§ 62-110. Certificate of convenience and necessity.
Article 6.
The Utility Franchise.
§ 62‑110. Certificateof convenience and necessity.
(a) Except as providedfor bus companies in Article 12 of this Chapter, no public utility shallhereafter begin the construction or operation of any public utility plant orsystem or acquire ownership or control thereof, either directly or indirectly,without first obtaining from the Commission a certificate that publicconvenience and necessity requires, or will require, such construction,acquisition, or operation: Provided, that this section shall not apply toconstruction into territory contiguous to that already occupied and notreceiving similar service from another public utility, nor to construction inthe ordinary conduct of business.
(b) The Commissionshall be authorized to issue a certificate to any person applying to theCommission to offer long distance services as a public utility as defined inG.S. 62‑3(23)a.6., provided that such person is found to be fit, capable,and financially able to render such service, and that such additional serviceis required to serve the public interest effectively and adequately; providedfurther, that in such cases the Commission shall consider the impact on thelocal exchange customers and only permit such additional service if theCommission finds that it will not jeopardize reasonably affordable localexchange service.
Notwithstanding any otherprovision of law, the terms, conditions, rates, and interconnections for longdistance services offered on a competitive basis shall be regulated by theCommission in accordance with the public interest. In promulgating rulesnecessary to implement this provision, the Commission shall consider whetheruniform or nonuniform application of such rules is consistent with the publicinterest. Provided further that the Commission shall consider whether thecharges for the provision of interconnections should be uniform.
For purposes of this section,long distance services shall include the transmission of messages or othercommunications between two or more central offices wherein such central officesare not connected on July 1, 1983, by any extended area service, local measuredservice, or other local calling arrangement.
(c) The Commissionshall be authorized, consistent with the public interest, to adopt proceduresfor the issuance of a special certificate to any person for the limited purposeof offering telephone service to the public by means of coin, coinless, or key‑operatedpay telephone instruments. This service may be in addition to or in competitionwith public telephone services offered by the certificated telephone company inthe service area. The access line from the pay instrument to the network may beobtained from the local exchange telephone company in the service area where thepay instrument is located, from any certificated competitive local provider, orany other provider authorized by the Commission. The Commission shallpromulgate rules to implement the service authorized by this section,recognizing the competitive nature of the offerings and, notwithstanding anyother provision of law, the Commission shall determine the extent to which suchservices shall be regulated and to the extent necessary to protect the publicinterest regulate the terms, conditions, and rates for such service and theterms and conditions for interconnection to the local exchange network.
(d) The Commissionshall be authorized, consistent with the public interest and notwithstandingany other provision of law, to adopt procedures for the purpose of allowingshared use and/or resale of any telephone service provided to persons whooccupy the same contiguous premises (as such term shall be defined by theCommission); provided, however, that there shall be no "networking"of any services authorized under this subsection whereby two or more premiseswhere such services are provided are connected, and provided further that anycertificated local provider or any other provider authorized by the Commissionmay provide access lines or trunks connecting such authorized service to thetelephone network, and that the local service rates permitted or approved bythe Commission for local exchange lines or trunks being shared or resold shallbe on a measured usage basis where facilities are available or on a messagerate basis otherwise. Provided however, the Commission may permit or approveflat rates, measured rates, message rates, or some combination of those ratesfor shared or resold services whenever the service is offered to patrons ofhotels or motels, occupants of timeshare or condominium complexes servingprimarily transient occupants, to patrons of hospitals, nursing homes, resthomes, or licensed retirement centers, or to members of clubs or studentsliving in quarters furnished by educational institutions, or to personstemporarily subleasing residential premises. The Commission shall issue rulesto implement the service authorized by this subsection, considering thecompetitive nature of the offerings and, notwithstanding any other provision oflaw, the Commission shall determine the extent to which such services shall beregulated and, to the extent necessary to protect the public interest, regulatethe terms, conditions, and rates charged for such services and the terms andconditions for interconnection to the local exchange network. The Commissionshall require any person offering telephone service under this subsection bymeans of a Private Branch Exchange ("PBX") or key system to secureadequate local exchange trunks from any certificated local provider or anyother provider authorized by the Commission so as to assure a quality ofservice equal to the quality of service generally found acceptable by theCommission. Unless otherwise ordered by the Commission for good cause shown bythe company, the right and obligation of the certificated local provider or anyother provider authorized by the Commission to provide local service directlyto any person located within its certificated service area shall continue toapply to premises where shared or resold telephone service is available,provided however, the Commission shall be authorized to establish the terms andconditions under which such services should be provided.
