applicable to many services.
RMIDENCE-(NM7LIFELINE)I
Present
Monthly Proposed -
Tariff IDnthly
Rate Rate
o Unlimited Service (Local)
$8.25
$16.00
o Measured Service
- Economy Plan
$4.452
$6.003
Initial Minute (Local)
$0.04
$0.05
Each Add. Minute
$0.01
$0.01
- Call Allowance Plan
(not offered)
$10.00
Call Allowance
130 local calls
Over Allowance (131+)
$0.10 per call
o Foreign Exchange
- Flat (Local)
$15.00
$22.75
- Measured
$8.504
$10.055
Initial Minute (Local)
$0.048
$0.05
Each Add. Minute
$0.012
$0.01
o Call Waiting
$3.50
$3.75
o ZUM (Zones 20)
- Zone 2
Initial Minute
$0.08
$0.10
Each Add. Minute
$0.03
$0.045
- Zone 3
Initial Minute
$0.10
$0.10
Each Add. Minute
$0.05
$0.045
lReferences in all charts to Zones 1, 2 and 3 and to ZUM (Zone Usage
Measurement) only apply in San Francisco, Los Angeles, Orange, Sacramento and
San Diego extended areas. In these areas the proposed rates and allowances for
local calls apply to Zone 1.
3The rate includes a $3.00 allowance for local calls (Zone 1, 2, or 3).
The proposed rate includes a $2.00 allowance for local calls (Zone 1).
5The rate includes a $3.60 allowance for local calls (Zone 1).
The proposed rate includes a $2.00 allowance for local calls (Zone 1).
-2-
As the chart above indicates, under Pacific's proposal, unlimited local calling
(Zone I in measured service areas) would be offered for $16.00 per month. In
areas offering measured service, a new usage option, the "Call Allowance Plan"
could be selected. Customers choosing the Call Allowance Plan would pay the
basic service rate of $10.00 per month., Included as part of the monthly rate
would be 130 untimed local calig, with a charge of 10 cents per call for any
calls over 130. Customers who only make.a few local calls may choose the fully
measured usage option and receive $2.00 worth of local calls as par's of the
$6.00 per month basic access rate ("Economg Plan"). The customer would be
charged for each call based on the duration of the call and the tiof day the
call is placed. During the day time of
5 cents would be charged for the first minute
and I cent for each additional minute. Presently, 4 cents is charged for ti3e
first minute and 1 cent is charged for each additional minute. Discounts would
apply in the e�rening and night periods and on the weekend and �r.,tain holidays.
Present
Monthly Proposed
Tariff Monthly
Rate Rate
In Areas Whew. MRaoured
Service is Available;
o Lifeline - Economy Measured
Calls Included
Calls Beyond 30 (31-40)
(41+)
o Lifeline - Call Allowance Plan
Call Allowance
Over Allowance (131+)
o Lifeline - Unli,-nited Plan
Call Allowance
$1.48
30 local calls
$0.10 per call
$0.15 per call
(not offered)
(not offered)
$"3.38
$2.25
30 local calls
$0.10 per call
$0.10 per call
$4.25
130 local calls
$0.10 per call
$10.25
unlimited
local calls
$7.25
6Rates shown reflect $0.75 CPE credit. For Zone 2 and 3 usage rates, see
Residence (Non -Lifeline) chart.
As the chart above indicates, under Pacific's proposal, as an alternative to
today's Lifeline - Economy Measured Service, qualified customers could choose
the Unlimited Plan for $10.25 per month or the Call Allowance Plan with 130
untimed local calls for $4.25 per month.
BUSINEM
Present
,Only available in pertain areas. Includes unlimited local usage.
,Only
Zone 2 and 3 usage rates. see Residence (Non -Lifeline) chart.
Monthly
Tariff
Rate
Proposed
Monthly
Rate
BUSII ESS ACCESS DINES
Monthly
Proposed
o One -Party Flat
$17.15
$25.50
o One -Party Measure9
$8.25
$I0.75
o Trunk Line - Flat
$25.65
$38.00
o Trunk Line - Measured
$8.2'5
$14.50
o Foreign Exchange
$19.50
$?0.75
o Semi -Public Coin
$20.00
$31.00
o Call Waiting
$4.20
$4.50
BUSINESS LOCAL USAGE
$20.00
$25.00
o measured Usage
Allowance
None
None
Initial Minute
$0.04
$0.05
Each .Add. Minute
$0.01
$0.015
,Only available in pertain areas. Includes unlimited local usage.
