SECTION 165:35-25-2. Extension of distribution systems

(a)   Free extension. The utility shall extend its overhead distribution lines a distance of three hundred feet (300') to provide service to each bona fide application for residential service, without cost to the consumer. The utility may prescribe terms and conditions of extending service to applicants for other types of service, and for extensions for low load service such as wells, security lights, and fence charges, and for extension policy required by law or by the terms of a financing agreement; which provisions, when filed with and approved by the Commission, shall be deemed to constitute compliance with this Section.

(b)   Tariff requirements of extension. A utility shall include in its filed tariffs, terms and conditions of furnishing underground service which shall provide for determining and recovery by the utility for the additional cost of providing underground service, and the responsibility for trenching and backfilling, and the method of calculating costs of construction.

(c)   Extension above free limit. If the extension of the distribution system necessary to furnish service to an applicant or group of applicants is greater than specified in (b) of this Section, the utility shall require payment of the cost of the extension over the free limit before extending the distribution system.

(d)   Extension may be made above free limit when economically justified. In lieu of making an extension pursuant to (a) and (b) of this Section, the utility may make an extension above the free limit upon receipt of a lesser payment or no payment, when the gross anticipated annual revenue from the extension will provide the utility with adequate return upon its investment, pursuant to a formula approved by the Commission or contained in its approved terms and conditions of service.

(e)   Determination of the length and cost of an extension. For purposes of measuring extensions under this Section, the distance shall be measured along lines of proper construction from the nearest point of connection to the point of delivery on the property to be served. A required advance for construction shall be calculated from the total construction cost of the extension from which there shall be deducted:

(1)   Any cost incident to excess capacity above that required to serve the applicant or group of applicants.

(2)   Any cost incident to future expansions or to continue a construction plan of the utility.

(3)   The cost of the free extension to which the applicant would be entitled.

(f)   Extensions applicable to prospective real estate subdivisions.

(1)   In lieu of extensions pursuant to other provisions of this Section, the utility may require a developer desiring an extension to a prospective real estate subdivision to make an advance for construction equal to the estimated total cost of the project before construction or the extension is started, which advance for construction shall not draw interest. The term "project" includes the entire distribution construction necessary to serve the subdivision and all line extensions to serve the individual parcels of said subdivision. In no case shall the total amount refunded exceed the amount advanced for construction with the utility. Consumers locating on an extension made pursuant to this paragraph shall not be required to make an extension advance for construction.

(2)   The utility may require the developer desiring service to a prospective real estate subdivision to make an advance for construction equal to the estimated cost of the distribution system without line extensions. In such cases no refund to the developer will be made upon connection of individual line extension within the subdivision.

(3)   A utility may enter into a contract with a developer which shall be deemed a special contract governed by OAC 165:35-5-1(c).

(g)   Appeals to the Commission. If the extension above the free limits is of such length and the future anticipated revenues therefrom so small that it is doubtful that the extension would ever make a fair return on the investment, the utility or any interested person may apply to the Commission for an appropriate order.

(h)   Property of extension. Every extension shall at all times be the property of the utility, regardless of whether an advance for construction is made in aid of its construction. At the end of five (5) years, any unrebated portion of a contribution or advance for construction made subject to refund shall become the property of the utility.

(i)   Adoption of policy by utility. The utility may adopt a policy for extension to be made for the purpose of serving irrigation wells and/or oil field water flooding projects and for advances for construction for payment of all or part of the cost thereof by such consumer, which policy shall be prescribed in its approved tariffs.

[Source: Amended at 31 Ok Reg 1030, eff 9-12-14; Amended at 36 Ok Reg 620, eff 7-25-19]