Background

Ducor Telephone Company, a local exchange telephone utility based in Ducor, California, provides local exchange telephone service in three exchanges; Rancho Tehama, Ducor, and Kennedy Meadows, serving approximately 1,300 customers.

On December 19, 2007, Ducor filed AL 318 in response to D.01-05-031, in which the California Public Utilities Commission (CPUC) set in motion the waterfall¹ provision in 2003 requiring Ducor to file a General Rate Case (GRC) by the end of 2002. The last GRC filed by Ducor was filed on December 19, 2002, through an advice letter and its most recent intrastate results of operations were authorized by Resolution T-16764 dated October 30, 2003. Resolution T-16764 authorized $1,886,674 CHCF-A support for Ducor for test year 2004.

In AL 318, Ducor proposes an increase in the CHCF-A support of $1,211,387, which represents a 68% increase in year 2008 CHCF-A support for the year 2009. The total proposed 2009 CHCF-A support requested is $2,993,395

On September 3, 2008, CD held a meeting with Ducor management so as to provide an opportunity for the company to discuss CD's proposal. The meeting served to share information and for more recent data to be provided which assisted in making adjustments

¹ The waterfall provision refers to the 6-year phase down of the CHCF-A funding level beginning in 1998, the year after the Commission approval of a GRC. The funding levels are 100% of the forecast 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.