HELENA, Mont.—Qwest Communications is offering a $16 million reduction in customers’ bills to settle a complaint that it was overcharging Montana consumers.
The settlement, which stems from a complaint current Public Service Commissioner Ken Toole filed in 2006 when he was running for office, will need the approval of the rest of the commission. Toole said he will recuse himself from the vote.
Toole alleged that Denver-based Qwest, the dominant telephone company in Montana, was exceeding its allowed profit in the state.
Toole said he estimates that $16 million reduction in rates means the company will make about 9 percent return on its investments instead of an estimated 21 percent. He said the lower figure is more appropriate for a regulated utility.
“I’m pretty pleased,” Toole said of the settlement.
Denise Peterson, the attorney who worked on behalf of Qwest customers along with the Montana Consumer Counsel, said long negotiations led to the agreement.
The settlement also calls for Qwest to invest more money in its Montana infrastructure, she said. In exchange, the company would get a little more freedom from regulatory constraints.
Basic residential rates would drop $2 per month under the proposal, while business basic rates would be reduced $3.94. Other charges would be reduced, so a customer could see a reduction as large as $12.41, depending on the type of service used.
Qwest said it was also pleased with the proposal.
“Overall, we and our customers will benefit from a more modernized form of regulation that not only shows how the industry has evolved competitively, but that also allows us to more quickly offer the new features and services our customers want,” said Johnna Hoff, Qwest spokeswoman.
Qwest serves about 300,000 customers in Montana.
