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Telecom Public Notice
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Ottawa, 16 April 1985
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Telecom Public Notice CRTC 1985-30
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BELL CANADA - AMENDED DIRECTIONS ON PROCEDURE FOR AN APPLICATION FOR A GENERAL INCREASE IN RATES FOR 1986
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In Bell Canada - General Increase in Rates - Interim Rate Increase, Telecom Decision CRTC 84-28, 19 December 1984, the Commission approved interim increases in rates of 2% for all Bell Canada services for the year 1985. In that decision, in order to permit a review of the 1985 interim rate increases, the Commission directed Bell Canada (the Company) to file its proposed general rate increase application to be heard in the Fall of 1985 (1985 Fall Hearing) on the basis of two test years, 1985 and 1986.
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In a letter dated 20 March 1985, Bell Canada indicated to the Commission that it no longer anticipates requiring a general rate increase to be effective on 1 January 1986. However, the Company indicated that it may require a general increase in rates to be effective in the latter part of 1986. It therefore requested that the Commission postpone the proposed 1985 Fall Hearing and adopt the following amendments to the Directions on Procedure previously prescribed by the Commission:
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1. The 1985 Fall Hearing be postponed until 27 May 1986, with the filing of the Company's general rate application on 10 February 1986;
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2. The Commission grant final approval of the 1985 interim rate increases without further process.
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The reasons provided by Bell Canada for its change in plans were improved forecast revenues from local services, an increase in sales type leases, and greater than anticipated success in expense control through hiring controls, early retirement incentive plans and a voluntary management termination plan.
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The improved financial forecasts are expected to result in the following financial ratios:
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a) the regulated rate of return on common equity will be 14.0% in 1985 and 13.4% in 1986;
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b) interest coverage will be 3.9 times in both 1985 and 1986; and
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c) debt ratio will be 46.8% at the end of 1985 and 45.1% at the end of 1986.
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The Commission has considered Bell Canada's proposals and approves the amendments to its earlier Directions on Procedure to postpone the filing date of Bell Canada's application for a general increase in rates from 4 June 1985 to 10 February 1986. The proposed central hearing is therefore to be held commencing 27 May 1986 rather than in the Fall of 1985. Items 1 to 6 of the Directions will now read as follows:
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1. The filing date of the application will be 10 February 1986.
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2. Letters of intervention and notices of intention to participate at the central hearing are required to
be filed by 28 March 1986.
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3. Interrogatories addressed to the applicant are required to be filed and served by 28 March 1986,
provided that supplementary interrogatories may be permitted after that date with the consent of
the Commission. The applicant is required to respond to interrogatories received within the
specified time limit by 28 April 1986.
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4. A pre-hearing conference is scheduled to take place in the Conference Centre, Phase IV, Place
du Portage, 140 Promenade du Portage, Hull, Quebec commencing on 20 May 1986.
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5. Provided the application file is completed to the satisfaction of the Commission, the central
hearing will commence in the Conference Centre, Phase IV, Place du Portage, 140 Promenade
du Portage, Hull, Quebec on 27 May 1986.
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6. Regional hearings will be held in the period from 20 May to 26 May 1986, if considered
necessary, in locations to be announced.
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With respect to Bell Canada's request for final approval of the interim increases of 2%, the Commission does not consider it appropriate to grant final approval of interim general rate increases without further process and has therefore decided not to consider this matter at this time but will review the 1985 interim increases during the 1986 hearing.
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In view of the improving trend in the Company's financial performance, the Commission further directs as follows:
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Bell Canada is to provide to the Commission for the balance of 1985, within 30 days after the end of each month, commencing with April 1985, a full year forecast of revenues and expenses on a regulated basis for the year 1985, together with the estimated financial ratios including the projected regulated return on common equity.
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The Commission will monitor the Company's financial performance during 1985, in order to determine whether any further rate action may be necessary.
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Fernand Bélisle
Secretary General
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