[BETA] Fortnightly

The Tennessee Public Service Commission (PSC) has directed South Central Bell Telephone Co., a local exchange carrier (LEC), to reduce rates by $56,285 million under its existing price-cap regulation plan. According to the PSC, the LEC had achieved overall earnings "well above the authorized rate of return" during the rate period ending March 31, 1995. Based on an audit conducted by its staff, the PSC determined that the utility had earned an overall rate of return of 12.74 percent, higher than the authorized level of 10.65 to 11.85 percent.

The PSC set a figure of 10.35 percent for a reasonable overall return. It directed the carrier to reduce rates by: 1) cutting long-distance charges and expanding free area-wide calling, 2) eliminating the $1.50 charge for touch-tone service; and 3) eliminating its current $1.00 zone charge. Re Bell South Telecommunications, Inc., dba South Central Bell Tel. Co., Dkt. No. 95-02614, Jan. 23, 1996 (Tenn.P.S.C.).

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