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38.5.101   LETTER OF TRANSMITTAL
(1) The letter of an electric, natural gas, or private water utility transmitting a rate schedule or a part thereof to the commission for filing, to supersede, supplement or otherwise change the provisions of a rate schedule required to be on file, shall:

(a) List the documents submitted with the filing;

(b) State the names and addresses of those to whom copies of the rate schedule have been mailed;

(c) Include a brief description of the proposed changes in service or rate and charge;

(d) State the reasons for the proposed changes;

(e) State the estimated number of customers whose cost of service will be affected and annual amounts of either increases or decreases, or both, in cost of service to such customers.

(f) Name an employee of the utility who shall be responsible for answering questions concerning the application, or for referring inquiries to appropriate members of the utility staff.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.102   APPLICATIONS FOR RATE INCREASES
(1) Applications for rate increases exceeding one hundred thousand dollars annually shall include the cost of service to be supplied and shall include the additional material required in ARM 38.5.103 to 38.5.175 and 38.5.179 to 38.5.183, inclusive, minimally. Further or additional materials may be supplied by the utility if the utility believes such materials are necessary.

(2) Three copies of the letter of transmittal and three copies of all materials required in ARM 38.5.103 to 38.5.175 and 38.5.179 to 38.5.183, inclusive, shall be filed with the commission at the time of application. Montana consumer counsel shall receive two copies of the same materials.

(3) All or any part of the requirements of these rules may be waived by a quorum of the commission upon a showing of good cause. Waiver of any requirements, however, shall not preclude the commission from requiring the filing of specific cost data and material sufficient to support the application.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77; AMD, 1993 MAR p. 1669, Eff. 7/30/93.

38.5.103   COMPARISON OF SALES, SERVICES AND REVENUES

(1) The application for a rate increase shall include a statement comparing sales and services and the revenues therefrom under the rate schedules proposed to be superseded or supplemented and the proposed changed rate schedules. Such comparisons shall be applied to the transactions for the 12 months of the test period. Such comparisons should be made for each rate schedule.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.104   COMPARISON OF RATES
(1) A billing comparison of the proposed rates with present rates of the filing public utility for similar sales or services shall be included in the application for a rate increase.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.105   COST OF SERVICE UNDER THE NEW RATES

This rule has been repealed.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77; REP, 1993 MAR p. 1669, Eff. 7/30/93.

38.5.106   ANALYSIS OF SYSTEM COSTS FOR A TWELVE MONTH HISTORICAL TEST YEAR
(1) The statement of the cost of service shall contain an analysis of system costs as reflected on the filing utility's books for a test period consisting of 12 months actual experience ending no earlier than 9 months prior to the date of filing of the data required by ARM 38.5.101 and 38.5.105, unless good cause be shown. This analysis shall include the return, taxes, depreciation, and operating expenses, and an allocation of such costs to the services rendered. The information submitted with the statement shall show the data itemized below for the test period, as reflected on the books of the filing public utility. Any proposed adjustments to book costs shall be explained in writing. Such adjustments shall be shown separately and shall be fully supported, including schedules showing their derivation, where appropriate. However, no adjustments shall be permitted unless based on changes in facilities, operations, or costs which are known with certainty and measurable with reasonable accuracy at the time of the filing. No adjustment will be entertained unless it will become effective within 12 months of the last month of the test period as used in this section.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.107   REFERENCE DATA TO BE PROVIDED
(1) If any of the data required by ARM 38.5.106 is submitted by reference, copies of such data shall be provided to the commission within 15 working days from receipt of any written request for such data made by the commission staff or an intervenor.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.108   OTHER DATA RELIED ON
(1) If the public utility has relied on data other than those in Statements A through N (see ARM 38.5.121 through 38.5.180) in support of its rate increase, such other data, appropriately identified and designated as such and separately stated, shall be submitted in addition to the data required by Statements A through N.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.109   WORKING PAPERS TO BE FILED
(1) In the statements described in ARM 38.5.121 to 38.5.180, inclusive, certain items are designated as "working papers." Three sets of such working papers are to be filed at the time the Statements A through N are filed with the commission whether filed pursuant to ARM 38.5.102 or 38.5.194. Such working papers shall be available to intervenors on request.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77; AMD, 1993 MAR p. 1669, Eff. 7/30/93.

38.5.110   NARUC OR FPC UNIFORM SYSTEM OF ACCOUNTS TO BE GENERALLY FOLLOWED
(1) All statements and schedules shall be prepared in accordance with general classifications set forth in the NARUC or FPC Uniform Systems of Accounts for the respective types of public utilities, provided that such action does not conflict with Montana law and the commission's rules and orders. If the utility believes that the NARUC or FPC classifications are inconsistent with this commission's orders, the applicant's treatment and the inconsistency shall be stated on all related materials disclosing full particulars properly cross-referenced to the filing. Computations and other information related to the inconsistency shall be available for examination by the staff and intervenors. Working papers supporting such statements and schedules shall be detailed so as to allow identification of individual NARUC or FPC accounts relative to the books of record of the utility.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.111   WORKING PAPERS SUFFICIENT TO SUPPORT THE FILING SHALL BE AVAILABLE ON COMMISSION REQUEST
(1) Any utility filing a rate increase shall be responsible for preparing prior to filing and for maintaining after filing, work papers sufficient to support the filing. Any request for work papers other than those required in ARM 38.5.121 to 38.5.180, inclusive, shall be answered within 15 working days upon receipt of said request by the utility. In the event that there shall be a delay beyond said period the utility shall notify the commission and present a written explanation therefore. If such written explanation does not set forth good cause for refusal or delay response to the request, the commission shall so notify the utility in writing. If the utility then fails to answer the request promptly, the commission may issue such order as is reasonable under the circumstances. In addition to the working paper support, the following specific material normally prepared by the filing utility, related to the test period and subsequent periods, shall be available for the commission's verification and analysis:

(a) Copies of monthly financial report;

(b) Copies of accounting analyses of balance sheet accounts;

(c) Complete trial balances of all the balance sheet accounts at the beginning and end of the 12 months of actual experience used for the filing;

(d) Analyses of the various miscellaneous revenues;

(e) Analyses of surplus and capital surplus accounts.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.112   TESTIMONY ON ACCOUNTING DATA
(1) The filing utility shall provide a witness to testify that the cost statements, working papers, and other supporting data submitted as a part of the filing or maintained by the filing public utility in support of the filing which purport to reflect the books of the public utility do, in fact, set forth the results shown by such books. Rules ARM 38.5.121 to 38.5.180, inclusive, contain a description of Statements A through N required to be filed.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.121   STATEMENT A -- BALANCE SHEET
(1) Statement A shall include the balance sheets as of the beginning and end of the test period, and the most recently available balance sheet.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.122   STATEMENT B -- INCOME STATEMENTS
(1) Statement B shall include an income statement for the test period, and the most recently available income statement.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.123   STATEMENT C -- UTILITY PLANT ACCOUNTS

(1) Statement C shall include a statement showing in summary form Utility Plant by functional category of electric, gas or water utility plant, as the case may be. Working papers shall also be supplied to show the change in additions and retirements with regard to balances on Statement C.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.124   WORKING PAPERS -- PLANT ADDITION AND RETIREMENT FOR TEST PERIOD
(1) Working papers shall show major production and transmission plant addition and retirement projects for the test period, brief descriptions thereof, approximate dates of commercial operation or retirement from service, and cost.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.125   WORKING PAPERS -- SHOWING PLANT ACCOUNTS ON AVERAGE BASIS FOR TEST PERIOD
(1) Working papers shall show plant balances on a beginning and end of period basis averaged for the test period representing functional classifications and total plant. The effect of proposed adjustments, if any, on the average balances shall also be shown.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.126   WORKING PAPERS ON CAPITALIZING INTEREST AND OTHER OVERHEADS DURING CONSTRUCTION
(1) Working papers shall include a complete statement of methods and procedures followed in capitalizing interest during construction and other construction overheads, including any policy changes, effective dates and reasons therefore for the test year.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.127   CHANGES IN INTANGIBLE PLANT WORKING PAPERS

(1) Working papers shall show any significant changes in intangible plant for the test year.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.128   WORKING PAPERS ON PLANT NOT USED AND USEFUL

(1) Working papers shall set forth the cost and description of plant carried on the company's books as utility plant which was not used and useful.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.129   PROPERTY RECORDS WORKING PAPERS

(1) Working papers shall set forth a description of the continuing property records maintained by the utility, including methods and procedures used to price retirements. Any data required by this section which has been previously submitted to the Commission by the utility, pursuant to these rules, may be incorporated by specific reference.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.133   STATEMENT D -- ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
(1) Statement D shall include a statement of the accumulated provision for depreciation, depletion and amortization by functional classifications as of the beginning of the test period and as of the end of the test period. Any claimed adjustments to the book amounts shall be shown in adjoining columns. All adjustments shall be clearly and fully explained in the supporting material submitted.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.134   WORKING PAPERS ON RECORDED CHANGES TO ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
(1) Working papers shall include a summary of the following with respect to the book changes in each functional classification set forth in Statement D.

(a) Starting balance;

(b) Annual provision;

(c) Retirements, with cross-reference to plant schedule;

(d) Salvage;

(e) Removal costs;

(f) Adjustments, including particulars of any significant items;

(g) Ending balance.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.135   WORKING PAPERS ON DEPRECIATION, DEPLETION AND AMORTIZATION METHOD
(1) Working papers shall include a description of the methods and procedures followed in depreciating, depleting or amortizing plant and recording abandonments by the utility if any policy change has been made effective since the period covered by the last annual report on FPC Form No. 1 or FPC Form No. 2 as filed with the FPC, or the annual report as filed with this Commission.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.136   WORKING PAPERS ON ALLOCATION OF OVERALL ACCOUNTS

(1) With respect to each allocation of an overall account to obtain the amounts applicable to various functional groups of plant, provide a complete explanation of the method, procedures and significant data used in making the allocation.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.141   STATEMENT E -- WORKING CAPITAL
(1) Statement E shall show the computation of the working capital claimed as part of the public utility's rate base using averages. The statement shall show the respective components of the claimed working capital and shall be in such detail as to show how the amount of each component was computed.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.142   BALANCES FOR MATERIALS, SUPPLIES, FUEL STOCKS

(1) Working papers shall set forth balances at the beginning and end of the test period for materials, supplies, and fuel stocks in such detail as to disclose, either by subaccounts regularly maintained on the books or by analysis of the principal items included in the main account, the nature of the charges included therein.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.143   DATA USED IN COMPUTING WORKING CAPITAL

(1) Working papers shall show the computations, crossreferences and sources from which the data used in computing claimed working capital is derived.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.146   STATEMENT F -- RATE OF RETURN
(1) Statement F shall show the percentage rate of return claimed. The statement shall show the cost of debt capital, preferred stock capital and the return on the stockholder's equity resulting from the overall rate of return claimed, based upon the utility's capitalization. In addition, items required in ARM 38.5.147 to 38.5.152, inclusive, shall be submitted as part of Statement F. In such cases wherein 50 percent or more of the common stock of the public utility is not held by the public but is owned by another corporation, the information required by ARM 38.5.147 to 38.5.152, inclusive, shall also be submitted to the extent applicable with respect to the debt, preferred stock and common stock of the parent company.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.147   DEBT CAPITAL
(1) Statement F shall also show the weighted average cost of debt capital based upon the following data for each class and series of long-term debt outstanding according to the most recently available balance sheet:

(a) Title;

(b) Date of issuance and date of maturity;

(c) Interest rate;

(d) Principal amount of issue;

(e) Net proceeds;

(f) Amount currently outstanding;

(g) Cost of money and yield to maturity based on the interest rate and net proceeds per unit outstanding determined by reference to any generally accepted table of bond yields;

(h) If issue is owned by an affiliate, state name and relationship of owner. Furnish a copy of the latest prospectus issued by the public utility, any superimposed holding company or subsidiary companies.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.148   PREFERRED STOCK CAPITAL
(1) Statement F shall also show the weighted average cost of preferred stock capital based upon the following data for each class and series of preferred stock outstanding according to the most recently available balance sheet:

(a) Title;

(b) Date of issuance;

(c) Dividend rate;

(d) Par value of stated amount of issue;

(e) Issuance expenses;

(f) Net proceeds;

(g) Cost of money, that is, the dividend rate divided by net proceeds per unit or share;

(h) Amount outstanding;

(i) If issue is owned by an affiliate, then provide the name and relationship of owner.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.149   COMMON STOCK CAPITAL WORKING PAPERS
(1) Working papers shall show for each sale of common stock during the five year period preceding the most recently available balance sheet:

(a) Number of shares sold;

(b) Gross proceeds at offering price;

(c) Underwriters' discount or commission;

(d) Proceeds to the filing utility;

(e) Amount of issuance expenses;

(f) Net proceeds;

(g) Offering price per share;

(h) Net proceeds per share;

(i) Whether issue was offered to stockholders through subscription rights or to the public.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.150   WORKING PAPERS -- STOCK DIVIDENDS, STOCK SPLITS OR CHANGES IN PAR OR STATED VALUE
(1) Working papers shall include information respecting any stock dividends, stock splits or changes in par or stated value during five-year period preceding the date of the most recently available balance sheet and by months for the 12 month test period.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.151   WORKING PAPERS -- COMMON STOCK INFORMATION

(1) Working papers shall include the following information on outstanding common stock for the five calendar years preceding the end of the test period and by months for the 12 month test period:

(a) Average number of shares outstanding;

(b) Earnings per average share for only the five years preceding the test year;

(c) Annual earnings per share for only the latest reported 12 month average;

(d) Annual dividend rate per share;

(e) Dividends listed as percent of earnings;

(f) Average market price based on the monthly high and low.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.152   SCHEDULE F-1 -- REACQUISITION OF BONDS OR PRE-FERRED STOCK
(1) If any bonds or preferred stock have been reacquired by the utility during the 18 months prior to filing, show full details in schedule F-1, including:

(a) Title or series;

(b) Principal amounts or par value reacquired;

(c) Reacquisition cost;

(d) Gain or loss on reacquisition;

(e) Income taxes, if any, allocable to the gain or loss, and basis of allocation.

History: Sec. 69-3-103, MCA; IMP, . 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.156   STATEMENT G -- OPERATING AND MAINTENANCE EXPENSES

(1) Statement G shall show the utility's operation and maintenance expenses according to each account of the Uniform Systems of Accounts for public utilities. The expenses shall be shown under appropriate columnar headings as follows for each functional classification:

(a) Operation and maintenance expense as booked, for the test period and the total for the test period;

(b) Claimed adjustments, if any, to expenses as booked;

(c) Total adjusted operation and maintenance expenses claimed.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.157   WORKING PAPERS -- ADJUSTMENTS TO OPERATING AND MAINTENANCE EXPENSES
(1) Working papers shall show the 12 months of actual test period experience and the claimed adjustments there to, if any, by functional classifications. In the event operation and maintenance expenses as presented per books reflect any special accrual accounting entries for internal purposes, the effect there of shall be fully disclosed and explained. Any amounts not currently payable, except depreciation charged through clearing accounts included in operation and maintenance expenses, shall be fully explained.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.158   WORKING PAPERS -- COST OF POWER AND GAS

(1) Working papers shall show the total annual cost of power or gas purchased for the 12 months test period of actual experience, the claimed adjustments thereof, if any, and the total adjusted cost for the test period detailed by major category. If any of the prices are effective subject to refund, there shall be shown by major category and by commission docket number for the test period, the rate and the amount paid subject to refund.

(2) If the utility purchases and sells power under exchange or pooling argeements, the method of recording on books, total gross receipts and deliveries exchanged, total gross dollar amounts involved for such receipts and deliveries and details of such exchanges shall be submitted.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.159   WORKING PAPERS FOR LISTED EXPENSE ACCOUNTS

(1) With respect to the following listed expense accounts, detail shall be furnished as designated for the 12 months of the test period and for claimed adjustments. This shall include analytical details which will clearly disclose for each account a classification of principal charges and credits with all minor items grouped.

(a) Advertising expenses shall be separated by media utilized and classification of message in accordance with applicable Montana statutes.

(b) All other Administrative and General Expense accounts shall be presented in sufficient detail to allow reasonable verification of the amounts and type of charges incurred during the test period.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.160   WORKING PAPERS FOR INTERDEPARTMENTAL TRANS- ACTIONS

(1) If the expense accounts contain charges or credits from associated companies or nonutility departments of the utility, submit for each such associated company or nonutility department work papers showing the following:

(a) The amount of the charges or credits during the test period;

(b) The account classification or classifications charged or credited;

(c) Descriptions of the specific services performed for or by the associated company or nonutility department;

(d) The basis used in determining the amounts of the charges or credits.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.164   STATEMENT H -- OPERATING REVENUES
(1) Statement H shall show the utility's operating revenues from sales with related units of sales and other operating revenues according to revenue classifications established by the uniform system of accounts.

(2) Statement H shall also show, by rate schedule, revenues under presently effective rate schedules as well as under the proposed rate schedules filed by the utility. Said statement shall show number of customers, amount of increase and percent increase. Working papers shall also be supplied showing:

(a) The reconciliation of book revenues of the test period if differing from present revenues as set forth in Statement H;

(b) Adjustments for material and nonrecurring changes which are known and measurable to actual period revenues and sales units if appropriate.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.165   STATEMENT I -- DEPRECIATION, DEPLETION AND AMORTIZATION EXPENSE
(1) Statement I shall show for the test period depreciation, depletion and amortization expense by functional classification. These expenses shall be shown in separate columns as follows:

(a) Expenses for the test period per books;

(b) Claimed adjustments, if any, to actual expense;

(c) Total adjusted expense claimed.

(2) The bases, methods, essential computation and derivation of unit rates for the calculation of depreciation, depletion and amortization expense for the test period and for the adjustments thereto shall be fully and clearly explained by working papers supporting the exhibited amount. The amounts of depreciable plant shall be shown by functions specified in the account "accumulated provisions for depreciation of plant in service" of the Uniform Systems of Accounts for public utilities.

(3) Any deviation from the rates used in disposing of the utility's last previous rate filing or determination by this Commission shall be explained, showing the rate or rates previously used together with supporting data for the new rate or rates used for this filing.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.166   WORKING PAPERS -- EXPENSE CHARGED OTHER THAN PRESCRIBED DEPRECIATION, DEPLETION AND AMORTIZATION
(1) Working papers shall be included in support of Statement I as a reconciliation of the aggregate investment in utility plant shown in Statement C, and the expense thereon charged in the first instance to other than prescribed depreciation, depletion, and amortization expense accounts.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.169   STATEMENT J -- INCOME TAXES
(1) Statement J shall show for the test period income taxes computed on the basis of actual taxable income and adjusted taxable income. All tax adjustments shall be completely described and the amounts thereof shown separately. Amounts of deferred taxes debited and credited shall be shown separately. There also should be shown the amounts and basis of assignments of income taxes attributed to other utility departments and nonutility operations, together with all tax savings affecting the total tax liability. Any abnormalities such as nonrecurring income, gains, losses and deductions affecting the income tax for the test period shall be explained and the tax effect therein set forth.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.170   WORKING PAPERS FOR FEDERAL INCOME TAXES
(1) In support of federal income taxes, the utility shall submit a reconciliation of the book net income with taxable net income as reported to the federal Internal Revenue Service for the most recent year for which a tax return was filed. An explanation of all items in the reconciliation shall be submitted. In the event the tax allowances claimed give effect to omission of items appearing in the reconciliations for the most recent tax return for inclusion of items not appearing therein, the reasons for such omissions or inclusions shall be submitted.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.171   DIFFERENCES IN BOOK AND TAX DEPRECIATION

(1) Where tax depreciation differs from book depreciation, the utility shall file work papers showing the computation of the tax depreciation which will indicate the differences between book and tax depreciation.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.172   WORKING PAPERS FOR CLAIMED ALLOWANCES FOR STATE OR PROVINCIAL INCOME TAXES
(1) In support of the claimed allowances for income taxes accrued for state governments or Canadian provinces, the utility shall submit work papers showing the income tax accrued for each state or province in the current or previous year covered by the test period, including the effect of liberalized depreciation on such taxes accrued.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.173   STATEMENT K -- OTHER TAXES
(1) For the test period, other taxes shall be classified under appropriate headings of federal, state and local, with appropriate subclassifications showing kind of taxes. The statement shall show separately, by columns, the following:

(a) Tax expense per books for the test period;

(b) Claimed adjustments, if any, to amounts booked;

(c) Total adjusted taxes claimed.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.174   WORKING PAPERS FOR ADJUSTED TAXES
(1) Working papers shall show computations of adjusted taxes claimed in Statement K.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.175   OVERALL COST OF SERVICE
(1) Working papers shall show for the test period the overall cost of service per books for the filing public utility's utility operations during the test period, including allowances for return and income taxes based upon the rate of return claimed, together with the operating revenues of the filing public utility for the test period. If the filing public utility claims any adjustments to book figures, the cost of service based upon the claimed adjustments shall be shown on a separate schedule. If the amount of the filing public utility's total utility operating revenue differs significantly from its overall cost of service, including allowances for claimed return and income taxes, the filing public utility shall show the amounts available for return and taxes on income and return expressed as a percentage of rate base.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.176   STATEMENT L -- ALLOCATED COST OF SERVICE (ACOS)

(1) Statement L shall present the cost of service results in detail for every customer class. Written testimony shall describe the development of these cost of service results. Included shall be the following:

(a) A general discussion of the purpose of the filing with goals and objectives of the allocated cost of service proposals. Industry standard terminology shall be used to describe and define allocated cost of service proposals. Where unique terms are used, they shall be defined in a separate glossary to be included as part of the filing.

(b) A benchmark allocated cost of service comparing the last commission-approved filing to the current filing. Any substantive deviation in procedures and/or methods used to prepare the current filing compared to the last commission-approved filing will be summarized and explained in the cost of service testimony.

(c) A generic allocated cost of service model which provides a basic understanding of the allocated cost of service study. The public service commission currently recognizes allocated cost of service based on marginal cost principles. Any utility testimony and exhibits on allocated cost of service should follow the format of the generic marginal cost model as described below.

(2) A generic marginal cost model shall also be provided. Marginal cost of service shall be determined for each of the following functions:

(a) Generation, transmission, substation, distribution, and customer for electric filings.

(b) Supply, storage, transmission, distribution, and customer for natural gas filings.

(3) Marginal costs shall be determined using the following additional steps:

(a) Classify the functionalized costs as energy (commodity) , capacity, reactive power and/or customer related and compute the associated marginal unit costs.

(b) Multiply classified marginal unit costs by allocation factors to compute total marginal cost.

(4) Allocation factors, annualization factors, and adjustment factors (d) to (j) below, may be used at various times throughout the cost of service study. These do not necessarily apply to all utilities. An example is seasonal costs since not all utilities have seasonal differences in costs. Inputs and factors include:

(a) Select the relevant time periods and compute relevant allocation factors;

(b) Select methods to determine and then compute relevant seasonal and time-of-day costs;

(c) Select methods to compute annualized costs and compute annualization factors;

(d) Select a loss method, compute loss percentages and then apply such loss estimates to energy and capacity cost estimates;

(e) Compute spatial energy and/or capacity transportation rates for the associated products;

(f) Select operation and maintenance marginal cost methods and compute factors;

(g) Select administrative and general marginal cost methods and compute factors;

(h) Select general and common plant marginal cost methods and compute factors; and

(i) Select price adjustments and indexes.

(5) The following models shall be followed when preparing a generic marginal cost model.

(a) Model 1. Generic electric marginal cost study model.

(b) Model 2. Generic natural gas marginal cost study model.

(6) In addition to the use of the generic model, the following allocated cost of service guidelines should be followed:

(a) Year's dollars for computing costs of service should reflect costs two years beyond January 1st of the year in which the filing is submitted. For example, if a cost of service study is filed any time in calendar year 1992, costs will be computed in January 1, 1994 dollars.

(b) Relevant market value sources should be reflective of opportunities available to the utility's system. For example, electric generation and gas supply cost functions ought to reflect a resource's highest foregone use in the markets opened up by transmission access.

(c) Relevant time horizon for costs depends on the cost function and applications.

(d) Carrying charges should be used for the development of the marginal costs.

(e) Capacity and energy losses reflective of the utility's system should be developed and used to adjust relevant marginal costs.

(f) Proxy cost estimates, as necessary and appropriate, may be used for the marginal costs.

(g) If a production cost model is used by the utility, it should be identified and explained and its relative merit justified (e.g., chronological versus probabilistic) .

(h) Distribution/customer costing should be reflective of the utility's system and included as appropriate. Line extension policies should be described and any changes explained.

(i) Administrative and general, operation and maintenance and general and common adders should be reflective of the utility's system and included as appropriate.

(j) Allocation of costs to customer classes should use allocation factors that reflect cost causation.

(k) Seasonal or time-of-day cost allocation should be supported in sufficient detail to fully analyze the result.

(l) The method of reconciliation used should be identified and explained. Model 1. Generic Electric Marginal Cost Study Model

Model 2. Generic Natural Gas Marginal Cost Study Model

History: Sec. 69-3-103, MCA; IMP; Sec. 69-2-101, MCA; NEW, Eff. 7/5/77; AMD, 1993 MAR p. 1669, Eff. 7/30/93.

38.5.177   STATEMENT M -- RATE DESIGN
(1) Written testimony shall describe the development and results, and provide supporting workpapers for each customer class rate design. Included shall be a general discussion of the purpose of the filing with the overall goals and objectives of the rate design proposals. Industry standard terminology shall be used to describe rate design proposals. Where unique terms are used, they shall be defined in a separate glossary to be included as part of the filing.

(2) The billing impact for each customer class must be provided. This analysis must indicate how many customers on each tariff would receive bill increases or decreases of various percentages and dollar amounts.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77; AMD, 1993 MAR p. 1669, Eff. 7/30/93.

38.5.178   DERIVATION OF INCRRASED RATES

This rule has been repealed.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77; REP, 1993 MAR p. 1669, Eff. 7/30/93.

38.5.179   STATEMENT N -- DESCRIPTION OF UTILITY OPERATIONS

(1) Statement N shall include a description of the utility's area and diversity of operations and a breakdown of sales between jurisdictional and nonjurisdictional operations.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.180   WORK PAPERS -- PURCHASES FROM AFFILIATED COMPANIES

(1) If any of the preceding statements cover major purchases or major transfers from an affiliate that is not regulated as to price, the applicant shall submit an explanation of the price associated with the purchases or transfers.

 
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.181   DUPLICATION OF TESTIMONY AND REQUIRED INFORMATION

(1) To the extent that testimony and exhibits required to be filed pursuant to ARM 38.5.181 duplicate information required to be submitted pursuant to ARM 38.5.101 to 38.5.180, inclusive, such information need only be submitted with the testimony and exhibits pursuant to ARM 38.5.181.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.182   TESTIMONY AND EXHIBITS
(1) A utility filing for an increase in rates and charges shall be prepared to go forward at a hearing on reasonable notice on the data, testimony and exhibits which have been submitted pursuant to these rules and sustain the burden of proof of establishing that its proposed charges are just and reasonable and not unduly discriminatory or preferential or otherwise unlawful. Although ARM 38.5.121 through 38.5.180, inclusive, provide for an historical test period, the utility, in addition, may submit cost of service information for a nonhistorical test period commencing no later than nine months after the close of the historical test period contemplated by those rules.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.183   COMMISSION MAY SEEK SPECIFIC COST DATA
(1) If a rate schedule required to be on file with this Commission is not required to be supported by cost of service data as set forth in these rules, but such data may be needed for commission analysis, these rules contemplate that each filing public utility may be required, by letter from the Commission, to submit specified cost data.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.184   DEFICIENT FILINGS
(1) The Commission shall, within 30 days of filing by the utility of an application for rate increases, notify the utility of any failure of the application to comply with requirements of these rules. The notice shall specify the deficiencies and grant the utility a reasonable period of time in which to supplement or correct the filing. If notice is not given within 30 days of filing, the application shall be deemed to comply with these rules. The date of the initial filing shall be preserved unless the utility fails to comply with any notice of deficiency or the initial filing patently fails to substantially comply with these rules. No filing shall be deemed to have patently failed to substantially comply with these rules if the Commission can reasonably judge the merits of the application. If the filing utility fails or refuses to provide information with respect to an expense, revenue, plant or other account item, but otherwise meets its burden of proof, the Commission may adjust the utility's revenue requirement to reflect the failure to meet the burden of proof as to the specific item.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, Eff. 7/5/77.

38.5.190   STATEMENT O -- PICTORIAL EXHIBIT REQUIREMENTS

(1) Applicant utilities that submit information in accordance with the minimum rate case filing standards for electric, gas and private water utilities shall provide pictorial exhibits, as defined below, for those items which affect the unallocated utility results of operations and the allocated costs of service/rate designs pertaining to Montana operations. Applicant utilities may provide such other pictorial exhibits as will further understanding of their filing.

(a) Each adjustment that is identified in textual or numerical information and causes a ratemaking change to the actual unallocated test year results of operations shall be presented in a flow chart or decision matrix that depicts each factor that caused the adjustment. Alternatively, adjustments may be identified and explained in a report that summarizes each adjustment.

(b) The total revenue requirements requested, both interim and permanent, shall be depicted in graphs or charts which show actual unallocated test year results of operations and each adjustment referred to in subsection (a) .

(c) Each account, excluding subaccounts, which affects the adjusted unallocated results of operations shall be shown in tabular form. The tables shall include the test year adjusted account value, the test year actual account value, the account value most recently approved by the Montana public service commission in a final rate case order and the actual account values from the previous four years. Values for functionalized categories which are accumulated from various accounts such as the distribution expense category shall be presented as bar charts. Each chart shall include the actual test year value, the adjusted test year value, and the actual value for the year preceding the test year.

(d) Applicant utilities that submit testimony and exhibits which are in response to rebuttal testimony and exhibits of other parties shall include pictorial exhibits which show the effect that the rebuttal submissions have upon the original filings. The submitted testimony and exhibits of each rebutting party shall be depicted in graphs or charts which show the actual unallocated test year results of operations and each adjustment that causes a ratemaking change to the actual unallocated test year results. The allocated cost of service/ rate design study of each rebutting party shall be depicted in charts that show each item referred to in subsection (e) .

(e) Each component of an applicant's allocated cost of service/rate design study shall be depicted in pie charts or bar charts. The charts shall include values for functionalizations by customer class of all cost categories, classifications by customer class of each functionalized cost category, moderations and rate designs by customer classes, allocators that were most recently approved by the Montana public service commission in a final rate case order and that are proposed.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1992 MAR p. 1760, Eff. 8/14/92.

38.5.194   APPLICATION FOR ALLOCATED COST OF SERVICE AND RATE DESIGN CHANGES
(1) Applications for allocated cost of service and rate design changes shall include the material required in ARM 38.5.103, 38.5.104, 38.5.109, 38.5.176 and 38.5.177, minimally.

(2) Each allocated cost of service and rate design application shall include an example and general explanation of each current bill format that is used by the utility for tariffed services. Copies of other billing information that are provided to large groups of customers should also be provided and briefly explained. Additional information may be provided at the discretion of the filing utility.

(3) Absent regular allocated cost of service and rate design filings, a marginal cost of service study shall be submitted to the commission for information purposes, minimally, every two years. If the utility files an integrated resource plan with the commission, cost information shall be submitted within six months following such filing, unless the cost information has been presented within the previous two years. At the time a marginal cost of service study is filed, the utility, at its own option, may submit an embedded cost of service study.

(4) A marginal cost of service study filed pursuant to this rule or in the context of a rate case must contain current allocation factors.

(5) Three copies of the letter of transmittal and three copies of all material required in ARM 38.5.176, 38.5.177 and 38.5.109 shall be filed with the commission at the time of application. Montana consumer counsel shall receive two copies of the same materials.

(6) All or any part of the requirements of these rules may be waived by the commission upon a showing of good cause. Waiver of any requirements, however, shall not preclude the commission from requiring the filing of specific cost data and material sufficient to support the application.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1993 MAR p. 1669, Eff. 7/30/93.

38.5.195   POST-FILING CONFERENCE FOR ALLOCATED COST OF SERVICE AND RATE DESIGN APPLICATIONS
(1) Within 20 days after receipt of an application for allocated cost of service and rate design changes, the commission may, on its own motion or upon petition by any party, request the utility and all other interested parties to attend a conference for the purpose of identifying and clarifying potential issues associated with said application. Such conference shall be informal and without prejudice to the rights of the parties, and no statement or admission made at such conference shall be admissible in evidence in any formal hearing before the commission.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1993 MAR p. 1669, Eff. 7/30/93.

38.5.201   PRELIMINARY DETERMINATION OF ELIGIBILITY

This rule has been repealed.

History: Secs. 2-4-303 and 69-3-103, MCA; IMP, 69-3-102, MCA; NEW, 1980 MAR p. 584, Eff. 2/15/80; REP, 1983 MAR p. 1738, Eff. 11/26/83.

38.5.202   AWARD OF COSTS

This rule has been repealed.

History: Secs. 2-4-303 and 69-3-103, MCA; IMP, 69-3-102, MCA; NEW, 1980 MAR p. 585, Eff. 2/15/80; REP, 1983 MAR p. 1738, Eff. 11/26/83.

38.5.203   PROCEDURES

This rule has been repealed.

History: Secs. 2-4-303 and 69-3-103, MCA; IMP, 69-3-102, MCA; NEW, 1980 MAR p. 586, Eff. 2/15/80; REP, 1983 MAR p. 1738, Eff. 11/26/83.

38.5.204   ACCOUNTING TREATMENT

This rule has been repealed.

History: Secs. 2-4-303 and 69-3-103, MCA; IMP, 69-3-102, MCA; NEW, 1980 MAR p. 586, Eff. 2/15/80; REP, 1983 MAR p. 1738, Eff. 11/26/83.

38.5.301   APPLICATIONS FOR RATE INCREASES

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-3-103, MCA; NEW, 1980 MAR p. 2280, Eff. 8/1/80; AMD, 1989 MAR p. 981, Eff. 7/28/89; REP, 2004 MAR p. 2933, Eff. 12/3/04.

38.5.302   TWO TYPES OF FILINGS

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-3-103, MCA; NEW, 1980 MAR p. 2280, Eff. 8/1/80; REP, 2004 MAR p. 2933, Eff. 12/3/04.

38.5.303   LETTER OF TRANSMITTAL

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-3-103, MCA; NEW, 1980 MAR p. 2280, Eff. 8/1/80; REP, 2004 MAR p. 2933, Eff. 12/3/04.

38.5.304   UTILITY-RELATED ORDINANCES

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-3-103, MCA; NEW, 1980 MAR p. 2280, Eff. 8/1/80; REP, 2004 MAR p. 2933, Eff. 12/3/04.

38.5.305   PETITION AND PROPOSED TARIFFS

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-3-103, MCA; NEW, 1980 MAR p. 2280, Eff. 8/1/80; REP, 2004 MAR p. 2933, Eff. 12/3/04.

38.5.306   RESOLUTION

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-3-103, MCA; NEW, 1980 MAR p. 2280, Eff. 8/1/80; REP, 2004 MAR p. 2933, Eff. 12/3/04.

38.5.307   NARRATIVE, COMPARISON OF RATES, NUMBER OF CUSTOMERS AFFECTED, AND ANTICIPATED ADDITIONAL REVENUE

This rule has been repealed.

History: 69-3-103, MCA; IMP, 39-3-103, MCA; NEW, 1980 MAR p. 2280, Eff. 8/1/80; REP, 2004 MAR p. 2933, Eff. 12/3/04.

38.5.308   COMPARISON OF REVENUES AND EXPENSES

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-3-103, MCA; NEW, 1980 MAR p. 2280, Eff. 8/1/80; REP, 2004 MAR p. 2933, Eff. 12/3/04.

38.5.309   SCHEDULES OF REVENUES BY CLASS

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-3-103, MCA; NEW, 1980 MAR p. 2280, Eff. 8/1/80; REP, 2004 MAR p. 2933, Eff. 12/3/04.

38.5.310   SCHEDULES OF NUMBERS OF CUSTOMERS

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-3-103, MCA; NEW, 1980 MAR p. 2280, Eff. 8/1/80; REP, 2004 MAR p. 2933, Eff. 12/3/04.

38.5.311   WATER STATISTICS

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-3-103, MCA; NEW, 1980 MAR p. 2280, Eff. 8/1/80; REP, 2004 MAR p. 2933, Eff. 12/3/04.

38.5.312   ATTESTATION

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-3-103, MCA; NEW, 1980 MAR p. 2280, Eff. 8/1/80; REP, 2004 MAR p. 2933, Eff. 12/3/04.

38.5.313   WORKING PAPERS

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-3-103, MCA; NEW, 1980 MAR p. 2280, Eff. 8/1/80; REP, 2004 MAR p. 2933, Eff. 12/3/04.

38.5.401   DEFINITIONS
(1) For purposes of this subchapter "radio common carrier" means: any party providing or reselling communication services furnished through a general mobile radio base station, or a central office radio base station, between a radio subscriber station and a wire telephone, between a radio subscriber station and a mobile radio unit, or between two radio subscriber stations, where a radio subscriber station is a fixed radio telephone, which has been licensed by the federal communications commission, used by a subscriber for communications.

History: 69-3-103(2), MCA; IMP, 69-3-103(2), MCA; NEW, 1981 MAR p. 1497, Eff. 11/13/81.

38.5.402   PROCEDURE GOVERNED
(1) These rules (as well as the commission's procedural rules ARM Title 38, chapter 2) govern practice and procedure in rate cases involving radio common carriers before the public service commission of the state of Montana, in accordance with applicable laws of the state of Montana.

History: 69-3-103(2), MCA; IMP, 69-3-103(2), MCA; NEW, 1981 MAR p. 1497, Eff. 11/13/81.

38.5.403   LETTER OF TRANSMITTAL
(1) The letter of a radio common carrier transmitting a proposed new rate schedule to the commission shall:

(a) include a brief description of the proposed changes in service, rate, or charge; and

(b) name an employee of the carrier who shall be responsible for answering questions concerning the application.

History: 69-3-103(2), MCA; IMP, 69-3-103(2), MCA; NEW, 1981 MAR p. 1497, Eff. 11/13/81.

38.5.404   NOTICE
(1) Upon receipt of a properly completed application to alter the provisions of an existing rate schedule and letter of transmittal, the commission will publish this information in a notice of opportunity for public hearing.

(2) This notice shall also contain the following language: As the commission believes that competitive conditions prevail in this industry, your request for a hearing must contain a preliminary showing either that competitive conditions do not prevail with respect to this radio common carrier or that this application represents some other type of abuse by the applicant.

(3) If a request for a hearing is made that does not meet the requirements of ARM 38.5.404(2) , the commission staff will contact the person requesting the hearing to determine if either of the showings required by ARM 38.5.404(2) can be made. If the showings cannot be made, no hearing will be held.

(4) The commission shall liberally construe its rules of discovery (ARM 38.2.3301- 38.2.3305) in order to effectuate the goals of this rule.

History: 69-3-103(2), MCA; IMP, 69-3-103(2), MCA; NEW, 1981 MAR p. 1497-1498, Eff. 11/13/81.

38.5.501   DEFINITION
(1) An interim rate increase is an increase granted by the Commission prior to a hearing or after a hearing and before a final decision. Interim rate increases are designated "temporary" rate increases in the enabling statute, 69-3-304 , MCA.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-304, MCA; NEW, 1979 MAR p. 324, Eff. 3/30/79.

38.5.502   PREREQUISITE TO INTERIM RATE INCREASE REQUEST

(1) Any application for an interim grant of authority to increase utility rates must be filed in conjunction with a permanent rate case proceeding.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-304, MCA; NEW, 1979 MAR p. 324, Eff. 3/30/79.

38.5.503   NOTICE
(1) The utility will issue notice of all applications it makes for interim rate increases. The notice will be transmitted to the Montana Consumer Counsel, and all parties to the permanent rate case of which the request for temporary relief is a part, to media of general dissemination in the area affected by the increase in rates, and to interested parties that participated in the most recent general rate increase application of the particular utility. The notice shall emphasize that any response should be made speedily.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-304, MCA; NEW, 1979 MAR p. 324, Eff. 3/30/79; AMD, 1981 MAR p. 384, Eff. 6/12/81.

38.5.504   HEARINGS

This rule has been repealed.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-304, MCA; NEW, 1979 MAR p. 324, Eff. 3/30/79; REP, 1982 MAR p. 2150, Eff. 12/17/82.

38.5.505   SUPPORTING MATERIAL
(1) Any application for interim authority to increase utility rates sought as part of a general (other-than-tracking) rate increase shall only be deemed filed when all prefiled direct testimony and exhibits supporting the general rate increase request have been submitted.

(2) For every interim rate increase request, the applicant shall file the original and eight copies of the letter of transmittal, application exhibits, certificate of service for notice of the interim application and proposed order, with the Commission; two copies of the letter of transmittal, the application and any exhibits shall be simultaneously filed with the Montana Consumer Counsel; copies of the letter of transmittal, application, and any exhibits shall also be filed with all parties to any coincident permanent rate case.

(3) Any applications for interim authority to increase utility rates to meet increased costs of a single, clearly measurable expense item (tracking cases) shall be supported by the following:

(a) Letter of transmittal

(b) Application

(c) Rate schedules - current and proposed

(d) Detail of increased expense item

(e) Summary of base cost of expense item and proposed adjustment

(f) Statements showing effects of proposed adjustment, including operating income, rate of return, and return on average equity.

(g) Most recent 12 month balance sheet and income statement.

(4) Filings made under this rule and those contemplated by ARM 38.5.507 are not subject to the standards set forth in the Commission's Minimum Rate Case Filing Standards ARM 38.5.101 through 38.5.184.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-304, MCA; NEW, 1979 MAR p. 324, Eff. 3/30/79; AMD, 1981 MAR p. 384, Eff. 6/12/81.

38.5.506   CRITERIA FOR APPROVAL OF REQUEST
(1) Consideration of an application to increase rates on an interim basis in a general rate increase proceeding will be guided by generally established principles of utility rate regulation.

(2) The Commission shall calculate all interim rate increase requests in a general rate increase proceeding in the following manner:

(a) Test year booked net utility operating income and test year average rate base will be normalized and annualized, when such test year data is available.

(b) Any adjustments that were made in the most recent Commission general rate order of the utility will also be made using the methodology and rate of return on equity from that order, and applied to the filed test year amounts. These adjustments may be modified and other adjustments made as deemed appropriate by the Commission.

(3) Consideration of an application to increase rates on an interim basis in a tracking case will be guided by:

(a) A showing that the expense item concerned is a clearly identifiable cost to the utility;

(b) A clear showing that the proposed rate increase precisely matches the known increased expenses;

(c) A clear showing that deferred rate relief would result in irreparable financial harm to the petitioning utility; and

(d) Supporting material as enumerated in ARM 38.5.505(3) .

(4) All interim rate increase requests must be accompanied by a revenue increase figure calculated in accordance with ARM 38.5.506(2) .

History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-304, MCA; NEW, 1979 MAR p. 324, Eff. 3/30/79; AMD, 1982 MAR p. 857, Eff. 4/30/82.

38.5.507   DEPENDENT UTILITIES
(1) In the case of utilities dependent on other regulated utilities for significant portions of their fuel supplies, any application for interim rate relief made in response to an interim increase granted another utility will not be subject to these rules.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-304, MCA; NEW, 1979 MAR p. 324, Eff. 3/30/79.

38.5.508   WAIVER
(1) The commission, in its discretion, may at any time, waive any or all of these rules.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-304, MCA; NEW, 1979 MAR p. 324, Eff. 3/30/79.

38.5.601   PURPOSE
(1) The purpose of this sub-chapter is to establish an optional ratemaking process for regulated gas, electric, water and sewer utilities. This process is designed to match the rates authorized by the commission for utility services to the costs actually incurred by the utilities in providing such service; and to increase the commission's scrutiny of the rates of return achieved by the utilities.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1992 MAR p. 319, Eff. 2/28/92.

38.5.602   SCOPE
(1) In the event of any conflict between the rules of this sub-chapter and any other rule of the commission, the rules in this sub-chapter shall control, but only for those utilities making the election to proceed under this sub-chapter. Nothing in this sub-chapter applies to gas cost tracking adjustments filed pursuant to a commission authorized tariff.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1992 MAR p. 319, Eff. 2/28/92.

38.5.603   EFFECTIVENESS MEASUREMENTS
(1) To measure the effectiveness of this optional ratemaking process the commission will evaluate a utility's regulatory rate of return without relying upon the ratemaking process set forth in these optional rules.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1992 MAR p. 319, Eff. 2/28/92.

38.5.604   ELECTION
(1) A utility filing for a general rate increase may elect to make its filing under this sub-chapter, provided such election is made within 24 months of the publication of the notice of adoption of the rules of this sub-chapter. Such election shall be binding and irrevocable for a period of 71 months after the date of such filing, subject to the provisions of ARM 38.5.605. The utility's election to proceed under this sub-chapter shall be contained in its initial filing and shall provide, without qualification, that:

(a) The utility elects to process its filing under this sub-chapter, and that it consents to having the rates it is authorized to charge for the utility's services under consideration determined in accordance with this sub-chapter for a period of 71 months from the date of the filing in which it made its election, subject to the provisions of ARM 38.5.605.

(b) The utility will file with the commission, at intervals of 24 and 48 months after the date of the filing in which it made its election, a complete cost of service filing pre- pared in accordance with the commission's rules, including the rules of this sub-chapter.

(c) The utility will file with the commission 72 months after the date of the filing in which it made its election, a complete cost of service filing prepared in accordance with the commission's rules, excluding the rules of this subchapter. Nothing in this rule shall be construed as prohibiting the utility from simultaneously applying to the commission for authority to establish rates in the same manner as set forth in this sub-chapter, or any other manner.

(d) The filing requirements specified in ARM 38.5.604(b) are intended only to establish a minimum frequency of filings. Nothing in these rules shall be deemed to prohibit a utility, or any other party, from making application to the commission for additional rate changes. Except in the case of a filing pursuant to ARM 38.5.604(c) , additional filings will be prepared in accordance with the commission's rules, including the rules of this sub-chapter.

History: Sec. 69-3-103, MCA; IMP, . 69-2-101, MCA; NEW, 1992 MAR p. 319, Eff. 2/28/92.

38.5.605   FINAL ORDERS -- APPEALS
(1) Nothing in the rules of this sub-chapter shall be construed as limiting in any way the right of a utility, or any other party, from challenging the reasonableness of a final order pursuant to the applicable provisions of Title 69 of the Montana Code Annotated, and the Montana Administrative Procedure Act.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1992 MAR p. 319, Eff. 2/28/92.

38.5.606   RATEMAKING PROCEDURE -- GENERAL RATE CASES

(1) A utility which elects to proceed under the rules of this sub-chapter shall be permitted by the commission to include in its rates a cost of service which includes the following special components:

(a) All test year measures of cost shall be adjusted to reflect changes known with certainty and measurable with reasonable accuracy prior to the commission's hearing on the utility's application for increased rates, provided no such changes shall be reflected in the rates finally authorized by the commission if they occurred more than 13 months from the close of the test period used to determine the cost of service.

(b) Test year expenses which are affected by test year replacement of capital facilities used in providing service shall be adjusted so that they accurately reflect, on an annual basis, such replacement.

(c) Any costs incurred during the test year that were not adjusted pursuant to ARM 38.5.606(1) (a) , shall be adjusted pursuant to the following formula:

Costs x .45 x Consumer Price Index

(d) The rate base shall be computed on an end of test year basis.

(e) For matching purposes, test year revenues shall be restated to reflect end of year customer counts and the annualization of known changes in revenues occurring during the test year. In addition, revenues shall be restated to reflect changes known with certainty and measurable with reasonable accuracy prior to the commission's hearing on the utility's application for increased rates, provided no such changes shall be reflected if they occurred more than 13 months from the close of the test period used to determine the cost of service in the utility's filing.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1992 MAR p. 319, Eff. 2/28/92.

