2006 Minnesota Statutes

237.075 RATE CHANGE.
    Subdivision 1. Notice. Unless the commission otherwise orders, no telephone company shall
change a rate which has been duly established under this chapter, except upon 60 days' notice
to the commission. The notice shall include statements of facts, expert opinions, substantiating
documents, and exhibits, supporting the change requested, and state the change proposed to be
made in the rates then in force and the time when the modified rates will go into effect. The filing
telephone company shall give written notice, as approved by the commission, of the proposed
change to the governing body of each municipality and county in the area affected. All proposed
changes shall be shown by filing new schedules or shall be plainly indicated upon schedules on
file and in force at the time.
    Subd. 1a.[Repealed, 1989 c 74 s 26]
    Subd. 2. Suspension of proposed rate; hearing; final determination defined. (a)
Whenever there is filed with the commission as provided in subdivision 1 a schedule modifying or
resulting in a change in any rate then in force, the commission may suspend the operation of the
schedule by filing with the schedule of rates and delivering to the affected telephone company
a statement in writing of its reasons for the suspension at any time before the rates become
effective. The suspension shall not be for a longer period than ten months beyond the initial filing
date except as provided in paragraph (b). During the suspension the commission shall determine
whether all questions of the reasonableness of the rates requested raised by persons deemed
interested or by the department can be resolved to the satisfaction of the commission. If the
commission finds that all significant issues raised have not been resolved to its satisfaction, or
upon petition by ten percent of the affected customers or 250 affected customers, whichever is
less, it shall refer the matter to the Office of Administrative Hearings with instructions for a public
hearing as a contested case pursuant to chapter 14, except as otherwise provided in this section.
The commission may order that the issues presented by the proposed rate changes be bifurcated
into two separate hearings as follows: (1) determination of the telephone company's revenue
requirements and (2) determination of the rate design. Upon issuance of both administrative law
judge reports, the issues shall again be joined for consideration and final determination by the
commission. All prehearing discovery activities of state agency intervenors shall be consolidated
and conducted by the Department of Commerce. If the commission does not make a final
determination concerning a schedule of rates within ten months after the initial filing date, the
schedule shall be deemed to have been approved by the commission; except if a settlement has
been submitted to and rejected by the commission, the schedule is deemed to have been approved
12 months after the initial filing.
(b) If the commission finds that it has insufficient time during the suspension period to make
a final determination of a case involving changes in general rates because of the need to make
final determinations of other previously filed cases involving changes in general rates under this
section or section 216B.16, the commission may extend the suspension period to the extent
necessary to allow itself 20 working days to make the final determination after it has made final
determinations in the previously filed cases. An extension of the suspension period under this
paragraph does not alter the setting of interim rates under subdivision 3.
(c) For the purposes of this section, "final determination" means the initial decision of
the commission and not any order which may be entered by the commission in response to a
petition for rehearing or other further relief. The commission may further suspend rates until it
determines all those petitions.
    Subd. 3. Interim rate; refund. Notwithstanding any order of suspension of a proposed
increase in rates, the commission shall order an interim rate schedule into effect not later than 60
days after the initial filing date. The commission shall order the interim rate schedule ex parte
without a public hearing. Notwithstanding the provisions of sections 216.25 and 237.25, no
interim rate schedule ordered by the commission pursuant to this subdivision shall be subject
to an application for a rehearing or an appeal to a court until the commission has rendered its
final determination. Unless the commission finds that exigent circumstances exist, the interim rate
schedule shall be calculated using the proposed test-year cost of capital, rate base, and expenses,
except that it shall include: (1) a rate of return on common equity for the company equal to that
authorized by the commission in the company's most recent rate proceeding; (2) rate base or
expense items the same in nature and kind as those allowed by a currently effective order of the
commission in the company's most recent rate proceeding; and (3) no change in the existing rate
design, except for products and services offered by nonregulated competitors. In the case of a
company which has not been subject to a prior commission determination or has not had a general
rate adjustment in the preceding three years, the commission shall base the interim rate schedule
on its most recent determination concerning a similar company.
