1997 Minnesota Statutes

     237.625 Incentive regulation. 

    Subdivision 1.    Incentive plans.  (a) A telephone 
 company whose general revenue requirement is determined under 
 section 237.075 may petition the commission for approval of an 
 incentive plan.  The incentive plan must apply to the 
 noncompetitive services of a company covered by section 237.62, 
 subdivision 1, and must apply to noncompetitive services and 
 services subject to emerging competition if the company has 
 chosen to be governed by section 237.62, subdivision 1a.  The 
 purpose of the plan is to provide an incentive to the company to 
 improve its operating efficiency while maintaining or improving 
 the quality of its service.  If a telephone company is able to 
 increase its earnings, the telephone company shall share the 
 increased earnings with its customers to the extent and in the 
 manner set forth in the commission-approved plan.  The 
 commission may not approve a plan that does not meet the 
 requirements of this paragraph and paragraphs (b) to (f). 

    (b) A telephone company shall share increased earnings 
 during the term of the incentive plan with its customers either 
 by giving them credits against bills or by lowering rates.  The 
 division of increased earnings between the company and the 
 customers must reflect the degree to which the company has 
 assumed a risk of earning less than its revenue requirement and 
 the degree to which the customers have assumed a risk of rate 
 increases.  Any plan approved or renewed under this section 
 after August 1, 1994, must require that the percentage of 
 increased earnings shared with customers change in relation to 
 the amount that earnings exceed the last authorized return on 
 equity for that company. 

    (c) The incentive plan must be in effect for at least two 
 years. 

    (d) The incentive plan must provide for periodic reporting 
 to the commission to document that the sharing requirements of 
 the plan are being properly implemented.  The company's rates 
 and earnings under the plan are not subject to section 237.081, 
 subdivision 2, paragraph (b), except to the extent necessary to 
 enforce the sharing provisions of the incentive plan. 

    (e) An incentive plan may not permit rate increases except 
 under other provisions in this chapter.  The plan may, however, 
 permit the direct pass-through of cost decreases and increases 
 approved or reallocated by a governmental entity, except for 
 changes in intrastate depreciation schedules. 

    (f) An incentive plan approved or renewed by the commission 
 pursuant to this section after August 1, 1994, must contain: 

    (1) specific standards for measuring the quality of 
 noncompetitive services and services subject to emerging 
 competition in all areas served by the company and including, 
 but not limited to, standards concerning installation and time 
 intervals for restoration or repair of service, trouble rates, 
 exchange access line held orders, customer satisfaction, and 
 dial tone speed; 

    (2) quality reports provisions for reporting to the 
 commission at least annually the company's performance as to the 
 quality of service standards; 

    (3) indexing provisions that index quality of service 
 improvements for local residence services to similar 
 improvements for local business services; and 

    (4) appropriate remedies, which may include incentives and 
 sanctions, that may apply to ensure substantial compliance with 
 the quality of service standards set forth in the plan. 

    Subd. 2.    Adoption of a plan.  Before acting on a 
 petition for approval of an incentive plan, the commission shall 
 conduct any public meetings it may consider necessary.  The 
 commission shall require the petitioning telephone company to 
 provide notice of the proposed plan to its customers, along with 
 a summary description of the plan provisions and the dates, 
 times, and locations of public meetings scheduled by the 
 commission.  In addition to public meetings, the commission 
 shall conduct a proceeding under section 237.61 to decide 
 whether to approve the plan.  The commission shall issue 
 findings of fact and conclusions concerning the appropriateness 
 of the proposed plan and the terms and conditions of the sharing 
 of increased earnings between the company and its customers.  
 The commission may approve, reject, or modify a proposed plan, 
 but may not order that a modified plan take effect without the 
 agreement of the petitioning telephone company.  The commission 
 shall reject a plan if it has substantial reason to believe that 
 existing rates are inappropriate.  The commission shall issue 
 its decision on a plan within six months after receiving the 
 petition to approve the plan.  If the commission does not act 
 within six months, the plan is deemed withdrawn unless the 
 commission and the petitioning company agree to an extension of 
 the time for commission action. 

    HIST: 1989 c 74 s 18; 1994 c 534 art 1 s 12 

*   NOTE:  See section 237.5799