65- 407 C.M.R. ch. 395, § 9

Current through 2024-25, June 19, 2024

Section 407-395-9 - Allocation of Line Extension Costs among Customers

A.Applicability. This section shall apply to all single phase and polyphase line extensions, except for line extensions located in a development.

B.Initial Allocation Required for Two or More Customers. If a line extension will serve two or more customers at the time it is energized, each customer shall pay the customer responsibility amount for that customer as determined pursuant to the allocation method of subsection D below.

C.Additional Customer

1.Reallocation. When an additional customer connects to a line extension within 20 years after the extension first provided service to a customer, the costs of the line extension shall be reallocated among all customers pursuant to the method described in subsection D below.

2.Payment by New Customer. The additional customer shall pay the customer responsibility amount for that customer determined pursuant to the allocation method in subsection D below.

3.Distribution to Old Customers of Payment by New Customer. The utility shall distribute the amount paid by the new customer to the previous customers who have attached to the line extension. The amount paid to each previous customer shall equal the amount of that customer's responsibility under the prior allocation minus the amount of that customer's responsibility under the new allocation.

4.Substitution of Customer. If a customer who previously attached to the line extension is no longer a customer at the same location on the line extension, the T&D utility shall make the payment required by this subsection to the customer currently receiving service at that location.

5.Loss of Customer Location. If a customer service location previously connected to the line extension during the 20-year allocation period no longer receives electric service, and new customers connect to the line, all future reallocations shall be modified as follows:

a.Customer Share. The "customer share" calculation in subsection D(1) below shall exclude the former customer location; and

b.Cost; Customer Responsibility. The "current total cost of the line extension" amount, determined pursuant to subsection D(1)(b) below, shall exclude the customer responsibility amount of the last customer served at that location, as determined in the most recent reallocation of the line (pursuant to subsection D(1) below) that occurred while the customer location was still connected to the line extension.

D.Allocation of Line Extension Costs

1.Allocation Method. Each customer's responsibility for line extension costs will be determined by multiplying the following two factors:

a.Customer Share. The customer's share of the length of the line extension, which shall be equal to the length of the line extension that serves that customer exclusively plus, for each segment of the line extension that serves two or more customers, the length of that segment divided by the number of customers served by the segment, all divided by the total length of the line extension; and

b.Cost. The current total cost of the line extension, which shall be equal to:

(i) The cost of the original construction, as calculated pursuant to paragraph 2 below; plus

(ii) Amounts paid by customers to the utility pursuant to sections 7(E)(1) or 7(F)(1) to compensate the utility for taxes it paid as a result of a contribution in aid of construction or a contribution of facilities by an owner of the line.

2.Determination of Construction Cost

a.General Rule. Construction costs shall equal the amount paid to the T&D utility by customers for portions of the line extension constructed by the T&D utility, plus payments made to private contractors for each portion of the line extension that was privately-constructed. If those amounts cannot be reasonably established, the utility shall use its own average per-foot construction costs for the year in which the line extension was built, multiplied by the number of feet for the line extension.

b.Single-Phase Customer Served from Polyphase Line. Where a single-phase customer connects to a polyphase line, the construction costs for that customer shall be the costs of construction of a single-phase line extension. If the line was built originally as a single-phase line and later rebuilt as a polyphase line, the construction costs applicable to the single-phase customer shall be the costs for the original single-phase line. If the line was built originally as a polyphase line, the construction costs applicable to the single-phase line shall be the costs of constructing, on a stand-alone basis, a single-phase line in the same location.

3.Application of Allowance or Low-Income Support. If the Terms and Conditions of a T&D utility provide that all customers will receive a certain portion of the line extension without charge or provide for a credit, discount or other support for low-income customers, the amount of that allowance or low-income support shall be deducted from the customer responsibility amount, calculated pursuant to subsection D(1), for each customer who has received the allowance or support. The deduction shall be made after the calculation of each customer's pre-allowance or pre-support customer responsibility. No deduction shall be made to the construction cost calculated pursuant to subsection D(2).

4.Allocation of Support or Other Monthly Charges. Where a utility charges line extension customers a support charge or other monthly charge, instead of, or in addition to, requiring a contribution in aid of construction, the charge shall be allocated pursuant to the customer share allocation factor in subsection D(1)(a) above.

E.Additional Line Extensions Added to Earlier Line Extensions. If a new line extension is built from the end of, or from any point along, an earlier line extension that first provided service to a customer within the past 20 years, new customers served by the newer line extension will be required to make a payment to the utility pursuant to subsection C above that the utility will then pay to existing customers served by the earlier extension. A customer served by the newer extension shall be considered as being located at the point at which the newer extension connects to the earlier extension, and the customer's share of the costs of the earlier line extension shall be calculated pursuant to subsection D above. The payment required by this subsection E is in addition to the payment that the customer must make for the costs of the newer extension. The requirements of this subsection E shall terminate after 20 years following the provision of first service to a customer from the earlier line.

65- 407 C.M.R. ch. 395, § 9