Section R14-2-506. Construction Agreements

A.      General requirements

1.        Each utility shall file for Commission approval a tariff which incorporates the provisions of this rule and specifi- cally defines the conditions governing construction agreements. Subsections (A), (B), (C), and (D) of this Section do not apply to tariffs providing for construction charges fixed by zone.

2.        Upon request by an applicant for service, the utility shall provide, without charge, a preliminary sketch and rough estimates of the cost of installation to be paid by said applicant.

3.        Any applicant for service requesting the utility to prepare detailed plans, specifications, or cost estimates may be required to deposit with the utility an amount equal to the estimated cost of preparation. The utility shall, upon request, make available within 90 days after receipt of the deposit referred to above, such plans, specifications, or cost estimates of the proposed construction. Where the applicant authorizes the utility to proceed with construc- tion of the extension, the deposit shall be credited to the cost; otherwise the deposit shall be nonrefundable. 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.

4.        Where the utility requires an applicant to advance funds for construction, the utility shall furnish the applicant with a copy of the agreement or tariff of the appropriate utility prior to the applicant’s acceptance.

5.        All construction agreements requiring payment by the applicant shall be signed by each party.

6.        In the event the utility’s actual cost of construction is less than the amount advanced by the customer under a con- struction agreement, the utility shall make a refund to the applicant within 120 days of service commencement.

7.        The provisions of this rule apply only to those applicants who in the utility’s judgment will be permanent custom- ers of the utility. Applications for temporary service shall be governed by the Commission’s rules concerning tem- porary service applications.

B.       Minimum written agreement requirements

1.        Each construction agreement shall, at a minimum, include the following information:

a.         Name and address of applicant or applicants;

b.        Proposed service address or location;

c.         Description of requested service;

d.        Description and sketch of the requested construction

e.         A cost estimate to include materials, labor, and other costs as necessary;

f.         Payment terms;

g.        A concise explanation of any refunding provisions, if applicable;

h.        Utility’s estimated start date and completion date for construction;

i.         A summary of the results of the economic feasibility analysis performed by the utility to determine the amount of advance required from the applicant for the proposed construction.

2.        Each applicant shall be provided with a copy of the con- struction agreement.

C.      Construction  requirements.  Each   construction  tariff  shall include the following provisions:

1.        A maximum footage and/or equipment allowance to be provided by the utility at no charge. The maximum foot- age and/or equipment allowance may be differentiated by customer class.

2.        An economic feasibility analysis for construction which exceed the maximum footage and/or equipment allow- ance. Such economic feasibility analysis shall consider the incremental revenues and costs associated with the construction. In those instances where the requested con- struction does not meet the economic feasibility criteria established by the utility, the utility may require the cus- tomer to provide funds to the utility, which will make the

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construction economically feasible. The methodology employed by the utility in determining economic feasibil- ity shall be applied uniformly and consistently to each applicant requiring a construction.

3.        The timing and methodology by which the utility will refund any advances in aid of construction as additional customers are served off the construction project. The customer may request an annual survey to determine if additional customers  have  been connected to  and are using service from the project. In no case shall the amount of the refund exceed the amount originally advanced.

4.        All advances in aid of construction shall be noninterest bearing.

5.        If after five years from the utility’s receipt of the advance, the advance has not been totally refunded, the advance shall be considered a contribution in aid of construction and shall no longer be refundable.

D.      Residential subdivision development and permanent mobile home parks. Each utility shall submit as a part of its construc- tion tariff provisions for residential subdivision developments and permanent mobile home parks.

E.       Underground extension of communication lines

1.        Extension of communication lines necessary to furnish permanent communication service to new residential buildings or mobile homes within a new or undeveloped subdivision and to residential development in which facilities for communication service have not been con- structed for which applications are made by a developer shall be installed underground in accordance with the provisions set forth in this regulation and in accordance with applicable tariffs on file with this Commission except where it is not feasible from an engineering, oper- ational or economic standpoint.

