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             California Public Utilities Commission
505 Van Ness Avenue, Room 5301            San Francisco, CA 94102
CONTACT: Dianne Dienstein          December 20, 1996  CPUC - 103B
         415-703-2423            (Res. T-15976, T-15977, T-15978)

      PACIFIC BELL, GTEC, AND CTC-CALIFORNIA RATES FOR 1997

    The California Public Utilities Commission (CPUC) today
ordered the following companies' rate changes to be reflected in
the surcredit/surcharge part of customers' monthly bills
effective January 1, 1997:

O  Pacific Bell (Pacific) to reduce rates by $65.6 million. This
   means a 1.13 percent reduction for local service reflected in
   the surcharge/surcredit part of customers' monthly bills.  If
   for instance, the local service portion of the monthly bill is
   $20, it would go down 22 cents.

O  GTE-California (GTEC) to increase rates by $27.5 million.
   This means a .16 percent increase for local service reflected
   in the surcharge/surcredit part of the monthly bill.  If for
   instance, the local service portion of the monthly bill is
   $20, it would go up 3 cents.

O  Citizens Telecommunications Company of California (CTC-
   California) to increase rates by $2.5 million. This means a
   7.34 percent increase for local service in the surcharge/
   surcredit part of the monthly bill.  If for instance, the
   local service portion of the monthly bill is $20, it would go
   up $1.46.

    The rate changes reflect revenue changes Pacific, GTEC and
CTC-California are authorized to collect from customers in 1997.
They are calculated using a formula based on a price cap index.
                            - more -
    The Commission established the formula five years ago as part
of its new regulatory framework for Pacific and GTEC and has used
it to adjust rates on January 1 of each year to account for
changes in inflation and productivity in the previous year rather
than using a lengthy, costly rate case proceeding to analyze the
reasonableness of utility expenses.  Recently, the new regulatory
framework and formula began to be applied also to CTC-California.
    In December 1995, the Commission suspended use of the Gross
Domestic Product Price Index (GDP-PI) minus productivity factor
part of the formula for Pacific and GTEC until further order of
the Commission or until 1998.  In a separate decision issued
today, the Commission similarly suspended this part of the
formula for CTC-California.  With increasing competition in the
local phone market, market forces are expected replace the
productivity factor in producing cost and other efficiencies.
    Most of Pacific's 1997 revenue requirement reduction reflects
costs of payments to mid-size phone companies for Extended Area
Service and Settlement Transition agreements, and a one-time gain
on sale of land.  The revenue decrease will be applied to a total
billing base of $5,702,766,000 for local and private line
service, local toll service and local toll access service.
    Most of GTEC's revenue increase reflects costs for its
Calling Party Number Passage/Caller ID customer education/
notification program, and the end of payments from Pacific Bell
for Extended Area Service.  The revenue increase will be applied
to a total billing base of $1,831,075,000.
    CTC-California's revenue increase reflects primarily a
reduction in revenue from the Interstate High Cost Fund.  The
revenue increase will be applied to a total billing base of
$48,517,000.

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