(a) Application. This section applies to dominant certificated
telecommunications utilities (DCTUs) as that term is defined by §26.5
of this title (relating to Definitions) which are subject to the ratemaking
jurisdiction of the commission for any service or market.
(1) A DCTU may alternatively seek approval for an application
for a promotional rate in accordance with §26.208 of this title
(relating to General Tariff Procedures), however the presiding officer
may require any application for a promotional rate to also comply
with the requirements of this section.
(2) If an application for a promotional rate is reviewed
under this section, each promotional rate must comply with the requirements
of §26.208 of this title.
(b) Purpose. The procedures outlined in this section
are intended to establish a process by which DCTUs may obtain authorization
for offering promotional rates for the purpose of increasing long
term demand for a service or utilizing unused capacity of the DCTU's
network.
(c) Filings requesting approval of promotional rates.
After the effective date of this section, a DCTU may request approval
of promotional rates for a service by following the procedures outlined
in this section. Not later than 35 days prior to the proposed effective
date of the promotional rate, the DCTU must file with the commission
an application containing the following information:
(1) a statement of intent by the DCTU to use the procedures
established in this section;
(2) a description of the specific proposed or tariffed
service for which promotional rates are proposed and a description
of the temporary rates for such service proposed by the DCTU;
(3) if the promotional rates are proposed to be offered
on less than a system-wide basis as provided in subsection (d) of
this section, a description of the locations for which the promotional
rates are proposed:
(4) the starting date and ending date of the period
over which the promotional rates are proposed to be offered;
(5) a description of all time periods during the five
years preceding the filing of this application for which promotional
rates were offered for the service as authorized under this section;
(6) a statement detailing the type of notice, if any,
the DCTU has provided or intends to provide to the public regarding
the application and a brief statement explaining why the DCTU's notice
proposal is reasonable and in compliance with §26.208 of this
title;
(7) a copy of the notice;
(8) detailed documentation showing the long run incremental
cost of the service for which promotional rates are requested, including
projections of revenues, demand and expenses of the service for the
period during which the promotional rates are proposed to be offered.
The commission will allow an incumbent local exchange company (LEC)
that is not a Tier 1 LEC as of September 1, 1995, at that company's
option, to adopt the cost studies approved by the commission for a
Tier 1 LEC. The application must include projections of the effect
of the promotional rate on the service's revenues and cost and its
impact on the service's contribution during the promotional period
and over the remaining life of the service. The application must also
include all workpapers and supporting documentation relating to computations
or assumptions contained in the application; and
(9) any other information which the DCTU wants considered
in connection with the commission's review of its application.
(d) Modification and waivers of requirements. In its
application a DCTU may request the waiver of the long run incremental
cost requirements set forth in this section. Such a waiver will only
be granted if the presiding officer determines that the long run incremental
cost standard imposes an unreasonable burden on a DCTU which has inadequate
resources to produce the required cost information to meet the standard
and if the presiding officer determines that an appropriate alternative
cost standard is available. If the long run incremental cost standard
is waived, the DCTU must provide other cost information showing the
relationship between its proposed promotional rates and the costs
of providing the service. A DCTU may also request a waiver of the
requirement that promotional rates be offered in every exchange when
such rates are proposed to be offered for a tariffed service which
is being expanded into central offices which previously did not provide
the service. Any request for waiver of the long run incremental cost
information requirement or the system-wide application of the promotional
rates requirement must include a complete statement of the DCTU' arguments
supporting that request.
(e) Notice of intent to file. At least ten days before
any application under this section may be filed by a DCTU, the DCTU
must file a statement of intent to file such an application and the
expected filing date. Such notice must also include a statement of
the DCTU's intent to use the expedited procedures of this section,
a description of the service, and a description of the proposed promotional
rates and the proposed promotional period. The commission must then
publish notice of the DCTU's intent to file such application in the Texas Register.
(f) Requirements for promotional rates. Unless waived
or modified by the presiding officer as provided in subsection (d)
of this section, the following requirements must apply to promotional
rates approved under this section:
(1) the promotional rates must be offered in every
exchange in which the service is offered throughout the DCTU's system;
(2) promotional rates for any particular service in
any specific exchange must not be offered for more than six months
during any five-year period, and no customer must be charged promotional
rates for more than three consecutive months;
(3) promotional rates must be offered only to new customers
of a service or to new and existing customers, provided that, for
existing customers, the promotional rates must only apply to additional
units of service ordered during the promotional rate period; and
(4) the promotional rate must be designed to generate
sufficient revenue to recover the long run incremental cost of providing
the service (or, if the long run incremental cost standard is waived,
such other costs as are approved by the commission) within one year
of introduction of the promotional rate. If the proposed promotional
rate is for the reduction or elimination of an installation charge
or service connection charge, the revenue and costs related to provision
of the entire service must be used in determining whether the cost
standard for the service is met. If the proposed promotional rate
is for a service whose tariffed rate does not recover the costs of
providing the service, a promotional rate may be approved if the DCTU
can demonstrate that the promotional rate will move the service closer
to full cost recovery. However, no promotional rate must be approved
for a service whose tariffed rate does not recover the cost of the
service if such service has been found to be subject to significant
competition under §26.211 of this title (related to Rate-Setting
Flexibility for Services Subject to Significant Competitive Challenges)
or if the service is enumerated in the Public Utility Regulatory Act §52.057.
The commission may approve a promotional rate even if it does not
provide a contribution to joint and common costs.
(g) Notification to the public of services to be offered
at promotional rates. If promotional rates for a service are approved
under this section, all advertising related to such service and its
promotional rates must clearly describe the temporary nature of the
rate, the date on which the promotional rate will expire, and the
rate which will apply after expiration of the promotional rate. The
DCTU must provide the same information to all customers requesting
rate information for such service or ordering the service during the
period the promotional rates are in effect.
(h) Reporting requirements. If promotional rates are
approved, the DCTU must file with the commission a report showing
the actual revenues, demand and related expenses and investment for
the service over each period promotional rates are in effect. This
report must be filed with the commission within three months after
each authorized period for offering promotional rates has expired.
(i) Treatment of revenues and expenses related to promotional
rates in subsequent rate cases. In any subsequent rate case in which
a service was offered at promotional rates during the test year, the
revenues attributed to such service must be adjusted upward to reflect
the revenues which would have been collected if all customers who
were charged the promotional rate had been charged the permanent tariffed
rate over the promotional period.
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