Advocate: Verizon rates need reversing

PORTLAND – Maine’s public advocate says he will ask the state’s highest court to overturn a recent rate increase for Verizon phone customers.

The Maine Supreme Judicial Court ruled in February that the Public Utilities Commission acted properly when it approved a $1.78 increase in monthly rates over a five-year period. At the same time, the court ordered the PUC to review whether it had complied fully with the law establishing a new regulatory process.

Public Advocate Stephen Ward now wants the court to order the commission to reverse the rate increase while it conducts the review.

“The PUC’s refusal to comply with the court’s decision is costing 650,000 Verizon customers in Maine $1 million per month and is causing serious harm to customers on fixed incomes,” Ward said.

But Verizon officials, as well as Public Utilities Commission Chairman Tom Welch, have said they detected nothing in the court’s opinion suggesting that the increase be nullified. Welch said at the time that the commission would review the increase, a process he said could take several months.

The court’s ruling was the result of an appeal brought by Ward’s office, which had argued that the Verizon rate increase approved in June 2001 amounted to an overcharge of roughly $75 million.

Under the alternative rate process created by the Legislature, rates are set according to a formula divorced from the phone company’s actual costs. The new, incentive-based system was intended to offer greater profits in return for a utility’s efficient operation.

The American Association of Retired Persons is working with Ward to have the increase rolled back until the review is complete.

Steve Jennings, the AARP’s state director, said the court needs to ensure “compliance with fair procedures that protect consumers.”