Instead of the $27 million record high rate increase the New England Telephone Co. sought from its Maine customers, the utility faces a rate slash of approximately $1.9 million.
The Maine Public Utilities Commission said yesterday its formal decision in the marathon phone company rate case will be issued on Friday but the rate reduction will be "in the range of $1.9 million," chairman Ralph H. Gelder said.
Officials of the phone company said that as soon as the decision is published it will be appealed to the Maine Supreme Court. The action was termed "totally irresponsible" by James McCatherine, a phone company spokesman.
The PUC has set guidelines that would provide reductions in charges of basic residential rates for any of the phone company's 350,000 subscribers and insure that no basic rate would be increased. The basic residential rate in Portland is $9.30 a month for unlimited local calls. At the hearing this charge was termed among the highest in the country.
The commission also plans to revise charges for in-state long distance calls which would provide savings incentives for customers who keep their conversations short.
However, the commission will grant a 20-cent fee for each call made for directory assistance. The first 10 such calls each month would be free.
The utility has sough the $27 million rate increase contending that this would give it an overall rate of return of 11.6 per cent. The PUC said that a rate of return of 8.75 per cents is more reasonable. It noted that 86 per cent of New England Telephone stock is owned by American Telephone and Telegraph Co.
In sumbitting its arguments for the rate increase the company sought $3.9 million for inflation while the PUC staff argued $2.7 million was adequate. It sought funds to pay a 10 per cent wage and benefits package increase to its hourly rated employees while the PUC staff argued 8 per cent was sufficient. Negotiations for a new contract will open this summer between the company and the International Brotherhood of Electrical Workers (AFL-CIO) which represents the phone company employees. But one of the major areas of concern to the PUC commissioners was the manner in which the phone company handled its tax accounts.