20240925Uniform Main Extension Rule For Water Utilities.pdf

RECEIVED
Wednesday, September 25, 2024
IDAHO PUBLIC
UTILITIES COMMISSION
UNIFORM MAIN EXTENSION RULE FOR WATER UTILITIES
Based on Order No. 7830 (Case No. U-1500-22)
A. GENERAL PROVISIONS AND DEFINITIONS
1. Applicability
a. All extensions of distribution mains from the utility's existing distribution
system, to serve new customers, except for those specifically excluded
below shall be made under the provisions of this Rule unless specific
authority is first obtained from the Commission to deviate therefrom. A
main extension contract shall be executed by the utility and the applicant
or applicants for the main extension before the utility commences
construction work on said extension or, if constructed by applicant or
applicants, before the facilities comprising the main extension are
transferred to the utility.
b. Extensions solely for fire hydrant, private fire protection, resale,
temporary, standby, or supplemental service shall not be made under this
Rule.
c. The utility may, but will not be required to, make extensions under this
Rule in easements or rights-of-way where final grades have not been
established, or where street grades have not been brought to those
established by public authority. If extensions are made when grades have
not been established and there is a reasonable probability that the
existing grade will be changed, the utility shall require that the applicant
or applicants for the main extension deposit, at the time of execution of
the main extension agreement, the estimated net cost of relocating,
raising, or lowering facilities upon establishment of final grades.
Adjustment of any difference between the amount so deposited and the
actual cost of relocating, raising, lowering facilities shall be made within
ten (10) days after the utility has ascertained such actual cost. The net
deposit representing actual cost is not subject to refund. The entire
deposit related to the proposed relocation, raising or lowering shall be
refunded when such displacements are determined by proper authority to
be not required.
2. Definitions
a. Bona Fide Customer, for the purposes of this Rule, shall be a customer
(excluding any customer formerly served at the same location) who has
given satisfactory evidence that service will be reasonably permanent to
the property which has been improved with a building of permanent
nature and to which service has commenced. The provision of service to a
real estate developer or builder during the construction or development
period shall not establish him as a bona fide customer.
b. Real Estate Developer or Builder, for purposes of this Rule, shall include
any individual, association of individuals, partnership, or corporation that
divides a parcel of land into two (2) or more portions.
c. Adjusted Construction Cost, for the purposes of this Rule, shall be
reasonable and shall not exceed the costs recorded in conformity with
generally accepted water utility accounting and sound engineering
practices, and as specifically defined in the, Uniform System of Accounts
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for Water Utilities prescribed by the Commission, of installing facilities, of
adequate capacity for the service requested. If the utility at its option
should install facilities with' a larger capacity or resulting in a greater
footage of extension than required for the service, the adjusted
construction cost for the purposes of this Rule shall be determined by the
application of an adjustment factor to actual construction cost of facilities
installed. This factor shall be the ratio of estimated cost of required
facilities to estimated cost of actual facilities installed.
d. Commission shall mean the Idaho Public Utilities Commission.
3. Ownership, Design and Construction of Facilities
a. Any facilities installed hereunder shall be the sole property of the utility.
In those instances in which title to certain portions of the installation, such
as fire hydrants, will be held by a political subdivision, such facilities shall
not be included as a part of the main extension under this Rule.
b. The size, type, quality of materials and their location shall be specified by
the utility and the actual construction shall be done by the utility or by a
constructing agency acceptable to it.
c. Where the property of an applicant is located adjacent to a right-of-way,
exceeding 70 feet in width, for a street, highway or other public purpose,
regardless of the width of the traveled way or pavement; or a freeway,
waterway or railroad right-of-way, the utility may elect to install a main
extension on the same side thereof as the property of the applicant and
the estimated and adjusted construction costs in such case shall be based
upon such an extension.
d. When an extension must comply with an ordinance, regulation, or
specification of public authority, the estimated and adjusted construction
costs of said extension shall be based upon the facilities required comply
therewith.
4. Estimates, Plans and Specifications
a. Upon request by a potential applicant for a main extension, the utility shall
prepare without charge a preliminary sketch and rough estimates of the
cost of installation to be advanced by said applicant.
b. Any applicant for a main extension requesting the utility to prepare
detailed plans, specifications and cost estimates shall be required to
deposit with the utility an amount equal to the estimated cost of
preparation of such material. The utility shall, upon request, make
available within 45 days after receipt of the deposit referred to above,
such plans, specifications and cost estimates of the proposed main
extension. If the extension is to include oversizing of facilities to be done
at the utility's expense appropriate details shall be set forth in the plans,
specifications and cost estimates.
c. In the event a main extension contract with the utility is executed within
180' days after the utility furnishes the detailed plans and specifications,
the deposit shall become a part of the advance, and shall be refunded in
accordance with the terms of the main extension contract. If such contract
is not so executed the deposit to cover the cost of preparing plans,
specifications and cost estimates shall be forfeited by the applicant for the
main extension and the amount of the forfeited deposit shall be credited
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to the account or accounts to which the expense of preparing said
material was charged.
d. When detailed plans, specifications and cost estimates are requested the
applicant for a main extension shall furnish a map to a suitable scale
showing the street and lot layouts, and when requested by the utility,
contours or other indication of the relative elevation of the various parts of
the area to be developed. If changes are made subsequent to the
presentation of this map by the applicant, and these changes require
additional expense in revising plans, specifications and cost estimates this
additional expense shall be borne by the applicant, not subject to refund,
and the additional expense thus recovered shall be credited to the account
or accounts to which the additional expense was charged.