If, at the time of its final determination, the commission finds that the interim rates are in
excess of the rates in the final determination, the commission shall order the company to refund
the excess amount collected under the interim rate schedule, including interest on it which shall be
at the rate of interest determined by the commission. The company shall commence distribution
of the refund to its customers within 120 days of the final order, not subject to rehearing or appeal.
If, at the time of its final determination, the commission finds that the interim rates are less
than the rates in the final determination, the commission shall prescribe a method by which the
company will recover the difference in revenues from the date of the final determination to the
date the new rate schedules are put into effect.
If the telephone company fails to make refunds within the period of time prescribed by the
commission, the commission shall sue therefor and may recover on behalf of all persons entitled
to a refund. In addition to the amount of the refund and interest due, the commission shall be
entitled to recover reasonable attorney's fees, court costs and estimated cost of administering the
distribution of the refund to persons entitled thereto. No suit under this subdivision shall be
maintained unless instituted within two years after the end of the period of time prescribed by the
commission for repayment of refunds. The commission shall not order an interim rate schedule in
a general rate case into effect as provided by this subdivision until at least four months after it has
made a final determination concerning any previously filed change of the rate schedule or the
change has otherwise become effective under subdivision 2, unless:
(1) the commission finds that a four-month delay would unreasonably burden the company,
its customers, or its shareholders and that an earlier imposition of interim rates is therefore
necessary; or
(2) the company files a second general rate case at least 12 months after it has filed a
previous general rate case for which the commission has extended the suspension period under
subdivision 2.
    Subd. 4. Burden of proof. The burden of proof to show that the rate change is just and
reasonable shall be upon the telephone company seeking the change.
    Subd. 5. Determination after finding rate unacceptable. If, after the hearing, the
commission finds the rates to be unjust or unreasonable or discriminatory, the commission shall
determine the rates to be charged or applied by the telephone company for the service in question
and shall fix them by order to be served upon the telephone company. The rates shall thereafter
be observed until changed, as provided by this chapter. In no event shall the rates exceed the
level of rates requested by the telephone company, except that individual rates may be adjusted
upward or downward. Rate design changes shall be prospective from the effective date of the new
rate schedules approved by the commission.
    Subd. 6. Factors considered, generally. The commission, in the exercise of its powers
under this chapter to determine just and reasonable rates for telephone companies, shall give due
consideration to the public need for adequate, efficient, and reasonable service and to the need
of the telephone company for revenue sufficient to enable it to meet the cost of furnishing the
service, including adequate provision for depreciation of its telephone company property used
and useful in rendering service to the public, and to earn a fair and reasonable return upon the
investment in the property. In determining the rate base upon which the telephone company is to
be allowed to earn a fair rate of return, the commission shall give due consideration to evidence
of the cost of the property when first devoted to public use, to prudent acquisition cost to the
telephone company, less appropriate depreciation on each, to construction work in progress, to
offsets in the nature of capital provided by sources other than the investors, and to other expenses
of a capital nature. To the extent that construction work in progress is included in the rate base,
the income used in determining the actual return on the telephone company property may include
an allowance for funds used during construction. For purposes of determining rate base, the
commission shall consider the original cost of telephone company property included in the base
and shall make no allowance for its estimated current replacement value.
    Subd. 7. Advertising. The commission shall not make an allowance for operating expenses
incurred by a telephone company for institutional advertising.
    Subd. 8. Charitable contribution. The commission shall allow as operating expenses only
50 percent of the qualified charitable contributions which the commission deems prudent for the
use of any community chest, corporation, trust, fund, association, foundation, or organization, and
only as long as the use is exclusively for religious, charitable, public cemetery, scientific, literary,
artistic, or educational purposes or for the prevention of cruelty to children or animals. No part of
a charitable contribution may inure to the benefit of any private stockholder or individual.
    Subd. 9. Election on regulation; cooperative, municipal, independent. For the purposes of
this section, "telephone company" shall not include a cooperative telephone association organized
under the provisions of chapter 308A, an independent telephone company, or a municipal, unless
the cooperative telephone association, independent telephone company, or municipal makes the
election provided in this subdivision.
