Code of Maine Rules › 65 - DEPARTMENT OF PUBLIC UTILITIES COMMISSION › 407 - PUBLIC UTILITIES COMMISSION › Chapter 395 - CONSTRUCTION STANDARDS, OWNERSHIP. COST ALLOCATION, AND CUSTOMER CHARGES RULES FOR ELECTRIC DISTRIBUTION LINE EXTENSIONS AND SERVICE DROPS › Section 407-395-7 - Transfer of Ownership; Taxes on Contribution in aid of Construction

Current through 2024-29, July 17, 2024
A.
Line Extensions in
				Developments
. The ownership all line extensions in developments shall be
				transferred to the T&D utility prior to energization of the line.
B.
Optional Transfer of
				Ownership
. A person who owns a privately-owned line extension may
				request the T&D utility to assume ownership of the line extension. The
				T&D utility must assume ownership if the line meets the standards required
				by section
				3, and the owner has made all the
				payments required by subsection E below. If the line extension does not meet
				the standards required by section
				3, the owner of the line shall upgrade
				the line extension to those standards or request the utility to upgrade the
				line, subject to the payment requirements of subsection E(3) below. If the line
				was energized prior to the date of transfer, and the standards required by
				section
				3 have changed since the line was
				energized, the line must be brought into compliance only with those changed
				standards that affect the reliability or safety of the line.
C.
Additional Customers
. If an
				additional person will be served by a line extension that is owned by a private
				person as permitted by the provisions of section
				6(B)(1) and (2), the
				ownership of all portions of the existing line extension and of any new line
				extension, extending from the existing line extension, that will serve more
				than one customer must be transferred to the T&D utility prior to
				energization of the new line. If the existing line extension does not meet the
				standards required by section
				3, the new customer or customers shall
				cause the line extension to be upgraded to current standards that affect the
				reliability or safety of the line or request the T&D utility to upgrade the
				line extension to those standards, subject to the payment requirements of
				subsection F(2)(b) below.
D.
Compensation to Customers for Transfers of Ownership of Line
				Extensions
. If the Terms and Conditions of a T&D Utility require a
				person ordering or building a line extension to pay for all the costs of the
				line extension, whether built by the utility or by a private contractor, the
				utility shall not compensate an owner of a line extension that transfers
				ownership of a line extension pursuant to subsections A, B, or C of this
				section. If the utility's Terms and Conditions provide some portion of line
				extensions or line extension costs to customers without charge, its Terms and
				Conditions must also provide for compensation to an owner that transfers a line
				extension pursuant to this section, in an amount equivalent to the amount that
				would have been provided by the utility if it had built the line extension, if
				that amount has not already been provided to the owner of the line
				extension.
E.
Cost Obligation
				of Owner Transferring Line Extension Pursuant to Subsections A or B
.
				When an owner of a privately-owned line extension transfers ownership to a
				T&D utility pursuant to the provisions of subsections A or B above, the
				transferring owner shall pay the T&D utility an amount that includes:
1.
Taxes on Contribution in Aid of
				Construction or Contribution of Facilities
. Amounts that the T&D
				utility must pay in federal and state taxes for contributed facilities, reduced
				by the present value of the tax reduction the utility receives as a result of
				tax depreciation over the years of the tax depreciable life of the asset. The
				amount that the transferring owner must pay shall be calculated by:
a. Determining the amount of the income tax
				payable by the utility as a result of the contribution, pursuant to federal and
				State of Maine income tax law, using the utility's expected marginal federal
				and state income tax rates;
b.
				Determining the amount of tax depreciation for each remaining year of the tax
				depreciable life of the asset;
c.
				Determining the amount of income tax reduction resulting from tax depreciation
				over each remaining year of the tax depreciable life of the asset, using the
				utility's expected marginal federal and state tax rates;
d. Determining the present value of the
				amounts established by step c, using as a discount rate the weighted cost of
				debt plus the pre-tax weighted cost of equity as most recently determined in a
				Commission proceeding for an investor-owned T&D utility; and
e. Deducting the total amount established by
				step d from the amount of the calculated in step a;