Annual report, 1993

STATE OF CEORCIA

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OFFICE OF THE CONSUMERS' UTILITY COUNSEL
1993
ANNUAL REPORT
SUBMII I ED TO: THE HONORABLE ZELL MILlER, GOVERNOR THE HONORABLE PIERRE HOWARD, LT. GOVERNOR RNANCE AND PUBUC UTIUTIES CO....ITTEE
STATE SENATE INDUSTRY CO.... I lEE STATE HOUSE OF REPRESENTATIVES

TABLE OF CONTENTS
I. Introduction A. Summary B. Legislative History C. Functions and Duties D. Relationship of the CUC To The Georgia Public Service Commission
II. Administrative Summary A. Performance Audit B. Organization Structure And Staffing Level
III. Activities A. Major Cases B. Conferences, Seminars, Workshops and Speeches C. Legislative Activities
IV. Budget
Budget Information
Per Diem, Fees and Contracts
Biographical Information
Case Summaries Electric Utility Cases Natural Gas Cases Telecommunication Cases Generic Utility Cases Financing Applications Accounting
Regular Utility Filings Maintained by the Office

Page
1 1 3 5
7
9 9 12
13 13 13 14
15
Appendix A
Appendix B
Appendix C
Appendix D 1 14 22 63
64 68
Appendix E

I. Introduction A. Summary
The Office of Consumers' Utility Counsel ("CUC") was created in 1975. The purpose of the office is to represent Georgia's residential and small commercial utility ratepayers in matters involving the rates and services furnished by regulated public utilities which come before the Georgia Public Service Commission ("Commission"), federal administrative agencies and the courts. According to law, the CUC is responsible for ensuring that the Commission is furnished with all available information concerning the consequences of its decisions in those cases which directly affect the majority of Georgia's citizens.
The position of the Consumers' UtilIty Counsel is appointed by the Governor. ancy G. Gibson the current Counsel, was appointed in February, 1990, by Governor Joe Frank Harris. The CUC falls under the executive branch of state government and is attached to the Governor's Office of Consumer Affairs for administrative purposes.
State law authorizes the Counsel to employ a full-time staff to assist in fulfilling the obligations of the office. In addition, the Counsel is authorized to procure the services of outside consultants on an "as-needed" basis to assist in the economic, technological, and financial ramifications of cases. Currently, the personnel of the office consists of two staff attorneys, one financial analyst, one research analyst, an administrative assistant and a legal secretary.
The CUC has operated under a sunset provision since 1977. If the sunset is not renewed periodically by the legislature, the CUC ceases to exist. However, a four year extension of the office was approved by the General Assembly in 1991, which is the longest renewal ever granted to the office. A detailed legislative history follows this summary.

Considering the modest staff size, the CUC participated in a large and varied assortment of electric, gas, and telecommunications issues of great importance to consumers in the state. Appendix D of this report summarizes in detail all of the major cases in which the CUC participated in 1993.
Although rate cases continue to be filed by various regulated utilities in the state, more and more time and effort by the CUC is spent on "generic dockets". This type of docket is created by the Commission to gather evidence on issues effecting more than one utility or to . study "public policy" issues with regulatory implications. Examples of generic dockets in which the CUC participated were: continued hearings related to Integrated Resource Planning for the regulated electric utilities; introduction by Southern Bell of NIl service; the acquisition by ALLTEL Corporation of the GTE properties in Georgia; implementation of Senate Bill 144; "dial-around" compensation for independent payphone providers.
Compared to the resources available to the regulated utilities and the Commission, the CUC, operating within the constraints of a tight budget, actively participated in every important regulatory proceeding before the Commission, as well as in state and federal courts. As a result of CUC's activity, the Performance Audit of 1993 confirmed that the information CUC provided to the Commission during the deliberation of four rate cases aided the Commission in reducing requested utility rate increases. More information on this subject is included in the section summarizing the performance audit.
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B. Legislative History

The Office of Consumers' Utility Counsel was created by the Consumers' Utility Counsel

Act of 1975. The CUC was attached to the Public Service Commission for administrative

purposes and the Counsel was appointed by and served at the pleasure of the Attorney General.

At that time, tbe Counsel was allowed to engage in the private practice of law in addition to

performing the duties of Counsel. This provision was subsequently eliminated in 1977 as the

responsibilities of the office demanded a full-time position. Also, in 1977, the Georgia General

Assembly added a "sunset" or automatic repealer clause to the CUC's authorizing statutes,

providing for the expiration of the agency two years later, on June 30, 1979.
I In 1979, the Georgia General Assembly voted to attach the CUC to the Office of

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Planning and Budget for administrative purposes and to have Counsel appointed by and serve

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at the pleasure of the Governor. The General Assembly also continued the CUC for an

additional year.

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The 1980 General Assembly did not act to re-create the CUC, with the probable result

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of cessation of operations on June 30. However, on June 30, 1980, Governor George D. Busbee

signed an Executive Order providing for the continued operation of the office. Governor Busbee

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also signed an agreement with the Commission allowing CUC representation at Commission

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hearings and meetings and to otherwise continue its functions. In 1981, the General Assembly

continued the office for a two-year period. The office's existence was extended for another two-

I year period in 1983 and for one-year periods in 1985, 1986 and 1987.

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In 1988, Governor Joe Frank Harris proposed that the practice of periodic "sunset" of

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the CUC be discontinued and that the agency be granted a three-year renewal. In addition, the

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1993 Annual Report - 3

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LEGISLATIVE SYNOPSIS
1975 - Created. No sunset provision. Part-time counsel 1977 - Agency status. Two year sunset provision.
Full-time counsel. 1979 - One year renewal. 1980 - Lapsed. Continued by Executive Order. 1981 - Two year renewal. 1983 - Two year renewal. 1985 - One year renewal. 1986 - One year renewal. 1987 - One year renewal. 1988 - Three year renewal. 1991 - Four year renewal.

c. Functions And Duties

In its original form, the Consumers' Utility Counsel represented all utility consumers in

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the state. Counsel was authorized to appear "on behalf of the public of this State" in matters

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involving public utility companies. Effective with the 1977 Act, and in recognition of the role

of Counsel which continues today, Counsel is charged with representing the interests of the

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"residential and small business" customer classes. These classes of ratepayers still have the

authority to represent themselves in proceedings before the Commission but the CUC is
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authorized to ensure that the interests of these classes are adequately represented in all

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proceedings involving utility regulation.

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The residential and small commercial ratepayers of Georgia would not be adequately

represented in regulatory proceedings without the CUC's participation. These utility consumers

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represent not only the largest percentage of ratepayers in Georgia, but they also comprise the

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class of customers with the least amount of political influence and funding with which to protect

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their interests in regulatory proceedings. The CUC provides a vital service for its constituency

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1993 Annual Report - 5

which cannot be duplicated by any other state agency or political advocacy group. The tax dollars used to fund the CUC are far outweighed by the savings afforded as a result of this office's activities in proceedings before the Commission, federal agencies and the courts.
A copy of any application, complaint, pleading, or notice filed with or issued by the Commission is required by law to be served upon Counsel. In addition, Counsel must receive a copy of any correspondence or paper filed with or issued by the Commission or its staff. In addition, written notice must be given to the Counsel at least ten days in advance before the Commission may consider any matter ( O.C.G.A. Section 46-10-5).
Counsel has an absolute right of intervention in all proceedings before the Commission and in proceedings before any state or federal administrative agency or body having jurisdiction over public utility services, including related judicial proceedings. In addition, Counsel has the unique statutory authority to initiate either administrative or judicial proceedings involving Georgia's regulated utilities.
The CUC is the only intervening party before the Commission which has, as a matter of law, the full rights of civil discovery in utility cases. The Counsel and her staff also have access to all records, files, reports, documents and other information in the possession and custody of the Commission. Employing all of these tools, the CUC monitors the filings and other activities of Georgia's regulated utilities.
It is CUC's primary purpose to provide information and technical data to the Commission to ensure that this regulatory body is fully informed as to the interests of residential and small commercial utility customers in Georgia. It is essential that the Office of Consumers' Utility Counsel remain a participant in the regulatory process in Georgia so that the delicate regulatory
1993 Annual Report - 6

balance will not be upset. Georgia's residential and small commercial ratepayers cannot be adequately protected by any other agency or party. Thus, to continue to ensure that the residential and small commercial ratepayers are represented in regulatory matters, the General Assembly should grant permanent status to the agency, rather than continue a sunset review.
D. Relationship Of The CUC To The Georgia Public Service Commission The role of the CUC is quite different from that of the Commission. The CUC
represents the distinct interests of particular classes of customers before the Commission, other regulatory bodies and courts. The Commission, on the other hand, is a regulatory body charged with protecting the public interest generally and has the responsibility of making the final decisions in regard to utility rates and general public policy matters in Georgia. Thus the CUC's role is one of an advocate whereas the Commission acts as the decision maker.
The Commission's role is both quasi-legislative and quasi-judicial in nature. In its quasijudicial role, it adjudicates contested matters and. in that regard, operates much as a court in resolving disputes among competing interests. The rendering of just verdicts is an entirely different function from the representation of a party to a case. The CUC acts in a representative capacity before the Commission, not as an adjudicatory body. In its quasi-legislative role, the Commission makes public policy decisions. However, this type of policy-making is quite different from the formal representation that is provided by the CUe. In making its decisions the Commission must consider the interests of all parties, not just the interests of the residential and small commercial classes represented by Counsel.
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The Commission's technical arm, the Utility Finance Section ("UFS"), was created in 1981 and this staff section routinely appears as an actual party to proceedings before the Commission. UPS is authorized to perform a number of functions for the Commission in regard to electric utilities. The statutory provision of the Official Code of Georgia governing the activities of the Utility Finance Section only authorizes the UFS to appear in cases involving electric utilities. This statutory limitation has never been imposed upon the UFS and it routinely appears in cases involving any of Georgia's regulated companies. However, the UFS is an advisory body for the Commission and does not represent consumers per se. For example, the UFS cannot appeal Commission decisions, whereas the CUC has specific statutory authority to initiate appeals of Commission decisions.
In the revenue allocation/rate design phase of rate cases, industrial and large commercial utility customers appear at Commission proceedings with private legal counsel. These parties are the primary opponents of the residential and small commercial customer classes in this phase of the proceeding. The absolute amount of revenue increase, prior to being allocated to customer classes, affects all customer classes similarly. Therefore, there is typically linle conflict between the interests of the various customer classes in the revenue phase of a rate proceeding.
Quite unlike the commission or its Staff, the CUC is charged with the representation of particular customer classes. The CUC is empowered to intervene before federal agencies and to initiate actions before such agencies and courts on behalf of residential and small commercial consumers. The CUC is the office which provides the legal and technical expertise required in
1993 Annual Report - 8

order to protect the interests of the residential and small commercial customers of Georgia's regulated utilities.
II. ADMINISTRATIVE SUMMARY A. PERFORMANCE AUDIT
A performance and management audit was conducted by the Georgia Department of Audits to comply with an amendment to CUC's enabling legislation passed in 1991 by the General Assembly which requires a performance and management audit to be completed prior to January 1, 1993 and January 1, 1995. The audit is to be submitted to the Senate Finance and Public Utilities and House Industry Committees. 1) Audit Objective and Scope
The overall purpose of the audit is to determine if the CUC is complying with its mandate of representing residential and small business ratepayers of Georgia in proceedings involving the regulated public utilities of the state.
In assessing whether the CUC is successful in achieving its goals, the auditors examined the following specific objectives:
a) Whether the analyses of utility company rate filings conducted by the CUC are used by the Commission to reduce companies' rate requests and to allocate rate increases equitably among the different classes of customers, i.e. residential, commercial, and industrial;
b) Whether the work performed by the CUC unnecessarily duplicates the work performed by the Commission Staff;
1993 Annual Report - 9

c) Whether the CUC is concentrating its efforts on those types of cases and issues that have the greatest impact on residential and small business customers;
d) Whether the CUC is implementing adequate internal controls over the selecting process for outside consultants;
e) Whether the CUC has both the number and type of staff personnel to meet its objectives in an efficient and effective manner; and
f) Whether the CUC's record-keeping procedures for documents are sufficient to ensure easy access along with proper safeguards.
2) Summary of audit findings a) First Findin!!:
The audit confirmed that the CUC is in complete compliance with a.C.G.A. Section 4610-1 in representing residential and small commercial ratepayers in utility matters heard by the Commission. More specifically, the audit substantiates CUC's effectiveness in working for the best interests of residential and small commercial ratepayers with the following conclusion:
Reviews of four utility rate cases decided by the Commission during the period 1989 through 1992 indicated that the testimony provided by the CUC resulted in additional reductions totalling $13.9 million in the amount of rate increases awarded the companies by the Commission. 1 The audit further stated that due to CUC's efforts, the rate increases granted by the Commission in the above four rate cases were distributed equitably among the residential,
J Department of Audits, State of Georgia, Performance Audit, 1993, p. 4.
1993 Annual Report - 10

commercial and industrial classes of customers. The cases utilized by the auditors' cover the three types of regulated utilities in this state: gas, electric and telecommunications.
In addition to the involvement in utility rate cases, the CUC acts on behalf of residential and small commercial ratepayers in other docketed cases heard by the Commission. In the year scrutinized by the auditors (1992) the CUC intervened in nearly 70% of all docketed cases heard by the Commission. The cases not addressed by the CUC were ones with minor impact on the residential and small commercial classes. Therefore, the conclusionary finding of the audit is that the CUC is meeting its statutory obligation of providing the Commission with the information it needs on behalf of the ratepayer classes the CUC represents. b) Second Findinll:
There is a good working relationship between the CUC and the Commission Staff. Further, an improved working relationship between the Staff and CUC serves to increase the Commission's acceptance of Counsel's analysis of issues and to lessen unnecessary duplication of effort between the CUC and the Staff. c) Third Finding:
Although the CUC IS effectively meeting its statutory obligation in representing residential and small commercial ratepayers, the audit recommends that an economist be added to the office. Ten utility-related consumer offices similar to the CUC have an economist on staff. This would enhance the ability of the office to broaden its scope of analysis and perhaps lessen its reliance on outside consultants.
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d) Fourth Finding: The audit team made several suggestions to improve the CUC's handling of contracts
with consultants. Most of these revisions were made prior to the release of the audit. Improved contract wording clearly outlining the terms of payment and return of documents has already been implemented by the CUC. The audit concludes that the records maintained by the office are generally well-organized, readily accessible, and properly stored. e) Fifth Finding:
The audit recommended that the overlapping of retainer contracts for consultants on an as-needed basis be consistent with the Office of Planning and Budgets accounting practices. Procedures have been implemented by the CUC for fiscal 1993 to rectify this oversight.
The next management and performance audit of the office will be conducted prior to January 1, 1995.
B. ORGANIZATION STRUCTURE AND STAFFING LEVEL The present staff of the CUC is composed of the Counsel, two staff anorneys, one utility
analyst, one senior research associate, one administrative assistant, and one legal secretary. One staff anorney position changed in terms of personnel, but all alloned positions are presently filled.
During state-wide budget cuts in 1991 and 1992, the office lost two attorney positions. This has resulted in a "bare bones" staff which limits, to a degree, its involvement in all proceedings involving residential and small commercial ratepayers. In the meantime, the amount of cases heard by the Commission has not decreased, and in fact, has increased over the past
1993 Annual Report - 12

several years. Therefore, it remains a priority of this office to restore at least one attorney position and add an economist to the staff, as recommended by the 1993 audit. In addition, adequate funding for Per Diem, Fees and Contracts for consultants is crucial if the CUC is to continue its adequate representation as mandated by the General Assembly.
General areas of assignment for the staff attorneys are the electric, gas and telecommunications areas. The office's utility analyst concentrates in the areas of revenue requirement, revenue allocation and rate design. The senior research associate is responsible for certain telecommunication matters and assistance in some electric and gas issues. The individual responsibilities of the staff of the office appear more fully in the biographical sketches contained in Appendix C of this report.
III. ACTIVITIES A. Major Cases
Appendix D contains brief summaries of all regulatory proceedings in which the CUC actively participated or monitored in 1993. Included in the summaries is a discussion of the issues involved and the position maintained by the CUC.
B. Conferences, Seminars, Workshops And Speeches A small, but important, percentage of time is allotted to attendance at various
conferences, seminars and workshops on topics of concern in the area of regulated utilities. These events are sponsored by such groups as the National Association of State Utility Consumer
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Advocates ("NASUCA"), National Association of Regulatory Utility Commissioners ("NARUC"), the Commission, utilities and various other groups.
Both the mid-year and annual meetings of NASUCA were attended by one or more of the office staff and Counsel. A workshop on Renewable Energy was attended by one staff member following the mid-year NASUCA meeting.
The Counsel addressed the Georgia Public Communications Association on topics of related interest. She also was invited to speak to the AARP Legislative Caucus on matters concerning regulated public utilities and in regard to proposed legislation. One staff member was invited to speak to the Kennesaw Optimist Club about the activities of the office.
C. Legislative Activities Legislation introduced In the 1993 Session of the General Assembly which was of
consequence to regulated utilities or of importance to the operation of the CUC as a state agency was tracked by the CUe. If the proposed legislation concerned an issue with possible impact on the classes of ratepayers the office represents, the Counselor CUC staff members attended the appropriate committee meetings. This afforded an opportunity to further study the bill or resolution under consideration or answer questions from lawmakers addressed to the Counsel concerning regulatory impact. This activity by the office is considered important as the Counsel feels it is incumbent upon her to be aware of legislation which may have a direct or indirect impact on the ratepayers the CUC represents.
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IV. BUDGET
The Office of Consumers' Utility Counsel is budgeted totally by State General Appropriations. Budgets for Fiscal Years 1978 through 1994 are summarized in Appendix A of this report. State funds allocated for Fiscal Year 1994 are currently $529,821.
Funding for the two major components of the CUC's budget, the Personal Services and Per Diem, Fees and Contracts object classes, has remained adequare for this year. No reduction in staffing has been required due to budget reductions during the past year and none is expected for rhe remainder of Fiscal Year 1994.
For this current fiscal year, the CUC received a slighr increase in irs Per Diem Fees and Contracts objecr class. We view rhis increase as a positive sign thar rhe Governor's Office and the Legislature are becoming more aware of the CUC's viral mission on behalf of Georgia's residential and small commercial utiliry customers. Appendix B of rhis report summarizes consultant expenditures for fiscal years 1981 through 1993.
In January of this year, rhe CUC received $4,000 from rhe Governor's Emergency Fund for the purchase of a new computer and laser printer. The new computer replaced a nonworking, outdated model and rhe new laser printer is now rhe Office's primary printer. These addirions to our computer inventory have made an enormous difference in the production of this office's documents.
Looking toward the future, the CUC is seeking, in its 1995 Budget Request, only modest continuation amounts in each of its object classes. In the Personal Services Object Class, rhe CUC is requesring improvement funding for a new economist posirion. The State Department of Audits, in its Performance Audit Report of January 1993, recommended that an economist
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be added to the staff of the CUe. This recommendation was based partially upon an informal survey done by the Audit Team of other utility consumer advocate offices. The Audit Department's recommendation reinforces our belief in the importance of such a position in an office of our type.
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APPENDIX A BUDGET INFORMATION

BUDGET HISTORY

FY Federal Funds

78

$125,005

79

200,000

80

142,500

81

151,899

82

74,183\

83

84

15,501 2

85

19,7002

86

87

88

89

90

91

92

93

94

State Funds $ 67,100
97,353 102,164 314,072 344,816 363,014 358,951 385,307 418,894 448,653 481,834 651,987 650,834 630,964 513,137 524,067 529,821

# Positions 13 14 14 14 13 13 10 10 9 9 9 9 9 9 7 7 7

Total Funds $192,105 297,353 244,664 465,971 418 999 363,014 374,452 405,007 418,894 448,653 481,834 651,987 650,834 630,964 513,137 524,067 529,821

I This figure represents federal funds carried over from the FY '81 budget and made available for use during FY'82.

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2 Grant from the Office of Energy Resources.

