3. Line Extension Rules and Terms
When a new residential development is constructed in an area without exiting utility services, the developer must apply to the electric utility to be connected to the utility's system. The facilities that will have to be built to make the connection are of two kinds. First, the utility's distribution line will have to be extended to the edge of the new development if not already there. This is called a distribution line extension which is governed by Rule 15. Second, the utility's distribution line will have to be connected to the meters at each dwelling. These are called service extensions which are governed by Rule 16. As used herein, the term "Distribution Line Extension" refers to both the line and service extension.
The cost to the developer for the line extension depends on the utility's total estimated installed cost which is offset by allowances granted to the developer. The utility may complete a line extension without charge, provided the total estimated installed cost does not exceed the allowances from permanent bona fide load to be served.1 The cost of a residential Distribution Line Extension is divided into two parts: non-refundable and refundable.2 The non-refundable costs (trenching, conduit, etc.) are paid for by the applicant. The refundable costs are covered in whole or in part by the line extension allowance. The allowance is a fixed amount for each utility which is based on a revenue-supported methodology.3 For example, the line extension allowance for electric service during the period Victoria Falls was constructed ranged from $2,073 to $1,247.4 The refundable costs (electric wire, etc.), in excess of the allowance, are advanced by the applicant to the utility.5
The developer has two payment options to choose from in Distribution Line Extensions; the Refundable option and the Discount Option. The Refundable option requires the developer to advance the utility's total estimated cost to install the line extension, including the income tax component of contribution (ITCC) minus any applicable up-front allowances. The Discount Option requires the developer to contribute, on a non-refundable basis, a percentage of the total line extension refundable advance payment plus any applicable non-refundable costs. However, if the developer chooses the discount option, the total payment is non-refundable.
Under the Refundable Option, refunds are paid to the developer based on the additional revenues generated (above allowances granted) from the new or incremental residential and or non-residential loads and continue for up to
10 years from the date the utility is first ready to serve.6 SCE is required to make refunds within 90 days after the date of first service to new permanent loads, but may accumulate refunds to a minimum $50 total or the refundable balance if less than $50.7
1 Rule 15.C.1.
2 Rule 15.D.5.
3 Rule 15.C.2.
4 Prepared Testimony of SCE at 9.
5 Rule 15.D.5.
6 Rule 15.E.
7 Rule 15.E.7.
