The California Public Utilities Commission on Wednesday ordered Pacific Bell to trim its telephone rates by $191 million a year, effective May 1.
Neither the commission nor the company could offer an immediate estimate of how much the action would reduce residential bills.
But Pacific Bell, which had unsuccessfully argued for a $75.7-million rate cut, estimated that its proposal would have reduced bills by about 20 cents a month. Since the commission's reduction is 2.5 times greater, the monthly savings could amount to about 50 cents--all other things being equal.
Pacific Bell's customers currently pay a 4.13% surcharge that is applied to their total local phone charges. The PUC order will reduce the size of this surcharge starting with May bills.
The company was unhappy with the decision, which it claimed "overestimates the effect on our revenues of growth while underestimating the expenses which growth forces Pacific to absorb." The company said it is unable, under its present rates, to achieve its authorized maximum rate of return of 12.52%.