N.J. Admin. Code § 14:3-8.5

Current through Register Vol. 56, No. 9, May 6, 2024

Section 14:3-8.5 - General provisions regarding costs of extensions

(a) The cost that an applicant pays a regulated entity for an extension shall be determined by mutual agreement between the regulated entity and the applicant. If a regulated entity and an applicant cannot agree on the applicant's cost of an extension, a deposit, or a non-refundable contribution, either party may petition the Board to apply the suggested formula set forth at 14:3-8.9, 8.10, or 8.11, as applicable.

(b) Except for certain underground extensions covered by 14:3-2.1(f), an extension shall become the property of the regulated entity upon its completion. If an extension is paid for by an applicant in accordance with this chapter, a regulated entity shall include the extension in its contribution in aid of construction (CIAC) accounts, for accounting purposes only. The regulated entity shall record such a contribution in a manner consistent with the Uniform System of Accounts, 18 CFR Part 101, which is incorporated herein by reference in this subchapter. Amounts that a regulated entity receives in accordance with this subchapter, which are not refunded to an applicant, shall be credited to the appropriate plant account or accounts.

(c) The cost of an extension for which a regulated entity receives a deposit, or receives a non-refundable contribution, shall include the tax consequences incurred by the regulated entity as a result of receiving deposits under the Tax Reform Act of 1986, in accordance with 14:3-8.6.

(d) Regulated entities, customers, applicants, developers, builders, municipal bodies, and other persons shall cooperate fully in order to facilitate construction of an extension at the lowest reasonable cost consistent with system reliability and safety. This includes sharing trenches, where practicable, allowing the applicant, where practicable, to dig the portion of the trench located on the property to be served, and coordinating scheduling and other aspects of construction to minimize delays and to avoid difficult conditions, such as frozen or unstable soils. If the applicant elects to dig the portion of the trench located on the property to be served, the applicant is responsible for ensuring that the excavation is done in accordance with utility/utilities standards and that the resulting trench complies with utility/utilities standards. Whether using an individual trench, a shared trench, or applicant-dug trench, a utility shall not place an extension within a trench unless the trench complies with the appropriate utility/utilities standards. A municipality shall not impose an ordinance or other requirement that conflicts with this subchapter or which would prevent or interfere with another person's compliance with this subchapter.

(e) Each regulated entity shall submit for Board approval a proposed tariff containing charges for services, including installation of underground service. The regulated entity shall periodically submit updated tariffs on its own initiative or as requested by the Board. A tariff shall not require an applicant for an extension to pay a deposit or non-refundable contribution that is greater than would be required under the suggested formula at N.J.A.C. 14:3-8.9, 8.10, or 8.11, as applicable. A tariff shall not provide for a deposit refund that is less than would be required under the suggested formula at N.J.A.C. 14:3-8.9, 8.10, or 8.11, as applicable.

(f) If a regulated entity requires that the applicant pay a deposit or non-refundable contribution, the regulated entity shall first provide the applicant with all of the following information, in writing:

1. A detailed estimate of the total cost of the extension, including:

i. An itemization of the number of units of each item required to build the extension (for example, the number of feet of wire, feet of pipe, feet of conduit, feet of trench, number of transformers, number of valves, and number of labor hours);

ii. The cost per unit for each item listed under (f)1i above, multiplied by the number of units of that item; and

iii. The sum of all items in (f)1ii. This sum shall equal the total estimated cost of the extension;

2. The estimated annual distribution revenue offset, if any;

3. The total amount of the deposit or non-refundable contribution required; and

4. If any portion of a deposit or non-refundable contribution is taxable under Tax Reform Act of 1986 (TRA-86), and the regulated entity has decided to include the TRA-86 tax consequences in the deposit or non-refundable contribution:

i. The total deposit before taxes;

ii. The taxable portion of the deposit;

iii. The gross-up factor from 14:3-8.6(c); and

iv. The dollar amount of the tax consequences incurred on the deposit, from 14:3-8.6(d)5.

(g) A regulated entity shall construct each extension with sufficient capacity to provide safe, adequate, and proper service to customers, in accordance with 14:3-8.3(e). For example, if an applicant requests a four kilovolt extension of electric service but the regulated entity's minimum system design standard is thirteen kilovolts, the regulated entity shall construct a thirteen kilovolt extension. In such a case, the cost of the extension for purposes of this subchapter and the suggested formula shall be the full cost of the thirteen kilovolt extension, and not merely the cost of a four kilovolt extension.

(h) If a regulated entity chooses to construct an extension or portion of an extension with additional capacity over that which is needed to comply with 14:3-8.3(e), the regulated entity may not require the applicant to pay for such additional capacity.

(i) The costs of any installation or construction of infrastructure, which is not governed by this subchapter, shall be governed by other applicable law.

(j) A regulated entity may base the cost of an extension, for the purpose of determining the amount of the required deposit or non-refundable contribution, on site-specific unitized costs. The regulated entity shall determine the site-specific unitized cost by:

1. Sending a qualified representative to the site;

2. Developing a work plan that includes a list of materials needed based upon the actual extension to be constructed;

3. Multiplying the quantity of each type of item on the list of materials by the cost per unit for that type of item. The cost per unit for each item listed shall reflect the material cost of that item as well as the associated labor as set forth in the definition of cost at 14:3-8.2; and

4. Adding up the results obtained under (j)3 above.

N.J. Admin. Code § 14:3-8.5

Amended by 47 N.J.R. 3133(c), effective 12/21/2015

Amended by 48 N.J.R. 1305(b), effective 6/20/2016