PUC Annual ReportâFiscal Year 2004-05 - Public Utilities Commission

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Public Utilities Commission Annual Report 2004-05State of Hawaii Page 16Figure 2Five-Year Comparison of Commission-ApprovedElectric Utility CIPs$45,000,000$40,000,000$35,000,000CIP Amount$30,000,000$25,000,000$20,000,000$15,000,000$10,000,000$5,000,000$-FY 2000-01 FY 2001-02 FY 2002-03 FY 2003-04 FY 2004-05KE/KIUC $10,150,835 $- $2,958,900 $41,750,000 $580,000MECO $2,435,540 $2,046,452 $3,379,707 $5,984,591 $-HELCO $2,311,179 $3,788,695 $6,502,973 $8,221,363 $2,585,463HECO $23,379,569 $9,109,866 $41,639,829 $26,999,323 $36,835,359FYC. GAS PROCEEDINGS.The Gas Company, LLC (“TGC”) is a duly franchised public utility providing gas servicefor residential, commercial, and industrial uses throughout the State. TGC’s operations consist ofthe purchase, production, transmission, and distribution of gas through gas pipelines, and sale ofsynthetic natural gas (“SNG”) and liquid propane gas.During the Fiscal Year, TGC filed an application requesting approval of a new residentialrate on the island of Lanai. The application was pending at the end of the Fiscal Year. 6D. TELECOMMUNICATIONS PROCEEDINGS.The Commission oversees the intrastate cellular, paging, mobile telephone, and otherservices of telecommunications providers in addition to the services of Hawaiian Telcom, Inc.(“Hawaiian Telcom”), formerly known as Verizon Hawaii Inc. (“Verizon Hawaii”), the State’s onlyincumbent local exchange carrier and largest provider of intrastate services.Key activities in telecommunications are highlighted below.1. COMMISSION APPROVES MERGER TRANSACTION AMONGVERIZON HAWAII, CERTAIN VERIZON AFFILIATES, AND6 In July 2005, the Commission approved TGC’s request to establish a rate schedule toprovide gas utility service to residential customers on the island of Lanai. Decision and OrderNo. 21913, filed July 8, 2005, in Docket No. 05-0131.
Public Utilities Commission Annual Report 2004-05State of Hawaii Page 17HAWAIIAN TELCOM COMMUNICATIONS, INC.(“HT COMMUNICATIONS”).In March 2005, the Commission approved, by a 2-1 vote, the merger transaction bywhich TC Group L.L.C., dba The Carlyle Group (“Carlyle”), through its affiliates, acquired controlover Verizon Hawaii and other assets. HT Communications, which was formed expressly for thepurpose of consummating the proposed merger transaction, owns all of the outstanding stock ofVerizon Hawaii, now known as Hawaiian Telcom. HT Communications is wholly-owned byHT HoldCo which is controlled by affiliates of Carlyle. The base purchase price of the transfer ofcontrol was initially proposed as $1.65 billion, but was voluntarily adjusted to $1.6 billion followingthe Commission's conditional approval of the merger transaction.The Commission approved the merger transaction provided that the following conditions,among other things, are adhered and/or agreed to: (1) Hawaiian Telcom commits to not submit ageneral utility rate increase application utilizing a prospective test year earlier than calendar year2009; (2) the general rate increase moratorium shall not preclude the filing of proposed tariffchanges for regulated services that are revenue neutral; (3) each residential and business retailaccess line customer shall receive a customer appreciation bill credit of approximately $20.70 perqualifying access line; (4) the terms and conditions of the stipulation filed by HT Communicationsand Time Warner Telecom of Hawaii, L.P., dba Oceanic Communications (“Oceanic”), asamended; (5) infusion of additional equity as necessary to achieve a consolidated capitalstructure of 76.3 per cent debt and 23.7 per cent equity; (6) any dividend proceeds shall beearmarked specifically and used only for debt repayment and dividend payments shall not bemade until Hawaiian Telcom’s debt is reduced to 65 per cent, without prior Commission approval;and (7) to obtain the Commission’s approval before selling, divesting, transferring, mortgaging, orencumbering the directory assets.2. COMMISSION APPROVES MERGER OF SPRINT CORPORATION(“SPRINT”) AND NEXTEL COMMUNICATIONS, INC. (“NEXTEL”).In April 2005, the Commission approved an application filed by Sprint CommunicationsCompany, L.P. (“Sprint Communications”), Sprint Payphone Service, Inc. (“Sprint Payphone”),and ASC Telecom, Inc. (“ASC Telecom”) which proposed the merger of Sprint and Nextel. Sprintwill be renamed Sprint-Nextel Corporation upon completion of the merger. SprintCommunications is authorized to provide intrastate telecommunications services in Hawaii as afacilities-based carrier and reseller. It also is the exclusive provider of intrastatetelecommunications relay services (“TRS”) in Hawaii from July 1, 2003 to June 30, 2006. SprintPayphone holds a certificate of registration (“COR’) to provide intrastate pay telephone servicesin the State. ASC Telecom is authorized to provide intrastate telecommunications services withinthe State as a reseller. Nextel is not providing any intrastate telecommunications services in theState.3. COMMISSION APPROVES MERGER OF SBC COMMUNICATIONSINC. (“SBC”) AND AT&T CORP. (“AT&T”).In May 2005, the Commission approved the merger of AT&T and a wholly-ownedsubsidiary of SBC. The merged entity will retain the AT&T name. AT&T Communications ofHawaii, Inc. (“AT&T Hawaii”) will remain a wholly-owned subsidiary of AT&T. AT&T Hawaii is anauthorized provider of intrastate telecommunications services in the State on a facilities-basedand resold basis.
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PUC Annual ReportâFiscal Year 2004-05 - Public Utilities Commission

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PUC Annual ReportâFiscal Year 2004-05 - Public Utilities Commission