BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION



WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION,

   Complainant,

v.

U S WEST COMMUNICATIONS, INC.,

   Respondent.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
DOCKET NO. UT-970766


THIRD SUPPLEMENTAL ORDER

COMMISSION DECISION DENYING OBJECTIONS; AFFIRMING AND ADOPTING FIRST 
SUPPLEMENTAL ORDER ON PREHEARING CONFERENCE; GRANTING INTERVENTION

  This matter is a tariff filing by US WEST Communications, Inc. (U S WEST or 
Company), to increase its rates and charges.  At a prehearing conference held 
September 17, 1997, the presiding officers reserved a ruling upon one petition 
for intervention, ruled upon other requests to intervene, and established a 
schedule for the proceeding.  They entered a prehearing conference order on 
September 19, 1997, memorializing their rulings.

  Pursuant to WAC 480-09-060, the American Association of Retired Persons 
(AARP) and Public Counsel challenge the schedule adopted at the prehearing 
conference.

  The Commission in this order will rule upon the objections to the prehearing 
conference order and will rule upon the remaining request to intervene.


OBJECTIONS TO PREHEARING ORDER

  AARP and Public Counsel both object to the schedule adopted in the prehearing 
order, contending that it may deprive them of a meaningful opportunity to 
participate in the proceeding.  Public Counsel compares the schedule in this 
proceeding with the schedule for the prior general rate proceeding involving 
this company, Docket No. UT-950200.  

  We believe that the schedule adopted is appropriate for this proceeding. The 
prior proceeding was a massive undertaking in which the Company sought to 
litigate virtually every issue involved in ratemaking for its intrastate 
operations. Nearly every fact and nearly every principle was contested.  As 
Public Counsel notes, that docket remains on appeal and the results of the 
litigation -- hence, the validity of the Commission’s decisions -- have not 
been determined.



  In the instant proceeding, a majority of the Company’s request flows from 
other decisions that the Commission has made.  According to the Company’s 
presentation, $36 million of its request flows from depreciation decisions that 
the Commission made in Docket No. UT-951425.  It states that another $10 
million of the request stems from revisions to the Company’s management 
compensation system, ostensibly to correct flaws that the Commission found in 
its order in Docket No. UT-950200, and is filed pursuant to authorization in 
that order. 

  The remaining request is for an additional $24.3 million in gross revenue.  
That is certainly a large sum, but it is a small fraction of the revenues 
requested in the prior proceeding.  We understand that the $24.3 million 
represents what may loosely be termed a “make-whole” case -- one that is not 
intended to raise new issues or to make major changes in principle from those 
decided by the Commission in Docket No. UT-950200.  We understand the Company 
to be saying, in largest part, "even under the principles that you adopted in 
the former case, we are entitled to this relief."

  To the extent that this is true, we believe this matter is much less complex 
than the prior general rate increase case.  We do not expect to hear arguments 
on major shifts in principle.  We do not expect to hear arguments on major 
changes in evidence.  We do not expect to hear arguments on major changes in 
authorized rate of return.  We do not expect to hear arguments about the 
appropriateness of cost studies or the allocations in cost studies.  The 
participants to a large extent, by their participation in the prior proceeding, 
have been through the development of the principles adopted in Docket No. 
UT-950200.  

  The essence is that -- based on what we now know about the filing and its 
underlying basis -- this is not the major, “ground-up” review that the parties 
and the Commission conducted in the prior proceeding, and its time requirements 
simply cannot be compared with that proceeding.  To the extent that the Company 
is merely asking the Commission to apply the principles decided in the prior 
proceeding, most of the most time-consuming aspects of the prior proceeding 
need not be repeated. We understand that the underlying information may be 
complex.  But we believe that meaningful and prudent participation is 
reasonably afforded by the schedule that we adopt. 

  If it appears that the foregoing is untrue, and that the Company’s request 
requires relitigating major elements of the prior proceeding, counsel may again 
raise their objections as to schedule.









DISCOVERY DISPUTES

  Public Counsel raises concerns about the number of disagreements between 
Public Counsel and the Company arising from Company responses to Public Counsel 
data requests.  We are not in a position to know whether the disputes are 
substantial and well-founded or are minor and technical, or whether they result 
from the questions that are asked or the answers that are given.

  We do expect the parties to work together and to talk with each other 
promptly, in a straightforward and expeditious manner, and to resolve 
disputes.  It is essential that the parties do approach discovery and other 
disagreements with the utmost good faith.  All parties are so instructed.  If 
doing so would be helpful to the participants, the Commission will direct one 
of the presiding ALJs to participate in discovery conferences and rule on 
discovery questions.  


PETITION FOR INTERVENTION

  The Washington Citizen Action (WCA) petitioned to intervene but did not 
attend the prehearing conference.  The presiding ALJs asked the Company and 
Public Counsel to pursue responses to questions that the parties -- or the 
bench --raised regarding WCA’s participation. Problems in pursuing and 
providing that information placed an unnecessary burden on both Public Counsel 
and the Company,  and demonstrate the disadvantages of petitioners’ absence 
from the conference.  We understand potential problems inherent in relatively 
short notice.  A better ruling in future proceedings may be denial, however, 
unless a petitioner appears to explain its petition and to answer questions 
relevant to its participation.

  The Commission welcomes the contribution that participation by diverse 
interests will bring to Commission proceedings.  Admission to the arena, 
however, brings with it the obligation to maintain the professional standards 
required for participation.  Commission proceedings are conducted at the level 
of complex litigation in courts of record, and we expect all participants to 
know and follow the practices and procedures that apply to such proceedings.  
That level of professionalism is essential if the Commission is to accomplish 
its tasks.  

  We are concerned by petitioner’s absence from the prehearing conference and 
failure to arrange for representation, as it deprived us and the parties the 
opportunity to find answers to questions.  We will assume that petitioner does 
have a substantial number of qualified members who could be affected by the 
result, and we will grant this intervention, conditionally.  The intervenor 
must in a statement filed with the Commission (1) state the approximate number 
of members in U S WEST’s service  territory; and (2) state the process by which 
a person becomes a member of WCA (e.g., submission of an application, payment 
of a fee, etc.).  We may reconsider the grant, based on the information 
provided.


  By accepting intervenor status, petitioner agrees that it will conduct itself 
in compliance with Commission rules of practice and procedure and with 
pertinent standards of professionalism, and agrees that it is bound by rulings 
made to date in the proceeding, to the same extent as other parties are bound.  

  Finally, a requirement and condition to the petitioner’s intervenor status is 
that it will coordinate its participation with Public Counsel and with AARP to 
avoid duplication.


CONCLUSION

  The Commission denies the objections to the prehearing conference order; 
directs the parties to expedite discovery with the utmost good faith; and 
grants the petition for intervention of Washington Citizen Action upon 
condition.  In doing so, the Commission affirms and adopts the prehearing 
conference order, First Supplemental Order, in this matter.

  DATED at Olympia, Washington, and effective this           day of October 
1997.
WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION



       ANNE LEVINSON, Chair



       RICHARD HEMSTAD, Commissioner



       WILLIAM GILLIS, Commissioner