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Appendix A-I

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APPENDIX B PER DIEM, FEES AND CONTRACTS

PER DIEM, FEES AND CONTRACTS BUDGET
Per Diem, Fees and Contracts is the budget object class from which the CUC funds outside consulting services and expert testimony presented in regulatory proceedings. Utility regulation involves as complex an area of litigation as is encountered in any court of law or administrative forum. The advice and testimony of experts in this complex technical area are indispensable to effective participation in regulatory proceedings.
The CUC's Per Diem, Fees and Contracts object class saw a slight increase in funding for Fiscal Year 1994. The Office's current appropriation for that object class is $105,000, an amount which is insufficient to secure expert consultants in all of the major proceedings scheduled by the Public Service Commission for this fiscal year, but which will allow us to participate in a reasonable number of such proceedings. In addition to the continuing Integrated Resource Plans presently being monitored by the Commission, it is anticipated that several major telecommunications proceedings and other generic hearings will take place before June of 1994.
As a result of House Bill 280 the Commission now reviews and approves integrated resource plans filed by the State s two largest electric utilities, Georgia Power Company and Savannah Electric and Power Company, and preapproves all plant construction. In undertaking these additional responsibilities, the Public Service Commission was allocated funds to support a new IRP division which has the responsibility of overseeing the review of IRP plans offered by the companies, as well as monitoring the implementation of approved plans. The CUC should be in a position to perfonn similar reviews; however, the lack of staff and inadequate financial resources does not allow this office to perfonn the type of analysis that is required in such a review.
Appendix 8 - I

SUMMARY

PER DIEM, FEES AND CONTRACTS FISCAL YEARS 1987 THROUGH 1994

Actual Expenditures, FY 1981 - FY 1993

FY 1981: FY 1982: FY 1983: FY 1984: FY 1985: FY 1986:

$71,340 51,088 48,735 57,817 93,650 34,982

FY 1993:

$93,967

FY 1987: FY 1988: FY 1989: FY 1990: FY 1991: FY 1992:

Fiscal Year 1988

Governor s Recommendation

$ 70,000

Appropriation Object Class Transfer Emergency Funds Total Available Funds

50,000 30,000 12.500 92,500

Actual Expenditures

$ 91,644

$ 69,966 91,644 171,311 195,300 161,473 99,786

Fiscal Year 1989 Governor's Recommendation Appropriation Actual Expenditures

$ 70,000 200,000 $171,311

Appendix B-2

Fiscal Year 1990 Governor's Recommendation Appropriation Actual Expenditures Fiscal Year 1991 Governor's Recommendation Appropriation Actual Expenditures
Fiscal Year 1992 Governor's Recommendation Appropriation Actual Expenditures
Fiscal Year 1993 Governor's Recommendation Appropriation Actual Expenditures
Fiscal Year 1994 Governor's Recommendation Appropriation

$200,000 200,000 $195,300
$200,000 166,226 $161,473
$161,786 99,786
$ 99,786
$100,000 100,000 $ 93,967
$105,000 105,000

Appendix B-3

APPENDIX C BIOGRAPIDCAL INFORMATION

Nancy G. Gibson Counsel
Nancy Gibson was appointed to the position of Consumers' Utility Counsel for the State of Georgia in February, 1990, by Governor Joe Frank Harris. Prior to her appointment, Ms. Gibson served as a staff attorney for the Office of Consumers' Utility Counsel specializing in cases involving the gas and electric utility industries. Ms. Gibson has participated in numerous utility proceedings before the Georgia Public Service Commission, the Superior Court of Fulton County, the Court of Appeals and the ,Supreme Court of Georgia.
Ms. Gibson's history as a consumer advocate began in 1984 when she was a Staff Attorney for the Governor's Office of Consumer Affairs. She designed and implemented the State-Wide Advertising Monitoring Unit and directed its operation. Ms. Gibson also served as Assistant Director of Case Administration in addition to her duties as Staff Attorney for the office.
Ms. Gibson received a B.A. degree cum laude in Government from Suffolk University in Boston Massachusetts and was a member of Pi Gamma Mu National Honor Society. She received her J. D. degree from Woodrow Wilson College of Law and was awarded the American Jurisprudence Award for Excellence in Conflict of Laws. Ms. Gibson maintains memberships with the State Bar of Georgia, Atlanta Bar Association, Georgia Association of Women Lawyers and the American Bar Association.
Appendix C - I

Margie A. Conley Administrative Assistant Ms. Conley joined the Office of Consumers' Utility Counsel in 1986 as a Legal Secretary, was promoted to the position of Administrative Secretary in 1987 and was named Administrative Assistant in March of 1990. She was previously employed by Georgia State University for ten years. Ms. Conley received her undergraduate degree from Tuskegee University in Tuskegee Institute, Alabama. Her major responsibilities as Administrative Assistant include budget preparation and monitoring, personnel matters and records management.
Allison S. Morris Utility Analyst
Prior to joining the Office of Consumers' Utility Counsel in April of 1986, Ms. Morris was employed by the Florida Public Service Commission as an auditor and an accounting analyst. While with the Florida Commission, Ms. Morris was senior auditor for several years, auditing numerous companies within the electric, gas, telephone and water and sewer utility industries. As an accounting analyst with the Florida Commission, she perfonned analyses of company testimony and exhibits and prepared and presented recommendations to the Commission.
Ms. Morris is a Tallahassee, Florida native who received a B.S. degree from Florida State University in 1981 with a major in accounting. From April, 1986 to April, 1990, Ms. Morris was employed by the Consumers' Utility Counsel as a financial advisor. She was responsible for the analysis of rate filings and other financial filings submitted in proceedings before the Commission and for the preparation and presentation of testimony in those
Appendix C - 2

proceedings. In April of 1990, Ms. Morris was promoted to Utility Analyst at which time her duties were expanded to include analysis of tariff filings and rate design proposals in regard to Georgia's regulated utility companies. Ms. Morris is responsible for general oversight and case administration. She testifies on behalf of CUC in proceedings before the Commission and conducts cross examination of other experts when necessary.
Linda D. Green Legal Secretary Ms. Green joined the Office of Consumers' Utility Counsel in August 1992 as a legal secretary. A native Atlantan Ms. Green received a B.S. degree in Psychology from Georgia State University. She obtained her M.A. degree ma!!na cum laude in Communications from Regent University. In 1984, she was awarded an "Outstanding Student in Communications" award. She also graduated with honors from a local professional paralegal training program. Her prior employment has included positions in Teaching, Communications and Investigations. Her major responsibilities with the Office of Consumers' Utility Counsel include word processing, reception, file management and general office duties.
Daniel S. Walsh Attorney
Mr. Walsh joined the Consumers' Utility Counsel in November, 1993. He is originally from Chatham, New Jersey. As an undergraduate at Emory University, he completed a doublemajor in English and Political Science and was a member of the Political Science Honor Society,
Appendix C - 3

Pi Sigma Alpha. Mr. Walsh obtained his juris doctorate degree from the Emory University School of Law. While in law school, he interned with Atlanta Legal Aid and held summer associate positions with law finns in Atlanta and Columbia, South Carolina.
Mr. Walsh completed an internship in the office of Governor's Executive Counsel in the summer of 1993. His areas of concentration at the CUC are gas and electric regulatory matters.
William R. L. Atkinson Attorney
Mr. Atkinson joined the CUC staff in May, 1992. Originally from Montgomery, Alabama, he attended Louisiana State University, where he was a member of Phi Kappa Phi and Pi Kappa Lambda. Upon receiving his undergraduate degree from LSU, Mr. Atkinson entered graduate school at the University of Georgia and graduated with a Master of Ans degree. Shonly thereafter, he was enrolled at the Georgia State University College of Law. While a GSU law student, Mr. Atkinson interned in the office of Justice Charles L. Weltner of the Georgia Supreme Court, received the American Jurisprudence Award for Excellence in Research, Writing and Advocacy, and became a member of Phi Delta Phi.
Mr. Atkinson began working at CUC shortly after completing an internship in the office of the Governor's Executive Counsel during the 1992 session of the General Assembly. He is currently working on a variety of regulatory matters especially in the area of telecommunications.
Appendix C - 4

Jeanette L. Mellinger Senior Research Associate Ms. Mellinger joined the Consumers' Utility Counsel in May, 1990. Originally from Iowa, Ms. Mellinger received a B.S. degree in history from Goshen College, Goshen, Indiana. She attended graduate studies at Michigan State University East Lansing, Michigan and the University of South Florida in Fort Myers, Florida. In 1989 she obtained a J.D. degree from the Walter F. George School of Law at Mercer University, Macon, Georgia. Prior to law school, Ms. Mellinger held various managerial, program development, and research/resource positions and was a public school instructor. Ms. Mellinger has responsibility for cases involving the smaller local exchange carriers in Georgia and monitoring tariff filings of the interexchange carriers, as well as generic dockets established for these two groups. In addition, she contributes to the research, organizational and developmental demands of the office.
Appendix C - 5

APPENDIX D CASE SUMMARIES

ELECTRIC UTILITY CASES
In Re: Georgia Power Company's Application for Certification of Demand-Side Programs for the Commercial and Industrial Customers: GPSC Docket No. 4132-U; CUC File No. 92008.
In Re: Savannah Electric and Power Company's Application for Certification of Demand-Side Programs for the Commercial and Industrial Customers: GPSC Docket No. 4135-U; CUC File No. 92014.
In 1992, both Georgia Power Company ("GPC" or "Company") and Savannah Electric and Power Company ("SEPCO" or "Company") had integrated resource plans ("IRPs") adopted by the Commission. These plans included demand-side programs ("DSM") for the residential as well as the commercial and industrial ratepayers. The purpose of the IRPs was to develop a comprehensive plan for meeting Georgia's electrical needs for the future. The plan was to be used as a blueprint to integrate both supply-side measures and demand-side measures so that Georgia's energy needs could be met in the least cost alternative.
Subsequent to the IRP Orders, the Companies filed applications for the certification of certain residential as well as commercial and industrial ("C&I") demand-side programs. Prior to a hearing on the programs, the Companies withdrew all of the programs designed for large commercial and industrial customers. The CUC objected to the withdrawal on the basis that separate consideration of residential and C&I DSM programs would lead to inconsistent or unbalanced development of demand-side programs.
The revised C&I applications were filed in December, 1992. The Companies presented their direct case at hearings held on March 3rd through 10th, 1993. Prior to the Intervenor portion of the proceedings held April 13th through 15th, 1993, GPC, the Adversarial Staff, Georgia Industrial Group ("GIG"), Georgia Textile Manufacturers Association ("GTMA "), Atlanta Gas Light Company ("AGL") and Southwire Company ("Southwire') signed a Stipulation resolving some of the issues in the case. Testimony in support of the Stipulation was presented contemporaneously with the Intervenor portion of the proceedings. The CUC, the National Federation of Independent Business ("NFIB") and the Southern Environmental Law Center ("SELC") opposed the Stipulation.
The CUC recommended that the Commission deny the Stipulation for several reasons:
1. A lack of equity existed between the residential and small commercial DSM programs and the large C&I programs;
2. The Companies' ftlings were contrary to that which the Commission had authorized in its IRP Orders;
Appendix D - 1

3. CUC recommended, as in the residential proceeding, that the Commission reject the incentive rewarded to the Companies as excessive; and
4. CUC urged the Commission to reject the rider mechanism included in the Stipulation as an inappropriate method of cost recovery.
The Commission accepted the Stipulation as presented by the parties and issued an Order on August 6, 1993.
The Georgia Industrial Group vs. Georgia Public Service Commission: Fulton Superior Court Docket No. E-12499; CUC File No. 93031.
On March 1, 1993, the Georgia Industrial Group ("GIG") filed a petition for judicial review of the Commission's decisions in the Georgia Power Company Residential Demand-Side Certification and Supply-Side Certification dockets. The basis of GIG's appeal was two-fold. First, GIG argued that permitting Georgia Power Company to recover more than $4.9 million in interruptible service credits was erroneous. Second, GIG contended that the rider implemented was contrary to the provisions of the test year statute and as such violated longstanding regulatory legal principles.
The CUC filed an entry of appearance in Fulton Superior Court on March 8, 1993. The case had originally been assigned to Judge Holmes-Cook' however, it was subsequently transferred to Judge Phillip Etheridge. Georgia Power Company ("GPC") and Savannah Electric & Power Company ("SEPCO") joined the respondents in the appeal and Georgia Textile Manufacturers Association ("GTMA") and Southwire Company entered an appearance to argue in agreement with the petitioner.
On June 8, 1993, GPC filed a motion to dismiss the appeal arguing that GIG lacked the requisite standing to challenge the implementation of a residential DSM rider. The Motion was denied. During the pendency of this appeal, the Commission rendered a decision in the C&I DSM filing and authorized recovery for DSM related costs through yet another rider assessed to commercial and industrial customers. That case was consolidated into the instant appeal.
Oral argument was heard by the Court on October 15, 1993. GIG, CUC and GTMA argued that the Commission exceeded its statutory authority by allowing GPC to implement the rider outside of a test year examination of all other revenues and expenses. The Respondents argued that the rider was specifically provided for in the Integrated Resource Planning statute so that no disincentive existed in connection with conservation efforts by the Company. Ruling from the bench, Judge Etheridge reversed the Commission s Orders authorizing the riders in question.
On October 22, 1993, an Order was signed by the court stating that the IRP statute requires DSM costs be recovered in rates and that the Commission must use existing ratemaking procedures in allowing for recovery. A Consent Order was also signed by the Court and all
Appendix D - 2

parties agreed that, during the appeal, if any, GPC shall not apply the rider to custo'mers' bills and shall not collect revenues under the riders unless and until the court's decision is reversed.
In its Administrative Session on November 2, 1993, the Commission voted unanimously to reject the Attorney General's recommendation to appeal the case further and also prohibited the Attorney General's office from joining any appeal on behalf of the Commission. GPC filed its Notice of Appeal to the Court of Appeals on November 5, 1993.
CUC's Request that the Commission Reverse the DSM Riders Implemented by Savannah Electric & Power Company; GPSC Docket No. 4135-U.
In light of the Superior Court's Order which prohibited Georgia Power Company ("GPC") from collecting demand-side management ("DSM") program costs through an automatic adjustment or rider (summarized above), the CUC requested that the Commission reverse, upon its own motion, those portions of the Commission Orders which approved the use of riders in connection with costs incurred by Savannah Electric & Power Company ("SEPCO"). The CUC noted that to permit SEPCO to continue the implementation of its DSM cost recovery riders while prohibiting GPC from doing so is clearly a violation of the rights of SEPCO's ratepayers to equal protection and due process of the law. The request was made on December 1, 1993. A decision is expected in early January 1994.
Georgia Power Company's Request for Accounting Treatment of DSM Costs: GPSC 4132-U; CUC File o. 93095.
In a letter to the Commission dated October 27, 1993, Georgia Power Company ("GPC") requested that accounting order be entered to confirm the correct accounting procedure for GPC's DSM costs that would have been collected under the riders which were overturned by the Superior Court (summarized above). Specifically, the Company sought Commission approval to defer, and accrue a return on the unrecovered balance of, all costs that were to be recovered in the riders.
The CUC, the Georgia Industrial Group ("GIG"), and the Georgia Textile Manufacturers Association ("GTMA") sought and the Commission held oral argument on November 22, 1993. Briefs were filed by the parties on December 1, 1993. The CUC made three specific recommendations that the Commission: 1) enter an accounting order which authorized GPC to accrue and begin amortizing all appropriately incurred DSM program cost, but which excluded all costs that are not related to demand-side management, such as interruptible service credits and standby generation (allowing the Company to earn a rate of return equal to GPC's current cost of capital on the unamortized portion of the deferred costs); 2) require GPC to provide a detailed accounting by subaccounts on the accrued costs; and 3) that the accounting order provide for Commission flexibility in determining what costs are recoverable at the time the request is made.
Appendix 0 - 3

In its December 7, 1993, Administrative Session, the Commission adopted the Commission Staff's proposed Order which allows GPC to defer all the costs that had been included in the riders (including interruptible service credits and standby generation) with a carrying cost equal to the Company's AFDUC rate. An appeal of this Order is expected.
In The Matter of Fuel Substitution Investigation Pursuant to Georgia Public Service Commission Order: GPSC Docket No. 4692-U; CUC File No. 93082-U.
The Joint Stipulation accepted and adopted by the Commission in the proceeding which granted applications for certificates for the commercial and industrial demand-side management programs (summarized above) provided for several additional filing requirements. This docket was opened for purposes of complying with the following provision:
Georgia Power Company and Atlanta Gas Light Company shall present information to the Commission staff relating to marginal rates, externality values, utility discount rates, customer discount rates, societal discount rates, inflation rates, loss factors, avoided energy costs, and avoided capacity costs. Each utility that is proposing or implementing DSM programs shall provide the Commission Staff with a benchmarking analysis of the tools to be used in the analysis of energy efficiency options for all their customers, to ensure that those tools are providing results which are consistent with one another and with other widely accepted tools in the market (such as the Department of Energy's DOE 2 and MICRO-DOE models). Additionally, the Commission Staff shall seek data regarding base case energy consumption, monthly load profiles, peak day adjustment factors, incremental costs, target population of DSM measures, appliance saturation rates, costs of appliances and equipment, penetration rates, free riders, and any other information necessary for the Staff to perform its duties. If the Commission Staff requests information which a party deems to be proprietary and confidential, the party(ies) shall seek a protective order in the Fulton Superior Court which would allow the Commission Staff to examine such data. Nothing in this stipulation shall be deemed to waive the rights of the Georgia Public Service Commission or the Consumers' Utility Counsel to contest arguments made by any party in attempting to seek such a protective order. The Commission Staff shall propound an initial set of this Joint Stipulation, and shall submit a preliminary report regarding these matters to the Commission within one hundred twenty (120) days of this Joint Stipulation. (Joint Stipulation, Para. 3, Staff Ex. 2, at 6-7 )
The Commission Staff issued data requests to Georgia Power and AGL on August 23, 1993. The responses have been received and are being analyzed. No scheduling order has been issued by the Commission.
Appendix D - 4

In Re: Georgia Power Company's Application for Certification of the Robins Combustion Turbine Project: GPSC Docket No. 4311-U; CUC File No. 93015.
Georgia Power Company ("GPC" or "Company") filed an application on January 29, 1993, pursuant to O. C. G. A. Section 46-3A-I, et seq. to have two combustion turbines certified for use in 1995 at the Robins Air Force Base ("Robins CTs"). The CUC intervened in this proceeding on February 1, 1993. A hearing on the Company's direct case was held May 3, 1993, and the intervenor portion of the case was presented to the Commission on July 15, 1993.
The CUC pointed out to the Commission that GPC had failed to properly evaluate all options which could have provided the capacity at a potentially lower cost to ratepayers, such as purchased power or expanding use of interruptible service. CUC, therefore, urged the Commission to require the Company to comply with Commission rules and evaluate all viable . capacity alternatives in future certification applications. Additionally, CUC noted that this need for capacity had not been identified in any of the numerous proceedings surrounding GPC's Integrated Resource Plan, which had just been filed the year before. The Plan is a twenty-year blueprint for supplying the state s future energy needs and certainly should have incorporated the anticipation of this peaking capacity just two years from its filing.
The CUC agreed that the evidence presented in the proceeding clearly indicated that GPC has a need for the peaking capacity in 1995, but expressed concern to the Commission regarding the excess cost of locating the units at the Robins site. In a letter to the Commission on July 21, 1993, GPC agreed to lower the requested certificated cost to that equal to what had been shown to be the most economical site, or by approximately $2 million. The Company also stated that it would not be filing rebuttal testimony and requested that the proceedings be accelerated.
On September 7, 1993 the Commission granted the certificate to construct the Robins CTs and directed the Company in future certificate filings to make application consistent with the IRP, the IRP statute and Commission rules.
In Re: Implementation of the Commission Supply-Side IRP Decisions on December 15, 1992, Regarding Purchased Power and the Issues Contained in the Federal
Energy Policy Act of 1992: GPSC Docket No. 4384-U; cue File No. 93050.
The Commission opened this docket to investigate purchased power considerations relating to its decision in the 1992 Supply-Side Certification case concerning Georgia Power Company ("GPC") and Savannah Electric and Power Company ("SEPCO"), Docket Nos. 4133U and 4136-U. The Commission's procedural order in this docket identified six issues to be addressed by the parties: the four areas of general evaluation set out in Section 712 of the Energy Policy Act of 1992 ("EPACT"); procedures for Requests for Proposals ("RFPs") for power purchases; and the type and amount of the "additional sum" to be recovered to encourage long-term power purchases pursuant to O.C.G.A. 46-3A-8.
Appendix 0 - 5

The CUC intervened in this proceeding on May 7, 1993. The Companies' direct case was heard before the full Commission on June 22, 1993. Hearings on the intervenor portion of the case were heard on August 2, 1993, and the Companies' rebuttal hearings were conducted on September 1, 1993.
EPACT required the Commission to consider the evaluation of the cost of capital effect of purchased power. GPC proposed to allocate the alleged additional risks associated with purchasing capacity from Independent Power Producers ("IPPs ") by treating some portion of the utility's contract payments as equivalent to debt financing. CUC and other parties pointed out to the Commission that any additional risks that may be associated with purchasing capacity as opposed to building capacity could be alleviated by careful contract construction. The Commission decided that it will determine on a case-by-case basis whether the specific purchased power option will have an impact on the utility'S cost of capital and whether this impact should be considered in evaluating the purchased bid.
In response to EPACT's requirement that the Commission consider the merit of conducting a general evaluation concerning exempt wholesale generator's (IOEWGs") capital structure, GPC raised two issues: the high debt leverage of the IPP creates a financial risk for the IPP; and this high debt leverage gives the IPPs an unfair advantage over utility selfconstructed capacity. The Commission accepted the recommendation of many intervenors including CUC, which was not to allow the Company to impose an anificial penalty on the price of IPP power or an artificial discount on the cost of utility self-generation.
The third EPACT issue considered by the Commission was whether to implement procedures for the advance approval or disapproval of the purchase of a panicular long-term wholesale power supply. This is not an issue in Georgia because the integrated resource planning statute already requires advance approval. And last, the EPACT requirement for the Commission to consider an evaluation of assurances of fuel supply adequacy was considered and determined by the Commission to be a case-by-case determination during the cenification proceedings.
The two issues that the Commission specifically asked to be addressed by the parties were areas of greater contention among the panies. CUC, and the majority of other intervenors in the case, agreed with the Commission Staff that rules (or guidelines) for the Company's RFPs should be issued by the Commission. CUC urged the Commission to accept the Staff's proposed rules which would serve to enhance the process of purchasing power and ensure that it is consistent with the companies' integrated resource plans. The CUC agreed that the absence of such clear, basic guidelines would inhibit the development of competitive and fair processes and that approving the proposed rules would be to the ratepayers' benefit. The Commission, in its Order, did not adopt the nine rules proposed by Staff but elected to implement them through the rulemaking procedure prescribed by the Administrative Procedure Act. The Commission also directed the utilities to consider the rules as guidelines in soliciting and evaluating purchase power bids in the interim.
Appendix D - 6

