56-235.9 - Recovery of funds used for capital projects prior to a rate case for strategic natural gas facilities.
§ 56-235.9. Recovery of funds used for capital projects prior to a rate casefor strategic natural gas facilities.
A. As used in this section:
"Capitalized carrying cost" includes the return on the investment,depreciation, and tax.
"Natural gas utility" means any investor-owned public service companyengaged in the business of furnishing natural gas service to the public.
"Strategic natural gas facility" includes, without limitation, a naturalgas distribution or transmission pipeline, storage facility, compressorstation, liquefied natural gas facility, peaking facility or otherappurtenant facility, used to furnish natural gas service in the Commonwealththat, for a natural gas utility with fewer than 150,000 customers, addsstand-alone design day deliverability or designed send-out of at least 10,000dekaTherms per day or two or more such facilities, regardless of size, thatadd design day deliverability or designed send out of at least 75,000dekaTherms per day in the aggregate, and for a natural gas utility with150,000 or more customers, adds stand-alone design day deliverability ordesigned send out of at least 20,000 dekaTherms per day or two or more suchfacilities, regardless of size, that add design day deliverability ordesigned send out of at least 100,000 dekaTherms per day in the aggregate.
B. Any natural gas utility that places a strategic natural gas facility intoservice on or after July 1, 2008, to serve its customers shall have the rightto recover through its rates charged to those customers the entire prudentlyincurred costs of the facility including: planning, development andconstruction costs; costs of infrastructure associated therewith; anallowance for funds used during construction; and the capitalized carryingcost from the time construction is completed and the asset is placed intoservice until the time that the Commission establishes new rates that includerecovery of all costs as defined herein. Such recovery shall be permitted byallowing such costs to be recorded in the utility's plant accounts andincluded in rate base for purposes of cost recovery (i) in new rate schedulesfor service not offered under existing rate schedules or new rate schedulesfor expansion of existing services as permitted by § 56-235.4, (ii) in a ratecase using the cost of service methodology set forth in § 56-235.2, or (iii)in a performance-based regulation plan authorized by § 56-235.6, subject toCommission determination that such costs were prudently incurred. Theallowance for funds used during construction and the return on investmentshall be calculated utilizing the weighted average cost of capital, includingthe cost of debt and cost of equity used in determining the natural gasutility's base rates in effect during the construction period of thestrategic natural gas facility.
C. Nothing in this section shall be construed to prohibit the Commission fromgranting similar treatment to other natural gas facilities when theCommission deems such treatment to be in the public interest.
(2008, c. 867.)