(A) The company will make, own, and maintain all necessary connections with its street mains, and install a service line to the customer’s location at company’s expense for installation for up to 75 feet. Installation costs beyond 75 feet will be borne by the customer. The company will own, maintain, and specify the route of the piping. Access must be granted on customer’s property for replacement or repairs of these facilities. The company may at its option install a service cock and box. The meter location will be determined by the company. The company will also set and own the meter and regulator, but all other piping, connections, and appliances for the purpose of utilizing gas shall be furnished and installed by the house owner or consumer at his or her risk and expense.
(B) Extensions from the company’s distribution lines will be made under the following conditions and circumstances:
(1) In considering main extensions in distribution plants, main extensions in rural areas, and extensions from pipeline taps, the company shall construct these extensions from its existing facilities to serve new customers where the cost of the company’s capital investment is economically feasible. If the construction cost of the extension exceeds the company’s allowable capital investment, as determined in accordance with Appendix B to this chapter, then the customer will be required to pay the amount above the allowable capital investment referred to as Above Threshold Investment (ATI). On such an advance, the company will enter into an agreement with the customer to refund his or her contribution. Refunds will be based only on the amounts in excess of annual stated load under which the original investment costs were calculated. The company shall establish, when capital funds are available, such new distribution service where the company will be reasonably assured of a sufficient number of customers and an annual revenue to justify the capital expenditure.
(2) When the company is requested to extend its distribution facilities to an area with existing potential users where no contributory capital is available and the estimated annual usage exceeds 4,250 Mcf or the estimated service connections exceed 50, then the company has the option to provide the necessary capital in the amount equal to the ATI cost of the project to be recovered by a surcharge rate applied to each MCF of gas sold within the boundaries of the project for up to five years [special conditions may warrant extending this period based on economic conditions], or until the ATI is recovered by the company, whichever comes first. Under this option, the company will construct and finance the facilities and recover the ATI cost through surcharge rates in addition to an appropriate interest (or debt service charge) assigned to the capital required to fund the ATI construction costs. If ATI costs are not recovered during the special pay-back period, the remaining amount of ATI will be added to and included in the company’s overall rate base from that point forward. To ensure sufficient customer commitment to each project, each customer will be required to sign an Extension Surcharge Agreement and to pay a customer deposit at the time service is initiated. Surcharge areas are defined as those areas in which the required number of existing potential customer connections are agreed upon to establish the surcharge areas. After the initial installation of facilities to serve the surcharge area, all subsequent connections which utilize mains from the original surcharge area installation will be subject to same rates and surcharge rate to be applied to each Mcf of gas for the remaining period of the surcharge agreement.
(3) When new extensions from the surcharge area are requested, the person(s) requesting an extension from these facilities will be required to execute an extension agreement stated under division (B)(1) above for ATI costs if applicable and, in addition, will be subject to the surcharge rate for the remaining period of the surcharge rates.
(4) When a subsequent area (50 customers, or 4,250 Mcf or more) requests service utilizing the facilities of an existing surcharge area, the following regulations will apply:
(a) When a subsequent surcharge area is established after the installation of an existing surcharge area and the subsequent surcharge area’s ATI results in a surcharge rate in excess of the surcharge rate applicable to the established surcharge area, then the subsequent surcharge area will bear only the cost of their new facilities.
(b) When a subsequent surcharge area is established after the installation of an existing surcharge area and the subsequent surcharge area’s ATI results in a surcharge rate which is less than the surcharge rates applicable to the established surcharge area, then the subsequent surcharge area will bear a portion of the remaining unpaid ATI balance of the established surcharge area in addition to its own surcharge allocation as follows:
The cost of the mainline established for the existing surcharge area shall be shared by the subsequent surcharge area up to an amount equal to the existing area surcharge rate if their computed surcharge is lower than the surcharge for the existing area. This shall be achieved by assigning an unamortized portion of mainline investment which was required for the existing surcharge area to the subsequent surcharge area in order to fairly equate the surcharges. The amount of investment cost assigned to the subsequent surcharge area will then be credited to the unamortized amount payable by the existing surcharge area customers.
(C) The company will not be required to enlarge its system of mains to meet the demand for gas of a prospective customer or to provide for an appreciable increase in the demands of a present customer unless in the judgment of the company a reasonable rate of return is assured as a result of the expenditure required.
(D) When the company extends its main to serve new customers, the company will extend that main which, in its judgment, will be most advantageous for rendering service.
(E) Where the customer requires that his or her meter be placed underground in a curb box, the company will make a reasonable charge to cover the additional cost of the underground meter, the cost of the curb box and lid and the added installation cost. The installation shall become and remain the property of the company.
(F) (1) A standard rural gas contract must be executed by each customer requesting a pipeline tap. The company will not make or serve a tap on any federally certificated transmission line, unless, in the judgment of the company, a reasonable rate of return can be earned as a result of the expenditure required to construct the tap and serve the customer, without unreasonable consequences to other customers. In addition, the company will not make a tap on any other transmission line, field gathering pipeline, or lines to wells which, in the company’s opinion, presently contain or may in the foreseeable future contain undehydrated gas, liquid hydrocarbons, sour gas, or gas that is otherwise not merchantable.
(2) For purposes of computing a reasonable rate of return, ARKLA will apply the above threshold investment (ATI) calculation according to the class of customer but make adjustments to the non-gas cost to represent the incremental cost associated with this customer outside the common distance of our service area (approximately 20 miles). ARKLA will reduce the non-gas costs in the ATI by a representative factor of cost per mile. The adjusted non-gas cost will not be allowed to go below the return on investment (ROI) included in the original non-gas cost. If the adjusted non-gas cost less the ROI is less than or equal to zero, the proposed tap will be identified as not economically feasible and will negate ARKLA’s obligation to serve. If the adjusted non-gas costs are greater than zero, then the ROI should be added to the balance and adjusted for depreciation and state and federal taxes. The result is multiplied by the present value ordinary annuity factor to establish a new ATI for that potential pipeline customer.
(Ord. 2-95, passed 5-8-1995)