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Kerman Telephone Company
2016 General Rate Case (GRC)

 

Background

In December 2011, Kerman Telephone Company filed an Application with the CPUC requesting to increase its intrastate revenues by $2.9 million for 2013.  Contained within this request, Kerman proposed: 

  • 12.69% return on Rate Base (authorized utility investments)  
  • $6.5 million in total California High-Cost Fund-A (CHCF-A) subsidy support. 

Kerman receives a subsidy from the CHCF-A, supported by all telephone customers statewide, for the purpose of minimizing rate disparity of basic telephone services between rural and metropolitan areas. By accepting this subsidy, Kerman is required to justify the reasonableness of its business expenditures through a regular General Rate Case at the CPUC. In October 2013, the CPUC issued a Decision staying Kerman’s General Rate Case Application so that the CPUC could first resolve foundational issues in the High Cost Fund-A Rulemaking.   

On August 28, 2014 the CPUC issued a Ruling permitting Kerman to update its Application as a result of the stay in the proceeding. In November 2014, Kerman filed its Response to the Ruling updating its Application with a requested:  

  • 13.63% return on Rate Base  
  • $6.8 million total in CHCF-A subsidy support  

In January 2015, Kerman filed a Response that further updated its GRC Application to conform to the CPUC’s Final Decision in the California High Cost Fund-A proceeding requesting: 

  • 13.63% Return on Rate Base  
  • $6.0 million total in CHCF-A subsidy support 

Evidentiary Hearings were held April 28 - May 1, 2015 at the CPUC. 

A CPUC Proposed Decision is expected by summer 2016. 

 

ORA’s Policy Position

ORA reviewed Kerman’s updated January 2015 Application to ensure that its request complies with providing safe and reliable telephone service at the lowest rates, in order to keep telephone service affordable for all Californians. ORA’s review included ensuring that Kerman's request complies with the statutory requirement that the CHCF-A subsidy support is not excessive. Based on ORA's analysis, it makes the following recommendations: 

  • 5.44% return on Rate Base 
  • $1,938,638 million total in CHCF-A subsidy support 

See ORA’s full analysis and recommendations in its March 27, 2015 Testimony. 

  

See ORA’s June 29, 2015  Opening Brief 

See ORA’s July 17, 2015 Reply Brief 

  

Proceeding Docket

See the Proceeding docket.  

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