Use of Proceeds

Cal-Ore states in the Application that it will require up to an additional $6,711,750 to pay for additions and improvements to plant to: 1) serve approximately 432 new subscribers; 2) construct two new fiber routes from the Macdoel and Dorris central offices to points of interconnection with other local exchange carriers; 3) replace buried copper plant in the Dorris and Macdoel exchanges and to add line extensions; and 4) add fiber termination equipment in the Dorris and Macdoel central offices.

Cal-Ore believes that it is not in a position nor is it prudent or in the best interest of subscribers to finance all of its large program out of its current earnings or resources when below market rate interest loans are available from the RUS and the RTB.

Cal-Ore's proposed project is consistent with its provision of telecommunications services as a public utility. Because long-term borrowings from the RUS and the RTB represent a much lower cost of capital than either equity or other forms of debt, it is beneficial to both utility and customers. However, the Commission does not by this decision determine that the proposed use of the loan proceeds, including the construction budget, the cash requirements forecasts, and the capital structure presented herein, are necessary or reasonable for ratemaking purposes.

In Resolution (Res.) ALJ 176-3080 dated January 23, 2002, the Commission preliminarily categorized this Application as ratesetting, and preliminarily determined that hearings were not necessary. No formal protests have been received. Given these developments, a public hearing is not necessary, and there is no need to alter the preliminary determinations made in Res. ALJ 176-3080.

This is an uncontested matter in which the decision grants the relief requested. Accordingly, pursuant to § 311(g)(2) of the PU Code, the otherwise applicable 30-day period for public review and comment is being waived.

We approve Cal-Ore's Application in this order.