TITLE 46 PUBLIC UTILITIES AND PUBLIC TRANSPORTATION

Section 4. Distribution, Storage, and Sale of Gas, 46-4-1 through 46-4-166.

ARTICLE 5 NATURAL GAS COMPETITION AND DEREGULATION

46-4-154. Notice of election; unbundling; rates; application requirements; surcharge on interruptibles.

1. A gas company may elect to become subject to the provisions of this article by filing a notice of election with the commission and by filing an application to establish just and reasonable rates, including separate rates for unbundled services. Pursuant to such application, the commission shall:
   1. Maintain rates for interruptible distribution service at the levels set forth in the rate schedules approved by the commission and in effect on the day the gas company files a notice of election as provided for in this Code section;
   2. After notice and hearing, establish rates for firm distribution service using a reasonable method of rate design, which may, at the commission's discretion, include a straight fixed variable method of rate design; provided, however, that a consumer shall not be required to pay a fee for distribution service during any billing period when the consumer's meter is turned off; and provided, further, that the method of rate design selected by the commission shall provide for recovery of the revenue requirements of the electing distribution company;
   3. Establish separate rates and charges, which may be based on market value, for each type of ancillary service which is classified separately;
   4. Provide for the recovery in rates of those costs which the commission determines are prudently incurred and used and useful in providing utility service; and
   5. Provide for recovery of costs found by the commission to be stranded and necessary to provide a reasonable return, provided that only prudently incurred stranded costs that cannot be mitigated may be recovered.
2. In any proceeding before the commission to establish rates as provided in subsection (a) of this Code section, the commission shall prescribe rates for the services and cost recovery purposes specified in paragraphs (2), (3), (4), and (5) of subsection (a) of this Code section at levels which are designed to recover the costs of service of the electing distribution company as established by the commission in such proceeding. In such proceeding, the commission shall also prescribe a mechanism by which 95 percent of the revenues to the electing distribution company from rates for interruptible distribution service shall be credited to the universal service fund established for that electing distribution company pursuant to Code Section 46-4-161. Each electing distribution company is authorized to retain for the benefit of its shareholders or owners 5 percent of the revenues the electing distribution company received from rates for interruptible service. Each electing distribution company which retains 5 percent of such revenues shall make a report to the commission annually describing the benefits resulting to firm retail customers from interruptible distribution service revenues.
3. In addition to any other applicable filing requirements, any such application by a gas company shall include the following:
   1. An identification of each component of natural gas service, including but not limited to commodity sales service, distribution service, and ancillary services, which are to be unbundled and offered under separate rates, together with the total costs to provide each such service by the electing distribution company including a return on investment;
   2. Provisions for offering each unbundled service on an equal access, nondiscriminatory basis;
   3. A description of the method by which the electing distribution company proposes to allocate its intrastate capacity for firm distribution service to a marketer based upon the peak requirements of the firm retail customers served by the marketer;
   4. A description of the method by which the electing distribution company proposes to allocate its rights to interstate pipeline and underground storage to a marketer based upon the peak requirements of the firm retail customers served by the marketer; and
   5. A plan for establishing and operating an electronic bulletin board by which the electing distribution company will provide marketers with equal and timely access to information relevant to the availability of firm distribution service.
4. Notwithstanding any other provision of this title, the commission shall hold a hearing regarding an application filed pursuant to this Code section and may suspend the operation of the proposed schedules and defer the use of the proposed rates, charges, classifications, or services for a period of not longer than six months.
5. The commission shall establish a surcharge on all customers receiving interruptible service over the electing distribution company's distribution system sufficient to ensure that such customers will pay an equitable share of the cost of the distribution system over which such customers receive service. The commission is authorized to direct the electing distribution company or the marketers to collect such surcharge directly from the customers. Such surcharge shall be paid promptly upon receipt into the universal service fund. This surcharge shall not be applied to any hospital that has a medicare and Medicaid payor mix of at least 30 percent and has uncompensated writeoffs for the provision of charity, indigent, and free health care services of not less than 5 percent of such hospital's annual operating expenses based on the annual hospital surveys by the Department of Community Health. This surcharge shall not be applied to any institution or property enumerated in Code Section 50-16-3, or administered or regulated under authority granted by Code Section 42-2-5 or 49-4A-6 or by Chapter 9 of Title 50.

(Code 1981, §46-4-154, enacted by Ga. L. 1997, p. 798, § 4; Ga. L. 2002, p. 475, § 10; Ga. L. 2009, p. 453, § 1-51/HB 228.)

The 2002 amendment, effective April 25, 2002, substituted the present provisions of paragraph (a)(2) for the former provisions which read: "Establish rates for firm distribution service using the straight fixed variable method of rate design, subject to the provisions of subsection (b) of this Code section;"; deleted former subsection (b) which read: "(b) If the commission determines that inefficiencies in the rate design or other causes in existence immediately preceding the implementation of the straight fixed variable rate design will result in a material fluctuation of rates for firm distribution service to a group of retail customers upon implementation of straight fixed variable rate design, the commission may make such adjustments to the rates for firm distribution service as it deems appropriate to phase in the straight fixed variable rate design for firm distribution service:

"(b)(1) Over a 12 month period from the date the rates filed by the electing distribution company would otherwise be effective if such material fluctuation will be less than 10 percent of the total gas charges for a group of retail customers; or

"(b)(2) Over a 24 month period from the date the rates filed by the electing distribution company would otherwise be effective if such material fluctuation will be equal to or greater than 10 percent of the total gas charges for a group of retail customers.

"However, in no event shall any such adjustment be made if the adjustment results in cross-subsidization between retail customers receiving firm distribution service and retail customers receiving interruptible distribution service or if the adjustment reduces the revenues to the electing distribution company for firm distribution service below those that would be recovered by the electing distribution company under the straight fixed variable rate without such adjustment."; redesignated former subsections (c) through (e) as present subsections (b) through (d), respectively; in subsection (b), substituted "95 percent" for "90 percent" in the second sentence and substituted "5 percent" for "10 percent" in the last two sentences; and added subsection (e).

The 2009 amendment, effective July 1, 2009, deleted "the Division of Health Planning" following "hospital surveys by" in the next-to-last sentence of subsection (e).