Lastly, the Commission accepted the CUC's recommendation on the issue of whether the utility should be awarded an "additional sum" to encourage use of purchased power options. The CUC stated that in general, there is no basis for an "additional sum" to compensate the utility for some alleged hidden cost such as for off-balance sheet liabilities. Any incentives, the CUC stated, should be set on a case-by-case basis to allow for recognition of the fact that each purchased power contract should be negotiated on an individual basis, to obtain the best and lowest cost options for ratepayers.
The Commission issued its Order in this docket on October 19, 1993. No schedule has been set as yet for the rulemaking procedure.
In Re: Review of Trading and Usage of, and the Accounting Treatment for, Emissions Allowances by Electric Utilities in Georgia: GPSC Docket No. 4152-U;
cue File No. 92019.
On February 21, 1992, the Commission issued a Notice of Inquiry to all affected parties regarding the creation of a docket established to investigate the accounting treatment for the emission allowances mandated by the federal Clean Air Act Amendments of 1990 ("CAAA"). The purpose of the docket is to determine what regulatory oversight would be necessary and appropriate for allowance trading and what accounting and ratemaking treatment should be used for allowances. Because the Commission's decision in this docket will have a very significant impact on the rates and charges paid by current and future customers of Georgia s two main investor-owned electric utilities, Georgia Power Company ("GPC") and Savannah Electric & Power Company ("SEPCO"), CUC intervened in this matter on March 2, 1992, and filed extensive Reply Comments. Counsel wants to ensure that residential and small commercial ratepayers are treated equitably under any proposed regulatory or accounting treatment for these allowances.
The 1990 Amendments can be divided into three major areas of new air quality compliance requirements: the sulfur dioxide (S02) reduction program; the National Ambient Air Quality Standards; and the required installation of continuous emissions monitors (CEMs). In the regulatory context, the most significant portion of the legislation is the S02 reduction program, which consists of two phases. Phase I (1995-2000) is an interim, 'gear shifting' period during which the affected coal generating units of electric utilities must reduce their S02 emissions to 2.5 pounds per million BTU. In Phase II, the definition of 'affected units' broadens substantially, and these units must reduce S02 emissions to 1. 2 pounds per million BTU. In order to help utilities meet these stringent requirements, Congress devised an elaborate system of emissions allowances. Based upon a predetermined historical baseline period for the affected units (1985-87), the Environmental Protection Agency ("EPA") will issue free' allowances to utilities with affected units. Each allowance is a registered certificate which permits the bearer utility to emit one ton of S02. Utilities will receive decreasing numbers of the 'free' allowances in Phase II; accordingly, in order to comply, the utilities must either conserve allowances in Phase I by significantly reducing emissions, buy a sufficient number of allowances on the open
Appendix D - 7

market, or do some of both. Utilities that do not possess an allowance for each ton of S02 produced will face stiff civil and criminal penalties.
CUC proposed a detailed plan of action for the Commission to follow as it proceeds in this matter. Specifically, Counsel urged the Commission to: 1) ensure that allowance trading is not unnecessarily restricted; 2) consider CAAA compliance as a key aspect of the IRP which should be reviewed in each IRP hearing; 3) pre-approve appropriately drafted CAAA plans based on what is known at the time of the approval (similar to the procedure followed in CAAA plans), keeping in mind, however, that the utility should be prepared to continue making prudent CAAA decisions as modifications to the approved plan become necessary; 4) specify that fInal CAAA compliance costs must pass both a "prudence review" and a "used and useful" cost test, as established by the Commission; 5) review the cost recovery of gains and losses due to allowance trading, and also for recovery of CAAA compliance costs before attempting to determine the sharing of risk to be assumed by ratepayers and shareholders; 6) decline to establish the utilities' proposed "environmental clause", which would serve to pass through CAAA compliance costs; 7) establish formalized reviews of fuel costs and CAAA variable compliance costs in fuel hearings; 8) create a deferred account for net investments in banked allowances (similar to plant for future use), on which ADFUC would accrue; 9) order the companies to flow through the return on investment in a reasonably sized contingency reserve of allowances to ratepayers in current base rates by including the investment in the base rate; and 10) decline to implement management/stockholder incentives for CAAA compliance.
During its July 20, 1992 Administrative Session, the Commission voted to defer consideration of the hearing schedule for this docket until after the schedule for DSM and supply-side certification dockets for Georgia Power and SEPCO had been completed. The Commission also consolidated the Clean Air Act issues in the certification and IRP dockets with the issues in this docket.
In accordance with the Commission's Scheduling Order in this docket, issued on May 7, 1993, GPC and SEPCO filed their respective companies' direct testimony. Because of the fact that 23 GPC generating units are affected during Phase I of the CAAA requirements and no SEPCO units are affected during that same time period, CUC and the other intervenors naturally concentrated on the GPC compliance plan. GPC's plan calls for reducing S02
emissions by switching from the 3 % sulfur coal currently burned at the company's affected units
to 1% sulfur coal. By reducing emissions in this manner instead of installing air scrubbers or switching to natural gas, GPC states that it has set upon the least-cost way in which to build up a sufficiently large bank of allowances during Phase I to help comply with the more stringent Phase II requirements.
CUC's testimony filed in connection with this docket concentrated on several aspects of GPC's compliance plan that have the most potential to negatively impact residential and small commercial ratepayers. First, CUC urged the Commission to require GPC to 'fine tune' its proposed methodology for allocating EPA granted allowances. SpecifIcally, the retail and wholesale jurisdictions should be defined more precisely in order to distinguish retail service
Appendix D - 8

customers, wholesale requirements service customers (either all or partial requirements), wholesale long-term service customers (out-of-state utilities not included in the Southern Company System), and wholesale 'other' service customers (i.e., those who do not fall into either the requirements service or the long-term service categories, such as purchasers of economy power). CUC recommended that the allocation of EPA granted allowances between these customer categories should follow the same percentage split used to allocate generating unit capital costs in the jurisdictional rate base in the most recent test year used for rate cases. If the Commission follows this approach, only one bank of allowances will be needed, instead of GPC's proposal to create separate banks for "retail" and "wholesale" allowances.
In addition, CUC recommended that the Commission require GPC to "hedge its bets" in connection with future allowances prices on the open market by ordering the company to sell some portion (preferably, 50 %) of the excess allowances it generates during Phase I, and bank the remaining excess allowances. As a result, the intergenerational inequity caused by the relatively heavy early year rate impacts of Clean Air Act compliance costs would be reduced, because the income generated by selling allowances during Phase I could be flowed through the fuel adjustment clause to offset these early year costs paid by current and Phase I ratepayers. In the event that GPC does not sell any allowances in any given year during Phase I, CUC asked that the Commission impute for ratemaking purposes the market value of a hypothetical sale of some portion of allowances (again, 50% was recommended) banked each year during Phase I. This imputed value could then be flowed through to ratepayers in order to provide an immediate rate reduction, thus offsetting the rate increases caused by other early year CAAA compliance related costs.
With regard to the amount that each jurisdictional class of customers will pay for the allowances consumed because of their purchases. CUC made the following recommendations. First, GPC retail customers and the requirements service customers should pay only the weighted average cost of banked allowances, some of which will come from the EPA and some of which will come from the market. Second, the long-term service customers should potentially get some "free" allowances based on the number of EPA granted allowances allocated to the generating units from which the sales are contracted. Third, the economy sales customers and the Southern Company pool members should be required to pay the full market value for all allowances used to generate the power they purchase. Finally, CUC recommended that the Commission require GPC to use its best efforts to have the Southern Company petition FERC in the near future to reconsider all of its FERC economy power tariffs so that allowance costs can be included in the energy charges at the onset of Phase I in the above-described manner.
The next recommendation dealt with the potentially harmful impact of speculative allowance transactions upon ratepayers. CUC asked that the Commission adopt a set of guidelines designed to ensure that both GPC and SEPCO ratepayers are completely financially sheltered from the adverse consequences of these kinds of transactions. The set of guidelines should, at a minimum, require members of the Southern Company pool to sell all allowances at market value regardless of whether they sell allowances either from one account to another (i.e., from
Appendix D - 9

the "compliance" account to the "speculative" account) within the same utility, or from one account to another between two member companies.
CUC's final two recommendations in this docket dealt with the allocation of bonus allowances generated by a 'one-shot' deal between GPC and certain utility interests in Pennsylvania, and with the allocation of costs associated with controlling nitrous oxide (NOx) emissions and with other CAAA compliance requirements. CUC recommended that the Commission allocate all of the 9,200 allowances acquired by GPC through its KeystoneConemaugh deal to the GPC's retail customers, thereby apportioning none to the company's stockholders. As for the costs of controlling NOx emissions and the costs of other CAAA compliance requirements, CUC asked that the Commission allocate these costs on an energy basis, as opposed to allocation on a demand basis.
Hearings in the company direct testimony phase, the intervenor testimony phase, and the rebuttal phase of these proceedings were held before the Commission on June 29-30, September 2, and on October 19, 1993, respectively, and the initial and reply briefs were filed by the parties on November 15 and December 6, 1993, respectively. The most notable recommendations contained in the parties' briefs were Georgia Power's suggestion to, in effect, defer all regulatory determinations of consequence in connection with this docket until a later date and the Staff s proposal that the Commission authorize a final round of comments for the purpose of gathering more information regarding certain key ratemaking issues. CUC will continue to actively participate in this very important docket.
Georgia Power Company: Revision to Real Time Pricing Tariff: GPSC onDocket; CUC File No. 93057.
In 1992, Georgia Power Company ("GPC" or "Company") filed an application with the Commission to implement a new experimental rate called Real Time Pricing ("RTP"). The tariff was filed in an effort to encourage large industrial customers to shift their load to off-peak periods by having rates during these periods reflect the actual costs of generating and transmitting the electricity to the customer. Generally, off-peak production is significantly less expensive than peak production. The filing was supported by CUC and Staff and the tariff was approved by the Commission after a hearing on the matter.
On May 7 1993, GPC filed an application with the Commission to amend the tariff so that prices would be provided on an hourly as opposed to day-ahead basis. The Company also proposed allowing customers taking service on the interruptible service rider ("IS ") to take service under the RTP. Initially, CUC was concerned that the IS customers may unfairly benefit and/or create a revenue erosion if they were allowed to receive service at the lower RTP rate during curtailments. However, after meeting with GPC, certain restrictions were included in the tariff language to prevent any "double dipping." The Commission approved the amendments at its May 18, 1993, Administrative Session.
Appendix D - 10

Georgia Power Company - Notice of Acquisition by Associate Company of Interest in a Foreign Utility Company: GPSC non-docket; CUC File No. 93076.
As required by statute, Georgia Power Company gave notice in August to the Commission of the Southern Company's purchase of Hidroelectrica Alicura, a hydroelectric generating facility in Argentina. No Commission action was required in this matter. The CUC also received notice of the transaction and duly noted the acquisition for its files.
Filing of Georgia Power Company Changing Fuel Cost Recovery Rate: GPSC Docket No. 4798-U; CUC File No. 93086.
On October 13, 1993, Georgia Power Company ("GPC") filed notice of its intent to increase its fuel cost recovery rate pursuant to O.e.G.A. Section 46-2-26(c) which provides for rate changes based solely on a change in fuel costs. The existing Fuel Cost Recovery Schedule (FCR-12) had been approved by the Commission on December 17, 1991, however the Company estimated its cumulative underrecovery of fuel cost at the time of filing to be approximately $83.5 million. GPC proposed that the new schedule take effect on or after December 1, 1993.
GPC's expert witness testified on November 9, 1993. Expert witnesses gave testimony on behalf of the Staff on November 29, 1993. Oral argument took place on December 2 1993.
In addition to recalculating the fuel adjustment factor to collect the cumulative underrecovery, GPC adjusted the fuel clause to include both nuclear performance standards and proceeds from emission sales.
$8.5 million was proposed to be recovered over a 36 month period to reward GPC for exceeding industry standards in its performance related to Plants Hatch and Vogtle. The CUC expressed its concern that including in the fuel clause matters not clearly related to fuel costs would create more complex issues. These complex issues make it difficult to adequately evaluate GPC's filings within the 45 days provided for in O.e.G.A. Section 46-2-26(e). The CUC recommended that the Commission require GPC to file detailed and regular filings to allow for continual review of the fuel clause. The Staff recommended that the Commission adopt a policy of discouraging companies from including in their fuel clause filings costs, expenses and issues not directly related to fuel costs.
The Company also adjusted FCR-13 to reflect a credit to retail customers of approximately $955,000 for the retail portion of proceeds received from emission allowance sold at the EPA's annual allowance auction in March 1993. This proposal was also an issue in the Clean Air Docket. The CUC argued that it would be unfair to the parties in that pending docket to approve the split in this proceeding. The CUC asserted that the Commission should decide the issue on the evidence presented in the Clean Air Docket. The Staff recommended that the Commission approve this credit temporary basis.
Appendix D - 11

GPC proposed to charge customers at separate rates based on the loss incurred in providing the service for that voltage level. In the past, one uniform rate applied to all customers. The proposed change would charge smaller customers at a higher rate per kilowatt than large customers because it cost more to service these customers. The CUC opposed this new method. While GPC's calculations were not in dispute, the Commission has always considered other factors in setting rates. A uniform rate is easier to understand than separate rates. The precedent on the Commission is for having one rate for all customers. The Staff also recommended that the Commission deny the dual rate proposal.
The Commission adopted the Staff's recommendations on each issue.
FERC Transmission Services Notice of Inquiry: GPSC on-Docket; CUC File No. . 93090.
The Federal Energy Regulatory Commission ("FERC") issued a Notice of Inquiry on transmission pricing issues to interested parties. The ending date for filing initial comments was
ovember 8, 1993. In its response to FERC, the Commission Staff extracted only those questions pertaining to issues in which a state regulatory interest is involved.
The Commission's participation in this Notice of Inquiry is important because of certain issues dealing with the pricing of wholesale wheeling and its possible subsequent effect on the interests of Georgia's electrical consumers. The CUC reviewed the Commission's Comments for informational purposes.
In Administrative Session on October 19, 1993, the Commission approved the Comments prepared by the Staff to be sent to FERC in timely fashion.
Matter of Application of GPC to Establish TOU Rates; GPSC Docket o. 4755-U; CUC File No. 93077.
In compliance with the Commission Order in Docket No. 4132-U, Georgia Power Company ("GPC") filed its time-of-use rates (TaU) on September 1, 1993. The Order directed GPC to implement rate programs designed to shift electricity usage to off-peak periods.
On September 21, 1993, the Commission suspended GPC's proposed load management rates for five months beginning October 1, 1993. The Commission reasoned that it had not yet addressed issues vital to the proposed rates and that the remaining issues were complex. On October 28, 1993, the Georgia Industrial Group intervened. Campaign for a Prosperous Georgia also has intervened.
The TaU rate design encourages a shift in electric use to off-peak hours. The rates for on-peak use is six times higher than the rates for off-peak use. This reflects the reduced cost
Appendix D - 12

for GPC of producing at off-peak times. The rates that GPC proposed are open to all commercial and industrial customers. GPC filed three TOU rates, each designed to serve a different size customer. The energy-only TOU rate targets the small customers whose peak usage does not exceed 30 kilowatts. The general service demand TOU rate covers mid-size customers who use between 30 and 1,000 kilowatts. The special service demand TOU serves those customers who use more than 1,000 kilowatts.
The CUC approves of the general direction in which GPC moves with this proposal. In the past, the CUC has supported energy only rates and seasonal differentials in TOU rates.
However, the CUC does have concerns about the rate proposal. GPC's exclusion of residential customers from their TOU rates conflicts with the CUC's position that this class should have the option of TOU rates. The Company has agreed to discuss offering TOU rates to residentials in the future.
CUC is currently analyzing these rates for residential and small commercial rate impact. Direct testimony from the staff and intervenors is scheduled for December 20, 1993. GPC may file rebuttal testimony on January 12, 1994.
In Re: Request by Mid-Georgia Cogen L.P. that Commission Determine whether Cogeneration Facility Rate is at or below Georgia Power's Avoided Costs: GPSC Docket No. 4900-U; CUC File No. 93102. Mid-Georgia Cogen L.P. ("MGC") filed a complaint against Georgia Power Company ("GPC") stemming from the failed negotiations between the parties over the purchase price of energy and capacity. FERC requires that GPC purchase its energy and capacity from a cogeneration facility offering it for at or below GPC's avoided costs. Negotiations broke down when GPC refused both MGC's offer and their request for access to GPC's calculation of avoided costs.
MGC is asking the Commission to determine if the rate they offered is below GPC's avoided costs. If so, then MGC wants the Commission to order GPC to negotiate in good faith.
Appendix D - 13

NATURAL GAS CASES
Southern atural Gas Company v. Federal Energy Regulatory Commission: In the United States of America, Eleventh Circuit Court of Appeals Docket No. 92-9192; CUC File No. 90143.
Arcadian Corporation (" Arcadian"), the largest industrial customer of Atlanta Gas Light Company ("AGL"), filed a complaint against Southern Natural Gas Company ("Southern") before the Federal Energy Regulatory Commission ("FERC"). The complaint against Southern stemmed from Southern's refusal to provide direct service to Arcadian, thus bypassing the AGL system. After two years of extensive briefs and hearings, FERC rendered a decision ordering Southern to provide the requested direct service to Arcadian. Southern, as well as AGL, filed an appeal of the FERC decision to the Eleventh Circuit Court of Appeals. Other appeals were . filed in the D.C. Circuit Court of Appeals; however, the cases were consolidated with the Eleventh Circuit Appeal by consent. AGL filed a motion with the appellate court to stay the FERC decision.
CUC has been involved in this case since it began at FERC and has continued its participation on the appellate level. On December 14, 1992, the CUC filed an application to intervene in the appeal. As of the date of this summary, the case has not been noticed for docketing; therefore, the briefing schedule has not been set. Further the Court has not rendered a decision on AGL's petition to stay the FERC decision.
Arcadian Corporation vs. Georgia Public Service Commission: In the United States District Court of the orthern District of Georgia; CUC File No. 93032.
Arcadian Corporation ("Arcadian") filed a declaratory judgment action in the United States District Court for the Northern District of Georgia after the Commission rendered its decision in Docket No. 4270-U pertaining to the petition of Atlanta Gas Light Company ("AGL") to enjoin Southern Natural Gas Company ("SONAT") from providing natural gas directly to Arcadian prior to obtaining a Certificate of Public Convenience and Necessity from the Commission.
Atlanta Gas Light Company ("AGL") moved to intervene in the action and filed an answer denying the allegations of SONAT. As of the date of this summary, there have been no hearings scheduled or other pleadings filed in the case.
In Re: Atlanta Gas Light Company v. Southern atural Gas Company: GPSC Docket No. 4270-U; CUC File No. 92121.
Atlanta Gas Light Company ("AGL") filed a complaint against Southern Natural Gas Company ("Southern") which arose after an Order issued by the Federal Energy Regulatory
Appendix D - 14

I
Commission ("FERC") directed Southern to provide direct gas service to Arcadian Corporation ("Arcadian"). Arcadian is AGL's largest industrial customer and had filed a complaint before FERC against Southern when Southern had refused to provide direct gas service to Arcadian. FERC issued an order on the matter directing Southern to provide direct service to Arcadian and requiring that Southern immediately begin constructing the necessary pipeline to provide such service. Several parties filed motions for reconsideration before FERC as well as filing appeals before the D.C. and the Eleventh Circuit Courts of Appeal.' Although the FERC decision ordered Southern to provide natural gas directly to Arcadian, the Order said nothing about Southern being exempt from acting in accordance with Georgia law when providing this gas to Arcadian. Since Southern was preparing to provide natural gas directly to Arcadian without obtaining a Certificate of Public Convenience and Necessity from the Commission, AGL filed the instant complaint asking the Commission to order Southern to comply with the laws of the State.
At the January 5, 1993, Administrative Session, the Commission ordered the parties to pre-file testimony for a hearing to be held on January 19. The CUC intervened in the matter and participated in the hearing on January 19. Southern, as well as the Georgia Industrial Group, argued that the Commission lacked jurisdiction to render a decision in the case and that AGL's complaint was merely a collateral attack on the FERC decision. The CUC's primary concerns were that the authority of the Commission and state regulation would be undermined by this decision and that other large industrial customers would attempt to obtain direct service from other natural gas pipelines. The financial ramifications of losing the Arcadian load would have been $4 million annually which would have to be recovered from other ratepayers on the AGL system.
The CUC and AGL argued that the excess gas resulting from deliveries ("negative imbalances") provided to Arcadian was a "sale" under Georgia law and therefore required Commission approval prior to making these sales. Southern and Arcadian contended that the negative imbalances were incidental to the interstate transportation of natural gas and therefore were under the exclusive jurisdiction of FERC. All parties filed briefs on January 25, 1993.
The Commission decided in a Special Administrative Session held on February 2 1993, that the gas sale would fall within Commission jurisdiction anytime the negative imbalances
exceeded 5 % of the total gas nominated by Arcadian.
CUC, AGL, and Southern filed motions for reconsideration and rehearing. Another evidentiary hearing was held on April 22, 1993, at which time all of the parties had an opportunity to present new evidence and oral argument. Southern also filed a motion to stay the monthly reporting obligations contained in the Commission's initial decision pending a resolution of the petition for declaratory judgment filed by Southern in the United States District Court. The petition to stay was denied by the Commission at its Administrative Session held on April 20, 1993. All of the parties filed briefs on May 12, 1993.
2 These appeals are summarized above in this report.
Appendix D - 15

In its Order on Rehearing and Reconsideration issued October 21, 1993, the Commission concluded that Southern is offering direct sales service in Georgia and is therefore engaged in the operation of a gas pipeline without having secured a Certificate of Public Convenience and Necessity from the Commission as required by law. The Commission allowed Southern 30 days from the date of the Order (November 20, 1993) to comply with these provisions.
In its Administrative Session on November 11, 1993, the Commission granted an extension to Southern until December 20, 1993. The request was made by the Attorney General's office, with agreement of all parties, due to the pending federal suit which had set November 19 as the date for hearing a request for a preliminary injunction against the Commission. The extension was granted to avoid the difficulty of preparing both for the preliminary injunction hearing and summary judgment response within the deadline.

In Re: Atlanta Gas Light Company's Integrated Resource Plan: GPSC Docket o. 4267-U; CUC File o. 92120.

In the Atlanta Gas Light Company's ("AGL" or "Company") 1991 rate case, Docket No. 4011-U, the Commission required AGL to file an Integrated Resource Plan ("IRP"). Integrated Resource Planning focuses on the implementation of the least cost method of meeting ratepayers' requirements by integrating supply and demand-side resources ("DSM"). In the natural gas industry, supply-side resources are centered on the method of procuring natural gas supply such as firm contracts or through the spot market purchases. Demand-side resources concentrate on reducing consumption at the consumer or end-user level so that additional energy obligations need not be incurred by the Company. Conservation measures, as well as load management devices such as time-of-use rates, are examples of demand-side resources.

Pursuant to the Commission's order, AGL filed its IRP on December 18, 1992. The CUC intervened in the proceeding on December 23 1992, and deposed Company witnesses on March 5th, 1993.

AGL's proposed IRP contained eight conservation DSM programs. Four of the programs were residential weatherization programs including the installation of high efficiency gas appliances. The other four DSM programs were as follows:

1. Customized commercial and industrial programs which include weatherization as well as the installation of high efficiency gas equipment;

2. The natural gas vehicle program which is designed to provide incentives to individuals, governmental entities, and businesses that use natural gas vehicles;

3.

