2If a utility has fulfilled its infrastructure investment commitment pursuant to s. 196.196 (5) (a) , Stats., and does not file an optional infrastructure objectives plan under sub. (2) (dn) 2., the infrastructure investment penalty value shown above shall be added to the penalty value assigned to quality of service and the infrastructure investment penalty shall be set at zero. The infrastructure investment incentive shall be set at zero and the total maximum incentive value shall be decreased by the maximum infrastructure investment incentive value shown above.

PSC 163.04(3) (3) Calculating the unadjusted cumulative PCI. At the effective date of election of price regulation the unadjusted cumulative PCI shall be initialized at 100. On the third anniversary date, the unadjusted cumulative PCI shall be equal to the annual PCI. On all other anniversary dates, the unadjusted cumulative PCI shall be calculated by the commission using the following formula: - See PDF for table

PSC 163.04(4) (4) Calculating the 3-year maximum PCI. At the effective date of election of price regulation, on the third anniversary date, upon implementation of any rate decrease required by this section, and any time a rate increase causes the annual API to exceed the annual PCI, the 3-year maximum PCI shall be initialized at 100. On each anniversary date, the 3-year maximum PCI shall be calculated by the commission using the following formula: - See PDF for table

PSC 163.04(5) (5) Calculating the annual api.

PSC 163.04(5)(a) (a) At the effective date of election of price regulation, and at every anniversary date, the annual API shall be initialized at 100. The annual API shall be changed for each increase or decrease in a price for a price-regulated service, according to the following formula: - See PDF for table

PSC 163.04(5)(b) (b) Revenue weights shall be calculated on the first anniversary date as set forth in sub. (1) (a), and reviewed on each subsequent anniversary date. If additional price-regulated services are added pursuant to s. 196.196 (1) (a) 2., Stats., the annual API shall be calculated so that the addition of these services shall not cause a change in the annual API.

PSC 163.04(5)(c) (c) The annual API shall exclude any price decreases ordered by the commission under s. 196.196 (5) (e), Stats.

PSC 163.04(6) (6) Calculating the unadjusted cumulative api. At the effective date of election of price regulation the unadjusted cumulative API shall be initialized at 100. On the third anniversary date, the unadjusted cumulative API shall be equal to the annual API. On all other applicable dates, the unadjusted cumulative API shall be calculated using the following formula: - See PDF for table

PSC 163.04(7) (7) Calculating the 3-year maximum api. At the effective date of election of price regulation, on the third anniversary date, upon implementation of any rate decreases required by this section, and at any time a rate increase causes the annual API to exceed the annual PCI, the 3-year maximum API shall be initialized at 100. On all other applicable dates, the 3-year maximum API shall be calculated using the following formula: - See PDF for table

PSC 163.04(8) (8) Rate adjustments.

PSC 163.04(8)(a) (a) The commission shall issue an order no later than 60 days after the utility's anniversary date authorizing the amount the utility may increase its rates or mandating the amount it shall reduce them based on the calculated PCI. If a hearing is held, the time within which the commission shall issue an order may be extended by 60 days. The order shall set forth the PCI and API values as of the anniversary date. Once the commission issues an order authorizing the change, the utility shall have until the next anniversary date to raise its prices by the amount the 3-year maximum PCI exceeds the 3-year maximum API. The increase in any rate element shall not at any time exceed 10% or the annual change in the GDPPI index, whichever is greater. The commission's order may also set the revenue weights for calculating the API. If the utility elects to increase rates, it shall file with the commission tariffs implementing the increase. It shall also file a calculation of the annual API, unadjusted cumulative API and 3-year maximum API which results after an increase in rates. Any such increase shall become effective 45 days after the date on which notice is received by the commission, unless the commission determines it is in violation of the authorized increase. If the 3-year maximum PCI is less than the 3-year maximum API, and the unadjusted cumulative PCI is less than the unadjusted cumulative API, the utility shall file tariffs implementing the decrease. Any such decrease shall become effective no later than 45 days after the date of the commission order mandating the decrease unless the commission determines it is in violation of the authorized decrease. The utility shall also file a calculation of the annual API, unadjusted cumulative API, and 3-year maximum API which result after such decrease. The resulting unadjusted cumulative API shall be no greater than the unadjusted cumulative PCI.

PSC 163.04(8)(b) (b) Under s. 196.196 (1) (c), Stats., the only service specified by s. 196.196 (1) (a), Stats., for which prices may be increased during the first 3 years after the utility's initial price-regulated rates take effect is basic message telecommunications service. For any price change during the initial 3-year period after a utility elects price regulation, the API shall only include basic message telecommunications service.

PSC 163.04 History History: Cr. Register, October, 1995, No. 478, eff. 11-1-95; CR 00-184: am. (1) (c), (2) (a), (bm), (g) and Table 1, (8) (a), renum. (2) (c) 1. to be (2) (c) 2. a., 3. to be (2) (cd) 3. a. 4. to be (2) (cd) 3. b., 5. to be (2) (c) 2. b., 6. (intro.) to be (2) (cp) 1. (intro.), a. to c. to be (2) (cp) 1. a. to c. 7. (intro) to be (2) (cp) 2. (intro.), 7. a. to be (2) (cp) 2. a., 7. b. to be (2) (cp) 2. b., 7. c. to be (2) (cp) 2. c. 8. (intro.) to be (2) (cp) 3. (intro.), 8. a. to be (2) (cp) 3. a., 8. b. to be (2) (cp) 3. b., 10. to be (2) (ch) 2., (2) (d) 1 to 4. to be (2) (d) and (dc) 1. to 3., 5. to be (2) (dr), 7. to be (2) (dg) 1., r. (2) (c) 2. and 9., (d) 6., (e), cr. (2) (c) 1., 2. (intro.), c., 3., (2) (cd), 1. to 3. (intro.), 4., (2) (ch) 1., 3., (2) (cp) (intro.), (2) (ct), (2) (dc) 4., (2) (dg) (intro.), 2., (dn) 1. to 3., (dw), r. and recr. (2) (f), Register March 2002 No. 555, eff. 4-1-02; reprinted to restore dropped copy in (7) Register August 2005 No. 596.

