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Qwest under scrutiny in Montana
By The Associated Press
Denver Post
Thursday, May 24, 2007


Helena, Mont. - The Montana Public Service Commission has agreed to investigate a complaint, filed by Commissioner Ken Toole before he was elected, that Qwest Communications is exceeding its allowed profit in Montana.

The complaint was filed last October and the PSC this week set a schedule for the investigation, including an Oct. 31 hearing, but not before two commissioners questioned whether the complaint was politically motivated.

"What we have is a utility behaving very arrogantly, and, by all indications, over-earning by massive amounts," said Toole, D-Helena, who has excused himself from participating in or voting on the case.

The complaint says Qwest, the dominant telephone company in Montana, has earned $85 million more than its authorized rate of return in the state the past five years.  The complaint says Qwest, as a regulated utility, is authorized to make up to a 10.44 percent return on its investments in Montana, but has earned between 19 percent and 21.7 percent annually, dating back to 2001.

Qwest spokeswoman Jennifer Barton in Denver said Wednesday that the company looks forward to responding to evidence filed in the case.

"It's hard to imagine what that (evidence) will be, since Qwest has not raised rates in Montana in 15 years," she said.

Qwest serves about 300,000 customers in Montana.

Testimony and evidence in the case will be filed with the PSC starting June 29 and continuing throughout the summer and early fall.

Toole's name remains on the complaint, although two weeks ago he was removed as lead plaintiff and replaced with Russ Doty of Billings, a Democrat who lost a 2004 PSC election to Brad Molnar.

Commissioner Molnar, R-Laurel, complained that Toole and Doty were using the case for personal political gain.

Doty said Wednesday he has no current plans to run again and that his involvement in the case is not political.

Commissioner Doug Mood, R-Seeley Lake, said the complaint would have "more believability and integrity" if it didn't "seem to have a political aspect."  After the commission voted to proceed with the complaint, Toole said he's been involved in efforts to scrutinize Qwest's earnings for more than two years, and that there's nothing politically motivated about the complaint.

Even if it has a political aspect, that's no reason to delay or deny the investigation, he said.

"That (would be) straight-up political-belief discrimination," which is prohibited by the state constitution, Toole said.

The five-member commission tried in 2003 to force Qwest to justify its current rates, suspecting they are too high, but the company wouldn't provide information requested by the PSC.

The commission took the issue to court and lost, and then appealed the ruling to the Montana Supreme Court in late 2004.  The high court has yet to rule on the appeal.

Toole said the commission couldn't make Qwest return the money earned in the past, but should put a stop to over-earning that he says is approaching $20 million a year.

http://www.denverpost.com/business/ci_5977021