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On November 30, 2017, the California Public Utilities Commission (“CPUC”) held its most recent agenda meeting.  The Commissioners voted to adopt the agenda decisions adopting the all-party settlement agreements in the Ponderosa Telephone Company (“Ponderosa”) and Sierra Telephone Company, Inc. (“Sierra”) rate cases.  In addition, the Commissioners voted to approve amendments to the Commission’s Rules of Practice and Procedure that clarify and address procedural rules relating to the disqualification of administrative law judges, the requirements for Prehearing Conferences and Scoping Memos and ex parte restrictions and reporting requirements.  These and other items of interest addressed during the Commission meeting are summarized below.
Decision Adopting All-Party Settlement Agreement in the Application of Ponderosa for New Intrastate Rates and Charges, Establish New Intrastate Revenue Requirement and Rate Design, and Modify Selected Rates (Item 11, adopted on consent agenda)
While the decision purports to adopt the settlement agreement between Ponderosa and ORA, it deviates from the parties’ agreement by adopting a more detailed results of operations table that was not part of the parties’ agreement.  In early May 2017, Ponderosa and ORA reached the settlement agreement reflecting, among other terms, agreement upon the revenue requirement, total forecasted revenues, and California High Cost Fund-A draw.  After bringing a joint motion for adoption of the agreement, the ALJ issued a ruling requiring the parties to complete a more detailed results of operations table requesting that the parties provide forecasted underlying cost and rate base items.  The parties provided this information for illustrative purposes only and requested that the detailed results of operation not be adopted in lieu of or as part of the settlement agreement
Notwithstanding the parties’ agreement, the Proposed Decision (“PD”) issued on October 23, 2017 adopted the more detailed results of operations table and stated that that “Commission staff will rely on the [Results of Operations] that the Commission adopts in this GRC decision (Appendix 4) to determine CHCF-A support.”  The Settlement Agreement, however, expressly contemplated that annual adjustments to the Universal Service Fund (USF)/High Cost Loop Support (HCLS) figure would occur as part of the annual CHCF-A advice letter process under D.91-09-042. would occur. 
The Proposed Decision gave the parties an opportunity to provide an updated 2018 USF/HCLS figure consistent with the terms of the settlement agreement.    
The Commission also proposed to extend the detailed results of operations to 2019, which is outside the test year and the scope of the parties’ agreement.   
Ponderosa and ORA submitted joint comments requesting changes to address the issues noted above as well as other smaller items.  Other than adopting the more detailed results of operations table, the Commission’s decision made substantially all of the parties’ requested edits, adopted the updated USF figure, and explicitly adopted the parties’ agreement that the CHCF-A draw would be subject to annual adjustments under D.91-09-042.
A copy of the decision is available at the following link:
Decision Adopting All-Party Settlement Agreement in the Application of Sierra for New Intrastate Rates and Charges, Establish New Intrastate Revenue Requirement and Rate Design, and Modify Selected Rates  (Item 21, adopted on consent agenda)
The settlement agreement and proposed decision in Sierra’s rate case were similar to the agreement and proposed decision in Ponderosa’s rate case.  Sierra and ORA also submitted similar joint comments to the proposed decision to address the issues described above.  However, unlike the Ponderosa decision, the Sierra decision adopted at the November 30th meeting did not incorporate several of the parties’ requested changes.   
The decision updated the 2018 USF figure to reflect the latest NECA number and  removed references to the CHCF-A figure being controlled by the decision as to 2019.  However, like the Ponderosa decision, the Sierra decision adopted the detailed results of operations figures for “all regulatory purposes.”  Unlike the Ponderosa decision, the Sierra decision did not make the parties’ requested changes to expressly acknowledge the adjustment process under D.91-09-042 as to the 2018 CHCF-A figure; however, the parties’ settlement agreement that the Commission adopted includes this language.   
A copy of the decision is available at the following link:
Resolution Adopting Amendments to the Rules of Practice and Procedure to Implement Statutory Amendments Pursuant to Senate Bill 215, Reflect Changes in the Commission’s Administration, Streamline Certain Procedures, and Provide Greater Clarity –  This resolution implements statutory amendments pursuant to SB 215 and revises 25 rules of practice and procedure.   Here are some of the key changes:

