Opinion ID: 2280428
Heading Depth: 1
Heading Rank: 3

Heading: Pay Telephone and Directory Assistance Rate Changes

Text: Upon remand after our original decision, the Board made two significant changes in the rates it had originally approved. It increased from three to five the allowance per month for directory assistance calls without charge, and it reduced the local coin call (pay station) rate from 20¢ to 10¢. The Company does not seek to upset those decisions. But it urges error in denying its request, set out in a motion for reconsideration, to require rate design changes reflecting additional revenue requirements resulting therefrom. It puts these requirements at $534,000. Of this amount it allocates $94,000 to the net impact of providing directory assistance service as ordered, and $440,000 to the revenue reduction associated with the 10¢ rate. It claims that absent such adjustment it is deprived of the opportunity to receive even the level of revenues which the Board itself found appropriate. The Company's position, as a general proposition, is not without support. We have condemned unreasonably low and confiscatory rates, even when imposed to cure discrimination. In re New England Telephone & Telegraph Co., 116 Vt. 480, 520, 80 A.2d 671, 694-95 (1951). The rates cannot be arbitrary or capricious. City of Newport v. Citizens Utilities Co., 116 Vt. 103, 107, 70 A.2d 590, 593 (1950). They must be just and reasonable. In re Green Mountain Power Corp., 131 Vt. 284, 294, 305 A.2d 571, 576 (1973). But we have also recognized that in every rate case there is left a reasonable margin of fluctuation and uncertainty. In re Central Vermont Public Service Corp., 116 Vt. 206, 220, 71 A.2d 576, 585 (1950). The amounts claimed by the Company here, however, would seem to exceed that reasonable margin, even in a case involving the large totals making up this rate increase. Nor are we impressed with the public's argument that future rate cases can adjust for present errors, whatever their extent. The language to that effect in In re Central Vermont Public Service Corp. simply cannot be taken to extend to errors of whatever magnitude, as such a conclusion would render the whole ratemaking process nugatory. But it does not follow that reversal on this point is here required. The company argues its position as though the amounts which it claims were either established or certain, but the record does not bear out this contention. Although the findings below are far from crystal clear, being interspersed without distinction through conclusions and general discussion, it seems reasonably apparent that the Board did not determine the amounts involved to be as substantial as the Company claims. There was evidence introduced upon which the Board could have found the Company claims to be substantiated, but it was far from undisputed. The $94,000 figure assigned to the change in the free-call allowance was only an estimate by the Company's witness. The difference in suppression effect between a three-call allowance and a five-call allowance was not great, amounting to only about 6%, and this seemed to vary greatly from area to area. Even this amount was termed high by the expert witness for the public, and the Board, in an unchallenged finding, termed it so little. The Board appears to have concluded that the financial effect of the change involved was not of sufficient significance to require a rate restructuring to supply additional annual revenue. We do not hold that an opposite result would not have been sustainable, but we are unconvinced that, on the record before us, the Company has demonstrated actions exceeding the reasonable margin of uncertainty. Its claim of error in this respect is not sustained. The claim for a $440,000 adjustment reflecting revenue loss from the reduction in future local coin call rate stands on a somewhat different footing. Its amount is far more significant. But it appears to be no more definite. As the Board pointed out in its findings, the computation of cost of service failed to include any allocation of cost to interstate service, in spite of evidence that some 84% of calls made from coin stations are toll calls, either interstate or intrastate. Although the Board cannot order an increase in rates for interstate calls from a Vermont pay station, costs associated with such calls should be allocated to them, and not made the basis for intrastate rates, either local or long distance. Our prior opinion indicated the right and duty of the Board in this respect. See In re New England Telephone & Telegraph Co. supra, 135 Vt. at 532, 382 A.2d at 831. By failing to convince the Board that the amount claimed was justified, the Company did not meet its burden. With an insufficient showing below as to the actual revenue deficiency attributable to intrastate service, it cannot here complain that all of that deficiency was not made up by rate adjustments in such service. The Company's claim of error in this respect is not sustained. The order appealed from is affirmed, except as to recoupment. The cause is remanded with direction that the Public Service Board allow recoupment in Docket No. 4033 for the period of July 25, 1975, to September 14, 1979, in accordance with the views herein expressed. Let the result be certified.