§ 62-158. Natural gas expansion.
§ 62‑158. Naturalgas expansion.
(a) In order to facilitate the construction of facilities in andthe extension of natural gas service to unserved areas, the Commission may,after a hearing, order a natural gas local distribution company to create aspecial natural gas expansion fund to be used by that company to constructnatural gas facilities in areas within the company's franchised territory thatotherwise would not be feasible for the company to construct. The fund shallbe supervised and administered by the Commission. Any applicable taxes shallbe paid out of the fund.
(b) Sources of funding for a natural gas local distributioncompany's expansion fund may, pursuant to the order of the Commission, afterhearing, include:
(1) Refunds to a local distribution company from the company'ssuppliers of natural gas and transportation services pursuant to refund ordersor requirements of the Federal Energy Regulatory Commission;
(2) Expansion surcharges by the local distribution companycharged to customers purchasing natural gas or transportation servicesthroughout that company's franchised territory; provided, however, indetermining the amount of any surcharge the Commission shall take into accountthe prices of alternative sources of energy and the need to remain competitivewith those alternative sources, and the need to maintain just and reasonablerates for natural gas and transportation services for all customers served bythe company; provided further that the expansion surcharge shall not be greaterthan fifteen cents (15¢) per dekatherm; and
(3) Other sources of funding approved by the Commission.
(c) The application of all such funds to expansion projectsshall be pursuant to the order of the Commission. The Commission shall ensurethat all projects to which expansion funds are applied are consistent with theintent of this section and G.S. 62‑2(9). In determining economicfeasibility, the Commission shall employ the net present value method ofanalysis on a project specific basis. Only those projects with a negative netpresent value shall be determined to be economically infeasible for the companyto construct. In no event shall the Commission authorize a distribution fromthe fund of an amount greater than the negative net present value of anyproposed project as determined by the Commission. If at any time a project isdetermined by the Commission to have become economically feasible, theCommission may require the company to remit to the expansion fund or tocustomers appropriate portions of the distributions from the fund related tothe project, and the Commission may order such funds to be returned withinterest in a reasonable amount to be determined by the Commission. Utilityplant acquired with expansion funds shall be included in the local distributioncompany's rate base at zero cost except to the extent such funds have beenremitted by the company pursuant to order of the Commission.
(d) The Commission, after hearing, may adopt rules to implementthis section, including rules for the establishment of expansion funds, for theuse of such funds, for the remittance to the expansion fund or to customers ofsupplier and transporter refunds and expansion surcharges or other funds thatwere sources of the expansion fund, and for appropriate accounting, reportingand ratemaking treatment. The Commission and Public Staff shall report to theJoint Legislative Utility Review Committee on the operation of any expansionfunds in conjunction with the reports required under G.S. 62‑36A. (1991, c. 598, s. 2.)