TELEPHONE CUSTOMERS IN MISSOURI GET CREDITS FROM SOUTHWESTERN BELL

Southwestern Bell Telephone Co. customers in Missouri received a little holiday cheer in the form of credits on their December phone bills.

Statewide, the credits total nearly $70 million on phone usage from Jan. 1 through Sept. 30. They reflect a settlement reached in September involving the company, the Missouri Public Service Commission and the Office of Public Counsel, which represents utility customers.

The action stems from a rate reduction case handled by the PSC.

In December 1993, the commission ordered the company to reduce its rates by $85 million. The company appealed.

While the appeal was being fought in the courts, state lawmakers approved legislation allowing the company to raise rates by $15 million a year to recover retirement benefit costs.

The net result is an annual reduction of nearly $70 million in phone rates for the next four years for the company's more than 2 million business and residential customers in Missouri.

The one-time credits reflect money that was held in escrow while Southwestern Bell appealed the rate reduction order. The credits reflected in the December bills were based upon phone usage and reflect reductions in Touch-Tone, long-distance and access charges. For some residential customers, the credits amounted to hundreds of dollars.

Company officials were unable to provide an average credit figure, pointing out that customer usage varies widely.

Martha Hogerty, the state's public counsel, described the credit and rate reduction as a good deal for consumers.

"From my perspective, all this legal wrangling got the commission's order into effect," she said from Jefferson City.

"You have to recognize that a monopoly company doesn't have the kind of risk that a competitive enterprise has, and that is why you regulate these monopolies," she said.

As part of the agreement, the company won't seek a rate hike prior to Jan. 1, 1999, nor will the Office of Public Counsel and the PSC seek a rate reduction during that period.

"I imagine some people were very happy with what they received. It came at a good time, definitely," Southwestern Bell spokesman Ernest Harris said.

Harris called it a "landmark agreement that can help give Missouri access to the information superhighway."

The four-year agreement is a $1.4 billion package of investments, rate reductions and rate credits.

In a practical sense, the company will be able to operate for the next four years without a cap on its rate of return, Harris said.

He said the company, in return, will invest $1.1 billion over the four years to improve telephone service in the state. Some of that money will go toward eliminating party lines and implementing fiber optic technology.

Hogerty said the projected investment is only slightly more than the company's average annual capital expenditures.