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Line Extension Services

Contribution-in-Aid-of-Construction of Service Extension

Upon written application of the owner of any property, the owner’s agent, or the occupant with the consent of the owner, the Company shall furnish, place and construct such primary and secondary service extension as is necessary in accordance with the General Job Specifications and General Terms and Conditions to render the service requested. The total cost of providing the service extension, including any tax assessments and recog¬nizing any telephone company participation, less the credit for the service drop, if applicable, as defined in Section B above, shall be paid by the party requesting the service extension. Costs and charges shall be calculated according to this tariff. The above is subject to the following conditions:

1) The Customer shall first execute an agreement, the terms of which shall provide substantially as follows:

The applicant shall contract to pay the Company the appropriate rates charged to Customers, including minimum charges, and shall contract to pay the Company prior to start of construction a contribution-in-aid-of-construction for the service extension. The Company does not provide financing or credit for any portion of a line extension.

2) Whenever more than one Customer is connected to a Customer-financed line extension, total contributions-in-aid-of-construction shall be computed to yield to the Company not more than the total cost of extending or expanding service to the new Customer(s), less the service drop credit(s). Amounts to be collected from new customers connecting to Customer financed lines shall be computed as follows:

(a) For a period of five (5) years from the completion of construction of a line extension, reimbursement from new customers connecting to said line to customers entitled to reimbursements shall be based upon an equal sharing of the full cost of construction of the subject line extension, adjusted to the specific portion(s) of the line actually used to the point of connection.

(b) For a period of ten (10) years immediately following the initial five (5) year period discussed in (a) above, reimbursement to customers entitled to reimbursements shall be based upon an equal sharing of the full cost of construction of the subject line extension depreciated at a straight line rate to zero at the end of the ten (10) year period, also adjusted to the specific portion(s) of the line actually used to the point of connection.

(c) For each new transaction (defined as one or more new connections at the same time and location) involving a line that is subject to contribution-in-aid-of-construction payments for new connections within the 15-year reimbursement period, an administrative fee of $100.00 shall be retained by the Company from the total amount to be reimbursed to customers entitled to reimbursements. If the total amount of all reimbursements owed for each transaction is less than the Company’s administrative fee, no reimbursements shall be collected or distributed.

(d) All line extension reimbursements shall be paid by the Company to the current owners of the dwellings or structures served by line extensions that are subject to reimbursement payments for new connections, except that reimbursements payments shall be made to any Customer who paid for or contributed to the costs of line extensions and who subsequently sold the dwelling or structures originally served prior to the date of the Board’s order of September 21, 1999, in Docket 5496.

(e) The presumption regarding reimbursements for Customer financed lines described in the immediately preceding subsection (d) shall be changed if there is a grantee/grantor relationship between the person connecting to a Customer financed line and the person who originally paid for the line to whom a reimbursement would otherwise have been due. In such cases, no reimbursement shall be collected from the connecting Customer or paid by the Company to the grantor.

3) Utility tax liability arising under Federal Tax Reform Act of 1986: In order to avoid costs of a Customer line extension or relocation being paid or subsidized by the Company’s other ratepayers, all contributions-in-aid-of-construction billed to the Customer under this tariff will be adjusted to include an adjustment equal to the liability to the Company for applicable federal and state income taxes arising from contribution-in-aid-of-construction as a result of the federal tax code (as the same may be amended from time to time). This adjustment for Customer built line extensions or relocations, the Customer will be billed for the adjustment based upon the reasonable cost or value of the construction contributed to the Company as determined by the Company. The Customer must provide reasonable proof of costs of Customer-built line extensions or relocations or the Company may determine the value in accordance with the costs and terms of this tariff.

4) Extension Cost Update: Periodically, the Company will file with the Public Service Board and the Department of Public Service an electric service extension tariff revision updating its cost to extend its lines to a new service location. The revision shall develop unit prices, where applicable, based on the average installed cost to the Company for such items during the test period plus directly assignable administrative costs, adjusted for (a) known and measurable changes, and (b) capital contributions received from a telephone company associated with the attachment of telephone voice grade communication cables to poles utilized by both parties. The revision shall include a tax assessment amount reflecting the liability to the Company for applicable federal and state income taxes arising from contributions-in-aid-of-construction.

Upon acceptance by the Public Service Board, the costs as described above shall be applicable to applications for the extension of electric service and relocations.