..Additional interruptible service tariffs for commercial and industrial customers;
and

Appendix 0 - 16

4. The development of new gas technologies.
According to the Company's estimates, the conservation DSM programs were expected to reduce natural gas consumption on the AGL system by 66 million therms annually, whereas those programs designed to increase demand strategically would increase consumption during off-peak periods by 25 million therms.
In addition to the DSM programs, AGL also proposed a portfolio of supply-side options to meet ratepayers' demand which would purportedly reduce the cost of natural gas by 5.8 cents per therm by the year 2002.
An area of particular concern for the CUC was the Company's proposed regulatory treatment for DSM expenses and incentives. AGL requested that the Commission approve the Company's proposed IRP Cost Recovery Rider which is designed to recover both DSM program costs as well as a performance based incentive only from general service customers and not interruptible service customers. In addition, the Company proposed several allegedly revenue neutral changes to its rate design to augment DSM and requested that a working group be created by the Commission to further cooperation among the interested parties.
Hearings were held on the Company's direct case on March 31 through April 2, 1993. The CUC raised the following issues during the course of the Company's direct testimony and the presentation of the CUC's case:
1. The failure of the Company to analyze the effect of the Menu of Services program on the price of gas for firm ratepayers;
2. The collection of DSM program costs only from general service ratepayers who include both residential and small commercial customers;
3. The proposal to charge the ratepayers for the research and development of natural gas vehicles;
4. The attempt to recover previously disallowed promotional advertising expenses by including it as the only incentive in the Energy Wise New Home demand side management program;
5. The proposed DSM program for large commercial and industrial customers contained no specific measures or incentives;
6. The Company attempted to re-design its rate structure to recover all of the costs in the demand rather than the commodity component of rates. This methodology is contrary to the concept of conservation for it rewards those who use the most gas; and
Appendix D - 17

7. The Company proposed recovery of an incentive for replacing high efficiency heating equipment because it was not based upon the amount of energy savings achieved through these high efficiency appliances but rather upon the number of installations.
After the conclusion of the Company's direct case, the Adversarial Staff filed a motion with the Commission to consolidate the IRP proceedings with the rate case that had been filed on March 31, 1993 (summarized below). The Commission held oral argument on the motion and subsequently denied the petition to consolidate the two proceedings.
Briefs were filed by all of the parties on June 16, 1993. At its June 22, 1993, Administrative Session the Commission denied the entire filing of AGL. The Company then filed a motion for reconsideration. Oral argument on the motion was heard before the full Commission on July 20, 1993.
The Commission reconvened in a Special Called Administrative Session on August 5, 1993, and voted, upon reconsideration, to approve AGL's IRP filing with clarification on the collateral issues of fuel neutrality and certain program and cost recovery modifications.
In Re: Filing of Atlanta Gas Light Company to Increase Rates and Charges for Gas Service: GPSC Docket No. 4451-U; CUC File No. 93038.
On March 31, 1993, the Atlanta Gas Light Company ("AGL" or "Company") filed an application with the Commission to increase its rates by $62,530,000, almost $20 million more than was requested in the Company's 1992 rate case. If the new rates were approved as filed, the overall revenues of the Company would have increased by 6.11 percent excluding gas costs. AGL has filed an annual rate case for the past fourteen years.
According to the filing, the primary motivation for the rate increase request was prompted by: a substantial capital investment required for the test year; an increase in the number of customers; competition from alternative energy sources both regulated and unregulated; the impact of by-pass; restructuring of the natural gas industry due to FERC Order 636; and the implementation of the accounting change for post-retirement benefits.
The CUC intervened in this case and propounded two sets of data requests in an effort to detennine the appropriateness of the test year expenses and proposed rate design changes. At its April 20, 1993, Administrative Session the Commission declared the matter complex litigation and suspended the rate schedules for five months. The Company's direct case was heard before the full Commission on July 6,7, and 8, 1993. The CUC sponsored two witnesses to address pertinent issues on behalf of residential and small commercial consumers during the intervenor phase of the proceeding. Briefs were filed by all interested parties on September 22, 1993, after AGL had an opportunity to present rebuttal testimony.
Appendix D - 18

CUC made several recommendations to the Commission concerning the Company's rate base and net operating income. CUC urged the Commission to accept its recommendations and adjustments to the following projected expense items: budgeted work force level; postretirement benefits; promotional expenses; American Gas Association ("AGA") dues; regulatory expenses; antitrust legal expenses; injuries and damages reserve accruals; current income tax; deferred income tax; and interest synchronization.
CUC also took issue with AGL's class cost of service study which is conducted to assist in the detennination of the level of costs properly associated with the utility service provided to each of the various classes. CUC presented evidence to the Commission which indicated that the methodology used by AGL tended to overstate the cost associated with serving the residential class of customers and that other cost misallocations were included in the study. CUC also provided a revised cost of service study and a proposed rate design consistent with cost and revenue allocation recommendations presented.
The Commission in its initial Order issued on October 1, 1993 granted AGL a revenue
increase of $11, 166,000, less than 18 % of the amount requested.
AGL petitioned the Commission for Rehearing, Reconsideration and Oral Argument only on the rate design issues reflected in the Order. At its Administrative Session on November 2, 1993, the Commission voted to grant reconsideration and hear from all parties regarding the revenue allocation and rate design aspects of the Order. As of the date of this summary, a final decision has not been rendered by the Commission.
Atlanta Gas Light Company's Proposed Buy/Sell Rider; GPSC Non-Docket; CUC File o. 93085.
On October 12, 1993, Atlanta Gas Light Company ("AGL" or "Company") filed a modification to its existing Interruptible Gas Cost Adjustment Rider. The rider was proposed to pennit interruptible customers to sell gas supplies to the Company at a receipt point on a pipeline, and for the Company to sell the gas back to the customer at a pipeline delivery point on the Company's system for subsequent delivery to the customer under the Interruptible Delivery Service Rider. The difference between the price paid by the Company to the customer and the price paid by the customer to the Company was proposed to be no less than AGL's incremental cost of transporting the volumes to the Company's system. All gas costs to the Company were proposed to be debited to the current commodity costs under AGL's Purchased Gas Adjustment ("PGA") Rider, and all revenues received were proposed to be credited to the current commodity cost under the PGA.
The tenns of the Federal Energy Regulatory Commission's orders implementing Order 636 allow for buy/sell arrangements for interruptible customers to operate after restructuring, provided that the buy/sell arrangement was in place prior to November 1, 1993. Given the short time frame involved, CUC did not object to the filing. However, to ensure that this arrangement
Appendix 0 - 19

would not work to the detriment of the Company's fInn ratepayers, CUC provided proposed fIling requirements to be made by the Company to the Commission and CUC so that the effectiveness of the program can be monitored. On October 20, 1993, the Commission considered and approved the rider on a one year interim basis subject to the reporting requirements proposed by CUC.
Request of Atlanta Gas Light Company for Redefinition System Certificate Boundaries In Cobb County, Georgia: GPSC Docket os. 1056-U, 1796-U, and 3135-U; CUC File No. 93014.
Atlanta Gas Light Company ("AGL" or "Company ") filed a petltlon with the Commission to redefine its distribution boundaries in Cobb County, Georgia on January 13, 1993. SpecifIcally, the area AGL was seeking to serve can also be served by the City of Austell. The City of Austell filed a letter with the Commission contemporaneous with AGL's application stating that it had no opposition to the Company's filing. The Commission approved this application at its February 22, 1993, Administrative Session.
Request of Atlanta Gas Light Company for Redefinition of System Certificate Boundaries In Cobb County, Georgia: GPSC Docket 3526-U; CUC File No. 93013.
Atlanta Gas Light Company (" AGL") filed a petition with the Commission to redefine its distribution boundaries in Cobb County, Georgia on January 13, 1993. No opposition was filed to this application which was approved at the Commission's February 22, 1993, Administrative Session.
Atlanta Gas Light Company Requesting Authorization to Add the City of Macon to the Natural Gas Vehicle Service Rate V-52 as One of the Initial 15 Customers: GPSC Docket No. 4667-U; CUC File No. 93093.
In May, 1991, the Commission approved Atlanta Gas Light Company's experimental tariff for natural gas vehicles. The tariff was fIled to encourage customers with fleets to operate natural gas vehicles. To encourage this change, AGL proposed to assist customers with installing pumps to provide the natural gas.
The tariff as approved in 1991 included the following provisions:
1. Minimal levels of consumption were set as a condition of service for the first 15 customers.
2. At the time each of the first 15 customers begin service, AGL agreed to report to the Commission and tbe CUC the customer's name and address, cost of the refueling
Appendix D - 20

I
facilities, anticipated fleet size and usage patterns, estimated annual consumption, and calculated payback period; and
3. The cost for providing the refueling stations to the first 15 customers would be amortized over a five year period. The amount subject to amortization in the next rate case was not to be less than $1,050,000.
On July 30, 1993, AGL requested authorization to add the city of Macon to the experimental natural gas vehicle service as one of the initial 15 customers. (Several of the CUC's earlier concerns about the 1991 tariff were addressed in the above provisions.) The addition of the city of Macon was approved by the Commission in a Letter Order on October 14, 1993.
Consideration of Request for Proposed Rulemaking: GPSC Rule 515-9-1-.05, Leak Standards and GPSC Rule No. 515-9-3-.14, Utilities Protection Center: GPSC Docket os. 4835-U and 4836-U; CUC File 0 93099.
The Commission is proposing a new section to its Rules, Chapter 515-9-1, Safe Installation and Operation of Natural Gas Transmission and Distribution Systems. The proposed rule on leak standards will incorporate guidelines for classifying and repairing natural gas leaks into Commission Rules. The proposed rule which has been adopted by the American Society of Mechanical Engineers will give gas system operators and inspectors concrete definitions and courses of action to allow consistent enforcement of the regulations.
A new section is also proposed for Chapter 515-9-3, Enforcement Procedures Governing Gas Pipeline Safety. This rule change will make it mandatory for all gas distribution systems to comply with a federal mandate requiring membership in a one-call system. A one-call system allows a contractor to call one phone number to get all underground utilities in the area of proposed construction marked. This will make digging safer and protects all utilities.
Written comments on the proposed rulemaking are due on December 10, 1993. The adoption of these amendments will be considered in the Administrative Session on December 21, 1993. The CUC approves the adoption of the proposed rules.
Appendix D - 21

TELECOMMUNICATION CASES
Investigation into Cross-Subsidy Matters Relating to Southern Bell Telephone and Telegraph Company: GPSC Docket No. 3987-U; CUC File No. 91028.
On December 18, 1990, the Commission adopted an incentive regulation plan for Southern Bell Telephone and Telegraph Company ("Southern Bell" or "Company"). During the course of these proceedings, several parties asserted that incentive regulation increases the likelihood of cross-subsidization. Cross-subsidization can take any number of forms, but the term has been succinctly defined by the Commission to mean "any action undertaken by [Southern Bell] which results in an understatement of intrastate, regulated revenues or an overstatement of intrastate, regulated expenses or investment for [the Company]". The Consumers' Utility Counsel ("CUC" or "Counsel") agreed with the Commission that measures should be developed to help safeguard against cross-subsidization. Unfortunately, this is not an easy task. Southern Bell's operations and cost allocations are complex, as is the process of detecting cross-subsidies. CUC called upon the Commission to set policies which discourage cross-subsidization and to create mechanisms that help protect ratepayers from increased costs resulting from cross-subsidization.
CUC is very concerned about the potential detrimental impact on ratepayers of crosssubsidization between Southern Bell's regulated and non-regulated operations. One example of the problem concerns the time reporting practices for multipurpose personnel that are used to provide both regulated and unregulated services. There appears to be an incentive to charge more hours to the regulated operations than justified. Improper cost allocations result in a windfall to the shareholders of the Company at the expense of Southern Bell s ratepayers. For instance, Southern Bell offers MemoryCall, a nonregulated service. The revenues generated from this service offering flow directly to the shareholders of the Company. However, the same personnel used to process orders for telephone service also processed orders for the MemoryCall service. Therefore, the expenses associated with handling these orders should be properly allocated between MemoryCall and the telephone service. This type of system generally results in charging more hours to the regulated side of operations since Southern Bell can recover the costs through rates charged to the general body of ratepayers. When the unregulated services are undercharged for expenses, the Company's shareholders realize a disproportionate amount of revenue with very little overhead.
The Commission issued its legal notice on February 21, 1991, which requested that all interested parties file comments regarding the substantive as well as procedural matters in this docket. The CUC intervened and filed comments as well as reply comments to certain issues raised by Southern Bell. On October 7, 1991, the Commission issued a Letter Order detailing issues and establishing a schedule.
Counsel issued six sets of Data Requests and Interrogatories. Southern Bell responded and made several objections, including that the materials requested contained proprietary
Appendix 0 - 22

information and confidential, trade secrets, and that the requests were irrelevant, burdensome and overly broad. After several unsuccessful attempts to work out a suitable agreement, Counsel served notice on Southern Bell of her plan to file a Motion to Compel Discovery in Superior Court. After scheduling a date for the Motion to be heard, Southern Bell withdrew all of its objections with the exception of those asserting that the information requested was proprietary and confidential. Southern Bell did, however, agree to allow CUC and its expert to review the requested documents, provided that certain restrictions regarding the photocopying of materials were obeyed.
CUC filed testimony and presented a witness during the first phase of the hearings on February 12-14, 1992. During the hearings CUC addressed numerous concerns and made several recommendations on possible remedies for these problems. Essentially, CUC recommended that Southern Bell be required to file cost studies on a regular basis detailing its joint advertising, marketing and billing service and that an independent audit be conducted pertaining to the Company's nonregulated operations and its relationships with its nonregulated subsidiaries. Furthermore, this office urged the Commission to order Southern Bell to alter its Cost Allocation Manual so that it clearly explains the methods used to allocate costs from BellSouth to the Company, and to also change the size-driven nature of the general allocator currently used by Bellsouth to allocate costs to Southern Bell. In addition, CUC requested that the Commission order Southern Bell to provide documentation of the "affiliate rule" which it uses to charge for services between the Company and BellSouth's unregulated affiliates.
CUC also recommended that a royalty fee be assessed against the revenues of the nonregulated subsidiaries and affiliates of Southern Bell. The purpose of the royalty fee is twofold. First of all, the imputation of a royalty would serve to reimburse Southern Bell for certain intangible benefits bestowed upon the Company's unregulated affiliates, including the use of the Southern Bell name, logo, reputation and expertise associated with the Bell system. Second, to the extent that cross-subsidies do occur, the fee would serve as compensation to the regulated side of Southern Bell's operations.
The final action in the preliminary phase of this docket took place during a specially called Administrative Session on July 23, 1992. The Commission accepted the staff's recommendation and ordered the creation of three separate dockets dealing with the following cross-subsidy topics: 1) the rate design of Southern Bell's intrastate services (such as issues relating to predatory pricing, etc.); 2) Open Network Architecture (which was designated as Docket 4018U); and 3) a continuation of Docket 3987-U, in which the Commission would closely examine five specific areas of concern in relation to cross-subsidy: affiliate transactions; classification of services as regulated versus non-regulated; allocation of costs between regulated versus nonregulated products and services; separations; and costs associated with future products and services.
In addition, the Commission ordered its staff to investigate the feasibility of the royalty fee regulatory mechanism. The Commission specified that the staff's investigation should cover the legal as well as the regulatory soundness of such an assessment. This matter was later assigned
Appendix D - 23

a docket number, Docket 4230-U, and hearings in the new docket were scheduled for December 11, and 14, 1992, and then rescheduled for April 7-9,1993 (see summary of the royalty docket, CUC File No. 92110, below).
The Commission also determined that three regulatory safeguards should be implemented immediately so as to prevent and discourage potential cross-subsidy on the part of Southern Bell. First, the Commission placed increased reporting requirements on the Company in the five above mentioned areas of cross-subsidy concern. Second, Southern Bell was required to initiate cost study analyses on a service-by-service basis. The analyses were ordered so as to assure that intrastate, regulated services are properly priced in relation to the true cost of service. Lastly, the Commission followed the advice of the CUC and other intervenors and ordered the initiation of an independent audit. The auditor will be instructed to examine any area where the risk of potential cross-subsidy is high, including affiliate transactions, research and development costs, advertising, lobbying, and capital expenses. The auditor shall be selected by and will report only to the Commission. Moreover, the cost of the audit will be borne solely by Southern Bell shareholders.
Regarding the increased reporting requirements in the five specific areas of cross-subsidy concern, the Commission established time periods in each area during which the Company was ordered to supply the requested information. Furthermore the Commission classified the information which it was seeking into two groups: "generic information" and "specific information." For each area the information labeled as "generic" was due to be filed with the Commission thirty days prior to the specific information.
On September 4, 1992 Southern Bell filed with the Commission a Motion for Reconsideration of the Interim Order. On September 9, and thereafter as directed by the Interim Order, the Company began filing the generic information. On October 7, the Company notified counsel for Staff by letter of the Company's intent to file a motion for stay in this Court. Two days later, on October 9, 1992, the Company began to file its responses to the specific information requirements imposed by the Commission. Southern Bell's response to several of the specific information requests included an objection, namely, that the requests called for the disclosure of "confidential information, trade secrets and proprietary information."
Southern Bell's letter of October 7, 1992, notified counsel for the Commission of the Company's intent to seek a stay of those parts of the Commission's Interim Order which would require the Company to submit the materials which allegedly contain trade secrets. Accordingly, the Company filed its Motion for a Temporary Restraining Order and Action for Declaratory Judgment and Injunction Civil Action No. E-7376, with the Fulton County Superior Court on October 14, 1992. On the next day, counsel representing Southern Bell and the Commission entered into a "Joint Motion and Stipulation for Continuance", in which the parties agreed to postpone the scheduled hearing "for a period of fourteen days or until such time as the parties are able to be heard by the Judge to whom the matter is assigned, whichever is later." CUC was prepared to sign the agreement, but did not do so at the Company's insistence.
Appendix D - 24

After the parties agreed to postpone the hearing, the Company's action and motion were assigned to Judge Elizabeth E. Long. On November 3, 1992, Judge Long recused herself from the consideration of the case, and on that same day, Southern Bell formally consented to CUC's intervention in Civil Action No. E-7376. The Company's action and motion were then reassigned to Judge Frank M. Eldridge. Southern Bell subsequently moved for partial summary judgment in connection with its action for declaratory judgment and motion for injunction. Accordingly, the Commission staff cross-moved for summary judgment.
On March 3, 1993, the original parties and intervenor CUC participated in a hearing before Judge Eldridge in connection with the motions for summary judgment. Citing the need for a complete factual record regarding the declaratory judgment action, Judge Eldridge denied both motions and, accordingly, set the matter down for a bench trial on the merits. That trial was held on March 17, 1993, at which time the parties argued their respective positions. CUC. defended the Commission's right to initially treat allegedly proprietary materials as falling under the Georgia Open Records Act. Specifically, CUC argued that Georgia law does not impose upon the Commission an affirmative duty to protect materials which a utility claims to contain "trade secrets." After the Commission has made its initial determination regarding how to treat the allegedly proprietary materials, Georgia law then requires that the courts of this state shall make the binding legal determination as to whether a particular set of materials in fact contains "trade secrets."
Judge Eldridge issued his Order in connection with these proceedings on April 16, 1993. Construing pertinent portions of the Georgia Trade Secrets Act and Georgia Open Records Act in pari materia, Judge Eldridge found that the Commission has a legal duty to protect materials which a utility alleges to contain "trade secrets" until such time that a judicial determination is made as to whether the disputed documents actually contain trade secrets. The Order requires a utility to submit contested information to the Commission in two forms: the documents in their entirety, which the PSC must protect from disclosure; and a summary of the information which is suitable for public disclosure. In addition, the Commission and the Attorney General are required to devise and implement all procedural rules necessary to carry out the specific instructions included in the Order. Both the Commission and CUC were permanently enjoined from seeking the contested documents from Southern Bell until such rules are in place. Acting on behalf of the Commission staff, the Attorney General entered his Notice of Appeal in this matter on May 5, 1993.
In order to adequately represent the interests of its statutorily prescribed clients, CUC filed a separate notice of appeal with the trial court. Subsequently, CUC reevaluated the situation and determined that its clients' interests were so substantially similar to those of the Commission in this matter that a separate appeal was unnecessary. Accordingly, this office withdrew its separate appeal and joined the Commission's appeal as a party. The Georgia Supreme Court heard oral arguments in connection with this matter on October 4, 1993, and subsequently issued its Order on November 1, in which the Court affirmed without opinion the ruling of the lower court. As a reSUlt, unless the matter is appealed further, all governmental agencies and private third parties requesting allegedly proprietary materials in connection with PSC proceedings must
Appendix D - 25

follow the procedures outlined in Judge Eldridge's Order. CUC will continue to closely monitor this very important matter.
Southern Bell Introduction of NIl Service: GPSC Docket No. 4232-U; cue File No.
92077.
On July 6, 1992, Southern Bell Telephone and Telegraph Company ("Southern Bell" or "Company") filed with the Commission its request to introduce N11 Service. The Company's offering proposed to make five three-digit codes (211, 311, 511, 711, and 811) available to Enhanced Service Providers (ESPs), in other words, to providers of information services. Since possession of one of the five codes is likely to be of substantial value to its owner, the exact method of assignment is a matter of considerable interest and debate.
On August 18, 1992, Governor Zell Miller filed with the Commission a letter requesting that the Commission delay any action relating to the NIl tariff filing until it has had time to consider whether one or more of the codes should be reserved for use in connection with the State's Distance Learning and Telemedicine program. The Counsel supported the Governor's request for more time in which to consider the best use of these scarce public resources. On that same day, the Commission voted to suspend Southern Bell's N11 service offering for five months.
CUC formally intervened in the N11 docket on September 21, 1992. Four days later, on September 25, 1992, the Commission scheduled the hearing dates for the consideration of Southern Bell's N11 tariff filing. By mid-November, ten parties had petitioned the Commission for assignment of an N11 number, including Cox Enterprises, Williams Communications, and American Cities Business Journals. Furthermore, in addition to CUC's statutory intervention, nine parties had formally asked for the Commission's leave to intervene in the proceedings, including the Georgia Department of Administrative Services.- Telecommunications Division, Sprint, Cox and MCl.
During the hearings in connection with this matter, CUC presented two main recommendations. First, this office urged the Commission to establish an N11 policy that makes abbreviated dialing capability available on the widest possible scale for both public and private purposes. In connection with potential "public purpose" uses for the codes, CUC fully supported the Department of Administrative Services' request that the Commission reserve one N11 code for future use by state and local governmental entities. Second, this office strongly recommended that the Commission ensure that NIl service is priced so as to recover all costs incurred, plus provide a contribution to adequately reflect the advantages and benefits received by both enhanced service providers and enhanced service customers from abbreviated dialing capability. CUC further recommended that all contributions in excess of cost of service should flow solely and directly to Georgia's ratepayers, who are responsible for building the very telecommunications network which makes N11 service possible.
Appendix D - 26

