| (4) Burden of proof. A small ILEC will bear the initial
burden of production and the burden of persuasion.
(5) Timing for contested cases. The commission must
grant or deny an application filed under subsection not later than
the 120th day after the date a sufficient application is filed. The
commission may extend the deadline upon a showing of good cause. The
application will be processed in accordance with the commission's
rules applicable to docketed cases.
(6) Timing to file a subsequent contested case. Once
the commission issues an order in a contested case under this section,
the small ILEC and commission staff may not file a subsequent contested
case before the third anniversary of the date on which the small ILEC's
most recent application for adjustment is initiated, unless good cause
is proven.
(i) Confidentiality of information.
(1) A report or information that a small ILEC is required
to provide to the commission under subsection (e) of this section
is confidential and not subject to disclosure under Chapter 552, Government
Code.
(2) A third party may only access confidential information
filed according to subsection (h) of this section, or proceedings
related to that filing, if the third party is subject to an appropriate
protective order.
(3) This subsection does not apply to a subsequent
contested case initiated under subsection (h) of this section, and
no claim of confidentiality will arise from this subsection in such
a subsequent contested case.
(j) Commission adjustment of the small ILEC's revenue
requirement and Small and Rural Incumbent Local Exchange Company Universal
Service Plan support.
(1) Revised revenue requirements.
(A) In a proceeding conducted in accordance with subsection
(h) of this section, the commission will determine the small ILEC's
new revenue requirement necessary to allow the company to earn a reasonable
rate of return; however, the commission may not set a small ILEC's
support level at more than 140 percent of the annualized support the
small ILEC received in the 12-month period before the date of the
adjustment, nor may the rate adjustment adversely affect universal
service.
(B) A small ILEC that is in Category 1 cannot request
an increase in the Small and Rural Incumbent Local Exchange Company
Universal Service Plan support that would result in a rate of return
greater than the minimum of the reasonable rate of return. In a proceeding
for a small ILEC in Category 3, a small ILEC or commission staff may
not request a decrease in the Small and Rural Incumbent Local Exchange
Company Universal Service Plan support that would result in a rate
of return greater than the maximum reasonable rate of return.
(2) Small and Rural Incumbent Local Exchange Company
Universal Service Plan support payments to small ILECs. The commission
will determine the amount of adjustment to the annual Small and Rural
Incumbent Local Exchange Company Universal Service Plan support or
basic rates for the small ILEC that will be needed to meet the new
revenue requirement identified in this paragraph. The commission will
determine the fixed monthly support payment for a small ILEC by dividing
the Small and Rural Incumbent Local Exchange Company Universal Service
Plan support by 12. Each small ILEC that has Small and Rural Incumbent
Local Exchange Company Universal Service Plan support adjusted under
this section must provide the TUSF administrator with a copy of the
final order indicating the adjusted amount of Small and Rural Incumbent
Local Exchange Company Universal Service Plan support.
(3) Small and Rural Incumbent Local Exchange Company
Universal Service Plan support payments to ETPs other than small ILECs.
The Small and Rural Incumbent Local Exchange Company Universal Service
Plan support for ETPs other than a small ILEC will be determined by
calculating the per-line support for each small ILEC's study area
based on the most recent monthly support using December line counts
for the small ILEC. The payment to each ETP other than a small ILEC
will be calculated by multiplying the computed per-line amount for
the given small ILEC study area by the number of eligible lines served
by the ETP in such study area for the month.
(k) Miscellaneous items.
(1) Federal Universal Service Fund (FUSF) support.
The amount of annual FUSF support received by the small ILEC that
is considered to be an intrastate expense adjustment under Part 36
and Part 54 of the FCC's rules or by FCC order, regardless of the
category of FUSF support, will offset the total intrastate expenses
and be reflected as such in the small ILEC's annual report. The timing
of any FUSF support will be considered when making a determination
under subsection (j) of this section.
(2) Recovery of FUSF support from the TUSF in accordance
with PURA §56.025. The amount of FUSF support recovered from
the TUSF in accordance with PURA §56.025 that is considered an
intrastate expense adjustment under Part 36 and Part 54 of the FCC
rules or by FCC order, regardless of the category of FUSF support
or type of budget control mechanism placed on FUSF support, will be
shown as an offset to the total intrastate expenses in the small ILEC's
annual report. The timing of any recovery of FUSF support from the
TUSF in accordance with PURA §56.025 and the timing of any true-ups
must be considered when making a determination under subsection (j)
of this section.
(3) Commission authority. Nothing in this section prohibits
the commission from conducting a review in accordance with PURA, Chapter
53, Subchapter D.
(l) Treatment of federal income tax expense.
(1) Accumulated deferred federal income taxes (ADFIT).
(A) For a small ILEC investor-owned utility (IOU) subject
to federal income tax, the IOU must record on its books a regulatory
liability for amounts of excess ADFIT resulting from the Tax Cuts
and Jobs Act of 2017 (TCJA), in accordance with the commission's order
in Project No. 47945. An IOU must include this information on the
annual report required by this rule. For the purposes of this section,
excess ADFIT is defined as the difference between the amount of ADFIT
on the IOU's books after incorporating changes from the TCJA and the
amount of ADFIT that would have been on the IOU's books had the tax
changes in the TCJA not occurred.
(B) IOUs will either amortize the excess ADFIT regulatory
liability over a period not to exceed five years or allow it to reverse
along with the associated ADFIT according to the transaction that
resulted in the ADFIT.
(2) Current federal income tax expense.
(A) For an IOU subject to federal income tax, the IOU
must record on its books a regulatory liability for amounts of excess
current federal income taxes resulting from the TCJA, in accordance
with the commission's order in Project No. 47945. An IOU must include
this information on the annual report required by this section. For
purposes of this section, excess current federal income tax expense
is defined as the difference between the amount of revenue collected
under current rates related to current federal income tax expense
and the amount of revenue related to current federal income tax expense
that should have been collected under rates reflecting changes in
the TCJA. An acceptable alternative calculation of an appropriate
regulatory liability for purposes of this rule is the difference in
the current period federal income tax expense calculated under the
TCJA and the amount that would have been calculated under the federal
tax code immediately preceding the TCJA.
(B) At such time that commission staff files a memorandum
for the commission to categorize the IOUs' rate of return for 2017,
the IOUs will no longer accrue on the books the regulatory liability
for excess current federal income tax expense.
(C) An IOU will amortize the regulatory liability for
the excess current federal income tax expense over a period not to
exceed five years.
(D) An IOU will supplement its 2017 reported financial
information to reflect the amount of current federal income tax expense
for 2017 calculated as if the terms of the TCJA had applied to 2017
operations to calculate potential support from the Small and Rural
Incumbent Local Exchange Company Universal Service Plan. The IOU will
report this information as a proposed adjustment.
(3) This subsection will expire on December 31, 2019.
Any amortization of a regulatory liability resulting from application
of this subsection would continue until completed.
|