A cooperative telephone association may elect to become subject to rate regulation by the
commission pursuant to this section. The election shall be (a) approved by the board of directors
of the association in accordance with the procedures for amending the articles of incorporation
contained in section 308A.135, excluding the filing requirements; or (b) approved by a majority of
members or stockholders voting by mail ballot initiated by petition of no fewer than five percent
of the members or stockholders of the association. The ballot to be used for the election shall be
approved by the board of directors and the department. The department shall mail the ballots to
the association's members who shall return the ballots to the department. The department will
keep the ballots sealed until a date agreed upon by the department and the board of directors.
On this date, representatives of the department and the association shall count the ballots. If a
majority of the association's members who vote elect to become subject to rate regulation by
the commission, the election shall be effective 30 days after the date the ballots are counted.
For purposes of this section, the term "member or stockholder" shall mean either the member
or stockholder of record or the spouse of the member or stockholder unless the association has
been notified otherwise in writing.
A municipal may elect to become subject to rate regulation by the commission pursuant
to this section. The election shall be (a) approved by resolution of the governing body of the
municipality; or (b) approved by a majority of the customers of the municipal voting by mail
ballot initiated by petition of no fewer than 20 percent of the customers of the municipal. The
ballot to be used for the election shall be approved by the governing body of the municipality
and the department. The department shall mail the ballots to the municipal's customers who shall
return the ballots to the department. The department will keep the ballots sealed until a date agreed
upon by the department and the governing body of the municipality. On this date, representatives
of the department and the municipal shall count the ballots. If a majority of the customers of the
municipal who vote elect to become subject to rate regulation by the commission, the election
shall be effective 30 days after the date the ballots are counted. For purposes of this section, the
term "customer" shall mean either the person in whose name the telephone service is registered or
the spouse of the person unless the municipal utility has been notified otherwise in writing.
An independent telephone company may elect to become subject to rate regulation by the
commission pursuant to this section. The election shall be (a) approved by the board of directors
of the company in accordance with the procedures for amending the articles of incorporation
contained in sections 302A.133 to 302A.139, excluding the filing requirements; or (b) approved
by a majority of subscribers voting by mail ballot initiated by petition of no fewer than five
percent of the subscribers of the company. The ballot to be used for the election shall be approved
by the board of directors and the department. The department shall mail the ballots to the
company's subscribers who shall return the ballots to the department. The department will keep
the ballots sealed until a date agreed upon by the department and the board of directors. On this
date, representatives of the department and the company shall count the ballots. If a majority of
the company's subscribers who vote elect to become subject to rate regulation by the commission,
the election shall be effective 30 days after the date the ballots are counted. For purposes of
this section the term "subscriber" shall mean either the person in whose name the telephone
service is registered or the spouse of the person unless the independent telephone company has
been notified otherwise in writing.
    Subd. 10. Intervenor reimbursement. The commission may order a telephone company
to pay all or a portion of a party's intervention costs not to exceed $20,000 per intervention in
any general rate case when the commission finds that the intervenor has materially assisted the
commission's deliberation and the intervenor has insufficient financial resources to afford the
costs of intervention. No entity which provides telephone services of any kind is eligible for
reimbursement of intervention costs under this subdivision.
    Subd. 11. Recovery of expenses of segregating billing charges. The public utilities
commission shall allow each telephone company and independent telephone company subject to
the requirements of section 325F.692 to automatically adjust tariffs or rates paid by information
service providers to reflect the reasonable cost to the company to comply with section 325F.692.
History: 1977 c 359 s 7; 1978 c 694 s 2; 1979 c 319 s 1; 1980 c 615 s 60; 1981 c 248 s
2; 1981 c 357 s 73; 1Sp1981 c 4 art 4 s 17; 1982 c 414 s 7-12; 1982 c 424 s 130; 1983 c 247
s 98; 1984 c 611 s 1; 1984 c 640 s 32; 1986 c 409 s 8,9; 1987 c 384 art 2 s 1; 1988 c 457 s
4,5; 1988 c 719 art 2 s 6; 1989 c 144 art 2 s 4; 1989 c 356 s 12; 1994 c 449 s 3; 1Sp2001 c 4
art 6 s 54,55; 2003 c 2 art 1 s 23