10. Section 311(g)(2) - Reduced Comment Period
The Commission mailed the draft decision of the ALJ in this matter to the parties in accordance with Section 311(g)(1) and Rule 77.7. Pursuant to Pub. Util. Code § 311(g)(2), parties have stipulated to reduce the otherwise applicable 30-day period for public review and comment to seven days. Comments were filed on ________________.
1. Notice of this application appeared in the Commission's Daily Calendar of September 27, 2000.
2. No protests have been filed.
3. Applicants seek approval pursuant to Pub. Util. Code § 854(a) for the acquisition of the stock of Evans Telephone by Evans Holdings and the transfer of control of Evans Telephone to Evans Holdings and Country Road.
4. Evans Telephone is an incumbent local exchange telephone utility serving approximately 12,000 access lines in portions of Merced, Stanislaus, Santa Clara, and Yolo Counties.
5. Evans Holdings and its parent company Country Road are Delaware corporations that own and operate two small local exchange companies in Maine and West Virginia.
6. After the proposed acquisition, Country Road, Evans Holdings, and Evans Telephone will be separate corporations.
7. Evans Holdings will enter into a loan transaction with CoBank for $42 million to finance the acquisition. Evans Telephone is not responsible for this loan.
8. Because of the separate legal structures of Country Road and its subsidiaries, Evans Telephone will not incur any liability for the debt incurred to finance the transaction and Evans Telephone ratepayers are insulated from any debt obligation from the transaction.
9. CRC Communications of California, Inc. will be financed independently of Evans Holdings and Evans Telephone.
10. Country Road will not rely on revenue from CRC to support debt service obligations resulting from the acquisition of Evans Telephone.
11. Evans Telephone must report all significant transactions with unregulated affiliates according to Section 587 and the rules set forth in D.93-02-019.
12. The transaction will benefit the public interest if Applicants invest $11 million in network infrastructure and increase the offering of broadband and other services to Evans Telephone customers without increasing local rates.
1. The proposed stock acquisition and transfer of control of Evans Telephone to Evans Holdings and Country Road is in the public interest as long as Evans Telephone ratepayers are insulated from the debt repayment obligations of Country Road and Evans Holdings, and insulated from the success or failure of Country Road's CLC operation, CRC.
2. To ensure the proposed transaction is in the public interest, the Commission should approve this application subject to the conditions set forth in Appendix A of this order.
3. The proposed transaction does not have the potential for causing a significant effect upon the environment. Applicants must follow all applicable environmental regulations and Commission rules for construction of any facilities.
4. This proceeding is designated a ratesetting proceeding; no protests have been received; no hearing is necessary.
IT IS ORDERED that:
1. Application (A.) 00-09-045 is approved subject to the conditions set forth in Appendix A of this order.
2. Applicants are not granted any authorization by this order to construct facilities and shall follow all applicable environmental regulations and Commission rules should they wish to construct facilities.
3. A.00-09-045 is closed.
This order is effective today.
Dated , at San Francisco, California.
APPENDIX A
ADOPTED CONDITIONS
The authority granted by this decision is contingent upon the following conditions:
1. Evans Telephone shall not sell any assets used or useful in the provision of its regulated services to satisfy debt obligations incurred by Country Road or Evans Holdings to finance the acquisition of the Evans Telephone or Evans Communications.
2. Evans Telephone shall not increase rates for its customers due to any increase in costs brought about by its acquisition by Country Road and Evans Holdings.
3. Evans Telephone shall manage its finances on a stand-alone basis, independent of Country Road, CRC Communications of California, and other affiliates.
4. Country Road and Evans Holdings shall provide Evans Telephone with sufficient equity capital to maintain a reasonable and balanced capital structure and to provide service to the public that is safe, reliable, and in compliance with all applicable statutes and Commission orders.
5. Evans Telephone shall comply with all existing and future affiliate rules and reporting requirements.
6. Evans Telephone shall not pay a dividend, loan money, or provide any other forms of capital to Country Road, Evans Holdings, or other affiliates if doing so would jeopardize the utility's ability to provide reliable service at reasonable rates.
7. Country Road shall invest approximately $11 million in network infrastructure for Evans Telephone over the next five years and increase the offering of broadband and other services to Evans Telephone customers, over current levels, without increasing local rates.
(END OF APPENDIX A)
