Sprint rate hike would last 5 years

Monday, May 20, 2002 | 9:11 a.m.

Sprint Corp.'s new local telephone rates in the Las Vegas area would stay in effect for five years under a stipulation proposed to the Public Utilities Commission of Nevada Friday.

PUC presiding officer Adriana Escobar Chanos accepted the settlement by Sprint, the Bureau of Consumer Protection, the PUC staff and four competitors that are intervenors in the case in a 10-minute hearing after telling them earlier in the week that she wanted them to consider a term longer than the three years submitted in an earlier filing.

The term was the only matter at issue in the revised stipulation. Earlier in the week, the parties chopped a proposed rate increase from $90 million a year to $43.5 million. That would result in residential customers paying 15 percent more for basic telephone service, from $9.05 to $10.40 a month before taxes, and 13.7 percent more, from $18.25 to $20.75 a month, for businesses.

Other rates for services would also be increased under the stipulation.

The commissioner said in a hearing Tuesday that the way she interprets state rate regulations, Sprint should have been required to keep its new rates in effect for at least five years.

Consumer Advocate Tim Hay said he preferred the five-year term because it would lock in rate stability for consumers for a longer period. However, Sprint wanted the flexibility of being allowed to apply for an increase sooner in case technological advancements resulted in the company being less competitive. Under the stipulation presented Friday, Sprint is allowed to petition for a change in rates in July 2004 if conditions warrant it.

Chanos said the revised stipulation would be placed on the full commission's agenda May 30. If approved, the new rates would take effect July 1.

Lou Emmert, Sprint's general manager in Las Vegas, said the company was satisfied with the content of the final stipulation, particularly since it includes the clause that enables the company to file for a new rate if conditions change.

Emmert said that while the company wouldn't be getting the rate increase it originally sought, the stipulated increases would close the gap between what it gets from ratepayers and what it costs to provide service.

"We're happy that we could reach this agreement and look forward to the commission hearing this," Emmert said after Friday's meeting.

"We're very pleased with the outcome of the case," added Hay, who did not attend the meeting. "My guess is that it will be a smooth process the rest of the way, although the other two commissioners have to evaluate the merits of the stipulation."

Had the parties not been able to come to an agreement on the stipulation, Chanos would have conducted hearings on Sprint's original $90 million request, which would have raised residential rates by 76 percent.