(e) Notwithstandingsubsection (d) of this section, the Commission may authorize any telephoneservices provided to a nonprofit college or university, and its affiliatedmedical centers, which is qualified under Sections 501 and 170 of the UnitedStates Internal Revenue Code of 1986 or which is a State‑ownedinstitution, to be shared or resold by that institution on both contiguouscampus premises owned or leased by the institution and noncontiguous premisesowned or leased exclusively by the institution, provided these services areoffered to students or guests housed in quarters furnished by the institution,patrons of hospitals or medical centers of the institution, or persons orbusinesses providing educational, research, professional, consulting, food, orother support services directly to or for the institution, its students, orguests. The services of a certificated local provider or any other providerauthorized by the Commission, when provided to said colleges, universities, andaffiliated medical centers shall be rated in the same way as those provided forshared service offered to patrons of hospitals, nursing homes, rest homes,licensed retirement centers, members of clubs or students living in quartersfurnished by educational institutions as provided for in subsection (d) of thissection. The institutions regulated pursuant to this subsection shall not beprohibited from electing optional services from the certificated local provideror any other provider authorized by the Commission which include measured ormessage rate services. There shall be no "networking" of any servicesauthorized under this subsection whereby two or more different institutionswhere such services are provided are interconnected. Any certificated localprovider or any other provider authorized by the Commission may provide accesslines or trunks connecting such authorized services to the telephone network.The Commission shall require such institutions to secure adequate localexchange trunks from the certificated local provider or any other providerauthorized by the Commission to assure a quality of service equal to thequality of service generally found acceptable by the Commission. Unlessotherwise ordered by the Commission for good cause shown by the certificatedlocal provider or any other provider authorized by the Commission, the rightand obligation of that provider to provide local service directly to any personlocated within its certificated service area shall continue to apply topremises where shared or resold telephone service is available under thissubsection, provided however, the Commission shall be authorized to establishthe terms and conditions under which such service should be provided. TheCommission shall issue rules to implement the services authorized by thissubsection.
(f) Reserved.
(f1) Except as providedin subsection (f2) of this section, the Commission is authorized, followingnotice and an opportunity for interested parties to be heard, to issue acertificate to any person applying to provide local exchange or exchange accessservices as a public utility as defined in G.S. 62‑3(23) a.6., withoutregard to whether local telephone service is already being provided in theterritory for which the certificate is sought, provided that the person seekingto provide the service makes a satisfactory showing to the Commission that (i)the person is fit, capable, and financially able to render such service; (ii)the service to be provided will reasonably meet the service standards that theCommission may adopt; (iii) the provision of the service will not adverselyimpact the availability of reasonably affordable local exchange service; (iv)the person, to the extent it may be required to do so by the Commission, willparticipate in the support of universally available telephone service ataffordable rates; and (v) the provision of the service does not otherwiseadversely impact the public interest. In its application for certification, theperson seeking to provide the service shall set forth with particularity theproposed geographic territory to be served and the types of local exchange and exchangeaccess services to be provided. Except as provided in G.S. 62‑133.5(f),any person receiving a certificate under this section shall, until otherwisedetermined by the Commission, file and maintain with the Commission a completelist of the local exchange and exchange access services to be provided and theprices charged for those services, and shall be subject to such reportingrequirements as the Commission may require.
Any certificate issued by theCommission pursuant to this subsection shall not permit the provision of localexchange or exchange access service until July 1, 1996, unless the Commissionshall have approved a price regulation plan pursuant to G.S. 62‑133.5(a)for a local exchange company with an effective date prior to July 1, 1996. Inthe event a price regulation plan becomes effective prior to July 1, 1996, theCommission is authorized to permit the provision of local exchange or exchangeaccess service by a competing local provider in the franchised area of suchlocal exchange company.
The Commission is authorizedto adopt rules it finds necessary (i) to provide for the reasonableinterconnection of facilities between all providers of telecommunicationsservices; (ii) to determine when necessary the rates for such interconnection; (iii)to provide for the reasonable unbundling of essential facilities wheretechnically and economically feasible; (iv) to provide for the transfer oftelephone numbers between providers in a manner that is technically andeconomically reasonable; (v) to provide for the continued development andencouragement of universally available telephone service at reasonablyaffordable rates; and (vi) to carry out the provisions of this subsection in amanner consistent with the public interest, which will include a considerationof whether and to what extent resale should be permitted. In adopting rules toestablish an appropriate definition of universal service, the Commission shallconsider evolving trends in telecommunications services and the need forconsumers to have access to high‑speed communications networks, theInternet, and other services to the extent that those services provide socialbenefits to the public at a reasonable cost.
