Background
Ponderosa, a local exchange telephone utility based in O'Neals, California, provides local exchange telephone service in parts of Madera, Fresno and San Bernardino counties. Ponderosa currently serves approximately 9,300 business and residential access lines in its Auberry, Big Creek, Cima, Friant, North Fork, O'Neals, Shaver, and Wishon telephone exchanges.
In D.01-05-031, the California Public Utilities Commission (CPUC, or Commission) set in motion the waterfall provision1 in 2002 for six small LEC's if they did not each file a GRC by the end of 2001.2
The last GRC filed by Ponderosa was by AL No. 316 filed December 30, 2002, for test year 2004 and adopted by Resolution T-16771 on October 30, 2003. The CHCF-A funding amount granted to Ponderosa in T-16771 was $3,293,749, with an additional one-time CHCF-A funding amount of $48,156, due to Ponderosa's losses from the WorldCom bankruptcy.
In AL No. 374 and AL No. 374A, Ponderosa proposes a) increases to certain discretionary non-basic service rates; b) an intrastate Rate of Return (ROR) of 10.00%, the same rate of return granted in its previous GRC filing in 2004; and c) an increase in its CHCF-A draw increase of $3,589,024, or 259.2%, or from its 2008 draw of $2,254,710. In AL No. 374A, Ponderosa proposes a revised 2009 CHCF-A draw of $6,320,400, an increase of $4,065,690, or 180.32%, from its 2008 CHCF-A draw of $2,254,710.
In this rate case, Ponderosa also proposes to eliminate the Transport Interconnection Charge (TIC), from its Access Service tariff, to comply with Ordering Paragraph 8 of D.07-12-020, which requires the elimination of non-cost based elements from rates.
1 The waterfall provision refers to the 6-year phase down of the CHCF-A funding level beginning in 1998, the year after the completion of a GRC. The funding levels are 100% of the test year CHCF-A amount for the first 3 years, i.e., 1998, 1999 and 2000; 80 % the fourth year, i.e., 2001, 50% the fifth year, i.e., 2002; and 0% thereafter.
2 The six companies were Evans Telephone Company, Happy Valley Telephone Company, The Ponderosa Telephone Company, Sierra Telephone Company, Inc., The Siskiyou Telephone Company, and The Volcano Telephone Company.
