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LEC Rejects Price-cap Plan

Fortnightly Magazine - May 1 1995

While reconsidering an earlier rate case order for New England Telephone & Telegraph Co., a telecommunications local exchange carrier (LEC), the Vermont Public Service Board (PSB) has approved an incentive regulation plan for the LEC and set out a series of recommendations to guide the development of a full price-cap regulation plan. Nevertheless, the PSB noted that a problem had developed in the case as a result of combining the revenue requirement aspect of the rate proceeding with consideration of the LEC's price-cap plan. According to the PSB, the LEC has exercised its statutory right to refuse to accept regulation under the price-cap plan it negotiated in the case because of the $14.9-million rate reduction ordered in the same proceeding. Hearing the two matters in separate dockets would have placed the LEC in a position to propose a price-cap plan that it could accept if approved, the PSB said. Re New England Telephone and Telegraph Co., Docket No. 5700/5702, Feb. 2, 1995 (Vt.P.S.B.). t

Phillip S. Cross is an associate legal editor of PUBLIC UTILITIES FORTNIGHTLY.

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