,Only
Zone 2 and 3 usage rates. see Residence (Non -Lifeline) chart.
Present
Monthly
Proposed
Tariff
Monthly
Rate
Rate
RESIDENCE
o Installation of. a Simple
Residence Access Line
$34.50
$45.00
o Restoral Charge
$20.00
$25.00
o Number Change
$20.00
$25.00
o Network Service Non -Intercept
$20.00
$25.00
BUSINESS
o Service Connection
- Initial Line
$70.00
$100.00
- Trunk
$70.00
$175.00
o Number Change
$30.00
$34.00
o Restoral Charge
$40.00
$45.50
0111ER SERVICES
Rates for certain other services would also increase. For example:
o Rate increases ranging from 9% to 142% are proposed for various private line
recurring and non-recurring services.
o Directory assistance charges would increase from $0.25 to $0.35 and the 2 call
allowance for business would be eliminated.
o The monthly rate for non -published listings would increase from $0.30 to
$1.20.
o Pacific proposes to consolidate the present 18 message toll distance bands
into four bands.. This would result in decreases in the rate applied to some
bands and increases in the rate applied to others.
ESTIMATED REVENUE IMPACT
The estimated revenue impact and percentage change for those portions of
services subject to the proposed rate design are as follows:
Estimated
Amount of Increase Estimated Avg. %
(Millions) Chance in Revenue
Basic Exchange
Business Lines
$131.771
38.34%
Residence Lines
298.822
42.32%
Semi-public coin
9.156
44.75%
Central Office Services
6.527
3.53%
Foreign Area Services
58.500
74.50%
Local Usage (Zone 1)
162.768
41.03%
Operator Services
55.025
72.50%
Optional Calling Plans
11.356
9.93%
Private Line
78.526
35-eZ%
Toll Usage
22.043
1.25%
Wbite Pages Listings
27.306
157.46%
Zone Usage Measurement
22.528
11.24%
(Zone 2 and 3)
- Subtotal
884.328
Elimination of -.85% Surcharge 50.172
Total Revenues
$934.500
All of the amounts shown above are estimates. The CPUC staff will review this
amendment to Pacific's application and may propose changes in the rates
requested by Pacific. Other interested parties may also propose rate changes.
-5-
Although a variety of rate proposals may be submitted, the final determination
will be made by the CPUC after hearings have been completed. The CPUC may grant
rates different from those requested, and the rate changes authorized may be in
different classes of service and/or higher than those listed.
Public witness hearings concerning the proposed rate structure will be held at
some later time. You will be notified of the dates, times and locations of
these hearings. If you would like to participate in these proceedings and need
advice on how to do so, write to the Public Advisor, California Public Utilities
Coamission, 350 McAllister Street, San Francisco, CA 94102. In addition to the
public witness hearings, additional hearing days will be devoted to analyzing
ways of allocating any approved increase among residential, commercial, and
industrial custaners. At these hearings the Commission will receive the
testimony of Pacific Bell and the testimony of other interested parties, and the
CPUC staff. The CPUC staff consists of engineers, accountants,: econcnists, and
attorneys who independently evaluate the proposals of utilities for rate
increases and present their analyses and reccamndations to the CPUC at public
hearings.
A copy of this amendment to Pacific's application and related exhibits will be
furnished by Pacific Bell upon written request to: J. C. Cook, District Staff
Manager, Pacific Bell, 140 New Montgomery Street, Room 922, San Francisco, CA
94105 (telephone number: 415-545-1483).
Further information may be obtained from Pacific Bell at its headquarters or at
its local public offices. In addition, any ccnments or inquiries relative to
the proposed increase, including a request to receive notice of the date, time
and place of any hearing on this application may be directed to one of the
California Public Utilities Cmmission offices at:
350 McAllister Street or 107 South Broadway
San Francisco, CA 94102 Los Angeles, CA 90012
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