In the Administrative Session held on April 16, 1993, the Commission awarded the N11 code 211 to the Department of Administrative Services for future use on a state-wide basis by the state. On May 18. 1993, the Commission entered its Order in this docket. In addition to awarding one code to the state on an 'at cost' basis, the Commission assigned the number 511 to Cox Enterprises for commercial use on a one-year, experimental basis. During the trial period, Cox will be required to submit monthly financial and operating reports to the Commission. The Order further stated that at the end of a year, the Commission will evaluate the available data and determine at that time whether, and on what terms, the other codes should be assigned. Furthermore, the Commission conditioned the assignment of codes on the understanding that Cox, D.O.A.S. and all subsequent assignees agree to migrate from N11 service to alternative abbreviated dialing arrangements when such alternatives become available.
As might have been expected in a matter with such potential financial impact, the Commission's Order did not signal the end of the proceedings in this docket. On May 28, 1993, Williams Communications and Infodial filed their respective motions for reconsideration, rehearing, and oral argument. The Commission denied both motions during its June 22, 1993, Administrative Session. Howe~er, the Commission later voted during the Administrative Session held on December 7, 1993, to award the number 711 to Williams Communications, Inc., on the same terms and conditions as the previous award to Cox. The Commission's decision in this regard came in the wake of a Staff report which favored the allocation of additional numbers. Accordingly, the Commission also decided during the same Administrative Session to schedule a hearing for December 21, 1993, during which it will consider awarding some or all of the remaining N11 numbers.
During the June 22, 1993, Administrative Session, the Commission also prohibited Cox Enterprises from jointly marketing with Southern Bell any information services over its assigned NIl code unless and until the companies receive specific approval from the Commission for such ventures. This action came in the wake of an announced agreement between Cox and Southern Bell to jointly offer electronic classified ads. The Commission is currently expected to reconsider the companies' joint venture proposal during the Administrative Session scheduled for December 21, 1993.
On June 24, 1993, Morris Communications Corporation filed with the Commission a petition for assignment of an N11 code for the Athens, Augusta, and Savannah calling areas. Morris, a competitor of Cox in Georgia, in effect asked to be put on equal footing with Cox regarding the provision of NIl information services in the areas where Morris owns newspapers. Morris' request is currently pending before the Commission.
Another issue that developed in the wake of the Commission's Order in this docket was whether Southern Bell was authorized to charge customers for call blocking in connection with N11 service. During the September 13, 1993, meeting of the Communications Committee, it was revealed that Southern Bell intended to charge a monthly recurring fee in connection with its provision of NIl service to Cox. Such a move by the Company would have been highly irregular in that call blocking for other consumer-sensitive services, such as 900 and 976 calls,
Appendix D - 27

is provided free of charge. Southern Bell apparently had initiated the charge in a tariff filing, dated June 16, 1993, that was intended to be "in compliance" with the Commission's Order in this docket. However, as a Commissioner who was in attendance at the committee meeting pointed out, the aforementioned Order in no way authorized such a charge. Accordingly, Southern Bell requested permission to remove the recurring charges and reduce the nonrecurring charge in connection with NIl call blocking. The Commission approved this request during its Administrative Session held on September 21, 1993.
Southern Bell Treatment of Royalties: GPSC Docket No. 4232-U; cue File No.
92110.
During the course of the hearings in the cross-subsidy docket involving Southern Bell Telephone & Telegraph Company ("Southern Bell" or "Company" - please see the summary for Docket No. 3987-U above), the Commission sought to address three predetermined issues, one of which was to identify topics for further inquiry. One of the primary areas of concern which surfaced during the hearings was the "royalty issue." In varying degrees of emphasis several parties to the hearings mentioned the possibility of imputing a certain percentage of revenues earned by a regulated utility's (in this case, Southern Bell's) unregulated affiliates in order to compensate ratepayers for certain valuable intangible benefits bestowed on these affiliates. The term "intangible benefits" is generally understood to include such assets as: the use of a utility's strong name recognition in advertising and marketing situations; the backing of a financially strong organization; an affiliate's access to the utility's large body of skilled employees; and use of the utility's "good will. "
On August 24, 1992, the Commission issued its Interim Order in Docket No. 3987-U. In the "Ordering Paragraphs" portion of the Interim Order, the Commission identified the royalty issue as one of these areas of further inquiry:
[A]ll parties to this proceeding are directed to provide the commission with an analysis of the policy relating to the imposition of a royalty fee as described in the testimony and arguments of the CUC. Such arguments and evidence shall be presented in the next phase of this proceeding.
In accordance with the Commission's Interim Order, the Commission's Executive Secretary established a docket number (4230-U) for the royalty fee issue.
On September 4, 1992, CUC issued its "First Data Requests and Interrogatories" to Southern Bell in connection with the royalty docket. Although the Company erroneously questioned its obligation to respond to the discovery, Counsel, in an effort to cooperate, extended the deadline for the first set of data responses for a period of fourteen days. The parties agreed that the responses would be due on October 19, 1992, the same due date for the Company's responses to CUC's second set of data requests in Docket No. 4230-U. In return, Southern Bell promised
Appendix D - 28

through its counsel to endeavor in good faith to answer the requests in both sets to the fullest extent possible without waiving any legal objections.
Southern Bell delivered its responses to both sets of CUC data requests on the date agreed to by the parties, October 19, 1992. Although the Company at least partially responded to most of the requests, many of the responses were substantially incomplete due to Southern Bell's legal objections to the information requested. The Company's objections involved issues of relevancy, trade secrets and proprietary information, vagueness and ambiguity, that compiling the requested materials would be overly burdensome, and that certain requested information pertaining to affiliates is not in Southern Bell's possession, custody or control. As a result of the Company's decision to omit certain materials, CUC lacked important information which it needed in order to prepare written testimony in connection with the royalty docket.
On October 23, 1992, CUC filed a petition in Fulton County Superior Court to enforce its administrative discovery propounded in the royalty docket. A hearing in the matter was held before Judge William H. Alexander on December 21, 1992. The resulting Protective Order issued by the Court in this matter required Southern Bell to make available to CUC certain financial documents and other potentially proprietary information within the Company's possession, custody and control. However, the Court declined to require the Company to provide certain information and documents alleged to be in the possession, custody and control of other BellSouth affiliates.
On March 31, 1993, CUC filed its written testimony in the royalty docket. The royalty fee described in this testimony would consist of an amount equal to five percent of the revenues of Southern Bell's unregulated affiliates from sales to non-affiliates, adjusted for Southern BellGeorgia's share of total BellSouth regulated revenues. The five percent figure was derived from the results of three surveys pertaining to the value ascribed to benefits purchased in franchisorfranchisee relationships. The benefits examined in these surveys correspond to the intangible benefits described above, and all of the other benefits that are accounted for in the typical commercial franchise arrangement were excluded from consideration. The proposed five percent amount would be imputed 'on paper to Southern Bell's regulated operations; no money would directly change hands.
The parties in the royalty docket presented testimony before the Commission on April 7-9, 1993. Because cross-examination of the three Southern Bell witnesses had not been concluded within the allotted time, hearings in this matter will resume at a later date.
Open etwork Architecture (ONA): GPSC Docket o. 4018-U; cue File o. 92043.
In its Administrative Session on May 7, 1991, the Commission voted to establish a docket regarding Open Network Architecture (aNA). ONA is a regulatory tool that requires the Local Exchange Carriers to "unbundle" (separately offer the individual functional components of a
Appendix D - 29

service) exchange network functionality and offer these unbundled functionality elements to competing suppliers of enhanced and information services.
The history of ONA began in the Computer Inquiry III proceeding when the Federal Communications Commission ("FCC") undertook a broad reexamination of the regulatory framework for enhanced services which was originally adopted in the Computer Inquiry II decision. In the Computer Inquiry III proceeding, the FCC allowed the Bell Operating Companies ("BOCs") to offer enhanced services without structural separation, provided they followed a set of nonstructural safeguards, one of which was ONA. These safeguards are designed to prevent improper cost shifting in the provision of unregulated services, promote efficiency and competition in the enhanced services marketplace, and prevent discrimination by the BOCs.
The Commission issued a Notice ofInquiry ("NOI") on February 19, 1992 in order to assist the Commission in determining the scope and intent of a generic investigation regarding ONA. Comments on the NOI were filed April I?, 1992, and reply comments were filed May 22,1992. The Commission issued a Scheduling Order on August 18, 1992.
CUC filed comments and reply comments in this docket, as well as presented testimony on January 4, 1993, which addressed such topics as ONA pricing and costing issues, Company access to customer proprietary network information (CPNI), the scope and extent of unbundling, and ESSX and Multiline Caller ID.
Hearings were held on SBT's Comprehensive Intrastate ONA Tariff filing on November 24, 1992, and January 13-14, and February 10, 1993. In the Administrative Session held on May 18, 1993, the Commission adopted the Advisory Staff's recommendations in this matter. Specifically, the Commission approved Southern Bell's ONA tariffs as filed on an interim basis, with the understanding that consideration for permanent approval of these tariffs shall be given at the conclusion of the Commission's investigation regarding the rate redesign of the Company's General Subscriber Service Tariff. The Commission deferred the question of whether to unbundle certain network features until after the FCC's interconnection proceedings are concluded. Similarly, a decision on prohibitions against resale was also deferred until the conclusion of Southern Bell's rate redesign proceeding. Southern Bell was also required to submit four types of information to the Commission on a monthly basis during the interim approval period.

cue Southern Bell Incentive Regulation Review: GPSC Docket No. 3905-U;

File No.

93021.

On December 18, 1990, the Commission adopted an incentive regulation plan for Southern Bell Telephone & Telegraph Company ("Southern Bell" or "Company"). The plan was adopted on a three-year, experimental basis, with diagnostic analyses scheduled to occur in April of

Appendix D - 30

1992, 1993 and 1994. The three consecutive yearly reviews are based upon Soufuern Bell Telephone's achieved return on equity for the preceding calendar year.
The "incentive" in the currently employed incentive regulation plan refers to the fact that Southern Bell Telephone will be eligible to retain a share of profits, the amount of which would normally be considered excessive under traditional ratemaking principles, if the Company meets or exceeds two threshold requirements. First, Southern Bell Telephone must meet a 95 % quality
of service ratio as to 90 % of the total number of access lines in its Georgia service territory.
That is, for every 100 telephone access lines in Southern Bell Telephone's territory, an average of 95% based upon 90 lines (or, 85.5 lines) must remain in service at all times. Second, the Company's total factor productivity (as measured by a set of complicated economic factors) must reach at least a 5 % level. If one or both of these thresholds are not achieved, Southern Bell Telephone will not be entitled to share excessive revenues, if any, with the ratepayers. Thus, . the plan is designed to supply the Company with substantial monetary incentives if it achieves certain goals, the attainment of which are beneficial to Georgia's ratepayers.
It is important to note that the revenue sharing/rate increase mechanism contained in the plan only provides for ratepayer sharing in the event that Southern Bell Telephone's earned rate of return on equity falls above or below certain levels. Assuming that the threshold requirements are met, ratepayers will not share in Southern Bell Telephone's revenues if the Company's earned rate of return on equity falls between 12 % and 14 %. Again, assuming that the thresholds are met, ratepayers become eligible for revenue sharing if the Company s rate of return on equity falls between 14% and 16%. Furthermore, the plan provides that all revenues in excess of a earned rate of return on equity of 16% will be refunded to ratepayers. On the other hand, if Southern Bell Telephone meets the prescribed thresholds, but posts a rate of return on equity below 10%, the Company will be permitted to increase its rates according to preestablished formulas.
In order to thoroughly evaluate the effectiveness of this new, alternative form of utility regulation, the Commission provided for a comprehensive review of the incentive regulation plan at the end of 1993. Accordingly, on January 21, 1993, in anticipation of the comprehensive evaluation due by year-end, the Commission staff issued two sets of data requests in connection with Southern Bell's 1990 cash working capital lead-lag study. A lead-lag study is designed to determine the delay (the "lag") between the time when the company incurs proper regulatory expenses and is entitled to payment by its customers, and the time when it actually receives these payments. Utility shareholders are due a return on their investment for this lag because it is a basic tenet of utility regulation that utilities are entitled to recoup all costs incurred in relation to providing utility service.
On March 8, 1993, the Commission issued a Scheduling Order in connection with the 'leadlag study' portion of the incentive regulation review process. In accord with the Order, the staff filed its lead-lag study report on March 15, 1993, the parties filed written testimony regarding the staff report on April 1 (only the Company and the staff filed testimony), and the Commission held a hearing in this matter on April 21, 1993. During the hearing, CUC cross-examined
Appendix 0 - 3 1

Southern Bell's witness on a variety of subjects, including whether any Georgia regulatory precedent existed for the Company's suggestion that non-cash items such as depreciation be included in the working capital calculations.
During its June 1, 1993, Administrative Session, the Commission postponed consideration of Southern Bell's 'lead-lag study' in order to give the matter further review. In the meantime, CUC has issued two sets of data requests pertaining to other aspects of the incentive regulation review, and is currently working with Company officials and attorneys from the Attorney General's Office in order to design a satisfactory and legally permissible protective agreement which will allow CUC to examine the allegedly proprietary documents responsive to its requests.
On November 23, 1993, Southern Bell filed with the Commission its motion to extend the duration of the Incentive Regulation Plan until further notice by the Commission. The motion is currently pending before the Commission. CUC will continue to participate in this very important docket.

Applications for Certificates of Public Convenience and Necessity and Financing

cue Authority Filed by Various ALLTEL Entities: GPSC Docket o. 451l-U;

File

o. 93058.

On February 3, 1993, GTE Telephone Operations and ALLTEL Corporation disclosed the details of a plan whereby GTE would trade all of its local phone exchange operations in exchange for ALLTEL's local exchange properties in Michigan, Illinois and Indiana. Accordingly, on May 3, 1993, four different corporate entities of ALLTEL Corporation filed with the Commission their applications for issuance of Certificates of Public Convenience and Necessity and for Financing Authority. When the Commission issues the Certificates, the ALLTEL entities will be authorized to operate as local exchange carriers in the 106 exchanges previously operated by GTE South and GTE Systems of the South (formerly Contel of the South). There are approximately 392 exchanges in Georgia.

Although the specific details of the planned transaction between GTE and ALLTEL are complicated, the gist of the agreement is easily summarized. The exchanges, franchises, and related assets of ALLTEL Indiana and ALLTEL Michigan will be exchanged for the exchanges, franchises and related assets of GTE Systems of the South located in Georgia. Similarly, the exchanges, franchises, and related assets of ALLTEL Illinois along with $440,000,000 in cash will be exchanged for the exchanges, franchises and related assets of GTE South located in Georgia.

ALLTEL Indiana will become a wholly owned subsidiary of ALLTEL Michigan. ALLTEL Michigan will operate under the name of Georgia ALLTEL Telecom, Inc. Georgia ALLTEL Telecom will operate all of the former GTE Systems of the South exchanges on a consolidated basis and pursuant to consolidated tariffs that will adopt GTE System's various local, toll, access, and private lines rates as approved by the Commission. Georgia ALLTEL Telecom will

Appendix 0 - 32

also implement a five-year plan to upgrade the services and facilities in the exchanges to remedy the current service problems. In conjunction with this filing, Georgia ALLTEL Telecom requested financing authority to issue debt up to $30,000,000 to provide for its initial long-term financing needs.
ALLTEL Illinois will become a wholly owned subsidiary of ALLTEL Georgia Communications Corp. ALLTEL Georgia Communications will operate all of the former GTE South's exchanges in Georgia on a consolidated basis and pursuant to consolidated tariffs that will adopt GTE South's local, toll, access, and private line rates as currently approved by the Commission. ALLTEL Georgia Communications will also implement a five-year plan to upgrade the services and facilities in the affected exchanges to remedy current service problems. In connection with this filing, ALLTEL Georgia Communications requested financing authority to issue debt up to $200,000,000 to be used as its initial long-term financing needs.
ALLTEL Georgia, Inc. is the only ALLTEL entity currently operating as a local exchange carrier in Georgia. Neither ALLTEL Georgia nor the 21 exchanges it serves are involved in the transaction described above.
The ALLTEL companies' original filing in this matter also included a "Regulatory Plan" which was designed to cover a five-year period. The essential feature of the plan was an agreement by the Commission to observe a five-year moratorium on rate reductions and overearnings proceedings. In turn, the ALLTEL entities will implement a five-year capital improvement plan, during which the companies will replace certain parts of the old GTE properties physical plant (such as air core cable and antiquated switches). The "Regulatory Plan" also included a list of certain "Exogenous Factors", the occurrence of which would give either the companies or the Commission the option of discontinuing the plan.
On June 7 1993, the Commission held hearings on the ALLTEL companies' applications. During the course of these hearings, the Commission expressed concern over certain aspects of the ALLTEL plan which were first discussed during cross-examination of company witnesses by counsel for CUe. The Commissioners found especially troubling the Companies' unusual proposal to include the telephone plant acquisition adjustment (TPAA) in rate base and cost of service for computing intrastate rates of return during the term of the "Regulatory Plan". The inclusion of the TPAA in ALLTEL's cost of service would have amounted to an increase in the companies' rate base during the first year alone of approximately $37 million.
Because of these and other concerns raised during the hearings, the Commission Staff, CUC, and ALLTEL entered into negotiations, the purpose of which were to modify the companies' plan so that it would be more readily acceptable by the Commission. As a result of several faceto-face negotiation sessions, teleconferences and written correspondence, the three parties entered into a stipulated agreement. As modified by the Stipulation the "Regulatory Plan" still calls for a five-year moratorium on earnings proceedings or adjustments. However, the plan as adopted now requires ALLTEL to channel all income over a certain 'benchmark' rate of equity (with the 'benchmark' to be determined each year by the Commission) into the companies' capital
Appendix D - 33

improvement plan, thereby accelerating the deployment of improvements. In addition, the modified plan contains no mention of the controversial TPAA originally requested by ALLTEL.
During the Administrative Session held on July 20, 1993, the Commission adopted the parties' stipulated agreement. Approval for the ALLTELIGTE deal was obtained from all relevant state regulatory commissions, and the FCC formally ratified the agreement in its Order issued on September 17, 1993.
Southern Bell Request for Authority to Move Certain Required Documents Outside the State of Georgia: GPSC Non-Docket; CUC File No. 93048.
On April 22, 1993, BellSouth Telecommunications, Inc., d/b/a Southern Bell Telephone and. Telegraph Company ("Southern Bell" or "Company") filed with the Commission a letter in which the Company requested the authority to move outside the state certain records which Commission Rules require telephone utilities to maintain within Georgia at all times.
Commission Rule 515-12-1-.02(1) requires all telephone utilities operating in Georgia to keep within the state several different categories of records such as service trouble reports and exchange maps, so that these documents may be made readily available to the Commission staff or other authorized personnel in the event that such inspection is warranted. Southern Bell stated that some relocation of these records was necessary in order for the Company to carry out a resources consolidation plan involving 28 Data Centers throughout the nine-state BellSouth region. The plan calls for a consolidation of the 28 original centers into five Data Centers. The Company indicated that this action would improve Southern Bell's efficiency and enhance the security of stored data.
On May 6, 1993, CUC issued a set of data requests in order to learn more about the Company's proposal. CUC was initially concerned that moving the documents in question outside the state might affect Southern Bell's legal possession, custody and control of the materials. The custody/control issue and other concerns were satisfactorily addressed in the Company's responses, dated May 21, 1993; therefore, CUC did not object to Southern Bell's subsequent request to expedite consideration of the matter. During the Administrative Session held on June 22, 1993, the Commission voted to approve the Company's proposal.
Southern Bell Introduction of Caller ill Deluxe: GPSC on-Docket; CUC File o. 93008.
On April 14, 1993, Southern Bell Telephone and Telegraph Company ("Southern Bell" or "Company") filed with the Commission a request to introduce a new optional service offering entitled Caller ID Deluxe. Caller ID Deluxe is a calling number delivery (CND) service which is identical to the Company's currently available Caller ID offering, except that the new offering would enable subscribers to receive calling parties' names along with their numbers. As a result
Appendix D - 34

of the expanded infonnation which would be delivered to customers, some current Caller ID subscribers would have to purchase a new display unit in order to receive the calling party's name.
CUC's position on Caller ID Deluxe is consistent with our position on the basic Caller ID offering: the overriding concern with these types of offerings is that the caller has absolutely no control over who receives his or her telephone number and records it for possible future use (such as telemarketers). CUC also asserted that the usefulness of Caller ID offerings as tools in the fight against harassing phone calls is lessened by the availability of more effective offerings, such as Call Trace.
In a letter to the Commission dated July 27, 1993, CUC commended the Commission for its past action in ordering Southern Bell to offer pennanent line blocking in connection with all . CND services, and urged the Commission to require the Company to include in each and every advertisement for Caller ID Deluxe a statement which announces the availability of the free pennanent line blocking option. CUC reminded the Commission that Southern Bell has already consented to do this in connection with every service that includes CND capability (see hearing transcript in Docket No. 4018-U, Open Network Architecture, January 13, 1993, T. 399).
In that same letter, CUC requested that the Commission require Southern Bell to conduct whatever kind of consumer infonnation program is necessary in order to accomplish two important goals: that ratepayers are made aware that Caller ID Deluxe subscribers will have access to their name and number unless they request pennanent line blocking; and, that potential Caller ID Deluxe subscribers are put on notice that the service will not provide the names and numbers of calling parties who have chosen the pennanent line blocking option.
During the Administrative Session held on August 3, 1993, the Commission voted to postpone consideration of this matter.
Southern Bell Request to Increase Rates for Local and Toll Operator Surcharges and Verification and Emergency Interrupt Charges: GPSC Non-Docket; CUC File No. 93008.
On November 24, 1992, Southern Bell Telephone and Telegraph Company ("Southern Bell" or "Company") filed with the Commission a set of proposed tariff provisions containing increased rates for certain local and toll operator surcharges and verification and emergency interrupt charges. Southern Bell stated that the dual purpose of the filing was to generate new revenue in order to offset revenue lost when the Commission declined to authorize the continuation of the Company's Late Payment Charge, and also to achieve price parity between local and toll operator surcharges and operator verification and emergency interrupt charges. The requested rate changes were designed to generate approximately $8.3 million in revenues.
Appendix D - 35

On March 10, 1993, before a determination had been made regarding these proposed revisions, the Commission authorized certain price changes for operator surcharges that were in compliance with the Commission's Order approving the Stipulation in Dkt. No. 3995-U, IntraLATA Toll Competition. Accordingly, on September 9, 1993, the Company filed with the Commission a revised version of its original proposal which recognizes the price changes authorized in Docket No. 3995-U. Southern Bell stated that these revised tariff provisions were designed to bring its initial proposal back into the revenue neutral posture which the Company had intended the filing to assume. The Company further stated that the surcharges as modified were comparable to but still less than the fees assessed by other carriers for the same services.
In a letter to the Commission, dated September 16, 1993, CUC stated its objections to the proposed tariff revisions. First, CUC strongly objected to Southern Bell's attempt to offset the revenue loss resulting from the elimination of its Late Payment Charge by increasing the operator surcharges in question, since the Company does not introduce revenue reductions to offset the revenues generated by its numerous yearly tariff filings. Second, CUC found misleading the Company's assertion that the increases were being introduced in part to achieve price parity between local and toll operator surcharges, since the level of revenue increases needed to reach parity would be far below the $8.3 million expected to be earned from the requested increases. Finally, CUC believed that proposed revenues of this magnitude should be considered in conjunction with the earnings review portion of Southern Bell's upcoming incentive regulation plan review.
During the Administrative Session held on September 21, 1993, the Commission approved Southern Bell's requested rate increases.
Southern Bell Technical Trial of Fully Automated Directory Assistance in Metro Atlanta: GPSe Non-Docket; cue File No. 93101.
In November, 1993, CUC received a phone call from a customer of Southern Bell Telephone and Telegraph Company ("Southern Bell" or "Company"). The customer had called to complain about a situation involving Southern Bell's provision of Directory Assistance ("DA") in the metro Atlanta area. The Company was in the process of conducting a technical trial of a more automated version of its DA service, wherein a computer generated voice is employed to ask the caller for the desired city and listing name. Currently, a computer generated voice is generally used by Southern Bell to deliver just the requested telephone number, and only then after a live operator has asked the caller for the applicable city and listing name.
At the time of the initial complaint by the Southern Bell customer, both CUC and the Commission Staff were unaware that the DA trial was taking place. Apparently, the Company conducts technical trials similar to the one in question on a fairly regular basis. Such trials usually involve only Southern Bell personnel and/or a small number of customers; therefore, the Company does not always inform the Commission that the trials are taking place. However, CUC learned in subsequent conversations with Company officials that this trial was being
Appendix D - 36

conducted in several large metro Atlanta central offices, thus potentially involving hundreds of thousands of customers. Accordingly, since this office detennined that the DA trial constituted a change in a regulated telephone service which will potentially impact large numbers of residential and small commercial ratepayers, CUC requested that Southern Bell fonnally notify the Commission that the trial was being conducted. Southern Bell complied with this request in its letter to the Commission, dated December 8, 1993. CUC will continue to monitor this matter.
Southern Bell Change in Denial of Service Notification in 912 Area Code: GPSC Non-Docket; CUC File No. 93093.
On November 15, 1993, Southern Bell Telephone & Telegraph Company ("Southern Bell" or "Company") filed with the Commission a letter in which the Company notified the Commissioners of its intent to change the procedure whereby Southern Bell customers residing in the 912 area code are notified that their telephone service will be interrupted unless certain past due regulated service charges have been paid by a specified date. Presently, these customers are notified of the impending denial/interruption of service through separately mailed letters, as arguably required by Commission Rule 515-12-1-.28. The Company's proposed change in the currently employed procedure would incorporate the notification within subscribers' bills.
CUC requested that Southern Bell provide a sample copy of the new denial notification. After examining the sample submitted by the Company, CUC had several concerns. The denial notice itself tends to blend in with the rest of the bill, thus increasing the possibility that ratepayers will not read the warning. In addition, although the notice states that service reconnection charges will apply in the event that service is interrupted due to nonpayment, the amount of the reconnection charge is not provided.
The fonnat of the provided sample is also problematic in that ratepayers may be led to believe by the wording and presentation of the proposed notification that one has to pay the total amount due in order to avoid service disconnection. This is not always the case. Local basic service cannot be disconnected due to a subscriber's failure to pay unregulated service charges, such as 900/976 calls, inside wiring, and MemoryCall service. Thus, the proposed fonnat does not clearly distinguish between the total amount owed and the amount that the subscriber must pay (the regulated service charges) in order to avoid service disconnection.
CUC voiced these and other concerns to Southern Bell representatives. As a result, this office, the Commission Staff, and the Company are presently discussing the matter in order to find a satisfactory solution. So as to provide a starting point for these talks, CUC has made available to the other parties a copy of the denial notification fonnat currently employed by Southern Bell's sister company, South Central Bell, in Kentucky. Among its several advantages, the Kentucky fonnat clearly distinguishes between the total amount due, and the total regulated charges which must be paid in order to avoid service disconnection. CUC will continue to participate in these discussions.
Appendix D - 37

