Public Utility Commission of Texas Approves Adjustment to Increase High-Cost Support for Livingston Telephone Company LLC

Strategic Insights -

The Public Utility Commission of Texas (PUCT) has approved an application by Livingston Telephone Company LLC (LivCom) to adjust its high-cost support under 16 TAC § 26.407(h). The application, filed on March 29, 2022, in Docket No. 53402, seeks to increase the company's annual high-cost support by $241,070, or $20,819.17 per month, to a total annual amount of $843,751. This adjustment is part of a support-only increase, as raising LivCom's rates would adversely affect universal service in contravention of PURA § 56.032(h)-(i) and 16 TAC § 26.407(j)(1)(A).

Key Takeaways:

  • LivCom is a Category 1 small ILEC with a 2023 Commission Staff-recommended rate of return of -3.85%, which is more than three percentage points below the 9.75% rate of return set forth in PURA § 56.032(a)(1).
  • The company is eligible to file an application for an adjustment to increase its annual high-cost support without affecting its current rates.
  • The adjustment complies with the cap of 140% of the annualized support the provider received in the prior 12 months, as required by 16 TAC § 26.407(g)(1).
  • The increase will allow LivCom to earn a more reasonable return on its investments, bringing its projected unreasonably low return from approximately 1.96% to a closer alignment with the minimum reasonable rate of return of 6.75%.
  • The adjustment is part of a support-only increase, as raising LivCom's rates would adversely affect universal service in contravention of PURA § 56.032(h)-(i) and 16 TAC § 26.407(j)(1)(A).

Statistics:

  • LivCom's high-cost support will increase by $241,070, or $20,819.17 per month.
  • The total annual amount of high-cost support will be $843,751.
  • The adjustment complies with the cap of 140% of the annualized support the provider received in the prior 12 months.
  • LivCom's projected unreasonably low return on investments will decrease from approximately 1.96% to a closer alignment with the minimum reasonable rate of return of 6.75%.
  • The adjustment is part of a support-only increase, as raising LivCom's rates would adversely affect universal service in contravention of PURA § 56.032(h)-(i) and 16 TAC § 26.407(j)(1)(A).

Sources:

  • Application of The Livingston Telephone Company, LLC to Adjust High Cost Support Under 16 TAC § 26.407(h), Docket No. 53402.
  • Public Utility Regulatory Act (PURA) § 56.032.
  • 16 Texas Administrative Code (TAC) § 26.407.
  • Report to the 80th Texas Legislature, Review and Evaluation of the Texas Universal Service Fund Pursuant to PURA § 56.029 (Jan. 2007).
  • Docket Nos. 40755, 41079, 41191, 41332, 41423, 41487, 41526, 41529, 41550, 41617, 41654, 41846, 41925, 42143, 42254, 42276, 44901, 45016, 45944, 45971, 46082, 46714, 47026, 47387, 47525, 47573, 47677, 47683, 48904, 48906, and 48907.
  • Docket Nos. 41598, 41797, 45182, and 47678.