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Press Release

Attorney General's Office Negotiates Rate Reduction and Refunds for Adak Telephone Customers

October 9, 2008

(Anchorage, AK) The Alaska Attorney General's office, under the direction of Attorney General Talis Colberg who serves as the Public Advocate for regulatory matters, negotiated a settlement with Adak Eagle Enterprises, LLC d/b/a Adak Telephone Utility (AdakTel) that provides for a one-time 33% rate refund to consumers for local rates paid during 2008, and a 57% rate reduction in permanent local telephone rates going forward. On 9/17/08 in Docket U-07-144, the Regulatory Commission of Alaska (RCA) approved the stipulated agreement between state attorneys and AdakTel.

In late 2007, AdakTel filed two successive simplified rate filings with the RCA in which it sought to reduce rates by less than the 57% amount cost-justified because of anticipated, near-term cost increases and reduced universal service subsidy support of its revenue requirement. The RCA suspended the utility's filings for further review but approved the utility's request for an interim rate reduction of only 23% until the case was concluded. At the time of AdakTel's filing, the residential, local telephone rate for its customers was approximately $100 per month.

Responsive to RCA request, the Attorney General elected to participate in the proceeding on behalf of the public interest on 1/18/08. AS 44.23.020(e). The Regulatory Affairs & Public Advocacy (RAPA) section of the Attorney General's office began to analyze the utility's filings and was prepared to file testimony regarding the issues in the case.

On 8/18/08, the Attorney General's office (RAPA) and AdakTel filed a Stipulation with the RCA to resolve all issues regarding the utility's filings. In the Stipulation, AdakTel agreed to reduce residential and business local telephone rates by 57%. Also, the utility agreed to issue approximately $57,000 in total refunds (reflecting the difference between the 57% permanent rate reduction and the 23% interim rate reduction) for application to each individual customer's bill. Finally, AdakTel agreed to file a new, full rate case for RCA review in 2009.

Following RCA approval of the settlement, new local telephone rates became effective 9/17/08, and the utility plans to issue refunds to its customers by crediting the monthly bills issued during the last week of October 2008.

For further information, please contact Daniel Patrick O'Tierney, Chief Assistant Attorney General for Regulatory Affairs & Public Advocacy (RAPA) at (907)269-5100.

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