MPUC Comment: FairPoint Customer Rate Reduction Approved by Bankruptcy Court; FairPoint Regulatory Requests for Maine Released
February 9, 2010
Augusta, Maine— On the heels of FairPoint’s filing of its bankruptcy plan of reorganization (yesterday), two events have taken place in the last twenty-four hours involving the Maine Public Utilities Commission and FairPoint.
First: Today the federal bankruptcy judge approved a consent order which dissolved the “stay” which had been issued against the Commission’s enforcement of a November order directed at FairPoint. As a result, FairPoint will begin crediting customer bills beginning March 1 for the rate adjustments required because of their failure to meet service quality benchmarks in 2008-2009. Customer bills are to be lowered by $1.72 per line per month for a year starting March 1st, 2010, for a total rate adjustment which will be slightly in excess of $ 8 million.
The November 2009 Commission order had directed FairPoint to credit customer bills starting December 1, 2009. FairPoint had then filed in bankruptcy court to seek relief from this regulatory requirement; the Commission objected. After several hearing dates were postponed, the court judge ordered the Commission and FairPoint to participate in mediation.
Second: The Commission appointed a staff member to participate in the court-ordered mediation process (between the Commission, FairPoint, and the Office of the Public Advocate-OPA). Upon ordering the mediation, bankruptcy court explicitly acknowledged and ratified that the Commission’s representative to the mediation was limited to making recommendations to the Commission and that the representative was without authority to bind the Commission’s future actions. The Commission staff member-- along with FairPoint and the OPA--has today agreed to recommend that the Commission approve various regulatory requests by FairPoint which arise out of the Plan of Reorganization filed by the company yesterday in bankruptcy court.
FairPoint’s requests are related to change of control of the company, and certain modifications to the broadband build-out and pricing requirements which had been imposed by the Commission on FairPoint in the 2008 order approving the FairPoint/Verizon merger. This agreement does not and cannot diminish the Commission’s obligation and authority to consider and deliberate on any filing of a FairPoint request for Commission approval of these issues in an open proceeding in which all interested parties have an opportunity to participate.
The Commission expects FairPoint to file a petition in the next several days asking the Commission to commence a public proceeding in order to consider the company’s request for approval of a proposed change in control of the company and for modifications of provisions of the 2008 Verizon/FairPoint merger order.
Contact: Evelyn deFrees, 207-287-6141 evelyn.defrees@maine.gov