38.5.607   RATEMAKING PROCEDURES -- LIMITED ISSUE FILINGS

(1) A utility which elects to proceed under this sub-chapter shall be permitted by the commission to make limited issue filings that do not meet the requirements of ARM 38.5.101, et seq. Such limited issue filings may only be made when the utility experiences a change in costs which exceeds three percent (3%) of the utility's allowed overall return, in dollars, as determined by the last order in the last general rate case establishing rates for those services that are the subject of the filing or the cost of service filing required in ARM 38.5.604(1) (b) , whichever is most recent.

History: Sec. 69-3-103, MCA; IMP, . 69-2-101, MCA; NEW, 1992 MAR p. 319, Eff. 2/28/92.

38.5.608   COST OF EQUITY
(1) The commission will permit no adjustments to the electing utility's cost of equity capital under a theory that the election has reduced the cost of capital to the electing utility.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1992 MAR p. 319, Eff. 2/28/92.

38.5.609   COST OF SERVICE FILING
(1) The electing utility will make the filings required in ARM 38.5.604(b) as follows:

(a) It will prepare its cost of service filing in compliance with the minimum filing standards, as modified by the rules of this sub-chapter. In addition:

(i) The utility will reflect in its filing as its cost of equity capital the last return on equity authorized by the commission, unless the utility proceeds in accordance with ARM 38.5.609(b) .

(ii) If the utility's filing does not seek a change in rates, its filing need not comply with the provisions of ARM 38.5.103, 38.5.104, 38.5.105, 38.5.112, 38.5.176, 38.5.177 and 38.5.178.

(b) A utility which files an application to change its rates simultaneously with the submission of its cost of service filing may include in its cost of service filing a rate of return on equity other than that last authorized by the commission.

(c) If the cost of service filing establishes a revenue requirement less than that last authorized by the commission, and the utility does not request a decrease in rates to reflect such a change, the utility expressly assumes the burden of proving why its rates should not be decreased to the extent reflected in its cost of service filing.

(d) Any party, including the utility, may make application to the commission for a change in rates based upon the filing and such other facts the parties by competent evidence may establish. All applications for a change in rates will be heard in accordance with Title 69, MCA, and the Montana Administrative Procedure Act.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1992 MAR p. 319, Eff. 2/28/92.

38.5.610   APPLICATION FOR SUMMARY CLOSURE
(1) The commission will docket the utility's cost of service filings made pursuant to ARM 38.5.604 as a contested case proceeding regardless of whether the utility applies for a change in rates, and:

(a) If the utility does not file an application to change its rates, it shall file an application for summary closure of the docket.

(b) The commission will notice the application for summary closure in accordance with the provisions of the Montana Administrative Procedure Act and permit intervention as in any other contested case proceeding.

(c) Upon considering the application for summary closure, the commission will either grant or deny the application. If its decision is to deny the application it shall by order establish a procedure for hearing the claims of those parties opposing the application.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1992 MAR p. 319, Eff. 2/28/92.

38.5.611   SUNSET/REPEALER
(1) The rules in this sub-chapter are of an experimental nature and are intended to be of limited duration. The rules in this sub-chapter are repealed 96 months after publication of their notice of adoption.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1992 MAR p. 319, Eff. 2/28/92.

38.5.701   JURISDICTIONAL POLICY

This rule has been repealed.

History: 69-3-102 and 69-3-103, MCA; IMP, 69-7-101, 69-7-102, 69-7-113 and 69-7-201, MCA; NEW, 1982 MAR p. 293, Eff. 2/12/82; REP, 2004 MAR p. 2933, Eff. 12/3/04.

38.5.702   DETERMINATION OF PUBLIC SERVICE COMMISSION JURISDICTION

This rule has been repealed.

History: 69-3-102 and 69-3-103, MCA; IMP, 69-7-101, 69-7-102, 69-7-113 and 69-7-201, MCA; NEW, 1982 MAR p. 293, Eff. 2/12/82; REP, 2004 MAR p. 2933, Eff. 12/3/04.

38.5.801   APPLICABILITY

(1) This subchapter is applicable to electric and natural gas public utilities.

(2) Except where otherwise provided, a utility shall comply with the minimum filing standards of this subchapter whenever it files for a rate schedule change pursuant to 69-3-302 or 69-3-308, MCA which incorporates changes in Montana state and local tax expense, except that this subchapter does not apply to rate schedules filed to adjust for the Public Service Commission tax or the Montana Consumer Counsel tax.

(3) Filings made pursuant to 69-3-308, MCA are exempt from the filing requirements of ARM 38.5.101 to 38.5.195.

 

History: 69-3-103, 69-3-310, MCA; IMP, 69-3-302, 69-3-308, MCA; NEW, 2017 MAR p. 790, Eff. 6/10/17.

38.5.802   ELECTRONIC INFORMATION – LETTER OF TRANSMITTAL

(1) The utility shall include with the request for a rate adjustment all files in an easily readable electronic format, which, if applicable, shall have all digital links intact.

(2) The letter of transmittal with respect to a filing for a new or existing tariff to provide for an adjustment of state and local taxes and fees under 69-3-308, MCA shall:

(a) list the documents submitted with the filing;

(b) state the names and addresses of those to whom copies of the rate schedule have been mailed;

(c) include a brief description of the proposed changes in service or rate and charge;

(d) state the reasons for the proposed changes;

(e) state the estimated number of customers whose cost of service will be affected and annual amounts of either increases or decreases, or both, in cost of service to such customers;

(f) name an employee of the utility who shall be responsible for answering questions concerning the application, or for referring inquiries to appropriate members of the utility staff;

(g) include a clear statement of the relief requested;

(h) include a table or spreadsheet showing each rate affected by the rate adjustment, including the rate as it currently exists, the incremental change due to the tracker, the proposed total rate, and the portion of the rate attributable to tax; and

(i) propose revised tariffs that would be affected by the rate adjustment, including both clean and red-lined copies.

 

History: 69-3-103, 69-3-310, MCA; IMP, 69-3-302, 69-3-308, MCA; NEW, 2017 MAR p. 790, Eff. 6/10/17.

38.5.803   PRE-FILED TESTIMONY

(1) The application made under 69-3-308, MCA, by a utility shall include the pre-filed testimony of a witness or witnesses. If the testimony of more than one witness is presented, the utility will identify one witness who is responsible for the completeness of the statements and work papers contained in the filing.
 

History: 69-3-103, 69-3-310, MCA; IMP, 69-3-202, 69-3-205, 69-3-308, MCA; NEW, 2017 MAR p. 790, Eff. 6/10/17.

38.5.804   EXPENSE AND REVENUE ADJUSTMENT WORK PAPERS

(1) The application for automatic adjustment for Montana state and local taxes and fees, excluding income taxation, provided for under 69-3-308, MCA shall include:

(a) the projected changes in taxes from the prior year;

(b) the true-up of the prior year's actual revenue attributable to taxes versus actual taxes; and

(c) the extinguishment of deferred balances.

(2) Revenues attributable to the component of existing rates attributable to Montana state and local taxes and fees shall be calculated, including the revenues earned and projected to be earned by:

(a) rates authorized by the Montana Public Service Commission;

(b) rates authorized by the Federal Energy Regulatory Commission (FERC);

(c) rates authorized by other state utility commissions, to the extent that Montana state and local taxes and fees are allocated to those jurisdictions; and

(d) charges made by the utility, its affiliates, or its parent for services which are not regulated but on which the utility is assessed Montana state and local taxes and fees, including but not limited to non-regulated gas gathering and production activities.

 

History: 69-3-103, 69-3-310, MCA; IMP, 69-3-201, 69-3-202, 69-3-308, MCA; NEW, 2017 MAR p. 790, Eff. 6/10/17.

38.5.805   JURISDICTIONAL FERC ALLOCATIONS FOR TAXES

(1) For Montana state and local taxes and fees, excluding income taxation, allocated to rates collected under FERC tariffs:

(a) the utility shall disclose and explain the present allocation methodology of the expense to retail and wholesale customers;

(b) the utility will identify in a table a list of all property which is subject to a jurisdictional allocation between retail and wholesale customers by:

(i) FERC account;

(ii) value in rate base, on an original cost less depreciation basis; and

(iii) the total amount of tax expense for each FERC account listed.

(c) if the taxing jurisdiction does not disclose or specifically identify the amount of tax expense allocated or assessed to property by type, the utility will disclose as such and will use an appropriate allocator consistent with prior commission orders or with its own internal practice;

(d) the utility will indicate the last time it has filed at FERC a general rate case or a case specific to a service offered under its open access transmission tariff, and describe how tax expense was incorporated into its rate proposal and, if specified, the FERC's final determination of rates;

(e) the utility will present information for allocation methodologies, regardless of which is proposed or adopted for current use. These shall include at a minimum:

(i) the revenue produced under FERC rates which is attributable to Montana state and local tax and fee expense, calculated on the basis of the percentage of the last-approved revenue requirement which was attributable to this expense; and

(ii) a calculation of the usage of the assets subject to state and local taxes and fees by retail customers and by wholesale customers, with an allocation of the associated tax expense to the wholesale and retail customers of the utility on a basis consistent with that usage employing a twelve-coincident-peak methodology.

(f) the commission may request an additional study to allocate this expense on another basis; and

(g) a utility that does not collect any revenues under FERC tariffs will file a statement certifying accordingly.

 

History: 69-3-103, 69-3-310, MCA; IMP, 69-3-201, 69-3-202, 69-3-302, 69-3-308, MCA; NEW, 2017 MAR p. 790, Eff. 6/10/17.

38.5.806   JURISDICTIONAL ALLOCATIONS FOR TAXES

(1) For Montana state and local taxes and fees and for other states' taxes, excluding income taxation, which are allocated to rates authorized by the commission and by other state utility commissions:

(a) the utility shall disclose and explain the allocation methodology of these expenses to Montana customers and to customers of other states; and

(b) the utility shall provide a statement including data for the last three years and for the coming year, which:

(i) discloses the actual tax expense attributable to each jurisdiction under the last approved allocation methodology of the commission; and

(ii) provides an estimate of the amount of revenue attributable to these taxes the utility had projected to earn based on the tax expense in rates of its last general rate case filings in those jurisdictions, inflated or deflated by the projected growth in sales volumes of units whose rates include tax-related expense.

(2) For the purposes of making findings on questions of jurisdictional separations for the purposes of including tax expense into rates, the commission, upon evaluating the information provided pursuant to this section and other information which it may possess, may find errors that lead to adjustments in rates for reasons including, but not limited to, the following:

(a) that an allocation methodology inaccurately allocates the expense or the revenue, or both, to customers of different jurisdictions; or

(b) that revenues from other jurisdictions' customers are sufficient to satisfy the utility's liability for Montana state and local taxes and fees.

 

History: 69-3-103, 69-3-310, MCA; IMP, 69-3-201, 69-3-202, 69-3-302, 69-3-308, MCA; NEW, 2017 MAR p. 790, Eff. 6/10/17.

38.5.807   INCOME TAXATION

(1) To account for the deductibility of tax expense from the utility's income tax liability when filing for an automatic rate adjustment for Montana state and local taxes and fees, the utility will multiply the statutory income tax rate by the incremental change in Montana state and local tax expense. The product of this multiplication is the amount of the income tax benefit, positive or negative, that results from the automatic rate adjustment for Montana state and local taxes and fees.

(2) Together with an application for a change in rate schedules filed pursuant to 69-3-302, MCA the utility shall:

(a) provide its last three annual income tax filings for both the federal and Montana jurisdictions;

(b) file a request for a protective order no later than three weeks before such a rate filing is made, if the utility desires to exercise its right under federal law to keep its income tax filing confidential; and

(c) file a statement which:

(i) discloses the amount of revenue attributable to the component of existing commission rates attributable to federal and state income taxes;

(ii) identifies the total income tax expense associated with or allocated to the customers paying those commission rates;

(iii) indicates any amount of tax benefit or liability which is normalized pursuant to federal or state laws or regulations;

(iv) indicates any amount of tax benefit or liability which is normalized voluntarily, at the utility's option, and not because it is required pursuant to federal or state laws or regulations; and

(v) provides a spreadsheet or other information documenting a cost-benefit analysis for customers regarding the utility's election for a tax treatment that prohibits flow-through and requires normalization.

 

History: 69-3-103, 69-3-310, MCA; IMP, 69-3-201, 69-3-202, 69-3-302, 69-3-308, MCA; NEW, 2017 MAR p. 709, Eff. 6/10/17.

38.5.808   ATTRIBUTION OF TAX TO PLANT

(1) Together with an application for an automatic rate adjustment for Montana state and local taxes and fees under 69-3-308, MCA, a utility will identify an allocation of Montana state and local taxes and fees to plant by FERC account.

(2) In making the allocation of taxes to plant type, the utility will identify and explain its methodology, which may be informed by both the books and records of the utility company's capital investments and by the allocation of value to taxing jurisdictions by governmental authorities and by other factors the utility and the commission consider reasonable.

(3) The utility will provide FERC account balances for plant for the previous two years as of the lien date used by the Montana Department of Revenue for tax purposes.

 

History: 69-3-103, 69-3-310, MCA; IMP, 69-3-109, 69-3-201, 69-3-202, 69-3-308, MCA; NEW, 2017 MAR p. 790, Eff. 6/10/17.

38.5.809   VALUATION AND PROTESTS

(1) A utility will file the past two years' tax valuations from the Montana Department of Revenue.

(2) The utility will describe any informal or formal protests for its valuation or its tax expense that it has filed with any jurisdiction.

(3) For the purposes of complying with 69-3-308(2)(a)(i)(C), MCA a utility will provide a statement or table of adjustments made for the resolution of property taxes paid under protest. If there are none, it will file a statement indicating as such.

 

History: 69-3-103, 69-3-310, MCA; IMP, 69-3-106, 69-3-109, 69-3-302, 69-3-308, MCA; NEW, 2017 MAR p. 790, Eff. 6/10/17.

38.5.810   ALLOCATION OF TAXES AND FEES – RATE DESIGN

(1) A utility's application under 69-3-308, MCA, must include testimony and work papers showing the allocation of an adjustment to Montana state and local taxes and fees to each of the utility's customer classes. Testimony must include a thorough description of and justification for the allocation method(s).

(2) A utility's application must include testimony and work papers showing the derivation of rate adjustments provided for in ARM 38.5.802(2)(i). Testimony must include a thorough description and justification for the requested rate design. Work papers must include an analysis showing customer bill impacts, by customer class, for various usage levels typical for the customer class.

 

History: 69-3-103, 69-3-310, MCA; IMP, 69-3-201, 69-3-308, MCA; NEW, 2017 MAR p. 790, Eff. 6/10/17.

38.5.811   TAXES EXCLUDED

(1) A utility will disclose any taxes or fees assessed by taxing jurisdictions within the state of Montana which are not Montana state or local taxes or fees under 69-3-308, MCA, including, but not necessarily limited to, tribal taxes.

 

History: 69-3-103, 69-3-310, MCA; IMP, 69-3-201, 69-3-202, 69-3-308, MCA; NEW, 2017 MAR p. 790, Eff. 6/10/17.

38.5.812   REQUIREMENTS FOR THE SUBMISSION OF OMITTED INFORMATION

(1) For utility applications made pursuant to 69-3-308, MCA if a utility has not complied with the minimum filing standards of this subchapter or has otherwise failed to provide information as provided for in the proceeding to consider the filing, the commission may order within forty-five days of receipt of the utility's application that the utility address these omissions and continue the proceeding until they are addressed.

(2) For utility applications made pursuant to 69-3-302, MCA, a filing made by a utility which does not include the information required by this subchapter, the remedies provided for in ARM 38.5.184 apply.

(3) This rule does not affect the commission's ability to pursue the remedies provided for in 69-3-206 and 69-3-208, MCA.

 

History: 69-3-103, 69-3-310, MCA; IMP, 69-3-202, 69-3-206, 69-3-208, 69-3-302, 69-3-308, MCA; NEW, 2017 MAR p. 790, Eff. 6/10/17.

38.5.901   DEFINITION
(1) "Billing error" means any bill issued by a natural gas, electric, private water or sewer utility that is not designated as an estimate and that understates the amount owed by a utility customer. It also means a utility's failure to bill a customer, although there was energy consumption which would, under the utility's normal billing practices, be billed to the customer.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1983 MAR p. 1739, Eff. 11/26/83.

38.5.902   BILLING ERRORS
(1) When a billing error is discovered which is not the result of theft by the customer, the utility may submit a bill to the customer based on the corrected information for a period not to exceed six months from the date the billing error is discovered.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1983 MAR p. 1739, Eff. 11/26/83.

38.5.903   EXEMPTION
(1) Billing errors on accounts of industrial customers are exempt from the provisions of these rules.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1983 MAR p. 1739, Eff. 11/26/83.

38.5.904   EFFECTIVE DATE
(1) Utilities are required to comply with this rule for billing errors discovered on and after January 26, 1984. However, utilities are authorized to implement the rule immediately, both for billing errors presently known and for errors which are discovered prior to January 26, 1984.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1983 MAR p. 1739, Eff. 11/26/83.

38.5.1001   RATES, CHARGES, AND SERVICE REQUIREMENTS OF PUBLIC UTILITIES
(1) Rates, charges and service requirements of each public utility under the jurisdiction of the commission ( 69-3-101 , MCA and following) are contained within the tariffs and files of each public utility as filed with and approved by the commission. Information relative to such rates, charges and service requirements in regard to each utility may be obtained from the commission office.
History: 69-3-104, MCA; IMP, 69-3-105, 69-3-301, MCA; NEW, Eff. 12/31/72.

38.5.1002   UNDERGROUNDING OF ELECTRIC DISTRIBUTION LINES IN NEW SUBDIVISIONS
(1) Section 69-4-102 , MCA, requires a public utility furnishing electricity to install underground distribution lines in new subdivisions of five or more consumer units when undergrounding is technically and economically feasible.

(2) As used in this rule, "technically feasible" means that the trench through which the underground lines would run could be excavated by a conventional backhoe or trencher, with no blasting and minimal use of jackhammers or like equipment required, and the consumer unit is situated on a lot or parcel not larger than five acres.

(3) As used in this section, "economically feasible" means:

(a) If underground installation cost/unit does not exceed twice overhead installation cost/unit, underground installation is feasible and shall be constructed at the expense of the utility and the developer or the customer in accordance with the applicable rate schedule on file with the commission; and

(b) If underground installation cost/unit is more than twice overhead installation cost/unit, underground installation is economically infeasible within the meaning of 69-4-102 , MCA, and underground installation is not required in such cases.

(4) As used in the preceding subsection, "unit" means a residence or commercial structure in a new subdivision, as defined in 69-4-102 , MCA, and "distribution lines" mean all electrical lines in the subdivision used for the conveyance of electricity from a bulk power source to the consumer.

History: 69-4-102(3), MCA; IMP, 69-4-102, MCA; NEW, Eff. 12/6/76.

38.5.1010   INCORPORATION BY REFERENCE OF NATIONAL ELECTRICAL SAFETY CODE

(1) Pursuant to 69-4-201, MCA, the commission is empowered to implement and enforce construction standards for utility lines and facilities and for that purpose the commission hereby adopts and incorporates by reference the 2017 edition of the National Electrical Safety Code (NESC). A copy of the NESC may be obtained from the American National Standards Institute, 25 West 43rd Street, 4th Floor, New York, New York 10036, or may be reviewed at the Public Service Commission Offices, 1701 Prospect Avenue, Helena, Montana 59620-2601.

 

History: 69-4-201, MCA; IMP, 69-4-201, MCA; NEW, 1993 MAR p. 3042, Eff. 12/24/93; AMD, 1997 MAR p. 317, Eff. 2/11/97; AMD, 1998 MAR p. 180, Eff. 1/16/98; AMD, 2004 MAR p. 339, Eff. 2/13/04; AMD, 2006 MAR p. 2966, Eff. 12/8/06; AMD, 2011 MAR p. 2829, Eff. 12/23/11; AMD, 2017 MAR p. 789, Eff. 6/10/17.

38.5.1101   ESTABLISHMENT OF CREDIT -- RESIDENTIAL
(1) An applicant for residential utility service may establish credit by demonstrating to the utility any one of the following factors:

(a) Prior service with utility in question within the previous 12 months during which for at least 6 consecutive months service was rendered and was not disconnected for failure to pay, and no more than one delinquency notice was served upon the customer.

(b) Prior service with a utility of the same type as that of which service is sought with a satisfactory payment record as demonstrated in (a) above, provided that the reference may be quickly and easily checked by the utility and the necessary information is provided.

(c) Full-time consecutive employment during the entire 12 months next previous to the application for service, with no more than two employers, and the applicant is currently employed or has a regular source of income.

(d) Ownership of significant legal interest in the premises to be served.

(e) Furnishing of a satisfactory guarantor to secure payment of bills for services requested in a specified amount not to exceed an estimated one year bill, such estimation to be made at the time the service is established.

(f) In the case of telephone utilities, the guarantee amount shall be for the total amount of the bill.

History: 69-3-306, MCA; IMP, 1975 HJR 27; NEW, Eff. 4/5/77; AMD, 1978 MAR p. 721, Eff. 5/26/78.

38.5.1102   ESTABLISHMENT OF CREDIT -- NONRESIDENTIAL

(1) An applicant for nonresidential service may be required to demonstrate that it is a satisfactory credit risk by reasonable means appropriate under the circumstances.

History: 69-3-306, MCA; IMP, 1975 HJR 27; NEW, Eff. 4/5/77; AMD, 1978 MAR p. 721, Eff. 5/26/78.

38.5.1103   DEPOSIT REQUIREMENTS
(1) A deposit may be required under the following circumstances:

(a) Where the applicant has failed to establish a satisfactory credit history as outlined above.

(b) In any event, a deposit may be required when within the 12-months prior to the application, the applicant's service of a similar type has been disconnected for failure to pay amounts owing, when due; where there is an unpaid, overdue balance owing for similar service from the utility to which application is being made or from any similar utility; or where two or more delinquency notices have been served upon the applicant by any other utility company during the 12-months previous to the application for service.

(c) Initiation or continuation of service to a residence where prior customer still resides and where any balance for such service to that prior customer is past due or owing.

(d) Where the customer has, in an unauthorized manner, interfered with the service of the utility situated or delivered on or about the customer's premises within the last five years, if the finding of unauthorized interference or use is made and determined after notice and opportunity for hearing is provided to the customer and is not in dispute.

History: 69-3-306, MCA; IMP, 1975 HJR 27; NEW, Eff. 4/5/77; AMD, 1978 MAR p. 721, Eff. 5/26/78.

38.5.1104   PROHIBITED STANDARDS FOR REQUIRING CASH DEPOSIT OR OTHER GUARANTEE FOR RESIDENTIAL SERVICE
(1) A utility shall not require a cash deposit or other guarantee as a condition of new or continued residential utility service based upon commercial credit standards (except as provided in these rules) , income, home ownership, residential location, race, color, creed, sex, age, national origin, or any other criteria not authorized by these rules. This rule does not prohibit a utility from ensuring that agreements with customers who may be incompetent, such as minors, are made in such a manner, and with such persons, as to be legally binding.
History: 69-3-306, MCA; IMP, 1975 HJR 27; NEW, Eff. 4/5/77; AMD, 1978 MAR p. 721, Eff. 5/26/78.

38.5.1105   AMOUNT OF DEPOSIT
(1) In instances where a deposit may be required by the utility, the deposit shall not exceed one-sixth of estimated annual billings; provided that deposit of not more than 25% of the estimate may be required of applicants for non-residential service.

(2) In the case of telephone utilities, the deposit may be accordingly adjusted when the actual interchange service charges are subsequently found to be more or less than those estimated.

History: 69-3-306, MCA; IMP, 1975 HJR 27; NEW, Eff. 4/5/77; AMD, 1978 MAR p. 721, Eff. 5/26/78.

38.5.1106   TRANSFER OF DEPOSIT
(1) Where a customer of whom a deposit is required transfers his service to a new location within the same utility's service area, within the state of Montana, the deposit, less any outstanding balance, shall be transferable and applicable to the new service location.

(2) In the case of telephone utilities, the deposit is only transferable within the same exchange.

History: 69-3-306, MCA; IMP, 1975 HJR 27; NEW, Eff. 4/5/77; AMD, 1978 MAR p. 721, Eff. 5/26/78.

38.5.1107   INTEREST ON DEPOSITS
(1) Interest on deposits held shall be accrued at the rate of 6% per year. Interest shall be computed from the time of the deposit to the time of refund or termination, to the nearest whole month, without compounding. This rule is effective October 1, 2002, applies to deposits received on and after October 1, 2002, and applies to the remaining period of deposits existing before October 1, 2002.
History: 69-3-103, 69-3-306, MCA; IMP, 1975 HJR 27; NEW, Eff. 4/5/77; AMD, 1978 MAR p. 722, Eff. 5/26/78; AMD, 1981 MAR p. 1791, Eff. 12/18/81; AMD, 2002 MAR p. 1995, Eff. 10/1/02.

38.5.1108   REFUND OF DEPOSITS
(1) Deposits plus accrued interest shall be refunded under the following circumstances and in the following form:

(a) Where the customer has for 12 consecutive months paid for service when due in a prompt and satisfactory manner as evidenced by the following:

(i) The utility has not initiated disconnection proceedings against the customer; and

(ii) No more than two notices of delinquency have been made to the customer by the utility.

(b) Upon termination of service the utility shall return to the customer the amount then on deposit plus accrued interest less any amounts due the utility by the customer for service rendered.

(c) Any deposit, plus accrued interest, shall be refunded to the customer in the form of a check issued and mailed to the customer no more than 30 days following the termination of service or completion of 12 months satisfactory payment as described above. Other methods of refund (e.g., cash) , if agreed to by the customer and the utility, are permitted. In the alternative, in the utility's discretion, unless the customer has specifically directed otherwise, the deposit may be applied to the customer's bill of service in the thirteenth and, if appropriate, subsequent months.

History: 69-3-306, MCA; IMP, 1975 HJR 27; NEW, Eff. 4/5/77; AMD, 1978 MAR p. 722, Eff. 5/26/78; AMD, 2001 MAR p. 45, Eff. 1/12/01.

38.5.1109   RECORD OF DEPOSITS
(1) A utility shall maintain a record of all deposits received from customers, showing the name of each depositor, the date and amount of the deposit made, the location of the premises occupied by the depositor at the time of making the deposit, and each successive location while the deposit is retained.

(a) Each customer posting a cash deposit shall receive in writing at the time of tender of the deposit a receipt as evidence thereof, which contains the following minimum information.

(i) Name of customer;

(ii) Address of customer;

(iii) Place of payment;

(iv) Date of payment;

(v) Amount of payment;

(vi) Identification of the employee receiving payment;

(vii) Statement of the terms and conditions governing the receipt, retention and return of deposit funds.

(b) A utility shall provide means whereby a customer entitled to a return of his deposit is not deprived of deposit funds even though he may be unable to produce the original receipt for the deposit. In such event company records shall be controlling.

History: 69-3-306, MCA; IMP, 1975 HJR 27; NEW, Eff. 4/5/77; AMD, 1978 MAR p. 722, Eff. 5/26/78.

38.5.1110   UNIFORM APPLICATION
(1) A utility shall apply deposit standards uniformly as condition of utility service to all residential customers.
History: 69-3-306, MCA; IMP, 1975 HJR 27; NEW, Eff. 4/5/77.

38.5.1111   GUARANTEE IN LIEU OF DEPOSIT
(1) In lieu of a cash deposit required by these rules, a utility shall accept the written guarantee of a responsible party as surety for a customer service account. For the purpose of this rule, a "responsible party" shall mean:

(a) Any individual or business entity which has maintained service with the utility in question for the previous 24 months, and who has not had service disconnected for failure to pay, and has received no more than two delinquency notices.

(b) Any special fund approved by the commission.

History: 69-3-306, MCA; IMP, 1975 HJR 27; NEW, Eff. 4/5/77; AMD, 1978 MAR p. 722, Eff. 5/26/78.

38.5.1112   GUARANTEE TERMS CONDITIONS
(1) A guarantee accepted in accordance with these rules is subject to the following terms and conditions:

(a) It shall be in writing, and if necessary shall be renewed in a similar manner annually.

(b) It shall state the terms of guarantee, the maximum amount guaranteed (such maximum not to exceed an estimated one year bill, such estimation to be made at the time the service is established) , and that the utility shall not hold the guarantor liable for sums in excess thereof unless agreed to in a separate written instrument.

(c) Credit shall be established for the customer and the guarantor shall be released upon the satisfactory payment by the customer of all proper charges for utility service for a period of 12 successive months. For purposes of this subsection, payment is satisfactory if:

(i) The utility has not initiated disconnection proceedings against the customer.

(ii) No more than two notices of delinquency have been made to the customer by the utility.

(2) The utility may withhold the release of the guarantor pending the resolution of a disputed discontinuance.

History: 69-3-306, MCA; IMP, 1975 HJR 27; NEW, Eff. 4/5/77; AMD, 1978 MAR p. 722, Eff. 5/26/78.

38.5.1201   DEFINITIONS
(1) "Standby charges" are defined for the purposes of this rule as charges different than those generally available for service under the utility's tariffs, imposed where utility service is either provided:

(a) only in the event of the nonavailability to the customer of any other form or source of energy from any supply, which other form of energy is predominately relied upon by the customer; or

(b) on a regular basis as the customer's predominate energy source but is subject to periodic partial or complete curtailment, at the customer's option, and replacement by another energy form or source.

History: Secs. 69-3-103, MCA; IMP, 69-3-301, MCA; NEW, 1978 MAR p. 1735, Eff. 12/29/78.

38.5.1202   "STANDBY CHARGES" NOT ALLOWED
(1) The Commission, in view of both the state energy conservation policy and the lack of cost impact data in this area, will not approve any "standby charges" at this time. Utilities shall supply "standby service" at presently authorized rates for all classes of customers. A hearing will be held under the Commission rules governing contested case proceedings prior to any Commission action on a request for standby charges.
History: Secs. 69-3-103, MCA; IMP, 69-3-301, MCA; NEW, 1978 MAR p. 1735, Eff. 12/29/78.

38.5.1203   SERVICE TO STANDBY CUSTOMERS
(1) Utilities shall supply standby service to requesting customers, subject to limitations imposed by federal regulatory agencies. However, unless specifically required by order of a federal regulatory agency, no utility may refuse service to a requesting customer solely on the grounds that the request is for standby service.
History: Secs. 69-3-103, MCA; IMP, 69-3-301, MCA; NEW, 1978 MAR p. 1736, Eff. 12/29/78.

38.5.1204   MINIMUM FILING REQUIREMENTS FOR FUTURE REQUESTS

(1) Any utility requesting "standby charges" before this Commission in the future shall provide adequate data supporting "standby service" costs incurred, including but not limited to:

(a) number of customers equipped with alternative, renewable energy sources who would be affected by such charges;

(b) current costs and payback periods of the major alternative energy systems with no standby charge; current costs and payback periods of the major alternative energy systems if the standby charge as requested is authorized;

(c) for proposed standby charges for electric utility service, time-of-day and load information for the various classes of customers; and for the various energy source systems employed by them;

(d) cost of service information, including incremental cost of service information broken down by cost of service to the class of customers with unlimited use backup systems and the class of customers with backup service restricted to off-peak replenishment of energy storage systems.

(2) In accordance with the information presented in response to (1) (d) proposed standby charges must distinguish between standby customers with unlimited use of the utility's service, and those with backup service restricted to off-peak replenishment of energy storage systems.

(3) Any utility requesting "standby charges" in the future must inform the Commission of the means by which the utility intends to determine which of its customers are to be subject to the standby charge if approved.

History: Secs. 69-3-103, MCA; IMP, 69-3-301, MCA; NEW, 1978 MAR p. 1736, Eff. 12/29/78.

38.5.1205   EXEMPTION: STANDBY CHARGES FOR INDUSTRIAL CUSTOMERS
(1) These rules shall apply to all requests for standby charges for residential and commercial classes of customers; these rules shall not apply to requests for standby charges for industrial customers.
History: Secs. 69-3-103, MCA; IMP, 69-3-301, MCA; NEW, 1978 MAR p. 1737, Eff. 12/29/78.

38.5.1301   DEFINITION

This rule has been repealed.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-301, MCA; NEW, 1978 MAR p. 1553, Eff. 12/1/78; REP, 1995 MAR p. 2038, Eff. 9/29/95

38.5.1302   CONDITIONS FOR APPROVAL

This rule has been repealed.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-301, MCA; NEW, 1978 MAR p. 1553, Eff. 12/1/78; REP, 1995 MAR p. 2038, Eff. 9/29/95

38.5.1303   PROCEDURE

This rule has been repealed.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-301, MCA; NEW, 1978 MAR p. 1553, Eff. 12/1/78; REP, 1995 MAR p. 2038, Eff. 9/29/95.

38.5.1305   DEFINITIONS

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-3-301, MCA; NEW, 1995 MAR p. 2038, Eff. 9/29/95; REP, 2015 MAR p. 1203, Eff. 8/14/15.

38.5.1307   EAS -- GENERAL

(1) The repeal of these rules does not affect the status of any existing EAS arrangement.

History: 69-3-103, MCA; IMP, 69-3-301, MCA; NEW, 1995 MAR p. 2038, Eff. 9/29/95; AMD, 2015 MAR p. 1203, Eff. 8/14/15.

38.5.1309   EAS PROCEDURE -- GENERAL

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-3-301, MCA; NEW, 1995 MAR p. 2038, Eff. 9/29/95; REP, 2015 MAR p. 1203, Eff. 8/14/15.

38.5.1311   EAS PROCEDURE -- REGIONS

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-3-301, MCA; NEW, 1995 MAR p. 2038, Eff. 9/29/95; REP, 2015 MAR p. 1203, Eff. 8/14/15.

38.5.1313   EAS PROCEDURE -- PHASE I, COMMUNITY OF INTEREST DETERMINATION

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-3-301, MCA; NEW, 1995 MAR p. 2038, Eff. 9/29/95; REP, 2015 MAR p. 1203, Eff. 8/14/15.

38.5.1315   EAS PROCEDURE -- PHASE II, COST ANALYSIS AND RATE DESIGN

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-3-301, MCA; NEW, 1995 MAR p. 2038, Eff. 9/29/95; REP, 2015 MAR p. 1203, Eff. 8/14/15.

38.5.1401   DEFINITIONS
For purposes of this subchapter:

(1) "Appliances essential for maintenance of health" means any electric or gas energy-using device which is certified by a licensed physician as being essential to prevent or to provide relief from serious illness or to sustain the life of a member of the household and for which there is no reasonable alternative.

(2) "Customer" means any purchaser of gas or electric service supplied by a utility for residential purposes.   A person who requests disconnection of service at his or her current address in order to move service to his or her new address with no break in the service is an existing customer, not an applicant for new service.

(3) "Delinquent account" means an account for residential service which remains unpaid for at least 30 days after the bill is rendered.   The exact due date shall be printed on the face of the bill.

(4) "Elderly" means any residential electric or gas consumer aged 62 or older, who resides at the service address.

(5) "Handicapped" means any residential electric or gas consumer who resides at the service address and has any physicial or mental impairment which substantially limits one or more of such person's life activities, and such person:

(a) is certified as being physicially disabled by a licensed physician, or

(b) is certified as being mentally disabled by a licensed psychiatrist or registered psychologist, veterans administration, social security administration, or local board of health.

(6) "Landlord customer" means one or more individuals or an organization listed on a gas or electric utility's records as the party responsible for payment of the gas or electric service provided to one or more residential units of a building, which is occupied by a tenant.

(7) "Person unable to pay or to pay only in installments" means any purchaser of electric or gas service for residential purposes, who is a recipient of public assistance and/or has an income at or below federal poverty guidelines.

(8) "Residential building" means a building containing one or more dwelling units occupied by one or more tenants, but excluding hotels and motels not used primarily for residential purposes.

(9) "Tenant" means any person or group of persons whose dwelling unit in a residential building is provided natural gas or electricity, pursuant to a rental agreement, but who is not the customer of the utility which supplies said gas or electricity.

(10) "Termination of service" means a cessation of service effectuated by the utility and not voluntarily requested by a customer.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 641, Eff. 2/29/80; AMD, 2000 MAR p. 1080, Eff. 4/28/00.

38.5.1402   GROUNDS FOR TERMINATION OF SERVICE
(1) Subject to the requirements of these rules, a utility may terminate service to a customer for any of the following reasons:  

(a) Nonpayment of a delinquent account;

(b) Misrepresentation of identity for the purpose of obtaining utility service;

(c) Unauthorized interference, diversion or use of the utility's service situated or delivered on or about the customers premises;

(d) Failure to comply with the terms and conditions of a deferred payment agreement made in accordance with these rules;

(e) Refusal to grant a duly authorized representative of a utility access to equipment upon the premises of the customer at reasonable times for the purpose of inspection, maintenance or replacement when the utility has given the customer reasonable notice of the need for such access and the time of visitation;

(f) Violation of other rules of the commission or utility which adversely affects the safety of the customers or other persons, or the integrity of the utility's delivery system.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 642, Eff. 2/29/80.

38.5.1403   PROHIBITED GROUNDS FOR TERMINATION OF SERVICE

(1) Neither of the following shall constitute grounds for a utility to terminate service:  

(a) The failure of any person, other than the customer against whom termination is sought, to pay any charges due to the utility;

(b) The failure of a customer to pay for merchandise, appliances or other services not contained in tariffs approved by the commission.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 644, Eff. 2/29/80.

38.5.1404   STATEMENT OF TERMINATION POLICY
(1) A current general statement of the utility's termination policy shall be posted in all local business offices of the utility, shall be made available upon request to all existing customers and shall be provided to all new customers when they initiate service. This statement must be written in clear and understandable language and must include the following information:

(a) The time allowed to pay outstanding bills;

(b) A statement that arrangements for installment payment of delinquent bills can be made at any time prior to termination of service;

(c) The title and telephone number of the utility employee to which inquiries and disputes may be directed;

(d) The time allowed to initiate a dispute;

(e) Instructions for designating a third party to receive a copy of termination notices;

(f) Instructions for designating elderly or handicapped status or a medical emergency;

(g) Instructions for designating the presence of special appliances essential for maintenance of health or safety.

(h) Details of the method of termination as described in ARM 38.5.1413.

(i) Availability of a copy of the Commission's rules on termination of service.

History: Sec. 69-3-103, MCA, IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 644, Eff. 2/29/80.

38.5.1405   NOTICE PRIOR TO AND AT THE TIME OF TERMINATION

(1) A utility may not terminate service to any residential, firm, commercial, industrial or other customer unless written notice is served.

(2) Termination notice shall be served as follows:

(a) If no response to the first notice is received within ten days of mailing, the utility must send a second notice by first class or certified mail (return receipt requested) . The second notice must be sent by the utility or personally served on the customer at least ten days prior to the date of the proposed termination.

(b) A utility may terminate utility services upon serving written notice five business days prior to the proposed termination date when a customer:

(i) remits an insufficient funds check as payment to the utility after receiving the first notice of termination, or

(ii) breaches a payment agreement made pursuant to ARM 38.5.1415.

(c) The provisions of (a) shall govern notice of termination to landlord customers, except that the first notice must be sent at least 30 days prior to the date of the proposed termination.

(d) The utility shall give written notice of the proposed termination for nonpayment to each residential unit reasonably likely to be occupied by an affected tenant of a landlord customer subject to termination. Such notice shall not be rendered earlier than five business days following initial notification to the landlord customer. However, if the landlord customer disputes the amount owing, such notice shall not be rendered until the dispute has been resolved. In no event shall such notice be served upon the tenants less than 15 days prior to the termination of service to the landlord customer on account of nonpayment. Upon affidavit, the Commission may, for good cause shown by the utility, reduce the minimum time between notification of the landlord customer and notification of the tenants.

(e) Prior to termination of service the utility must make a diligent attempt to contact the customer, either in person or by telephone, to apprise him of the proposed action. If telephone or personal contact is not made, the utility employee shall leave notice in a place conspicuous to the customer that service will be terminated on the next business day unless the delinquent charges have been paid.

(3) When service is terminated, the utility employee terminating service shall leave notice upon the premises in a place conspicuous to the customer that service has been terminated which gives the address and telephone number of the utility where the customer may arrange to have service restored. The utility shall have personnel available after the time of termination and during normal business hours authorized to reconnect service if the conditions cited as grounds for termination are corrected to the utility's satisfaction and upon payment of any reconnection charge specified in the utility's filed tariffs.

History: Sec. 69-3-103, MCA, IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 645, Eff. 2/29/80; AMD, 1982 MAR p. 2177, Eff. 12/31/82.

38.5.1406   CONTENTS OF WRITTEN NOTICE
(1) The written notices required by these rules must contain:

(a) The utility's statement of termination policy;

(b) An identification of the customer and service account affected by the proposed termination;

(c) A statement of reasons for termination;

(d) The date of proposed termination;

(e) The amount of the reconnection fee, if any;

(f) A summary of rights and remedies, including procedures to dispute the termination notice, provisions relating to elderly and handicapped consumers and those suffering a medical emergency, provisions for customers who are unable to pay their bills and steps necessary to make a claim of inability to pay, availability of installment payment arrangements and sources of financial assistance.

(g) Designation of the bill in question as actual or estimated;

(h) Except for notification of tenants, amount owed and time period over which amount was incurred;

(i) Instructions on how service can be restored;

(j) In the case of a landlord customer, the date on or after which the utility will notify tenants of the proposed termination.

(k) In the case of notification of tenants:

(i) The amount of an average monthly bill for utility service to the premises and the largest bill for utility service to the premises in the previous 12 months;

(ii) A statement that Commission procedures and the Laws of Montana may give the tenant certain rights with respect to which the tenant may wish to consult an attorney or Montana Legal Services.

History: Sec. 69-3-103, MCA, IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 647, Eff. 2/29/80.

38.5.1407   GROUNDS FOR TERMINATION OF SERVICE WITHOUT WRITTEN NOTICE
(1) A utility may terminate service without prior notice only:

(a) If a condition immediately dangerous or hazardous to life, physicial safety or property exists;

(b) Upon order by any court, the Commission or any other duly authorized public authority;

(c) If such service is obtained fraudulently or without authorization of the utility.

History: Sec. 69-3-103, MCA, IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 648, Eff. 2/29/80.

38.5.1408   CUSTOMER'S RIGHT TO DISPUTE A TERMINATION NOTICE
(1) Utilities must provide a reasonable procedure for customers to dispute the termination of service. If the utility decides such a dispute against the customer, it must do so in writing and must advise the customer that he or she may appeal the decision to the Commission. If the Commission is not able to resolve the complaint informally, formal complaint proceedings under ARM 38.2.2101, may be instituted by the customer.

(2) In its investigation of the proposed termination or during any hearing regarding the proposed termination, the Commission may make inquiry of the parties as to the following matters, among others:

(a) The extent to which the customer has control over their source of money for payments, including such matters as the lateness of public assistance checks;

(b) Weather conditions;

(c) The existence of illness of residents in the affected residences;

(d) The ages of the persons residing in the affected units;

(e) The existence of, or potential for, termination of service by other companies.

(3) The Commission may consider and give due weight to the above matters in any decision rendered on the appeal.

History: Sec. 69-3-103, MCA, IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 648, Eff. 2/29/80.

38.5.1409   TERMINATION NOTICE FOR NONPAYMENT-WHEN PROHIBITED
(1) A notice of termination of service may not be issued for nonpayment of a delinquent account if the entire amount is disputed by the customer and the customer is currently negotiating the dispute with the utility or has filed a complaint with the commission. A utility may, however, issue a notice of termination of service with respect to that portion of any delinquent account which is not disputed by the customer.
History: Sec. 69-3-103, MCA, IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 649, Eff. 2/29/80.

38.5.1410   TERMINATION OF SERVICE DURING WINTER MONTHS

(1) During the period November 1st to April 1st and on any day when the reported ambient air temperature at 8:00 a.m. is at or below freezing or if the U.S. Weather Service forecasts a snowstorm or freezing temperatures for the succeeding 24-hour period, no termination of residential service may take place if the customer establishes that he or she is unable to pay, or able to pay only installments, that he or she or a member of the household is at least 62 years old or that he or she or a member of the household is handicapped.

(2) No termination of service may take place during the period of November 1st to April 1st except with specific prior approval of the Commission.

History: Sec. 69-3-103, MCA, IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 650, Eff. 2/29/80.

38.5.1411   MEDICAL EXCEPTIONS

(1) Except as provided herein‚ service may not be terminated to a residence where a licensed health care professional certifies to the utility that the absence of service will aggravate an existing medical condition which would threaten the health of any permanent resident. A licensed health care professional means a licensed physician‚ physician assistant-certified‚ advanced practice registered nurse‚ or registered nurse provided for in ARM 37.106.2805 and Title 37, MCA. All certifications must be in writing and provide the name and address of the person with the medical condition that would be aggravated by a termination of service. The certification must include the printed name, signature‚ office address, and telephone number of the certifying licensed health care professional. A medical condition certificate is valid for 180 days from the date it is signed and dated by the licensed health care professional‚ and may be renewed on a semiannual basis.

(2) To avoid the accumulation of a substantial arrearage during the term of the medical certificate, the utility and the customer, or an authorized representative of the customer, shall negotiate an equitable payment arrangement that is reasonable and consistent with the customer's ability to pay. If the customer fails to make payments as established, resulting in an arrearage of $500 or more, the customer is required to enter into and comply with a monthly payment arrangement equal to the average of the last 12 months billing plus 1/12 of the arrearage. Failure to enter into a monthly payment arrangement and make payments will result in disconnection proceedings being initiated as set out in (3).

(3) The utility must provide written notice of the initiation of disconnection proceedings to the customer. If the missed payments are not received within ten days of mailing‚ the utility must send a second notice. From the date of the second notice the customer must pay at least one-third of the delinquent charges to avoid termination of service. The second notice must be sent by the utility at least ten days prior to the date of the proposed termination. All written notices must be sent by first class or certified mail. Prior to termination of service the utility must make a diligent attempt to contact the customer‚ either in person or by telephone‚ to apprise the customer of the proposed action. If telephone or personal contact is not made‚ the utility employee shall leave notice in a place conspicuous to the customer that service will be terminated on the next business day. If the required payment is made‚ a new payment arrangement will be recalculated consistent with (2). Under no circumstances shall disconnection proceedings occur on accounts with an arrearage of less than $500. Nothing in this rule prevents a utility from continuing service to a delinquent medically protected account.

(4) The utility must notify the commission in writing of the proposed termination at the beginning of the disconnection process. The commission may intervene and require a different payment arrangement or delay termination of services if the circumstances warrant. Before the commission will consider approving an alternate payment arrangement, the customer must apply, if eligible, for financial aid through organizations providing utility bill payment assistance and must respond to commission requests for information. The payment arrangement set by the commission is binding upon both the customer and the utility. Failure to comply with the payment arrangement may result in disconnection proceedings being initiated as set out in (3).

(5) From November 1 through March 31, the utility may not terminate a medical exception account protected from disconnection by the criteria established in ARM 38.5.1410.

 

History: 69-3-103, MCA; IMP, 69-3-102, MCA; NEW, 1980 MAR p. 651, Eff. 2/29/80; AMD, 2010 MAR p. 754, Eff. 3/26/10.

38.5.1412   TIME OF TERMINATION
(1) Service shall not be discontinued on a day, or a day immediately preceding a day, when the services of the utility are not available to the general public for the purpose of reconnecting terminated service. Service may be terminated only between the hours of 8:00 a.m. and 12:00 noon.
History: Sec. 69-3-103, MCA, IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 652, Eff. 2/29/80.

38.5.1413   METHOD OF TERMINATION
(1) Actual termination may not take place until one day after personal or telephone notice or, in the alternative, one business day after notice has been posted in a place conspicuous to the customer when the customer was not contacted personally or by phone.

