ORDER NO. 97-429

ENTERED NOV 04 1997

This is an electronic copy. Appendix not included.

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

UT 141

DISPOSITION: INVESTIGATION OPENED

At its September 30, 1997, public meeting, the Public Utility Commission of Oregon adopted a Commission Staff recommendation to investigate the earnings of GTE Northwest Incorporated (GTE) and to determine whether the company should refund the state corporate excise tax amount deferred under Order No. 97-026.

The Commission Staff recommendation was based on unaudited quarterly and monthly financial reports filed by GTE with the Commission which indicated that the intrastate operations earned overall rates of return of 11.0 percent in 1995 and 13.4 percent in 1996. Applying the authorized capital structure from docket UT 113 yields intrastate returns on equity of 13 percent for 1995 and 17 percent in 1996.

Staff proposes an April 1, 1996, through March 31, 1997, test year, with adjustments to recognize changes and unusual events, such as depreciation rates, extended area service, effective tax rates, new tariff filings, and separations. The investigation will also include possible refunds due to GTE's 1995 state tax refund which was deferred in docket UM 799. The Staff memo recommending the investigation is attached to this order as the Appendix.

ORDER

IT IS ORDERED that an investigation is opened into the revenue requirement and rates of GTE Northwest Incorporated.

Made, entered, and effective ____________________________.

A party may request rehearing or reconsideration of this order pursuant to ORS 756.561. A request for rehearing or reconsideration must be filed with the Commission within 60 days of the date of service of this order. The request must comply with the requirements of OAR 860-014-0095. A copy of any such request must also be served on each party to the proceeding as provided by OAR 860-013-0070. A party may appeal this order to a court pursuant to ORS 756.580.