PUC to Vote Today on Rate Cut at PacBell
State regulators are poised to approve today as much as $47 million in rate reductions for Pacific Bell customers, but the phone company is pushing a controversial plan that would cut that refund to just $13.9 million.
The PacBell plan has been criticized by consumer groups that say the company is trying to pocket the difference--about $33 million--even though the state Public Utilities Commission had already earmarked the money for customers.
The commission’s telecommunications division has filed a report in favor of refunding the entire $47 million to customers of PacBell, the state’s largest phone company.
But the company’s alternative calling for the $13.9-million refund is backed by at least one of the five commissioners: Jesse J. Knight Jr., who retires from the PUC at the end of the year.
“If the commission approves [PacBell’s plan], they would be making a huge mistake,” said Paul Stein, a staff attorney for the Utility Reform Network, or TURN, a San Francisco-based consumer advocacy group.
“This is $33 million that belongs to ratepayers,” Stein said. “Once you parcel it out, it doesn’t amount to very much on an individual basis. But that doesn’t mean PacBell should be able to keep it.”
The money at issue stems from the PUC’s effort to remove hidden subsidies in phone rates.
Under the old system, customers subsidized high-cost rural service by paying inflated rates for certain types of calls and services. The restructuring separated those fees as a separate tax on phone bills, but didn’t eliminate the higher rates. That temporarily left customers paying twice.
Because of the overcharging, the PUC in July called for PacBell to cut rates by $305 million. For customers, that resulted in slightly lower toll call prices and lower monthly charges for certain features, such as call waiting. The toll call price cuts range from a few cents a month to as much as $35 a month.
PacBell said it has received $352 million from the fund this year. But the company is arguing that the $305 million figure is too low and that it should be required to refund just $13.9 million instead of $47 million, the difference between $352 million and $305 million.
Either way, customers are unlikely to notice a major change in their bills.
“This is clearly a violation of the commission’s July order,” said Kelly Boyd, a senior telecommunications analyst with the Office of Ratepayer Advocates, the PUC’s consumer advocacy arm. “PacBell would be cheating customers out of $33 million.”
PacBell says the PUC’s earlier decision does not restrict them from revising the numbers.
“There is a legitimate reason to see this both ways,” said PacBell spokesman John Britton.