Southern Bell Automatic Conversion of Calling Card Calls to Third Number Billed Calls: GPSC Non-Docket; CUC File No. 93089.
In late November, 1993, CUC received a phone call from a Southern Bell customer who voiced a complaint regarding her last phone bill. On several occasions, while attempting to place a number of Southern Bell Calling Card calls, the subscriber entered the fIrst part of her Calling Card number (i.e., the same as her area code and phone number), but neglected to enter her four-digit Personal IdentifIcation number ("PIN") at the end. As a result, the Southern Bell software automatically converted the calls from calling card calls to "third number billed" calls, which are billed at a substantially higher rate. Obviously, this conversion took place without the knowledge or consent of the caller.
CUC contacted Southern Bell in order to discuss the situation and seek a quick solution to a serious problem. CUC inquired if it were technically possible, for instance, to notify the caller in some manner before the call goes throu!!h that the call will be converted to the higher "third number billed" rate unless the subscriber's PIN is entered. Southern Bell quickly agreed that the above described situation was a problem that needed to be rectified as soon as possible. In subsequent phone conversations with company officials, CUC has learned that Southern Bell is presently considering several possible solutions, and will soon contact CUC and the Commission Staff in order to discuss the most viable options. CUC will continue to participate in this important matter.
Enforcement and Implementation of Senate Bill 144: GPSC Docket No. 4231-U; CUC File o. 92099.
This docket is a continuation of a docket originating in 1992 to implement Senate Bill 144 (O.e.G.A. Section 46-2-25.2). The goal of SB 144 is to eliminate, or lower, toll charges between two telephones where the central offices serving such telephones are within sixteen miles of each other. S.B. 144 mandated the Commission to investigate the feasibility of further reductions in the zero to sixteen-mile toll band before July, 1993. Therefore, the Commission urged the Staff to study the possibility of lowering toll charges in the zero to sixteen mile toll band in order to comply with the legislation.
A third hearing in this docket was held on January 20, 1993 to give intervening parties an opportunity to question a Staff witness about the Staff Report submitted to the Commission in December, 1992.
The Staff Report outlined three options for the Commission to consider in making their decision regarding further reductions of toll-free calling in the zero to sixteen mile toll bands. In developing the three options for Commission consideration, the Staff considered the financial impact on the local exchange companies of further reductions in toll charges. The three options
Appendix D - 38

presented were: 1) Leaving rates at the present 50% reduction that took place July 1, 1992; 2) Creating a second percentage reduction of rates; or, 3) Zeroing out rates completely.
Under Option #1, Southern Bell Telephone and Telegraph Company ("SBT") would
continue to be the only company substantially impacted by the 50 % reduction. The Staff
estimated this impact to be $9.6 million.
Under Option #2, the Staff identified a range of four to eight companies that would need assistance from the Hardship Assistance Fund ("HAF") which might result in the need for an extension of these funds. (HAF monies were set aside from the overeamings in the Southern Bell Rule Nisi Case to help offset expenses for implementing county-wide calling as mandated by Senate Bill 524.)
Under Option #3, the total compensation loss incurred by the industry is estimated by the Staff to be approximately $24.3 million. The number of companies possibly needing assistance from HAF is estimated by the Staff to be in a range of from four to twelve.
The second issue discussed in the January hearing was an extension of the mileage bands to include toll-free calling between two telephones where the central offices servicing such telephones are within twentv-two miles of each other. This hearing was a continuation of the hearings held in November and December of 1992 in which the parties discussed possible further reductions in the sixteen mile toll band as mandated by Senate Bill 144 (O.e.G.A. Section 46-2.25.2). According to Staff estimates, the cost of zeroing out rates in the 0-16 mileage band is $22 million and $53 million in the 0-22 mileage band.
The CUC concurred with Staff Option #1, whereby the 50% toll reductions in the sixteen mile toll bands that took effect on July 1, 1992, would remain without any further reductions. This option has the least revenue impact on ratepayers. Furthermore, the CUC recommended that each telephone company file optional EAS plans addressing the remaining community of interest needs throughout the state as suggested by Staff in its Supplemental Action under Option #1 to ensure that a majority of ratepayers are not paying for the minority's calling interests.
In the Administrative Session on 4/6/93, the Commission decided to postpone its decision pending further study of the costs of providing free toll calling in the 0-16 and 16-22 mile toll bands. Also to be studied is the feasibility of whether free calling to a town's "trade center" is the more economical way to proceed, rather than providing free calls everywhere in the 0-22 mile band.
The Commission Staff issued Data Requests in September, 1993, to all 35 independent telephone companies in the state. This is being done for information gathering for this docket as well as a renewal of the earnings investigation of all the companies begun by the Commission in 1991. The purpose of this discovery is to determine the ability of each company to absorb the cost of providing toll free calling in the 0-16 and 0-22 mile calling bands.
Appendix D - 39

The CUC is currently studying the ongoing responses from the companies in relation to their ability or inability to absorb the associated costs of toll-free calling and the accompanying effect on ratepayers. After all the responses have been received and analyzed, the CUC will present its recommendation to the Commission. A decision in this matter will most likely be issued sometime in 1994.
Petition of the Georgia Public Communication Association for Implementation of Intrastate Dial-Around Compensation: GPSC Docket No. 4206-U; CUC File No. 92072.
The Georgia Public Communication Association ("GPCA") petitioned the Commission on June 10, 1992, to order the implementation of an interim flat rate compensation fee for intrastate "dial-around" carrier access code calls placed from independent public payphones. The GPCA sought an interim flat rate compensation of $6.00 per phone per month to be paid to independent public payphone providers ("IPPs"). This would mirror an earlier decision by the Federal Communications Commission ("FCC") in April, 1992, which mandated similar compensation at the interstate level. The FCC action is currently on appeal.
A "dial-around" call occurs when the IPP's presubscribed long-distance carrier is bypassed by a customer accessing an Interexchange Carrier ("IXC") via an 800, 950, or lOxxx number. A hearing was held December 15, 1992, whereby GPCA's witness presented evidence depicting the inequities of the present system allowing "dial-around" calls. The hearing was continued on February 16, 1993, allowing intervening parties to present evidence that the current method of "dial-around" calls be continued without compensation.
The CUC's concern was the potential "pass through" cost to the consumer. The IPPs are currently being compensated for interstate calls under the FCC ruling of $6.00/per month/per phone, and an intrastate compensation mechanism would be an "add-on" to this payment. The CUC infonned the Commission that it would be contrary to the best interest of the ratepayer to order dial-around compensation since it may result in a rate increase to consumers.
In Administrative Session on July 20, 1993, the Commission ordered compensation to COCOT providers with 5M licenses for 1-800, 10-XXX, and 950 calls. Eligible Customer Owned/Coin Operated Telephones ("COCOT") providers may receive a flat rate of $1.50/per phone/per month with increases in incremental amounts of $1.50 every three months until a cap of $5.00/per phone/per month is reached. The docket remains open for the Commission to reconsider in 18 months (or sooner) a per-call mechanism should this technology be available at that time. A per-call mechanism will have the capability to record each "dial-around" call made from a COCOT.
Appendix D - 40

Chickamauga Telephone Company's Hardship Assistance Filing ("HAF"): GPSC Docket No. 4077-U; CUC File No. 91198.
After several hearings conducted in 1992 following the merger of Chickamauga Telephone Corporation's ("Chickamauga" or "Company") Hardship Assistance Filing with the Company's Additional Filing Requirements docket, the Commission ordered that the Company's Certificate of Public Convenience and Necessity be placed on probation until certain requirements have been met.
The CUC concurred with the Staff in questioning the financial viability of the Company due to an advance of $4.8 million made by the Company to affiliated companies and a lack of documentation of evidence to support the ability to repay Chickamauga ratepayers. Until specific requirements have been met by the Company in satisfaction of this liability, the Company will remain on probation.
The Commission granted Chickamauga's Motion For Reconsideration. A Hearing was held on March 9, 1993 for oral argument on the Company's Motion. The Commission's decision whether to amend the Order of December 15, 1992 is pending. Under the probationary period the parent company continues to make quarterly payments to Chickamauga as Ordered by the Commission. The CUC continues to monitor the Company's compliance in this matter.
TOLL-FREE CALLING BOUNDARY CHA GES
Atlanta Metro EAS Expansion:
The investigation regarding expansion of the metro Atlanta toll-free calling area began in May of 1992. The initial investigation was discussed in tandem with the area code split announced by Southern Bell Telephone and Telegraph Company ("Southern Bell" or "Company"). The area code split controversy was resolved on December 1, 1992, when the Commission ordered Southern Bell to retain 34 exchanges in the 404 area code which had been moved to the new 706 area code. However, the question of which communities to include in an expanded metro Atlanta toll-free calling area is an ongoing matter before the Commission.
Traffic and cost studies have been submitted to the Commission and the CUC by the four affected telephone companies (Southern Bell, ALLTEL, GTE, and Nelson-Ball Ground ("Nelson"). (Note that all GTE telephone exchanges in Georgia became the property of ALLTEL on July 1, 1993 as explained supra.) The estimated revenue shortfall for bringing in the 24 exchanges requesting entrance into the metro Atlanta toll-free calling area is approximately $40 million based on cost studies submitted by the telephone companies. (These cost studies are now more than one year old.)
Appendix D - 41

A Special Called Administrative Session was held in Peachtree City on July 13, 1993, to address the petition filed by certain citizens that requested the Commission to relocate the telephone exchange boundary of south Fayette County so as to include the Fayetteville Exchange. Such action would make telephone calls from the affected area into the metro Atlanta calling area a local call. The Commission approved the petition and ordered Southern Bell to revise its exchange boundary maps for the Fayetteville, Griffin and Senoia exchanges so as to include the rest of south Fayette County on or before October 15, 1993.
In order to resolve this docket, or at least move it forward, the matter was placed on the agenda for the Administrative Session on November 2, 1993. Following a lengthy discussion, the Commission directed Southern Bell to conduct a survey of every telephone customer in the present metro toll-free calling area as well as every customer in the 24 exchanges in which traffic and cost studies were perfonned over a year ago. Every subscriber in metro Atlanta and the 24 surrounding exchanges will be mailed a letter and ballot to vote on whether they want to become part of the expansion of the metro Atlanta toll-free calling area. The letter accompanying the ballot explains the additional charges to basic rates that will occur if the Commission approves the expansion. The exact amount of rate increases is dependent on the number of exchanges brought into the metro toll-free calling area.
The proposed rate design that will be sent to all subscribers will show an increase in residential base rates by $.25 in metro Atlanta. Outlying exchanges will see increases in their respective exchange residential rates to equal the same amount charged metro Atlanta customers for basic telephone service. Business rates will be increased according to the balance of costs associated with the expansion. This figure will vary depending on how many exchanges approve the expansion. In the letter being sent to every access line customer, the maximum rate increase listed is based on all exchanges being included. If less than the number of exchanges polled vote to be included within the metro Atlanta toll-free calling area, the increase in residential and business rates will most likely be less than the amount stated in the proposed letter. However, under the proposed rate design being sent to all subscribers, basic telephone rates will increase for both residential and business access lines.
Following completion of the survey and tabulation of the results, the Commission will decide whether to expand the metro Atlanta toll-free calling area and which exchanges will be included. It is anticipated that a decision on holding a public hearing concerning this matter will be made at that time.
Two days after the decision in Fayette County, Southern Bell filed a tariff to increase the returned check charge from $11.00 to $15.00. Southern Bell stated that the filing was designed to offset the revenue loss as a result of the toll loss from the inclusion of portions of south Fayette County into the Fayetteville exchange as well as cover internal costs of processing returned checks. Southern Bell estimated the total network costs associated with the toll-free area transfer in Fayette County amounts to approximately $466.000 annually.
Appendix D - 42

The CUC expressed several concerns to the Commission about Southern Bell's tariff filing to offset toll losses. One, that neither the CUC or the Commission Staff had an opportunity to review Southern Bell's estimated toll loss figures and further, the CUC objected to any attempt by Southern Bell to recoup the alleged revenue losses in this manner. It is the CUC's belief that tariffs already approved recently by the Commission with an estimated annual positive revenue impact of over $800.000 leave Southern Bell in a positive revenue impact situation.
Since CUC has a statutory obligation to represent all residential and small commercial ratepayers in the state, the office has limited its involvement in this matter to using available resources to analyze the cost studies presented by the companies and ensure that they are not overstated or inflated in any way. The very clear division among and between the customer classes exemplifies this office's lack of authority to speak to the viability of any particular plan, thereby recommending a position that may benefit some ratepayers to the detriment of others. Instead, CUC will continue to urge the Commission to comply with the EAS rules and time honored regulatory principals which dictate the necessity of an earnings review prior to any rate increase. The Commission must, prior to any extension of the toll-free calling area and the imposition of the cost associated with it, examine the telephone company in question to determine if any of the costs can be absorbed by excess earnings levels.
Petition For Extended Area Service (EAS) From Richmond Hill and South Bryan County to Savannah: GPSC Docket No. 4184-U; CUC File o. 92115.
An application for inclusion in the Savannah local calling area was submitted to the Commission by citizens of Richmond Hill and surrounding exchange areas. A traffic study in accordance with Commission Rule 515-12-1.29(5) was ordered by the Commission to be conducted by the Pembroke Telephone Company, Inc. ,("Pembroke") and Coastal Utilities, Inc. ("Coastal"), the companies serving Richmond Hill and South Bryan County. Traffic studies were completed and submitted by the companies.
The Commission also required that cost studies be performed in May and June, 1993, after staff analysis of traffic studies demonstrated a sufficient community of interest calling. Pembroke conducted cost studies from Richmond Hill, Keller, Pembroke and Ellaville to Savannah. Coastal has completed their cost studies from Richmond Hill and Keller to Savannah, Tybee Island, and Pooler. The CUC is currently analyzing this information in order to determine the impact on residential and small commercial ratepayers.
A decision by the Commission is pending in this matter.
Appendix D - 43

Petition For Extended Area Service (EAS) From Roberta to Macon: GPSC NonDocket; CUC File No. 92116.
A petition for EAS between certain exchanges in his district was filed with the Commission by Representative Robert F. Ray. The Commission ordered Southern Bell to conduct two-way traffic studies from Roberta to Macon and other exchanges; Fort Valley and other exchanges; and Perry to Byron and Centerville. GTE South (now ALLTEL) and Public Service Telephone Company also submitted traffic studies to the Commission.
Following analysis of the traffic studies by the Commission Staff, the Commission ordered cost studies to be done in May and June, 1993, by Southern Bell, ALLTEL, and Public Service Telephone Company in the exchanges under consideration. The CUC is analyzing the recently completed cost studies for ratepayer impact. A decision will be made by the. Commission pending the results of an ongoing analysis by Staff. The CUC will advise the Commission at such time as the analysis has been completed.
Petition by Effingham County Commission for Extended Area Service from Springfield, Rincon, Guyton, and South Guyton Exchanges to Savannah, Tybee Island and Pooler Exchanges: GPSC Docket o. 4293-U; CUC File No. 93024.
Upon petition by the Effingham County Commission for extended area service between Springfield Rincon, Guyton and South Guyton exchanges with Savannah, Tybee Island and the Pooler exchanges, the Commission ordered Planters Rural Telephone Company ("Planters"), Southern Bell, and GTE South to conduct traffic studies in their respective exchanges.
After Staff's presentation on June 1, 1993, of their analysis of the completed traffic studies, the Commission ordered the three telephone companies to conduct cost studies for NonOptional Flat Rate EAS for all exchanges stated in the petition. The Commission reminded all parties involved that ordering cost studies is not intended to indicate that these routes have been approved for EAS. The CUC is continuing to analyze the information submitted by the companies.
A decision in this case is pending upon completion of the cost studies.
Petition For Extended Area Service (EAS) Between Tunnel Hill, Chatsworth, and Cohutta: GPSC Non-Docket; CUC File No. 93041.
A petition for EAS between Tunnel Hill, Chatsworth, and Cohutta was filed with the Commission by Mayor Kenneth F. Gowin of Tunnel Hill. The Commission ordered GTE South (now ALLTEL) to perform a traffic study. Even though the traffic study indicated low community of interest factors, the Commission ordered cost studies be performed. Cost studies
Appendix D - 44

have now been completed and the CUC is currently analyzing the studies for ratepayer impact. A decision by the Commission in this matter is pending.
Petition For Extended Area Service (EAS) Between Kensington, Villanow, LaFayette and Noble to Chattanooga, Tennessee: GPSC Docket No. 4732-U; CUC File No. 93078.
Senator Sonny Huggins of the 53rd District made a request on August 25, 1993, for a traffic study to be perfonned on the Kensington, Villanow, LaFayette and Noble exchanges to Chattanooga, Tennessee. The request was made so that the Commission could examine the feasibility of providing EAS to persons residing in these exchanges.
Traffic studies were ordered by the Commission on September 21, 1993 to be perfonned by Southern Bell and ALLTEL. The CUC will monitor this docket to assess the ratepayer impact of providing EAS to Chattanooga.
Application of U.S. Osiris Corporation For Clarification of GPSC's Jurisdiction Over Completion of Cellular Roamer Calls: GPSC Docket No. 4398-U; CUC File
o. 93034.
U.S. Osiris Corporation ("Osiris") requested a ruling from the Commission concerning whether certain proposed activities of Osiris require the Commission' s prior approval. Osiris is a cellular carrier, and as such, not subject to the Commission's jurisdiction. However, whenever a cellular subscriber is "roaming" and utilizes the services of a local exchange carrier for completion of a call, a question arises whether such service falls under the Commission's jurisdiction.
Osiris stated its belief that the service it proposes to provide involves only the resale of cellular radio service and does not provide services that are subject to Commission jurisdiction. A clarification by the Commission to this effect was requested by Osiris.
In Administrative Session on 9/7/93 the Commission ruled it had no jurisdiction over certain activities of Osiris pertaining to its cellular activities within the state. This conclusion is based in part on an opinion from the Attorney General in 1983 that cellular regulation is outside the boundaries of the Commission's jurisdiction, and the Commission's previous desire not to exercise jurisdiction over the cellular industry. A letter to that effect was issued to the company from the Commission on September 9, 1993, stating that Osiris activities in the cellular arena do not require Commission approval. The Commission has asked the Attorney General to review and clarify the 1983 opinion. Osiris may be subject to Commission jurisdiction at some future date should the Attorney General identify appropriate jurisdictional grounds for regulation of cellular providers.
Appendix D - 45

The CUC monitored this docket for informational purposes.
Georgia Telephone Association Member Companies Application to Amend Section S to Concur with NECA Tariff 5 for New Services in Connection with SS7 Trunk Signaling, STP Connections and 800 Data Base Queries; GPSC non-docket; CUC File No. 93043.
The Georgia Telephone Association ("GTA"), on behalf of its member companies, filed with the Commission an application to amend each member company's Section S tariff. The revised tariff adds new services in connection with SS? Trunk Signaling, STP Connections and 800 Data Base Queries. The purpose of the filing was to mirror the interstate rates in accordance with the FCC ruling on 800 Portability, effective May 1, 1993.
GTA's application was approved by the Commission, effective May 1, 1993. It was handled administratively in accordance with the Order approving the Georgia Depooling Plan in Docket No. 3921-U.
In The Matter Of: GPSC Jurisdiction and Regulation of Cellular Services; nondocket; CUC File o. 93063.
In the Administrative Session held on May 18 1993, the Commission requested an update from the Attorney General's office of an Opinion written in 1983 concerning GPSC jurisdiction to regulate cellular radio telecommunication services. Specifically, The Commission requested clarification of the statement within the earlier opinion that the Commission "may" have jurisdiction over the cellular services provided by telephone utilities.
In response to a growing number of complaints regarding the charges assessed in connection with cellular telephone service, the Commission is gathering information on possible future regulation. The first step taken thus far has been the Commission's request to the Attorney General concerning the question of jurisdiction. The CUC is monitoring this issue for informational purposes and potential ratepayer significance.
Petition of MobileComm of the Southeast, Inc. and Dial Page, Inc. For Authority To Terminate Service Statewide: GPSC Docket No. 4277-U; CUC File No. 93016.
MobileComm of the Southeast, Inc. and Dial Page, Inc. are radio common carriers licensed in the state. The companies petitioned the Commission for authority to complete calls for their customers on a statewide basis in any and all locations outside their respective certificated service areas.
Appendix D - 46

