Arkansas Code
Subchapter 6 - Gas Utilities — Extension Projects
§ 23-3-605. Conditions, limitations on grant of certificates

Certificates shall be granted under this subchapter under the following provisions and conditions:
(1)
(A) Only proposed extension projects are eligible for recovery of the cost of excess expenditures under this subchapter.
(B) Proposed extension projects are those for which neither actual construction activity has begun nor expenditures made, other than for planning the extension project, at the time the petition for the certificate is initially filed with the Arkansas Public Service Commission;

(2) Certificates shall be granted under this subchapter only for proposed extension projects that will serve areas not served by any gas utility at the time of the filing of the petition for the certificate;
(3) Certificates shall be granted under this subchapter only if the Arkansas Public Service Commission determines the extension project is of economic benefit to the gas utility and its existing ratepayers and is in the public interest;
(4) Certificates shall not be granted under this subchapter to recover excess expenditures incurred in replacing existing pipelines, equipment, or plants, unless the replacement is necessary for adequate gas supply for the proposed extension project;
(5) When the Arkansas Public Service Commission has granted more than one (1) certificate to a gas utility, the Arkansas Public Service Commission may determine prospectively the sequence in which the gas utility shall commence work on pending extension projects based on whatever reasonable criteria the Arkansas Public Service Commission develops. However, once construction has begun on any given extension project, the Arkansas Public Service Commission determination shall not serve to postpone or defer construction;
(6)
(A) There is a limitation on the total annual dollar recovery of excess expenditures to be recovered under § 23-3-604 through rates or surcharges. The limitation is a dollar amount that equals five-tenths of one percent (0.5%) of the gas utility's gross plant at original cost used in determining the gas utility's most recent application for a general change in rates and charges.
(B) As used in this subdivision (6), “gross plant” does not include construction work in progress or portions of extension projects that have been granted certificates and are currently included in the gas utility's base rates; and

(7) With respect to any extension project funded under this subchapter to provide service to a project developer that also receives funds or incentives provided by the Arkansas Economic Development Commission, any agreement between a project developer and the Arkansas Economic Development Commission shall include a provision that any funds provided by a surcharge to recover the cost of an extension project under this subchapter shall be recovered from any project developer that failed to take natural gas service from such an extension project and refunded to ratepayers as directed by the Arkansas Public Service Commission.

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