NAC704.7977. Advance application: Required provisions.

     1. A gas infrastructure replacement advance application must provide sufficient evidence and be supported by sworn testimony to estimate the revenue requirement associated with each replacement project proposed in the advance application. The evidence must include, without limitation:

     (a) The number of miles of pipeline proposed to be replaced;

     (b) A detailed map of the proposed early-vintage steel pipeline to be replaced that includes mileposts or other relevant local and specific information, and a general map of the areas where early-vintage plastic pipe will be replaced during the next subsequent calendar year;

     (c) The type of pipeline that is being replaced and the type of pipeline to be used in the replacement;

     (d) The estimated cost of the materials to be used in each replacement project;

     (e) The estimated labor costs of the gas utility for each replacement project;

     (f) The estimated contractor costs for each replacement project;

     (g) The estimated cost of loadings;

     (h) The estimated costs of any permits, rights-of-way, studies or other governmental mandates required to replace the pipeline; and

     (i) Any other estimate of costs incurred as a result of the replacement project.

Ê An applicant who does not provide an estimate required by paragraphs (d) to (i), inclusive, shall provide a statement in the advance application as to the reasonableness of the exclusion of the estimate.

     2. The advance application must include:

     (a) A description, supported by sworn testimony, of each replacement project that provides sufficient evidence to support a conclusion that:

          (1) A safety and reliability concern exists justifying replacement on an accelerated basis; and

          (2) The completion of the replacement project is in the public interest;

     (b) A description of the gas utility’s plan for supplying gas throughout the utility’s service territory during the next 10 calendar years, including, without limitation, the known and projected gas supply during the next 10 calendar years, and any projected changes in supply that may occur during the next 10 calendar years;

     (c) An integrated plan for gas infrastructure replacement that balances the existing need for replacement as described pursuant to paragraph (a) with the plan for gas supply described pursuant to paragraph (b);

     (d) A description of each alternative studied by the gas utility in lieu of the proposed replacement projects identified in the advance application, if any, including, without limitation, a statement explaining why each alternative for replacement was rejected for the upcoming calendar year; and

     (e) An integrated analysis that establishes priorities among the gas utility’s options for replacement projects during the next 5 calendar years. Such analysis must take into account safety and reliability risks and benefits in addition to the plans for future gas supply in a manner sufficient to enable the Commission to determine the extent to which the utility’s advance application balances the objectives of minimizing cost, mitigating risk and maximizing reliability of service during the next 5 calendar years.

Ê An applicant who does not provide all of the information required pursuant to this subsection shall provide a statement in the gas infrastructure replacement advance application as to the reasonableness of the exclusion of such information.

     3. The advance application must include an analysis to demonstrate that each replacement project proposed is incremental in nature and not a project that the gas utility is currently undertaking in the normal course of business with respect to replacement of its existing gas pipeline infrastructure. For the purpose of establishing that the proposed replacement project is incremental in nature, the gas utility shall file:

     (a) A description of each replacement project the gas utility is currently undertaking in the normal course of business or to which the utility is committed in a public document or filing; and

     (b) A statement explaining why each replacement project proposed in the advance application is incremental in nature and not undertaken during the normal course of business of the gas utility.

Ê Each replacement project that is considered to be a project undertaken during the normal course of business and that is not undertaken incrementally will be evaluated at each general rate case of the gas utility where the cost of such project is proposed for incorporation into rates by the gas utility.

     4. The advance application must be accompanied by a summary that is suitable for distribution to the public. The summary must include:

     (a) A brief introduction, addressed to the public, describing the gas utility, its facilities and the purpose of the advance application and replacement mechanism;

     (b) A description of each replacement project;

     (c) A statement explaining the necessity of each replacement project; and

     (d) The estimated costs and the estimated revenue requirement associated with each replacement project.

     (Added to NAC by Pub. Utilities Comm’n by R020-13, eff. 2-26-2014)