PSC 163.05 PSC 163.05  Rate increases and rate structure changes independent of the price cap index.

PSC 163.05(1) (1) Under s. 196.196 (1) (e) 1., Stats., a price-regulated telecommunications utility, not earlier than 3 years after electing to become price-regulated, may alter its rate structure or increase rates for price-regulated services upon 120 days' prior notice to the commission. Under s. 196.196 (1) (e) 2., Stats., the commission upon a complaint by an affected party or on its own motion, may initiate an investigation. Within 120 days after initiating the investigation and following a hearing, the commission shall issue an order approving, modifying or rejecting the rate change.

PSC 163.05(2) (2) The API and PCI as set forth in s. PSC 163.04 (2) through (7), shall be reinitialized to 100 upon any rate increase or rate structure change in this section that results in the 3-year maximum API exceeding the 3-year maximum PCI.

PSC 163.05(3) (3) The notice required under s. 196.196 (1) (e), Stats., for a price-regulated telecommunications utility to change its rate structure or increase rates for price-regulated services shall be accompanied with the following information:

PSC 163.05(3)(a) (a) Documentation that addresses the factors specified in s. 196.03 (6), Stats., for determining what is just and reasonable, and the impact of the proposed change on the public interest.

PSC 163.05(3)(b) (b) A cost of service study supporting a change in rates above those allowed in s. 196.196 (1) (c), Stats. The cost of service study shall demonstrate that the cost of providing one or more price-regulated services, and all price-regulated services in the aggregate, have increased due to cost allocations or changes in the costs of providing that service that are outside the control of the telecommunications utility and the change in cost will not be fully offset by resulting changes in the GDPPI.

PSC 163.05(3)(c) (c) If the rate change is based on changes in the allocation of costs outside of the control of the telecommunications utility, documentation shall include a description of the change in cost allocation methods, when management became aware of the change, the impact of the change on both the profitability of total company operations and the cost of providing price-regulated services, other steps taken by the utility to mitigate the impact of the change, and evidence that the change will disproportionately impact that utility with respect to other providers or carriers.

PSC 163.05(3)(d) (d) If the reason for the rate change is based on effects of competition, a description of the actual or potential harm caused by competition if the proposed alteration of rate structure or rate increase is not granted.

PSC 163.05(3)(e) (e) An estimate of the dollar amount of the monthly change for the typical residential customer that will result if the rate change becomes effective.

PSC 163.05(3)(f) (f) The percent increase as a result of the rate change by rate element, by class and in total.

PSC 163.05(3)(g) (g) If the rate change is based on changes in the costs of providing the service that are outside of the control of the telecommunications utility, documentation shall include a description of and the estimated annual impact of each changed cost given current rates and revenue forecasts, when management became aware of the change, the portion of the impact of the cost change which will not be fully offset by resulting changes in the GDPPI, support that the impact of the cost change will persist over several years, and the reasons why the cost change is not part of the normal risk of doing business which should be recovered by increasing productivity instead of increasing rates or prices.

PSC 163.05(3)(h) (h) Full explanations of reasons for changes in tariff structures, including applicable tariff regulations.

PSC 163.05(3)(i) (i) Documentation to reconcile changes in rate design to overall revenue increase and to justify allocation of the proposed increase among various services or customer classes.

PSC 163.05 History History: Cr. Register, October, 1995, No. 478, eff. 11-1-95.

PSC 163.06 PSC 163.06  Price regulation review. Pursuant to s. 196.196 (1) (g), Stats., in order to perform a review of price regulation after 5 years and any time thereafter, the commission needs to implement an effective monitoring program for price-regulated telecommunications utilities. In order to implement an effective monitoring program each telecommunications utility electing to become price-regulated shall file the following information during the period in which price regulation is in effect:

PSC 163.06(1) (1) A report on how competition, economic development, consumer choice, quality of life, societal goals, and universal service have changed since the utility's election of price regulation or since the last such report on the impact of price regulation was submitted by the utility as part of a price regulation review by the commission, whichever is later. The report shall, where possible, include quantifiable data, disaggregated into separate services, demographic groups and geographic areas, and compare measures of the above factors under price regulation to measures of the above factors before price regulation. Price-regulated telecommunications utilities shall file such report no later than four and one-half years after the date the commission commences regulating the utility in the manner prescribed in s. 196.196 (1), Stats., and this chapter. For subsequent reviews of price regulation, price-regulated telecommunications utilities shall file such reports at such times as specified by the commission. This subsection does not affect the commission's ability to require interim or periodic reports on specific subjects for monitoring purposes.

PSC 163.06(2) (2) Financial results in summary form, showing revenues, expenses, net investment rate base, capital structure, and rate of return on utility common equity. This information shall be submitted no later than April 1 of each year, for the previous calendar year.

PSC 163.06 History History: Cr. Register, October, 1995, No. 478, eff. 11-1-95; CR 00-184: am. (1) and (2), Register March 2002 No. 555, eff. 4-1-02.