I
The General Assembly amended the Georgia Radio Utility Act in 1992 allowing a radio common carrier, under certain conditions, to terminate service for its own customers in established service areas other than its own. If approved, the petition would enable MobileComm and Dial Page's customers to receive messages throughout the state of Georgia in accordance with the statute.
The CUC analyzed this filing and determined that it did not adversely impact residential and small business customers. The Commission approved the petitions of MobileCornm and Dial Page in its Administrative Session held on April 20, 1993.
Cherry Communications Applications for Certificates of Public Convenience and Necessity: GPSC Docket No. 4268-U; CUC File No. 93006.
Cherry Communications ("Cherry"), a division of Cherry Payment Systems, Inc., is a provider of coin operated customer owned telephones ("COCOT"), resale and alternative operator services (AOS). Cherry was granted an interim COCOT Certificate in Georgia on May 19, 1992.
Sometime after the Commission granted an interim certificate to Cherry, the Commission Staff began to receive complaints from persons leasing equipment from Cherry concerning Cherry's business practices. The complaints alleged that Cherry had engaged in improper signage and default of local operator traffic. In response to Staff investigation of complaints, Cherry's certificate was suspended in November, 1992, for noncompliance with COCOT regulations.
Cherry reapplied for certificates of Public Convenience and Necessity for resale, AOS, and COCOT services in January 1993. A hearing was held on March 23, 1993. While Cherry did not deny the service complaints, it claimed many of its past problems were due to the company's lack of experience in the area of regulatory telecommunications. Cherry's representatives suggested that "restricted" certificates might be appropriate until such time that the Commission is assured of Cherry's ability to provide reliable service.
Based upon the information that the company submitted, Staff was not convinced that Cherry had eliminated all of its past problems. CUC concurred with Staff s recommendation that the Commission deny Cherry's application.
In the Administrative Session held on April 6, Cherry Communications requested the Commission hold its decision on recertification until the Company's problems in other states have been resolved.
Appendix D - 47

Blue Ridge Telephone Company Request for Authority to Eliminate Mileage Charges and to Make All Customers One-Party; GPSC Docket No. 432S-U; CUC File No. 93028.
The Blue Ridge Telephone Company ("Company") filed this tariff to eliminate all mileage or zone charges and to make all customers one-party or private line customers as the specific routes are completed. The Company stated that the purpose of the filing was to equalize rates among all of its customers by eliminating the mileage and zone charges paid by customers the farthest away from the loop.
The CUC was concerned about the significant increase in basic rates that would occur if this tariff was approved. Accordingly, the CUC issued a set of data requests to the Company. A hearing on the matter was held on May 28, 1993, at which time the Company stated that the. filing was revenue neutral. A loan obtained from the REA and approved by the Commission in 1991 will apparently be used to upgrade all customers to one-party service without mileage charges. Customers currently paying mileage charges will experience a rate decrease; however,
more than one half of the Company's current customers will see their basic rates increase by a maximum of $2.45.
The CUC was not opposed to eliminating mileage charges and providing all customers with private line service. However, CUC urged the Commission to first investigate whether the costs associated with elimination of two-party lines and mileage charges could be offset with revenues from services other than basic rates and requested the Commission to consider the Company's current level of earnings.
In the Administrative Session held on July 6, 1993, the Commission approved the Company's request.
Glenwood Telephone Company Application For Hardship Assistance Filing: GPSC non-Docket; CUC File o. 93037.
On March 30, 1993, the Glenwood Telephone Company ("Glenwood") filed with the Commission a request to continue receiving financial relief from the Universal Service Fund. Glenwood's present relief from the fund expired at the end of March 1993. The CUC sent data requests to Glenwood to ascertain its need for funds.
The Company withdrew its application on June 21, 1993, since no decision on whether to extend or modify the 0-16 or 16-22 mile toll band had been made by the Commission. Therefore, Glenwood temporarily withdrew the application until such future time as the Commission issues an order in this matter and an amount certain can be ascertained as needed to carry out the order.
Appendix D - 48

The Georgia Public Service Commission Investigation Into COCOT Rates at Institutions; GPSC non-docket; CUC File No. 93070.
At a special called Administrative Session on July 14, 1993, the Staff submitted proposed reductions in Institutional COCOT access tariff rates. Also submitted by Staff was a proposed coin telephone tariff to be implemented by each LEC under their General Subscribers Services Tariff. If approved by the Commission, all local exchange companies ("LECs") would be operating under the same tariff and rates and charges would be determined on a usage rate basis, or on a flat rate basis where usage rate service is not available.
In part, the special Administrative Session was called to deal with COCOT and Institutional tariffs filed by Statesboro Telephone Company. The county jail in Statesboro did not have COCOT telephone service at that time, a situation which caused hardship for both the . jail administration and inmates. The Commission in Administrative Session on July 20, 1993, allowed the Statesboro Telephone Company to provide COCOT service to the jail pending the Commission approval of Staff's proposal.
The CUC believes the impact of Staff s proposal on residential and small business ratepayers is minimal, but will continue to monitor Staff's investigation. Staff's proposal on COCOT institutional rates remains pending before the Commission.
Petition of Nelson-Ball Ground Telephone Company For Approval of Corporate Restructuring: GPSC non-docket; CUC File o. 93084.
On October 4, 1993, Nelson-Ball Ground Telephone Company ("Company") requested the Commission's approval to restructure its corporation, thereby creating a holding company.
As part of the restructuring, certain non-regulated assets and liabilities would be transferred to a wholly-owned subsidiary, or non-regulated company.
As stated in the Company's petition, the regulated Company would continue to operate in the same manner as in the past. Customers, service, rates and management would remain unaffected and ratepayers would not bear the restructuring costs. There was also no proposed revenue impact resulting from the proposed restructuring.
The Company expressed a willingness in its Petition to provide full and complete access to the books and records of the holding company and the non-regulated company for examination and review by the Commission regarding this and future transactions between the Company and the newly formed businesses.
The CUC has analyzed the Company's Petition and does not oppose its restructuring plan due to its revenue mentality and the Company's assurances in writing of an "open examination" policy regarding Company books and records.
Appendix D - 49

The petition was approved at the Commission Administrative Session on December 15, 1993.
Fairmount Telephone Company Application In Support Of Rate Case Filing: GPSC Docket No. 4206-U; CUC File No. 92109.
Fairmount Telephone Company's Hardship Assistance Filing: GPSC Docket No. 4261-U; CUC File No. 92074.
Applications by the Fairmount Telephone Company ("Company") for increased rates and charges and for Hardship Assistance Relief ("HAF") were filed with the Commission on November 4, 1992. The revenue requirement the Company sought was $463,089.00 resulting from three factors: 1) loss of HAF funds that expire in January, 1993; 2) loss of revenue due to elimination of the sixteen mile toll band; and, 3) the need to earn a reasonable return on investments. The Company sought some type of permanent assistance similar to the HAF funds it had been receiving since 1991.
The Commission merged both dockets into one (4206-U) in its Administrative Session held on February 2, 1993. Hearings were conducted in April and May.
Subsequent to its original application, the Company reduced its proposed revenue requirement to $324,481. The reduction was caused by the initial inclusion of an anticipated loss of revenue of $90,000 due to the elimination of toll-free calling within the 0-16 mile toll band. This issue remains under study by the Commission and any inclusion into rate base by the Company was recognized to be premature. In addition, the Company revised its proposed cost of equity from 12.5 % to 11.5 % and accepted several adjustments proposed by the CUC.
The revised revenue requirement proposed by the Company would have more than doubled the current residential and business basic local service rates. The CUC was concerned about this dramatic increase in local basic rates, particularly when 60% of the Company's residential access lines are elderly customers on fixed incomes or low income families. The CUC issued Data Requests and after analyzing the evidence presented, CUC realized that the Company's case was seriously flawed. Based on an 11.5 % cost of equity and the adjustments proposed by the CUC and Commission Staff, the CUC recommended that the Company's rates be reduced to reflect a revenue reduction of $31,508. The CUC recommended that the Company reflect this reduction in the following manner:
1) Reduce Touch Tone Service for residential customers from $2.10 to $1. 00 and for business customers from $3.10 to $1. 50 ($16,465.20);
2) Reduce Calling Feature rates ($165.00); and 3) Refund the remaining amount on an equal percentage basis to reduce rates for all
customers ($14,877.80)
Appendix 0 - 50

On September 17, 1993, the Commission concluded that the Company had a revenue deficiency of less than $1,000 and therefore ordered the Company to maintain its current base rates for telephone service and denied the Company's application for a rate increase.
International Telecommunications Exchange Introduction of SPECTRUM and ATTACHE and a Late Payment Charge: GPSC non-docket; CUC File No. 93037
International Telecomm, a reseller of telecommunications services in Georgia, filed a tariff with the GPSC to introduce two new services and assess a late payment charge of 1.5% on past due balances. The CUC is opposed to a late payment charge. The application for the late payment charge was withdrawn from the tariff by International Telecomm before any Commission action.
Georgia Public Service Commission Versus Southeastern Communications, Inc., Rule isi to Show Cause: GPSC Docket os. 4521-U through 4528-U; CUC File o.
93072.
Southeastern Communications, Inc. ("Southeastern") is a radio utility service company operating in eight service areas in Georgia. Following Southeastern's acquisition of the eight service areas, the Commission Staff advised Southeastern in September of 1992 to apply for certificates of public convenience and necessity pursuant to Georgia law.
Southeastern failed to apply for the necessary certification and the Commission issued a Rule Nisi to show cause why its application in May, 1993, should not be pennanently denied for apparent wilful acts of violation of Georgia law. A scheduled public hearing in Macon, where numerous complaints had been lodged against Southeastern, was canceled when Southeastern withdrew its applications to operate radio utility services in the state.
After Southeastern withdrew its applications to operate radio utility services, the Commission stated its intention to proceed with the Rule Nisi. Both Staff and Southeastern are continuing their discussions about this matter and trying to resolve the issue of certain documents in Staff's possession that Southeastern believes it needs to prepare for the Rule Nisi hearing in Macon. The hearing in Macon has been postponed pending further Commission action.
Application of AT&T Telecommunications Services For Deregulation of Its Intrastate Services Pursuant to Georgia Code Section 46-2-23: GPSC Docket No. 4186-U; CUC File No. 92047.
On April 29, 1992, AT&T Telecommunications Company ("AT&T or Company") filed an Application requesting the Commission deregulate its intrastate service offerings. The Company stated that the presence of many interexchange carrier competitors provide the market
Appendix D - 51

forces necessary for robust competition, thereby eliminating the need for the expense and delay associated with the regulatory process.
At a hearing on December 9, 1992, the Commission approved a stipulation entered into by the major interexchange carriers in Georgia. A one-year trial period was put into effect and applied to interLATA business services and optional residential service offerings only. During this trial period, new tariffs and rate increases were filed on five days notice, while all increases in rates were filed on seven days notice.
The CUC did not oppose the stipulation because of the safeguards built into it for the one-year trial and the fact that residential Message Toll Services 800 Services and Operator Services continue to be fully regulated.
On December 3, 1993, AT&T filed a motion to approve the stipulation on a pennanent basis. The Telecommunications Resellers Association and International Telecommunications Exchange Corporation also filed a petition with the Commission requesting equal treatment grated to AT&T.
The CUC voiced its concern over pennanent deregulation with its belief the trial period should be extended another year or on an indefinite basis. CUC believes that a further extension of the trial period would give additional time for the Commission to study the effects of deregulation, thereby preserving the Commission's regulatory authority over these services. The CUC agrees that during the year trial period there have been no complaints registered against AT&T.
In Administrative Session on December 15, 1993, the Commission approved AT&T's motion to adopt the stipulation and deregulate interstate business services and optional residential services. All certificated switchless reseller carriers in Georgia were granted deregulation of their same services on a one-year trial basis with Commission review at the end of the 1994 trial year.
Local Exchange Companies Additional Filing Requirements
The earnings level of the following companies are presently under investigation by the Commission:
ALLTEL Georgia, Inc.; GPSC Docket Nol 4021-U; CUC File No. 91136.
Progressive Rural Telephone Cooperative; GPSC Docket No. 4024-U; CUC File No. 91134.
Public Service Telephone Company; GPSC Docket No. 4027-U; CUC File No. 91124.
Appendix D - 52

Standard Telephone Company; GPSC Docket No. 4027-U; CUC File No. 91127.
Statesboro Telephone Company; GPSC Docket o. 4028-U; CUC File No. 91131.
On April 2, 1991, during its Administrative Session, the Commission directed twenty-one
(21) local exchange companies with a return on equity of 15 % or greater to file the following
additional information for the year ending 1990: a balance sheet and income statement; operating revenue and expense schedules; and a revenue requirement calculation so that it could be determined whether or not those companies should be subject to a Rule Nisi investigation. Based on the financial information presented, the Commission dismissed fourteen (14) of the dockets. Of the seven remaining dockets, one docket resulted in a rate reduction (Docket No. 4025-U, Camden Telephone Company) and one docket was merged with the company's hardship assistance filing (Docket No. 4026-U, Chickamauga Telephone Company). The five companies listed above remain subject to the additional filing requirements dockets. According to the Commission Staff, these five cases are on hold pending the outcome of SB 144, GPSC Docket No. 4231-U; CUC File No. 92099. Under Docket No. 4231-U, the Commission is again investigating the earnings position of all telephone companies in Georgia. The purpose is to determine the level of excess earnings available to fund zero rating the 0-16 mile and, possibly, the 0-22 mile toll bands. This matter is still pending before the Commission.
Local Exchan2e Companies
Local exchange companies ("LECs"), or telephone companies, provide basic telephone service throughout Georgia. Currently, there are 36 LECs operating in Georgia. Each company is required to file with the Commission all proposed changes of the tariffs under which they operate. The following is a list of tariff filings for the year 1993.
Southern Bell Request to Remove the Tariffed Option of MegaLink & LightGate Service 1.544 Mbps Channelization Elements at Customer Premises Locations; CUC File No. 93008.
Southern Bell Introduction of Open 800 Service and 800 Access Ten-Digit Screening Service; CUC File No. 93008.
Southern Bell Request to Revise Regulations Regarding the Application of Rates for Business and Residence Service; CUC File No. 93008.
Southern Bell 1993 Filings in Connection with Special Promotions Tariff; CUC File No. 93008.
Southern Bell Request to Bill COCOT Customers the Local Tariffed Measured Rates for Sent-Paid Calls (compliance filing in connection with Docket No. 3921-U); CUC File No.
Appendix D - 53

93008.
Southern Bell Application for Authority to Introduce Several New Regulations into General Subscriber Service Tariff; CUC File No. 93008.
Southern Bell Request for Authority to Implement Second Phase of IntraLATA Toll Competition Stipulation in Dkt. No. 3995-U; CUC File No. 93008.
Southern Bell Introduction of Anonymous Call Rejection; CUC File No. 93008.
Southern Bell Introduction of Service Installation Guarantee (SIG) for Special Access and Switched Access Services; CUC File No. 93008.
Southern Bell Request to Delete Text in Special Construction Access Service Tariff (deletes nonrecurring service charge); CUC File No. 93008.
Southern Bell Compliance Filing with Tariff F.C.C. No.1: Provide Changes to Jurisdictional Reporting Requirements; CUC File No. 93008.
Southern Bell Application for Authority to Revise Existing Optional Offering Known as Derived Data Channel Service; CUC File No. 93008.
Southern Bell Introduction of Custom Network Service; CUC File No. 93008.
Southern Bell Request to Revise Transfer of Service Provisions; CUC File No. 93008. Southern Bell Introduction of New Tariff Language Requiring IXCs to Provide ew Pill Factors for Switched Transport Facilities; CUC File No. 93008.
Southern Bell Request to Revise Sections E3 and E9 (CCL Access) of Intrastate Access Service Tariff; CUC File No. 93008. Southern Bell Revision of Tariff Language for Bill Processing Service for Enhanced Service Providers; CUC File No. 93008. Southern Bell Request to Revise Text of Nll Service Tariffs as Required by Commission's Order in Dkt. No. 4232-U; CUC File No. 93008.
Southern Bell Introduction of Directory Assistance Database Service (DADS) and Directory Publishers Database Service (DPDS); CUC File No. 93008.
Appendix D - 54

Southern Bell Introduction of Designer Listings Service for Residential Customers; CUC File No. 93008.
Southern Bell Request to Increase Returned Check Charge; CUC File No. 93008.
Southern Bell Application to Change Manner in Which Service Charges are Applied in the Event of Disasters; CUC File No. 93008.
Southern Bell Introduction of ative Mode LAN Interconnection (NMLI) on Market Trial Basis; CUC File No. 93008.
Southern Bell Introduction of Two Optional Features for FGA/LSBSA Customers: Call Screening and Split Hunt Arrangement; CUC File No. 93008.
Southern Bell Request to Remove Restriction from Saver Service Tariff; CUC File 93008.
Southern Bell Introduction of Interstate Option to Existing Open 800 Service; CUC File No. 93008.
Southern Bell Application to Make Clarifying Text Changes to Nll Service Tariff & Extension of Nll Service Blocking to ESSX Service; CUC File No. 93008.
Southern Bell Introduction of Inmate Calling Services; Introduction of Public Telephone Access Line for the Institutional Service Providers for COCOT Service Providers; CUC File No. 93008.
Southern Bell Request to Extend Derived Data Channel Service to Access Services Tariff (also introduces Data Over Voice Channel Service); CUC File No. 93008.
Southern Bell Request to Enhance Existing Integrated Digital Service Network (ISDN) Offering; CUC File No. 93008.
Southern Bell Application to Extend Date by Which Combined 800 Service Will be Grandfathered; CUC File No. 93008.
Southern Bell Request to Make Various Text Changes (includes text modifications to prevent Nll calls from being placed through the Georgia Relay Center); CUC File No. 93008.
Southern Bell Petition to Extend Optional Transactions Capabilities Application Part (TCAP) Service Offering; CUC File No. 93008.
Southern Bell Request to Make Text Revisions to Section E 10 of Access Service Tariff; CUC File No. 93008.
Appendix D - 55

Southern Bell Request to Restructure Switched Access Local Transport Rate Element; CUC File No. 93008.
Southern Bell Application to Introduce Company Initiated Blocking and Eliminate Charge for Secondary Request for Certain Customized Code Restrictions; CUC File No. 93008.
Southern Bell Request to Extend Market Trial for Frame Relay Service; CUC File No. 93008.
Southern Bell Request to Grandfather and Obsolete Customized Dialing Package (CDP) Service; CUC File No.93008.
Southern Bell Application to Obsolete Combined 800 Service; CUC File No. 93008.
Southern Bell Request to Extend Existing ISDN Service to Single-Line Business and Residential Customers; CUC File No. 93008.
Southern Bell Introduction of SmartLine Service for COCOT Providers; CUC File No. 93008.
Southern Bell Application to Extend Existing Trial Tariff for Switched MuItimegabit Data Service (SMDS) for Additional One-Year Period; CUC File No. 93008.
Southern Bell Request to Add New Tariff Provision Regarding Variable Term Payment Plans for State, County and Municipal Governmental Entities; CUC File No. 93008.
Southern Bell Request to Permanently Provide Bill Processing Service to all Enhanced Service Providers; CUC File No. 93008.
ALLTEL Request to Add 19.2 kbps Digital Service Special Access Rates to NECA Tariff No.5; CUC File No. 93011.
ALLTEL Application to Delete Installation Charge for Touch Calling Service; CUC File No. 93011.
ALLTEL Request to Change Initial Temporary Billing Service Period from Three Months to One Month; CUC File No. 93011.
ALLTEL Request to Distribute Refund Amount of $8,038 in the Form of a Credit on Future Carrier Access Bills; CUC File No. 93011.
ALLTEL Application to Introduce Datapath Service; CUC File NO. 93011.
Appendix 0 - 56

ALLTEL Request to Make Text Changes to Link Up Georgia Tariff Provisions; CUC File No. 93011.
ALLTEL Georgia Communications Corporation Request to Add Tariff Language to Georgia Network Access Register (NAR) Package; CUC File No. 93011.
GTE Systems of the South Request to Remove Non-premium Carrier Common Line and Switched Access Service; CUC File No. 93010.
GTE Systems of the South 1993 Special Promotions Tariff Filings; CUC File No. 93010.
GTE Systems of the South Introduction of Calling Plans -- GTE Discount Calling Plans Service; CUC File No. 93010.
GTE Systems of the South Introduction of 800 Data Base Query Service; CUC File No. 93010.
GTE Systems of the South Request to Reduce Selective Routing Common Equipment Charges in Connection with 911; CUC File No. 93010.
GTE South Request to Modify GTE's Billing and Collections Services; CUC File No. 93009.
GTE South Introduction of Calling Plans -- GTE Discount Calling Plans Services; CUC File No. 93009.
GTE South 1993 Special Promotions Tariff Filings; CUC File No. 93009.
GTE South Winter Storm Assistance Plan; CUC File No. 93009.
GTE South Request to Revise Special Service Arrangement of CentraNet Service for the State of Georgia; CUC File No. 93009.
GTE South Introduction of 800 Data Base Query Service; CUC File No. 93009.
GTE South Request to Reduce Selective Routing Common Equipment Charges in Connection with 911; CUC File No. 93009.
GTE South Introduction of Directory Connect Plus; CUC File No. 93009.
GTE South Provision of Customer Network Control Service (CNC) to Shaw Industries; CUC File No. 93009.
GTE/Walker County Telephone Co. Request for Authority to Offer Special Promotions; CUC File No. 93009.
Appendix D - 57

GTE/Walker Co. Telephone Co. Introduction of Calling Plans -- GTE Discount Calling
Plans Service; cue File No. 93009.
GTA Members Application for Revisions to Section S of Telephone Tariff for SS7
Signaling, STP Connections & 800 Data Base Queries; (28 member companies); cue No.
93043
Blue Ridge Telephone Company for Authority to Introduce Centrex Service; cue File No.
93049-1
Blue Ridge Telephone Company for Authority to Introduce Additional Custom Calling
Features; cue File No. 93049-2 Bulloch Telephone Cooperative, Inc. For Direct-Inward-Dialing Service; cue File No.
93036-1
Bulloch Telephone Cooperative, Inc. To Revise Rates for General Subscriber Services
Tariff and Introduce Caller ID and Other CLASS Features; cue File No. 93036-2 Camden Telephone Company to Add Custom Calling Services; cue File No. 93089-1
Coastal Utilities, Inc. to provide Verification and Emergency Service, Operator Assisted Local Calls, Direct-Inward Dialing Service and Universal Emergency Number Service-911; CUC File No. 93018
Citizens Telephone Company, Inc. Request to Modify Individual Depreciation Rates Under
GPSC Rules Section 515-3-1-.10; Docket No. 4337-U; cue File No. 93025
Hart Telephone Company to Introduce CLASS Services and Add Additional Custom
Calling Features; cue File No. 93100 Hawkinsville Telephone Company Application For Depreciation Rate Represcription; cue
File No. 93022
Interstate Telephone Company to Introduce CLASS Services and Establish a Special Service Interconnection Charge for Centrex Service at T-l Level; GPSC Docket Nos. 4839-U and
4852-U; cue File No. 93098
elson-Ballground Application for Depreciation Rate Represcription; CUC File No. 93044-1
Nelson-Ballground Application for Continuing Relief From the Universal Service Fund;
cue File No. 93044-2
Appendix D - 58