(2) The utility's representative (employee) shall attempt to inform the occupant of the affected residence that service is to be discontinued. The employee shall present the occupant with a statement of charges due and shall request verification that the delinquent charges have not been paid or are not subject to a dispute previously registered with the utility or the Commission. Upon the presentation of evidence which reasonably indicates that the charge has been paid or is subject to a dispute previously registered with the utility or the Commission, service shall not be terminated.

(3) The employee shall be authorized to accept payment. If payment in full of all delinquent charges is tendered, service shall not be terminated.

(4) Payment may be tendered in any reasonable manner including personal check. Payment by personal check is not reasonable if the customer has paid the utility with checks returned for insufficient funds twice or more within the previous two years.

History: Sec. 69-3-103, MCA, IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 653, Eff. 2/29/80.

38.5.1414   THIRD-PARTY NOTIFICATION
(1) If a customer designates a third person to receive customer notifications of termination of service, the utility shall forward a duplicate of such notices to the designated third party. The third party so notified will not be liable for the account of the customer, unless he or she has agreed to be a guarantor for the customer.

(2) Each utility shall promptly, and in no event later than 90 days after the effective date of these rules, devise procedures reasonably designed to provide a voluntary system of third party notification for all customers. Such procedures shall be submitted by each company in writing to the Commission. The Commission may require, by a written notification, such modifications of a utility's procedures as it considers reasonably necessary to carry out the purposes of this rule.

History: Sec. 69-3-103, MCA, IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 654, Eff. 2/29/80.

38.5.1415   PAYMENT ARRANGEMENTS
(1) When a customer cannot pay a bill in full, the utility may continue to serve the customer if the customer and the utility can agree on a reasonable portion of the outstanding bill to be paid immediately, and the manner in which the balance of the outstanding bill shall be paid.

(2) In deciding on the reasonableness of a particular agreement, the utility shall take into account the customer's ability to pay, the size of the unpaid balance, the customer's payment history, and the amount of time and reasons why the debt is outstanding.

(3) If a customer fails to make the payment agreed upon by the date that it is due, the utility may, but is not obligated to, enter into a second such agreement.

(4) No such agreement or settlement shall be binding upon a customer if it requires the customer to forego any right provided for in these rules.

History: Sec. 69-3-103, MCA, IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 654, Eff. 2/29/80.

38.5.1416   IDENTIFICATION OF LANDLORD CUSTOMERS
(1) Utilities shall determine, prior to termination, whether the residence subject to termination is occupied by a tenant.
History: Sec. 69-3-103, MCA, IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 655, Eff. 2/29/80.

38.5.1417   NOTICE TO COMMISSION OF TERMINATIONS AFFECTING TENANTS
(1) Notwithstanding anything contained elsewhere in these rules, prior to any termination for nonpayment which would affect tenants, the utility shall notify the Commission in writing of the proposed termination. Upon notice and investigation of such proposed termination, or during any hearing pursuant to the complaint procedures provided for in ARM 38.2.2101 et seq., the Commission may make inquiry of the parties as to the following matters, among others:

(a) The amount the tenants have paid to the utility in relation to the amount equal to one month's bill, and the arrearage on any earlier bill due from tenants;

(b) The number of vacant units in the building;

(c) The extent to which the tenants have control over their source of money for rent payments, including such matters as the lateness of public assistance checks, direct rent payments by the Welfare Department to the tenants' landlord, or participation by tenants in a leased housing or rental assistance program;

(d) Whether the tenants are engaged in rent withholding against their landlord;

(e) The amount of payments recently received by the utility from the landlord and the size of the past due bill of the landlord;

(f) Whether the utility has pursued collection remedies, other than threatened termination of service, against the landlord;

(g) Weather conditions;

(h) The existence of illness of persons residing in the affected units;

(i) The ages of the persons residing in the affected units;

(j) The availability of other housing to the tenants; and

(k) The existence of, or potential for, termination of service by other companies.

(4) The Commission may consider and give due weight to the above matters in any decision rendered on the complaint.

History: Sec. 69-3-103, MCA, IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 657, Eff. 2/29/80.

38.5.1418   EXEMPTIONS
(1) If hardships result from the application of any of these termination rules, or if unusual difficulty is involved in complying with any of these rules, application may be made by any utility to the Commission for permanent or temporary exemption from its provision, but such application shall be supported by full and complete justification for such action.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 658, Eff. 2/29/80.

38.5.1501   EXISTING RATE INFORMATION
(1) Each electric utility shall transmit to each of its consumers a clear and concise statement containing the existing rate schedule applicable to such consumer.

(2) The statement of existing applicable rate schedule shall be sent at least once each year to each consumer, the initial statement to be sent within 90 days of adoption of this rule, or within 60 days of commencement of service to new consumers, whichever is later. If the applicable rate schedule is changed during the course of any year, a statement of the new rate schedule shall be sent to each consumer concurrent with the bill which reflects for the first time the change in rate.

(3) Each electric utility shall transmit to each of its electric consumers not less frequently than once each year a clear and concise summary explaining the existing rate schedules applicable to each of the major classes of its electric consumers for which there is a separate rate and shall identify each class of consumer whose rates are not summarized.

(4) The summary may be transmitted with the consumer's bill or in such other manner that each electric utility deems appropriate.

History: Secs. 2-4-303 and 69-3-103, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 2497, Eff. 8/29/80.

38.5.1502   PROPOSED RATE CHANGES INFORMATION

This rule has been repealed.

History: Secs. 2-4-303 and 69-3-103, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 2497, Eff. 8/29/80; REP, 1998 MAR p. 2968, Eff. 11/6/98.

38.5.1503   OPTIONAL OR ALTERNATIVE RATE INFORMATION

(1) Within 60 days of any establishment of optional or alternative rate schedules, and annually thereafter, the utility shall furnish each consumer who may be affected by them, a summary of the applicable rate schedules, together with a notice calling the attention of the consumer to the availability of alternative rate schedules for the consumer's particular class of service and stating that, upon request, the utility will assist the consumer in determining the billing for such service as is specified by the consumer under the various rate schedules.

History: Secs. 2-4-303 and 69-3-103, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 2498, Eff. 8/29/80.

38.5.1504   INDIVIDUAL CONSUMPTION INFORMATION
(1) Each electric utility, upon request of a consumer, shall deliver to the consumer a clear and concise written summary of the actual consumption of electric energy by the consumer during each billing period of the previous 12 months if such data is reasonably ascertainable by the utility.
History: Secs. 2-4-303 and 69-3-103, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 2498, Eff. 8/29/80.

38.5.1505   INFORMATION TO BE KEPT IN UTILITY OFFICES

(1) Each electric utility shall keep on file in every office of the utility where payments are received, copies of its rate schedules and rules and regulations applicable thereto. Reasonable notice shall be given consumers as to where this information is available.

History: Secs. 2-4-303 and 69-3-103, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 2498, Eff. 8/29/80.

38.5.1506   BILLING DISPUTE INFORMATION
(1) Each electric utility shall assign to one or more of its personnel in each of its offices where it transacts business with the public, the duty of hearing, in person, any dispute by a consumer. Such personnel shall consider the consumer's allegations and shall explain the consumer's account and the utility's contentions in connection therewith. Such personnel shall be authorized to act on behalf of the utility in resolving the complaint and act on behalf of the utility in resolving the complaint and shall be available during all business hours for the duty hereinbefore described.

 

 

 

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History: Secs. 2-4-303 and 69-3-103, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 2498, Eff. 8/29/80.

38.5.1601   DEFINITIONS
(1) For purposes of this rule:

(a) "New building" means:

(i) any building the construction of which commenced six months after the effective date of these rules; and

(ii) any existing building in which the replacement of the electrical system is commenced six months after the effective date of these rules, in which there are more than one unit and the occupant of each such unit has control over a portion of the electric energy used in such unit.

(b) "Construction" or "replacement" commences at the time physical labor involved with the erection of the building or the actual replacement of the electrical system begins.

(c) "Affected electric utilities" are all electric utilities subject to the jurisdiction of this Commission.

History: Secs. 2-4-303 and 69-3-103, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 2502, Eff. 8/29/80.

38.5.1602   PROHIBITION OF MASTER METERS
(1) All electricity delivered to a new building shall be sold by the electric utility on the basis of individual meter measurement for each occupancy unit, except for:

(a) Electricity delivered to hotels, motels, hospitals, dormitories, and other similar transient lodging;

(b) Where the individual contractor or owner of a new building provides to the utility, in writing before commencement of construction or replacement, data showing that the contractor's or owner's costs of purchasing and installing facilities for separate metering, when added to the utility's costs of purchasing and installing separate meters, exceed the long run benefits.

(2) Each electric utility shall, by March 1, 1981, submit to the commission for approval the criteria by which the utility proposes to analyze utility and owner or contractor costs when a determination of whether the costs of purchasing and installing separate meters exceed the long-range benefits of separate metering is required.

History: Secs. 2-4-303 and 69-3-103, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 2502, Eff. 8/29/80.

38.5.1603   UTILITIES TO ASSURE COMPLIANCE-APPEAL TO COMMISSION
(1) The affected electric utilities shall assure compliance with ARM 38.5.1602 and shall not furnish service to a new building that does not comply with ARM 38.5.1602. If a dispute arises between the utility and the builder or owner of a new building, either party may petition the commission to make a determination on the appropriateness of requiring individual meters for the building.

(2) The affected electric utilities shall submit to the public service commission, by March 1, 1981, and semi-annually thereafter:

(a) A list of the contractors or owners of new buildings who, during the reporting period, have submitted written data to the utility to establish exception status from ARM 38.5.1602; and

(b) A list of the contractors or owners of new buildings for which the utility has recognized such exception status during the reporting period.

 

 

 

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History: Secs. 2-4-303 and 69-3-103, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 2503, Eff. 8/29/80.

38.5.1701   DEFINITION
(1) As defined in the Public Utility Regulatory Policies Act of 1978, and for purposes of this rule:

(a) "Automatic adjustment clause" means a provision of a rate schedule which provides for increases or decreases (or both) , without prior hearing, in rates reflecting increases or decreases (or both) in costs incurred by an electric utility. Such term does not include an interim rate which takes effect subject to a later determination of the appropriate amount of the rate.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 2969, Eff. 11/29/80.

38.5.1702   AUTOMATIC ADJUSTMENT CLAUSES PROHIBITED

(1) Section 69-3-303 , MCA, which requires notice and public hearing before the commission may approve increases in utility rates of general applicability, prohibits the use of automatic adjustment clauses.

(2) It is the policy of the Montana public service commission to preserve the hearing process demanded by section 69-3-307 , MCA, and by the Montana Administrative Procedure Act, and on that ground to deny the use of automatic adjustment clauses in utility rate schedules of general applicability.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1980 MAR p. 2969, Eff. 11/29/80.

38.5.1801   PURPOSE AND OBJECT OF RULES

This rule has been repealed.

History: Secs. 69-3-101, 69-3-102, 69-3-103(1) and 69-3-106, MCA; IMP, Secs. 69-3-102 and 69-3-103(1), MCA; NEW, 1980 MAR p. 3064, Eff. 5/15/81; REP, 1987 MAR p. 2161, Eff. 11/28/87.

38.5.1802   DEFINITIONS (IS HEREBY REPEALED)

This rule has been repealed.

History: Secs. 69-3-101, 69-3-102, 69-3-103(1) and 69-3-106, MCA; IMP, Secs. 69-3-102 and 69-3-103(1), MCA; NEW, 1980 MAR p. 3064, Eff. 5/15/81; REP, 1987 MAR p. 2161, Eff. 11/28/87.

38.5.1803   PROHIBITIONS (IS HEREBY REPEALED)

This rule has been repealed.

History: Secs. 69-3-101, 69-3-102, 69-3-103(1) and 69-3-106, MCA; IMP, Secs. 69-3-102 and 69-3-103(1), MCA; NEW, 1980 MAR p. 3064, Eff. 5/15/81; REP, 1987 MAR p. 2161, Eff. 11/28/87.

38.5.1804   EXEMPTIONS (IS HEREBY REPEALED)

This rule has been repealed.

History: Secs. 69-3-101, 69 69-3-103(1) and 69-3-106, MCA; IMP, Secs. 69-3-102 and 69-3-103(1), MCA; NEW, 1980 MAR p. 3065, Eff. 5/15/81; REP, 1987 MAR p. 2161, Eff. 11/28/87.

38.5.1805   EXEMPTIONS BASED ON HISTORICAL SIGNIFICANCE

This rule has been repealed.

History: Secs. 69-3-101, 69-3-102, 69-3-103(1) and 69-3-106, MCA; IMP, Secs. 69-3-102 and 69-3-103(1), MCA; NEW, 1980 MAR p. 3066, Eff. 5/15/81; REP, 1987 MAR p. 2161, Eff. 11/28/87.

38.5.1806   EXEMPTIONS BASED ON MEMORIAL LIGHTING

This rule has been repealed.

History: Secs. 69-3-101, 69-3-102, 69-3-103(1) and 69-3-106, MCA; IMP, . 69-3-102 and 69-3-103(1), MCA; NEW, 1980 MAR p. 3066, Eff. 5/15/81; REP, 1987 MAR p. 2161, Eff. 11/28/87.

38.5.1807   EXEMPTIONS BASED ON COMMERCIAL LIGHTING OF TRADITIONAL SIGNIFICANCE

This rule has been repealed.

History: Secs. 69-3-101, 69-3-102, 69-3-103(1) and 69-3-106, MCA; IMP, Secs. 69-3-102 and 69-3-103(1), MCA; NEW, 1980 MAR p. 3067, Eff. 5/15/81; REP, 1987 MAR p. 2161, Eff. 11/28/87.

38.5.1808   EXEMPTION BASED ON SAFETY OF PERSONS AND PROPERTY

This rule has been repealed.

History: Secs. 69-3-101, 69-3-102, 69-3-103(1) and 69-3-106, MCA; IMP, Secs. 69-3-102 and 69-3-103(1), MCA; NEW, 1980 MAR p. 3067, Eff. 5/15/81; REP, 1987 MAR p. 2161, Eff. 11/28/87.

38.5.1809   TEMPORARY EXEMPTION BASED ON TIME NEEDED TO INSTALL SUBSTITUTE LIGHTING

This rule has been repealed.

History: Secs. 69-3-101, 69-3-102, 69-3-103(1) and 69-3-106, MCA; IMP, Secs. 69-3-102 and 69-3-103(1), MCA; NEW, 1980 MAR p. 3068, Eff. 5/15/81; REP, 1987 MAR p. 2161, Eff. 11/28/87.

38.5.1810   EXEMPTION BASED ON SUBSTANTIAL EXPENSE

This rule has been repealed.

History: Secs. 69-3-101, 69-3-102, 69-3-103(1) and 69-3-106, MCA; IMP, Secs. 69-3-102 and 69-3-103(1), MCA; NEW, 1980 MAR p. 3068, Eff. 5/15/81; REP, 1987 MAR p. 2161, Eff. 11/28/87.

38.5.1811   EXEMPTION BASED ON THE PUBLIC INTEREST

This rule has been repealed.

History: Secs. 69-3-101, 69-3-102, 69-3-103(1) and 69-3-106, MCA; IMP, Secs. 69-3-102 and 69-3-103(1), MCA; NEW, 1980 MAR p. 3068, Eff. 5/15/81; REP, 1987 MAR p. 2161, Eff. 11/28/87.

38.5.1901   DEFINITIONS
(1) The commission hereby adopts and incorporates by reference 18 CFR, Part 292, which sets forth general requirements and criteria for cogeneration and small power production facilities which are eligible for consideration under sections 201 and 210 of the federal Public Utility Regulatory Policies Act of 1978, Pub. L. 95-617. A copy of this incorporated material may be obtained from the Commission, 1701 Prospect Avenue, P.O. Box 202601, Helena, Montana 59620-2601.

(2) For purposes of these rules, the following definitions apply:

(a) "Avoided costs" means the incremental costs as determined by the commission to an electric utility of electric energy or capacity or both which, but for the purchase from the qualifying facility or qualifying facilities, such utility would generate itself or purchase from another source.

(b) "Cogeneration facility" means equipment used to produce electric energy and forms of useful thermal energy such as heat or steam, used for industrial, commercial, heating or cooling purposes, through the sequential use of energy.

(c) "Commission" means the Montana Public Service Commission.

(d) "Interconnection costs" means the reasonable costs of connection, switching, metering, transmission, distribution, safety provisions, and administrative costs incurred by the utility directly related to the installation and maintenance of the physical facilities necessary to permit interconnected operations with a qualifying facility, to the extent such costs are in excess of the corresponding interconnection costs which the electric utility would have incurred if it had not engaged in interconnected operations, but instead generated an equivalent amount of electric energy itself or purchased an equivalent amount of electric energy or capacity from other sources. Interconnection costs do not include any costs included in the calculation of avoided costs.

(e) "Purchase" means the purchase of electric energy or capacity or both from a qualifying facility by an electric utility.

(f) "Qualifying facility" or "facility" means:

(i) A cogeneration facility which meets the operating, efficiency, and ownership standards established by FERC regulations, 18 CFR, Part 292, as incorporated in ARM 38.5.1901(1) ; or

(ii) A small power production facility which meets the production capacity, energy source, and ownership criteria established by FERC regulations, 18 CFR, Part 292, as incorporated in ARM 38.5.1901(1) .

(g) "Rate" means any price, rate, charge, or classification made, demanded, observed or received with respect to the sale or purchase of electric energy or capacity, or any rule, regulation, or practice respecting any such rate, charge, or classification and any contract pertaining to the sale or purchase of electric energy or capacity.

(h) "Sale" means the sale of electric energy or capacity or both by an electric utility to a qualifying facility.

(i) "Small power production facility" means a facility with a power production capacity which, together with any other facilities located at the same site, does not exceed 50 megawatts of electricity, and which depends upon biomass, waste, or renewable resources for its primary source of energy. At least 50 percent of the equity interest in a small power production facility must be owned by a person not primarily engaged in the generation or sale of electric energy. The provisions of FERC regulations, 18 CFR, Part 292, as incorporated in ARM 38.5.1901(1) , respecting site location and primary energy sources are incorporated by reference in this definition.

(j) "Standard rates" means those rates calculated by a means approved by the commission which:

(i) In the case of purchases, are based on avoided costs to the utility, are computed annually by the utility and made available to the public, are reviewed by the commission, and are applicable to all contracts with qualifying facilities which do not choose to negotiate a different rate; or

(ii) In the case of sales by a utility to a qualifying facility, are the utility's tariff schedules in effect for members of the same class as the qualifying facility.

(k) "System emergency" means a condition on a utility's system which is likely to result in imminent significant disruption of service to customers or is imminently likely to endanger life or property.

(l) "Utility" means any public utility, as defined in 69-3-101 , MCA, which provides electric service subject to the jurisdiction of the Montana Public Service Commission.

History: 69-3-103, MCA; IMP, 69-3-102, MCA; NEW, 1981 MAR p. 459, Eff. 5/15/81.

38.5.1902   GENERAL PROVISIONS

(1) The commission hereby adopts and incorporates by reference 18 CFR, Part 292, which sets forth general requirements and criteria for cogeneration and small power production facilities which are eligible for consideration under sections 201 and 210 of the federal Public Utility Regulatory Policies Act of 1978, Pub. L. 95-617. A copy of this incorporated material may be obtained from the commission, 1701 Prospect Avenue, P.O. Box 202601, Helena, Montana 59620-2601.

(2) Any cogeneration or small power production facility in Montana, which is a qualifying facility under the criteria for size, fuel-use, and ownership established by FERC regulations, 18 CFR, Part 292, as incorporated in ARM 38.5.1901(1), is a qualifying facility eligible to participate, under these rules, in arrangements for purchases and sales of electric power with electric utilities regulated by the commission.

(3) Any qualifying facility in Montana which produces electric energy or capacity, or both, available for purchase by any public utility regulated by the commission, shall not be considered a public utility within the meaning of 69-3-101, MCA, and shall be exempt from regulation by the commission as a public utility, except insofar as these rules or any other commission order, tariff, requirement, or rule governing the activities of public utilities may affect the facility in its dealings with such regulated utilities. Nothing in these rules is to be construed to limit the full powers of regulation, supervision, and control of public utilities vested by law in the commission.

(4) Nothing in these rules shall exempt any qualifying facility from the applicable licensing or permit requirements which may be imposed on facilities by Montana laws and regulations governing water use, land use, community development and planning, zoning, air quality, environmental protection, or any other existing pertinent law or regulation administered by state agencies other than the commission.

(5) All purchases and sales of electric power between a utility and a qualifying facility that is not eligible for standard offer rates shall be accomplished according to the terms of a written contract negotiated between the parties. The utility shall compute the avoided costs for a qualifying facility that is not eligible for standard offer rates at the time the qualifying facility requests a contract. Only qualifying facilities having a nameplate capacity not greater than 3 MW are eligible for standard offer rates. All purchases and sales of electric power between a utility and a qualifying facility that is eligible for standard offer rates shall be accomplished according to the terms of a written contract between the parties or in accordance with the applicable standard tariff provisions as approved by the commission. The utility shall recompute short-term and long-term avoided costs for standard offer rates following submission of its least cost plan filing, ARM 38.5.2001 through 38.5.2012, or procurement plan filing, ARM 38.5.8201 through 38.5.8229. The contract shall specify:

(a) the nature of the purchases and sales;

(b) the applicable rate schedule or negotiated rates for the purchases and sales;

(c) the amount and manner of payment of interconnection costs;

(d) the means for measurement of the energy or capacity purchased or sold by the utility;

(e) the method of payment by the utility for purchases, and the method of payment by the facility for utility sales;

(f) any installation and performance incentives to be provided by the utility to the qualifying facility;

(g) the services to be provided or discontinued by either party during system emergencies;

(h) the term of the contract;

(i) applicable operating safety and reliability standards with which the qualifying facility must comply;

(j) appropriate insurance indemnity and liability provisions.

(6) All purchases and sales of electric power between a utility and a qualifying facility shall be compatible with the goal of the commission's integrated least cost resource planning and acquisition guidelines, ARM 38.5.2001 through 38.5.2012, and the commission's procurement plan guidelines, ARM 38.5.8201 through 38.5.8229.

(7) An existing qualifying facility smaller than 10 MW whose contract with a utility expires prior to July 1, 2015 will not be subject to the 3 MW size limitation for the purpose of obtaining a new or extended contract under an existing standard rate option. 

History: 69-3-103, 69-3-604, MCA; IMP, 69-3-102, 69-3-602, 69-3-603, MCA; NEW, 1981 MAR p. 459, Eff. 5/15/81; AMD, 1992 MAR p. 2764, Eff. 12/25/92; AMD, 2007 MAR p. 2140, Eff. 12/21/07; AMD, 2013 MAR p. 2161, Eff. 11/15/13; AMD, 2015 MAR p. 2318, Eff. 12/25/15.

38.5.1903   OBLIGATIONS OF UTILITIES TO QUALIFYING FACILITIES

(1) Each utility shall purchase any energy and capacity made available by a qualifying facility, except that a utility is not obligated to make purchases from an interconnected qualifying facility:

(i) during system emergencies if such purchase would contribute to the emergency;

(ii) as stipulated in the contract between the utility and the qualifying facility;

(iii) if, due to operational circumstances, purchases from a qualifying facility will result in costs greater than those which the utility would incur if it did not make such purchases. This provision is only applicable in the case of light loading periods in which the utility must cut back base load generation in order to purchase the qualifying facility's production followed by an immediate need to utilize less efficient generating capacity to meet a sudden high peak. Any utility seeking to invoke this exception must notify each affected qualifying facility and the commission one month prior to the time it intends to invoke this provision. Failure to properly notify the qualifying facilities and the commission or incorrect identification of such a period will result in reimbursement to the qualifying facility by the utility in an amount equal to that amount due had the qualifying facility's production been purchased.

(2) Except as provided in ARM 38.5.1903(1) , each utility shall purchase any energy and capacity made available by a qualifying facility:

(a) At a standard rate for such purchases which is based on avoided costs to the utility as determined by the commission; or

(b) If the qualifying facility agrees, at a rate which is a negotiated term of the contract between the utility and the facility and not to exceed avoided cost to the utility. However, the utility shall offer long-term contracts with qualifying facilities which permit a rate higher than avoided costs in the early years of the contract and a lower rate in the latter years.

(3) Each utility shall sell to any qualifying facility all electricity requested by the facility.

(4) Each utility shall make such interconnections with a qualifying facility in accordance with the provisions of ARM 38.5.1904.

(5) Each utility shall offer each qualifying facility the option of:

(a) operating in parallel with the utility grid, with a single meter monitoring only the net amount of electricity purchased or sold, or

(b) operating in a simultaneous purchase and sale arrangement with separate meters whereby all power produced by the qualifying facility is sold to the utility at the standard or negotiated purchase rate and all power used by the facility is sold to the facility by the utility at the tariff rate; provided that the requirements of ARM 38.5.1907 are met by the qualifying facility.

(6) Any utility which is otherwise obligated to purchase energy or capacity from a qualifying facility may, if the affected qualifying facility agrees, transmit energy or capacity purchased from the facility to any other electric utility. Any electric utility subject to the commission's jurisdiction that receives this energy or capacity shall be subject to the pricing provisions contained in these rules. The cost of transmission may be assigned to the qualifying facility.

(7) Each utility shall, if required by the commission, include installation and performance incentive provisions in any contract with a qualifying facility. Such provisions shall offer a maximum dollar amount per kw per month for any month in which the facility's energy output meets or exceeds specified levels of performance.

(8) Each utility shall, upon initial contact with a potential qualifying facility, provide the potential qualifying facility with one (1) copy of:

(a) these rules,

(b) the commission's approved standard provisions tariff, and

(c) the commission's standard complaint procedure.

History: 69-3-103, MCA; IMP, 69-3-102, MCA; NEW, 1981 MAR p. 459, Eff. 5/15/81.

38.5.1904   OBLIGATIONS OF QUALIFYING FACILITIES TO UTILITIES

(1) A qualifying facility shall specify in its contract with a utility the nature of the purchases undertaken in the contract, including:

(a) The technology used in the production of energy or capacity by the qualifying facility;

(b) The qualifying facility's best estimate of the facility's energy and/or capacity supply characteristics, including its availability during utility system daily and seasonal peak periods and during system emergencies.

(2) A qualifying facility shall be fully responsible for interconnection costs and shall:

(a) Submit, for written approval prior to actual installation equipment specifications and detailed plans to the utility for the installation of its interconnection facilities, control and protective devices, and facilities to accommodate utility meter(s) .

(b) Provide and install necessary meter socket and enclosure equipment at or near the point of interconnection, unless the utility has agreed to install the equipment and the facility has agreed to pay for this service;

(c) Reimburse the utility for special or additional interconnection facilities, including control or protective devices, time of delivery metering, and reinforcement of the utility's system to receive or continue to receive the power delivered under the contract. Such reimbursement may be accomplished by means of amortization over a reasonable period of time within the term of the contract and such costs must be reasonable according to industry standards.

(3) Interconnection costs undertaken by the utility shall be reimbursed by the qualifying facility on a nondiscriminatory basis with respect to other customers with similar load characteristics.

(4) A qualifying facility shall be required to provide power to a utility during a system emergency only to the extent specified in the contract between the facility and the utility, unless the qualifying facility is able to supply additional power and agrees to do so.

History: 69-3-103, MCA; IMP, 69-3-102, MCA; NEW, 1981 MAR p. 459, Eff. 5/15/81.

38.5.1905   RATES FOR PURCHASES
(1) Each utility shall submit to the commission within 30 days of the filing of its integrated least cost resource plan, or an update to that plan, as required by ARM 38.5.2001 - 38.5.2012, the following cost data for use by the commission in determining avoided costs and standard rates therefrom.

(a) The estimated avoided cost on the electric utility's system, solely with respect to the energy component, for various levels of purchases from qualifying facilities. Such levels of purchases shall be stated in blocks of 10 megawatts and in blocks of 100 megawatts for systems with peak demand of 1000 megawatts or more, and in blocks of 10 megawatts and in blocks equivalent to 10 percent of the system peak demand for systems of less than 1000 megawatts. The avoided costs shall be stated on a cents per kilowatt-hour basis, during daily and seasonal peak and off-peak periods, by year, for the current calendar year and each of the next five years;

(b) The electric utility's integrated least cost resource plan, developed with reference to the commission's guidelines in ARM 38.5.2001 - 38.5.2012, for the addition of capacity by amount and type, for purchases of firm energy and capacity, and for capacity retirements for each year during the succeeding ten years; and

(c) The estimated capacity costs at completion of the planned capacity additions and planned capacity firm purchases, on the basis of dollars per kilowatt, and the associated energy costs of each unit, expressed in cents per kilowatt hour. These costs shall be expressed in terms of individual generating units and of individual planned firm purchases and shall represent the avoidable resources in the utility's integrated least cost resource plan developed according to the commission's guidelines, ARM 38.5.2001 - 38.5.2012.

(2) Each utility shall purchase available power from any qualifying facility at either the standard rate determined by the commission to be appropriate for the utility, or at a rate which is a negotiated term of the contract between the utility and the qualifying facility.

(3) The rate paid by the utility for any purchase shall not exceed the avoided costs to the utility, calculated:

(i) At the time of delivery of the facility's energy or capacity, for "as available" purchases; or

(ii) At either the time of delivery or the time the obligation is incurred, at the facility's option, for purchases of firm power over the term of the contract.

(4) The standard rate for purchases from a qualifying facility shall be that rate calculated on the basis of avoided costs to the utility which is determined by the commission to be appropriate for the particular utility after consideration, to the extent practicable, of the avoided cost data submitted to the commission by the utility and other interested persons.

(5) Assignment of a particular qualifying facility to the appropriate standard rate schedule for purchases by the utility should consider:

(a) The availability of capacity and energy from the qualifying facility during system daily and seasonal peak periods;

(b) The expected or demonstrated reliability of the qualifying facility;

(c) The relationship of the availability of energy or capacity from the qualifying facility to the ability of the utility to avoid cost;

(d) The contractual obligations the owner or operator of the qualifying facility is willing to undertake.

(e) The full range of resource attributes listed in the commission's integrated least cost resource planning and acquisition guidelines, ARM 38.5.2001 - 38.5.2012.

(6) If a qualifying facility has provided in its contract with a utility that measurement of facility energy input to the utility system and measurement of facility load will be accomplished with one meter, the qualifying facility shall be subject to a net billing system, whereby the utility shall pay the standard rate or the negotiated rate for purchases only for the facility's input to the system which is in excess of the facility's load.

(7) If the qualifying facility has agreed in its contract with a utility that measurement of facility input to the utility system shall be accomplished by metering separate from that measuring the facility load, the qualifying facility may receive payment for all of the energy it supplies to the utility according to the applicable schedule of standard rates for purchases. Unless the qualifying facility has contracted for a different rate, the standard rate is applicable regardless of whether the qualifying facility is simultaneously served by the utility for the facility's load, and regardless of the rate charged by the utility for such simultaneous sales.

History: 69-3-103, MCA; IMP, 69-3-102, MCA; NEW, 1981 MAR p. 459, Eff. 5/15/81; AMD, 1992 MAR p. 2764, Eff. 12/25/92.

38.5.1906   RATES FOR SALES
(1) Each utility shall sell power delivered to a qualifying facility under the terms of the contract at the same rate applicable to the utility's nongenerating customers belonging to the same class as the qualifying facility or having similar load or other cost-related characteristics.

(2) The standard rates for sales of power to interconnected qualifying facilities shall be each utility's current applicable tariff schedules approved by the commission.

History: 69-3-103, MCA; IMP, 69-3-102, MCA; NEW, 1981 MAR p. 459, Eff. 5/15/81.

38.5.1907   OPERATING SAFETY PROVISIONS
(1) The commission hereby adopts and incorporates by reference commission rule ARM 38.5.1010, which adopts the National Electrical Safety Code as the construction standard for utility lines and facilities.

(2) Each qualifying facility shall, in the design, installation, interconnection, maintenance, and operation of the facility, comply with the requirements of the National Electrical Safety Code.

(3) Each qualifying facility seeking parallel operation with any utility shall provide such control and protective devices as required by the utility for such operation.

(4) Each utility shall have the right:

(a) To enter the premises of the qualifying facility at reasonable times and with reasonable notice for inspection of the facility's protective devices, and

(b) To disconnect without notice if a hazardous condition exists in the generation or other equipment of the qualifying facility, and such immediate action is necessary to protect persons, utility facilities or other customers' facilities from damage or interference imminently likely to result from the hazardous condition.

(5) The commission shall have the same power to investigate accidents occurring in the operation of any qualifying facility which result in death or serious injury to any person as it has under section 69-3-107 , MCA, with respect to public utilities.

History: 69-3-103, MCA; IMP, 69-3-102, MCA; NEW, 1981 MAR p. 459, Eff. 5/15/81; AMD, 2006 MAR p. 2966, Eff. 12/8/06.

38.5.1908   INFORMATION TO BE PROVIDED TO THE COMMISSION

(1) Pursuant to initial contact with a potential qualifying facility, each utility shall provide the commission with one (1) copy of the utility's initial written response.

History: 69-3-103, MCA; IMP, 69-3-102, MCA; NEW, 1981 MAR p. 459, Eff. 5/15/81.

38.5.2001   GOAL AND POLICY
(1) The goal of these integrated least cost resource planning guidelines is to encourage electric utilities to meet their customers' needs for adequate, reliable and efficient energy services at the lowest total cost while remaining financially sound. To achieve this goal utilities should plan to meet future loads through timely acquisition of an integrated set of demand- and supply-side resources. Importantly, this includes actively pursuing and acquiring all cost effective energy conservation. The cost effectiveness of all resources should be determined with respect to long-term societal costs.

(2) These guidelines represent the policy of the Montana public service commission concerning proper integrated least cost resource planning and acquisition. Electric utilities under the jurisdiction of the Montana public service commission are required to file least cost plans as outlined below.

(3) These guidelines do not change the fundamental ratemaking relationship between the utilities and the commission. Rather, they are a restatement of the commission's regulatory objective: to efficiently allocate society's resources to the provision of electricity services and ensure just and reasonable rates for consumers.

(4) The guidelines provide the utilities with policy and planning guidance. With the exception of ARM 38.5.8301, they do not specify the outcome of the planning process nor mandate particular investment decisions. Each utility's plan should be the result of that utility's unique planning process and judgment.

(5) Integrated least cost planning may demonstrate that, on the basis of overall societal costs, previously rate-based resources should be abandoned and replaced by new resources. In addition, least cost plans may show that it is in society's best interest for construction of a new resource to be abandoned in favor of some other resource option. If such situations occur, the commission will open separate proceedings in which it will determine how recovery of the undepreciated, rate-based capital costs will be accomplished.

(6) The guidelines do not shift risk; rather, they suggest ways to reduce and manage the risk of resource choices to shareholders, ratepayers and society.

(7) Existing resources should be operated, and new resources acquired, only when needed and in a manner consistent with these guidelines.

(8) Until such time as the commission determines that market failures and market barriers which may interfere with ratepayer investment in conservation have been reduced or eliminated, utility investment in conservation measures installed on the customer's side of the meter should be considered cost effective up to 115 percent of the utility's long-term avoided cost.

(9) The utility should thoroughly document the exercise of its judgment in weighing the importance of conflicting decision objectives. The utility should prepare such documentation so that it can be reasonably understood by the commission and interested parties.

(10) Resource decisions have a significant impact on the public. Each utility can best meet the diverse goals of its shareholders, its ratepayers and society if it involves the public in resource planning. To facilitate such involvement the resource planning process should be thoroughly documented and reasonably understandable.

(11) Implementation of these guidelines will require a commitment from both the public and private sectors to honor the spirit and intent of the guidelines.

History: 69-3-103, 69-3-1204, 69-8-1006, MCA; IMP, 69-3-102, 69-3-106(1), 69-3-201, 69-3-1202, 69-8-1004, 69-8-1005, MCA; NEW, 1992 MAR p. 2764, Eff. 12/25/92; AMD, 2006 MAR p. 1461, Eff. 6/2/06.

38.5.2002   DEFINITIONS
(1) "Integrated least cost resource planning" is an ongoing, dynamic and flexible process which:

(a) explicitly manages the consequences of uncertainty and risk associated with a utility's market characteristics and supply alternatives,

(b) integrates the demand- and supply-side resources that represent the least cost to society over the long-term,

(c) explicitly weighs a broad range of resource attributes (e.g., environmental externalities) in the evaluation of alternative resources,

(d) is reasonably understandable to interested persons (including members of the general public) and the commission,

(e) involves stakeholders and nonutility expertise in utility resource planning,

(f) results from a planning process within the utility which facilitates communication and coordination among the entities dealing with utility finances, demand forecasts, demand- and supply-side resource evaluations, as well as other relevant entities, and

(g) continually monitors and develops data on the cost effectiveness and actual productivity of conservation programs.

(2) "Energy conservation" is any reduction in electric power consumption resulting from:

(a) increased energy efficiency in the production, transmission, distribution and customer end-use applications of electricity, and

(b) increased customer knowledge concerning the societal impacts of consumption. (Such knowledge may be the result of economically efficient energy prices or other means of communication when prices are of the "second best" nature.)

(3) "Energy efficiency" refers to a ratio of output to input; a ratio of one indicates the highest conceptual degree of efficiency. In terms of least cost resource planning, the output ultimately produced is an energy service; the generation, transmission, distribution and end-use conversion of electricity are intermediate steps in the production of the energy service. The input may be a fuel source such as coal, wind or moving water, which is converted to electricity. Energy efficiency encompasses the entire spectrum, from conversion of the fuel source to electricity, to the energy service finally consumed.

(4) "Societal cost" consists of all costs to the utility plus all external costs which are imposed on the global society.

(5) "External costs" or "negative externalities" are costs imposed on society, but which are not directly borne by the producer in production and delivery activities. Due to imperfections in, or the absence of, markets, the producer's production and pricing decisions do not account for these costs.

(6) "Planning costs" are the costs of evaluating the future demand for energy services and of evaluating alternative methods of satisfying that demand. Planning costs include, but may not be limited to, costs associated with:

(a) econometric and end-use forecasting,

(b) identification and evaluation of alternative demand- and supply-side resource options,

(c) evaluation of externalities associated with alternative resources, and

(7) "Portfolio development costs" are costs of preparing a resource in a portfolio for prompt and timely acquisition. Portfolio development costs include, but may not be limited to, costs associated with:

(a) negotiating contracts with competitively acquired resources,

(b) acquiring and holding resource options, and

(c) developing and maintaining the capability to rapidly acquire demand-side resources.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-106(1), 69-3-201, MCA, ARM 38.5.2001; NEW, 1992 MAR p. 2764, Eff. 12/25/92.

38.5.2003   ENVIRONMENTAL EXTERNALITIES
(1) Negative externalities result in over consumption of goods and services and misallocation of society's resources. It is in society's interest to internalize external costs when the marginal benefits of continued efforts to do so are greater than the marginal costs. Utilities should address external environmental costs in their existing resource portfolios and in resource planning and acquisitions as follows.

(a) A range of environmental impact mitigation and control costs should be quantified. The value of unmitigated environmental impacts should be estimated using the best available methods for assessing environmental costs. External environmental costs which are nonquantifiable should not be ignored; they should be incorporated using documented judgment in the multiple attribute evaluation;

(b) The uncertainty and risk associated with the cost of future environmental regulations which may be imposed on a utility should be assessed and incorporated into resource planning decisions;

(c) Uncertainty associated with the size and importance of external environmental costs should be incorporated into the risk assessment analysis;

(d) Existing and potential resources should be weighed and ranked, in part, on the basis of their environmental impacts. The utility should assign weights and ranks by drawing on the best available scientific and engineering methods, its own judgment and input from the public;

(e) The external environmental costs associated with all resource alternatives, including continued operation of existing resources, PURPA resources and resources identified through competitive solicitations, should be analyzed consistently. The type of analysis specified in the decision standards in the administrative rules of the Major Facility Siting Act may be used as a reference. See ARM 36.7.101 - 36.7.5502;

(f) In evaluating resource options utilities should recognize protected areas such as wildernesses, parks, the Northwest Power Planning Council's (NWPPC) designated "protected areas" (see protected areas and amendments and responses to comments; NWPPC issue paper 88-22) and any areas inhabited by protected wildlife;

(g) Utilities should recognize the external benefits associated with resources that correct or reduce existing environmental damage to, for example, critical airsheds and superfund sites;

(h) Sensitivity analyses should be conducted to determine if more environmentally benign resource alternatives exist which can provide equivalent benefits at lower societal cost.

(2) The external costs associated with transmission facilities should be accounted for in the utilities' least cost plans.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-106(1), 69-3-201, MCA, ARM 38.5.2001; NEW, 1992 MAR p. 2764, Eff. 12/25/92.

38.5.2004   UNCERTAINTY AND RISK
(1) Integrated least cost resource planning and resource acquisition requires evaluating uncertainty and managing risk associated with a utility's market characteristics and its alternatives for supplying energy services and products. In order to evaluate uncertainty and manage risk, utilities should determine the sources of risk using their own techniques and judgment. Sources of risk include, but may not be limited to:

(a) resource lead-time,

(b) water availability,

(c) future load growth,

(d) shortcomings of various forecasting methods,

(e) performance and useful lives of existing resources,

(f) cost and performance of future demand- and supply-side resources,

(g) the rate of technological change,

(h) future fuel availability and price,

(i) the existence and social evaluation of environmental externalities, and

(j) the future sociopolitical and regulatory environment.

(2) Utilities should consider risk management techniques when evaluating and acquiring resources. Planning techniques that manage the risk associated with the above sources include, but may not be limited to:

(a) assessing the risk of resource alternatives,

(b) developing resource options which increase scheduling flexibility,

(c) developing small, short lead-time resources which better match loads with resources and reduce the amount of, and period over which, capital must be invested to meet future load growth,

(d) diversifying the resource portfolio to allow adaptation to a range of future outcomes,

(e) managing loads to increase utility control over resource requirements,

(f) encouraging the acquisition of resources through competitive processes,

(g) incorporating consumer response to rate design into forecasting models,

(h) providing for public involvement and education in resource decisions, and

(i) maintaining a transparent integrated least cost resource planning and acquisition process (i.e., one which produces resource plans that can be reasonably understood by the public and the commission.)

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-106(1), 69-3-201, MCA, ARM 38.5.2001; NEW, 1992 MAR p. 2764, Eff. 12/25/92.

38.5.2005   INITIAL RESOURCE SCREENING
(1) A critical component of integrated least cost resource planning and acquisition is the initial screening of demand- and supply-side resource alternatives. This involves weighing, ranking, sizing, evaluating and selecting the individual resources which will eventually form the resource plan. Utilities should use the best scientific and engineering methods available, their own judgment and public comment to weigh and rank the operation of existing resources and the acquisition of new resources based on consideration of multiple resource attributes. Resource attributes are variables that may affect (positively and negatively) the cost society incurs when the resource is acquired and allocated to the production of energy services. Some attributes may be accounted for in utility costs; others may represent externalities. Since efficient resource acquisition requires information about the societal resource cost, and since the societal resource cost will be a major determinant of a resource's initial suitability as a least cost resource, utilities should ensure that the cost assigned to each resource reflects all relevant attributes. Attributes that may influence the societal cost of a resource include, but may not be limited to:

(a) environmental externalities,

(b) the overall efficiency with which the resource produces energy services,

(c) administrative costs of acquisition programs,

(d) the cost effectiveness of the resource, determined in the context of the utility system,

(e) risk and uncertainty,

(f) reliability, and

(g) associated transmission costs. The transmission costs, positive and negative, associated with the resource should be imputed based on relevant long run avoidable costs. The imputed costs should reflect the utility's best estimate of the opportunity cost value of new or existing transmission capacity that would be consumed by the resource if that resource were acquired. This value should be added to the price of the resource.

(2) Demand-side resources should be sized and evaluated consistent with the following guidelines.

(a) The impact of price-induced conservation, (i.e., conservation undertaken by customers in the absence of utility sponsored programs) should be accounted for either in the load forecast or as part of the total available resource. In designing programs to acquire cost effective resources a utility should estimate and pay the price necessary to achieve the resource at the time of acquisition, which may be less than the cost effective level due to customer or other contributions.

(b) The revenue impacts of decreased sales resulting from the implementation of demand-side resources should not be added to the cost of the resources acquired through such programs.

(c) A nonparticipant (no-losers) test considers utility-sponsored programs cost effective only if rates to customers that do not participate in the program are not affected by the program. A nonparticipant test should not be applied to demand-side resources just as it is not applied to any other resource choice.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-106(1), 69-3-201, MCA, ARM 38.5.2001; NEW, 1992 MAR p. 2764, Eff. 12/25/92.

38.5.2006   OPTIMIZATION OF SUPPLY AND DEMAND-SIDE RESOURCES

(1) Utilities should optimize demand- and supply-side resources by applying process planning cycles such as those illustrated in Figure 1 below.

(2) The optimization process should extend to the utility's reserve requirement. Regardless of participation in reserve margin pooling groups, utilities should analyze their reserve margins as part of their least cost planning efforts.

(3) The utility's application of the process planning cycles should be thoroughly documented so that it can be reasonably understood by groups contributing to it, as well as by the commission and interested persons.

(4) Each utility should maintain a broad-based advisory body (e.g., customers and public interest organizations) to review, evaluate and recommend modifications to planning processes, resource plans, resource acquisition processes and efficiency programs. Maintaining an effective advisory body may require the utility to provide funding for member technical support.

Figure 1: Least Cost Planning Optimization Process Example

 

 

 

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-106(1), 69-3-201, MCA, ARM 38.5.2001; NEW, 1992 MAR p. 2764, Eff. 12/25/92.

38.5.2007   LEAST COST RESOURCE PLANS
(1) Plans which are consistent with the overall goal and definition of integrated least cost resource planning and acquisition will not concentrate solely on minimizing dollar costs, but will also consider the impacts on society and the environment over the long-term. Least cost resource plans should seek to provide the best balance of the following non-all-inclusive list of objectives:

(a) minimize the societal cost of producing energy services,

(b) minimize the costs of risk not incorporated into the formal cost analysis,

(c) minimize the environmental and other external costs not incorporated into the formal cost analysis,

(d) maintain economical levels of service reliability which incorporate consideration of customers' value of service reliability, and

(e) distribute costs and benefits in an equitable manner.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-106(1), 69-3-201, MCA, ARM 38.5.2001; NEW, 1992 MAR p. 2764, Eff. 12/25/92.

38.5.2008   RATE DESIGN
(1) Rate design is a key element in the integrated least cost planning process. A long-term resource planning process that is consistent with the guidelines will:

(a) explicitly recognize and utilize the ability of rate design to yield demand-side resources. Although rate designs will be determined in contested case proceedings, on-going integrated least cost planning encompasses such proceedings. Therefore, utilities should keep resource planning in mind when proposing rate designs.

(b) ensure that, to the extent possible, the goals and objectives of all rate design efforts are consistent with the goal and definition of integrated least cost planning, while recognizing other rate design objectives such as rate stability. In considering rate design as it relates to integrated least cost resource planning and acquisition, the influence of externalities should be incorporated into prices proposed in rate case proceedings. Total marginal cost of service derived in rate case proceedings should reflect total societal cost as described in these guidelines.

(2) If a utility is faced with the potential loss of a large industrial load and is considering a request for a retention rate, it should use least cost planning methodologies and tools to evaluate the impacts of retaining or losing the load and to consider alternatives such as efficiency improvements and pricing alternatives.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-106(1), 69-3-201, MCA, ARM 38.5.2001; NEW, 1992 MAR p. 2764, Eff. 12/25/92.

