TIM/tcg 3/14/2002

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking on the Commission's Own Motion to Assess and Revise the New Regulatory Framework for Pacific Bell and Verizon California Incorporated.	Rulemaking 01-09-001 (Filed September 6, 2001)
Order Instituting Investigation on the Commission's Own Motion to Assess and Revise the New Regulatory Framework for Pacific Bell and Verizon California Incorporated.	Investigation 01-09-002 (Filed September 6, 2001)

ADMINISTRATIVE LAW JUDGE'S RULING

DENYING ORA'S MOTION TO STRIKE PORTIONS

OF PACIFIC BELL'S SUPPLEMENTAL REBUTTAL TESTIMONY

This ruling denies the Office of Ratepayer Advocates' (ORA's) motion to strike portions of Pacific Bell's (Pacific's) supplemental rebuttal testimony.

Background

In Phase 1 of this proceeding, the Commission will consider, among other things, proposed ratemaking adjustments. As set forth in the ruling issued by the assigned Commissioner on December 27, 2001, any party that proposes a ratemaking adjustment has the burden of demonstrating that its proposal has a clear and direct connection to ORA's audit, is legal (e.g., does not constitute an impermissible form of retroactive ratemaking), and is consistent with the New Regulatory Framework (NRF).

On January 22, 2002, ORA submitted the written testimony of Danilo E. Sanchez. Sanchez recommends, among other things, that Verizon's rates be reduced by $112 million over a three-year period. Sanchez asserts that his proposed ratemaking adjustment has a clear and direct connection to ORA's audit, does not constitute retroactive ratemaking, and is consistent with NRF.

On February 20, 2002, Pacific deposed Mr. Sanchez. During the course of the deposition, Pacific asked several questions pertaining to retroactive ratemaking. On February 22, 2002, Pacific submitted the Supplemental Rebuttal Testimony of Dr. Robert G. Harris that purports to contain testimony based on the Sanchez deposition. On February 26, 2002, ORA filed a motion to strike portions of (1) the Supplemental Rebuttal Testimony of Dr. Harris, and (2) the Sanchez deposition. Pacific opposes ORA's motion.