General Telephone May Skip Its Turn to Seek Rate Increase
In response to a request by state regulators, General Telephone of California said Thursday that it expects to skip its scheduled turn to seek a general rate increase this year, putting off the next major rate boost for its 2.5 million customers until at least 1988.
“The decision is not final,” cautioned company spokesman Tom Leweck, “but at this point it is looking very much as if we won’t be filing.”
Leweck said the company will make a final decision on the filing within 30 days.
If the company does not file this year, customers would enjoy a four-year stretch without a general rate increase. The last hike took effect last year.
The Public Utilities Commission asked General Telephone to hold off this year’s scheduled filing, Leweck said, because of an exceptionally heavy workload resulting in large part from consideration of a Pacific Bell rate case filed last fall and from continuing regulatory fallout in the breakup of the Bell System.
Under PUC procedures, General Telephone and Pacific Bell stagger filings of what is called “a general rate case.”
This year was General Telephone’s turn, with the filing scheduled to be made by September. Normally, the PUC would hold hearings on the matter and issue a ruling in 1986, with the resulting new rates taking effect in 1987.
General’s last general rate case was filed in August, 1982, and took effect last year, resulting in a $155-million increase.
“We’ve determined that if the economy stays on track, our earnings stay at present levels, our growth is sustained and we can maintain our productivity gains,” no formal rate proceedings will be necessary this year, Leweck said. The company does expect, however, to seek a cost-of-living adjustment in the fall and an increase in its depreciation allowance, and these proceedings could affect customers’ monthly bills.
(The PUC also is expected--perhaps at its meeting today--to correct some computational errors in General’s 1984 increase that could affect rates.)
The PUC granted General Telephone a $77-million adjustment last March that added a 4.83% surcharge to monthly bills. But cost-of-living adjustments can also reduce bills, Leweck acknowledged.
, as was the case in Pacific Bell’s most recent attempt.