5. Timing and Adjustment of Advances
a. Unless the applicant for the main extension elects to arrange for the
installation of the extension himself as permitted by Section C.1.c., the
full amount of the required advance or an acceptable surety bond must be
provided to the utility at the time of execution of the main extension
agreement.
b. If the applicant for a main extension posts a surety bond in lieu of cash,
such surety bond must be replaced with cash not less than ten (10)
calendar days before construction is to commence; provided, however,
that if special facilities are required primarily for the service requested,
the applicant for the extension may be required to deposit sufficient cash
to cover the cost of such special facilities before they are ordered by the
utility.
c. An applicant for a main extension who advances funds shall be provided
with a, statement of actual construction cost and adjusted construction
cost showing in reasonable detail the cost incurred for material, labor, any
other direct and indirect costs , overheads, and total costs; or unit costs
or contract costs; whichever are appropriate.
d. Said statement shall be submitted within sixty (60) days after the actual
construction costs of the installation have been ascertained by the utility.
In the event that the actual construction costs for the entire installation
shall not have been determined within 120 days after completion of
construction work, a preliminary determination of actual and adjusted
construction costs shall be submitted, based upon the best available
information at that time.
e. Any differences between the adjusted construction costs and the amount
advanced shall be shown as a revision of the amount of advance and shall
be payable within thirty (30) days of submission of the statement.
6. Assignment of Main Extension Contracts - Any contract entered into under
Sections B and C of this Rule, or under similar provisions of former rules, may
be assigned after settlement of adjusted construction costs, after written
notice to the utility by the holder of said contract as shown by the utility's
records. Such assignment shall apply only to those refunds which become due
more than thirty (30) days after the date of receipt by the utility of the notice
of assignment. The utility shall not be required to make any one refund
payment under such contract to more than a single assignee.
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7. Interpretations and Deviations - In case of disagreement or dispute regarding
the application of any provision of this Rule, or in circumstances where the
application of this Rule appears unreasonable to either party, the utility,
applicant or applicants may refer the matter to the Commission for
determination.
B. EXTENSIONS TO SERVE INDIVIDUALS
1. Free-Footage Allowance - The utility shall extend its water distribution mains
to serve new bona fide customers at its own expense, other than to serve
subdivisions, tracts , housing projects , industrial developments or organized
commercial districts, when the required total length of main extension from
the nearest existing utility facility is not in excess of fifty (50) feet per service
connection.
2. Advances - If the total length of main extension is in excess of fifty (50) feet
per service connection applied for, the applicant or applicants for such service
shall be required to advance to the utility, before construction is commenced,
that portion of the estimated reasonable cost of such extension which exceeds
the estimated reasonable cost of 50 feet of the main extension per service
connection, exclusive of the cost of service pipes, meter boxes and meters.
Such estimated reasonable cost shall be based upon the cost of a main not in
excess of six (6) inches in diameter except where a larger main is required by
the special needs of the applicant or applicants. The amount of the advance is
subject to adjustment in accordance with the provisions of Section A.5.e. of
this Rule.
3. Refunds - The money so advanced shall be refunded by the utility, in cash
without interest, in payments equal to the adjusted construction cost of fifty
(50) feet of the main extension for which advance was made, for each
additional service connection made to said main extension exclusive of that of
any customer formerly served in a reasonable manner at the same location.
At the request of the applicant, refunds shall be made within 180 days after
the date of first service to a bona fide customer. If no request is received
from applicant the utility shall, initiate refunds on an annual basis. No refunds
shall be made, after a period of ten (10) years from the date of completion of
the main extension and, the total refund shall not exceed the amount
advanced.
4. Exceptions - Where a group of five (5) or more individual applicants requests
service from the same extension, or in unusual cases after obtaining
Commission authorization, the utility, at its option, may require that the
individual or individuals advance the entire cost of the main extension as
herein provided and the utility shall refund this advance as provided in
Section C.2. of this Rule.