2.        Rights-of-way and easements

a.         The utility shall construct or cause to be constructed and shall own, operate and maintain all underground communication feeder, distribution and service lines along public  streets, roads  and highways  and on public lands and private property which the utility has the legal right to occupy.

b.        Rights-of-way and easements suitable to the utility must be furnished by the developer at no cost to the utility and in reasonable time to meet service requirements. No underground communication facil- ities shall be installed by a utility until the final grades have been established and furnished to the utility. In addition, the easement strips, alleys and streets must be graded to within six inches of final grade by the developer before the utility will com- mence construction. Such clearance and grading must be maintained by the developer during con- struction by the utility.

c.         If, subsequent to construction, the clearance or grade is changed in such a way as to require relocation of the underground facilities, the cost of such reloca- tion shall be borne by the developer or subsequent owners.

3.        Installation of underground communication lines within subdivision and multiple occupancy residential develop- ments:

a.         The developer shall provide the trenching backfill (including any imported backfill required), compac- tion, repaving, and any earthwork required to install the underground communication system all in accor- dance with the reasonable specifications and sched-

ules of other utilities in the same area when feasible. At its option, if the utility’s cost therefore is equal to or less than that which the developer would other- wise have to bear, the utility may elect at the devel- oper’s expense to perform the activities necessary to fulfill the developer’s responsibility hereunder.

b.        Each utility shall promptly inspect the trenching pro- vided by the developer and allow for phased inspec- tion of trenching. In all cases, the utility shall make every effort to expedite the inspection of developer provided trenching.

c.         The utility shall install or cause to be installed underground communication lines and related equipment with sufficient capacity and suitable materials that ensure adequate and reasonable com- munication service in the foreseeable future and in accordance with the applicable provisions of Insti- tute of Electrical and Electronic Engineers, Inc., Pub. No. C2-2007, The National Electrical Safety Code (2007), which is incorporated by reference in R14-2-207(E)(3)(c).

d.        When developer is required to provide a trench for other underground utilities and services, the utility shall use such common trench as long as the utility’s design layout, easement specification, routing and scheduling requirements can be met, unless other- wise agreed upon by utility and developer in writing or as otherwise established by the Commission.

4.        Special conditions

a.         When the application of any of the provisions of the regulation appears to either party not to be feasible from an engineering, operational or economic stand- point, the utility or the developer may refer the mat- ter to the Commission for a determination as to whether an exception to the underground policy expressed within the provisions of this regulation is warranted. Interested third parties may present their views to the Commission in conjunction with such referrals.

b.        Notwithstanding any provision of this regulation to the contrary, no utility shall construct overhead com- munication lines  in any  new  subdivision or  new multiple occupancy residential development to which this regulation is applicable and which is con- tiguous to another subdivision or multiple occu- pancy residential development in which service is furnished underground without the approval of the Commission after a public hearing.

F.       Nonapplicability. Any underground communication distribu- tion system requiring more than normal communication ser- vice is not covered by this regulation and shall be constructed pursuant to the effective rules and regulations of the affected utility as approved by the Commission.

G.      Ownership of facilities. Any facilities installed hereunder shall be the sole property of the utility.

Historical Note

Adopted effective March 2, 1982 (Supp. 82-2). Amended by exempt rulemaking at 5 A.A.R. 2054, effective June 4, 1999 (Supp. 99-2). Amended to correct subsection num- bering (Supp. 99-4). Amended by final rulemaking at 15

A.A.R. 1933, effective December 27, 2009 (Supp. 09-4).

Note

Editor’s Note: The following Section was amended under an exemption from the Attorney General certification provisions of the Arizona Administrative Procedure Act (State ex. rel. Corbin v. Arizona Corporation Commission, 174 Ariz. 216 848 P.2d 301

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(App. 1992)), as determined by the Corporation Commission. This exemption means that the rules as amended were not certified by the Attorney General.