38.5.2009   ELECTRIC UTILITY MARKETING GOALS, MARKETING PROGRAMS, AND COMPETITION FOR LARGE DISCRETIONARY LOADS

(1) To engage in efficient, economic and cost effective marketing programs, electric utilities should:

(a) evaluate marketing goals and efforts consistently with the overall goal and definition of integrated least cost planning to determine the effect on the future need for resources and capital and operating costs over time; projected revenues from new or altered loads resulting from marketing should be compared with the projected changes in overall costs to determine whether the changes are desirable from a societal cost effectiveness perspective;

(b) evaluate the effect that competing for large discretionary loads and off-system sales which could alter the most recent least cost resource plan has on resource costs and revenues, near-term rates, corporate profits and the full range of integrated least cost planning criteria in these guidelines.

(2) All utility marketing efforts should be consistent with the commission's guideline on rate design and integrated least cost planning.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-106(1), 69-3-201, MCA, ARM 38.5.2001; NEW, 1992 MAR p. 2764, Eff. 12/25/92.

38.5.2010   COMPETITIVE RESOURCE SOLICITATIONS
(1) Competitive resource solicitation is important to the overall least cost planning process in general and efficient resource acquisition in particular. Competitive solicitations provide utilities valuable information on available demand- and supply-side resources and the costs of those resources. Utilities should implement competitive solicitations as follows.

(a) Before acquiring any new resources, utilities should thoroughly test the market for cost effective resource alternatives.

(b) Need for new or alternative resources should not be assessed in terms of capacity deficit only, but also in terms of the avoidable societal costs of existing resources compared to alternative resources.

(c) Competitive resource solicitation and acquisition should not be seen as a substitute for least cost planning or any utility program encompassed by the least cost planning process.

(d) Resources identified through competitive solicitations should be evaluated with respect to the planning principles outlined in the guidelines.

(e) An all-source solicitation means requests for proposals are issued to the broadest practical group of potential demand- and supply-side resource providers, including, but not limited to: PURPA qualifying facilities (QFs) , nonutility independent power producers, publicly- and investor-owned utilities, power marketing agencies, international suppliers, and organizations capable of providing demand-side resources, including efficiency improvements to the utility's system. Further, an all-source solicitation should also place utility resources selected in the least cost planning process in competition with solicited resources.

(f) Bid proposals which involve demand-side resources should not be allowed to develop only the least expensive and most readily obtainable resource potential while stranding other measures which would be cost effective only if acquired in conjunction with those higher return resources.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-106(1), 69-3-201, MCA, ARM 38.5.2001; NEW, 1992 MAR p. 2764, Eff. 12/25/92.

38.5.2011   REGULATORY AND MARKET BARRIERS TO INTEGRATED LEAST COST PLANNING AND ACQUISITION OF DEMAND-SIDE RESOURCES

(1) Integrated least cost resource planning and acquisition is an ongoing process that may be continually refined and improved. Utilities should continually assess existing barriers which could impede and incentives which could encourage efforts to engage in integrated least cost planning and resource acquisition. These efforts should be thoroughly documented to facilitate efforts to remove the barriers and integrate the incentives.

(2) Utility directed demand-side programs should be focused on specific sectors where market barriers or other market failures prevent demand-side resources from being effectively and efficiently developed. Marginal investment in conservation on the customer's side of the meter should be considered cost effective up to 115 percent of the utility's long-term avoided costs. The avoided cost, to which the 115 percent should be applied, should be based on the avoidable resources in the utility's integrated least cost resource plan.

(3) Except when the entire resource would be lost as a result, utility directed demand-side programs should not be focused on "cream skimming." The least expensive and most readily obtainable resource potential should only be acquired if other measures, which would be cost effective only if they are acquired in conjunction with those higher return resources, are also acquired.

(4) The commission realizes that the concept of least cost planning embraced by these guidelines involves a certain amount of utility investment which may never be attributable to a particular resource acquisition. This investment is needed if the least cost planning process is to function properly. No guarantee can be given that utilities will recover all costs put under the heading of "planning costs" or "portfolio development costs." However, rate recovery of planning and portfolio development costs will be allowed if, upon commission review, the utility's investment in planning and portfolio development is found to be reasonable.

History: 69-3-103; IMP, 69-3-102, 69-3-106(1), 69-3-201, MCA, ARM 38.5.2001; NEW, 1992 MAR p. 2764, Eff. 12/25/92.

38.5.2012   SUBMITTING LEAST COST PLANS
(1) Utilities shall file least cost plans with the commission on a two year cycle. In the intermediate year the utility should file any necessary updates to the plan filed the previous year. Montana Power Company should file its first plan on March 15, 1993 and on March 15 of each odd year thereafter. Montana-Dakota Utilities should file its first plan on September 15, 1993 and on September 15 of each odd year thereafter. Pacific Power and Light Company should file its first plan on May 15, 1994 and on May 15 of each even year thereafter. All other electric utilities should file plans by March 15, 1994. Utility least cost plans and updates should be mailed to each person indicated on a service list to be compiled by the commission. In addition, utilities should make their plans available for public inspection at utility offices designated as follows: Montana Power Company - Butte, Missoula, Helena, Bozeman, Great Falls, Billings, Havre, Glasgow, Lewistown and Hamilton; Pacific Power and Light Company - Kalispell and Libby; Montana-Dakota Utilities Company - Glendive, Miles City and Billings. Utilities should also make their plans available for public inspection at each county library and each university, college, and junior college library in their Montana service territories.

(2) Persons wanting to comment in writing on a plan must do so within 30 days following the submission of the plan. Comments must be served on the commission, Montana Consumer Council, Department of Natural Resources and Conservation and on the utility. Opportunity to comment orally on a plan may be provided through informal hearings that will take place no later than 60 days following the close of the written comment period. Based on its review of the plan and consideration of the comments of others, the commission may issue a general statement indicating whether the plan conforms to the guidelines. A plan which conforms to the guidelines will not bind the commission in its review of utility resource plans in conjunction with a rate case nor will it bind the commission for purposes of setting rates. If a utility files a rate case in the same year as it is required to file a least cost plan, the least cost plan shall be the resource plan upon which the marginal cost of service and rate design studies are based. If a utility files a rate case in an intermediate year, the least cost plan from the previous year, updated as necessary, shall be the resource plan upon which the marginal cost of service and rate design studies are based.

(3) Along with the least cost plan, each utility shall submit an action plan which illustrates how the plan will be implemented over the near-term under various load and resource scenarios.

(4) The forecasting process must be documented and reasonably understandable to the public and the commission. Although the commission may determine that a least cost plan conforms to these guidelines, it may not endorse the forecasting methods used by the utility or the results of the forecast; the commission will not transfer any risk associated with incorrect forecasts to ratepayers.

(5) At the request of an electric utility, and for good cause shown, the commission may waive the requirement to file a least cost plan.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-106(1), 69-3-201, MCA, ARM 38.5.2001; NEW, 1992 MAR p. 2764, Eff. 12/25/92.

38.5.2016   RECOVERY OF ABANDONMENT COSTS
(1) The extent of electric utility recovery of abandonment costs as defined at 69-3-1203 (1) , MCA, will be governed by the commission's usual ratemaking consideration of plant and expenses.
History: 69-3-1206, MCA; IMP, 69-3-1206, MCA; NEW, 1997 MAR p. 78, Eff. 1/17/97.

38.5.2101   ELECTRIC UTILITY LINE AND FACILITY MAINTENANCE -- MINIMUM STANDARDS
(1) Each public utility providing electric service subject to the jurisdiction of the commission shall, at the minimum, maintain its electric utility lines and facilities pursuant to the national electrical safety code as that code is identified in 69-4-201 , MCA, the effective edition of which is designated at ARM 38.5.1010.

(2) The edition of the code applicable at the time of maintenance shall be that in effect by statute or rule at the time of construction of the electric utility line or facility unless, without undue expense, the edition in effect by statute or rule at the time of maintenance can reasonably be complied with.

History: 69-3-103, MCA; IMP, 69-3-108 and 69-4-201, MCA; NEW, 1993 MAR p. 1672, Eff. 7/30/93; AMD, 2004 MAR p. 339, Eff. 2/13/04.

38.5.2102   ELECTRIC UTILITY NOMINAL VOLTAGE AND PERMISSIBLE RANGE OF VARIANCE

(1) The standards of product and service for each public utility providing electric service subject to the jurisdiction of the commission shall, whether established by ordered tariff provision or administrative rule, allow for a nominal voltage and permissible range of variation as specified in American National Standards Institute (ANSI) C84.1 2016. A copy of ANSI C84.1 may be obtained from the American National Standards Institute, Operations, 25 West 43rd Street, 4th Floor, New York, New York 10036, or may be reviewed at the Public Service Commission Offices, 1701 Prospect Avenue, Helena, Montana 59620-2601.

(2) This rule shall not apply:

(a) to transmission systems not used to directly serve customers;

(b) where customers specifically request a voltage other than standard nominal system voltages as specified in ANSI C84.1; or

(c) in instances where voltage is in excess of 34,500 volts.

 

History: 69-3-103, MCA; IMP, 69-3-108, MCA; NEW, 1993 MAR p. 1672, Eff. 7/30/93; AMD, 1997 MAR p. 317, Eff. 2/11/97; AMD, 2004 MAR p. 339, Eff. 2/13/04; AMD, 2009 MAR p. 90, Eff. 1/30/09; AMD, 2015 MAR p. 309, Eff. 3/27/15; AMD, 2017 MAR p. 789, Eff. 6/10/17.

38.5.2201   STATEMENT OF GENERAL POLICY
(1) Pursuant to 69-3-207 , MCA, the commission is empowered to enforce the safety regulations and provisions adopted under the Natural Gas Pipeline Safety Act of 1968 (NGPSA) , as well as any amendments thereto. The rules of this subchapter 22 as well as the rules in subchapter 23 adopt regulations and provisions by reference where deemed necessary, identify the exceptions and qualifications applicable in Montana where deemed necessary, and describe the procedures and enforcement authority exercised by the commission for achieving and maintaining pipeline safety.
History: 69-3-207, MCA; IMP, 69-3-207, MCA; NEW, 1988 MAR p. 2569, Eff. 12/9/88; AMD, 1997 MAR p. 317, Eff. 2/11/97.

38.5.2202   INCORPORATION BY REFERENCE OF FEDERAL PIPELINE SAFETY REGULATIONS

(1) The commission adopts and incorporates by reference the U.S. Department of Transportation (DOT) Pipeline Safety Regulations, Code of Federal Regulations (CFR), Title 49, chapter 1, subchapter D, parts 191, 192, and 193, including all revisions and amendments enacted by DOT on or before October 30, 2016. A copy of the referenced regulations may be obtained from United States Department of Transportation, Office of Pipeline Safety, Western Region, 12300 West Dakota Avenue, Suite 110, Lakewood, Colorado 80228, or may be reviewed at the Public Service Commission Offices, 1701 Prospect Avenue, Helena, Montana 59620-2601.

 

History: 69-3-207, MCA; IMP, 69-3-207, MCA; NEW, 1988 MAR p. 2569, Eff. 12/9/88; AMD, 1990 MAR p. 1897, Eff. 10/12/90; AMD, 1993 MAR p. 3043, Eff. 12/24/93; AMD, 1995 MAR p. 40, Eff. 1/13/95; AMD, 1995 MAR p. 2425, Eff. 11/10/95; AMD, 1997 MAR p. 317, Eff. 2/11/97; AMD, 1998 MAR p. 180, Eff. 1/16/98; AMD, 1999 MAR p. 153, Eff. 1/15/99; AMD, 2000 MAR p. 752, Eff. 3/17/00; AMD, 2001 MAR p. 47, Eff. 1/12/01; AMD, 2001 MAR p. 2467, Eff. 12/21/01; AMD, 2003 MAR p. 564, Eff. 3/28/03; AMD, 2004 MAR p. 339, Eff. 2/13/04; AMD, 2005 MAR p. 386, Eff. 3/18/05; AMD, 2006 MAR p. 231, Eff. 1/27/06; AMD, 2006 MAR p. 2966, Eff. 12/8/06; AMD, 2007 MAR p. 2145, Eff. 12/21/07; AMD, 2009 MAR p. 90, Eff. 1/30/09; AMD, 2010 MAR p. 226, Eff. 1/29/10; AMD, 2010 MAR p. 2992, Eff. 12/24/10; AMD, 2011 MAR p. 2829, Eff. 12/23/11; AMD, 2013 MAR p. 62, Eff. 1/18/13; AMD, 2014 MAR p.128, Eff. 1/17/14; AMD, 2015 MAR p. 308, Eff. 3/27/15; AMD, 2016 MAR p. 321, Eff. 2/20/16; AMD, 2017 MAR p. 789, Eff. 6/10/17.

38.5.2203   COMMISSION'S PROCEDURAL RULES TO APPLY
(1) Except as otherwise provided in these rules, the commission's procedural rules shall govern any proceedings under this subchapter.
History: 69-3-103, 69-3-207, MCA; IMP, 69-3-207, MCA; NEW, 1988 MAR p. 2569, Eff. 12/9/88.

38.5.2204   INSPECTIONS, INVESTIGATIONS, AND REPORTING

(1) The commission, its employees, or authorized agents, have the power to investigate all methods and practices of pipeline owners and operators; to require the maintenance and filing of reports, records and other information in the form and detail as the commission may prescribe; to enter upon and to inspect the property, buildings, plants, and offices of pipeline owners and operators; and to inspect books, records, papers and documents relevant to enforcement responsibilities under the NGPSA.

(2) The commission, a staff member thereof, or some person appointed by it, may investigate and make inquiry into every incident occurring in the operation of any intrastate gas pipeline located in this state. The commission, in its discretion, may also investigate any other accident or event involving the operation of a pipeline.

History: 69-3-207, MCA; IMP, 69-3-207, MCA; NEW, 1988 MAR p. 2569, Eff. 12/9/88; AMD, 1997 MAR p. 317, Eff. 2/11/97; AMD, 1997 MAR p. 1215, Eff. 7/8/97.

38.5.2205   INFORMAL REPORT OF PROBABLE VIOLATION
(1) If an inspection indicates that a pipeline owner or operator is not in compliance with the applicable pipeline safety regulations, the commission's inspector will issue a report of probable violation to the owner or operator following the inspection. This report shall include a citation of the law, regulation or order which the owner or operator appears to have violated, and a statement that the owner or operator is required to correct all cited violations within 60 days following issuance of the report. This report will also note any on-site corrective actions which were taken during the inspection. The inspector may informally discuss the report with the owner or operator and an informal conference may be requested with commission staff. When the owner or operator corrects a violation in the report to the satisfaction of the inspector, the correction and the date thereof shall be noted in the report.
History: 69-3-207, MCA; IMP, 69-3-207, MCA; NEW, 1988 MAR p. 2569, Eff. 12/9/88.

38.5.2206   FORMAL ENFORCEMENT PROCEDURE
(1) If the violations are not satisfactorily resolved within 60 days following issuance of the report of probable violation, through the informal procedure described in ARM 38.5.2205 above, the commission may issue an order to show cause to the pipeline owner or operator, based upon the inspector's report indicating that the owner or operator remains in probable violation of the regulations or provisions of the NGPSA.

(2) The order to show cause shall include a statement of the laws, regulations or orders which the pipeline owner or operator is alleged to have violated and a statement of the evidence upon which the allegations are based.

History: 69-3-207, MCA; IMP, 69-3-207, MCA; NEW, 1988 MAR p. 2569, Eff. 12/9/88.

38.5.2207   RESPONSE TO ORDER TO SHOW CAUSE
(1) Within 30 days of the date of service of the order to show cause, or within such other reasonable period as may be set by the commission in the order to show cause, the pipeline owner or operator shall file a written response with the commission. The response shall be filed in accordance with the commission's procedural rules relating to the filing of answers, found generally at ARM 38.2.2107.
History: 69-3-207, MCA; IMP, 69-3-207, MCA; NEW, 1988 MAR p. 2569, Eff. 12/9/88.

38.5.2208   HEARING
(1) Upon request of an interested party, or upon its own motion, the commission may schedule a hearing in furtherance of its investigation under these rules.
History: 69-3-207, MCA; IMP, 69-3-207, MCA; NEW, 1988 MAR p. 2569, Eff. 12/9/88.

38.5.2209   COMMISSION DECISION
(1) After a hearing, or, if no hearing has been held, after the expiration of the response period allowed by the commission to the pipeline owner or operator, the commission may proceed to issue a decision in the form of an order.

(2) The order issued by the commission in any proceeding brought under these rules may direct compliance, or indicate an intention to seek judicial remedies, or both.

History: 69-3-207, MCA; IMP, 69-3-207, MCA; NEW, 1988 MAR p. 2569, Eff. 12/9/88.

38.5.2220   INVESTIGATION AND REPORTS OF INCIDENTS OF INTRASTATE GAS PIPELINE OPERATORS

This rule has been repealed.

History: 69-3-207, MCA; IMP, 69-3-207, MCA; NEW, 990 MAR p. 1897, Eff. 10/12/90; AMD, 1993 MAR p. 3043, Eff. 12/24/93; REP, 1997 MAR p. 317, Eff. 2/11/97.

38.5.2301   SCOPE AND COMPLIANCE
(1) This subchapter requires pipeline facilities subject to 49 Code of Federal Regulations (CFR) parts 192 and 193 to test employees for the presence of prohibited drugs and prohibited alcohol misuse and provide an employee assistance program.
History: 69-3-207, MCA; IMP, 69-3-207, MCA; NEW, 1990 MAR p. 1897, Eff. 10/12/90; AMD, 1995 MAR p. 2425, Eff. 11/10/95; AMD, 1997 MAR p. 317, Eff. 2/11/97.

38.5.2302   INCORPORATION BY REFERENCE OF FEDERAL PIPELINE SAFETY REGULATIONS -- DRUG AND ALCOHOL TESTING AND PREVENTION PROGRAMS

(1) Except as otherwise provided in this subchapter, the commission adopts and incorporates by reference the DOT Pipeline Safety Regulations, Drug and Alcohol Testing, 49 CFR 199, including all revisions and amendments enacted by DOT on or before October 30, 2016. A copy of the referenced CFRs is available from the United States Department of Transportation, Office of Pipeline Safety, Western Region, 12300 West Dakota Avenue, Suite 110, Lakewood, Colorado 80228, or may be reviewed at the Public Service Commission Offices, 1701 Prospect Avenue, Helena, Montana 59620-2601.

 

History: 69-3-207, MCA; IMP, 69-3-207, MCA; NEW, 1995 MAR p. 2425, Eff. 11/10/95; AMD & TRANS, from ARM 38.5.2327, 1997 MAR p. 317, Eff. 2/11/97; AMD, 1998 MAR p. 180, Eff. 1/16/98; AMD, 1999 MAR p. 153, Eff. 1/15/99; AMD, 2000 MAR p. 752, Eff. 3/17/00; AMD, 2001 MAR p. 47, Eff. 1/12/01; AMD, 2001 MAR p. 2467, Eff. 12/21/01; AMD, 2003 MAR p. 564, Eff. 3/28/03; AMD, 2004 MAR p. 339, Eff. 2/13/04; AMD, 2005 MAR p. 386, Eff. 3/18/05; AMD, 2006 MAR p. 231, Eff. 1/27/06; AMD, 2006 MAR p. 2966, Eff. 12/8/06; AMD, 2007 MAR p. 2145, Eff. 12/21/07; AMD, 2009 MAR p. 90, Eff. 1/30/09; AMD, 2010 MAR p. 226, Eff. 1/29/10; AMD, 2010 MAR p. 2992, Eff. 12/24/10; AMD, 2011 MAR p. 2829, Eff. 12/23/11; AMD, 2013 MAR p. 62, Eff. 1/18/13; AMD, 2014 MAR p. 128, Eff. 1/17/14; AMD, 2015 MAR p. 308, Eff. 3/27/15; AMD, 2016 MAR p. 321, Eff. 2/20/16; AMD, 2017 MAR p. 789, Eff. 6/10/17.

38.5.2303   DEFINITIONS

This rule has been repealed.

History: 69-3-207, MCA; IMP, 69-3-207, MCA; NEW, 1990 MAR p. 1897, Eff. 10/12/90; REP, 1997 MAR p. 317, Eff. 2/11/97.

38.5.2304   DRUG AND ALCOHOL TESTING -- EXCEPTIONS
(1) This subchapter does not apply to any pipeline or transportation activity to which the commission has not accepted jurisdiction.

(2) When applicable all drug and alcohol testing of employees shall be done in accordance with 39-2-205 through 39-2-211 , MCA. Nothing contained in this subchapter shall be construed or applied in a manner inconsistent with the provisions and requirements of 39-2-205 through 39-2-211 , MCA.

(3) In the event of any conflict in law, the substantive and procedural provisions of 39-2-205 through 39-2-211 , MCA, and the substantive and procedural provisions of the commission in this subchapter shall prevail over any federal provision adopted by the commission by reference.

History: 69-3-207, MCA; IMP, 69-3-207, MCA; NEW, 1997 MAR p. 317, Eff. 2/11/97; AMD, 1998 MAR p. 180, Eff. 1/16/98.

38.5.2305   DOT Procedures

This rule has been repealed.

History: 69-3-207, MCA; IMP,69-3-207, MCA; NEW, 1990 MAR p.1897, Eff. 10/12/90; REP, 1997 MAR p. 317, Eff. 2/11/97.

38.5.2307   Anti-Drug Plan

This rule has been repealed.

History: 69-3-207, MCA; IMP ,69-3-207, MCA; NEW , 1990 MAR p.1897, Eff. 10/12/90; REP , 1997 MAR p. 317, Eff. 2/11/97.

38.5.2309   Use of Persons Who Fail or Refuse a Drug Test

This rule has been repealed.

History: 69-3-207, MCA; IMP ,69-3-207, MCA; NEW , 1990 MAR p.1897, Eff. 10/12/90; REP , 1997 MAR p. 317, Eff. 2/11/97.

38.5.2311   Drug Tests Required: Pre-Employment, Post-Accident, Reasonable Cause and Return to Duty

This rule has been repealed.

History: 69-3-207, MCA; IMP ,69-3-207, MCA; NEW , 1990 MAR p.1897, Eff. 10/12/90; REP , 1997 MAR p. 317, Eff. 2/11/97.

38.5.2313   Drug Testing Laboratory

This rule has been repealed.

History: 69-3-207, MCA; IMP ,69-3-207, MCA; NEW , 1990 MAR p.1897, Eff. 10/12/90; REP , 1997 MAR p. 317, Eff. 2/11/97.

38.5.2315   Review of Drug Testing Results: Medical Review Officer

This rule has been repealed.

History: 69-3-207, MCA; IMP ,69-3-207, MCA; NEW , 1990 MAR p.1897, Eff. 10/12/90; REP , 1997 MAR p. 317, Eff. 2/11/97.

38.5.2317   Retention of Samples and Retesting

This rule has been repealed.

History: 69-3-207, MCA; IMP ,69-3-207, MCA; NEW , 1990 MAR p.1897, Eff. 10/12/90; REP , 1997 MAR p. 317, Eff. 2/11/97.

38.5.2319   EMPLOYEE ASSISTANCE PROGRAM

This rule has been repealed.

History: 69-3-207, MCA; IMP, 69-3-207, MCA; NEW, 1990 MAR p. 1897, Eff. 10/12/90; REP, 1997 MAR p. 317, Eff. 2/11/97.

38.5.2321   CONTRACTOR EMPLOYEES

This rule has been repealed.

History: 69-3-207, MCA; IMP, 69-3-207, MCA; NEW, 1990 MAR p. 1897, Eff. 10/12/90; REP, 1997 MAR p. 317, Eff. 2/11/97.

38.5.2323   RECORDKEEPING

This rule has been repealed.

History: 69-3-207, MCA; IMP, 69-3-207, MCA; NEW, 1990 MAR p. 1897, Eff. 10/12/90; REP, 1997 MAR p. 317, Eff. 2/11/97.

38.5.2325   SCOPE AND COMPLIANCE -- ALCOHOL MISUSE PREVENTION PROGRAM

This rule has been repealed.

History: 69-3-207, MCA; IMP, 69-3-207, MCA; NEW, 1995 MAR p. 2425, Eff. 11/10/95; REP, 1997 MAR p. 317, Eff. 2/11/97.

38.5.2327   INCORPORATION BY REFERENCE OF FEDERAL PIPELINE SAFETY REGULATIONS -- DRUG AND ALCOHOL TESTING AND PREVENTION PROGRAMS

This rule has been transferred.

History: 69-3-207, MCA; IMP, 69-3-207, MCA; NEW, 1995 MAR p. 2425, Eff. 11/10/95; AMD & TRANS, to ARM 38.5.2302, 1997 MAR p. 317, Eff. 2/11/97.

38.5.2401   GENERAL PROHIBITION

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-4-601, et seq. , MCA; NEW, 1984 MAR p. 1131, Eff. 8/17/84; REP, 2004 MAR p. 340, Eff. 2/13/04.

38.5.2402   PERMITTED CHARGES

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-4-603, MCA; NEW, 1984 MAR p. 1131, Eff. 8/17/84; REP, 2004 MAR p. 340, Eff. 2/13/04.

38.5.2403   DETERMINATION OF NECESSARY AND REASONABLE EXPENSES

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-4-603, MCA; NEW, 1984 MAR p. 1131, Eff. 8/17/84; REP, 2004 MAR p. 340, Eff. 2/13/04.

38.5.2404   EXCEPTIONS TO NECESSARY AND REASONABLE EXPENSES

This rule has been repealed.

History: 69-3-301, MCA; IMP, 69-4-603, MCA; NEW, 1984 MAR p. 1131, Eff. 8/17/84; REP, 2004 MAR p. 340, Eff. 2/13/04.

38.5.2405   AVERAGE COSTS

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-4-603, MCA; NEW, 1984 MAR p. 1131, Eff. 8/17/84; AMD, 1988 MAR p. 2037, Eff. 9/23/88; AMD, 1992 MAR p. 924, Eff. 5/1/92; REP, 2004 MAR p. 340, Eff. 2/13/04.

38.5.2406   PREPARATION AND SERVICE OF ESTIMATE

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-4-603, MCA; NEW, 1984 MAR p. 1131, Eff. 8/17/84; REP, 2004 MAR p. 340, Eff. 2/13/04.

38.5.2407   BIENNIAL REVIEW

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-4-603, MCA; NEW, 1984 MAR p. 1131, Eff. 8/17/84; REP, 2004 MAR p. 340, Eff. 2/13/04.

38.5.2410   DEFINITIONS
(1) For purposes of this subchapter:

(a) "Cost schedule" includes costs to the utility for work to be done directly by the utility and costs to the utility for work to be done indirectly by the utility through contract.

(b) "Utility" means a public utility (including a regulated telecommunications carrier or provider) , a cable television company, and an unregulated telecommunications carrier or provider, but does not include electric cooperatives.

History: 69-3-103, MCA; IMP, 69-4-602 and 69-4-603, MCA; NEW, 2004 MAR p. 340, Eff. 2/13/04.

38.5.2414   CHARGES FOR RAISING OR CUTTING OF WIRES OR CABLES OR MOVING POLES TO ACCOMMODATE THE MOVEMENT OF STRUCTURES
(1) By April 1 of each year all utilities owning or controlling wires, cables, or poles in a location which may impede the movement of structures must file a cost schedule for commission review. The cost schedule must be accompanied by a narrative explaining the bases for each of the costs in the cost schedule and work papers demonstrating calculation of each of the costs in the cost schedule. Costs within cost schedules must be on a per unit of time basis (e.g., per hour) unless the particular cost is unsuitable to that basis (e.g., parts, materials) .

(2) Cost schedules will become effective on an interim (temporary) basis no later than 30 days following the date filed with the commission unless the commission rejects the cost schedule on the basis that it appears the schedule includes costs that are above cost. The commission may notice cost schedules to the public and interested persons, allowing for intervention, discovery, opposing testimony, and hearing.

(3) The person moving the structure is not responsible for costs resulting from delays caused by a utility crew, a government crew, or force majeure.

History: 69-3-103, MCA; IMP, 69-4-602 and 69-4-603, MCA; NEW, 2004 MAR p. 340, Eff. 2/13/04.

38.5.2501   GENERAL RULES FOR PRIVATELY OWNED WATER UTILITIES

  (1) The following general rules shall be effective for all privately owned water utilities subject to the regulatory jurisdiction of the Public Service Commission. For the purposes of these rules, where the term "utility" is used, it shall mean privately owned water utilities, and where the term "Commission" is used, it shall mean the Montana Public Service Commission. 

(2) Certain of the following general rules allow a utility to adopt, subject to the approval of the Commission, special rules to fit the utility's local conditions. If a utility adopts any special rules, and an apparent conflict arises between the special rules and these general rules, the general rules shall govern.

History: 69-3-102, MCA; IMP, 69-3-102, MCA; NEW, 1982 MAR p. 861, Eff. 4/30/82.

38.5.2502   APPLICATION FOR WATER SERVICE
(1) All consumers wanting water service must make an application with the utility. Except as provided in ARM 38.5.2502(2) , the utility may require consumers make a service application at the utility office on printed application forms, which shall set forth all purposes for which the water will be used upon the premises, or the utility may allow the consumer to apply for service via the telephone. A copy of the utility's printed application form and any subsequent modifications shall be submitted to the Commission to become part of the utility's tariff. A deposit for guarantee of payment for water service may be required by the utility of the consumer applying for service pursuant to the deposit rules of the Commission, Title 38, Chapter 5, Sub-chapter 11.

(2) All applications for the original introduction of water service to any premises must be made on printed application forms furnished by the utility and described in ARM 38.5.2501(1) above, and must be signed by the property owner of those premises. When the ownership of the premises changes, the new property owner must make a new application for water service with the utility. A property owner is liable for payment for water service as a consumer, unless ARM 38.5.2502(3) applies.

(3) Where the consumer is a renter, a leasee, or is not the property owner, the application for water service shall be made in the consumer's own name, and that consumer shall be liable for payment for the water service. In such instances, the utility shall indicate the name of the consumer and the date that the consumer began to receive water service on the original written service application that was signed by the property owner of the premises.

(4) Upon the utility's acceptance of the application for water service, the consumer shall have the right to take and receive a supply of water for the particular premises for the purposes specified in the application subject to compliance by the consumer with these rules and any special rules promulgated by the utility.

(5) When an application for new water service has been accepted, the utility at its own expense will tap the main and furnish corporation cock, and clamp when necessary, and any other material used or labor furnished in connection with the tapping of the main. All expense of laying and maintaining the service pipes from the mains to the premises of the consumer must be borne by the consumer. The utility shall assist consumers and/or excavation contractors in locating water service mains and lines prior to the consumer beginning excavation in order to avoid water service interruptions due to broken mains and lines. The service pipe must be laid below street grade, on the premises of the consumer and at a standard depth designated by the utility to prevent freezing. A curb cock and curb box of approved pattern must be installed by the consumer at a point designated by the utility. Whenever a tap is made through which regular service is not immediately desired, the consumer will bear the entire expense of tapping, subject to a refund whenever regular service is begun.

(6) No charge may be made for turning on the water to a new consumer during the regular working hours of the utility.

(7) Contractors, builders or owners are required to apply for permit for the use of water for building and other purposes in construction work. Consumers are warned not to allow the use of their water fixtures unless the contractors, the builders or the owners produce a permit issued by the utility specifying the premises on which the water is to be used. Water will not be turned on at any new building until all water used during construction has been paid for.

History: Sec. 69-3-102 and 69-3-103, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1982 MAR p. 862; Eff. 4/30/82; AMD, 1987 MAR p. 2162, Eff. 11/28/87; AMD, 1998 MAR p. 3220, Eff. 12/4/98.

38.5.2503   PROVISION OF WATER SERVICE
(1) Service pipes. Service pipes shall be so arranged that the supply of each separate building, house or premises, may be controlled by a separate curb cock, placed within or near the line of the street curb, under rules established by the utility or civil authorities, except as provided in ARM 38.5.2509(3) . This curb cock and box must be easily accessible and must be kept in repair by the owner of the premises.

(2) Stop and waste cock. A stop and waste cock must be placed at some convenient point inside of the building located where it cannot freeze, and where water from the building can be readily shut off, and the water pipes drained to prevent freezing.

(3) Waste of water. Waste of water is prohibited, and consumers must keep their fixtures and service pipes in good working order at their own expense, and keep all waterways closed when not in use. Leaky fixtures must be repaired at once without waiting for notice from the utility. If reasonable notice is given by the utility and the repair is not made, the water will be shut off by the utility without further notice.

(4) Limitations on connections. No plumber or other person will be allowed to make connection with any conduit, pipe or other fixture or to connect pipes when they have been disconnected, or to turn water off or on, on any premises without permission from the utility.

(5) Mains. Before a utility is required to provide water service to a consumer, the utility's system of service mains must presently be in place at the point where service is desired.

(6) Extension of mains.

(a) Before a utility commences construction of a new water system or major alteration or extension of an existing public water system, an engineering report along with necessary plans and specifications for the public water system shall be submitted to the department of health and environmental sciences, water quality bureau, for review and approval pursuant to section 75-6-112(4) , MCA, and the rules of the department of health and environmental sciences.

(b) The utility shall make provisions in its tariff for the extension of service mains through special rules to be approved by the commission.

(7) Lawn sprinkling. A utility may require permits for lawn sprinkling which may be secured at the office of the utility. When necessary, the utility may impose lawn sprinkling restrictions.

(8) Billing errors. Where an error in billing has occurred, the utility shall go back in time as far as is necessary to cover and/or reconcile the erroneous billing, but no further than the most recent of either the date of the service application of the current consumer or the date of the most recent meter test, or as directed by the commission. When over collection occurs because of a fast meter, ARM 38.5.2513(2) will apply.

History: Sec. 69-3-102, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1982 MAR p. 863, Eff. 4/30/82.

38.5.2504   CONSUMER DISCONTINUANCE OF SERVICE

(1) Permanent Discontinuance. A consumer who, for any reason, including the vacating of the premises, wishes to have the water service permanently discontinued, shall give the utility at least 24 hours' notice and shall specify the date that service be discontinued. Until the utility has received such notice, the consumer shall be held responsible for all service rendered to the premises.

(2) Temporary Discontinuance. If a consumer wants to temporarily discontinue the water service, as in instances of seasonal use, the consumer shall notify the utility of the request. The utility may, subject to approval of the Commission, adopt special rules to fit local conditions for temporary discontinuance. The utility may assess the consumer a reconnection charge as provided in ARM 38.5.2505(2) .

History: Sec. 69-3-102, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1982 MAR p. 864; Eff. 4/30/82.

38.5.2505   UTILITY DISCONTINUANCE OF SERVICE
(1) Notice of Discontinuance.

(a) No utility shall discontinue service to any consumer for violation of rules or for nonpayment of bills, without first having tried diligently to induce the consumer to comply with its rules, or to pay outstanding bills. A record of these efforts must be maintained by the utility.

(b) A utility may not terminate service to any consumer unless written notice is sent by first class mail to the consumer that bills are ten or more days delinquent, or that the violation of the rules must cease. If no response to the first notice is received within ten days of mailing, the utility must send a second notice by first class or certified mail, or personally serve the customer at least ten days prior to the date of the proposed termination. If no response to the second notice is received within ten days of mailing or service, the utility shall leave notice in a place conspicuous to the consumer that service will be terminated on the next business day unless the delinquent charges have been paid or the violation of the rules have ceased.

(c) A utility may terminate water service without advance notice to the consumer when the utility's regulating or measuring equipment has been tampered with, or where the fraudulent use of water service by an unauthorized person is detected. The utility may assess a reconnection charge as provided in ARM 38.5.2505(2) before service is recontinued.

(d) All disconnections shall be performed by the utility between the hours of 8:00 a.m. and 12:00 noon, and in no case shall the utility discontinue service on Friday, Saturday, Sunday, or a day prior to holiday except as provided in ARM 38.5.2505(1) (c) .

(2) Charge for Reconnection.

(a) Whenever the supply of water is discontinued for violation of these general rules or the utility's special rules, nonpayment of bills, or as provided in ARM 38.5.2505 (1) (c) , the utility may make a reconnection charge as set forth in its tariff for the reestablishment of service.

(b) After service has been turned off because of nonpayment, service shall not be turned on again until all delinquent water bills and a reconnection charge as set forth in the utility's tariff have been paid or an agreeable pay arrangement has been made between the consumer and the utility.

(c) If a consumer requests that water service be discontinued and then requests service be recontinued any time within eight months following the discontinuance, the utility may require the consumer first pay a reconnection charge as set forth in the utility's tariff.

(3) Temporary Service Failure. Any temporary failure on the part of the utility to supply service by reason of accident or otherwise for a period in excess of 24 hours shall not render the utility liable beyond a pro rata abatement of service charges during such interruption.

(4) Emergency Service Disruption. Notice will be given, whenever possible, prior to shutting off water, but consumers are warned that owing to unavoidable accidents or emergencies their water service may be shut off at any time. In the event of such accidents or emergencies, consumers are advised to take the necessary precautions to prevent damage to their fixtures and premises.

History: Sec. 69-3-102, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1982 MAR p. 864-866; Eff. 4/30/82.

38.5.2506   GENERAL FLAT RATE AND METER RATE RULES
(1) The

following general flat rate and meter rate rules shall not be construed to mean that any utility must have both flat rates and meter rates. A utility may adopt, subject to the approval of the Commission, either a flat rate or a meter rate schedule, or both. In addition to the general flat rate and meter rate rules, a utility may adopt, subject to the approval of the Commission, other rules to be designated as special rate rules, to fit local conditions.

History: Sec. 69-3-102, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1982 MAR p. 866; Eff. 4/30/82.

38.5.2507   FLAT RATES
(1) Water Uses. The flat rate will cover the use of water for domestic, commercial and industrial uses, lawn sprinkling and any other purposes enumerated on the rate sheet covering flat rate services.

(2) Additional Fixtures. If a consumer on a flat rate schedule wants to install additional fixtures or wants to apply the water to purposes not stated in the original application, written notice must be given the utility prior to such installation or change of use. If a consumer places new fixtures on the premises without notifying the utility, when such fixtures are discovered, a charge will be made for the extra fixtures at schedule rates for the length of time such fixtures have been installed.

History: Sec. 69-3-102, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1982 MAR p. 866-867; Eff. 4/30/82.

38.5.2508   METER RATES
(1) Meter rates will apply to all water services as indicated on the utility's tariff schedule.   Any consumer wanting to receive water by meter measurement may have a meter placed by the utility under the following meter rules. Meters may be installed on any service when they become necessary to prevent waste of water.
History: Sec. 69-3-102, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1982 MAR p. 867; Eff. 4/30/82.

38.5.2509   UTILITY TO PROVIDE METERS
(1) Unless otherwise authorized by the Commission, each utility shall provide and install at its own expense and shall continue to own, maintain, and operate all equipment necessary for the regulation and measurement of water, in accordance with tariff or contract provisions, to its consumers. Where additional meters are requested by the consumer and are furnished by the utility for the convenience of the consumer, a charge for such meters may be made to the consumer.

(2) The utility will not make collections for any secondary meters, and all water rents of any single meter must be paid by one consumer when supplied by meter measurement from one service. The utility, however, may enclose the readings of secondary meters with the bill for the single meter service.

(3) In no case will the utility furnish water from one meter to two or more connections, except where master metering is being used.

(4) The utility may install or replace any meter at such time as it may see fit and shall determine the size of any meter installed.

History: Sec. 69-3-102, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1982 MAR p. 867; Eff. 4/30/82.

38.5.2510   LOCATION OF METERS
(1) In all cases where a meter is installed the consumer must furnish proper protection from frost or other damage, and the meter must be located where it is easily accessible for reading purposes and repairs. Where necessary for protection, a standard form of meter box will be placed by the utility. The actual cost of the box shall be paid by the consumer. After such protective receptacle is placed the utility will furnish and connect the meter, and maintain the same in good condition.

(2) Remote Meters. When a meter is located inside a home or building, the utility may install, at utility's expense, a remote register or dial on the exterior of a home or building accessible for meter reading.

History: Sec. 69-3-102, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1982 MAR p. 867; Eff. 4/30/82.

38.5.2511   METER READING
(1) The utility shall normally read meters for all urban consumers at monthly or bimonthly intervals and for all rural consumers at regular intervals up to six months. The day of the month for reading any meter as determined by the utility shall as closely as practicable be the same for each reading. The utility at its option, subject to the approval of the Commission, may read the meters at less frequent intervals if in the opinion of the utility such procedure tends to result in operating economies, but in no instance shall a meter be read less than once in six months.

(2) In months when meters are not read, the utility may provide the consumer with a postcard and request the consumer to read the meter and return the card to the utility. If such postcard is not received by the utility in time for billing, the utility may estimate the meter reading and render a bill accordingly.

(3) The consumer shall allow the utility reasonable access to the premises receiving water service for the reading of meters.

History: Sec. 69-3-102, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1982 MAR p. 867-868; Eff. 4/30/82.

38.5.2512   METER ACCURACY
(1) Accuracy Dispute. In case of a dispute as to the accuracy of a meter, the consumer, may demand that the meter be removed, and tested as to accuracy, in his presence. If the meter is found to be registering correctly or in favor of the consumer, the cost of such testing and replacing of the meter shall be borne by the consumer. If the meter is found to be recording incorrectly and against the consumer, the cost of such testing and replacing of the meter shall be borne by the utility. A meter registering not in excess of plus or minus two percent of accuracy shall be deemed to be registering correctly.

(2) If an over collection or under collection error in billing has occurred due to an inaccurate meter, the utility shall follow ARM 38.5.2503(8) .

History: Sec. 69-3-102, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1982 MAR p. 868; Eff. 4/30/82.

38.5.2513   METER TESTS
(1) Sample Tests. The utility shall select a sample of five percent of all of its meters in service each year for testing the accuracy of its registration.

(2) Fast Meters. If, upon test of any meter, the meter is found to have an average error of more than two percent fast, the utility shall follow ARM 38.5.2505(8) to reconcile the billing error.

(3) Dead Meters. If a meter is found not to register for any period, the utility shall compute the water used by taking the average of the water used for the meter-reading period preceding and the meter-reading period following the date when the meter was found to be dead, which amount shall be assumed to be the amount of water used by the customer during the billing period in which the meter was found dead. Exceptions will be made to this rule if the facts clearly show that the above method does not give the correct consumption for the period.

History: Sec. 69-3-102, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1982 MAR p. 868, Eff. 4/30/82.

38.5.2514   METER BILLING

(1) Where an overcollection or undercollection error in billing has occurred, the utility shall follow ARM 38.5.2503(8) .

(2) Water consumers are not permitted to interfere in any way with the meter after it is set in place. In case the meter seal is broken or the working parts of the meter have been tampered with or the meter damaged, the utility may render a bill for the current month, based on an average of the last two months, together with the full cost of such damage as has been done to the meter, and may refuse to furnish water until account is paid in full as provided in ARM 38.5.2505 (1) (c) .

 

History: Sec. 69-3-102, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1982 MAR p. 868, Eff. 4/30/82.

38.5.2526   DEFINITIONS

(1) "Contribution in aid of construction" means any money, services, or property received by a water or sewer utility to fund capital investments at no cost to the company with no obligation to repay.

(2) "Customer" means any individual or entity supplied with water or sewer service by means of a water or sewer line that connects a single building or living unit to the utility's water or sewer system. For purposes of these rules, each single building or living unit connected to the utility's system is one customer.

(3) "Operating ratio" means the ratio of a utility's operating expenses to operating revenues. For purposes of ARM 38.5.2529, a small water or sewer utility's operating ratio will be determined based on the expense and revenue information required to be submitted by the utility on the department's operating ratio methodology form referred to in ARM 38.5.2529(2).

(4) "Small water or sewer utility" means a water or sewer utility subject to the commission's jurisdiction that serves fewer than 500 customers.

History: 69-2-101, 69-3-103, 69-3-301, MCA; IMP, 69-2-101, 69-3-103, 69-3-301, MCA; NEW, 2014 MAR p. 394, Eff. 2/28/14.

38.5.2527   SIMPLIFIED REGULATORY TREATMENT OPTIONS

(1) Two simplified regulatory treatment options are available to a small water or sewer utility that allow it to establish or change its rates by a method other than filing a rate application in accordance with the minimum rate case filing standards of ARM 38.5.101, et seq. The options are:

(a) adoption of the commission-approved standard rate tariff to establish rates as described in ARM 38.5.2528; or

(b) filing a rate application in accordance with the operating ratio methodology as described in ARM 38.5.2529.

(2) A small water or sewer utility is not required to establish or change its rates using the simplified regulatory treatment options. It may elect to file a rate application in accordance with ARM 38.5.101, et seq.

(3) If a utility's election of either of the two simplified regulatory options described in ARM 38.5.2527(1)(a) or (1)(b) would result in increased rates to customers, it may request, or the commission may require the utility to implement the rates in increments over a reasonable time period.

(4) An existing small water or sewer utility must be in compliance with 69-3-203, MCA (annual report requirement), in order to elect either of the simplified regulatory treatment options or to request authorization for a reserve account as provided in ARM 38.5.2531.

History: 69-2-101, 69-3-103, 69-3-301, MCA; IMP, 69-2-101, 69-3-103, 69-3-301, MCA; NEW, 2014 MAR p. 394, Eff. 2/28/14.

38.5.2528   STANDARD RATE TARIFF

(1) A small water or sewer utility may establish its rates by adopting the commission's standard rates for small water or sewer utilities or by adopting its own rates if they are lower than the applicable standard rates. The standard rate tariff forms to be submitted for commission approval by the utility are available from the commission upon request or by obtaining them from the commission's web site at www.psc.mt.gov.

(2) The standard rates for small water and sewer utilities that choose to establish rates using this simplified regulatory option are:

(a) a flat charge of $50 per connection per month for a water utility that provides water to its customers on an unmetered basis;

(b) a monthly service charge of $40 per connection, plus a usage rate of $2.00 per 1,000 gallons for customer usage in excess of 10,000 gallons, for a small water utility that provides water to its customers on a metered basis;

(c) a flat charge of $30 per connection per month for a small sewer utility.

(3) Other terms and conditions of service are those provided in the commission's standard rate tariff forms and in ARM 38.5.2501, et seq.

(4) A person who seeks to challenge (2)(a), (b), or (c) may submit a complaint pursuant to ARM 38.2.2101, et seq.

(5) A small water or sewer utility that intends to adopt the standard rates must notify the commission and every customer in writing of its intention at least 30 days in advance of the proposed effective date of the standard rate tariff adoption.

(6) The customer notification must be mailed to each customer's billing address. The notification must inform customers of the standard rates, provide information that shows the typical bill impact of the application of the standard rates to the utility's average level of customer usage, and provide contact information for the utility, the Montana Consumer Counsel, and the commission.

(7) The commission notification must include the standard rates in tariff form, a copy of the notification provided to customers, and verification that all customers were mailed a notice of the proposed rate change. A small water or sewer utility must, if applicable, include in its commission notification a complete copy of the information regarding the utility's financial capacity that the utility provided to the Montana Department of Environmental Quality as part of that agency's public water system review process.

(8) The commission will act on the request to adopt the standard rate tariff no later than 45 days after it is received by the commission.

(9) The standard rate tariff adopted by a small water or sewer utility expires three years after its effective date, unless the commission approves an extension. At least three months prior to the expiration of the standard rate tariff, the utility must notify the commission whether it will file a request for an extension of the standard rate tariff option, a rate application in accordance with the minimum rate case filing standards of ARM 38.5.101, et seq., or an application in accordance with the operating ratio methodology pursuant to ARM 38.5.2529.

(10) The commission may deny the adoption of the standard rate tariff by a small water or sewer utility if the utility has been operating pursuant to commission-approved rates and the commission determines it would be unjust and unreasonable to approve adoption of the standard rate tariff for the utility.

(11) Nothing contained in these rules shall be construed to limit the statutory and constitutional authority of the Montana Consumer Counsel to participate and represent the interests of the utility ratepayers in these proceedings.

