After two hours of back and forth with VITELCO officials, Public Services Commission members voted to push back the vote on a proposed rate increase until its next meeting.
Ronald Belfon, the rate case hearing examiner attorney, explained to the PSC Tuesday night that VITELCO has not had a rate case since 2003 and, as a result, has suffered “profit loss” over the last three years.
VITELCO’s rates currently bring in a 4.49 percent return on investment and Belfon recommended Tuesday that the company raise its rates to allow for a 13.979 percent return.
That means residential customers currently charged $21.64 per month for landline service would see their bills jump to $36, according to VITELCO attorney Bennett Ross. Ross has said in other public rate case hearings that since the PSC last examined the VITELCO’s rates in 2008, the company has invested $125 million dollars in updates to its network, including a conversion to fiber-optic cable.
At the same time the company’s customer base has been shrinking thanks to the declining popularity of landline phones, he said. In 2008, VITELCO had 61,000 lines in service. By the end of 2014, that number had dropped to less than 39,000.
Ross said that VITELCO’s increase in investment expenditures and its decrease in phone customers leaves the company with little other option than to request the PSC approve rate increases.
At the public hearings, however, PSC advisors Georgetown Consulting recommended an annual rate reduction of $9.6 million, which would amount to a $12.94 decrease of VITELCO’s monthly rate for residential phone lines and a $34.98 decrease of its business line rate. During Tuesday’s PSC hearing on St. Thomas, Georgetown’s Jamshed Madan repeated the recommendations and said it’s VITELCO’s own fault for not filing for a rate increase for more than 10 years.
Madan said that in preparing its report, Georgetown found it difficult to get information from VITELCO, making it “difficult” for the team to do its work, and that Belfon, as hearing examiner, had just based his recommendations on VITELCO’s notes and testimony without doing additional research.
Georgetown contended that VITELCO’s claims that it had to get rid of all its debt before transferring control to Atlantic Tele-Network were false and that the company actually had more assets than it was letting on; a study of VITELCO’s facility on St. Thomas alone is worth $80 more than what “is on the books,” Madan said.
Madan added that the issue of “delivering the company debt free” is still being discussed between VITELCO and ATN.
“It’s not anywhere near settled,” he said. “It’s a big issue, with ATN saying they were never offered the ability to assume the debt.”
Commission members voted at the end to hold off on making a decision until their next meeting, once they have more time to review all the documents.