Local exchange companies andcompeting local providers shall negotiate the rates for local interconnection.In the event that the parties are unable to agree within 90 days of a bona fiderequest for interconnection on appropriate rates for interconnection, eitherparty may petition the Commission for determination of the appropriate ratesfor interconnection. The Commission shall determine the appropriate rates forinterconnection within 180 days from the filing of the petition.
Except as provided insubsections (f4) and (f5) of this section, each local exchange company shall bethe universal service provider (carrier of last resort) in the area in which itis certificated to operate on July 1, 1995. Each local exchange company ortelecommunications service provider with carrier of last resort responsibilitymay satisfy its carrier of last resort obligation by using any availabletechnology. In continuing this State's commitment to universal service, theCommission shall, by December 31, 1996, adopt interim rules that designate theperson that should be the universal service provider and to determine whetheruniversal service should be funded through interconnection rates or throughsome other funding mechanism. At a time determined by the Commission to be inthe public interest, the Commission shall conduct an investigation for thepurpose of adopting final rules concerning the provision of universal services,and whether universal service should be funded through interconnection rates orthrough some other funding mechanism, and, consistent with the provisions ofsubsections (f4) and (f5) of this section, the person that should be theuniversal service provider.
The Commission shall make thedetermination required pursuant to this subsection in a manner that furthersthis State's policy favoring universally available telephone service atreasonable rates.
(f2) The provisions ofsubsection (f1) of this section shall not be applicable to franchised areaswithin the State that are being served by local exchange companies with 200,000access lines or less located within the State, and it is further provided thatsuch local exchange company providing service to 200,000 access lines or lessshall not be subject to the regulatory reform procedures outlined under theterms of G.S. 62‑133.5(a) or permitted to compete in territory outside ofits franchised area for local exchange and exchange access services until suchtime as the franchised area is opened to competing local providers as providedfor in this subsection. Upon the filing of an application by a local exchangecompany with 200,000 access lines or less for regulation under the provisionsof G.S. 62‑133.5(a), the Commission shall apply the provisions of thatsection to such local exchange company, but only upon the condition that theprovisions of subsection (f1) of this section are to be applicable to thefranchised area and local exchange and exchange access services offered by sucha local exchange company.
(f3) The provisions ofsubsection (f1) of this section shall not be applicable to areas served bytelephone membership corporations formed and existing under Article 4 ofChapter 117 of the General Statutes and exempt from regulation as publicutilities, pursuant to G.S. 62‑3(23)d. and G.S. 117‑35. To theextent a telephone membership corporation has carrier of last resort obligations,it may fulfill those obligations using any available technology.
(f4) When anytelecommunications service provider: (i) enters into an agreement to providelocal exchange service for a subdivision or other area where access to right‑of‑wayfor the provision of local exchange service by other telecommunications serviceproviders has not been granted coincident with any other grant of access by theproperty owner; or (ii) enters into an agreement after July 1, 2008, to providecommunications service that otherwise precludes the local exchange company fromproviding communications service for the subdivision or other area, the localexchange company is not obligated to provide basic local exchange telephoneservice or any other communications service to customers in the subdivision orother area. In each of the foregoing instances, the telecommunications serviceprovider shall be the provider in the subdivision or other area under the termsof the agreement and applicable law. The local exchange company for thefranchise area or territory in which the subdivision or other area is locatedshall be relieved of any universal service provider obligation for thatsubdivision or other area. In that case, the local exchange company and allother telecommunications service providers shall retain the option, but not theobligation, to serve customers in the subdivision or other area. The localexchange company shall provide written notification to the appropriate Stateagency that the local exchange company is no longer the universal serviceprovider for the subdivision or other area. The appropriate State agency shallretain the right to redesignate a local exchange company or telecommunicationsservice provider as the universal service provider in accordance with theprovisions of subsection (f5) of this section. Any person that enters into anagreement with a telecommunications service provider to provide local exchangeservice for a subdivision or other area as described in this subsection shallnotify a purchaser of real property within the subdivision or other area of theagreement.