History: 69-2-101, 69-3-103, 69-3-301, MCA; IMP, 69-2-101, 69-3-103, 69-3-301, MCA; NEW, 2014 MAR p. 394, Eff. 2/28/14.

38.5.2529   OPERATING RATIO METHODOLOGY

(1) This option is available only to a small water or sewer utility that has been operating under commission-approved tariffed rates for at least three years. A small water or sewer utility electing this simplified option must file a rate application with the commission using the operating ratio methodology to determine the appropriate rates to be charged by the utility.

(2) The commission will make available the forms and schedules to calculate the operating ratio which must be completed and included by the utility in the rate application. The forms are available upon request from the commission or by obtaining them from the commission's web site at www.psc.mt.gov.

(3) The commission will determine whether an increase or decrease in operating revenues is justified by dividing the utility's reasonable and legitimate operating expenses by the target operating ratio of 80 percent, and subtracting that amount from the operating revenues. A positive difference will result in a rate decrease; a negative difference will result in a rate increase.

(4) No later than ten days after filing the application, the utility must notify its customers in writing of the application and the proposed rate changes. The notice shall provide, at a minimum:

(a) the filing date of the rate application;

(b) a statement that the utility filed its application without the necessary costs of preparing for a hearing; however, a formal public hearing will be held if at least 20 percent of the utility's customers or the Montana Consumer Counsel submits a written request for hearing;

(c) the current rate, the proposed rate, and the percentage of the difference between the two;

(d) a statement that customers may contact the utility, the Montana Consumer Counsel, or the commission regarding the application and contact information for the utility, the Montana Consumer Counsel, and the commission.

(5) A copy of the notice and the mailing list of customers to whom the notice was, or will be mailed, must be submitted to the commission with the rate application.

(6) There will be no hearing on the application unless 20 percent or more of the utility's customers or the Montana Consumer Counsel request it, or the commission schedules a hearing on its own motion. Upon request for hearing, the commission will use a contested case procedure to conduct its review of the application. In any event, an individual commissioner may schedule a hearing to obtain public comment on the application.

(7) In the event a hearing is held, the utility may elect to designate its application to serve as its prefiled evidence; however, the utility is not precluded from filing additional evidence.

(8) Rates approved pursuant to the operating ratio methodology are subject to periodic review to ensure their continued justness and reasonableness.

History: 69-2-101, 69-3-103, 69-3-301, MCA; IMP, 69-2-101, 69-3-103, 69-3-301, MCA; NEW, 2014 MAR p. 394, Eff. 2/28/14.

38.5.2530   PURCHASED WATER COST PASS-THROUGH OPTION

(1) A small water or sewer utility may file an application for authorization to pass through price changes (increases and decreases) relating to the cost of purchased water obtained from a local municipality or from other entities which are not affiliated interests.

(2) Following commission approval of the establishment of a purchased water cost pass-through mechanism, the utility shall timely revise and refile its pass-through rate tariff as its costs of purchased water change.

(3) A purchased water cost pass-through tariff shall be revised and refiled within 60 days of a decrease in purchased water costs, and shall be designed to pass through to customers the entire reduction in purchased water costs from the date the reduction becomes effective. A purchased water cost pass-through tariff may be revised and refiled at any time after an increase in purchased water costs, and shall be designed to recover cost increases prospectively from the date of filing only.

History: 69-2-101, 69-3-103, 69-3-301, MCA; IMP, 69-2-101, 69-3-103, 69-3-301, MCA; NEW, 2014 MAR p. 394, Eff. 2/28/14.

38.5.2531   RESERVE ACCOUNT

(1) The commission may authorize a small water or sewer utility to establish a reserve account. A reserve account is funded by customer contributions collected through rates for the purpose of making capital improvements to a utility plant pursuant to a long-range plan approved by the commission, or as required to assure compliance with state or federal safe drinking water statutes or regulations. The burden of demonstrating that actual or proposed expenditures are reasonable and in the public interest shall be borne by the utility.

(2) The amounts to be allocated to the reserve account will be determined by the commission after review of the utility's proposed capital budget and the justification for that budget.

(3) Funds in the reserve account shall be kept in a separate interest-bearing cash account. Interest accrued shall be credited to the reserve account and shall become part of the corpus of the reserve account.

(4) The utility must deposit all funds collected from customers for the reserve account at the close of each customer billing period and, in any event, no less frequently than quarterly.

(5) Funds from the account shall not be employed for a purpose other than those permitted under this section. Disbursements from the fund shall not be made without written authorization by the commission upon petition, shall be restricted to the uses in (1), and shall be made in accordance with a capital budget submitted with the initial rate filing or as modified with the consent of the commission.

(6) The utility shall report all disbursements from the reserve account by written notice to the commission and to other persons as the commission may direct within ten days of disbursement. In addition, the utility must provide by March 1 of each year a verified statement from the financial institution that houses the reserve account that shows all account transactions for the preceding calendar year. Disbursements from the reserve account which are found by the commission to have been made improperly, or in violation of any statute, regulation, or order of the commission shall be returned to the account or be refunded to ratepayers as the commission may direct. A person who makes, authorizes, or directs an improper or illegal disbursement of reserve funds shall be subject to the provisions of 69-3-209, MCA.

(7) Plant capitalized by means of the reserve account shall be accounted for as a contribution in aid of construction.

(8) In the event of a change of ownership of the small water or sewer utility, all funds in the reserve account must remain the property of the utility to be used for commission-approved purposes.

History: 69-2-101, 69-3-103, 69-3-301, MCA; IMP, 69-2-101, 69-3-103, 69-3-301, MCA; NEW, 2014 MAR p. 394, Eff. 2/28/14.

38.5.2532   RATEBASE TREATMENT OF SUBDIVISION-RELATED WATER OR SEWER UTILITY ASSETS – PRESUMPTION OF RECOVERY

(1) When a small water or sewer utility that has been built in connection with a subdivision elects to file a rate application pursuant to the commission's minimum rate case filing standards, ARM 38.5.101, et seq., or pursuant to one of the simplified regulatory treatment options, there is a rebuttable presumption that the value of original utility plant and assets has been recovered in the sale of lots in a development to be served by the small water or sewer utility.

History: 69-2-101, 69-3-103, 69-3-301, MCA; IMP, 69-2-101, 69-3-103, 69-3-301, MCA; NEW, 2014 MAR p. 394, Eff. 2/28/14.

38.5.2601   RATE TARIFF FILING

  (1) Every utility which changes its tariff sheets for rates, tolls and charges, pursuant to 69-3-302, MCA, shall file the tariff sheets with the commission.

(2) Every utility which changes its price list sheets for rates, tolls and charges or its detariffed service sheets, shall file the sheets with the commission.

(3) All tariff, price list and detariffed service sheet filings shall be accompanied by a letter of transmittal describing the type of filing and including the information required in ARM 38.5.2801.

(4) An original and ten copies of all tariff filings which propose a rate increase shall be filed with the commission.   An original and three copies of all price lists and other types of filings, shall be filed.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-204, 69-3-301, 69-3-302 and 69-3-304, MCA; NEW, 1984 MAR p. 1129, Eff. 8/17/84; AMD, 1993 MAR p. 1336, Eff. 6/25/93; AMD, 2000 MAR p. 1668, Eff. 6/30/00.

38.5.2602   ANNUAL REPORTS
(1) Every utility is required to file an annual report with the commission pursuant to 69-3-203, MCA.

 

Rules

History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-203 and 69-3-204, MCA; NEW, 1984 MAR p. 1129, Eff. 8/17/84; AMD, 2000 MAR p. 1668, Eff. 6/30/00.

38.5.2610   UTILITY NOTICE TO CONSUMERS
(1) Public utilities, transmission service providers, distribution service providers, and other providers of utility services regulated by the commission, on filing with the commission an application for approval of a proposed initial tariffed rate or change in existing tariffed rates, must notify each current utility consumer subscribing to services which may be affected by the proposed change. Proposed changes in rates which are exempt from this notice requirement and a waiver procedure for proposed changes not specifically exempt are identified below.

(2) Notice required by this rule must be in writing and provided to each affected consumer within 60 days following the filing of the application for a proposed change with the commission. Notice may be through a bill message, bill insert, or separate mailing. A copy of the notice sent to consumers must be provided to the commission when utility notice to consumers is complete. In the event circumstances would otherwise allow the commission to issue a final order on an application for a proposed change, the commission will not issue a final order until at least 10 days following utility notice to the affected consumers.

(3) The notice shall inform consumers:

(a) of the effect the proposal may have on rates;

(b) of the amount of the change proposed, in percentage change compared to the existing rate or in dollars and cents per measured service or commodity unit supplied and per month or other billing cycle per unmeasured service or rate component;

(c) of the reason for the proposed change;

(d) that, if required by law or permissible in the commission's discretion, a hearing on the proposal may be held before the commission upon request to the commission by any person directly affected;

(e) that the time and location of any hearing on the proposal will be available from the commission (telephone number included) as soon as a hearing is scheduled; and

(f) that the consumer counsel (telephone number included) is available to represent consumer interests regarding the proposal.

(4) Except as the commission may otherwise direct the utility within 60 days of the filing of an application for approval of a proposed rate, the following proposals are exempt from the requirements of this rule:

(a) rate decreases;

(b) initial tariffed rates for new non-basic services which are optional to consumers;

(c) rate increases for existing non-basic services which are optional to consumers;

(d) rate increases based on commission-approved commodity cost tracking and adjustment procedures;

(e) changes not required by law to be made only after hearing or an opportunity for hearing;

(f) detariffed services;

(g) pass throughs of federal- or state-mandated initial rates or rate increases;

(h) rates of small telecommunications providers, defined at 69-3-901, MCA, proceeding pursuant to 69-3-903, MCA;

(i) interLATA interexchange rates; and

(j) carrier to carrier (wholesale) rates.

(5) A public utility, transmission service provider, distribution service provider, or other provider of utility services regulated by the commission, may request the commission grant a one-time or permanent waiver for other specific types of initial tariffed rates and changes which may be proposed to existing tariffed rates. The request shall clearly identify the type of change for which waiver is requested and the reason why it should not be subject to this rule. The request must be filed no less than 60 days prior to an application for a change to which the waiver would apply. All waivers granted, whether the grant expressly states or not, are subject to the commission otherwise directing within 60 days of the filing of an application to which the waiver applies.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1998 MAR p. 2968, Eff. 11/6/98.

38.5.2701   PURPOSE
(1) The purpose of these rules is to implement the policy of the state of Montana to maintain universal basic telecommunications service at affordable rates and, to the extent that it is consistent with maintaining universal service to encourage competition in the telecommunications industry, thereby allowing access by the public to advances in telecommunications technology.

(2) Regulatory jurisdiction exists over two-way switched, voice grade access and transport of communications originating and terminating in this state and nonvoice grade access and transport if intended to be converted to or from voice-grade access and transport. The commission retains the power to protect ratepayer interests by totally regulating the rates for telecommunication services that are provided on a monopoly basis.

(3) These rules, adopted pursuant to the Montana Telecommunications Act and in accordance with the Montana Administrative Procedure Act, may be cited as the Montana Telecommunications Act Rules.

History: Sec. 69-3-822, MCA; IMP, Sees. 69-3-801 and 69-3-802, MCA; NEW, 1986 MAR p. 799, Eff. 5/16/86.

38.5.2702   DEFINITIONS
(1) "Regulated telecommunications service" means two-way switched, voice grade access and transport of communications originating and terminating in this state and nonvoice grade access and transport if intended to be converted to or from voice-grade access and transport including any service, terms, charges or condition associated with or imposed to acquire or maintain regulated telecommunications service .

(2) Regulated telecommunications service does not include the provision of:

(a) terminal equipment used to originate or terminate regulated telecommunications service;

(b) private telecommunications service as defined at 69-3-804, MCA;

(c) resale of telecommunications service;

(d) one-way transmission of television signals;

(e) cellular communication; or

(f) radio paging or mobile radio service.

History: Sec. 69-3-822, MCA; IMP, Secs. 69-3-803 and 69-3-804, MCA; NEW, 1986 MAR p. 799, Eff. 5/16/86.

38.5.2703   NOTICE
(1) Any person, corporation or organization wishing to be on a commission telecommunications mailing list shall submit their name and address, in writing, to the Assistant Administrator, Utility Division, Montana Public Service Commission, 1701 Prospect Avenue, P.O. Box 202601,Helena, Montana 59620-2601, and clearly indicate, by reference to this rule, that they want to be on a telecommunications mailing list. A yearly fee may be charged to recover the cost of this service.
History: Sec. 69-3-822, MCA; IMP, Secs. 69-3-803(3) and 69-3-807, MCA; NEW, 1986 MAR p. 807, Eff. 5/16/86; AMD, 1993 MAR p. 1336, Eff. 6/25/93.

38.5.2704   SERVICE PRESUMED TO BE BASIC TELECOMMUNICATIONS SERVICE
(1) All telecommunications service is presumed to be regulated telecommunications service except the services listed in 69-3-803 (3) , MCA. The rules applicable to the regulation of public utilities continue to apply to regulated telecommunications service. Telecommunications services regulated at the date of adoption of these rules continue to be regulated unless deregulated by statute and the tariff withdrawal approved by this commission.
History: Sec. 69-3-822, MCA; IMP, Secs. 69-3-803(3) and 69-3-807, MCA; NEW, 1986 MAR p. 800, Eff. 5/16/86.

38.5.2705   INFORMATION REQUIRED TO DETERMINE STATUS OF SERVICE AS REGULATED OR NOT REGULATED
(1) A telecommunications service provider may assert that a service it offers is not regulated by informing the commission of its intent to offer the service as not regulated no later than 90 days prior to offering the service as not regulated. The following information shall be provided to the commission:

(a) the name and address of the provider;

(b) a complete description of the service asserted to be not regulated, including an engineering description;

(c) a description of the market and geographic area in which the service is or will be offered;

(d) the type, and an estimate of the number, of existing and potential customers offered the service; and,

(e) an affidavit that all persons and organizations on the telecommunications mailing list have been notified as required in ARM 38.5.2706.

(f) within 10 days of filing the information requested in (a) through (e) , an affidavit that all customers of the service, if any, have been appropriately informed of the provider's intent to offer the service as not regulated;

(g) The commission may require additional information from the provider.

(2) Any interested party may assert that a telecommunications service should be offered as not regulated telecommunications. The burden of proof is on the party attempting to establish that the service is not regulated. Such a request will be considered a complaint subject to the requirements of ARM 38.2.2101 through 38.2.2107.

(3) The commission may initiate an inquiry regarding whether a regulated telecommunications service should be offered as not regulated.

History: Sec. 69-3-822. , MCA; IMP, Secs. 69-3-803(3) and 69-3-807, MCA; NEW, 1986 MAR p. 800, Eff. 5/16/86.

38.5.2706   NOTICE OF FILING TO INTERESTED PERSONS AND PROVIDERS
(1) When a telecommunications service provider files its intent to offer a service as not regulated as required by ARM 38.5.2705, it must notify all persons and entities on the telecommunications mailing list that it asserts that the service is not regulated. The notification shall contain the name and address of the provider, a description of the service asserted to be not regulated and the mailing date.
History: Sec. 69-3-822, MCA; IMP, Secs. 69-3-803(3) and 69-3-807, MCA; NEW, 1986 MAR p. 801, Eff. 5/16/86.

38.5.2707   COMMISSION PRIMARY JURISDICTION
(1) The commission shall have primary jurisdiction to determine if a telecommunications service is regulated. The commission may make its determination using contested case procedure or, if no hearing is requested, may act without a hearing.

(2) Any interested party may comment in writing on the assertion that a telecommunications service is not basic telecommunications service by filing comments with the commission within 20 days of the mailing date of the notification required in ARM 38.5.2706 or, if a hearing is scheduled, within 10 days of the hearing. The commission may consider these comments in making its determination.

(3) If the commission makes its determination without a hearing it shall inform the provider that it has accepted or rejected the assertion that the service is not regulated within 60 days of the filing of the information required in ARM 38.5.2705. If the commission takes no action within 60 days, the provider may consider the service not regulated.

(4) If a hearing is required:

(a) The commission must promptly schedule the hearing and must give written notice as required in ARM 38.2.1801.

(b) The commission must inform the telecommunication provider that it has accepted or rejected its assertion that the service is not regulated within 60 days of the hearing.

(5) Not less than 20 days prior to offering the service as not regulated the telecommunications provider shall inform current customers, if any, that the service will no longer be regulated.

History: Secs. 69-3-822 and 69-1-110(3), MCA; IMP, Secs. 69-3-803(3) and 69-3-807, MCA; NEW, 1986 MAR pp. 801-802, Eff. 5/16/86.

38.5.2708   ADDITIONAL INFORMATION THAT MAY BE REQUIRED FROM REGULATED PROVIDERS
(1) If the commission determines that a service is not regulated and the telecommunications provider also provides regulated telecommunications service the commission may require information regarding:

(a) the revenues of and the cost of providing the not regulated service;

(b) the loss, if any, in net expected contribution to the revenue requirement of regulated service caused by the deregulation; and

(c) whether the provider proposes to adjust rates in its regulated service to compensate for the loss of contribution.

History: Sec. 69-3-822, MCA; IMP, Secs. 69-3-803(3) and 69-3-807, MCA; NEW, 1986 MAR p. 802, Eff. 5/16/86.

38.5.2709   PROHIBITION AGAINST CROSS-SUBSIDIZATION

(1) No provider of regulated telecommunications service may use current revenues earned or expenses incurred in conjunction with a regulated service to subsidize a not regulated service. The accounting records of the provider shall be kept in a manner that provides adequate information to detect cross-subsidization. The commission has the authority to determine the proper assignment or allocation of revenues, expenses and common investment between regulated and not regulated service.

(2) Commission review to determine the proper allocation between regulated and not regulated service may be in a rate case or the commission may initiate an investigation.

(3) A fully allocated cost accounting or tracking system shall be implemented by each telecommunications provider to separate all revenues and costs that are regulated by this commission.

(a) If the commission finds it necessary it may require a telecommunications provider to maintain entirely separate records and accounts of regulated telecommunications service.

(4) On finding that a regulated service is subsidizing a not regulated service the commission may eliminate the subsidy by any method it deems appropriate.

(5) Nothing in Title 69, Chapter 3, Part 8 precludes the commission from exercising its authority under 69-3-202, MCA.

History: Sec. 69-3-822, MCA; IMP, Secs. 69-3-806 and 69-3-202, MCA; NEW, 1986 MAR p. 803, Eff. 5/16/86.

38.5.2710   MANNER OF REGULATION OF TELECOMMUNICATION SERVICE
(1) All regulated telecommunications service providers shall file a statement of provision of telecommunications service with the commission. All current providers shall file within six months of the enactment of these rules. Thereafter any telecommunications provider shall inform the commission of any change within 30 days of the change.

(2) The statement shall contain the information required in 69-3-805(1) (a) -(c) , MCA, and:

(a) a description of the facilities used;

(b) tariffs for the regulated telecommunications service, if not on file, or a request that tariffs not be required by the commission.

History: Sec. 69-3-822, MCA; IMP, Sec. 69-3-805, MCA; NEW, 1986 MAR p. 803, Eff. 5/16/86.

38.5.2711   REGULATION OF RATES AND CHARGES
(1) All regulated telecommunications service may be subject to this rule. Nothing in these rules authorizes the detariffing of any ser- vice for which there is no alternative provider of such service.

(2) The commission may initiate a determination of whether alternatives to rate setting are appropriate or the telecommunications provider or an interested party may request a determination. If the commission initiates the determination it must notify all parties on the telecommunications mailing list that it intends to consider alternatives to rate setting and may give any additional notice it deems appropriate. If a telecommunications provider or an interested party petitions the commission for an alternative to rate setting it shall notify all parties on the telecommunications mailing list.

(3) To make its determination the commission may use contested case procedure, or if no hearing is requested, act without a hearing.

(4) A petition for an alternative to specific rates, tariffs or fares pursuant to 69-3-807(2) (a) through (e) , MCA, shall contain the following information:

(a) a complete description of the service proposed to be detariffed;

(b) the number and type of customer affected;

(c) the service territory in which the proposed detariffed service will be offered;

(d) the name and address of alternative service providers offering the service in the territory;

(e) the justification for detariffing the service; and

(f) an affidavit that all persons and entities on the telecommunications mailing list have been notified as required in part (3) of this rule.

(g) the commission may require additional information to make its determination.

History: Sec. 69-3-822, MCA; IMP, Sec. 69-3-807, MCA; NEW, 1986 MAR pp. 803-804, Eff. 5/16/86.

38.5.2712   ALTERNATIVE TO RATE SETTING
(1) To determine if any of the alternatives to rate setting listed in part (2) of this rule are appropriate, the commission shall consider the factor listed in 69-3-807(3) (a) -(e) , MCA.

(2) If the commission determines that an alternative to rate setting is appropriate for the telecommunications service the commission may act as allowed in 69-3-807(2) (a) -(e) , MCA.

(3) Twenty days prior to offering the service at a rate not set by this commission, the telecommunications provider shall inform current customers that the service will no longer be tariffed.

History: Sec. 69-3-822, MCA; IMP, Sec. 69-3-807, MCA; NEW, 1986 MAR pp. 804-805, Eff. 5/16/86.

38.5.2713   FILING REQUIREMENT OF DETARIFFED SERVICES

(1) Any telecommunications provider offering regulated telecommunications service detariffed under ARM 38.5.2712 shall maintain sufficient internal documentation to demonstrate that the revenues from detariffed operations are in excess of the incremental cost of providing the service. To the extent that detariffed operations do not cover incremental costs the commission will not allow those costs to be recovered through the rates of regulated services.

History: Sec. 69-3-822, MCA; IMP, Sec. 69-3-807, MCA; NEW, 1986 MAR p. 807, Eff. 5/16/86.

38.5.2714   PROCEDURES TO REQUIRE RE-TARIFFING
(1) The commission retains the right to retariff. A determination that a service should be retariffed is dependent on the factors listed in 69-3-807(3) (a) -(e) , MCA.

(2) Any interested party may petition the commission for a redetermination of whether an alternative to rate setting is appropriate. The burden of proof is on the party attempting to establish that the service should be retariffed. Such a request will be considered a complaint subject to the requirements of ARM 38.2.2101 through 38.2.2107.

(3) If the commission intends to reconsider whether alternatives to rate setting are appropriate, it shall notify the telecommunication provider and all those on the telecommunications mailing list. Any interested party may file written comments within 20 days of notification that the commission intends to reconsider whether alternatives to rate setting are appropriate. If there is no material factual question the commission may make its determination without a hearing.

History: Sec. 69-3-822, MCA; IMP, Sec. 69-3-807, MCA; NEW, 1986 MAR p. 805, Eff. 5/16/86.

38.5.2715   FORBEARANCE
(1) Any telecommunications provider may apply to the commission for forbearance of regulation for purposes of negotiating an individual customer contract pursuant to 69-3-808, MCA, in accordance with the procedures set forth in this rule. The procedures specified herein must be satisfied before a telecommunications provider may offer an individual customer contract containing rates which differ from the provider's applicable tariffs or price lists.

(2) A telecommunications provider requesting forbearance approval for a particular customer must file an application with the commission containing all of the following information:

(a) the name and address of the telecommunications provider requesting forbearance;

(b) the name, address and telephone number of the customer;

(c) a description of the telecommunications service(s) to be offered the customer, including specific references to the provider's tariffs and price lists, and the market area to be served.

(d) A statement that either:

(i) Another telecommunications provider has given the customer an oral or written competitive offer to provide the same or similar service(s) for which forbearance is requested; or

(ii) The customer has requested a quotation of prices from another telecommunications provider having tariffs or price lists for similar services on file with the commission.

(e) the name, address and telephone number of the alternative provider referred to in (d) , if known.

(3) The forbearance application containing the information required by subsection (2) shall:

(a) be verified under oath in accordance with Montana law, 1-6-101 et seq., MCA;

(b) be served by mail on all persons and entities on the commission's forbearance mailing list, on the same day that it is filed with the commission; and

(c) include a certificate of service verifying service as required in subsection (b) .

(4) If a complete application is filed and served in full compliance with the above requirements, the application shall be deemed automatically granted one (1) day after the date of filing, without the necessity of formal commission action. Approval shall authorize the provider to negotiate rates with the customer without regard to its tariffs or price lists.

(a) The application shall be deemed automatically denied if it is incomplete, inaccurate or fraudulent.

(b) The automatic approval provided above shall be deemed void if it is demonstrated at a later date that the application was incomplete, inaccurate or fraudulent at the time it was filed.

(5) The commission reserves the right to investigate, request additional information or hold hearings at any time regarding forbearance applications, negotiations, contracts or the service and rates provided to forbearance customers. The commission may amend the terms or adjust the rates of any forbearance contract; or order such other relief as may be appropriate. If the commission determines that the rates charged under forbearance contracts were or are below costs, it may issue appropriate orders to ensure that the provider's shareholders, and not ratepayers, are responsible for any costs not recovered through the contract rates.

History: Sec. 69-3-822, MCA; IMP, Sec. 69-3-808, MCA; NEW, 1986 MAR p. 807, Eff. 5/16/86; AMD, 1992 MAR p. 57, Eff. 12/27/91; AMD, 1993 MAR p. 1336, Eff. 6/25/93.

38.5.2716   FORBEARANCE CONTRACTS
(1) After forbearance is granted the telecommunications provider may negotiate with the customer for the provision of the service(s) without regard to its filed tariffs or price lists.   Within ten days after reaching a final contract or agreement, the telecommunications provider shall file with the commission:

(a) A copy of the final contract or agreement; and  

(b) The charges and conditions of service.

(2) For the term of the contract, the telecommunications provider may provide service pursuant to the contract rates, without regard to the rates in its tariffs or price lists. However, the provider remains bound by all other service terms and conditions in its tariffs and price lists, and all other applicable provisions of law.

(3) If a contract or agreement is not finalized with the customer within sixty (60) days after the forbearance application is granted, the provider shall immediately file a status report with the commission, indicating whether negotiations are continuing or whether the customer has reached an agreement with an alternative provider. Additional reports shall be filed every 60 days thereafter, if any change has occurred.

History: 69-3-822, MCA; IMP, 69-3-808, MCA; NEW, 1986 MAR p. 807, Eff. 5/16/86; AMD, 1993 MAR p. 1336, Eff. 6/25/93.

38.5.2717   BILLING

This rule has been repealed.

History: 69-3-822, MCA; IMP, 69-3-102 and 69-3-201, MCA; NEW, 1986 MAR p. 805, Eff. 5/16/86; REP, 1989 MAR p. 1515, Eff. 9/29/89.

38.5.2720   FLEXIBLE PRICING FOR REGULATED TELECOMMUNICATIONS SERVICE -- GENERAL
(1) "Flexible pricing" is a regulatory procedure which permits regulated rates for certain regulated telecommunications services to be changed quickly to meet market conditions.   Rates resulting from flexible pricing are sometimes referred to as "market retention rates" or "competitive response rates."   Flexible pricing may include a fixed alternative rate or a permissible range of rates with fixed minimum and maximum rates.

(2) Flexible pricing is not detariffing (i.e., total or partial detariffing of rates as provided at 69-8-807, MCA) .   A flexible pricing rate and operating rules related to such rate remain regulated and tariffed.   Flexible pricing does not include forbearance (i.e., forbearance of rate regulation as provided at 69-3-808, MCA) or promotions (i.e., promotional pricing, market trials, and sales-related activities as provided at 69-3-305, MCA) .   Detariffing, forbearance, and promotional pricing are separate and distinct from flexible pricing.

History: 69-3-103, MCA; IMP, 69-3-807, MCA; NEW, 2001 MAR p. 48, Eff. 1/12/01.

38.5.2721   FLEXIBLE PRICING FOR REGULATED TELECOMMUNICATIONS SERVICE -- PROCEDURE
(1) Except at provided in (2) , applications for flexible pricing must include:

(a) a statement that the application is for flexible pricing in accordance with these rules and a statement that the application is not for detariffing, forbearance, or promotional pricing;

(b) an identification of the tariffed rate and the tariffed operating rules related to such rate which will be affected by or implemented in the flexible pricing, accompanied by a proposed tariff page reflecting all proposed tariff changes, through interlining of material to be deleted and underlining of material to be added, that will result if the application for flexible pricing is approved;

(c) specifically, by each wire center to which the application for flexible pricing pertains:

(i) an identification of the number, size, and distribution of alternative providers of the service to be flexibly priced and, as of the date of application, the number, size, and distribution of each alternative provider actually providing the service to be flexibly priced;

(ii) documentation of the entry of each alternative provider into the area affected;

(iii) the extent to which services are available from these alternative providers;

(iv) the ability of these alternative providers to make functionally equivalent or substitute service readily available;

(v) the present market share of each alternative provider for the service; and

(vi) an estimate of the number of customers who have chosen service from the alternative providers;

(d) a description of the overall impact of the flexible pricing on the continued availability of existing services at just and reasonable rates, including the continued maintenance of basic service at affordable rates;

(e) a description of the overall impact of the proposed flexible pricing on the continued encouragement of competition in the provision of telecommunications services; and

(f) verification that the alternative lower price or the minimum price in a proposed range of prices cover all relevant incremental costs for each specific geographical area and product mix for which the flexible pricing is proposed.

(2) If the applicant does not have access to one or more of the information items required in (1) (c) (i) through (vi) , including through being prohibited by law from accessing the information, the applicant shall so state in its application, explain in reasonable detail why access is not available, and request that the commission waive the requirement to provide the information.

(3) Applications for flexible pricing will be noticed to the public and processed as contested cases in accordance with commission procedural rules.

History: 69-3-103, MCA; IMP, 69-3-807, MCA; NEW, 2001 MAR p. 48, Eff. 1/12/01.

38.5.2722   FLEXIBLE PRICING FOR REGULATED TELECOMMUNICATIONS SERVICE -- APPROVAL
(1) The commission will approve or deny flexible pricing on a case-by-case basis considering all relevant factors.

(2) Rate changes required to offset any reduction in revenues resulting from implementation of flexible pricing will only be considered in the context of a general rate proceeding.

History: 69-3-103, MCA; IMP, 69-3-807, MCA; NEW, 2001 MAR p. 48, Eff. 1/12/01.

38.5.2730   APPLICABILITY

(1) ARM 38.5.2730 through

38.5.2750 apply to applications by carriers, as defined in ARM

38.5.3302(3) ,for the approval of a new detariffed telecommunications service introduced pursuant to § 69-3-810, MCA. As alternatives to the procedures in ARM 38.5.2730 through 38.5.2750, carriers may elect to request that a new telecommunications service be detariffed pursuant to:

(a) the commission's detariffing rules, ARM 38.5.2711 through 38.5.2712, and § 69-3-807(2) and (3) , MCA, or

(b) the standards set forth in § 69-3-807(4) , MCA. Nothing in ARM 38.5.2730 through 38.5.2750 precludes a carrier from otherwise introducing a new telecommunications service on a tariffed basis, pursuant to an application filed and approved by the commission. The provisions of ARM 38.5.2730 through 38.5.2750 are not applicable to new services offered on a tariffed basis.

History: Sec. 69-3-822, MCA; IMP, Sec. 69-3-810, MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93.

38.5.2732   DEFINITIONS

(1) For purposes of ARM 38.5.2730 through 38.5.2750, "new service" means any service that is introduced separately or in combination with other services, and:

(a) Is not functionally required to provide local exchange service;

(b) Is not a repackaged current service; and

(c) Is not a direct replacement for a regulated telecommunications service.

History: Sec. 69-3-822, MCA; IMP, Sec. 69-3-810, MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93.

38.5.2735   FILING REQUIREMENTS

(1) A carrier must file an application with the commission requesting approval of a new service pursuant to 69-3-810, MCA, in accordance with the following filing requirements. The carrier must file an application containing the following information:

(a) A description of the service;

(b) The proposed terms and conditions under which the service would be offered;

(c) A proposed minimum price for the service;

(d) The proposed price list sheets for the service, containing the information required in ARM 38.5.2747(2) .

(e) Detailed answers to the following:

(i) Is the service functionally required to provide local exchange service? Explain.

(ii) Is the service, or any component thereof, similar to any past or present service offered by any carrier in Montana (including the applicant) ? The applicant must provide details, including a list of such services, the name(s) of such carrier(s) , and a description of the differences between the services.

(iii) If any service is identified in (ii) , explain why the proposed new service:

(A) is not a repackaged current service, and

(B) is not a direct replacement for a regulated telecommunications service.

(f) The relevant incremental cost of providing the service, including supporting work papers and analysis. Cost information may be filed on a proprietary basis pursuant to 69-3-105, MCA;

(g) Identify any products or services offered by unregulated firms, or firms other than carriers, which could compete with the proposed new service, describe their availability in Montana, and describe the differences between those products or services and the proposed new service;

(h) A statement on the first page of the application containing the following: "Notice: This application for approval of a new telecommunications service is being filed with the Montana public service commission pursuant to 69-3-810, MCA. Interested parties which appear on the commission's new services telecommunications mailing list are receiving a copy of this application pursuant to ARM 38.5.2735; and should file any comments they have regarding this filing within 10 days after this application was filed with the commission, at the following address:

     Mr. Dennis Crawford

     Montana Public Service Commission

     P.O. Box 202601

     1701 Prospect Avenue

     Helena, MT 59620-2601 The commission may take action on this filing after the ten day comment period elapses. If the commission has not acted on this filing within 30 days following issuance of this notice, the applicant may proceed to offer the new service on a detariffed basis (i.e. with reduced regulatory oversight of rate changes and maximum rates) . This application is governed by ARM 38.5.2730 through 38.5.2750."

(2) The complete application must be served by first class mail on the parties listed on the commission's new services telecommunications mailing list, on the same day that it is filed with the commission. The complete application must also be served in the same manner and at the same time on all persons or entitles who have requested or inquired about the provision of such service from the carrier within the previous six (6) months. Certification of such service must be filed by the carrier with the commission no later than one day after the application is filed and served.

History: Sec. 69-3-822, MCA; IMP, Sec. 69-3-810, MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93.

38.5.2740   APPROVAL PROCESS
(1) The 10 day period immediately following the filing and service of the application constitutes a comment period for interested parties. However, nothing herein shall be interpreted to preclude interested parties from filing comments or requesting a hearing more than 10 days after filing and service of the application.

(2) Following the 10 day comment period, the commission may:

(a) Approve the application,

(b) Deny the application,

(c) Suspend the offering of the service, or

(d) Grant interim approval of the offering of the service.

(3) If the commission has not acted within 30 days following the filing and service of the application, the carrier may proceed to offer the service.

(4) Regardless of the form of approval, disapproval or suspension, the commission may conduct further investigations, hold hearings or public meetings, and take other appropriate actions at any time.

(5) In deciding whether to approve a new service as detariffed, the commission may consider:

(a) whether the service falls within the definition of "new service," § 69-3-808, MCA and ARM 38.5.2732;

(b) whether approval is consistent with the purposes of the Montana Telecommunications Act, § 69-3-802, MCA;

(c) whether approval would encourage competition, have no effect on competition, or be anti-competitive;

(d) whether approval would violate any other provisions of the Montana Telecommunications Act, 69-3-801 et seq., MCA or Title 69, MCA; and

(e) any other information or factor relevant to the public interest.

History: Sec. 69-3-822, MCA; IMP, Sec. 69-3-810, MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93.

38.5.2742   PROVISION OF NEW SERVICE
(1) A new service which has been approved as provided above, may be offered on a "detariffed" basis. For purposes of this rule, "detariffed" means that the rates for the service may be changed without commission approval (above a minimum rate) , but the service otherwise remains fully regulated.

(2) At the time the service is offered to the public, the carrier must file a compliance price list with the commission containing:

(a) The terms, conditions and description of the service;

(b) The minimum rate for the service; and

(c) The rate to be charged for the service.

(3) The compliance price list filed pursuant to subsection (2) must be consistent with the conditions of commission approval. If approval occurred automatically following the passage of 30 days, pursuant to ARM 38.5.2740(3) , the compliance price list must contain the same terms, conditions, description and minimum price that were contained in the application.

(4) The rate charged for the service must be above the minimum rate and above relevant incremental costs at all times.

(5) The minimum rate in the price list cannot be changed without subsequent commission approval.

(6) The service must be offered in accordance with the terms, conditions and description contained in the price list.

(7) The terms, conditions and description of the service cannot be changed without subsequent commission approval.

History: Sec. 69-3-822, MCA; IMP, Sec. 69-3-810, MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93.

38.5.2744   PRICE LIST REVISIONS

(1) A carrier may request a change in a price list rate for a new service by filing a proposed new price list with the commission which complies with the provisions of these rules, and mailing a copy to the commission's new services telecommunications mailing list at least seven (7) days prior to the proposed effective date of the new price list rate. The carrier must concurrently file a certificate of service which affirms compliance with this rule.

(2) Proposed new price list rates become automatically effective for services rendered seven (7) days after filing and service is completed pursuant to subsection (1) ; no commission action or approval is necessary.

(3) If a carrier designates an effective date more than seven (7) days after a filing made pursuant to subsection (1) , the new price list rate becomes automatically effective for services rendered after such designated date.

(4) The automatic approval process described in this rule is only available to change a price list rate to another rate which is also above the minimum rate in the current price list. Formal explicit commission approval is required to alter the minimum rate or the terms, conditions and description contained in the price list.

History: Sec. 69-3-822, MCA; IMP, Sec. 69-3-810, MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93.

38.5.2750   RETARIFFING

(1) The commission retains the

right to retariff a detariffed new service.

(2) The commission may initiate a proceeding, or an interested party may petition, for the retariffing of a detariffed new service in accordance with the procedure described in ARM 38.5.2714.

History: Sec. 69-3-822, MCA; IMP, 69-3-810, MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93.

38.5.2760   WITHDRAWAL
(1) A carrier may request withdrawal of a current telecommunications service pursuant to § 69-3-810(4) , MCA, in accordance with the following procedure. This rule shall not preclude a carrier from requesting withdrawal of a service pursuant to other procedural methods which are consistent with the Montana Administrative Procedure Act and other applicable provisions of law.

(2) An application requesting commission approval of withdrawal of a current service must contain the following information:

(a) The name and address of the applicant;

(b) The name and description of the service, including specific reference to tariffs and/or price list sheets;

(c) The approximate number of Montana customers currently subscribing to the service from the applicant;

(d) The names of other carriers capable of offering the same or similar service to the applicant's current customers, if known;

(e) The current price for the service;

(f) An explanation of the reasons why the applicant is requesting withdrawal of the service; and

(g) Any disadvantages, adverse effects or hardships which may be incurred by customers due to withdrawal of the service, if known.

(3) The complete application must be filed with the commission and copies served on the same day by first class mail, to all current subscribers of the service and the Montana consumer counsel. The applicant may request approval by the commission of an alternative method of subscriber notification. Certification of such service must be filed with the commission no later than one day after the application is filed and served.

(4) The withdrawal of the service shall be deemed automatically approved without commission action 30 days after a complete application is filed and served in accordance with the requirements of this rule. However, the commission may suspend withdrawal on its own motion or upon request of an interested party. During the suspension period, the applicant must continue to offer the service on the same terms and conditions. The commission may conduct such investigations or hearings as it deems appropriate during suspension, and may enter an order approving or denying the withdrawal, or take such further action as may be appropriate.

History: Sec. 69-3-822, MCA; IMP, Sec. 69-3-810, MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93.

38.5.2801   LETTER OF TRANSMITTAL
(1) The letter accompanying a telecommunications utility rate case filing to the commission shall contain a minimum of the following:

(a) A list of documents submitted with the filing;

(b) A list of names and addresses of those to whom copies of the rate case have been mailed;

(c) A brief description of the proposed changes in service, rates, and revenue levels;

(d) Reasons for the proposed changes;

(e) Estimated number of customers whose rates will be effected;

(f) List of names and phone numbers of utility employees or consultants who shall be responsible for answering questions concerning the rate case;

(g) List of names and addresses of utility employees or consultants who should be included on the service list.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1986 MAR p. 805, Eff. 5/16/86.

38.5.2802   APPLICATIONS FOR RATE INCREASES
(1) Applications for rate increases exceeding $500,000 annually shall include, minimally, the information required in ARM 38.5.2808 through 38.5.2820. Applications for rate increases not exceeding $500,000 annually shall contain such information the utility feels will allow the commission to adequately evaluate the request for an increase in rates. Additional information may be required by the commission or its staff subsequent to the time of filing.

(2) The original and ten copies of the letter of transmittal, the application, all testimony, and all statements required in ARM 38.5.2808 through 38.5.2820 inclusive shall be submitted to the commission at the date of filing. Montana consumer counsel shall receive two copies of the same materials.

(3) One copy of all of the material required in these rules shall be submitted on computer diskettes compatible with either IBM personal computers or an IBM System 36 where possible.

(4) All or any part of the requirements of these rules may be waived by a quorum of the commission upon a showing of good cause. Waiver of any requirements, however, shall not preclude the commission from requiring the filing of specific cost data and material sufficient to support the application.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1986 MAR pp. 805-806, Eff. 5/16/86.

38.5.2803   ANALYSIS OF TOTAL SYSTEM COSTS FOR A TWELVE MONTH HISTORICAL TEST YEAR
(1) The application shall contain an analysis of total Montana costs as reflected on the filing utility's books for a test period consisting of 12 months actual experience ending no earlier than 9 months prior to the date of the filing of the application to increase rates. Any proposed adjustments to book costs shall be explained in writing. Such adjustments to book costs shall be shown separately and shall be fully supported, including schedules showing their derivation, where appropriate. However, no adjustments shall be permitted unless based on changes in facilities, operations, or costs which are known with certainty and measurable with reasonable accuracy at the time of the filing. No adjustment will be entertained unless it will become effective within 12 months of the last month of the test period.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1986 MAR p. 807, Eff. 5/16/86.

38.5.2804   OTHER DATA RELIED ON
(1) If the applicant has relied on data other than those in statements A to I in support of its rate increase, such other data, appropriately identified and designated as such and separately stated, shall be submitted in addition to the data required in statements A to I.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1986 MAR p. 807, Eff. 5/16/86.

38.5.2805   WORKING PAPERS TO BE FILED
(1) Three sets of all detailed working papers or documentation supporting the filing and/or the statements described in these rules shall be submitted at the time the application is filed with the Commission. Such working papers shall be supplied by the applicant to intervenors on request.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1986 MAR p. 807, Eff. 5/16/86.

38.5.2806   UNIFORM SYSTEM OF ACCOUNTS TO BE GENERALLY FOLLOWED
(1) All statements and schedules shall be prepared in accordance with the Federal Communications Commission Uniform System of Accounts, provided that such action does not conflict with Montana law and the commission's rules and orders. If the applicant believes that the FCC classifications are inconsistent with this commission's orders, the applicant's treatment and the inconsistency shall be stated on all related materials disclosing full particulars properly cross-referenced to the filing. Computations and other information related to the inconsistency shall be available for examination by the staff and intervenors. The treatment of any expense, rate base or revenue item that is not in conformance with, or is inconsistent with, prior commission orders is to be clearly identified and explained.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1986 MAR p. 806, Eff. 5/16/86.

38.5.2807   COST OF SERVICE DATA
(1) With the initial application for a rate increase under these rules, the applicant shall submit a complete cost of service study supporting the services and customer classes receiving proposed rate increases and a clear showing that revenues from services or customer classes proposed to be excluded from a rate increase are covering costs.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1986 MAR p. 808, Eff. 5/16/86.

38.5.2808   STATEMENT A -- BALANCE SHEET
(1) Statement A shall include the balance sheets on a total company basis as of the beginning and end of the test period, and the most recent balance sheet.
History: Sec. 69-3-103, MCA; IMP, Secs. 69-2-101, 69-3-821 and 69-3-822, MCA; NEW, 1986 MAR p. 808, Eff. 5/16/86.

38.5.2809   STATEMENT B -- INCOME STATEMENTS
(1) Statement B shall include an income statement for the test period

set forth as follows:

(a) Total company;

(b) Total state;

(c) Regulated total state;

(d) Regulated intrastate.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-2-101, 69-3-821 and 69-3-822, MCA; NEW, 1986 MAR p. 808, Eff. 5/16/86.

38.5.2810   STATEMENT C -- RATE BASE
(1) Statement C shall include the average rate base proposed by the applicant set forth in a manner similar to the format shown in Statement B.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1986 MAR p. 808, Eff. 5/16/86.

38.5.2811   STATEMENT D -- PLANT NOT USED AND USEFUL

(1) Statement D shall set forth the cost and description of plant carried on the company's books as utility plant which is not used and useful.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-2-101 and 69-3-109, MCA; NEW, 1986 MAR p. 808, Eff. 5/16/86.

38.5.2812   STATEMENT E -- ALLOCATION OF OVERALL ACCOUNTS

(1) Statement E shall set forth the allocation of all overall accounts to separate the amounts applicable to regulated service and not regulated services and shall provide a complete explanation of the method, procedures, and significant data used in making the allocations. All allocation factors shall be provided. Any method or procedure for allocating revenues or costs that has changed since the prior rate case must be specifically set forth and explained.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-821 and 69-3-822, MCA; NEW, 1986 MAR p. 806, Eff. 5/16/86.

38.5.2813   STATEMENT F -- AFFILIATED INTEREST TRANSACTIONS
(1) If the expense or capital accounts contain charges or credits from associated entities of the applicant, submit for each such associated entity work papers showing the following:

(a) The amount of the charges or credits during the test period;

(b) The account classification or classifications

charged or credited;

(c) Descriptions of the specific services performed for or by the associated entity;

(d) The basis used in determining the amounts of the charges or credits.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-2-101 and 69-3-821, MCA; NEW, 1986 MAR p. 808, Eff. 5/16/86.

38.5.2814   STATEMENT G -- INCOME TAXES
(1) Statement G shall include a reconciliation between booked taxes and actual taxes paid. All adjustments shall be completely described and the amounts thereof shown separately. Amounts of deferred taxes debited and credited shall be shown separately. There also should be shown the amounts and basis of assignments of taxes attributed to not regulated operations. Any abnormalities such as nonrecurring gains, losses and deductions affecting the income tax for the test period shall be explained and the tax effect set forth.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1986 MAR pp. 806-807, Eff. 5/16/86.

38.5.2815   STATEMENT H -- RATE OF RETURN
(1) Statement H shall show the percentage rate of return claimed. The statement shall show the cost of debt capital, preferred stock capital, and common stock capital and the overall rate of return claimed based on the utilities capitalization. In addition, items required in ARM 38.5.2816 through 38.5.2819, inclusive, shall be submitted as part of Statement H. In such cases where 50 percent or more of the common stock of the public utility is not held by the public but is owned by another corporation, the information required in Statement H shall also be submitted to the extent applicable with respect to the parent company.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1986 MAR p. 807, Eff. 5/16/86.

38.5.2816   DEBT CAPITAL
(1) Statement H shall include the weighted average cost of debt capital based upon the following data for each class and series of long-term debt outstanding according to the most recently available balance sheet:

(a) Title;

(b) Date of issuance and date of maturity;

(c) Interest rate;

(d) Principal amount of issue;

(e) Net proceeds;

(f) Amount currently outstanding;

(g) Cost of money and yield to maturity based on the interest rate and net proceeds per unit outstanding determined by reference to any generally accepted table of bond yields;

(h) If issue is owned by an affiliate, state name and relationship of owner. Furnish a copy of the latest prospectus issued by the public utility, any superimposed holding company or subsidiary companies.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1986 MAR p. 808, Eff. 5/16/86.

38.5.2817   PREFERRED STOCK CAPITAL
(1) Statement H shall also show the weighted average cost of preferred stock capital based upon the following data for each class and series of preferred stock outstanding according to the most recently available balance sheet:

(a) Title;

(b) Date of issuance;

(c) Dividend rate;

(d) Par value of stated amount of issue;

(e) Issuance expenses;

(f) Net proceeds;

(g) Cost of money, that is, the dividend rate divided by net proceeds per unit or share;

(h) Amount outstanding;

(i) If issue is owned by an affiliate provide the name and relationship of owner.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1986 MAR p. 808, Eff. 5/16/86.

