DR 98-189
Contoocook Valley Telephone Company and Merrimack County Telephone
Company
Petition for Authority to Merge and for Approval of Tariffs and
Temporary and Permanent Rates of the Resulting Corporation
Order Approving Procedural Schedule
O R D E R N O. 23,074
December 1, 1998
APPEARANCES: Devine, Millimet & Branch by Frederick J.
Coolbroth, Esq., for Contoocook Valley Telephone Company, et al.;
William Homeyer for the Office of the Consumer Advocate; and,
Larry S. Eckhaus, Esq., for the Staff of the New Hampshire Public
Utilities Commission.
On October 26, 1998, Merrimack County Telephone Company
(MCT) and Contoocook Valley Telephone, Inc. (CVT) (collectively,
the Petitioners), both wholly owned subsidiaries of MCT, Inc.,
filed with the New Hampshire Public Utilities Commission
(Commission) a Petition for Authority to Merge MCT and CVT and
for Approval of Tariffs and Temporary and Permanent Rates of the
Resulting Corporation (Petition). According to the Petition, CVT
seeks to merge with and into MCT. The surviving entity,
operating as MCT Telecom, will provide local exchange telephone
service in all of the exchanges currently operated by MCT and
CVT.
On November 4, 1998, the New Hampshire Public Utilities
Commission (Commission) issued an Order of Notice and scheduled a
prehearing conference for November 20, 1998 to consider motions
to intervene, and to establish the remainder of the procedural
schedule.
At the duly noticed Prehearing Conference on November
20, 1998, the Office of the Consumer Advocate (OCA) appeared on
behalf of residential customers pursuant to RSA 363:28 II. In
accordance with the Order of Notice, the parties and Staff
provided preliminary statements of their positions.
POSITIONS OF THE PARTIES
A. CVT and MCT
The Petitioners are requesting authority to merge CVT
into MCT with the surviving company to be called Merrimack County
Telephone Company doing business as MCT Telecom. The Petitioners
propose to merge the rates of the two companies and, therefore,
to provide a single intrastate access tariff and rates applicable
throughout all exchanges. As part of the merger, the Petitioners
are proposing to implement full 2-way, home and contiguous EAS in
all eight exchanges. The Petitioners indicated that, although
the Petition includes requests for temporary and permanent rates,
after discussion with Staff and the OCA, Petitioners are willing
to coordinate this proceeding with Docket DR 98-160, although
they do not agree that CVT is in an overearnings situation, and
to delay the implementation of rates and system-wide home and
contiguous EAS until the conclusion of that proceeding.
B. OCA
The OCA maintained that additional information is
required before the Commission can determine whether this
Petition is in the public good. OCA is also concerned that any
earnings reduction for CVT go to the appropriate customers which
might not occur if the merger is first approved and temporary
rates are set, which could also blur the overearnings issue.
C. Staff
According to Staff, the filing raises numerous issues
including: whether the proposed merger is in the public interest;
whether the request for consolidated temporary rates is
appropriate; whether the proposed consolidated temporary rates
are just and reasonable; how the financial structure of MCT
Telecom as the surviving entity is affected; whether provision of
2-way EAS for all eight exchanges should be included as part of
the merger plan; and, the relationship of this proceeding to
Docket DR 98-160 which is an investigation into the earnings
level of CVT. Staff is of the opinion that this investigation
should track the schedule of DR 98-160, and that a determination
regarding CVT's overearnings is required before permanent rates
are set for the merged company. Staff maintains that the merger
petition, discussion of any merged rates, and other issues
contained therein, should be considered as a separate proceeding,
although both dockets could proceed along similar time lines.
At a Technical Session subsequent to the Prehearing
Conference, the parties and Staff agreed upon the following
procedural schedule, which is coordinated with Docket DR 98-160,
such that Company Testimony in this proceeding will be filed
after Staff and OCA Testimony in DR 98-160. A second hearing
date has been added so that DR 98-189 will be heard immediately
following DR 98-160 in order that CVT's overearnings be addressed
prior to setting permanent rates for the merged company.
Company Testimony February 26,1999
Staff & OCA Data Requests March 5,1998
- 1st Set
Company Data Responses March 12,1999
- 1st Set
Staff & OCA Data Requests March 19, 1999
- 2nd Set
Company Data Responses March 26, 1999
- 2nd Set
Staff & OCA Testimony April 9, 1999
All Parties Data Requests April 16, 1999
Staff & OCA Data Responses April 23, 1999
Settlement Discussions May 5, 1999
Stipulation (if any) May 11, 1999
or Rebuttal
Hearing May 18-19, 1999
The Parties and Staff are also discussing the
appropriate cost of service methodology to be used in
establishing rate design. The Parties and Staff will forward
their recommendation to the Commission if an agreement is
reached.
We find the proposed procedural schedule to be
reasonable and just, for the reasons suggested by the parties and
Staff.
Based upon the foregoing, it is hereby
ORDERED, that the procedural schedule stipulated to by
the parties and Staff is adopted to govern our investigation in
this proceeding.
By order of the Public Utilities Commission of New
Hampshire this first day of December, 1998.
Douglas L. Patch Susan S. Geiger Nancy Brockway
Chairman Commissioner Commissioner
Attested by:
Thomas B. Getz
Executive Director and Secretary