C. EXTENSIONS TO SERVE SUBDIVISIONS, TRACTS, HOUSING
PROJECTS INDUSTRIAL DEVELOPMENTS OR ORGANIZED
COMMERCIAL DISTRICT
1. Advances —
a. Unless the procedure outlined in Section C.1.c. is followed, an applicant
for a main extension to serve a new subdivision, tract, housing project or
industrial development or organized commercial district shall be required
to advance to the utility, before construction is commenced, the
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estimated reasonable cost of the extension to be actually installed, from
the nearest utility facility at least equal in size or capacity to the main
required to serve both the new customers and a reasonable estimate of
the potential customers who might be served directly from the main
extension without additional extension. The costs of the extension shall
include necessary service stubs, or service pipes, fittings, gates and
housing therefore, and meter boxes, but shall not include meters. To this
shall be added the cost of fire hydrants when requested by the applicant
for the main extension or required by public authority, whenever such
hydrants are to become the property of the utility.
b. If, for any purpose, special facilities are required primarily for the service
requested, the cost of such special facilities may be included in the
advance, subject to refund, as hereinafter provided, along with refunds of
the advance of the cost of the extension facilities described in Section
CA.a. above.
c. In lieu of providing the advances in accordance with Sections CA.a. and
CA.b., the applicant for a main extension shall be permitted, if qualified in
the judgment of the utility, to construct and install the facilities himself, or
arrange for their installation pursuant to competitive bidding procedures
initiated by him and limited to qualified bidders. The cost, including the
cost of inspection and supervision by the utility, shall be paid directly by
applicant. The applicant shall provide the utility with a statement of actual
construction cost in reasonable detail. The amount to be treated as an
advance subject to refund shall be the lesser of (1) the actual cost, or (2)
the price quoted in the utility detailed cost estimate. The installation shall
be in accordance with the plans and specifications submitted by the utility
pursuant to Section AAb.
2. Refunds
a. The amount advanced under Sections CA.a., CA.b.; i and CA.c. shall be
subject to refund by the utility in cash, without interest, to the party or
parties entitled thereto as set forth, in the following two paragraphs. The
total amount so refunded shall not exceed the total of the amount
advanced. Except as hereinafter provided, the refunds shall be made in
annual, semiannual or quarterly payments at the election of the utility,
and for a period not to exceed twenty (20) years after the date of the
contract.
b. Whenever costs of main extensions have been advanced pursuant to
Sections CA.a. or CA.c., the utility shall determine the revenue received
from customers other than residential, including fire protection agencies,
supplied by service pipes connected directly to the extension for which the
cost was advanced. The refund shall be 22 percent of the revenue so
received. For residential customers connected directly to the extension for
which the cost was advanced, the utility shall refund 22 percent of the
average revenue per residential customer of the entire system for the
immediately preceding 12-month period. (See Section C.2.d. and B.3.)
c. Whenever costs of special facilities have been advanced pursuant to
Sections CA.b. or CA.c., the amount so advanced shall be divided by the
number of lots to be served by the special facilities. This advance per lot
shall be refunded for each lot on which one or more bona fide customers
are served by those facilities.
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d. With respect to a contract entered into on and after the effective date of
this Rule, if, at any time during the 20-year refund period specified above
80 percent of the bona fide customers for which the extension or special
facilities were designed are being served therefrom, the utility shall
immediately notify the contract holder of that fact, and at that time shall
become obligated to pay, in cash, any balance which may remain
unrefunded at the end of said 20-year period. Such balance shall be
refunded in five (5) equal annual installments, payable beginning 21 years
after the date of the contract.
e. Where a contract has been entered into under a former main extension
rule, and where 80 percent of the bona fide customers for which the
extension or special facilities were designed are being served therefrom,
the utility may negotiate and enter into a new and substitute contract,
identical in all respects, with the original contract, including the original
termination date, except that said substitute contract shall include the
following provisions: "Notwithstanding any other provisions hereof, any
unrefunded balance remaining at the termination date of this contract
shall be paid in five (5) equal annual , installments beginning one (1) year
after, said termination date."
3. Termination of Main Extension Contracts
a. Any contract entered into under Section C of this Rule, or under similar
provisions of former rules may be purchased by the utility and terminated,
after first obtaining the authorization of the Commission, at any time after
the number of bona fide customers then receiving service from the
extension for which the advance was made equals at least 60 percent of
the total number of bona fide customers for which such extension was
designed by the utility and the terms are otherwise mutually agreed to by
the parties or their assignees and that, Section C.3.b. and Section C.3.c.
hereof are complied with.
b. The utility, in requesting authorization for such termination shall furnish to
the Commission the following information in writing by an advice letter in
the event the termination is to be accomplished by payment in cash, or by
a formal application:
(1) A copy of the main extension contract, together with data
adequately describing the development for which the advance was
made and the total adjusted construction cost of the extension.
(2)The balance unpaid on the contract, as above defined, as of the
date of termination and terms under which the obligation is
requested to be terminated.
(3)The name of the holder of the contract when terminated.
(4)The total number of bona fide customers for which the extension
was designed and the number of bona fide customers actually
receiving service on said extension as of the proposed date of
contract.
c. Discounts obtained by the utility for contracts terminated under the
provisions of this Section shall be accounted for by credits to Account 265
- Contributions in Aid of Construction.
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