38.5.2818   COMMON STOCK CAPITAL
(1) Statement H shall include the following for each sale of common stock during the two year period preceding the most recently available balance sheet:

(a) Number of shares sold;

(b) Gross proceeds at offering price;

(c) Underwriters' discount or commission;

(d) Proceeds to the filing utility;

(e) Amount of issuance expenses;

(f) Net proceeds;

(g) Offering price per share;

(h) Net proceeds per share;

(i) Whether issue was offered to stockholders through subscription rights or to the public.

(2) Statement H shall also include the following information on outstanding common stock for the five calendar years preceding the end of the test period and by months for the 12 month test period:

(a) Average number of shares outstanding;

(b) Earnings per average share for only the five years preceding the test year;

(c) Annual earnings per share for the latest reported 12 month average;

(d) Annual dividend rate per share;

(e) Dividends listed as percent of earnings;

(f) Average market price based on the monthly high and

low.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1986 MAR p. 807, Eff. 5/16/86.

38.5.2819   STATEMENT H-1 -- REACQUISITION OF BONDS OR PREFERRED STOCK
(1) If any bonds or preferred stock have been reacquired by the utility during the 18 months prior to the date of filing, show full details in Schedule H-1, including:

(a) Title or series;

(b) Principal amounts or par value reacquired;

(c) Reacquisition cost;

(d) Gain or loss on reacquisition.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1986 MAR p. 807, Eff. 5/16/86.

38.5.2820   STATEMENT I -- COMPARISON OF SALES AND REVENUES
(1) The application for a rate increase shall include a statement comparing rates, sales, and the revenues there from under the currently approved rate schedules and the rate schedules proposed to be superseded or supplemented. Such comparisons shall be applied to the sales levels for the 12 months of the test period. Such comparisons should be made for each rate schedule.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1986 MAR p. 808, Eff. 5/16/86.

38.5.2821   DEFICIENT FILINGS
(1) The commission shall, within 30 days of the filing by the utility of an application for rate increases, notify the utility of any failure of the application to comply with requirements of these rules. The notice shall specify the deficiencies and grant the utility a reasonable period of time in which to supplement or correct the filing. If notice is not given within the 30 days of filing, the application shall be deemed to comply with these rules. The date of the initial filing shall be preserved unless the initial filing patently fails to substantially comply with these rules. No filing shall be deemed to have patently failed to substantially comply with rules if the commission can reasonably judge the merits of the application and any deficiencies in the filing are corrected within 30 days. If the filing utility fails or refuses to provide information with respect to an expense, revenue, plant or other account item, but otherwise meets its burden of proof, the commission may adjust the utility's revenue requirement to reflect the failure to meet the burden of proof as to the specific item.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-2-101, MCA; NEW, 1986 MAR p. 808, Eff. 5/16/86.

38.5.2901   PURPOSE
(1) This sub-chapter's purpose is to provide guidelines for calculating the amount of contribution in aid of construction to be collected from a utility customer. Utilities with operating revenue of less than $25,000 are not subject to this sub-chapter.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1988 MAR p. 731, Eff. 4/15/88.

38.5.2902   DEFINITION
(1) The term contribution in aid of construction refers to all money or other property received by a public utility that it must include in its taxable income as a result of the repeal of IRC Sec. 118 (b) . It includes money or other property received by a regulated public utility to pay for the cost of additional plant or to pay the cost of modifying existing plant.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1988 MAR p. 731, Eff. 4/15/88.

38.5.2903   CALCULATION OF CONTRIBUTION
(1) The amount a regulated utility collects from a customer making a contribution in aid of construction must include:

(a) The contribution in aid of construction, and

(b) An amount equal to the utility's increased income tax expense that is caused by including the contribution in income, less the present value of estimated future tax savings from depreciation of the additional plant.

(i) To calculate the present value of future tax savings a utility must determine a reasonable discount rate using the following criteria:

(A) The discount rate may not exceed the overall rate of return established in the utility's last rate case.

(B) The discount rate must apply for no less than 12 months. All changes in the discount rate must be filed to be effective on January 1.

(C) The same discount rate must apply to all customers.

(2) A utility may be exempt from the requirement of ARM 38.5.2903 (1) (b) that it collect from the customer the tax expense and discounted present value of future tax savings associated with the contribution in aid of construction if:

(a) The additional tax expense is borne by the shareholders as a "below the line" expense, and

(b) All consumer's contributions in aid of construction are calculated in the same manner as regards responsibility for the tax expense; and

(c) The utility agrees to maintain its policy of treating the additional tax expense as shareholder expense until authorized to change by the commission.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1988 MAR p. 731, Eff. 4/15/88.

38.5.2904   EFFECT ON RATES
(1) Contributions in aid of construction are not included in income for ratemaking purposes. Ratepayers are not responsible for any effects associated with the inclusion of contribution in aid of construction in taxable income.
History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-102, MCA; NEW, 1988 MAR p. 731, Eff. 4/15/88.

38.5.3001   DEFINITIONS

This rule has been repealed.

History: 69-3-822, MCA and Ch. 349, sec. 37, L. 1997; IMP, 69-3-856 through 69-3-860, MCA; NEW, 1998 MAR p. 181, Eff. 10/21/97; REP, 2003 MAR p. 2085, Eff. 9/26/03.

38.5.3002   DESIGNATION AS A PUBLIC ACCESS POINT

This rule has been repealed.

History: 69-3-822, MCA and Ch. 349, sec. 37, L. 1997; IMP, 69-3-856 through 69-3-860, MCA; NEW, 1998 MAR p. 181, Eff. 10/21/97; REP, 2003 MAR p. 2085, Eff. 9/26/03.

38.5.3003   PRIORITY FOR FUNDING FROM THE MONTANA INTERIM UNIVERSAL ACCESS PROGRAM

This rule has been repealed.

History: 69-3-822, MCA and Ch. 349, sec. 37, L. 1997; IMP, 69-3-856 through 69-3-860, MCA; NEW, 1998 MAR p. 181, Eff. 10/21/97; REP, 2003 MAR p. 2085, Eff. 9/26/03.

38.5.3004   DETERMINATION OF DISCOUNT AMOUNT

This rule has been repealed.

History: 69-3-822, MCA and Ch. 349, sec. 37, L. 1997; IMP, 69-3-856 through 69-3-860, MCA; NEW, 1998 MAR p. 181, Eff. 10/21/97; REP, 2003 MAR p. 2085, Eff. 9/26/03.

38.5.3005   APPLICATION FOR DISCOUNTED SERVICES

This rule has been repealed.

History: 69-3-822, MCA and Ch. 349, sec. 37, L. 1997; IMP, 69-3-856 through 69-3-860, MCA; NEW, 1998 MAR p. 181, Eff. 10/21/97; REP, 2003 MAR p. 2085, Eff. 9/26/03.

38.5.3006   APPLICATION DEADLINES AND DISBURSEMENT OF FUNDS

This rule has been repealed.

History: 69-3-822, MCA and Ch. 349, sec. 37, L. 1997; IMP, 69-3-856 through 69-3-860, MCA; NEW, 1998 MAR p. 181, Eff. 10/21/97; REP, 2003 MAR p. 2085, Eff. 9/26/03.

38.5.3007   REDUCTION OF DISCOUNTS

This rule has been repealed.

History: 69-3-822, MCA and Ch. 349, sec. 37, L. 1997; IMP, 69-3-856 through 69-3-860, MCA; NEW, 1998 MAR p. 181, Eff. 10/21/97; REP, 2003 MAR p. 2085, Eff. 9/26/03.

38.5.3008   AUDITING

This rule has been repealed.

History: 69-3-822, MCA and Ch. 349, sec. 37, L. 1997; IMP, 69-3-856 through 69-3-860, MCA; NEW, 1998 MAR p. 181, Eff. 10/21/97; REP, 2003 MAR p. 2085, Eff. 9/26/03.

38.5.3009   MONTANA INTERIM UNIVERSAL ACCESS PROGRAM SURCHARGE RATE

This rule has been repealed.

History: 69-3-822, MCA and Ch. 349, sec. 37, L. 1997; IMP, 69-3-856 through 69-3-860, MCA; NEW, 1998 MAR p. 181, Eff. 10/21/97; REP, 2003 MAR p. 2085, Eff. 9/26/03.

38.5.3101   TYPES OF RECORDS TO BE MADE AVAILABLE

(1) "Transit record" is defined as telecommunications network transit traffic usage data and wireless telecommunications network transit traffic usage data pertaining to telecommunications traffic that an originating carrier delivers to a transiting carrier or carriers for delivery to a terminating carrier.

(a) The term does not mean traffic carried by interlocal access transport area carriers or providers of intralocal access transport area toll services.

(b) Such network usage data must be compiled in accordance with current telecommunications industry guidelines and in compliance with current ordering and billing forum (OBF) standards.

(2) To the extent the information has been transmitted by the originating carrier to the transiting carrier, transit records shall enable terminating carriers to identify originating carriers and other call information by means of a Category 11 or Category 11 type format record as defined in the EMR Bellcore Practice BR010 - 200 - 010, or a successor record adopted by the OBF, which enables a terminating carrier to identify each originating carrier's operating company number (OCN) , or carrier identification code (CIC) , or other call detail information necessary to identify, measure and appropriately charge for traffic that terminates on terminating carriers' networks.

(3) To the extent the information has been transmitted by the originating carrier to the transiting carrier, Category 11 or Category 11 type format records must provide terminating carriers with necessary call identification data such as the:

(a) the calling party number, including area code and number prefix;

(b) the called party number, including area code and number prefix;

(c) the date, time and duration of the call;

(d) the billed to number, including area code and number prefix;

(e) area code and number prefix; and

(f) related information associated with originating telecommunications traffic to enable the terminating carrier to identify, measure and appropriately charge the originating carrier for termination of local telecommunications service.

(4) Any transiting carrier shall deliver telecommunications traffic to a terminating carrier by means of facilities that enable the terminating carriers to receive from the originating carrier any and all information that the originating carrier or the interlocal access transport area carrier or intralocal access transport area toll provider of nonlocal telecommunications traffic transmits that enables the terminating carrier to identify, measure, and appropriately charge the originating carrier or the interlocal access transport area carrier or intralocal access transport area toll provider of nonlocal telecommunications traffic for the termination of its telecommunications traffic.

History: 69-3-803 and 69-3-815, MCA; IMP, 69-3-815, MCA; NEW, 2004 MAR p. 85, Eff. 1/16/04.

38.5.3102   COST OF THE TRANSIT RECORDS
(1) The rate for the transit records shall be the transit record rate set forth in qwest corporation's most recent Statement of Generally Available Terms on file with the commission or such other rate as the commission may establish.

(2) Nothing in this rule precludes two carriers from mutually agreeing in writing to any other arrangement pertaining to recovery of costs associated with acquiring transit or billing records from the transiting carrier or from the originating carrier.

History: 69-3-803 and 69-3-815, MCA; IMP, 69-3-815, MCA; NEW, 2004 MAR p. 85, Eff. 1/16/04.

38.5.3103   PARTY RESPONSIBLE FOR THE PAYMENT OF TRANSIT RECORDS TO THE TRANSITING CARRIER
(1) A transiting carrier must pass to the terminating carrier, unaltered, all information the transiting carrier receives in the signaling stream of the call from the originating carrier.

(2) Where a carrier requests transit records from a transiting carrier, the transiting carrier shall provide the transit records.

(3) The requesting carrier shall pay the transiting carrier for the records provided.

(4) Rates of compensation are as set forth in 38.5.3102, MCA.

History: 69-3-803 and 69-3-815, MCA; IMP, 69-3-815, MCA; NEW, 2004 MAR p. 85, Eff. 1/16/04.

38.5.3104   AUDITS AND VERIFICATION
(1) No more than twice a year, a transiting carrier required to provide transit records to a terminating carrier upon request shall permit the terminating carrier to independently verify through an audit that the records provided by the transiting carrier to the terminating carrier reasonably account for all the information the transiting carrier has received from the originating carrier and that the transiting carrier delivers to the terminating carrier.

(2) No more than twice a year, an originating carrier shall permit a terminating carrier to independently verify through an audit that the information provided by the originating carrier to the terminating carrier reasonably accounts for all the traffic the originating carrier delivers to the terminating carrier.

History: 69-3-803 and 69-3-815, MCA; IMP, 69-3-815, MCA; NEW, 2004 MAR p. 85, Eff. 1/16/04.

38.5.3105   RESPONSIBILITIES OF ORIGINATING CARRIER
(1) An originating carrier shall transmit to the terminating carrier or to the transiting carrier as part of the call transaction, information that permits the terminating carrier to:

(a) identify the originating carrier;

(b) measure the call (if appropriate) ; and

(c) charge the originating carrier for the termination of the call.

(2) At a minimum, the call transaction information set forth in (1) must include:

(a) the originating carrier's OCN or CIC or other call detail information necessary to identify the source of traffic that terminates on terminating carriers' networks;

(b) the calling party number (CPN) , including area code and number prefix;

(c) the called party number, including area code and number prefix;

(d) the date, time and duration of the call;

(e) the billed to number, including area code and number prefix;

(f) the jurisdictional identification parameter (JIP) or equivalent identifying parameter; and

(g) related information associated with originating telecommunications traffic to enable the terminating carrier to identify, measure and appropriately charge the originating carrier for termination of local telecommunications service.

History: 69-3-803 and 69-3-815, MCA; IMP, 69-3-815, MCA; NEW, 2004 MAR p. 85, Eff. 1/16/04.

38.5.3106   EXPEDITED RESOLUTION OF COMPLAINTS

(1) Complaints that are filed pursuant to this rule shall be designated as a complaint filed under the interconnection statutes, 47 USC Sections 251 and 252 and 69-3-831 , 69-3-832 , 69-3-833 , 69-3-834 , 69-3-835 , 69-3-836 , 69-3-837 , 69-3-838 and 69-3-839 , MCA, or as a complaint filed under 69-3-815 (6) , MCA.

(2) Where a complaint filed with the commission is designated a complaint filed under the relevant interconnection agreement statutes, the commission shall follow the procedures set forth in those statutes.

(3) Complaints that are filed under 69-3-815 (6) , MCA, shall be expedited according to a procedural schedule that will be implemented on a case-by-case basis in accordance with commission rules.

History: 69-3-803 and 69-3-815, MCA; IMP, 69-3-815, MCA; NEW, 2004 MAR p. 85, Eff. 1/16/04.

38.5.3201   PURPOSE AND SCOPE OF RULES
(1) Federal and Montana laws include provisions that apply to commission designation of eligible telecommunications carriers and also to commission review of the status of existing eligible telecommunications carriers.  The rules in this sub-chapter are minimum standards and must be read and applied in conjunction with federal and Montana law applying to designation of eligible telecommunications carriers and maintenance of eligible telecommunications carrier status.

(2) Eligible telecommunications carrier applications will be evaluated to determine whether the commission's public interest standard is met.

(3) Waiver of a rule in this sub-chapter will not be routinely granted, but may be granted, in the commission's discretion, for clearly demonstrated good cause.

History: 69-3-822, MCA; IMP, 69-3-840, MCA; NEW, 2005 MAR p. 653, Eff. 4/29/05.

38.5.3203   BURDEN IN PROCEEDINGS
(1) An applicant for designation as an eligible telecommunications carrier has the burden of demonstrating in fact and law that the requirements for designation as an eligible telecommunications carrier have been met.  An eligible telecommunications carrier, in any annual or other process involving certification as an eligible telecommunications carrier or maintenance of status as an eligible telecommunications carrier, has the burden of demonstrating in fact and law that the requirements for certification or maintenance of status have been met.

(2) Applicants in designation proceedings shall include, with the application for designation, prefiled testimony and supporting analysis establishing a prima facie case for designation.

History: 69-3-822, MCA; IMP, 69-3-103 and 69-3-840, MCA; NEW, 2005 MAR p. 653, Eff. 4/29/05.

38.5.3206   DESIGNATION AND MAINTENANCE -- COMPLIANCE WITH CONDITIONS

(1) The commission may revoke eligible telecommunications carrier status if the eligible telecommunications carrier is unable to establish that it meets commission compliance directives and conditions, provisions of federal and Montana laws including these rules, or assurances that have been provided by the eligible telecommunications carrier to the commission.

History: 69-3-822, MCA; IMP, 69-3-840, MCA; NEW, 2005 MAR p. 653, Eff. 4/29/05.

38.5.3209   DESIGNATION AND MAINTENANCE -- MINIMUM ADDITIONAL REQUIREMENTS
(1) An applicant for eligible telecommunications carrier status must demonstrate the  requirements for designation will be met upon designation or within a reasonable time following designation, and, on request by the commission, existing eligible telecommunications carriers must demonstrate the requirements for designation are being met or will be met within a reasonable time following a review of status proceeding.

(2) The minimum requirements for designation and maintenance of status as an eligible telecommunications carrier include:

(a) offering the services that are supported by the federal universal service support mechanisms as required by 47 CFR 54.201(d) (1) and identified in 47 CFR 54.101 and 47 USC 254(c) ;

(b) advertising the availability of the supported services and the charges for those services using media of general distribution as required by 47 CFR 54.201(d) (2) ;

(c) providing the supported services throughout the designated service area to all customers making a reasonable request for service, including low-income, low-density, rural, insular, and high-cost customers, and, for service in rural areas, in a manner reasonably comparable and at a rate reasonably comparable to similar services offered in urban areas;

    

(d) satisfying applicable consumer protection and service quality standards;

(e) offering a local usage plan comparable to the one offered by the incumbent local exchange carrier; and

(f) demonstrating eligible telecommunications carrier status is in the public interest.

History: 69-3-822, MCA; IMP, 69-3-840, MCA; NEW, 2005 MAR p. 653, Eff. 4/29/05.

38.5.3210   DESIGNATION AND MAINTENANCE -- PUBLIC INTEREST

(1) Consideration of the public interest will apply in all eligible telecommunications carrier designation and maintenance of status proceedings.

(2) The commission is not required to designate additional eligible telecommunications carriers in any service area, nonrural or rural.  The commission may determine designation of an eligible telecommunications carrier in any service area, rural or nonrural, is not in the public interest.

(3) Consideration of the "public interest" means the commission will consider all known factors regarding the designation of an eligible telecommunications carrier and the maintenance of status as an eligible telecommunications carrier that clearly demonstrate a public benefit or a public detriment, including, but not limited to:

(a) the ability of the eligible telecommunications carrier to provide the supported services in the manner required;

(b) the ability and willingness of the eligible telecommunications carrier to comply will all laws governing eligible telecommunications carriers;

(c) the ability of a service area to support or continue to support an additional eligible telecommunications carrier;

(d) the effect designation of an additional eligible telecommunications carrier will have on an existing eligible telecommunications carrier, primarily in regard to the provision of services and cost as relates to density, terrain, service, and so forth;

(e) whether the eligible telecommunications carrier technology platform is compatible with broadband and other advanced service offerings and facilitates availability of advanced telecommunications and information services in the areas served;

(f) the ability of the eligible telecommunications carrier to provide equal access to interexchange carriers in the event no other eligible telecommunications carrier is providing equal access in the service area;

(g) the extent to which the eligible telecommunications carrier is able to provide service to customers throughout the service area using the eligible telecommunications carrier's own network;

(h) the effect that designation or maintenance of status will have on the availability of universal service funds;

(i) the effect that designation or maintenance of status will have on the principles of universal service;

(j) the public convenience, including things such as mobility, quality of service, availability of competition, and market choices; and

(k) public necessity, including factors such as public safety, reliability of service, ability to operate in emergencies.

(4) Any one public interest factor, identified in (3) or otherwise relevant for consideration, is unlikely to be determinative in and of itself, regarding the designation of an eligible telecommunications carrier or the maintenance of status as an eligible telecommunications carrier.  A determination of public interest will generally include a consideration and balancing of all relevant factors.

History: 69-3-822, MCA; IMP, 69-3-840, MCA; NEW, 2005 MAR p. 653, Eff. 4/29/05.

38.5.3213   DESIGNATION AND MAINTENANCE -- COVERAGE

(1) Applications for designation as a competitive eligible telecommunications carrier and, upon request by the commission, existing eligible telecommunications carriers must provide a plan demonstrating the manner in which customers in the service area for which designation is sought or exists  have or will have access to service.  The plan for coverage must be in terms of percentage of customers served, minimum of 98%, within designated periods of time in years, up to five years.  The commission may approve the plan or modify the plan if the circumstances demonstrate modification is in the public interest.

(2) For purposes of this rule "access to service" means that the indicated percentage of residences and businesses must be able to utilize the designated carrier's services from their residence or business locations.  In the case of a wireless eligible telecommunications carrier, "access to service" also means that customers within the maximum required coverage for the period designated shall not be required to purchase any equipment, beyond a typical handheld mobile phone, that may be required to enhance the ability to transmit or receive the wireless communications service.

History: 69-3-822, MCA; IMP, 69-3-840, MCA; NEW, 2005 MAR p. 653, Eff. 4/29/05.

38.5.3216   MAINTENANCE -- INVESTIGATIONS, AUDITS, REPORTING, NOTICES

(1) The commission may conduct investigations and audits of any or all designated eligible telecommunications carriers in Montana.  The investigations and audits will be limited to compliance with eligible telecommunications carrier requirements.

(2) The commission may require reporting by any or all eligible telecommunications carriers in Montana.  Upon commission notification, eligible telecommunications carriers shall submit reports to the commission in a format prescribed by the commission, which may require affidavits in support.  The reports will be limited to compliance with eligible telecommunications carrier requirements.

 (3) Eligible telecommunications carriers receiving or intending to receive federal universal service funding for services provided by means other than customary wireline or mobile wireless service (e.g., satellite, internet, voice over internet protocol, cable, power line, and so forth ) must file with the commission notification of receipt or notification of intent to seek funding.  During an annual certification procedure or upon commission request, such carriers must demonstrate that the provision of basic exchange service by means other than customary wireline or mobile wireless (e.g., satellite, internet, voice over internet protocol, cable, power line, and so forth ) satisfies all of the requirements of federal and Montana law, including the requirements of these rules.

History: 69-3-822, MCA; IMP, 69-3-840, MCA; NEW, 2005 MAR p. 653, Eff. 4/29/05.

38.5.3218   MAINTENANCE -- ANNUAL CERTIFICATIONS

(1) The process for the annual certifications of eligible telecommunications carriers will be designed to meet all federal and Montana requirements for annual certification.  The process will be as prescribed by commission notice to all Montana eligible telecommunications carriers, with necessary reference to federal and Montana law, including these rules.  The notice will be provided to all Montana eligible telecommunications carriers in advance of the annual certification deadline.  Each eligible telecommunications carrier will receive the same notice, or, if certification distinctions are necessary, each nonrural eligible telecommunications carrier will receive an identical notice and each rural eligible telecommunications carrier will receive an identical notice.

History: 69-3-822, MCA; IMP, 69-3-840, MCA; NEW, 2005 MAR p. 653, Eff. 4/29/05.

38.5.3230   ELIGIBLE TELECOMMUNICATIONS CARRIERS -- CERTIFICATION AND VERIFICATION OF SUBSCRIBER ELIGIBILITY FOR FEDERAL LIFELINE/LINK-UP ON TRIBAL LANDS
(1) Each eligible telecommunications carrier providing federal lifeline/link-up service to a qualifying low-income subscriber who is an eligible resident of tribal lands, as defined at 47 CFR 54.400, must obtain that subscriber's signature on a document certifying under penalty of perjury that:

(a) the subscriber receives benefits from one of the qualifying low-income programs designated by the federal communications commission at 47 CFR 54.409 and related provisions, and identifying the program or programs from which that subscriber receives benefits; or

(b) the subscriber's household income is at or below 135% of the federal poverty guidelines and that the subscriber's presented documentation of income accurately represents the subscriber's household income; and

(c) the subscriber will notify the carrier if the subscriber ceases to participate in the qualifying low-income program or programs or if the subscriber's income exceeds 135% of the federal poverty guideline.

(2) If a subscriber is qualifying for the federal lifeline/link-up program under the criterion of household income below 135% of the federal poverty guidelines, an eligible telecommunications carrier must require the subscriber to present documentation of the subscriber's income prior to the subscriber's enrollment in the program that is in accordance with the requirements adopted by the federal communications commission at 47 CFR 54.410 and related provisions.

(3) In order to verify subscribers' continued eligibility for the federal lifeline program on tribal lands, each eligible telecommunications carrier must annually survey a statistically valid sample of subscribers who have qualified either as recipients of one of the qualifying low-income programs designated by the federal communications commission or under the criterion of household income under 135% of federal poverty guidelines.  A subscriber contacted in the eligible telecommunications carrier's survey must either certify, under penalty of perjury, that the consumer continues to participate in the qualifying program (program based eligibility) , or prove continued eligibility and self-certify continued eligibility in accordance with the requirements adopted by the federal communications commission, at 47 CFR 54.410 and related provisions (income-based eligibility) .  A subscriber's failure to respond to a survey will be deemed a negative response for purposes of continued eligibility and, upon proper notice, the subscriber will be removed from the federal lifeline program.

(4) In lieu of the above statistically valid sample, an eligible telecommunications carrier may do annual notice to all subscribers requiring each subscriber to establish continued eligibility for support.

History: 69-3-822, MCA; IMP, 69-3-840, MCA; NEW, 2005 MAR p. 820, Eff. 5/27/05.

38.5.3301   PURPOSE
(1) Section 69-3-201 , MCA, requires every public utility to furnish reasonably adequate service and facilities. The purpose of these rules is to establish certain minimum standards for determining if regulated telecommunications service provided on a retail basis is adequate. The commission will liberally construe these rules and may require additional standards when necessary to provide adequate service.

(2) Except as may be otherwise provided in a specific rule, these service rules apply to any carrier operating in Montana and subject to the commission's jurisdiction.

(3) If the application of any rule results in an unreasonable hardship to a carrier or a customer, either may apply for waiver of the rule.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-201, MCA; NEW, 1989 MAR p. 1515, Eff. 9/29/89; AMD, 2006 MAR p. 2967, Eff. 12/8/06.

38.5.3302   DEFINITIONS
In the interpretation of these rules, the following definitions shall be used:

(1) "Billing aggregator" has the meaning as provided in 69-3-1302 (2) , MCA.

(2) "Calls" means customers' telecommunications messages attempted.

(3) "Carrier" means any local exchange carrier, interexchange carrier, operator service provider, inmate calling provider, or other telecommunications provider which provides regulated telecommunications services pursuant to 69-3-803 , MCA. The term does not include a rural cooperative carrier or a wireless carrier.

(4) "Central office" means a switching unit which may provide local access lines in a telecommunications system providing service to the general public, having the necessary equipment and operating arrangements for terminating and interconnecting customer lines and trunks or trunks only. There may be more than one central office in a building.

(5) "Channel" means a path for telecommunications between two or more customers or central offices.

(6) "Competitive local exchange carrier" means a carrier providing regulated local exchange service through any means, but is not the incumbent local exchange carrier.

(7) "Customer" means any person, firm, partnership, corporation, municipality, cooperative, organization, governmental agency, or other legal entity which has applied for, been accepted, and is currently receiving telecommunications service.

(8) "Customer trouble report" means any oral or written report from a customer or user of telecommunications services relating to a physical defect or to difficulty or dissatisfaction with the operation of the utility's facilities.

(9) "Exchange" means a service area established by an incumbent localexchange carrier for the administration of telecommunications services in a specified area for which a separate local rate schedule is provided. It may consist of one or more central offices together with associated plant facilities used in furnishing telecommunications services in that area. An exchange has one point designated for the purpose of rating toll calls for all subscribers in the exchange.

(10) "Facilities-based carrier" for purposes of these rules means a carrier that owns a majority of the facilities by which the carrier provides telecommunications service in Montana.

(11) "Incumbent local exchange carrier" means, with respect to an area, the local exchange carrier that:

(a) on February 8, 1996, provided telephone exchange service in the area; and

(b) on February 8, 1996, was considered to be a member of the Exchange Carrier Association pursuant to 47 CFR 69.601(b) or is a person or entity that, after that date, became a successor or assign of a member of the Exchange Carrier Association.

(12) "Installation order" means a request for new or transferred primary or additional residential or business service, but does not include change orders or requests for features to be added to existing service.

(13) "Interexchange carrier" means a telecommunications carrier that carries telecommunications services between exchanges, whether inter- or intra-LATA.

(14) "Interoffice" means between central offices.

(15) "Local access line" means a facility, totally within one exchange, providing a telecommunications channel between a customer's service location and the serving central office or remote switch.

(16) "Local exchange carrier" means a carrier that provides local exchange service.

(17) "Local exchange service" means telecommunications service provided within local exchange service areas. It includes the use of facilities required to establish connections between customer locations within the exchange and between customer locations and interexchange trunks serving the exchange.

(18) "Network interface device (NID) " means a device which establishes a point of demarcation between the telecommunications utility facilities and a customer's premises wiring and equipment, permits the disconnection of all customer premises wiring from the exchange carrier network, and for testing purposes, provides for direct network access through an industry registered jack of a type provided for in Part 68 of the Federal Communications Commission (FCC) rules.

(19) "Out of service trouble report" means a trouble report concerning no dial tone, an inability to make or receive calls, or a deterioration of transmission quality to the point that communication is not workable.

(20) "Service provider" has the meaning as provided in 69-3-1302 (7) , MCA.

(21) "Tariff" means the entire body of rates, tolls, rentals, charges, classifications, and rules filed by the carrier and approved by the commission.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-201, MCA; NEW, 1989 MAR p. 1515, Eff. 9/29/89; AMD, 1991 MAR p. 2631, Eff. 12/27/91; AMD, 1993 MAR p. 1336, Eff. 6/25/93; AMD, 2006 MAR p. 2967, Eff. 12/8/06.

38.5.3320   DATA TO BE FILED WITH THE COMMISSION
(1) In addition to tariffs as required by 69-3-301 , MCA, each incumbent local exchange carrier must file with the commission a map showing the boundaries of the local exchange service area and showing base rate area and zone boundaries from which all customer locations can be determined and mileage or zone charges quoted for each exchange within the state. Boundary lines must be located by appropriate measurement to an identifiable location if not otherwise located on section lines, waterways, railroads, roads, etc. Maps must include location of highways, section lines, geographic township and range lines, railroads, and waterways outside municipalities and show the map scale and other detail. An exchange map and the applicable rates for local service must be available at the business office serving the exchange area.

(2) Each carrier must furnish to the commission, at such times and in such form as the commission requires, the results of any service-related tests, summaries, or records in its possession. The carrier must also furnish the commission with any information concerning the utility's facilities or operations which may be requested.

(3) Each facilities-based carrier must report promptly to the commission and to the nearest radio station or other local news media any specific occurrence or development which disrupts the service of a substantial number of its customers (the smaller of 25 percent or 100 customers) for a time period in excess of two hours. This rule shall not apply to interexchange carriers in the case of an outage affecting local service.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-201, MCA; NEW, 1989 MAR p. 1515, Eff. 9/29/89; AMD, 2006 MAR p. 2967, Eff. 12/8/06.

38.5.3330   RATE AND SPECIAL CHARGES INFORMATION
(1) A carrier must provide all information and assistance needed by applicants, customers, or others to determine the lowest cost telecommunications service available from the carrier that meets their stated needs. The carrier must provide written rate information at the request of customers and as otherwise required by the commission.

(2) Each carrier whose tariff or price list is filed with the commission must have its tariff or price list available for viewing at each business office. If the carrier has no local business office in Montana, the Montana tariff or price list must be posted on its web site.

(3) Prior to taking any action or offering any service, the local exchange carrier must notify customers of any connection charge or other charge and must provide an estimate of the initial bill for flat monthly services and other applicable charges. The local exchange carrier shall inform the customer whether or not taxes and other fees are included in the estimate.

(4) The local exchange carrier must offer to give an applicant a written estimate of special charges for services not established by tariff, such as construction charges, which are levied on an actual cost basis.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-201, MCA; NEW, 1989 MAR p. 1515, Eff. 9/29/89; AMD, 2006 MAR p. 2967, Eff. 12/8/06.

38.5.3331   BUSINESS OFFICES AND TOLL-FREE TELEPHONE INFORMATION
(1) Each carrier, billing aggregator, and service provider must have at least one business office to provide customers and others with access to personnel who can provide information on services and rates, accept and process service applications, explain customers' bills, adjust errors, and generally represent the entity. If one business office serves several exchanges or states, toll-free calling to that office must be provided and the office must be staffed during Montana business hours.

(2) Local exchange carriers which provide billing services for other carriers, billing aggregators, or service providers shall include in such bills the toll-free telephone numbers of such carriers or service providers or alternatively, the toll-free numbers of their billing aggregators, which are provided to the local exchange carriers in accordance with (3) .

(3) Carriers, billing aggregators, or service providers which bill through local exchange carriers are required to provide the toll-free telephone numbers required in (1) to all such local exchange carriers.

(4) Local exchange carriers and billing aggregators must provide a carrier's or service provider's toll-free number to a customer, upon request, at no charge, for any entity for which it bills.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-201, MCA; NEW, 1989 MAR p. 1515, Eff. 9/29/89; AMD, 1993 MAR p. 1336, Eff. 6/25/93; AMD, 2006 MAR p. 2967, Eff. 12/8/06.

38.5.3332   CUSTOMER BILLING
(1) Carriers and billing aggregators are required to bill in accordance with the following procedures:

(a) Bills must be issued monthly, unless the carrier has obtained the customer's consent for bills to be issued on an alternative billing schedule.

(b) Residential and single-line business bills must itemize the charges for all services and products. The bill must clearly provide the following information:

(i) payment due date;

(ii) total amount due, including taxes;

(iii) the toll-free telephone number of the company's business office serving the customer;

(iv) a statement that local exchange service may not be disconnected for nonpayment of unregulated services, toll services, or services provided by other carriers, except when a local exchange carrier's local, toll, or unregulated services are combined into one service package at a single rate;

(v) the address and telephone number of the commission.

(c) If a local exchange carrier bills and collects for any interexchange carrier, including itself, all toll calls must be itemized showing the date, the time, the length in minutes, discounts if applicable, and the destination of the call, unless the customer has subscribed to a service option which does not require itemization of each call. For collect and/or third party calls, the point of origin and the telephone number of origin must be stated.

(d) Upon request, a carrier must notify the commission of the name and address of all entities for which it provides billing and collection services. If a local exchange carrier bills and collects for another carrier or service provider, the local exchange carrier must, upon request, provide the customer with the name, address, and telephone number of the other carrier's or service provider's department responsible for customer dispute resolution.

(e) Charges contained in telephone bills must be accompanied by a brief, clear, nonmisleading, plain-language description of the service rendered. If the bill includes charges from an entity that did not bill the customer for service during the customer's previous billing cycle, the name of the new provider and the charges billed must be printed in a clear and conspicuous manner.

(f) If a customer has subscribed to local measured service, the bill must detail any and all charges in excess of the basic local measured service monthly charge, including, at a minimum, the total minutes and total charges in each rate category.

(2) If telecommunications service has been underbilled because of the carrier's error, omission, or negligence and the amount owed exceeds $25, the carrier must offer the customer a reasonable payment arrangement. If telecommunications service has been overbilled, the carrier must credit the customer's future bills for the amounts overbilled, unless the customer requests a cash refund of the credit balance. In either case (underbilling or overbilling) , the carrier shall abide by the applicable statute of limitations, and 69-3-221 , MCA.

(3) If a customer's service is interrupted for any reason other than the customer's negligence or willful act and service remains out for more than 24 hours after being reported, appropriate adjustments shall be made to the customer's bill upon determination of the outage. For the purpose of administering this rule, every month is considered to have 30 days.

(4) The carrier may require the customer to pay the undisputed portion of the bill to avoid discontinuance of service for nonpayment. The carrier must investigate the dispute and report the result to the customer. If the billing dispute is not resolved, the carrier must advise the customer that the commission is available for review and disposition of the matter.

(5) Local exchange service cannot be denied or terminated because of nonpayment of unregulated services, toll services, or services provided by other carriers, except when a local exchange carrier's local, toll, or unregulated services are combined into one service package at a single rate. A carrier's bill to its customer shall clearly distinguish between regulated and unregulated service.

(6) Undesignated partial payments of a bill shall be applied first to local exchange carrier regulated local exchange services and then to service other than local exchange carrier regulated local exchange services in such percentage as each other service provider's charges represent of the total charges. When a local exchange carrier's local, toll, or unregulated services are combined into one service package at a single rate, undesignated partial payments shall be applied first to the service package, then to other services as described above.

(7) If a carrier bills a customer for a service more than 60 days after the service is provided and the customer contacts the carrier (or its billing agent) to question or dispute the late-billed charges, the carrier (or its billing agent) must offer the customer a payment plan that allows an equal period of time to pay the late-billed charges as it took the carrier to bill the customer. During this period, late payment charges must not be assessed on the late-billed service charges, and the carrier is prohibited from taking any collection actions against the customer other than monthly notice by mail of the unpaid charges. Any such monthly notice must not threaten any further collection action, and must inform the customer that the carrier will arrange a payment plan in accordance with this rule upon customer request.

(8) All carriers are prohibited from charging any amount for unanswered calls.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-201, 69-3-221, MCA; NEW, 1989 MAR p. 1515, Eff. 9/29/89; AMD, 1990 MAR p. 593, Eff. 3/30/90; AMD, 1991 MAR p. 2631, Eff. 12/27/91; AMD, 1993 MAR p. 1336, Eff. 6/25/93; AMD, 2006 MAR p. 2967, Eff. 12/8/06.

38.5.3333   PUBLIC INFORMATION

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-201, MCA; NEW, 1989 MAR p. 1515, Eff. 9/29/89; REP, 2006 MAR p. 2967, Eff. 12/8/06.

38.5.3334   CUSTOMER DEPOSITS FOR TELECOMMUNICATIONS SERVICES
(1) Deposit requirements for business and residential service must comply with ARM 38.5.1101, et seq. A carrier may not collect a deposit in order to initiate local exchange service to a subscriber who participates in the Montana Telephone Assistance Program and who has also subscribed to toll blocking, except that a deposit may be required for optional local calling features and services subscribed to by the program participant.
History: 69-3-103, MCA; IMP, 69-3-102, 69-3-201, MCA; NEW, 1989 MAR p. 1515, Eff. 9/29/89; AMD, 2006 MAR p. 2967, Eff. 12/8/06.

38.5.3335   COMPLAINTS AND APPEALS
(1) All carriers must promptly investigate customer complaints and inform the customer of proposed action. If requested, the carrier must provide a written statement of its action on the complaint.

(2) A carrier must inform a customer that a review by supervisory personnel of an unfavorable action on a bill or complaint is available. If requested, the carrier must provide a written statement of the supervisor's action on the complaint. The written statement must also inform the customer that commission review is available and provide the commission's telephone number and address.

(3) Upon receipt of a complaint, either orally or in writing, from the commission or its staff on behalf of a customer or applicant, the carrier shall make a suitable investigation and advise the commission or its staff of the results thereof. Initial response to the commission or its staff shall be provided within five working days.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-201, MCA; NEW, 1989 MAR p. 1515, Eff. 9/29/89; AMD, 2006 MAR p. 2967, Eff. 12/8/06.

38.5.3336   DIRECTORIES
(1) An incumbent local exchange carrier must provide its customers telephone directories at regular intervals (not to exceed 18 months) , listing all customers' names, addresses, and telephone numbers, except public telephones, addresses, and telephone service not published at the customer's request.

(2) Each local exchange carrier must list its customers (except those customers requesting otherwise) with the directory assistance operators within three business days of service connection. If directory assistance (DA) is provided by another company, the local exchange carrier must submit the DA listing updates to the DA provider within three business days and the DA provider must update its listings within the following three business days.

(3) Upon issuance, a copy of each directory shall be distributed free to all customers served by that directory. Free copies shall also be made available to any public library in the state requesting a directory.

(4) Information pertaining to emergency calls, such as for the police and fire departments, must be conspicuously printed on the inside front cover of the directory.

(5) The directory must contain instructions on placing local and long distance calls, calls to repair and directory assistance services, and locations and telephone numbers of exchange carrier business offices within the appropriate service area.

(6) Incumbent local exchange carriers shall make available at a reasonable charge space in the front part of the directory for other carriers' information and rates.

(7) Each directory must contain, in the instructional section, the commission's address and telephone number and an explanation of the customer's right to bring complaints and inquiries to the commission.

(8) Except when the number listed in error is in use by another customer or is assigned to a different carrier, if there is an error in the directory listing for a customer, the local exchange carrier must intercept all calls to the listed number at no charge, for six months or until a new directory is published, whichever occurs first. Alternatively, the local exchange carrier may forward all calls to the listed number to the correct number. If there is an error or omission in the name listing of a customer, the correct name and telephone number must be placed in the files of the directory assistance and/or intercept operators and the correct number furnished the calling party upon request or interception. Competitive local exchange carriers are exempt from this requirement if technically unable to comply with it.

(9) When additions or changes in plant or changes to any other local exchange carrier operations necessitate changing telephone numbers to a group of customers, reasonable notice must be given to all affected customers.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-201, MCA; NEW, 1989 MAR p. 1515, Eff. 9/29/89; AMD, 2006 MAR p. 2967, Eff. 12/8/06.

38.5.3337   PAY TELEPHONES

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-201, MCA; NEW, 1989 MAR p. 1515, Eff. 9/29/89; AMD, 1993 MAR p. 1336, Eff. 6/25/93; REP, 2006 MAR p. 2967, Eff. 12/8/06.

38.5.3338   AUTOMATIC DIALING - ANNOUNCING DEVICES

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-201, MCA; NEW, 1989 MAR p. 1515, Eff. 9/29/89; AMD, 1993 MAR p. 1336, Eff. 6/25/93; REP, 2006 MAR p. 2967, Eff. 12/8/06.

38.5.3339   TERMINATION OF SERVICE
(1) A carrier may interrupt service without notice only in emergency situations, if the service has been abandoned by the customer, or if the service was obtained without the carrier's authorization.

(2) Subject to the requirements of these rules, telecommunications services may be discontinued, after notice, as provided in (5) , for the following reasons:

(a) Failure to make a security deposit or guarantee.

(b) Nonpayment of undisputed past due bills for regulated services.

(c) Unauthorized interference, diversion or use of telephone service.

(d) Violation of relevant laws, ordinances, commission rules or carrier tariffs, or

(e) Refusal to allow reasonable access to facilities or equipment.

(3) A carrier may neither terminate nor refuse to provide regulated local exchange service based on the following:

(a) The failure of any person, other than the customer against whom termination is sought, to pay any charges due to the carrier.

(i) Failure to pay for business service at a different location and with a different telephone number is not grounds for disconnecting residential service and vice versa.

(b) Failure to pay an amount in dispute pending before the commission.

(c) Failure to pay for unregulated service or service provided by other carriers, except when the unregulated service was part of a local exchange carrier's service package that combined its local, toll, or unregulated services at a single rate.

(4) All exchange carriers must establish a system of third party notification. That is, if a customer requests that a third party such as a social service, minister, responsible adult, etc., be notified of nonpayment, the exchange carrier must provide such a service, free of charge.

(5) Notice of termination of service must comply with the following:

(a) Written notice of termination must be sent at least seven days prior to service disconnection and must contain the following:

(i) The reason for disconnection.

(ii) Corrective actions the customer may take.

(iii) Appeal actions the customer may take.

(iv) Cost of reconnection, deposit requirements and any other costs associated with reconnecting the service.

(b) On the business day prior to disconnection a carrier representative must make a reasonable effort to contact and notify the customer of the information in the written notice. The carrier must keep a record showing the name of employee, date and hour of attempted contact and whether the customer was orally notified of disconnection.

(c) If a customer, to avoid disconnection, enters into a deferred payment agreement with a carrier, then fails to comply with the terms of the agreement, the carrier may terminate service to the customer without further notice.

(6) Excessive toll usage accompanied by a risk of nonpayment justifies an exception to the seven-day notice requirement. The seven-day notice requirement shall be excused when service is to be terminated for excessive toll usage and an identifiable risk of nonpayment exists, as defined herein.

(a) For purposes of this rule, "toll usage" includes regulated toll charges whether already billed or as yet unbilled, but excludes all amounts owed or owing for unregulated services or services provided by other carriers, except for other carriers' regulated services that cannot be disconnected or discontinued separate from local service.

(b) For purposes of this rule, "excessive toll usage" is toll usage for an estimated one month billing period that:

(i) exceeds 200 percent of the monthly average of the customer's toll charges, if any, from the preceding six months; and

(ii) is greater than $100.

(c) For purposes of this rule, "risk of nonpayment" is established by the presence of any one of the following:

(i) there is no customer deposit and ARM 38.5.1103 permits the requirement of such a deposit; or

(ii) during the preceding 12 months, any of the following conditions existed:

(A) the customer's telephone service was disconnected for failure to timely pay amounts owing;

(B) two or more delinquency notices were served on the customer; or

(C) payment was made with two or more dishonored checks.

(d) The carrier shall not terminate service under the provisions of this rule without first contacting or making a diligent effort to contact the customer. Such contact will be for the purposes of:

(i) notifying the customer of the excessive toll usage;

(ii) notifying the customer of the possibility that service can be terminated on an expedited basis; and

(iii) providing the customer with the opportunity to supply adequate assurance of payment. In no event shall a diligent effort consist of less than three distinct attempts to contact the customer, either in person or by telephone. The carrier must keep a record showing the name of the employee, date, hour and type of each attempted contact.

(e) For purposes of this rule, "adequate assurance of payment" includes:

(i) the establishment of satisfactory credit as defined by ARM 38.5.1101;

(ii) the existence of a deposit, such deposit being consistent in amount with ARM 38.5.1105; or

(iii) any other form of assurance mutually agreed upon by the customer and the carrier, including an oral or written promise to pay. If the customer supplies adequate assurance as defined herein, no further action may be taken to terminate service.

(f) If the carrier is unable to contact the customer, the carrier may terminate service three days (not including those days when there is no mail delivery) after the mailing of a notice consistent in form with the requirements of (5) . If the carrier is able to contact the customer and no adequate assurance is supplied, the carrier may terminate service not less than 24 hours after such contact.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-201, MCA; NEW, 1989 MAR p. 1515, Eff. 9/29/89; AMD, 1991 MAR p. 2631, Eff. 12/27/91; AMD, 2006 MAR p. 2967, Eff. 12/8/06.

38.5.3340   ALTERNATIVE OPERATOR SERVICES

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-201, MCA; NEW, 1989 MAR p. 1515, Eff. 9/29/89; REP, 1993 MAR p. 1336, Eff. 6/25/93.

38.5.3341   UNANSWERED CALLS

This rule has been repealed.

History: 69-3-103, 69-3-822, MCA; IMP, 69-3-102, 69-3-201, 69-3-802, MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93; REP, 2006 MAR p. 2967, Eff. 12/8/06.

38.5.3343   EMERGENCY CALL ROUTING

This rule has been repealed.

History: 69-3-103, 69-3-822, MCA; IMP, 69-3-102, 69-3-201, 69-3-802, MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93; REP, 2006 MAR p. 2967, Eff. 12/8/06.

38.5.3345   CHANGE IN CUSTOMER'S INTEREXCHANGE CARRIER

This rule has been repealed.

History: 69-3-103, 69-3-822, MCA; IMP, 69-3-102, 69-3-201, MCA; NEW, 1991 MAR p. 2631, Eff. 12/27/91; AMD, 1992 MAR p. 1400, Eff. 6/26/92; REP, 1993 MAR p. 3044, Eff. 12/24/93.

