Us West Seeks Residential Rate Increase If Approved, Hike Would Bring Extra $50 Million

US West is seeking another residential telephone service rate increase, contending it didn’t make enough money in Washington state last year.

The increase, if approved by the state Utilities and Transportation Commission, would raise residential rates about $2 a month and bring in an extra $50 million for US West, said company spokesman Scott McClellan.

The request comes as US West prepares to argue another rate case before the state Supreme Court. On June 24, the company will ask the court to overturn a decision it lost last year.

In that case, the state utilities commission rejected US West’s request to more than double residential telephone rates, from about $10.75 a month to $26 a month. The company, which earned nearly $1 billion in gross revenue in Washington in 1994, had asked to increase revenue by $205 million. It said that without the increase, it could not compete in the growing telecommunications market or continue to adequately serve customers.

But the utilities commission not only rejected US West’s request, but ordered the company to cut residential, business and long distance rates. It also told the company to cut its Washington revenue by $91.5 million.

US West went to court, and a judge ordered the company to lower average residential rates to $10.50 a month. He did allow the company to slightly raise directory assistance rates.

McClellan told The News Tribune of Tacoma that US West now is seeking an “expedited” rate increase because the company did not earn an adequate return on its investment in Washington state last year.

“We earned in 1996 (a profit of) 7.2 percent. In the last rate case, the commission said we should earn 9.37 percent,” he said Friday.

“We need money. You cut too deep. You took too much.”

McClellan said the $50 million increase in overall rates would make up the difference.

“We are trying to get some expedited rate relief because our earnings aren’t even what the commission thought they would be, given the rates they set,” he said.

McClellan said it was premature to say which rates US West would raise if its request is approved. The company believes residential rates are too low and business rates too high, he added.

Unlike the case pending before the state Supreme Court, the latest request by US West is not a formal rate case that is filed in a public document before the utilities commission.

This is in the form of a “friendly audit” or “informal review,” said Glenn Blackmon, the commission’s assistant director for telecommunications.

Blackmon said commission staff is reviewing US West’s financial records and likely would have a decision on the request in a month.