Peoples Telephone Company Request for Waiver to Allow Blocking of Incoming Calls on Certain Payphones; CUC File No. 93028-1
Pembroke Telephone Company, Inc. Request for Increased Charges for Verification of Emergency Interrupt Service and Operator Assisted Local Calls; CUC File No. 93033-1
Planters Rural Telephone Cooperative, Inc. For Direct-Inward-Dialing Service; CUC File No. 93035-1
Planters Rural Telephone Cooperative, Inc. for Revisions to General Subscriber Services Tariff and to Introduce Caller ill and other CLASS Features; CUC File No. 93035-2
Progressive Rural Telephone Co-operative, Inc. for Authority to Introduce Volunteer Fireman Concession Telephone Service; CUC File No. 93029-1
Public Service Telephone Company Estimate of Construction Costs to Build an Aerial Line to Service Customer; CUC File No. 93046-1
Public Service Telephone Company to Increase Rates Relative to EAS and for ew Depreciation Rates; CUC File No. 93046-2
Quincy Telephone Company to Provide a Telephone Charge Concession to Full-time Employees; CUC File No. 93081
Ringgold Telephone Company Revised Carrier Common Line Access Rate; CUC File No. 92023
Standard Telephone Company to Offer Call Forwarding Busy Line and Call Forwarding Don't Answer; CUC File No. 93017
Statesboro Telephone Company to Introduce Centrex Service; Docket No. 4612-U; CUC File No. 93069
Waverly Hall Telephone Company for Authority to Record the Extraordinary Retirement of Computer Hardware and Software; CUC File No. 93020-1
Waverly Hall Telephone Company Revised Carrier Common Line Rates; CUC File No. 93020-2
Wilkes Telephone and Electric Company for Authority to Introduce Directory Assistance Call Completion Service; Docket No. 4609-U; CUC File No. 93068
Wilkinson County Telephone Company to Offer Separate or Packaged Custom Calling Features; CUC File No. 93019
Appendix D - 59

Interexchan2e Carriers
Interexchange Carriers (ltIXCS It) provide intrastate and interstate long distance service. There are presently 11 IXCs operating in Georgia. IXCs must file any tariff changes with the Commission that affect intrastate rates and charges. CUC carefully analyzed the following IXC filings for potential impact on ratepayers:
ATC Add Three New Competitive Services to Resale Tariff; CUC File No. 93002-1
ATC Add Charges for OnLine Card Customers Who Choose to Access an Operator; CUC File No. 93002-2
ATC Add The Answer; Clarify ATC 800 Features; Add New Text to Association Saver/Alumni Saver; CUC File No. 93002-3
LDDS OF GEORGIA, INC. (ATC) The Answer; MTS Dial USA Service; RingAmerica and Assoc. Saver/Alumni Saver; CUC File No. 93002-4
LDDS OF GEORGIA, INC. Consolidate Georgia Service Offerings of LDDS Operating Subsidiaries Under Five Certificates of Public Convenience and Necessity; CUC File No. 93002-5
LDDS OF GEORGIA, INC. Add Discounted Service Offering for Hearing/speech Impaired; CUC File No. 93002-6
LDDS OF GEORGIA, INC. Add 800 Portability Language, Include Definition Language For Liability and Payments of 800 Charges; CUC File No. 93002-7
LDDS OF GEORGIA, INC. Incorporate ATC Products Into the LDDS Tariff; cue File
No. 93002-8
LDDS OF GEORGIA, INC. Add EasyAnswer; cue File No. 93002-9
AT&T Introduce Commercial Long Distance Service in Georgia; CUC File No. 93003-1
AT&T Revise Billing Charges and Discounts for Hearing or Speech Impaired Customers;
cue File No. 93003-2
Appendix D - 60

I
AT&T Third Amendatory Letter Order: Provide Relay Service for an Additional 2 Years from 4/1/94 through 3/31/96 and SBT and all LEC's Increase the Monthly DPRS Maintenance Surcharge Amount Currently Imposed from $.07 to $.10 effective 7/1/94; CUC File No. 93003
AT&T Introduce DIRECTORY LINK Service Which Will Provide Customer Who Uses a Calling Card or Calls the AT&T Operator Directly the Option of Having Their Calls Completed After Getting the Number From AT&T Directory Assistance Without Having to Hang Up and Dial the umber; CUC File No. 93003-3
AT&T Increase the Operator Station Service Charge and Surcharge for Operator Dialed Calls. (Final step in aligning intrastate service charges with interstate charges.) CUC File No. 93003-4
AT&T Restructure Operator Station Service Charge and Reduce Directory Assistance Calls for Disabled to 50 Calls Per Month; CUC File No. 93003-5
MCI Introduce EasyRate; CUC File No. 93004-1
MCI Application to Revise MCI 800 Service: Reduce Monthly Charge for Business Line Termination, etc.; CUC File No. 93004-2
MCI Re-introduce Special Promotion for Private Line Services; CUC File No. 93004-3
MCI Introduce Discount Plan for Vision Customers (Interstate Off-Peak) and Increase Per Minute Usage Rate With Vision Card; CUC File No. 93004-4
MCI Add an Additional Classification of Operator Assisted Calls; CUC File No. 93004-5
MCI Increase Station-to-Station, Third Party Billed & Operator Dialed Surcharges Associated With Operator Assisted Calls; CUC File No. 93004-6
MCI Restructure Metered Use Service Option I (Vnet Service); CUC File No. 93004-7
MCI Extend the Interstate Special Promotion to New and Existing Private Line Customers in Georgia Who Order One or More New MCI-Provided Voice Grade Data, Voice Grade Private Line, or Digital Private Line Circuits Between 8/1/93 and 9/30/93; CUC File No. 93004-8
MCI Introduce Metered Use Service Option M (Commercial Dial 1 Service); CUC File No. 93004-9
MCI Revise Metered Use Option K (MCI Preferred) 800 ; Increase the Per Minute Usage Charge of Vision Card Access; CUC File No. 93004-10
Appendix D - 61

MCI Delete Language Pertaining to 1-800-COLLECT; CUC File No. 93004-11 MCI Revise Access Coordination and Central Office Connection Charges Associated With Digital Private Line Service, etc.; CUC File No. 93004-12 MCI Extend Interstate Vision Regional Promotion to New and Existing Vision Customers; CUC File No. 93004-13 US SPRINT Eliminate the Complimentary Call Allowance for Directory Assistance; CUC File No. 93004-2 US SPRINT Promotional Offering For ew Commercial Customers: 800 Free Minutes of Usage; CUC File No. 93004-3 US SPRINT Introduce The Most for Business; CUC File No. 93004-4 US SPRINT Increase the Usage Rates for ULTRA 800; CUC File No. 93004-5 US SPRINT Introduce an Operator Dialed Surcharge; CUC File No. 93004-6 US SPRINT Increase Usage Rates For: FONCARD Advantage, FONCARD 800, ULTRA 800, Clarity FO CARD; CUC File No. 93004-7 US SPRINT Eliminate Certain Holidays From the Holiday Definition and Make Text Change to Indicate That Holiday Rates Only Apply to Day on Which Holiday Occurs; Add Option A, Sprint Clarity and Residential 800 Service to the Affinity Member Program; CUC File No. 93004-8 US SPRINT Introduce Sprint Clarity Switched Data Service, Introduce Clarity Customizer; Reduce Usage Rates for Clarity and Targeted Calling Options; and Add Option A, Sprint Clarity and Residential 800 Service; CUC File No. 93004-9
Appendix D - 62

GENERIC UTILITY CASES
Commission's Notice of Inquiry Issued to All Electric and Gas Utilities for Review of Remaining IRP and DSM Issues Pursuant to O.C.G.A. Section 46-3A-9 and Sections 111 and 1156 of the Energy Policy Act, Including the Treatment of Lost Revenues (Decoupling), if any, due to DSM; GPSC Docket 4229-U; CUC File No. 93092.
On October 19, 1993, the Commission issued a Notice of Inquiry (NOI) to all electric, natural gas and parties of record in Docket Nos. 4131-U through 4136-U. The purpose of this docket is to investigate, with the assistance of all interested parties, the remaining integrated resource plan ("IRP") and demand-side management ("DSM") issues related to the Georgia IRP statute (O.e.G.A. Section 46-3A-9) and the Energy Policy Act of 1992 (EPACT").
More specifically, the issues to be addressed relate to the treatment of lost revenues, if any, resulting from implementation of DSM programs. The decoupling portion of this docket addresses whether "revenue decoupling mechanisms" that adjust base rates between rate cases so that the utility recovers its allowed revenues, independent of sales, will eliminate a disincentive to DSM. However, as stated in the Scope of the NOI, it is the intent of the Commission in this docket to address more than decoupling mechanisms. Rather, the issues addressed will include both "lost revenue" issues and general IRP issues not previously addressed.
The Commission approved the proposed scheduling order in the November 2, 1993, Administrative Session. Comments from all parties are due January 21, 1994. The CUC will review such comments and file reply comments on April 15, 1994.
Economic Development Incentive Policy: GPSC Docket No. 4697-U; CUC File No. 93075.
In Administrative Session on August 3, 1993, the Commission voted to establish a comprehensive generic docket designed to establish a uniform state policy regarding economic development incentives for all utilities under its regulatory jurisdiction.
Economic development or incentive rates are defined as discounts offered by telephone, gas and electric utilities in the form of tariffs, riders, special contracts, or other provisions applicable to new or existing customers' initial or expanded utility services. The CUC will take an active part in all phases of this docket.
Appendix D - 63

A proposed Scheduling Order was approved in Administrative Session on September 21, 1993. On November 22, 1993, all utilities under regulatory jurisdiction submitted proposed tariffs and prefiled testimony. Hearings will take place in the early part of 1994.
FINANCING APPLICATIONS
Application of Georgia Power Company for Authority to Issue Up To An Additional $950,000,000 in Securities Through March 31, 1994 For Refunding Purposes Only; GPSC Docket No. 4376-U; CUC File No. 93027.
On February 24, 1993, Georgia Power Company ("Company") filed with the Commission an application seeking authority to issue and sell, for refunding purposes only, up to an additional $950,000,000 in securities through March 31, 1994. The Company stated that additional financing authority is desired in order to refund certain higher cost securities with lower cost securities, to meet sinking fund obligations, and to retire short-tenn borrowings. The Company also stated that interest and dividend rates have declined further during January 1993, which has allowed the Company to continue to broaden its refunding plans.
The projected annual savings derived from refunding from the requested authority in this filing is $9.5 million. After reviewing the filing, the CUC found no reason to oppose the Company's filing. The Commission approved the Company's application in its Administrative Session of March 9, 1993.
Application of Georgia Power Company for Authority to Issue Up To $1,100,000,000 in Securities For Refunding Purposes Only And To Issue Up To $50,000,000 in
Pollution Control Obligations; GPSC o. 4534-U; cue File No. 93061.
Georgia Power Company ("Company") filed an application with the Commission on May 18, 1993, requesting authority to issue and sell up to $1,100,000,000 in securities through December 31, 1994, for refunding purposes only. In addition, the Company is requesting authority to issue up to $50,000,000 in pollution control obligations to finance new pollution control expenditures. The Company anticipates annual savings of approximately $28.8 million from refunding.
The pollution control expenditures consist of approximately $40,000,000 at Plant Bowen and approximately $10 000,000 at Plant Hammond.
With no opposition from the cue, this matter was approved by the Georgia Public
Service Commission in its Administrative Session of June 1, 1993.
Appendix D - 64

Application of Atlanta Gas Light Company for Authority to Issue Securities; GPSC Docket No. 4507-U; CUC File No. 93051.
On April 30, 1993, Atlanta Gas Light Company ("AGL" or "Company") filed an application with the Commission to issue the following securities:
(1) Up to $300,000,000 aggregate principal amount of its secured or unsecured notes, debentures, revenue bonds or similar long-tenn debt securities;
(2) Up to 3,000,000 additional shares of its previously authorized but unissued Common Stock; and
(3) Shares of Common Stock sufficient to effect a common stock dividend or split in the form of a common stock dividend, if either is declared by the Company's Board of Directors.
The proceeds will be used to finance construction, completion, extension and improvement of facilities and properties, to refinance various outstanding debt securities and to reduce its then outstanding indebtedness under short-term bank loans.
After reviewing the filing, the CUC found no reason to oppose the Company's filing. This matter was approved by the Georgia Public Service Commission in its Administrative Session of June 1, 1993. Subsequently, the Company requested a hearing on this matter after being advised by its legal staff that to make sure the application was properly approved a hearing may be necessary. This matter was scheduled for hearing July 8, 1993, at which time a shon hearing was held. This matter was approved by the Commission in its August 3, 1993, Administrative Session.
Application of Pembroke Telephone Company for Approval of Financing Authority; GPSC Docket No. 4774-U; CUC File No. 93083.
On September 27, 1993, Pembroke Telephone Company filed with the Commission a financing application to borrow $6,889,000 from the Rural Electrification Administration ("REA") at a fixed annual interest rate of 5%. The proceeds from the loan will be used to: 1) connect 799 new subscribers; 2) upgrade software and hardware in the Pembroke digital central office' 3) construct a portion of a fiber optic ring; 4) construct five buildings to house remote line switches and $600,000 for a new headquarters building; and 5) purchase computer aided design equipment. The funds will be advanced over a period of five years. The Company requested waiver of a fonnal hearing on the matter.
After reviewing the Company's filing, the CUC had no objection to the Company's request for financing. This matter was approved by the Commission in its October 19, 1993, Administrative Session.
Appendix D - 65

Application of United Cities Gas Company for Approval of Financing Authority; GPSC Docket No. 4834-U; CUC File No. 93087.
On October 26, 1993, United Cities Gas Company ("Company") filed applications with the Georgia Public Service Commission requesting authority to:
(1) Issue 200,000 shares of common stock, pursuant to the terms and provisions of its Employee Stock Purchase Plan;
(2) Issue 100,000 shares of common stock, pursuant to the terms and provisions of its 401(k) Savings Plan; and
(3) Issue 200,000 shares of common stock, pursuant to the terms and provisions of a Direct Stock Purchase Plan.
The 401 (k) Savings Plan, which was adopted in 1987, is being amended such that the Company will be authorized to contribute 100,000 shares of its common stock on behalf of its employees instead of cash for the optional additional 20 % match of the first 6 % contributed by an employee to the 401(k) plan. The Company states that this amendment provides its employees an additional method by which to acquire common stock.
The Employee Stock Purchase Plan was adopted in 1968. The plan authorizes the sale of United Cities Common Stock to its employees at a 10% discount of the average of the closing asked prices for the stock on the Over-the-Counter market for the 30-day period prior to each Price Date. The Company has only 33,745 shares of common stock unissued under the plan and believes these shares to be insufficient to provide for normal and anticipated employee purchases. Therefore, the Company is requesting authority to increase the shares available for sale to its employees by 200,000 shares.
On August 6, 1993, the Company's Board of Directors created the Direct Stock Purchase Plan to encourage initial purchases of shares of the Company's common stock by persons residing in the jurisdictions in which the Company provides energy services. The plan allows any person who is not already a shareholder (including any employee of the Company) and who resides in any of the ten states in which the Company and its subsidiaries operate to make one stock purchase at a 5 % discount to the average price per share based on the closing prices for the period of five trading days ending on the Price Date.
The Company states that the proceeds from the issuance and sale of these shares will be used to increase cash available for working capital, pay bank loans, acquire property and fund the construction, extension or improvement of or additions to its facilities.
Based on a market price of $18.00, issuance of these shares will increase the balance of common stock by $9,000,000 or approximately 10%. The Company is also requesting waiver of GPSC Rule 515-4-1.13 ("Hearing Before Commission").
Appendix D - 66

I'
After reviewing the Company's filing, the CUC found no reason to oppose the Company's request. This matter is presently pending before ~he Commission.
Application of Dial Page, Inc. to Issue Securities For Its 1992 Equity Incentive Plan:
GPSC Docket Nos. 4137-U and 4138-U; cue File No. 93039.
On April 4, 1993, Dial Page, Inc. filed an application for authority to issue securities in the name of Dial Page, Inc. for radio common carrier systems in Savannah and Statesboro. The Georgia subsidiary will be called Dial Page Southeast, Inc. The effect of the reorganization is a name change only with sole ownership remaining with the parent company, Dial Page, Inc. The CUC monitored the filing for any possible ratepayer impact.
Approved by the Commission in Administrative Session on July 6, 1993 .

Appendix D - 67

ACCOUNTING
Statement of Financial Accounting Standard 106 (Other Post-retirement Benefits) and Statement of Financial Accounting Standard 109 (Accounting For Income Taxes); GPSC Docket 4247-U; CUC File No. 92105.
On October 20, 1992, the Commission established an investigatory docket to determine the extent of the impact of SFAS 106 and SFAS 109 on regulated utilities and jurisdictional ratepayers.
Both of these accounting changes effect the way certain costs are recovered from the ratepayers. The changes will effect the financial books of all regulated utilities and are effective in 1993. SFAS 109 establishes rules governing financial accounting and reporting for the effects of income taxes resulting from an enterprise's activities in current and prior years. It is believed that adopting SFAS 109 will generally not have a significant income statement effect on regulated operations. However, the balance sheet will be more significantly effected. Under SFAS 109, enterprises will recognize deferred tax liabilities for all taxable temporary differences while deferred tax assets will be recognized for deductible temporary differences and operating loss and tax credit carryforwards. Based on available evidence, deferred tax assets will be reduced by valuation allowance to amounts more likely to be reali~ed in future tax returns. As of yet, the Commission has taken no position on SFAS 109.
Generally, SFAS 106 (or, Other Post-Retirement Benefits--"OPRB") requires that for financial accounting purposes, employers must recognize post-retirement benefit obligations and related costs during the period employees provide the service that entitles them to the future benefits. This approach is best known as the accrual method.
Prior to this requirement, such post-retirements benefits were recognized for financial reporting purposes on a pay-as-you-go or cash method whereby the obligations and costs are not recognized until the future benefits are actually paid to retired employees. Historically, the public utility industry and regulators have accounted for post-retirement benefits on the pay-asyou-go or cash basis. The costs of benefits provided to qualified retirees have been included in rates and assigned to those ratepayers that purchase service during the period that the retiree received the benefit.
With the implementation of SFAS 106, regulators are faced with reconsidering the proper cost assignment of post-retirement benefits from a ratemaking perspective. In a position paper issued by the GPSC Staff ("Staff"), the Staff determined that there are basically three possible approaches: (1) continue pay-as-you-go; (2) allow SFAS 106 accounting with internal funding
Appendix D - 68

. ..
and/or external funding as options; or (3) allow SFAS 106 accounting and mandate external funding. The GPSC Staff recommended: (1) that the Commission direct all utilities to adopt SFAS 106 for accounting without mandating external funding; (2) that the Commission direct all utilities to file a plan with the Commission within 30 days of adoption of SFAS 106 incorporating and implementing SFAS 106, including rate recovery; and (3) that the Commission review each plan and approve, reject or modify the plans with specific provisions for rate recovery on a case-by-case basis. On March 18, 1993, the Commission adopted Staff's position.
In its Administrative Session held on May 18, 1993, the Commission considered the compliance filings of Georgia Power Company, Savannah Electric & Power Company and BellSouth Telecommunications, Inc., d/b/a Southern Bell Telephone & Telegraph Company. Prior to the session, the CUC filed a letter with the Commission requesting hearings on each company's plan of implementing SFAS 106. The CUC's request was granted. Hearings were held on July 22 to hear the evidence in the Georgia Power Company and Savannah Electric Dockets 4564-U and 4565-U, respectively. Hearings were held on July 23 to hear the evidence in the Southern Bell and General Telephone Dockets 4566-U and 4567-U, respectively. The CUC provided expert witness testimony in each of these dockets.
On October 12, 1993, the Commission rendered its decisions in these dockets. The Commission accepted the GPSC Staff's recommendation for Savannah Electric (Docket No. 4564-U), Southern Bell (Docket No. 4466-U), and GTE South, Inc. (Docket No. 4567-U). Staff's recommendation in those cases was to the accept the plans as filed by the respective companies. In Docket No. 4565-U (Georgia Power Company), the Commission accepted CUC's recommendation. CUC's recommendation calls for an immediate five-year phase-in of the OPRB expenses instead of a five-year deferral of these costs as proposed in the Company's filing.
Appendix D - 69

..
APPENDIX E UTILITY FILINGS

Utility Filings
Following is a list of records and reports on file in this office for the indicated utility company:
Atlanta Gas Light Company
1. Monthly Operating Reports 2. PGA Revenues & Cost of Gas 3. Purchased Gas Adjustment 4. Computation of Direct Bill Take-Or-Pay Gas
Cost Recovery Factor 5. Interruptible Transportation and Sales Maintenance Rider 6. Computation of Environmental Response Cost Recovery Rider 7. Computation of Interruptible Gas Cost Adjustment Rider 8. Annual Reports 9. All Tariffs and Service Schedules
United Cities Gas Company
1. Monthly Purchased Gas Adjustment 2. Monthly Take-Or-Pay Computations 3. Purchased Gas Adjustment and Franchise Tax Recovery Riders 4. Weather Normalization Adjustment Rider 5. All Tariffs and Service Schedules
Georgia Power Company
1. Customer Accounting Procedures 2. Monthly Operating Report & Accounting Work Papers 3. Generating Plant Outage Reports 4. Fuel Cost Recovery Position 5. Quarterly Survey of Customers Utilizing Time of Use Rate 6. Monthly Billing Determinants 7. Load Duration Curves 8. Schedule of Program Payments (Re: Docket 3618-U) 9. Retail Surveillance Reports 10. Major Generating Plant Construction Cost & Forecast Summary 11. Real Time Pricing Reports 12. Economy Energy Sales Adjustment Rider 13. Quarterly Energy Efficiency Programs Report
Appendix E - 1

14. Quarterly Results of Georgia Power Company and Savannah Electric Construction of McIntosh Combustion Turbines
15. GPSC Fonn 101 - Electric Energy Companies 16. Pilot Lighting Compliance Filing 17. Job Creation Rider Monthly Regulatory Report 18. Annual Reports 19. All Tariffs and Service Schedules
Savannah Electric & Power Company
1. Monthly Operating Reports 2. Monthly Financial Reports 3. Fuel Cost Recovery Statements 4. Coal Conversion Costs Recovery Statements 5. Quarterly Surveillance Filing 6. All Tariffs and Service Schedules
Electric Membership Corporations
1. Changes in Rate Schedules 2. All Tariffs and Service Schedules
Southern Bell Telephone & Telegraph Company
1. Fonn 522 (Detail of Monthly Revenues and Expenses) 2. Monthly Surveillance Reports 3. Monthly Quality of Service Reports 4. Tracking Report on Rate Design Changes Implemented
in Docket 3905-U 5. All Tariffs and Service Schedules
All Other Local Exchange Companies
1. Annual Reports 2. Fonn M 3. All Tariffs and Service Schedules
Appendix E - 2