For any circumstance notdescribed in this subsection, a local exchange company may be granted a waiverof its carrier of last resort obligation in a subdivision or other area by theappropriate State agency based upon a showing by the local exchange company ofall of the following:
(1) Providing service inthe subdivision or area would be inequitable or unduly burdensome.
(2) One or morealternative providers of local exchange service exist.
(3) Granting the waiveris in the public interest.
(f5) If the appropriateState agency finds, upon hearing, that the telecommunications service providerserving the subdivision or other area pursuant to subsection (f4) of thissection, or its successor in interest, is no longer willing or no longer ableto provide adequate services to the subdivision or other area, the appropriateState agency may redesignate the local exchange company for the franchise areaor territory in which the subdivision or other area is located, or anothertelecommunications service provider, to be the universal service provider forthe subdivision or other area. If the redesignated local exchange company issubject to price regulation or other alternative regulation under G.S. 62‑133.5,it may treat the costs incurred in extending its facilities into thesubdivision or other area as exogenous to that form of regulation and may,subject to providing written notice to the Commission, adjust its rates torecover these costs on an equitable basis from its customers whose rates aresubject to regulation under G.S. 62‑133.5. Any such action shall besubject to review by the Commission in a complaint proceeding initiated by anyinterested party pursuant to G.S. 62‑73. If the redesignated localexchange company is not subject to price regulation or other alternativeregulation under G.S. 62‑133.5, it may recover the costs incurred inextending its facilities into the subdivision or other area in the form of asurcharge, subject to Commission approval, spread equitably among all of itscustomers in a proceeding under G.S. 62‑136(a), without having to file ageneral rate case proceeding. During the period that a telecommunicationsservice provider is serving as a universal service provider and prior to theredesignation of a local exchange company as the universal service provider asprovided for herein, for the purposes of the appropriate State agency'speriodic certification to the Federal Communications Commission in mattersregarding eligible telecommunications carrier status, a local company's statusshall not be deemed to affect its eligibility to be an eligibletelecommunications carrier, and the appropriate State agency shall so certify.
(f6) For purposes ofsubsections (f4) and (f5) of this section, the following definitions areapplicable:
(1) "AppropriateState agency" means the Commission for purposes of any subdivision orother area within the franchise area of a local exchange company, and the RuralElectrification Authority for the purposes of any subdivision or other areawithin the franchise area or territory of a telephone membership corporation.
(1a) "Communicationsservice" means either voice, video, or data service through anytechnology.
(2) "Local exchangecompany" means a local exchange company subject to price regulation, orother alternative regulation or rate base regulation by the Commission or atelephone membership corporation organized under G.S. 117‑30.
(3) "Telecommunicationsservice provider" means a competing local provider, or any other personproviding local exchange service by means of voice‑over‑Internetprotocol, wireless, power line, satellite, or other nontraditional means,whether or not regulated by the Commission, but the term shall not includelocal exchange companies or telephone membership corporations.
(g) In addition to theauthority to issue a certificate of public convenience and necessity andestablish rates otherwise granted in this Chapter, for the purpose ofencouraging water conservation, the Commission may, consistent with the publicinterest, adopt procedures that allow a lessor to charge for the costs ofproviding water or sewer service to persons who occupy the same contiguouspremises. The following provisions shall apply:
(1) All charges forwater or sewer service shall be based on the user's metered consumption ofwater, which shall be determined by metered measurement of all water consumed.The rate charged by the lessor shall not exceed the unit consumption ratecharged by the supplier of the service.
(1a) If the contiguouspremises were built prior to 1989 and the lessor determines that themeasurement of the tenant's total water usage is impractical or not economical,the lessor may allocate the cost for water and sewer service to the tenantusing equipment that measures the tenant's hot water usage. In that case, eachtenant shall be billed a percentage of the landlord's water and sewer costs forwater usage in the dwelling units based upon the hot water used in the tenant'sdwelling unit. The percentage of total water usage allocated for each dwellingunit shall be equal to that dwelling unit's individually submetered hot waterusage divided by all submetered hot water usage in all dwelling units. Thefollowing conditions apply to billing for water and sewer service under thissubdivision:
a. A lessor shall notutilize a ratio utility billing system or other allocation billing system thatdoes not rely on individually submetered hot water usage to determine theallocation of water and sewer costs.
b. The lessor shall notinclude in a tenant's bill the cost of water and sewer service used in commonareas or water loss due to leaks in the lessor's water mains. A lessor shallnot bill or attempt to collect for excess water usage resulting from a plumbingmalfunction or other condition that is not known to the tenant or that has beenreported to the lessor.