  • Requires the assigned Commissioner to conduct a prehearing conference and issue a scoping memo in adjudicatory and ratesetting proceedings.
  • Amends rule regarding disqualification of administrative law judges to provide that in ratesetting and adjudicatory proceedings, a Commissioner or administrative law judge shall be disqualified for bias or prejudice based on “actions taken during the proceeding that demonstrate bias or prejudice” and “actions taken outside the public record of a proceeding demonstrating any commitment to provide relief to a party.”
  • Amends rule regarding disqualification of administrative law judges to include procedures for disqualification of a Commissioner for bias or prejudice.
  • Adds the definition of “party” for ex parte rules to include Commission staff assigned to a proceeding in an advocacy capacity.
  • Clarifies definition of “procedural matters” for ex parte rules.  Inquiries regarding the schedule, location or format of a hearing or other event are included only if the person inquiring reasonably believes that the subject of the inquiry is not in controversy.  Requests for a specific procedural action are procedural so long as all parties are included in the communication. 
  • Expands definition of “decisionmaker” for ex parte rules to include Commissioners’ policy and legal advisory staff assigned to a Commissioner’s office. 
  • Bars individual oral ex parte communications in ratesetting proceedings within three working days of the scheduled vote on the decision.
  • Authorizes the Assigned Commissioner to restrict or prohibit ex parte communications in a quasi-legislative or ratesetting proceeding or to require reporting of ex parte communications in a quasi-legislative proceeding.
  • Authorizes the Commission to impose penalties and sanctions for ex parte violations from $500 up to $50,000 for each offense, or more in certain circumstances, as well as adverse consequences in the proceeding.
  • Removes the requirement that the Commission will make agenda item documents available at 9:00 a.m. on the day of the Commission meeting.
  • Permits eligible local government entities to seek intervenor compensation.

The amended rules will be submitted to the Office of Administrative Law for approval and publication in the California Code of Regulations and will become effective on April 1, 2018 once approved.  
A copy of the resolution is available here:
Resolution Approving Blue Casa Telephone, LLC’s Request to Relinquish its Eligible Telecommunications Carrier (ETC) Designation in Specified Areas of California (Item 10, adopted on consent agenda) –  This resolution approves Blue Casa’s Tier 3 Advice Letter request to relinquish its ETC designation to provide federal Lifeline wireline service in the service territories of Citizens Telecommunications of California, Inc. and Consolidated Communications of California Company.  No protests were filed and the service areas and Citizens and Consolidated currently provide federal and state Lifeline service to eligible customers in these areas. 
A copy of the resolution is available here:  Adopted Resolution T-17554.
California Emerging Telecommunications Fund (CETF) Decade Report –  CETF is a nonprofit corporation that was established pursuant to Commission requirements in approving the mergers of SBC-AT&T and Verizon-MCI.  These merged companies were to provide $60 million over five years to advance broadband.  CETF’s mission is to close the digital divide by connecting Californians to broadband in underserved communities.  The CETF Co-Chair and Secretary, President and a director each provided an update and announced that CETF had met its goal of 98.7% broadband deployment and 87% broadband adoption.  It was also successful in obtaining further grant money of approximately $20 million and an executive order for digital literacy training.  In addition to supporting community based organizations (“CBOs”) to advance broadband, CETF also implemented “School2Home” to help close the digital divide in middle school low-income areas.  CETF expended the majority of its grant money (67.7%) in urban disadvantaged communities, but also engaged in efforts in rural, remote areas (24.1%) and assisted people with disabilities (8.2%).  In response to a question by Commissioner Peterman, CETF’s President stated that CETF has also worked with CBOs in efforts to advance broadband access for individuals for whom English is a second language.  Commissioner Guzman-Aceves also inquired whether CETF has set goals with the providers for more affordable plan options.  CETF’s President did not specify any concrete goals, but she noted that the companies have been regularly reporting pursuant to the terms of the memoranda of understanding and that Frontier, in particular, has collaborated with CETF in efforts to advance broadband options.   Melinda White, formerly Area President-West Region for Frontier, was recently appointed to CETF’s board of directors.  Despite CETF’s progress, CETF President noted that 43% of rural Californians still do not have reliable internet access.  CETF is committed to continuing its efforts to advance broadband for the next five years and asked for CPUC’s support in this process.
Conference with Legal Counsel – Disposition of Application for Rehearing of Resolution T-17531 filed by Kerman Telephone Company (“Kerman”) – Although there were no public discussions or handouts relating to this private conference, the results published following the meeting reflect that the Commissioners voted unanimously to approve a decision resolving Kerman’s application for rehearing of Resolution T-17531, which was issued in response to an advice letter filed by Kerman to true-up Kerman’s interim rate relief to adopted rates for Test Year 2016.  On December 5, 2017, the Commission published its decision denying rehearing of the interim rate relief resolution.
A copy of the decision is available here:

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