State of Utah

Administrative Rule Analysis

NOTICE OF PROPOSED RULE OR CHANGE
The agency identified below in box 1 provides notice of proposed rule or change pursuant to Utah Code Subsections 63-46a-4(2) and (4). Please address questions regarding information on this notice to the agency. The full text of all rule filings is published in the Utah State Bulletin unless excluded because of space constraints. The full text of all rule filings may also be inspected at the Division of Administrative Rules.
State of Utah

Division of Administrative Rules (DAR)

4120 State Office Building; 450 North Main

PO Box 141007

Salt Lake City, UT 84114-1007

Phone: (801) 538-3218, FAX: (801) 538-1773

State E-mail: asdomain.asitmain.rules

 DAR file no.:
Utah Admin. Code ref. (R no.): R746-352
Date filed:
Time filed:
Received by:
1. Department: Public Service Commission of Utah
Agency: Administration
Room no., building: Heber M. Wells Building, 4th Floor
Street address: 160 East 300 South
Mailing address:
City, state ZIP: Salt Lake City, UT 84111
Contact person: Barbara Stroud
Telephone: (801) 530-6716
FAX: (801) 530-6796
Internet E-mail: pupsc.bstroud@state.ut.us
(Interested persons may inspect this filing at the above address or at DAR between 8:00 a.m. and 5:00 p.m. on business days.)
2. Title of rule or section (catchline):
Price Cap Regulation
3. Type of notice:
Proposed rules New Amendment Repeal
Repeal and reenact
Other rule types X Change in proposed rule (changes original proposed rule file no.: 23232 )
4. Purpose of the rule or reason for the change:
Section 4-8b-2.4 requires the Commission to establish a price cap regulatory regime by which the prices for tariffed public telecommunications services will be set after a telephone corporation's last general rate case. The effective date for such a price cap regime will occur by February, 2001.

This file takes the 352oct.wpd text file, which was published in the November State Bulletin as the proposed rule 352 (price index) and makes changes to the proposed rule for publication in the March 1, 2001 bulletin. These changes are based on meetings and comments during the past few months.

5. This rule or change is a response to comments by the Administrative Rules Review Committee. Yes X No
6. Summary of the rule or change:
This new rule was created to set up a price cap regulatory approach in order to set future prices for tariffed public telecommunications services offered by telecommunications corporations subject to the pricing regime of Section 54-8b-2.4. The rule establishes the methodology for calculating the indices that will be applicable to these tariffed services and describes the filings, procedural process and reporting requirements by which these indices will be set on an annual basis. The changes to the proposed new rule include: Wording changes to R746-352-4 to clarify the process of determination of the X, Z, and Q factors; R746-352-5 to improve and clarify the language regarding service baskets; R746-352-6 to improve and clarify language regarding indexing, pricing rules and permitted rate adjustments; and R746-352-7 to improve and clarify language regarding index-based price cap and rate adjustments. Also a few additions and changes in Section 3 for correction or clarification of formulas.
7. Aggregate anticipated cost or savings to:
State budget: The state agency activities required by the proposed rule are a result of legislative changes in Utah's regulation of telecommunications companies from the 1995 Telecommunications Reform Act. Prior agency activities under the prior regulatory approach will be replaced with the activities under the new regulatory regime. It is anticipated that there will be no additional costs or resulting savings to state agencies because of the change in regulatory regime.
Local government: None, as local government activities are not affected by the proposed rule.
Other persons: Telecommunications corporations subject to the rule, like the state regulatory agencies, will be replacing activities under the prior regulatory regime with similar activities required by the new regulatory regime. It is anticipated that there will be no net change in the costs or the creation of any savings as a result of the rule. Such changes occurred in 1997 when traditional rate-of-return regulation ended for such corporations operating in the State of Utah.
8. Compliance costs for affected persons ("person" means any individual, partnership, corporation, association, governmental entity, or public or private organization of any character other than an agency):
The Commission is unable to quantify the costs for telecommunications corporations subject to the rule. The rule itself does not cause compliance costs, the 1995 statutory changes setting forth the regulatory approach to be applied is the cause of any compliance costs. The Commission estimates that the costs of complying with the new regulatory approach would not exceed the costs incurred in the prior regulatory approach. It is likely that the costs of the new approach, over time, will be less than the costs incurred under traditional rate-of-return regulation. However, neither the Commission nor the affected telecommunications corporation(s) subject to the rule have experience with the costs that would be incurred under Utah's new form of regulating the prices for tariffed public telecommunications services.
9. Comments by the department head on the fiscal impact the rule may have on businesses:
The Commission has attempted to promulgate a price cap rule that would be simple to formulate and apply in the future. It has incorporated factors required by statute in a manner which the Commission believes will reduce future disputes and litigation concerning measurement of the statutorily required index inputs. Because Utah has no experience with this type of regulatory approach for utility services, estimation of costs to be incurred have been difficult to formulate. The Commission does not anticipate that the costs would be greater than the costs incurred under the past rate-of-return regulation of prices for tariffed services.
10. This rule or change is authorized or mandated by state law, and implements or interprets the following state and federal laws.
State code or constitution citations (required): 54-8b-2.4
Federal citations (optional):
11. This rule or change adds or updates an incorporated reference (submit a copy to DAR): Yes X No
Reference title and date of issue or edition:
12. The public may submit written or oral comments to the agency identified in box 1. (The public may also request a hearing by submitting a written request to the agency. The agency is required to hold a hearing if it receives requests from ten interested persons or from an association having not fewer than ten members. Additionally, the request must be received by the agency not more than 15 days after the publication of this rule in the Utah State Bulletin. See Section 63-46a-5 and Rule R15-1 for more information.)
Comments will be accepted until 5:00 p.m. on (mm/dd/yyyy): 04/02/01
A public hearing (optional) will be held on (mm/dd/yyyy): at (time):
at (place): Heber M. Wells Building, 160 E. 300 South, Room 426, Salt Lake City, UT 84111
13. This rule or change may become effective on (mm/dd/yyyy): 04/03/01
14. Indexing information - keywords (maximum of four, in lower case):
price indexes, public utilities, telecommunications
15. Indexing information - affected industries (two-digit SIC codes):
48
16. Attach a WordPerfect document containing the text of this rule or change (filename): 352Feb14.wpd
To the agency: Information requested on this form is required by Sections 63-46a-4, 5, 6, and 10. Incomplete forms may be returned to the agency for completion, possibly delaying publication in the Utah State Bulletin, and delaying the first possible effective date.
AGENCY AUTHORIZATION
Agency head or designee, and title: Barbara Stroud (designee)

Paralegal

 Date (mm/dd/yyyy): 02/14/01