c. All equipment usedto measure water usage shall comply with guidelines promulgated by the AmericanWater Works Association.
d. The lessor shallmaintain records for a minimum of 12 months that demonstrate how each tenant'sallocated costs were calculated for water and sewer service. Upon advancedwritten notice to the lessor, a tenant may inspect the records duringreasonable business hours.
e. Bills for water andsewer service sent by the lessor to the tenant shall contain all the followinginformation:
1. The amount of waterand sewer services allocated to the tenant during the billing period.
2. The method used todetermine the amount of water and sewer services allocated to the tenant.
3. Beginning and endingdates for the billing period.
4. The past‑duedate, which shall not be less than 25 days after the bill is mailed.
5. A local or toll‑freetelephone number and address that the tenant can use to obtain more informationabout the bill.
(2) The lessor maycharge a reasonable administrative fee for providing water or sewer service notto exceed the maximum administrative fee authorized by the Commission.
(3) The Commission shallissue rules to define contiguous premises and to implement this subsection. Inissuing the rule to define contiguous premises, the Commission shall considercontiguous premises where manufactured homes, as defined in G.S. 143‑145(7),or spaces for manufactured homes are rented.
(4) The Commission shalldevelop an application that lessors must submit for authority to charge forwater or sewer service. The form shall include all of the following:
a. A description of theapplicant and the property to be served.
b. A description of theproposed billing method and billing statements.
c. The schedule ofrates charged to the applicant by the supplier.
d. The schedule ofrates the applicant proposes to charge the applicant's customers.
e. The administrativefee proposed to be charged by the applicant.
f. The name of andcontact information for the applicant and its agents.
g. The name of andcontact information for the supplying water or sewer system.
h. Any additionalinformation that the Commission may require.
(5) The Commission shallapprove or disapprove an application within 30 days of the filing of acompleted application with the Commission. If the Commission has not issued anorder disapproving a completed application within 30 days, the applicationshall be deemed approved.
(6) A provider of wateror sewer service under this subsection may increase the rate for service solong as the rate does not exceed the unit consumption rate charged by thesupplier of the service. A provider of water or sewer service under thissubsection may change the administrative fee so long as the administrative feedoes not exceed the maximum administrative fee authorized by the Commission. Inorder to change the rate or administrative fee, the provider shall file anotice of revised schedule of rates and fees with the Commission. TheCommission may prescribe the form by which the provider files a notice of arevised schedule of rates and fees under this subsection. The form shallinclude all of the following:
a. The current scheduleof the unit consumption rates charged by the provider.
b. The schedule ofrates charged by the supplier to the provider that the provider proposes topass through to the provider's customers.
c. The schedule of theunit consumption rates proposed to be charged by the provider.
d. The currentadministrative fee charged by the provider, if applicable.
e. The administrativefee proposed to be charged by the provider.
(7) A notification ofrevised schedule of rates and fees shall be presumed valid and shall be allowedto become effective upon 14 days notice to the Commission, unless otherwisesuspended or disapproved by order issued within 14 days after filing.
(8) Notwithstanding anyother provision of this Chapter, the Commission shall determine the extent towhich the services shall be regulated and, to the extent necessary to protectthe public interest, regulate the terms, conditions, and rates that may becharged for the services. Nothing in this subsection shall be construed toalter the rights, obligations, or remedies of persons providing water or sewerservices and their customers under any other provision of law.
(9) A provider of wateror sewer service under this subsection shall not be required to file annualreports pursuant to G.S. 62‑36 or to furnish a bond pursuant to G.S. 62‑110.3.(1931, c. 455;1933, c. 134, s. 8; 1941, c. 97; 1963, c. 1165, s. 1; 1983 (Reg. Sess., 1984),c. 1043, s. 2; 1985, c. 676, s. 9; c. 680; 1987, c. 445, s. 1; 1989, c. 451,ss. 1, 2; 1995, c. 27, s. 4; 1995 (Reg. Sess., 1996), c. 753, s. 1; 1997‑207,s. 1; 1998‑180, ss. 1, 2; 1998‑212, s. 15.8B; 1999‑112, s. 1;2001‑252, s. 1; 2001‑502, s. 1; 2002‑14, s. 1; 2003‑99,s. 1; 2003‑173, s. 1; 2004‑143, s. 7; 2005‑385, ss. 1, 2;2009‑202, s. 1; 2009‑279, s. 1.)