ORDER NO. 99-261
ENTERED APR 14 1999
This is an electronic copy. Appendices and footnotes may not appear.
BEFORE THE PUBLIC UTILITY COMMISSION
OF OREGON
UI 143 (2)
| In the Matter of the Supplemental Application of GTE Northwest Incorporated for Approval of an Amendment to the National Transport Network Services Agreement with GTE Telecom, Inc., an Affiliated Interest. | ) ) ORDER ) |
DISPOSITION: APPLICATION APPROVED WITH CONDITIONS
On January 19, 1999, the Commission received an application from GTE Northwest Incorporated (Company), filed pursuant to ORS 759.375 and ORS 759.390, requesting authority to engage in certain affiliated interest transactions. GTE Northwest Incorporated, GTE Telecom, Inc., (GTET) and GTE Communications Corporation (GTECC) are affiliated interests under ORS 759.010. This supplemental application apprises the Commission of the sale of assests by GTET to GTECC and the attendant assignment of all associated functions and personnel.
Based on a review of the application and the Commission’s records, the Commission finds that the application satisfies applicable statutes and administrative rules. At its Public Meeting on April 6, 1999, the Commission adopted Staff’s recommendation to approve the application with conditions. Staff’s recommendation is attached as Appendix A and is incorporated by reference.
OPINION
Jurisdiction
ORS 759.005 defines a "telecommunications utility" as anyone providing telecommunications service to the public in Oregon. The Company is a telecommunications utility subject to the Commission's jurisdiction.
Affiliation
An affiliated interest relationship exists under ORS 759.010.
Applicable Law
ORS 759.390 requires telecommunications utilities to seek approval of contracts with affiliated interests within 90 days of execution of the contract. The intent of the statute is to protect ratepayers from the abuses which may arise from less than arm's length transactions. Portland General Electric Company, UF 3739, Order No. 81-737 at 6. Failure to file within the 90-day time limit may preclude the utility from recovering costs incurred under the contract. See ORS 759.390.
ORS 759.390(3) requires the Commission to approve the contract if the Commission finds that the contract is fair and reasonable and not contrary to the public interest. However, the Commission need not determine the reasonableness of all the financial aspects of the contract for ratemaking purposes. The Commission may reserve that issue for a subsequent proceeding.
Ratepayers should not be harmed by approval of this application.
CONCLUSIONS
The Company is a telecommunications utility subject to the jurisdiction of the Commission.
An affiliated interest relationship exists.
The agreement is fair, reasonable, and not contrary to the public interest.
The application should be granted.
ORDER
IT IS ORDERED that the application of GTE Northwest Incorporated for authority to engage in certain affiliated interest transactions with GTE Telecom, Inc., is granted, subject to conditions, stated in Appendix A.
Made, entered, and effective ________________________.
| BY THE COMMISSION: ______________________________ Vikie Bailey-Goggins Commission Secretary |
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 pursuant to ORS 756.580.
APPENDIX A
ITEM NO.
PUBLIC UTILITY COMMISSION OF OREGON
STAFF REPORT
PUBLIC MEETING DATE: MARCH 16, 1999
REGULAR AGENDA CONSENT AGENDA X EFFECTIVE DATE
DATE: February 17, 1999
TO: Bill Warren through Marc Hellman and Mike Myers
FROM: Marion Anderson
SUBJECT: UI 143 (2) - GTE Northwest, Inc., (GTE-NW) Supplemental Application for Approval of an Amendment to the National Transport Network Services Agreement with GTE Telecom, Inc., (GTET), an Affiliated Interest
SUMMARY RECOMMENDATION:
I recommend approval with conditions.
DISCUSSION:
GTE-NW, GTET and GTE Communications Corporation (GTECC) are affiliated interests under ORS 759.010 in that GTE Corporation has 100% equity positions in these entities.
This supplemental application apprises the Commission of the sale of assets by GTET to GTECC and the attendant assignment of all associated functions and personnel. There are no other modifications of the contract’s terms and conditions. A staff request was made for the underlying reasoning on this action. The response stated that this a part of the overall effort to "…eliminate redundancies and reduce costs within the corporation. The Service Delivery and Assurance organization within GTE Communications was given the responsibility…".
PERTINENT ISSUES:
I have investigated the following issues to determine if the agreement is fair and reasonable, and not contrary to the public interest.
1. Scope of Services
2. Transfer Pricing Methods and Cost Allocations
3. Determination of Public Interest Compliance
The Commission approval in the review of these areas for the two previous orders issued in this docket, 95-272 and 97-370, is unaffected by this transfer.
4. Records Availability, Audit Procedures and Reporting Requirements
I believe that Detailed Recommendation Condition 1 affords the Commission adequate access to records and provides for the auditing of transactions between GTE Northwest Inc., and GTE Communications Corporation.
February 17, 1999
Page 2
CONCLUSIONS:
Based on an investigation and review of this application, my conclusions are as follows:
DETAILED RECOMMENDATION:
Based on the preceding discussion and conclusions, I recommend that the supplemental application presenting the amendment to the agreement between GTE Northwest, Inc., and GTE Telecom, Inc., recognizing the transfer of associated assets and functions to GTE Communications Corporation be approved with the following conditions: