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Subject 515-7-5 UNIVERSAL SERVICE FUND

Rule 515-7-5-.01 Definitions

As used in this Utility Rule 515-7-5, the following terms and phrases shall have the following definitions:

(a) "Act" means the Natural Gas Competition and Deregulation Act as provided for in O.C.G.A. § 46-4-150et seq.
(b) "Ancillary service" means a service that is ancillary to the receipt or delivery of natural gas, including without limitation, storage, balancing, peaking and customer services.
(c) "Commission" means the Georgia Public Service Commission.
(d) "Commodity sales service" means the sale of natural gas exclusive of any distribution or ancillary service.
(e) "Customer service" means a function related to serving a retail customer including, without limitation, billing, meter reading, turnon service, and turn-off service.
(f) "Distribution service" means the delivery of natural gas by and through the intrastate instrumentalities and facilities of a gas company or of a marketer certificated pursuant to O.C.G.A. § 46-4-153, regardless of the party having title to the natural gas.
(g) "Delivery Group" means a set of individual delivery points on one or more interstate pipeline suppliers to a gas company that may be aggregated and utilized for the distribution of gas to a particular set of retail customers.
(h) "Electing distribution company" means a gas company that elects to become subject to the provisions of the Act and satisfies the requirements of O.C.G.A. § 46-4-154.
(i) "Emergency" means imminent threats to public health, safety or welfare.
(j) "Expand" means to increase facilities in size, quantity, or scope. This term does not include any activities relating to the maintenance, repair, and/or replacement of facilities already in existence.
(k) "Extend" means to enlarge the area or scope of facilities. This term does not include any activities relating to the maintenance, repair, and/or replacement of facilities already in existence.
(l) "Facilities" mean all property, means, and instrumentalities owned, operated, leased, licensed, used, furnished, or supplied for, by, or in connection with the delivery of natural gas service to the public.
(m) "Firm" means a type of distribution service which ordinarily is not subject to interruption or curtailment.
(n) "Gas" means natural gas.
(o) "Gas company" means any person to whom a certificate of public convenience and necessity has been issued by the Commission to construct or operate any pipeline or distribution system, or any extension thereof, for the sale of natural gas.
(p) "Group 1 Consumers" means low-income residential consumers served by a regulated provider of natural gas.
(q) "Group 2 Consumers" means firm natural gas consumers served by a regulated provider of natural gas who had been unable to obtain or maintain natural gas commodity service or whose utility payment history was cited by the regulated provider of natural gas as reason for transfer from Group 1 to Group 2.
(r) "Interruptible" means a type of distribution service which is subject to interruption or curtailment.
(s) "Low-income residential customer" means any person who meets the definition of a person who is qualified for the Low Income Home Energy Assistance Program, as promulgated by the Department of Human Resourses, pursuant to Code Section 46-1-5.
(t) "Marketer" means any person certificated by the Commission to provide commodity sales service or distribution service pursuant to O.C.G.A. § 46-4-153 or ancillary services incident thereto.
(u) "Person" means any corporation, whether public or private; company; individual; firm; partnership; or association.
(v) "Regulated gas service" means gas service provided by a regulated provider of natural gas.
(w) "Regulated provider of natural gas" means the entity selected by the Commission to provide to consumers natural gas commodity service and ancillary services thereto in accordance with Code Section 46-4-166.
(x) "Retail customer" or "retail purchaser" means a person who purchases commodity sales service or distribution service and such purchase is not for the purpose of resale.
(y) "Service" means the act or means of supplying natural gas to the public.

Rule 515-7-5-.02 Commission Authority

Consistent with O.C.G.A. § 46-4-161, the Commission is authorized to create and establish regulations to administer a universal service fund for each gas company that elects to become subject to the provisions of Article 5 of Chapter 4 of Title 46 of the Official Code of Georgia Annotated, and which satisfies the requirements of O.C.G.A. § 46-4-154. With respect to each such gas company, which is also termed an "electing distribution company" under the Natural Gas Competition and Deregulation Act, the Commission is charged with making a determination prior to the commencement of the electing distribution company's fiscal year as to the amount of funding that is appropriate for that year.

Rule 515-7-5-.03 Purpose

A universal service fund shall be created for each electing distribution company for the purposes set forth in O.C.G.A. § 46-4-161(a). These purposes include assuring that gas is available for sale by marketers to firm retail customers within a territory certificated to each such marketer; enabling the electing distribution company to extend and expand its facilities and service in the public interest; assisting low-income residential consumers in times of emergency as determined by the Commission; and consumers of the regulated provider of natural gas in accordance with Code Section 46-4-166.

Rule 515-7-5-.04 Creation of Universal Service Fund

(1) A universal service fund for each electing distribution company shall be created by the Georgia Public Service Commission, which shall designate for this purpose any state or federally chartered bank, trust company, or savings and loan association located in the state of Georgia.
(2) All monies placed in a universal service fund created for an electing distribution company shall be deposited in a separate interest bearing escrow account kept at the Commission designated bank.

Rule 515-7-5-.05 Administration

(1) The universal service fund shall be administered by the Georgia Public Service Commission and maintained by the electing distribution company for which it was created.
(2) An electing distribution company shall enter into a written escrow agreement with the bank in which the Commission has created its universal service fund. The Commission shall be a party to this agreement and possess the exclusive authority to direct through a written instrument that a disbursement be made from an electing distribution company's universal service fund.
(a) The written escrow agreement entered into shall expressly designate the name, business address and telephone number of the following parties: an escrow agent, the agent of the electing distribution company who will maintain the fund, and a representative of the Commission. Under no circumstance shall the identities of the designated parties be changed without pre-approval being obtained from the Commission.
(b) All notices to any party to the agreement shall be reduced to writing and directed to the parties at their respective addresses.
(c) In performing any of its duties under the agreement, the escrow agent shall incur liability for any damages, losses or expenses incurred due to conduct that is the product of nonfeasance or malfeasance, willful behavior, a breach of trust or gross incompetence or negligence.
(d) The escrow agent shall ensure that the funds held in the escrow account be invested to earn interest. Universal Service Fund investments shall be diversified to minimize risk or loss pursuant to guidelines contained in the escrow agreement.
(e) In the event that any term and/or provision of the escrow agreement shall be found to be unenforceable or invalid under state or federal law, said unenforceability shall not invalidate or nullify the entire agreement; rather, the agreement shall be construed as if it did not contain the portion of the agreement found to be invalid or nullified and the rights of the parties shall be construed accordingly.
(3) The escrow agent shall provide to the Commission monthly bank statements. The Commission shall have the right to audit the escrow account when, in its discretion, such action is warranted. The electing distribution company shall forward reconciled copies of the bank statements to the Commission at least quarterly.
(4) Other than for costs and fees imposed by the financial institution where the escrow account is held, neither the Georgia Public Service Commission nor an electing distribution company shall be entitled to receive disbursements from a universal service fund for their respective roles in administering and maintaining the fund.
(5) All interest earned on monies placed in a universal service fund created for an electing distribution company shall accrue to the benefit of the respective fund.
(6) Both the electing distribution company and the escrow agent shall notify the Commission immediately if the escrow account is closed for any reason.

Rule 515-7-5-.06 Funding

(1) Prior to the beginning of the fiscal year of an electing distribution company, the Commission shall determine the amount of the fund appropriate for that fiscal year, which amount shall not exceed $25 million for that fiscal year. In making this determination, the Commission shall consider:
(a) The amount of money that will be necessary to provide sufficient contributions in aid of construction to permit the electing distribution company to extend and expand its facilities on occasions that the Commission deems to be in the public interest; and
(b) The amount required to assist low-income residential consumers in times of emergency as determined by the Commission and consumers of the regulated provider of natural gas in accordance with Code Section 46-4-166.
(2) Funding for an EDC's USF shall be derived from the following sources:
(a) Rate refunds to the EDC from its interstate pipeline suppliers;
(b) Any earnings allocable to ratepayers under performance based rates of the EDC authorized by Article 5 of Chapter 4 of Title 46 of the Official Code of Georgia Annotated;
(c) A surcharge to the rates for firm distribution service of the EDC when authorized for such purpose by the Commission;
(d) 95% of the revenues of the EDC from rates for interruptible service pursuant to O.C.G.A. § 46-4-154(b);
(e) The shares that are to be credited to the cost of gas sold to firm retail customers pursuant to the revenue sharing mechanisms set forth in O.C.G.A. § 46-2-23.1(i)(1);
(f) Surcharges on customers receiving interruptible service on the EDC's system imposed by the Commission in accordance with Code Section 46-4-154;
(g) Refunds of deposits required by marketers as a condition for service, if such refunds have not been delivered to or claimed by the consumer within two (2) years:
1. By December 15th of each year, all natural gas marketers and the Regulated Provider shall make annual remittances to the USF of all deposits that have not been delivered to or claimed by the consumer after two years from the date that the consumer was eligible to receive the refund of the deposit. Such annual remittance shall include all interest accrued on such unclaimed deposit.
2. By December 15th of each year, all marketers and the Regulated Provider shall file an "Annual Unclaimed Customer Deposit Report" with the Commission in Docket No. 15326-U. This report shall provide the following information with regard to the annual remittance to the USF:
(i) The dollar amount, even if $0.00, of the annual remittance of customer deposits to the USF, separately identifying the dollar amount of the customer deposits and the dollar amount of the interest included on the customer deposits;
(ii) Either the actual or average interest rate earned on the deposits during the two year period prior to the remittance to the USF. The marketers and the Regulated Provider shall employ any of the following three methods to demonstrate how the interest rate was determined:
(i) Dividing the sum of the total interest for each period (month) by the sum of the total customer deposits for each period (month).
(ii) Dividing the sum of the interest rates for each period (month) by the number of periods (months). or
(iii) Using the actual interest rates listed on the bank account statements. The marketer and Regulated Provider must state which method was used in its annual filing.
(iii) The total dollar amount, even if $0.00, of deposits that have not been delivered to or claimed by the consumer for which less than two years have passed since the consumer was eligible to receive the refund of the deposit. This component of the filing shall include the number of customer accounts that are associated with this dollar amount.
(h) Funds deposited by marketers in accordance with Code Section 46-4-160.3;
(i) The proceeds from the sale or lease of facilities financed from the Universal Service Fund; and
(j) Any other payments to the fund as provided for by law or by order of the Commission.
(3) Each EDC shall be required to make a filing one month prior to the beginning of its fiscal year. The filing shall include information necessary to assist the Commission in its determination of the proper funding level, including:
(a) The EDC's proposed capital budget for the upcoming fiscal year.
(b) Information related to disbursements from the USF for the prior fiscal year.
(4) Any amounts remaining in such fund at the end of a fiscal year in excess of $3 million shall be available for refund to retail customers in such manner as the Commission shall deem equitable. The balance at fiscal year end, whether positive or negative, after such refund, if any, shall become the initial balance of the fund for the ensuing fiscal year. The USF should bear any costs of administering the refund.
(5) When a USF refund goes to a certificated marketer of natural gas it shall be incumbent upon such marketer to pass through such refund to its retail customers as a condition of retaining its certificate of authority. O.C.G.A. 46-4-161(d).

Rule 515-7-5-.07 Applications for Disbursements from a Universal Service Fund: Electing Distribution Company

(1) An EDC seeking a distribution from the USF shall file with the Commission an Annual USF Facilities Expansion Plan ("Annual Plan") by September 1st of each year for the anticipated USF expansion projects for the 12-month period of January 1 through December 31 of the following year. USF funds shall only be available to aid in the construction of the approach main line-extension, service main, natural gas fueling infrastructure for motor vehicles, or compressed natural gas ("CNG") station, or Liquefied Natural Gas ("LNG") facilities for any proposed facilities expansion. The EDC may file revisions to its Annual Plan as necessary during the year. The Commission shall determine whether any such revisions are in the public interest. In establishing its Annual Plan, the EDC shall consider the following:
1. The facility needs of the system to ensure the reliability of the distribution system and service to customers;
2. The facility needs of the system to ensure the availability of a diversity of gas supply and interstate capacity options to serve the system;
3. The forecasted growth requirements of the EDC's system based on historical growth trends;
4. The forecasted growth requirements of the EDC's system based on input from developers and builders regarding their future development plans; and
5. The forecasted growth requirements of the EDC's system based on input from state and local community officials regarding economic development needs and the forecasted growth of local communities.

This application shall contain the following minimum filing requirements ("MFR"):

(a) MFR-1 will contain a detailed written technical description of the project (s). The technical description will include, but not be limited to, a discussion of the type, size, and length of the proposed facilities and the proposed route and the community and/or company that will be served. The technical description will affirmatively state if a proposed approach main line-extension is new main or an extension or expansion of existing main as defined in 515-7-5-.01(j)(k). There will be a discussion of the type and size of main proposed to be replaced. The technical description will affirmatively state if the EDC is or is not certificated to serve in the counties where the facilities will be constructed.
(b) MFR-2 will provide the the EDC's capital budget for the relevant fiscal year. If the capital budget for the relevant fiscal year of the Annual Plan is not available, then the current fiscal year's capital budget will be provided. When the capital budget for the relevant Annual Plan fiscal year is available, it will be filed in the docket number for the relevant Annual Plan.
(c) MFR-3 the EDC will set up a link on its website with a description of the Annual Plan and use an online public stakeholder process to help identify potential projects across the State of Georgia. The public survey will begin April 1st and close June 30th each year. As part of the Annual Plan filing, the EDC will include stakeholder information as an electronic Excel spreadsheet that will list the following, if available:
i. Name of Stakeholder
ii. Date Responded to Survey
iii. Company/Organization Address, Phone #, and Email Address
iv. Project Name
v. Project Type
vi. County
vii. Project Address (If Known)
viii. Project Closest Intersection
ix. Year Natural Gas Service Needed
x. Economic Development Details in Project Area
(d) MFR-4 will provide a detailed map of the project(s) that includes, but is not limited to, the location of the project, route of the line-extension, or location of the CNG station(s).
(e) MFR-5 will provide economic development data related to the project(s) to include, if available, capital investment by a natural gas customer or potential customers in land, builders, equipment, natural gas equipment, and training, the number of jobs that will be created as a result of natural gas service, and the estimated annual payroll of the new customer. The economic development data can discuss known growth in the project area(s), such as known residential and commercial developments.
(f) MFR-6 will provide a Project Financial Analysis ("PFA") electronic Excel spreadsheet with live cells and formulas intact. The PFA spreadsheet will include multiple worksheets with the following:
i. Separate worksheets for each proposed project to include a detailed estimated engineering breakout of construction costs.
ii. The last worksheet will provide a Cost to Serve table with each project name, the total estimated engineering costs, the gross up for income taxes, the gross up for financing costs, and the total estimated project cost. The total estimated project cost for all projects will be totaled. The proposed projects will be listed alphabetically.

The EDC may use either estimated engineering costs when calculating cost to serve for an approach main corridor project or CNG station or filed costs when supplementing a Tariff Rule 7 request or Tariff Rule 8 request.

(g) MFR-7 will provide a Project Technical Analysis ("PTA") electronic Excel spreadsheet with live cells and formulas intact. The PTA spreadsheet will include multiple worksheets with the following:
i. Separate worksheets for each project to include the engineering details of each project that will include, but not be limited to, the name of the project, type, size, maximum allowable operating pressure ("MAOP"), and length of approach main and service main in feet.
ii. For a CNG station, the details will include the name of the project, location, and a list of equipment to include, but not be limited to, the following:
a. Dispensers
b. Compressors
c. Storage
d. Dryer
e. Valve Panel
f. Regulators
g. CNG Equipment
h. Approach Main
i. Service Main
j. Engineering Design
k. Construction
l. Overheads
(h) In no event shall an EDC, who receives a distribution from the fund, sell or lease any facilities financed by the fund to an affiliate for less than the higher of the net book value or fair market value of such facility without approval by the Commission. All Excel spreadsheets will be provided with active and unlocked cells for formula evaluation and auditing.
(i) No later than forty-five days after the end of each quarter, the EDC shall make filings on the status of each open USF project. The filings shall be provided in paper and electronic format as an Excel spreadsheet with active and unlocked cells and shall include the following:
(a) Authorization for Expenditure ("AFE") Number
(c) Project Name
(d) Date Approved
(e) Dollar Amount Approved
(f) Status of the project with the following codes:
(i) A - Project completed Notice of Completion submitted funds received.
(ii) B - Project completed Notice of Completion to be submitted on a date certain.
(iii) C - Project ongoing with a percentage of completion and projected completion date.
(iv) D - Project cancelled with a date for a filing to be made with the Commission.
(2) In reviewing the information contained in the application of the EDC for a disbursement of money from its USF, the Commission shall take into account whether the facility that the EDC has proposed is in the public's interest. It shall be within the sole discretion of the Commission to make this determination based upon the EDC's application. The Commission may consider evidence regarding the economic justification of alternative energy sources.
(3) Disbursements to an EDC from its USF for the expansion of facilities and service shall not exceed five percent (5%) of the EDC's capital budget for the fiscal year for which the application(s) or Annual Plan is approved. The disbursement may be further restricted based on available unencumbered USF funds. In the event the USF funds are not sufficient to cover the project costs in an Annual Plan, the unrecovered portion of facilities may be recovered through the EDC's normal ratemaking process(es) or as otherwise ordered by the Commission.
(4) Any investment by an EDC in new facilities that are financed by the USF shall be accounted for as a contribution in aid of construction.
(5) The Commission shall not grant any application of an EDC seeking a disbursement of money from its USF to operate, maintain, replace or repair existing natural gas transmission and distribution facilities.
(6) The EDC shall maintain detailed records of all expenditures for which reimbursement is requested and shall make those records available to the Commission and its Staff for audit and verification.
(7) Upon the completion of the project and the project being placed in service, the EDC shall file a Notice of Completion Report with the Commission, which shall include an accounting of the actual cost or filed cost of the project and any significant budget variance to the Commission and the actual in-service date.
(8) Upon receipt of the Notice of Completion, the Commission through its Staff or agent, may audit all expenditures; however, previously audited expenditures pursuant to (6) above need not be audited again.
(9) Within thirty (30) days of the acceptance of the audit report, the Commission will authorize payment of the amount authorized or the adjusted audit amount to reflect actual cost as may be appropriate.
(10) In accepting any disbursement from the USF, an EDC shall agree as follows:
(a) Without prior Commission approval, the EDC shall not sell, or otherwise dispose of or transfer, any facilities for which the EDC received a disbursement from the USF. In reviewing any such request, the Commission shall consider such factors as it may deem appropriate, including whether the sale, disposition, or transfer is in the public interest.
(b) Prior to the approval of any such sale, disposition or transfer, the Commission shall require the EDC to return to its ratepayers, in such manner as the Commission may prescribe, the USF contribution to the cost of construction of the facility, plus a portion of the profit, if any, on such sale, disposition, or transfer.
(11) Notwithstanding the provisions of 515-7-5-.07(1), an EDC may apply for a disbursement from the USF to fund natural gas fueling infrastructure for motor vehicles at the discretion of the Commission. Such filing shall include detail sufficient to allow the Commission to oversee the program operations and determine whether the proposed project is in the public interest.

Rule 515-7-5-.08 Applications for Disbursements from a Universal Service Fund: Regulated Provider

(1) The regulated provider shall have access to the universal service fund to recover had debt arising from service to Group 1 Consumers in accordance with these rules and O.C.G.A. 46-4-166. The regulated provider shall not have access to the universal service fund to recover bad debt arising from service Group 2 Consumers.
(2) The Commission shall provide for the terms and conditions of recovery of bad debt arising from service to Group 1 Consumers in the order by the Commission selecting the regulated provider or in amendments thereto. Such procedures, terms and conditions of recovery shall be designed to encourage efficient debt collection practices by the regulated provider.

Rule 515-7-5-.09 Assisting Low-Income Customers in Times of Emergency

If the Commission determines that an emergency exists, it may disburse moneys from the fund to assist low-income customers.

Rule 515-7-5-.10 Hearing Procedures

If the Commission determines that a hearing is warranted, it shall be conducted not less than thirty (30) days after an application for a disbursement from a universal service fund is received. The burden of proof to show that a disbursement of money from a universal service fund is appropriate shall not be deemed met if the applicant fails to conform to these rules, orders of the Commission, and granting access to the Commission through its staff to audit information submitted by the applicant. Orders determining whether a particular amount of money should be disbursed from a universal service fund shall contain the Commission's finding of fact and conclusions of law upon which the Commission's action is based. Any such order shall be deemed a final order subject to judicial review under Chapter 13 of O.C.G.A. Title 50, the "Georgia Administrative Procedures Act."

Rule 515-7-5-.11 Repealed

Rule 515-7-5-.12 Repealed