38.5.3350   CONSTRUCTION
(1) In determining standard engineering and construction practice, the commission will be guided by provisions of the American National Standards Institute, the National Electrical Code, the National Electrical Safety Code, the Exchange Carriers Standards Association, the Rural Electrification Administration, and such other codes and standards as are generally accepted by the industry, except as modified by this commission or by municipal regulations within their jurisdiction. The telecommunications plant shall be designed, constructed, maintained, and operated in accordance with these standards, and in such manner to best accommodate the public, and to prevent interference with and from service furnished by other public utilities insofar as practical. The carrier shall design and construct the telecommunications facilities to reduce or prevent electromagnetic interference from AC power systems. The carrier shall engage in prior coordination with power utilities in the area before placing new plant or making major changes in existing plant likely to be impacted by the power utility's facilities. Such coordination shall be governed by the latest issue of ANSI/IEEE 776 Guide for Inductive Coordination of Electric Supply and Communications Lines.
History: 69-3-103, MCA; IMP, 69-3-102, 69-3-201, MCA; NEW, 1989 MAR p. 1515, Eff. 9/29/89; AMD, 2006 MAR p. 2967, Eff. 12/8/06.

38.5.3351   EMERGENCY OPERATION
(1) Carriers shall make reasonable provisions to meet emergencies resulting from failures of lighting or power service, unusual and prolonged increases in traffic, illness of personnel, or from fire, storm, or other acts of God and inform its employees as to procedures to be followed in the event of emergency in order to prevent or minimize interruption or impairment of telecommunications service.

(2) Each central office and interexchange toll switching office or access tandem shall contain as a minimum four hours of battery reserve.

(3) In central offices exceeding 5,000 lines and in all interexchange toll switching offices or access tandems, a permanent auxiliary power unit shall be installed. In central offices without permanently installed emergency power facilities, there shall be a mobile power unit available which can be delivered and connected on short notice.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-201, MCA; NEW, 1989 MAR p. 1515, Eff. 9/29/89.

38.5.3352   CONSTRUCTION WORK NEAR EXCHANGE CARRIER FACILITIES

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-201, MCA; NEW, 1989 MAR p. 1515, Eff. 9/29/89; REP, 2006 MAR p. 2967, Eff. 12/8/06.

38.5.3353   NETWORK INTERFACE
(1) Each facilities-based local exchange carrier shall establish a point of demarcation between the carrier facilities and a customer's premises wiring and equipment. It shall be the responsibility of the utility to install and maintain a network interface device (NID) in accordance with commission guidelines, the local exchange carrier's tariff, and with rules established by the Federal Communications Commission.

(2) The NID shall be located outside the customer's premises unless such location is impractical or the customer requests an inside location. If the NID is located inside, it should be at a point close to the protector and convenient to the customer.

(3) If a customer requests that an NID be placed in a location other than that selected by the utility, and which conforms to the criteria set forth herein, the company may charge the customer for any extra associated work.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-201, MCA; NEW, 1989 MAR p. 1515, Eff. 9/29/89; AMD, 2006 MAR p. 2967, Eff. 12/8/06.

38.5.3360   CUSTOMER TROUBLE REPORTS
(1) Each carrier shall provide for the receipt of customer trouble reports at all hours and make a full and prompt investigation of and response to all complaints. The carrier shall maintain an accurate record of trouble reports made by its customers for a period of two years. This record shall include appropriate identification of the customer or service affected, the time, date, and nature of the report, the action taken to clear trouble or satisfy the complaint, and the date and time of trouble clearance or other disposition. This record shall be available to the commission or its authorized representatives upon request at any time within the period prescribed for retention of such records. Trouble reports shall be cleared in accordance with service objectives listed in ARM 38.5.3371(7) .

(2) Provision shall be made to clear all out of service trouble of an emergency nature at all hours, consistent with the bona fide needs of customers and the personal safety of utility personnel. All out of service trouble reports shall be cleared and service restored in accordance with ARM 38.5.3371(7) of these rules.

(3) If unusual repairs are required, or other factors preclude clearing of reported trouble promptly, reasonable efforts shall be made to notify affected customers. Commitments to customers for repair service shall be met in accordance with ARM 38.5.3371(7) (c) of these rules.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-201, MCA; NEW, 1989 MAR p. 1515, Eff. 9/29/89; AMD, 2006 MAR p. 2967, Eff. 12/8/06.

38.5.3361   INSPECTIONS AND TESTS
(1) Each carrier providing services by means of its own facilities shall adopt a program of periodic tests, inspections, and preventive maintenance aimed at achieving efficient operation of its system and the rendition of safe, adequate, and continuous service.

(2) Each facilities-based carrier shall maintain or have access to test facilities enabling it to determine the operating and transmission capabilities of all equipment and facilities, both for routine maintenance and for trouble location. The actual transmission performance of the network shall be monitored in order to determine if the carrier's established objectives and operating requirements are met. This monitoring function shall consist of, but not be limited to, circuit order tests prior to placing trunks in service, routine periodic trunk maintenance tests, tests of actual switched trunk connections, periodic noise tests of a sample of customer loops in each exchange, and transmission surveys of the network.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-201, MCA; NEW, 1989 MAR p. 1515, Eff. 9/29/89; AMD, 2006 MAR p. 2967, Eff. 12/8/06.

38.5.3362   SERVICE INTERRUPTIONS
(1) In the event that a facilities-based local exchange service must be interrupted for over four hours for planned work on the facilities or equipment, the work shall be done at a time which will cause minimal inconvenience to customers. In the event that local exchange service must be so interrupted, the facilities-based local exchange carrier shall attempt to notify each affected customer at least 24 hours in advance of the interruption.
History: 69-3-103, MCA; IMP, 69-3-102, 69-3-201, MCA; NEW, 1989 MAR p. 1515, Eff. 9/29/89; AMD, 2006 MAR p. 2967, Eff. 12/8/06.

38.5.3370   GENERAL

This rule has been repealed.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-201, MCA; NEW, 1989 MAR p. 1515, Eff. 9/29/89; REP, 2006 MAR p. 2967, Eff. 12/8/06.

38.5.3371   SERVICE REQUIREMENTS
(1) These rules establish service quality requirements for facilities-based local exchange carriers. The carrier shall be expected to meet generally accepted industry standards for quality on any service provided by the carrier that is not covered by these rules.

(2) Based on commission receipt of increasing consumer complaints or other relevant information about the level of service being provided by a carrier to which these service quality requirements apply, the commission may require the carrier to begin documenting its compliance with any or all of these service requirements and providing periodic service quality reports containing such documentation to the commission. If a carrier is required by the commission to provide records or documentation regarding its compliance, the records or documentation must be reported on individual exchange and statewide aggregate bases.

(3) Regarding installation of local exchange service, the carrier shall complete 95 percent of its installation orders within five business days of the application date, excluding those orders where the customer specifically requests a later due date. Ninety-five percent of the orders where the customer specifically requested a later due date must be completed on the customer-requested due date.

(a) The carrier shall complete 100 percent of all orders for service installation, excluding those orders where the customer specifically requested a later due date, within 180 calendar days of the application date.

(b) Each carrier shall make commitments to customers as to the date of installation of all service orders.

(c) Violations of the installation requirements do not exist if the carrier is unable to comply due to customer reasons, or work stoppages directly affecting provision of service in Montana, or other circumstances outside the carrier's control that can be documented by the carrier. A carrier may not exclude orders from this measurement in those instances where the installation required access to the customer's location and no access was available, but the carrier either did not schedule an installation appointment with the customer for on-premises access or did schedule an appointment, which may not exceed a four-hour appointment window, but did not arrive at the customer's premises at the appointed time.

(d) A carrier shall not cancel customer installation orders at its own discretion. An installation order received by a carrier shall remain a pending order until the installation is completed or the customer requests cancellation at his or her own initiative or in response to the carrier's inquiry. An installation order may be cancelled if the carrier has made a good faith effort to contact the customer and the customer has not responded to the carrier's inquiries.

(4) Calls requiring timing shall be accurately timed. Each carrier shall maintain adequate personnel to provide an average operator answering performance on a monthly basis as follows:

(a) Eighty-five percent of toll and/or local assistance operator calls answered within ten seconds (equivalent measurements as approved by the commission may be used) .

(b) Eighty percent of directory assistance and intercept calls shall be answered within ten seconds (equivalent measurements as approved by the commission may be used) .

(5) Sufficient central office and interoffice channel capacity and equipment shall be provided by the carrier to meet the following requirements during the average busy season, busy hour without encountering blockages, or equipment irregularities:

(a) Dial tone within three seconds on 98 percent of calls.

(b) Proper completion of 97 percent of correctly dialed intraoffice calls.

(c) Proper completion of 97 percent of correctly dialed interoffice calls within the local calling area.

(d) Proper completion of 97 percent of correctly dialed interexchange toll calls.

(6) All facilities shall meet accepted industry design standards and shall conform to the following transmission and noise design parameters:

(a) Newly constructed and rebuilt subscriber lines shall be designed for no more than 8 dB transmission loss at 1000 + 20 Hz from the serving central office to the customer premises network interface. Subscriber lines shall be maintained so that transmission loss does not exceed 8 dB. Subscriber lines shall be designed and constructed so that metallic noise does not exceed 25 dB above reference noise level ("C" message weighting) on 90 percent of the lines. Subscriber lines shall be maintained so that metallic noise does not exceed 30 dB above reference noise level ("C" message weighting) .

(7) Customer trouble reports regarding local exchange service must meet, at the minimum, the following requirements:

(a) Service shall be maintained by the carrier in such a manner that the monthly rate of all customer trouble reports, excluding reports concerning interexchange calls or nonregulated customer premises equipment, does not exceed six per 100 local access lines per month per exchange.

(b) Ninety percent of out of service trouble reports shall be cleared within 24 hours, excluding Sunday (except where access to the customer's premises is required but not available, or where interruptions are caused by unavoidable causalities and acts of God affecting large groups of customers) .

(c) The carrier shall provide to the customer a commitment time by which the trouble will be cleared.

(d) Carriers may charge customers for investigating trouble reports only when:

(i) dispatch of carrier personnel to the customer site is required;

(ii) the customer has been notified, prior to the dispatch, that a charge may apply;

(iii) the carrier is able to identify the exact nature of the problem that prompted the trouble report; and

(iv) the problem exists on the customer side of the service.

History: 69-3-103, MCA; IMP, 69-3-102, 69-3-201, MCA; NEW, 1989 MAR p. 1515, Eff. 9/29/89; AMD, 2006 MAR p. 2967, Eff. 12/8/06.

38.5.3401   DEFINITIONS
(1) The provisions of this subchapter shall apply to all operator service providers which provide intrastate "regulated telecommunications services" in Montana as defined in the Montana Telecommunications Act, 69-3-801 , et seq., MCA. Operator service providers must comply with all provisions of these rules on all intrastate telephone calls. Federal laws are applicable to interstate calls.

(2) Except as context may otherwise demand, terms used in these rules have the following meanings:

(a) "Call blocking" means prohibiting or restricting a consumer's access to a carrier which offers service in the same local exchange area by means of equal access or an access code, including but not limited to 1-800, 950-XXXX, and 10-10XXX-0+ dialing sequences.

(b) "Call splashing" means the transfer of a telephone call from an operator service provider to another operator service provider or carrier in such a manner that the subsequent provider or carrier is unable or unwilling to determine the location of the origination of the call and, because of such inability or unwillingness is prevented from billing the call on the basis of such location.

(c) "Inmate operator service provider" means a carrier or operator service provider that provides regulated telecommunications services for the use of inmates in correctional facilities.

(d) "Operator service provider" means any person, company, or entity that provides automated or live assistance to a customer to arrange for billing or completion, or both, of an intrastate telephone call through a method other than:

(i) automatic completion with billing to the telephone from which the call originated; or

(ii) completion through an access code used by the customer, with billing to an account previously established with a telecommunications carrier by the customer.

History: 69-3-103, 69-3-822 and 69-3-1103, MCA; IMP, 69-3-102, 69-3-201, 69-3-802, 69-3-1102 and 69-3-1103, MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93; AMD, 1999 MAR p. 2081, Eff. 9/24/99.

38.5.3403   ALLOWABLE RATE

(1) Pursuant to 69-3-1102 and 69-3-1105 , MCA, an operator service provider may not charge more than an allowable rate, which is a rate for intrastate calls, inclusive of the call rate, aggregator surcharge, and all other calling fees, established by the commission for each category and type of service provided by an operator service provider.

(2) Except for cost-based allowable rates provided in ARM 38.5.3404 the allowable rate for each category and type of service provided by operator service providers will be established by the commission annually. The allowable rate for each category and type of service will be the average of the intrastate rates charged for each category and type of operator service provider service by AT&T, MCI, and CenturyLink, plus 50%.

(3) The categories and types of service for which allowable rates will be established are:

(a) assisted calls including operator dialed calling card; collect call; third party billed; person to person; operator dialed called number; and customer dialed calling card, non-company;

(b) message telecommunications service interLATA calls per minute (if the operator service provider has more than one per minute rate, e.g., distance, time of day, and so forth, "per minute" will be the average per minute); and

(c) message telecommunications service intraLATA calls per minute (if the operator service provider has more than one per minute rate, e.g., distance, time of day, and so forth, "per minute" will be the average per minute).

(4) Before an operator service provider may provide a service not identified in this rule, a cost-based allowable rate must be established for that service in accordance with ARM 38.5.3404.

History: 69-3-103, 69-3-1103, MCA; IMP, 69-3-201, 69-3-1101, 69-3-1102, 69-3-1105, MCA; NEW, 1999 MAR p. 2081, Eff. 9/24/99; AMD, 2004 MAR p. 2934, Eff. 12/3/04; AMD, 2015 MAR p. 1508, Eff. 9/25/15.

38.5.3404   COST-BASED ALLOWABLE RATE
(1) An operator service provider, determining an allowable rate established in ARM 38.5.3403 will not permit adequate revenues, may apply to the commission for cost-based allowable rates. Operator service provider applications for cost-based allowable rates must be made in accordance with commission procedural and substantive rules pertaining to telecommunication rate case filings. The cost-based allowable rates established in the resulting proceeding will be specific to the applicant operator service provider, including if the record demonstrates that the cost-based allowable rates should be lower than the allowable rates established in accordance with ARM 38.5.3403.

History: 69-3-103, 69-3-822 and 69-3-1103, MCA; IMP, 69-3-102, 69-3-201, 69-3-1102 and 69-3-1105, MCA; NEW, 1999 MAR p. 2081, Eff. 9/24/99.

38.5.3405   GENERAL REQUIREMENTS
(1) An operator service provider shall:

(a) Identify itself, audibly and distinctly, to the customer at the beginning of each telephone call and before the customer incurs any charges. Each operator service provider shall also identify itself to the called party on collect calls and the billed party when verifying third-party billed calls.

(b) Disclose, audibly and distinctly to the customer, at no charge and before connecting any intrastate call, how to obtain the total cost of the call, including any aggregator surcharge, or the maximum possible total cost of the call, including any aggregator surcharge, before providing further advice to the customer on how to proceed to make the call. The voice disclosure required in this subsection must instruct each customer that the customer may obtain applicable rate and surcharge amounts by dialing not more than two digits or by remaining on the line.

(c) Upon request, fully and immediately disclose to the customer, at no charge, the operator service provider's method of collecting its charges, a description of the operator service provider's method of resolving customer complaints, a toll-free telephone number that can be used to report complaints to or contest charges of the operator service provider, and all other requested information pertinent to the customer's use of the operator service provider's services. The provisions of this subsection apply to the called party on collect calls.

(d) Permit the customer to terminate the telephone call at no charge before the call is connected to the called party.

(e) Obtain an affirmative response from the called party on willingness to accept charges for collect calls.

(2) All operator service providers must connect the consumer to the local exchange company operator or explain dialing instructions for such access upon request and at no charge.

(3) Unless otherwise specifically provided by commission rule or order, all operator service providers must comply with all regulatory requirements imposed by Montana state statutes and rules, including but not limited to the Montana Telecommunications Act ( 69-3-801 , et seq., MCA) , the Montana telecommunications service standards (ARM 38.5.3301, et seq.) and the Montana Telecommunications Act rules (ARM 38.5.2701, et seq.) .

History: 69-3-103, 69-3-822 and 69-3-1103, MCA; IMP, 69-3-102, 69-3-201, 69-3-802 and 69-3-1104, MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93; AMD, 1999 MAR p. 2081, Eff. 9/24/99.

38.5.3407   BILLING DISCLOSURE
(1) Telecommunications carriers providing billing services for an operator service provider must disclose on customer bills:

(a) the operator service provider billed amount, clearly distinguished from the carrier's billed amount;

(b) the name of the operator service provider; and

(c) the toll-free telephone number of the operator service provider or the operator service provider's billing agent, if the billing agent has authority to resolve disputes and the operator service provider and billing agent have established an effective method of resolving customer disputes.

(2) Upon request of a customer, the billing telecommunications carrier must provide the exact legal name of the operator service provider, the toll-free telephone number of the operator service provider, the current and complete street address of the operator service provider, and the mailing address of the operator service provider.

History: 69-3-103, 69-3-822 and 69-3-1103, MCA; IMP, 69-3-102 and 69-3-1106, MCA; NEW, 1999 MAR p. 2081, Eff. 9/24/99.

38.5.3410   POSTING REQUIREMENTS
(1) Each operator service provider must post on or near each telephone instrument subscribed to its service, in plain view of consumers:

(a) the name, address, and toll-free telephone number of the operator service provider;

(b) a written disclosure that its rates are available upon request;

(c) dialing instructions detailing operator service provider dialing procedures as well as instructions for accessing the local exchange company operator; and

(d) emergency dialing information.

History: 69-3-103, MCA; IMP, 69-3-102 and 69-3-201, MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93.

38.5.3412   CALL BLOCKING PROHIBITED
(1) Except as otherwise provided in these rules, all agreements or contracts between an operator service provider and an owner of a pay telephone instrument or private telecommunications system must contain a provision which prohibits call blocking as defined in these rules. This requirement applies to all contracts or agreements entered into after the effective date of this rule; however, all operator service providers must comply with (2) of this rule at all times, including during the remaining term of all existing contracts and agreements.

(2) Operator service providers are prohibited from requiring or providing call blocking at any telephone instrument. Operator service providers are prohibited from offering service at any telephone instrument where call blocking exists.

(3) This rule does not prohibit the blocking of 101xxxx-1+ or 101xxxx-011+ calls.

History: 69-3-103, 69-3-822 and 69-3-1103, MCA; IMP, 69-3-102, 69-3-201 and 69-3-802, MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93; AMD, 1999 MAR p. 2081, Eff. 9/24/99.

38.5.3414   CALL SPLASHING PROHIBITED
(1) Call splashing is prohibited, except as provided in subsection (2) .

(2) Call splashing is only permitted after:

(a) The consumer requests to be transferred to another carrier or provider,

(b) The consumer is informed prior to incurring any charges that the rates for the call may not reflect the rates from the actual originating location, and

(c) The consumer then consents to be transferred.

(3) Operator service providers shall not bill for a call that does not reflect the location of the origination of the call, except for calls completed pursuant to subsection (2) .

History: Secs. 69-3-103 and 69-3-822, MCA; IMP, Secs. 69-3­102, 69-3-201 and 69-3-802, MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93.

38.5.3416   EMERGENCY CALL ROUTING
(1) Upon receipt of any emergency telephone call, an operator service provider must immediately provide emergency call routing service in accordance with ARM 38.5.3343(5) .
History: Secs. 69-3-103 and 69-3-822, MCA; IMP, Secs. 69-3-102, 69-3-201 and 69-3-802, MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93.

38.5.3420   DUTY TO INFORM
(1) All operator service providers must inform the owners of telephone instruments where they provide service of the requirements of this subchapter and ARM 38.5.3341 and 38.5.3343.
History: Secs. 69-3-103 and 69-3-822, MCA; IMP, Secs. 69-3-102, 69-3-201 and 69-3-802, MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93.

38.5.3424   DENIAL OF SERVICE
(1) If an operator service provider subscriber, such as a pay telephone owner, motel, hotel, hospital, university, public transportation facility, or any private telecommunications system, operates a telephone instrument which fails to comply with any provision of ARM 38.5.3401 through 38.5.3416, 38.5.3341 or 38.5.3343, the local exchange company which provides the subscriber with originating telephone service must refuse to provide service, after notice, until the subscriber's telephone instruments are in full compliance.
History: Secs. 69-3-103 and 69-3-822, MCA; IMP, Secs. 69-3-102, 69-3-201 and 69-3-802, MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93.

38.5.3440   INMATE CALLING PROVIDERS
(1) Inmate operator service providers are not subject to the prohibition on call blocking at ARM 38.5.3412.

(2) Inmate operator service providers may not block collect calls to a called party number, except on request by the called party or following seven days written notification to the called party, or for reasons of individual or public safety.

(3) Inmate operator service providers may not require a deposit from a called party unless requiring the deposit is in compliance with the commission customer deposit rules at ARM 38.5.1101 through 38.5.1112.

History: 69-3-103, 69-3-822 and 69-3-1103, MCA; IMP, 69-3-102, 69-3-201 and 69-3-802, MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93; AMD, 1999 MAR p. 2081, Eff. 9/24/99.

38.5.3701   APPLICABILITY
(1) The rules in this subchapter govern the adjustment of rates and set other regulatory requirements for intrastate interexchange carriers subject to the jurisdiction of the Montana public service commission.

(2) For purposes of this subchapter, "interexchange carriers" include AT&T, MCI, Sprint, Touch America, American Sharecom and all other common carriers which provide intraLATA or interLATA regulated telecommunications service, but do not also provide local exchange service.

(3) Unless otherwise specifically provided by commission rule or order, interexchange carriers must comply with all regulatory requirements imposed by Montana state statutes and rules, including but not limited to the Montana Telecommunications Act § 69-3-801 et seq., MCA) , the Montana telecommunications service standards (ARM 38.5.3301 et seq.) and the Montana Telecommunications Act Rules (ARM 38.5.2701 et seq.) .

History: Secs. 69-3-103 and 69-3-822, MCA; IMP, Secs. 69-3-102, 69 and 69-3-801 et seq. , MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93.

38.5.3705   TARIFFS AND MAXIMUM ALLOWABLE RATES

(1) All interexchange carriers must maintain tariffs on file with the commission that have been approved by the commission. The tariffs must include "maximum allowable rates" and terms, conditions and descriptions of all intrastate regulated telecommunications services offered by the interexchange carrier in Montana. The "maximum allowable rate" which shall be listed in the tariff for each service, is the maximum rate which can be charged pursuant to a price list filed pursuant to ARM 38.5.3707.

(2) Tariffs can only be changed by commission order, following the applicable notice and procedural requirements of Title 69, MCA, and the Montana Administrative Procedure Act, Title 2, chapter 4, MCA.

(3) Tariffs must be filed and maintained as "schedules"

in § 69-3-301 , MCA.

History: Secs. 69-3-103 and 69-3-822, MCA; IMP, Secs. 69-3-102, 69-3-201, 69-3-301 and 69-3-801 et seq. , MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93.

38.5.3707   PRICE LISTS
(1) In addition to the tariffs required in ARM 38.5.3705, interexchange carriers must maintain a separate set of price lists on file with the commission, which contain the names of all intrastate regulated telecommunications services offered in Montana, a reference to the section or page number where the service is located in the tariff, and the actual rate charged consumers.

(2) The rate in the price list can never exceed the "maximum allowable rate" contained in the approved tariff for the service. The price list rates shall be the only rates lawfully charged consumers.

(3) Price lists cannot alter the terms and conditions contained in the tariff for the service.

(4) Price lists must be filed and maintained as "schedules" in Sec. 69-3-301 , MCA.

History: Secs. 69-3-103 and 69-3-822, MCA; IMP, Secs. 69-3-102, 69-3-201 and 69-3-801 et seq. , MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93.

38.5.3709   PRICING FLEXIBILITY
(1) Interexchange carriers may revise a price list by filing a proposed new price list with the commission which complies with the provisions of this subchapter, and mailing a copy to the commission's interexchange carrier mailing list at least seven (7) days prior to the proposed effective date of the new price list. The interexchange carrier must simultaneously file a certificate of service which affirms compliance with this rule.

(2) A proposed new price list becomes automatically effective for services rendered seven (7) days after filing and service is completed pursuant to subsection (1) ; no commission action or approval is necessary.

(3) If an interexchange carrier files a proposed new price list which designates an effective date more than seven (7) days after a filing made pursuant to subsection (1) , the new price list becomes automatically effective for services rendered after such designated date.

History: Secs. 69-3-103 and 69-3-822, MCA; IMP, Secs. 69-3-102, 69-3-201 and 69-3-801 et seq. , MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93.

38.5.3715   ACCESS CHARGE FLOW-THROUGH
(1) All interexchange carriers are required to flow-through any changes to local exchange company access charges to the maximum allowable rates in their tariffs.

(2) Whenever a Montana local exchange company's carrier access charges increase or decrease, all interexchange carriers must make a filing with the commission, requesting approval of a commensurate change in maximum allowable rates for appropriate services. All interexchange carriers must make such a filing with the commission no later than thirty (30) days after the effective date of the change in local exchange company access charges.

(3) The exact nature and appropriate distribution of the access charge flow-through is subject to commission review, and must be approved by the commission.

History: Secs. 69-3-103 and 69-3-822, MCA; IMP, Secs. 69-3-102, 69-3-201 and 69-3-801 et seq. , MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93.

38.5.3720   RATES ABOVE COSTS
(1) All interexchange carrier rates must be above relevant costs.
History: Secs. 69-3-103 and 69-3-822, MCA; IMP, Sec. 69-3-811, MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93.

38.5.3725   RELAXED FORBEARANCE
(1) Interexchange carriers may deviate from the rates in their price lists for individual customer contracts, pursuant to the relaxed forbearance procedure set forth in ARM 38.5.2715 and 38.5.2716.
History: Sec. 69-3-822, MCA; IMP, Sec. 69-3-808, MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93.

38.5.3730   ANNUAL REPORTS
(1) Interexchange carriers are required to file annual reports with the commission, in a form prescribed by the commission, as required by 69-3-203 , MCA.
History: Secs. 69-3-103, 69-3-821 and 69-3-822, MCA; IMP, Secs. 69-3-102, 69-3-201, 69-3-203 and 69-3-801 et seq. , MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93.

38.5.3732   MARKET DATA FILING REQUIREMENTS
(1) Interexchange carriers are required to file market data information in the form and manner as may be prescribed by commission action.
History: Secs. 69-3-103, 69-3-106, 69-3-202, 69-3-203, 69-3-206, 69-3-208, 69-3-821 and 69-3-822, MCA; IMP, Secs. 69-3-102, 69-3-201, 69-3-203 and 69-3-801 et seq. , MCA; NEW, 1993 MAR p. 1336, Eff. 6/25/93.

38.5.3801   CHANGE IN TELECOMMUNICATIONS PROVIDER
(1) A telecommunications carrier may not initiate or effect a change in a customer's primary interexchange carriers or local exchange company except:

(a) When the carrier initiating the change has obtained the customer's written or electronic signature authorization in a form that meets the letter of agency form and content requirements (as referenced below) ; or

(b) When the carrier initiating the change has obtained a customer's electronic authorization placed from the telephone number(s) on which the carrier is to be changed, to submit the order that confirms the information described in the letter of agency form and content (as referenced below) .  Carriers electing to confirm customer authorizations electronically shall establish one or more toll-free telephone numbers exclusively for that purpose.  Calls to the number(s) will connect a customer to a voice response unit, or similar mechanism, that records the required information regarding the carrier change, including automatically recording the originating ANI (automatic number identification) ; or

(c) When a qualified and independent third party operating in a location physically separate from the carrier's telemarketing representative has obtained a customer's verbal authorization to submit the carrier change, providing the third party verification includes:

(i) A statement that the purpose of the call is to verify the customer's intent to switch to the newly requested telecommunications carrier.  The newly requested interexchange or local exchange telecommunications carrier must be clearly identified to the customer.  Reference to use of another telecommunications carrier's network or facilities, if stated, must be secondary in nature to the prominent identification of the interexchange or local exchange carrier which will be providing service and setting the rates with the customer's consent for the customer's service.

(ii) Confirmation that the person whose authorization for a carrier change is being verified is the subscriber on the account or a person authorized by the subscriber to make decisions regarding the telephone account on behalf of the subscriber.

(iii) Verification data unique to the customer (e.g., the customer's date of birth or social security number) .

(iv) The name and toll free telephone number of the newly requested telecommunications carrier.

(d) When the customer affected by the change initiates the contact with the carrier in order to request the change.

(2) The independent third party may not be owned, managed, controlled, or directed by the carrier or the carrier's marketing agent; and may not have any financial incentive to confirm preferred carrier change orders for the carrier or the carrier's marketing agent; and must operate in a location physically separate from the carrier or the carrier's marketing agent.  Any letter of agency, electronic authorization or verbal authorization verified by an independent third party that does not conform with this rule is invalid.  Documentation of valid verbal authorization must demonstrate compliance with each element required by (1) (c) above.

(3) An executing carrier shall not verify the submission of a change in a subscriber's selection of a provider of telecommunications service received from a submitting carrier.  For an executing carrier, compliance with the procedures prescribed in this rule shall be defined as prompt execution, without any unreasonable delay, of changes that have been verified by a submitting carrier.  The submitting carrier shall maintain and preserve records of verification of subscriber authorization for a minimum period of two years after obtaining such verification.

(4) Where a telecommunications carrier selling more than one type of telecommunications service (e.g., local exchange, intraLATA/intrastate toll, interLATA/interstate toll, and international toll) that carrier must obtain separate authorization from the subscriber for each service sold, although the authorizations may be made within the same solicitation.  Each authorization must be verified separately from any other authorizations obtained in the same solicitation.  Each authorization must be verified in accordance with the verification procedures prescribed in this rule.

History: 69-3-822, 69-3-1301, 69-3-1302, 69-3-1303 and 69-3-1304, MCA; IMP, 69-3-102, 69-3-201, 69-3-1303 and 69-3-1304, MCA; NEW, 1997 MAR p. 2088, Eff. 11/18/97; EMERG, AMD, 1999 MAR p. 1523, Eff. 7/2/99; AMD, 2003 MAR p. 2085, Eff. 9/26/03.

38.5.3802   LETTER OF AGENCY FORM AND CONTENT
(1) A telecommunications carrier initiating a change in a subscriber's primary interexchange carrier or local exchange carrier shall obtain any necessary written or electronically signed authorization from a subscriber by using a letter of agency as specified in this rule.  Any letter of agency that does not conform with this rule is invalid.

(2) The letter of agency shall be a separate document (or an easily separable document) or located on a separate screen or webpage containing only the authorizing language described in (5) , the sole purpose of which is to authorize a telecommunications carrier to initiate a primary interexchange carrier or local exchange carrier change.  The letter of agency must be signed and dated by the subscriber to the telephone line(s) requesting the change in carrier.

(3) The letter of agency shall not be combined on the same document screen or webpage with inducements of any kind.

(4) Notwithstanding (2) and (3) of this rule, the letter of agency may be combined with checks that contain only the required letter of agency language prescribed in (5) of this rule and the necessary information to make the check a negotiable instrument.  The letter of agency check shall not contain any promotional language or material.  The letter of agency check shall contain, in easily readable, bold-face type on the front of the check, a notice that the consumer is authorizing a primary interexchange carrier change or local exchange carrier change by signing the check.  The letter of agency language also shall be placed near the signature line on the back of the check.

(5) At a minimum, the letter of agency must be printed with a readable type of sufficient size to be clearly legible and must contain clear and unambiguous language that confirms:

(a) the subscriber's billing name and address and each telephone number to be covered by the change order;

(b) the decision to change the primary interexchange carrier or local exchange carrier from the current interexchange carrier or local carrier to the prospective carrier;

(c) that the subscriber designates the carrier to act as the subscriber's agent for the primary interexchange carrier or local exchange carrier change;

(d) that the subscriber understands that only one interexchange carrier may be designated as the subscriber's primary interLATA interexchange carrier and that only one local exchange carrier may be designated as the subscriber's local telecommunication provider for any one telephone number.  To the extent that a jurisdiction allows the selection of additional primary interexchange carriers (e.g., for intraLATA, intrastate or international calling) , the letter of agency must contain separate statements regarding those choices.  Any carrier designated as a primary interexchange carrier or local exchange carrier must be the carrier directly setting the rates for the subscriber.  One carrier can be a subscriber's interLATA primary interexchange carrier, a subscriber's intraLATA primary interexchange carrier, and a subscriber's local carrier; and

(e) that the subscriber understands that any primary interexchange carrier selection or local exchange carrier selection the subscriber chooses may involve a charge to the subscriber for changing the subscriber's primary interexchange carrier or local exchange carrier.

(6) Letters of agency shall not suggest or require that a subscriber take some action in order to retain the subscriber's current primary interexchange carrier or local exchange carrier.

(7) If any portion of a letter of agency is translated into another language, then all portions of the letter of agency must be translated into that language

(8) Letters of agency submitted with an electronically signed authorization must include the consumer disclosures required by Section 101(c) of the Electronic Signatures in Global and National Commerce Act (October 2000) which is adopted and incorporated by reference.  A copy of this section may be obtained from the Commission, 1701 Prospect Avenue, P.O. Box 202601, Helena, Montana 59620-2601.

(9) A carrier shall submit a carrier change order on behalf of a subscriber within no more than 60 days of obtaining a written or electronically signed letter of agency.  However, letters of agency for multi-line and/or multi-location business customers that have entered into negotiated agreements with carriers to add presubscribed lines to their business locations during the course of a term agreement shall be valid for the period specified in the agreement.

History: 69-3-822, 69-3-1301, 69-3-1302, 69-3-1303 and 69-3-1304, MCA; IMP, 69-3-102, 69-3-201 and 69-3-1304, MCA; NEW, 1997 MAR p. 2088, Eff. 11/18/97; EMERG, AMD, 1999 MAR p. 1523, Eff. 7/2/99; AMD, 2003 MAR p. 2085, Eff. 9/26/03.

38.5.3803   COMPLAINTS OF UNAUTHORIZED SWITCH IN CARRIERS

(1) Upon receipt of a complaint alleging an unauthorized switch in a customer's telecommunications carrier, either orally or in writing, from the customer, the customer's original pre-subscribed telecommunications carrier, the customer's local exchange company, or from the commission or its staff on behalf of a customer or applicant, the telecommunications carrier that initiated the change shall make a suitable investigation and advise the party requesting the investigation of the results. When advising the customer or party requesting the investigation of the results, the carrier that initiated the change shall provide documentation in accordance with ARM 38.5.3801 and 38.5.3802 that confirms the customer's valid authorization to switch telecommunications carriers. The burden is on the carrier that initiated the change to produce documentation that valid authorization was obtained from the customer. If a carrier fails to provide the documentation, the carrier change will be deemed invalid. A telecommunications carrier, upon receipt of a complaint from the commission or its staff alleging unauthorized switching, shall issue an initial response within five working days.

History: 69-3-1304, MCA; IMP, 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 2088, Eff. 11/18/97.

38.5.3804   TELECOMMUNICATIONS CARRIER LIABILITY
(1) An entity that is not the customer and that initiates a change in the customer's telecommunications carrier in violation of these rules, or cannot provide documentation that the change was initiated in compliance with these rules, is liable:

(a) to the customer for all intrastate long distance charges, interstate long distance charges, monthly service charges, carrier switching fees, and other relevant charges billed by the unauthorized carrier or its agent to the customer during the period of the unauthorized change; and

(b) to the customer's original telecommunications carrier for all charges related to reinstating service to the customer.

History: 69-3-1304, MCA; IMP, 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 2088, Eff. 11/18/97.

38.5.3805   REFUND OF CHARGES

(1) A telecommunications carrier which initiates a carrier change without authorization from the customer in accordance with these rules shall issue to the customer full credit or refund the entire amount of such customer's telephone charges attributable to telephone service from the telecommunications carrier for up to six continuous months of unauthorized service and any charges from another telecommunications carrier to re-establish service or to change the customer's pre-subscribed carrier.  The appropriate credit or refund must be issued within a period not to exceed 60 days from the date of the initial complaint from the customer, commission, or staff.

History: 69-3-1304, MCA; IMP, 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 2088, Eff. 11/18/97.

38.5.3810   VIOLATIONS
(1) The commission may refer violations of the prohibition against unauthorized change of a customer's telecommunications carrier to the appropriate law enforcement authority for prosecution.
History: 69-3-1304, MCA; IMP, 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 2088, Eff. 11/18/97.

38.5.3812   TRUE AND COMPLETE CARRIER COMMUNICATIONS PERTAINING TO CUSTOMER AUTHORIZATION FOR CHANGE OF CARRIERS

(1) When soliciting, obtaining, or verifying a customer's authorization for a change of telecommunications carriers, neither the carrier, its agent, nor the independent third party verifier may make false, misleading, or deceptive statements or fail to disclose material information.

(2) Authorization obtained under circumstances in which the carrier, its agents, or the third party verifier has made false, misleading, or deceptive statements or has failed to disclose material information is invalid and will not qualify as authorization for purposes of validating a change in carriers.

History: 69-3-1304, MCA; IMP, 69-3-1303, MCA; NEW, 2001 MAR p. 1648, Eff. 8/24/01.

38.5.3815   DEFINITIONS
For the purpose of this subchapter, the following definitions are applicable:

(1) "Electronic signature" has the meaning as provided in 30-18-102 (8) , MCA.

(2) "Executing carrier" means generally any telecommunications carrier that effects a request that a subscriber's telecommunications carrier be changed. A carrier may be treated as an executing carrier if it is responsible for any unreasonable delays in the execution of carrier changes or for the execution of unauthorized carrier changes, including fraudulent authorizations.

(3) "Submitting carrier" means generally any telecommunications carrier that:

(a) requests on the behalf of a subscriber that the subscriber's telecommunications carrier be changed; and

(b) seeks to provide retail services to the end user subscriber. A carrier may be treated as a submitting carrier if it is responsible for any unreasonable delays in the submission of carrier change request or for the submission of unauthorized carrier change request, including fraudulent authorizations.

History: 69-3-822 and 69-3-1304, MCA; IMP, 69-3-102, 69-3-201 and 69-3-1303, MCA; EMERG, NEW, 1999 MAR p. 1523, Eff. 7/2/99; AMD, 2003 MAR p. 2085, Eff. 9/26/03.

38.5.3816   PREFERRED CARRIER FREEZE
(1) A preferred carrier freeze (or freeze) prevents a change in a subscriber's preferred carrier selection unless the subscriber gives the carrier from whom the freeze was requested his or her express consent. All local exchange carriers who offer preferred carrier freezes must comply with the provisions of this rule.

(2) All local exchange carriers who offer preferred carrier freezes shall offer freezes on a nondiscriminatory basis to all subscribers, regardless of the subscriber's carrier selections.

(3) Preferred carrier freeze procedures, including any solicitation, must clearly distinguish among telecommunications services (e.g., local exchange, intraLATA /intrastate toll, interLATA /interstate toll, and international toll) subject to a preferred carrier freeze. The carrier offering the freeze must obtain separate authorization for each service for which a preferred carrier freeze is requested.

History: 69-3-822 and 69-3-1304, MCA; IMP, 69-3-102, 69-3-201 and 69-3-1303, MCA; EMERG, NEW, 1999 MAR p. 1523, Eff. 7/2/99.

38.5.3817   SOLICITATION AND IMPOSITION OF PREFERRED CARRIER FREEZES
(1) All carrier-provided solicitation and other materials regarding preferred carrier freezes must include:

(a) an explanation, in clear and neutral language, of what a preferred carrier freeze is and what services may be subject to a freeze;

(b) a description of the specific procedures necessary to lift a preferred carrier freeze, including an explanation that:

(i) these steps are in addition to the commission's verification rules in ARM 38.5.3801 and 38.5.3802 for changing a subscriber's preferred carrier selections; and

(ii) the subscriber will be unable to make a change in carrier selection unless he or she lifts the freeze; and

(c) an explanation of any charges associated with the preferred carrier freeze.

(2) No local exchange carrier shall implement a preferred carrier freeze unless the subscriber's request to impose a freeze has first been confirmed in accordance with one of the following procedures:

(a) the local exchange carrier has obtained the subscriber's written and signed authorization in a form that meets the requirements of (3) ; or

(b) the local exchange carrier has obtained the subscriber's electronic authorization, placed from the telephone number(s) on which the preferred carrier freeze is to be imposed, to impose a preferred carrier freeze. The electronic authorization should confirm appropriate verification data (e.g., the subscriber's date of birth or social security number) and the information required by (3) (b) (i) through (iv) . Telecommunications carriers electing to confirm preferred carrier freeze orders electronically shall establish one or more toll-free telephone numbers exclusively for that purpose. Calls to the number(s) will connect a subscriber to a voice response unit, or similar mechanism that records the required information regarding the preferred carrier freeze request, including automatically recording the originating automatic numbering identification; or

(c) an appropriately qualified independent third party has obtained the subscriber's oral authorization to submit the preferred carrier freeze and confirmed the appropriate verification data (e.g., the subscriber's date of birth or social security number) and the information required by (3) (b) (i) through (iv) . The independent third party must:

(i) not be owned, managed, or directly controlled by the carrier or the carrier's marketing agent;

(ii) not have any financial incentive to confirm preferred carrier freeze requests for the carrier or the carrier's marketing agent; and

(iii) operate in a location physically separate from the carrier or the carrier's marketing agent. The content of the verification must include clear and conspicuous confirmation that the subscriber has authorized a preferred carrier freeze.

(3) A local exchange carrier may accept a subscriber's written and signed authorization to impose a freeze on his or her preferred carrier selection. Written authorization that does not conform with this rule is invalid and may not be used to impose a preferred carrier freeze.

(a) The written authorization shall comply with ARM 38.5.3802(2) , (3) and (7) concerning the form and content for letters of agency.

(b) At a minimum, the written authorization must be printed with a readable type of sufficient size to be clearly legible and must contain clear and unambiguous language that confirms:

(i) the subscriber's billing name and address and the telephone number(s) to be covered by the preferred carrier freeze;

(ii) the decision to place a preferred carrier freeze on the telephone number(s) and particular service(s) . To the extent that a jurisdiction allows the imposition of preferred carrier freezes on additional preferred carrier selections (e.g., for local exchange, intraLATA/intrastate toll, interLATA/interstate toll service, and international toll) , the authorization must contain separate statements regarding the particular selections to be frozen;

(iii) that the subscriber understands that she or he will be unable to make a change in carrier selection unless she or he lifts the preferred carrier freeze; and

(iv) that the subscriber understands that any preferred carrier freeze may involve a charge to the subscriber.

History: 69-3-822 and 69-3-1304, MCA; IMP, 69-3-102, 69-3-201 and 69-3-1303, MCA; EMERG, NEW, 1999 MAR p. 1767, Eff. 7/2/99.

38.5.3818   PROCEDURES FOR LIFTING PREFERRED CARRIER FREEZES

(1) All local exchange carriers who offer preferred carrier freezes must, at a minimum, offer subscribers the following procedures for lifting a preferred carrier freeze:

(a) A local exchange carrier administering a preferred carrier freeze must accept a subscriber's written and signed authorization stating her or his intent to lift a preferred carrier freeze; and

(b) A local exchange carrier administering a preferred carrier freeze must accept a subscriber's oral authorization stating her or his intent to lift a preferred carrier freeze and must offer a mechanism that allows a submitting carrier to conduct a three-way conference call with the carrier administering the freeze and the subscriber in order to lift a freeze. When engaged in oral authorization to lift a preferred carrier freeze, the carrier administering the freeze shall confirm appropriate verification data (e.g., the subscriber's date of birth or social security number) and the subscriber's intent to lift the particular freeze.

History: 69-3-822 and 69-3-1304, MCA; IMP, 69-3-102, 69-3-201 and 69-3-1303, MCA; EMERG, NEW, 1999 MAR p. 1523, Eff. 7/2/99.

38.5.3819   SALE OR TRANSFER OF SUBSCRIBER BASES
(1) A carrier may acquire, through a sale or transfer, either part or all of another carrier's subscriber base without obtaining each subscriber's authorization and verification in accordance with ARM 38.5.3801, provided that the acquiring carrier complies with the following procedures.  A carrier may not use these procedures for any fraudulent purpose, including any attempt to avoid liability for violations under ARM 38.5.3801.

(a) No later than 30 days before the planned transfer of the affected subscribers from the selling or transferring carrier to the acquiring carrier, the acquiring carrier shall file with the commission a letter of notification providing the names of the parties to the transaction, the types of telecommunications services to be provided to the affected subscribers, and the date of the transfer of the subscriber base to the acquiring carrier.  In the letter notification, the acquiring carrier also shall certify compliance with the requirement to provide advance subscriber notice in accordance with the obligations specified in that notice, and with other commission requirements that apply to this process.  In addition, the acquiring carrier shall attach a copy of the notice sent to the affected subscribers.

(b) If, subsequent to the filing of the letter notification with the commission required by (2) (a) , any material changes to the required information should develop, the acquiring carrier shall file written notification of these changes with the commission no more than 10 days after the transfer date announced in the prior notification.  The commission may require the acquiring carrier to send an additional notice to the affected subscribers regarding such material changes.

(c) Not later than 30 days before the transfer of the affected subscribers from the selling or transferring carrier to the acquiring carrier, the acquiring carrier shall provide written notice to each affected subscriber of the information specified.  The acquiring carrier is required to fulfill the obligations set forth in the advance subscriber notice.  The following information must be included in the advance subscriber notice:

(i) The date on which the acquiring carrier will become the subscriber's new provider of telecommunications service;

(ii) The rates, terms, and conditions of the service(s) to be provided by the acquiring carrier upon the subscriber's transfer to the acquiring carrier, and the means by which the acquiring carrier will notify the subscriber of any change(s) to these rates, terms, and conditions;

(iii) The acquiring carrier will be responsible for any carrier change charges associated with the transfer;

(iv) The subscriber's right to select a different preferred carrier for the telecommunications service(s) at issue, if an alternative carrier is available;

(v) All subscribers receiving the notice, even those who have arranged preferred carrier freezes through their local service providers on the service(s) involved in the transfer, will be transferred to the acquiring carrier, unless they have selected a different carrier before the transfer date; existing preferred carrier freezes on the service(s) involved in the transfer will be lifted; and the subscribers must contact their local service providers to arrange a new freeze;

(vi) Whether the acquiring carrier will be responsible for handling any complaints filed, or otherwise raised, prior to or during the transfer against the selling or transferring carrier; and

(vii) The toll-free customer service telephone number of the acquiring carrier.

History: 69-3-1301, 69-3-1302 and 69-3-1303, MCA; IMP, 69-3-1304, MCA; NEW, 2003 MAR p. 2085, Eff. 9/26/03.

38.5.3901   CUSTOMER AUTHORIZATION REQUIRED PRIOR TO PLACEMENT OF CHARGES ON CUSTOMERS' TELEPHONE BILL

(1) A telecommunications carrier or other entity that is neither the customer's selected provider of local exchange service nor selected provider of interexchange service may not initiate the placement on a customer's telecommunications bill of charges for services or products except:

(a) When the service is a customer initiated and controlled selection or approval of a calling method, such as dial-around or acceptance of a collect call, or a customer initiated and controlled selection of an available service which will facilitate completing a call, such as directory assistance or operator assistance, if the charges for such calling-method and call-facilitation services are assessed on a per-use basis only and no further obligation of any kind extends to the customer;

(b) When the telecommunications provider or other entity initiating the placement of charges has obtained the customer's written or electronic signature authorization in a form that meets the letter of agency form and content requirements in ARM 38.5.3904;

(c) When the telecommunications provider or other entity initiating the placement of charges has obtained the customer's electronic authorization to submit the order for the product or service that confirms the information described in the letter of agency form and content in ARM 38.5.3904.  Carriers or other entities electing to confirm customer authorizations electronically shall establish one or more toll-free telephone numbers exclusively for that purpose.  Calls to the number(s) will connect a customer to a voice response unit, or similar mechanism, that records the required information regarding the authorization for services or products, including automatically recording the originating automatic number identification; or

(d) When a qualified and independent third party operating in a location physically separate from the carrier's or other entity's telemarketing representative has obtained a customer's verbal authorization for the product or service, providing the third party verification includes:

(i) a statement that the purpose of the call is to verify the customer's intent to order the product or service. The product or service and all charges applicable to the product or service must be clearly identified to the customer;

(ii) confirmation that the person whose authorization for a product or service is being verified is the subscriber on the billed telecommunications account or a person authorized by the subscriber to make decisions regarding the billed telephone account on behalf of the subscriber;

(iii) verification data unique to the customer (e.g., the customer's date of birth or social security number) ; and

(iv) the name and toll free telephone number of the provider of the requested product or service.

(2) The independent third party:

(a) may not be owned, managed, controlled, or directed by the carrier or other entity or their marketing agent;

(b) may not have any financial incentive to confirm product or service orders for the carrier, other entity, or their marketing agent; and

(c) must operate in a location physically separate from the carrier, other entity or their marketing agent.

(3) Any letter of agency, electronic authorization or verbal authorization verified by an independent third party that does not conform with this rule is invalid. Documentation of valid verbal authorization must demonstrate compliance with each element required by (1) (c) above.

(4) The submitting carrier or other entity shall maintain and preserve records of verification of subscriber authorization for a minimum period of two years after obtaining such verification.

(5) Where a telecommunications carrier or other entity is selling more than one type of product or service, that carrier or other entity must obtain separate authorization from the subscriber for each product or service ordered, although the authorizations may be made within the same solicitation.  Each authorization must be verified separately from any other authorizations obtained in the same solicitation.  Each authorization must be verified in accordance with the verification procedures prescribed in this rule.

History: 69-3-1301, 69-3-1302, 69-3-1303 and 69-3-1304, MCA; IMP, 69-3-1301, 69-3-1303 and 69-3-1304, MCA; NEW, 1999 MAR p. 2086, Eff. 9/24/99; AMD, 2003 MAR p. 2085, Eff. 9/26/03.

38.5.3904   LETTER OF AGENCY FORM AND CONTENT
(1) A telecommunications carrier or other entity initiating a product or service charge to be placed on a customer's telecommunications bill shall obtain any necessary written or electronically signed authorization from a subscriber by using a letter of agency as specified in this rule. Any letter of agency that does not conform with this rule is invalid.

(2) The letter of agency shall be a separate document (or an easily separable document) or located on a separate screen or webpage containing only the authorizing language described in (5) , the sole purpose of which is to authorize a charge to be placed on the customer's telecommunications bill for a product or service.  The letter of agency must be signed and dated by the subscriber to the telecommunications account being authorized for the billing.

(3) The letter of agency shall not be combined on the same document, screen or webpage with inducements of any kind.

(4) Notwithstanding (2) and (3) of this rule, the letter of agency may be combined with checks that contain only the required letter of agency language prescribed in (5) of this rule and the necessary information to make the check a negotiable instrument.  The letter of agency check shall not contain any promotional language or material.  The letter of agency check shall contain, in easily readable, boldface type on the front of the check, a notice that the consumer is ordering a product or service and, by signing the check, is authorizing the billing for product or service on his telephone bill.  The letter of agency language also shall be placed near the signature line on the back of the check.

(5) At a minimum, the letter of agency must be printed with a readable type of sufficient size to be clearly legible and must contain clear and unambiguous language that confirms:

(a) the subscriber's billing name and address and the telephone number on which the charge for the product or service will be billed;

(b) the decision to authorize the placement of the charge for the service or product on the subscriber's telephone bill; and

(c) a clear description of the service or product being ordered.

(6) Letters of agency shall not suggest or require that a subscriber take some action in order to prevent the placement of the charge for the product or service on the customer's telephone bill.

(7) If any portion of a letter of agency is translated into another language, then all portions of the letter of agency must be translated into that language.

(8) Letters of agency submitted with an electronically signed authorization must include the consumer disclosures required by Section 101(c) of the Electronic Signatures in Global and National Commerce Act (October 2000) which is adopted and incorporated by reference. A copy of this section may be obtained from the Commission, 1701 Prospect Avenue, P.O. Box 202601, Helena, Montana 59620-2601.

(9) A carrier or other entity shall submit an order for placement of the charge for the product or service on the subscriber's telephone bill within no more than 60 days of obtaining a written or electronically signed letter of agency authorizing the charge from the subscriber.  However, letters of agency for multi-line and/or multi-location business customers that have entered into negotiated agreements with carriers to add presubscribed lines to their business locations during the course of a term of agreement shall be valid for the period specified in the term agreement.

History: 69-3-1301, 69-3-1302, 69-3-1303 and 69-3-1304, MCA; IMP, 69-3-1301, 69-3-1303 and 69-3-1304, MCA; NEW, 1999 MAR p. 2086, Eff. 9/24/99; AMD, 2003 MAR p. 2085, Eff. 9/26/03.

38.5.3907   COMPLAINTS OF UNAUTHORIZED CHARGES FOR PRODUCTS OR SERVICES BEING PLACED ON A CUSTOMER'S TELEPHONE BILL
(1) Upon receipt of a complaint alleging an unauthorized charge for a product or service being placed on a customer's telephone bill, either orally or in writing, from the customer, the customer's local exchange company, or from the commission or its staff on behalf of a customer or applicant, the telecommunications carrier or other entity that initiated placement of the charge for the product or service on the customer's telephone bill shall make a suitable and documented investigation and advise the party requesting the investigation of the results.  The results of the investigation need not be in writing, unless otherwise directed by the commission or requested by a customer.  When advising the customer or party requesting the investigation of the results, the carrier or other entity that initiated the placement of the charge for the product or service on the customer's telephone bill shall provide documentation in accordance with ARM 38.5.3901 and 38.5.3904 that confirms the customer's valid authorization for placement of the charge for the product or service on the telephone bill. The burden is on the carrier or other entity that initiated the placement of the charge for the product or service on the customer's telephone bill to produce documentation that valid authorization was obtained from the customer.  If a carrier or other entity fails to provide the documentation, all charges for the products or      services that the customer did not authorize or that were not provided to the customer will be deemed invalid. A telecommunications carrier or other entity, upon receipt of a complaint alleging unauthorized placement of charges for products or service on a customer's telephone bill, shall issue an initial response within five working days.

(2) The carrier or other entity shall maintain and preserve records of complaints for a minimum period of two years after receipt of the complaint.  Records of complaints must include the complaint, documentation of the investigation of the complaint, and documentation of the response or responses to the complaint.  Records of complaints must include the customer's name, address, and telephone number, the date of the complaint, a summary of the complaint, the date the complaint was resolved, and the resolution reached.  Records of complaints must be provided to the commission within 20 days of request by the commission.

History: 69-3-1304, MCA; IMP, 69-3-1301 and 69-3-1303, MCA; NEW, 1999 MAR p. 2086, Eff. 9/24/99.

38.5.3910   TELECOMMUNICATIONS CARRIER OR OTHER ENTITY LIABILITY
(1) An entity that initiates a placement of a charge for a product or service on a customer's telephone bill in violation of these rules, or that cannot provide documentation that the billing for the product or service was initiated in compliance with these rules, is liable to the customer for all customer-paid charges and fees related to the product or service being billed on the customer's telephone bill by a telecommunications carrier, other entity, or agent of either, during the period of the unauthorized billing, not to exceed six continuous months of unauthorized billing.

(2) Penalties for violation are as provided in 69-3-1305, MCA.

History: 69-3-1304, MCA; IMP, 69-3-1301 and 69-3-1303, MCA; NEW, 1999 MAR p. 2086, Eff. 9/24/99.

38.5.3913   CREDIT OR REFUND OF CHARGES
(1) A telecommunications carrier or other entity which initiates a placement of a charge for a product or service on the customer's telephone bill without authorization from the customer in accordance with these rules shall issue to the customer a full credit or a refund of the entire amount of such customer's charges for the product or service attributable to the telecommunications carrier or other entity.  The required credit and refund are limited to six continuous months of unauthorized charges.  The appropriate credit or refund must be issued within a period not to exceed 60 days from the date of the initial complaint.

(2) If the customer has not paid the charges placed on the customer's telephone bill without authorization in accordance with these rules, the telecommunications carrier or other entity which initiated the unauthorized charge will make appropriate arrangements to adjust the telephone bill to remove the unauthorized charges and any interest or penalty that is attributable to the unauthorized charges.  Adjustment to the bill must be within 60 days from the date of the initial complaint.

History: 69-3-1304, MCA; IMP, 69-3-1301 and 69-3-1303, MCA; NEW, 1999 MAR p. 2086, Eff. 9/24/99.

38.5.4001   SCOPE AND PURPOSE OF RULES
(1) This subchapter governs all hearings and other proceedings before the Montana public service commission which relate to agreements between carriers seeking to provide competitive local exchange services in Montana. This subchapter shall be construed to secure the just, speedy and inexpensive determination of every action. All rules promulgated by the commission with regard to other adjudicative proceedings are superseded by this subchapter in proceedings governed by them to the extent they conflict with this subchapter.

(a) All references made in state or federal statutes and regulations to state commission proceedings for dispute resolution and approval of negotiated or arbitrated agreements for interconnection, services or network elements shall be governed by this subchapter.

(b) All matters before the Montana public service commission relating to negotiated or arbitrated agreements for interconnection, services or network elements shall be governed by this subchapter.

(c) Proceedings referred to in the Federal Telecommunications Act of 1996 (1996 Act) will be governed by this subchapter. The commission may waive, suspend or modify these rules for good cause to expedite a decision, prevent manifest prejudice to a party, assure a fair hearing, afford substantial justice, or fulfill its obligations under the 1996 Act.

(d) All controversies arising under provisions of state and federal law pursuant to negotiated or arbitrated agreements for interconnection, services or network elements involving the interpretation and application of such agreements shall be governed by this subchapter, except that parties to an agreement for interconnection, services or network elements may include methods allowed by applicable federal or state law for resolving disputes over the interpretation and application of terms and conditions in their agreement.

(2) The purpose of this subchapter is to provide guidelines and procedures for the commission to carry out its duties pursuant to the 1996 Act. The commission imposes this subchapter for competition within local service areas in order to encourage competitive entry, preserve and advance universal service, protect the public safety and welfare, ensure the continued quality of telecommunications services, and safeguard the rights of consumers while ensuring that the rates charged and services rendered by telecommunications services providers are just and reasonable.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 319, Eff. 2/11/97.

38.5.4002   TERMS AND DEFINITIONS
Terms used in this subchapter have the following meanings:

(1) "Arbitrated agreement" means an agreement between telecommunications carriers for interconnection, services or network elements pursuant to the 1996 Act, which is reached through arbitration or a combination of negotiation and arbitration.

(2) "Arbitration" means an alternative dispute resolution process in which a neutral third party decides a matter in dispute. Arbitration is an investigatory contested case proceeding under the Montana Administrative Procedure Act. The term arbitration as used in the 1996 Act is not arbitration under either the United States Arbitration Act, 9 USC 1, et seq., or the Montana Uniform Arbitration Act, 27-2-401, MCA, et seq.

(3) "CMRS" is commercial mobile radio service.

(4) "Commission" refers to the Montana public service commission.

(5) "Contested case" means any proceeding in which a determination of legal rights, duties or privileges of a party is required by law. Such proceedings are required by law whenever the Montana legislature has so provided or where constitutional due process requires a hearing.

(6) "FCC" is the federal communications commission.

(7) "Incumbent LEC" means, with respect to an area, the LEC that on February 8, 1996, provided telephone exchange service in that area.

(8) "Interconnection" is the physical linking of two networks for the mutual exchange of traffic. This term does not include the transport and termination of traffic.

(9) "Local exchange carrier (LEC) " is any person or entity that is engaged in the provision of telephone exchange service or exchange access but does not include CMRS providers.

(10) "Mediation" means an alternative dispute resolution process in which a neutral third party assists the disputants in reaching their own agreement but does not have the authority to make a binding decision.

(11) "Meet point" is a point of interconnection between two networks, designated by two telecommunications carriers, at which one carrier's responsibility for service begins and the other carrier's responsibility ends.

(12) "Meet point interconnection arrangement" is an arrangement by which each telecommunications carrier builds and maintains its network to a meet point.

(13) "Network element" is a facility or equipment used in the provision of a telecommunications service. Such term also includes, but is not limited to, features, functions, and capabilities that are provided by means of such facility or equipment, including but not limited to, subscriber numbers, databases, signaling systems, and information sufficient for billing and collection or used in the transmission, routing or other provision of a telecommunications service.

(14) "Negotiated agreement" means a voluntary agreement between telecommunications carriers for interconnection, services or network elements pursuant to the 1996 Act.

(15) "The 1996 Act" means the Telecommunications Act of 1996, Public Law No. 104-104, amending the Telecommunications Act of 1934, 47 USC 151, et seq.

(16) "Number portability" means the ability of users of telecommunication services to retain, at the same location, existing telecommunications numbers without impairment of quality, reliability or convenience when switching from one telecommunications carrier to another.

(17) "Open issues" means any unresolved difference(s) arising in the negotiations.

(18) "Physical collocation" is an offering by an incumbent LEC that enables a requesting telecommunications carrier to:

(a) place its own equipment to be used for interconnection or access to unbundled network elements within or upon an incumbent LEC's premises;

(b) use such equipment to interconnect with an incumbent LEC's network facilities for the transmission and routing of telephone exchange service, exchange access service or both or to gain access to an incumbent LEC's unbundled network elements for the provision of a telecommunications service;

(c) enter those premises, subject to reasonable terms and conditions, to install, maintain, and repair equipment necessary for interconnection or access to unbundled elements; and

(d) obtain reasonable amounts of space in an incumbent LEC's premises, as provided in this subchapter, for the equipment necessary for interconnection or access to unbundled elements, allocated on a first-come, first-served basis.

(19) "Premises" refers to an incumbent LEC's central offices and serving wire centers, as well as all buildings or similar structures owned or leased by an incumbent LEC that house its network facilities, and all structures that house incumbent LEC facilities on public rights-of-way, including but not limited to vaults containing loop concentrators or similar structures.

(20) "Rural LEC" is an entity that:

(a) provides common carrier service to any LEC study area that does not include either:

(i) any incorporated place of 10,000 inhabitants or more, or any part thereof, based on the most recently available population statistics of the bureau of the census; or

(ii) any territory, incorporated or unincorporated, included in an urbanized area, as defined by the bureau of the census as of August 10, 1993;

(b) provides telephone exchange service, including exchange access, to fewer than 50,000 access lines;

(c) provides telephone exchange service to any LEC study area with fewer than 100,000 access lines; or

(d) has less than 15 percent of its access lines in communities of more than 50,000 on February 8, 1996.

(21) "Statement of generally available terms and conditions" means a statement by a bell operating company (BOC) of the terms and conditions that such company generally offers within a particular state to comply with the requirements of section 251 of the 1996 Act and the regulations thereunder and the standards applicable under section 252 of the 1996 Act.

(22) "Telecommunications carrier" is any provider of telecommunications services, except that such term does not include aggregators of telecommunications services, which are persons that, in the ordinary course of operations, make telephones available to the public or to transient users of their premises, for interstate telephone calls using a provider of operator services.

(23) "Virtual collocation" is an offering by an incumbent LEC that enables a requesting telecommunications carrier to:

(a) designate or specify equipment to be used for interconnection or access to unbundled network elements to be located within or upon an incumbent LEC's premises, and dedicated to such telecommunications carrier's use;

(b) use such equipment to interconnect with an incumbent LEC's network facilities for the transmission and routing of telephone exchange service, exchange access service or both or for access to an incumbent LEC's unbundled network elements for the provision of a telecommunications service; and

(c) electronically monitor and control its communications channels terminating in such equipment.

(24) The meaning of undefined terms used in this subchapter shall be consistent with their general usage in the telecommunications industry unless specifically defined by other applicable Montana or federal law.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 319, Eff. 2/11/97.

38.5.4006   NEGOTIATION

(1) The commission encourages the voluntary negotiation of agreements for interconnection, services or network elements. In order to facilitate the streamlined processes mandated by the 1996 Act, negotiating parties should resolve as many terms and conditions in their agreements as possible prior to making a request for the commission to mediate or arbitrate unresolved terms. Parties should continue negotiating unresolved terms after petitioning the commission to arbitrate open issues and shall notify the arbitrator expeditiously when any open issue is resolved voluntarily.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 319, Eff. 2/11/97.

38.5.4009   MEDIATION

(1) Any party negotiating an agreement under section 252 of the 1996 Act may, at any point in the negotiation, ask the commission to participate in the negotiation and to mediate any differences arising in the course of the negotiation. Parties need not seek mediation by the commission and are free to employ the services of a private mediator.

(2) If a party requests mediation by the commission, the commission will consider the type of mediation requested by the parties and will use one of the following processes:

(a) The commission may appoint a staff member to mediate. Employees acting as mediators will not participate in the arbitration or approval process for the same agreement, unless the parties consent.

(b) The commission may appoint a commissioner to mediate. A commissioner acting as a mediator will not participate in the arbitration or approval process for the same agreement, unless the parties consent.

(c) The commission may use a co-mediation process involving both a commissioner or a commission staff member and a neutral professional mediator from outside the agency. If co-mediation is chosen, the negotiating parties shall jointly retain the services of a professional mediator acceptable to all parties and shall share the costs of the mediator equally. The parties shall secure the mediation services and identify the professional mediator to the commission not later than five business days after the request for mediation, unless more time is allowed by the commission. The commission will appoint a commissioner or a staff member to serve as a co-mediator. The parties may recommend the area of expertise required by a commission staff mediator, who may provide technical or other related information and advice to the professional mediator as needed throughout the mediation process.

(3) The mediator shall have discretion to regulate the course of the mediation, including scheduling of mediation sessions, in consultation with the parties. The following general procedures apply:

(a) the mediator may not impose a settlement but can offer proposals for settlement;

(b) the mediator may meet individually with the parties or attorneys during mediation;

(c) only the parties to the negotiation may attend the mediation session(s) , unless all parties consent to the presence of others;

(d) parties shall provide the mediator with a brief statement of position and relevant background information prior to the first mediation session, including a list of all issues raised in the negotiation on which mediation is sought and a list of all issues the parties have resolved through negotiation;

(e) the mediator may not provide legal advice to the parties, nor are any mediator's statements as to law or policy binding on the commission, unless later adopted by the commission;

(f) the mediation process is considered to be a private resolution process and is confidential to the extent permitted by law; and

(g) no stenographic record will be kept.

(4) Although mediation is generally a voluntary process, section 252(a) (2) of the 1996 Act requires all parties to participate in a commission mediation, once requested, unless disputes are otherwise resolved. The mediator may terminate the mediation if it appears that the likelihood of agreement is remote . Ordinarily, a mediation should not be terminated prior to the completion of at least one mediation session.

(5) Parties may indicate their preference for the skills desired in a mediator and may indicate a preference for the preferred mediation process as set forth in ARM 38.5.4009(2) .

(6) For good cause, the commission may refuse to mediate negotiations between parties.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 319, Eff. 2/11/97.

38.5.4012   PETITION FOR ARBITRATION OF OPEN ISSUES

(1) Any party to the negotiation of an interconnection agreement may, during the period from the 135th to the 160th day (inclusive) after the date on which a LEC receives a request for negotiation, petition the commission to arbitrate any open issues.

(2) To petition the commission for arbitration, a party to the negotiation shall file 10 copies of the request with the commission. On the same day it files its petition for arbitration with the commission, the petitioner shall serve a copy of the petition and all supporting documentation on any other party to the negotiation and the Montana consumer counsel. A docket number will be assigned and appropriate notice will be provided. The petition shall include the following information:

(a) the name, address, telephone number, fax number, and e-mail address of the party to the negotiation making the request;

(b) the name, address, telephone number, fax number, and e-mail address (if known) of the other party to the negotiation;

(c) the name, address, telephone number, fax number, and e-mail address (if known) of the parties' representatives who are participating in the negotiation and to whom inquiries should be made;

(d) the general negotiation history;

(e) all relevant nonproprietary documentation and arguments concerning unresolved issues and the position of each party on the unresolved issues;

(f) all relevant nonproprietary documentation on any other issue discussed and resolved by the parties; and

(g) a statement identifying information needed to resolve open issues or information which has been requested during negotiations but not yet provided.

(3) Copies of the petition for arbitration shall be directed to Program Manager, Utility Division, Montana Public Service Commission, 1701 Prospect Avenue, PO Box 202601, Helena, Montana 59620-2601.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 319, Eff. 2/11/97.

38.5.4013   OPPORTUNITY TO RESPOND TO PETITION

(1) A nonpetitioning party to a petition for arbitration shall file a response to the other party's petition and provide additional information within 25 days after the petition to arbitrate is filed. The response should identify information needed to resolve open issues, including information identified in the other party's petition for arbitration as information which has been requested during negotiations but not yet provided and must address each issue presented in the petition for arbitration. The response shall also present any additional issues for which the respondent seeks resolution and provide additional information and evidence necessary for the arbitrator's review. On the same day that it files its response with the commission, the respondent shall serve a copy of the response, and all supporting documentation, on any other party to the negotiation and the Montana consumer counsel.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 319, Eff. 2/11/97.

38.5.4016   COMMISSION RESPONSIBILITY
(1) Upon receipt of a timely and complete petition for arbitration, the commission shall appoint an arbitrator pursuant to ARM 38.5.4017. It is the function of the commission to approve a resolution of the issues in dispute if the parties cannot reach a voluntary agreement. The commission may not approve an arbitrator's resolution of issues that have not been identified by the parties as open issues.
History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 319, Eff. 2/11/97

38.5.4017   APPOINTMENT OF ARBITRATOR
(1) Arbitrations will be conducted by arbitrators appointed by the commission. The commission may appoint a single commissioner, a commission staff member, an internal arbitration panel which may be comprised of the commission or an independent arbitrator. The commission will not appoint an independent arbitrator unless it has insufficient resources with which to arbitrate the matter. The commission may permit parties to comment on the selection of the arbitrator prior to the appointment.

(2) The commission will appoint an arbitrator within 10 days of receiving a petition for arbitration.

(3) The arbitrator, if the commission does not act as such, shall be considered a hearings examiner under the Montana Administrative Procedure Act.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 319, Eff. 2/11/97.

38.5.4018   AUTHORITY OF ARBITRATOR
(1) The arbitrator will exercise all authority reasonable and necessary for the conduct of the arbitration subject to the provisions of this subchapter, the commission's procedural order on arbitration, and other provisions of law. If the commission is not the arbitrator, the arbitrator appointed by the commission shall have all the powers and duties of hearings examiners as set forth in the Montana Administrative Procedure Act.

(2) If the commission acts as the arbitrator, it may appoint a staff member to act as a hearings officer for procedural matters. The hearings officer may conduct scheduling and procedural conferences and decide procedural issues as necessary and reasonable to promote the speedy resolution of arbitration proceedings as mandated by the 1996 Act.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 319, Eff. 2/11/97.

38.5.4019   PREHEARING CONFERENCES
(1) Within 10 days after the respondent files its response to the petition for arbitration, the arbitrator or hearings officer will hold a conference to discuss a procedural schedule for the proceeding that conforms to the deadlines set forth in section 252 of the 1996 Act. The parties and the arbitrator will also attempt to identify, simplify and limit the issues to be resolved and discuss the scope and timing of discovery. The arbitrator or hearings officer may schedule other prehearing conferences as reasonable and necessary to ensure a timely resolution of open issues as required by the 1996 Act.
History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 319, Eff. 2/11/97.

38.5.4020   OTHER RESPONSIBILITIES OF THE ARBITRATOR

(1) The arbitrator must limit the arbitration process to the resolution of issues raised by the negotiating parties in the petition and response. The arbitrator, in resolving these issues must ensure that their resolution meets the requirements of the 1996 Act.

(2) The arbitrator shall resolve each issue raised by the parties by imposing appropriate conditions as required to implement section 252(b) (4) (C) of the 1996 Act upon the parties to the agreement, and shall conclude the resolution of any unresolved issues not later than nine months after the date on which the LEC received the request to negotiate. If any party refuses or fails unreasonably to respond on a timely basis to any reasonable request from the arbitrator, the arbitrator may proceed on the basis of the best information available to the arbitrator from whatever source derived.

(3) In resolving open issues by arbitration and imposing conditions upon the parties to the agreement, the arbitrator shall:

(a) ensure that such resolution and conditions meet the requirements of section 251 of the 1996 Act;

(b) establish any rates for interconnection, services or network elements according to the pricing standards in section 252(d) of the 1996 Act as enacted on February 8, 1996; and

(c) provide a schedule for implementation of the terms and conditions by the parties to the agreement.

(4) The arbitrator may decide whether any written statements shall be required from the parties or whether any written statements, pleadings or motions other than the petition and response shall be required from the parties or may bepresented by them and shall fix the period of time for submission of suchstatements, pleadings or motions.

(5) The arbitrator shall supervise discovery, including the setting of limits on the timing of discovery and the number of questions.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 319, Eff. 2/11/97.

38.5.4030   INTERVENTION AND PARTICIPATION BY INTERESTED PARTIES

(1) The addition of other parties to an arbitration would jeopardize the commission's ability to complete the arbitration within the limited time frame imposed by the 1996 Act and ARM 38.5.4020 by lengthening the proceeding and detracting from the arbitrator's ability to move forward expeditiously on the merits of the petition for arbitration. Intervention shall be limited to the Montana consumer counsel, the sole statutory intervenor, who shall have the rights and duties as directed under Montana law. The Montana consumer counsel, if he requests intervention, shall intervene as early as practicable and no later than 25 days after the petitioner files a request for arbitration.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 319, Eff. 2/11/97.

38.5.4033   PROPRIETARY INFORMATION

(1) Trade secret and proprietary information will be treated as provided for in the commission's rules of practice and procedure. The arbitrator or hearings officer may, at any time during the proceeding, enter a protective order to govern the treatment of information of a trade secret nature. Parties should request a protective order at the earliest possible time and may file a motion for protective order with the petition or response.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 319, Eff. 2/11/97.

38.5.4036   CONSOLIDATION OF ARBITRATTON PROCEEDINGS

(1) The commission may, to the extent practical, consolidate multiple proceedings for rural telephone company exemptions, eligible telecommunications carrier designations, arbitrations, and removal of barriers to entry in order to reduce administrative burdens on telecommunications carriers, other parties and the commission in carrying out its responsibilities under the 1996 Act. The commission may consolidate multiple arbitration proceedings with consent of all the parties.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 319, Eff. 2/11/97.

38.5.4039   ARBITRATION HEARING

(1) The arbitrator may require the parties to substitute closing arguments in lieu of post-hearing briefing. If briefs are submitted, the arbitrator may require filing of briefs as reasonable and necessary to allow for sufficient time to issue the recommended arbitration decision.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 319, Eff. 2/11/97.

38.5.4042   MOTIONS

(1) The filing of motions will not relieve a party of any requirements during the arbitration proceeding and must not delay the proceeding. The arbitrator will act promptly to consider all motions so as not to prejudice any party to the proceeding.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 319, Eff. 2/11/97.

38.5.4048   ARBITRATOR'S DECISION

(1) Unless the commission is the arbitrator the arbitrator shall issue a recommended decision on all the issues submitted for arbitration no later than 30 days before the date established for the commission's final decision on arbitration.

(2) The arbitrator's recommended decision shall set forth the recommended resolution of each issue submitted for arbitration and provide a recommended schedule for implementation by the parties. The decision shall provide a written rationale for each recommended resolution, including any necessary findings and relevant citations to law or the record.

(3) Parties may file exceptions to the recommended decision and request oral argument with the commission no later than 10 days after the arbitrator issues the recommended decision.

(4) The issues presented shall be resolved to ensure compliance with the requirements of sections 251 and 252 (d) of the 1996 Act, applicable FCC regulations, relevant state law and applicable rules or orders of the commission.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 319, Eff. 2/11/97.

38.5.4051   OTHER DUTIES OF INCUMBENT LOCAL EXCHANGE CARRIERS

(1) Within 10 days after receiving a petition for arbitration, the incumbent LEC shall provide notification of the filing in writing to all other telecommunications carriers requesting interconnection, services or network elements from it and with whom it has not negotiated a binding agreement.

(2) Upon filing a petition for approval of a negotiated or arbitrated agreement, the incumbent LEC shall provide notification of the filing in writing to all other telecommunications carriers requesting interconnection, services or network elements from it pursuant to section 252 of the 1996 Act.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 319, Eff. 2/11/97.

38.5.4054   APPROVAL OF NEGOTIATED AND ARBITRATED AGREEMENTS; PREEXISTING AGREEMENTS
(1) An interconnection agreement shall be submitted to the commission for approval under section 252 (e) of the 1996 Act after the issuance of the final arbitration order by the commission. The time for submitting the agreement shall be determined by the arbitrator on a case-by-case basis. The nine month time line for arbitration under section 252(b) (4) (C) and ARM 38.5.4020 is not applicable to the approval process.

(2) Petitions for approval of agreements and all relevant accompanying documents shall be filed with the commission in the manner provided for in ARM 38.5.4012. Along with the petition for approval of an arbitrated agreement, the parties shall file a proposed notice of the application and opportunity to comment for the commission to serve on its general telecommunications mailing list. Any party to the agreement may submit a petition for approval. Unless filed jointly by all parties, the petition for approval and any accompanying materials should be served on the other signatories by delivery on the day of filing. Any filing not containing the required materials will be rejected and must be refiled when complete. The statutory time lines shall be deemed not to begin until the petition for approval has been properly filed.

(3) Documents which must accompany the petition to constitute proper filing include the following:

(a) In the case of negotiated agreements:

(i) a complete copy of the signed agreement, including any attachments or appendices;

(ii) a brief or memorandum summarizing the main provisions of the agreement, setting forth the party's position on whether the agreement should be adopted or modified, including a statement on why the agreement does not discriminate against nonparty carriers, is consistent with the public interest, convenience, and necessity, and is consistent with applicable state law requirements; and

(iii) a proposed order containing findings and conclusions.

(b) In the case of arbitrated agreements:

(i) a complete copy of the signed agreement, including any attachments or appendices;

(ii) a brief or memorandum summarizing the main provisions of the agreement, setting forth the party's position on whether the agreement should be adopted or modified; a separate explanation of the manner in which the agreement meets each of the applicable specific requirements of section 251 of the 1996 Act, including the FCC regulations there under, and applicable state requirements;

(iii) complete and specific information to enable the commission to make the determinations required by section 252 (d) of the 1996 Act regarding pricing standards, including supporting information on the cost basis for rates on interconnection and network elements and the profit component of the proposed rate, transport and termination charges, and wholesale prices; and

(iv) a proposed order containing findings and conclusions.

(c) In the case of combined agreements containing both arbitrated and negotiated provisions, the request for approval shall include the foregoing materials as appropriate, depending on whether a provision is negotiated or arbitrated. The memorandum or brief should clearly identify which sections were negotiated and which arbitrated.

(4) The commission interprets the 1996 Act to require approval of agreements as follows:

(a) arbitrated agreements must be approved within 30 days after filing the executed agreement;

(b) negotiated agreements must be approved within 90 days after filing the executed agreement; and

(c) agreements containing both arbitrated and negotiated terms must be approved within 30 days after filing the executed agreement.

(5) Commission review of agreements:

(a) Upon the filing by one or more parties of an agreement adopted under the arbitration process, the parties involved in the arbitration may file written comments supporting or opposing the proposed agreement within 10 days. Responses to the comments may be filed within five days following the filing of the comments.

(i) The commission will review agreements adopted through arbitration and will approve or reject an agreement by issuing an order with written findings as to any deficiencies within 30 days after filing of the agreement.

(ii) The commission may only reject an arbitrated agreement if it finds that the agreement does not meet the requirements of section 251 of the 1996 Act, including FCC regulations under section 251 or the standards set forth in section 252 (d) of the 1996 Act.

(b) Upon the filing of an agreement resulting from voluntary negotiations, including mediation, interested persons may file written comments supporting or opposing the proposed interconnection agreement within 21 days following notice by the commission. Responses to the comments may be filed within 10 days following the filing of comments.

(i) The commission will review agreements resulting from voluntary negotiations and will approve or reject an agreement by issuing an order with written findings as to any deficiencies within 90 days after filing of the agreement. If the commission has not issued such order within 90 days, the agreement shall be deemed approved on the 91st day.

(ii) The commission may reject the agreement if it finds that the agreement or any portion of the agreement, discriminates against a telecommunications carrier not a party to the agreement; or if it finds the implementation of the agreement or portion is not consistent with the public interest, convenience, and necessity.

(6) The commission may review requests for approval and comments submitted pursuant to those requests at a public meeting and may schedule oral arguments to be presented at a public meeting. The commission does not interpret the approval process required by the 1996 Act as requiring a contested case type hearing. However, if reasonable or necessary, the commission may hold a hearing under the contested case procedures outlined in the Montana Administrative Procedure Act.

(7) Within 30 days of the commission's rejection of an agreement resulting from negotiation or arbitration or both, the parties may:

(a) file an application for reconsideration for the commission's consideration; or

(b) resubmit the agreement for commission approval if the parties have remedied the deficiencies found by the commission in its order.

(8) The commission may approve a negotiated interconnection agreement even if the terms of the agreement do not comply with the requirements of this subchapter as long as the agreement fully complies with section 252 (c) of the 1996 Act.

(9) The commission may not approve a BOC statement of generally available terms and conditions unless such statement complies with sections 251 and 252(d) of the 1996 Act. In approving such statement, the commission shall consider applicable state law and commission rules, including requiring compliance with telecommunications service quality standards or requirements.

(a) Within 60 days after a BOC statement of generally available terms and conditions is filed with the commission, the commission shall:

(i) complete the review of the statement, including reconsideration of the statement (unless the BOC agrees to an extension of the period for the review) ; or

(ii) permit the statement to take effect.

(b) If the commission has permitted the statement of generally available terms and conditions to take effect pursuant to ARM 38.5.4054(9) (a) (ii) , the commission may continue its review of such statement and may approve or reject the statement upon completion of its review.

(10) All interconnection agreements between an incumbent LEC and another telecommunications carrier, including those negotiated before February 8, 1996, shall be submitted by the parties to the commission for approval pursuant to section 252 (e) of the 1996 Act. Interconnection agreements negotiated before February 8, 1996, between class A carriers as defined in FCC regulations, shall be filed with the commission by June 30, 1997, unless the commission determines that earlier submission is necessary and reasonable in carrying out its functions under the 1996 Act.

(a) If the commission approves a preexisting agreement, it shall be made available to other parties upon request.

(b) The commission may reject a preexisting agreement on the grounds that it is inconsistent with the public interest or for other reasons set forth in section 252 (e) (2) of the 1996 Act.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 319, Eff. 2/11/97.

38.5.4055   APPROVED AGREEMENTS

(1) The commission retains continuing jurisdiction and will maintain regulatory oversight of the approved interconnection agreements to the extent permitted by law.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 319, Eff. 2/11/97.

38.5.4065   UNBUNDLING OF LOCAL EXCHANGE NETWORK ELEMENTS

(1) Each incumbent LEC and interconnecting facilities based new exchange carrier shall unbundle its local network elements. Network elements shall be unbundled at technically feasible points upon the bona fide request of a LEC. The requirement to fulfill all bona fide requests for the purchase of unbundled network elements by other LECs applies equally to incumbent LECs and new exchange carriers.

(2) At a minimum LECs shall unbundle the local loop, network interface device, switching, transport, databases and signaling systems. Unbundling of networks shall include access to necessary customer databases, such as, but not limited to, 9-1-1 databases, billing name and address, directory assistance, local exchange routing guide, line information database and 800 databases. Unbundling shall also include operator services, directory assistance, and signaling system functionalities. If a LEC receives a bona fide request for the purchase of a network element, the LEC receiving the request for unbundling shall have the burden of proving that the provision of the network element is not technically feasible.

(3) The commission may decline to unbundle a network element if it determines the network element is proprietary and the proposed telecommunication service can be provided through the use of other, nonproprietary unbundled network elements.

(4) Unbundled network element rates, terms and conditions should be established through negotiation between LECs upon receipt of a bona fide request for interconnection or through arbitration. A LEC may, however, provide unbundled network element rates, terms and conditions through tariffs or other arrangements approved by the commission. The commission, at its discretion, may order the filing of tariffs establishing unbundled network element rates, terms and conditions.

(5) Once an unbundled network element has been made available to an interconnecting carrier, on a contractual basis, the providing carrier shall make that unbundled network element available for purchase for all similar requests to the extent that technical compatibility exists between the LEC and the interconnecting carrier.

(6) Unbundled network elements shall be priced at cost based rates pursuant to the pricing standards in section 252 (d) of the 1996 Act as enacted on February 8, 1996.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 651, Eff. 2/11/97.

38.5.4068   EXEMPTIONS, SUSPENSIONS AND MODIFICATIONS FROM INTERCONNECTION REQUIREMENTS

(1) The incumbent LEC interconnection requirements in section 251(c) of the 1996 Act shall not apply to a rural LEC until:

(a) the rural LEC has received a bona fide request for interconnection, services or network elements; and

(b) the commission terminates the exemption according to (2) .

(2) The party making a bona fide request of a rural LEC for interconnection, services, or network elements shall submit a notice of its request to the commission. The commission shall conduct an inquiry to determine whether to terminate the exemption. Within 120 days of receiving notice of the request, the commission shall terminate the exemption if the request is not unduly economically burdensome, is technically feasible, and is consistent with 47 USC 254 as it existed on February 8, 1996, except subsections (b) (7) and (c) (1) (D) . Upon termination of the exemption, the commission shall establish an implementation schedule for compliance with the request that is consistent in time and manner with the federal communications commission's regulations.

(3) A LEC with fewer than 2 percent of the nation's subscriber lines installed in the aggregate nationwide may petition the commission for a suspension or modification of the application of a requirement or requirements of section 251(b) or (c) of the 1996 Act to telephone exchange service facilities specified in the petition. The commission shall grant the petition for the suspension or modification to the extent and for the duration that the commission determines is necessary

(a) to avoid a significant adverse economic impact on users of telecommunications services generally;

(b) to avoid imposing a requirement that is unduly economically burdensome; or

(c) consistent with the public interest, convenience, and necessity.

(4) The commission shall act upon any petition filed under (3) above within 180 days after receiving the petition. Pending such action, the commission may suspend enforcement of the requirement to which the petition applies with respect to the petitioning carrier or carriers.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 319, Eff. 2/11/97.

38.5.4071   TELEPHONE NUMBER PORTABILITY

(1) All facilities-based LECs shall provide number portability so that end users may retain the same telephone number as they change from one service provider to another as long as they remain at the same location or if moving, retain the same NXX code.

(2) A facilities-based LEC not offering permanent number portability shall provide interim number portability. Interim number portability shall be provided using remote call forwarding, direct inward dialing or any other comparable and technically feasible method. Prices for interim number portability using remote call forwarding or direct inward dialing shall be set at a level that recognizes the relative inferior quality of the service.

(3) Pursuant to FCC regulations, beginning January 1, 1999, all facilities-based LECs that control the provision of numbers shall provide permanent number portability within six months after receiving a specific request by another telecommunications carrier.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 319, Eff. 2/11/97.

38.5.4074   MINIMUM SERVICE STANDARDS

(1) All regulated LECs shall comply with this commission's Telecommunication Service Standards, ARM 38.5.3301 through 38.5.3371, as these currently exist and as may be modified by this commission.

History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 319, Eff. 2/11/97.

38.5.4085   SEVERABILITY
(1) If any rule in this subchapter is held invalid or any part of any rule in this subchapter is held invalid, the remainder or its application to other situations or person(s) , shall not be affected.
History: Sec. 69-3-103, MCA; IMP, Secs. 69-3-102 and 69-3-201, MCA; NEW, 1997 MAR p. 319, Eff. 2/11/97.

38.5.4101   SCOPE AND PURPOSE OF RULES
(1) This subchapter governs the implementation of intraLATA dialing parity in Montana. This subchapter shall be construed to secure the just, speedy and inexpensive determination of every action. All matters before the Montana public service commission relating to dialing parity implementation on or after the date of adoption of these rules shall be governed by this subchapter.

(2) The purpose of this subchapter is to provide guidelines and procedures for the commission to carry out its duties pursuant to the Federal Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996) . The 1996 Act imposes on all local exchange carriers the duty to provide dialing parity to competing providers of telephone toll service. 47 USC 251(b) (3) . The commission imposes this subchapter for competition within intraLATA areas in order to encourage competitive entry, protect the public safety and welfare, ensure the continued quality of telecommunications services, and safeguard the rights of consumers while ensuring that the rates charged and services rendered by telecommunications services providers are just and reasonable.

History: 69-3-103, 69-3-822, MCA; IMP, 69-3-102, 69-3-201, 69-3-834, MCA; NEW, 1998 MAR p. 983, Eff. 4/17/98.

38.5.4102   DEFINITIONS
(1) "Bona fide request," for purposes of this subchapter, is a written request submitted by a telecommunications carrier, other than the primary intraLATA toll carrier, to a local exchange carrier (LEC) for intraLATA equal access presubscription service in an exchange or exchanges.

(2) "IntraLATA equal access" or "intraLATA dialing parity" means that all toll carriers are able to provide telecommunications services in such a manner that customers have the ability to route intraLATA calls automatically without the use of any access code, to the telecommunications services provider of the customer's designation from among two or more telecommunications services providers, including the incumbent local exchange carrier. From a customer perspective, this means that the local exchange carrier shall provide all telecommunications carriers operating in an intraLATA equal access presubscription office with dialing arrangements and other service characteristics that are equivalent in type and quality to that provided to the primary toll carrier in its provision of toll service.

(3) "Letter of agency" or "letter of authorization" means an authorization which meets the requirements of ARM 38.5.3802 and 69-3-1303 , MCA.

(4) "Local exchange carrier" means any carrier that is engaged in the provision of telephone exchange service or exchange access, but does not include carriers that provide commercial mobile radio service under 47 USC 332(c) unless the Federal Communications Commission (FCC) makes a specific finding that such service should be included in the definition of local exchange carrier.

(5) "Presubscription" is customer preselection of the carrier to handle 1+/0+ toll calls without having to dial an access code (i.e. 10XXX or 101XXXX) .

(6) "Primary toll carrier" means the current provider of intraLATA long distance service. In certain instances, the primary toll carrier is the current local exchange carrier.

(7) "Primary (or presubscribed) interexchange carrier" or "PIC" means the telecommunications carrier with whom a customer may presubscribe to provide 1+/0+ toll service without the use of access codes, following equal access presubscription implementation.

(8) "Registered local exchange carrier" means a carrier that has registered with the commission to provide local exchange service within Montana using its own facilities or those of another carrier or entity.

(9) "2-PIC" is the equal access presubscription option that affords customers the opportunity to select one telecommunications carrier for all interLATA 1+/0+ toll calls, and at the customers' options, to select another telecommunications carrier for all intraLATA 1+/0+ toll calls.

History: 69-3-103, 69-3-822, MCA; IMP, 69-3-102, 69-3-201, 69-3-834, MCA; NEW, 1998 MAR p. 983, Eff. 4/17/98.

38.5.4103   EQUAL ACCESS PRESUBSCRIPTION IMPLEMENTATION

(1) US West Communications, Inc. is required to implement intraLATA equal access presubscription in its Montana territory when it begins providing in-region interLATA services pursuant to 47 USC 271 or on February 8, 1999, whichever is earlier. US West Communications, Inc. shall file an intraLATA dialing parity implementation plan consistent with the requirements of ARM 38.5.4120. Any grant of authority to US West Communications, Inc. to provide in-region interLATA services pursuant to 47 USC 271 will not affect the timing requirements applied to other carriers in the provision of intraLATA dialing parity. None of the provisions of (2) below apply to US West Communications, Inc.

(2) Other local exchange carriers shall, either in response to a bona fide request or on their own initiative, provide intraLATA dialing parity where technically and economically feasible using the 2-PIC method. A carrier that begins providing facilities-based local services after adoption of these rules must have on file a commission-approved plan for the implementation of intraLATA equal access before the carrier begins providing local exchange service.

(a) Within six months after receipt of a bona fide request pursuant to (2) , local exchange carriers shall complete implementation of intraLATA dialing parity.

(b) Local exchange carriers may negotiate implementation schedules that differ from the requirements in this rule with the agreement of all interexchange carriers that make bona fide requests pursuant to (2) within 90 days of the first bona fide request.

(c) A local exchange carrier may petition the commission for a waiver of the requirement to provide intraLATA dialing parity consistent with (2) on the grounds that a request it has received is not bona fide, that compliance is unduly economically burdensome or is technically infeasible, and that the waiver is consistent with the public interest. The commission, after notice and opportunity for hearing, may grant a waiver upon such a showing.

(d) A local exchange carrier may petition for an extension of the timing requirements of (2) on the grounds that equal access presubscription implementation cannot reasonably be provided in the given exchange(s) within the required time frame. The commission, after notice and opportunity for hearing, may grant such extension(s) for a reasonable period of time upon such a showing.

(e) A local exchange carrier may require a performance bond be established, in an amount approved by the commission, which would be forfeited by the requesting company in the event such company fails to provide intraLATA toll services to the particular exchange within the six months following implementation of equal access and the commission finds good cause exists for forfeiture.

History: 69-3-103, 69-3-822, MCA; IMP, 69-3-102, 69-3-201, 69-3-834, MCA; NEW, 1998 MAR p. 983, Eff. 4/17/98.

38.5.4104   CUSTOMER EDUCATION AND PRESUBSCRIPTION PROCEDURES
(1) In exchanges with existing interLATA dialing parity, the local exchange carrier shall provide written information to customers, at least 30 days prior to its scheduled implementation, describing intraLATA dialing parity and explaining presubscription procedures. Written information provided to customers pursuant to this rule shall advise customers with existing interLATA toll freezes on their account that their freeze will also apply to their existing intraLATA toll carrier until they take action to change it. Any customer commencing service after that mailing, but before implementation of equal access presubscription, shall also receive a copy of the written information from the local exchange carrier providing service.

(2) In exchanges without interLATA equal access presubscription, the local exchange carrier shall furnish customers with information at least 60 days prior to implementation of dialing parity. The information must provide clear directions and forms to allow customers to presubscribe to their selected primary intraLATA carrier.

(3) Customers who commence service after the initial intraLATA equal access presubscription implementation is completed in their end office shall be informed of their carrier selection options at the time that service is requested and may select both their primary interLATA and intraLATA carriers or be assigned no PIC status and be required to use access codes to place toll calls until a PIC(s) is selected.

(4) Informational materials, forms and scripts developed for use in compliance with this rule shall be complete, clear, and unbiased. US West Communications, Inc. shall file these materials, forms, and scripts with the commission as part of its implementation plan pursuant to ARM 38.5.4120. For implementation of presubscription in all other exchanges, the local exchange carriers or primary toll carriers shall file these materials, forms, and scripts with the commission not more than 60 days after the receipt of a bona fide request, denial of waiver, or the expiration of the waiver, for intraLATA equal access presubscription so that they can be reviewed by the commission prior to commission approval or modification. The carrier shall promptly make any changes required by the commission before using the materials, forms or scripts.

History: 69-3-103, 69-3-822, MCA; IMP, 69-3-102, 69-3-201, 69-3-834, MCA; NEW, 1998 MAR p. 983, Eff. 4/17/98.

38.5.4105   NOTICE AND IMPLEMENTATION
(1) Not more than 15 days after receipt of a bona fide request for implementation of intraLATA dialing parity, unless an implementation waiver is requested consistent with ARM 38.5.4103(2) (c) , the local exchange carrier or primary toll carrier shall provide notice of such request to the commission. The notice shall include information concerning the scheduled implementation dates as well as the ordering procedures, terms and conditions for an interexchange carrier to participate. If the local exchange carrier intends to seek a waiver, the notice shall include a brief description of the rationale for such. A copy of the notice shall be served on the person requesting dialing parity and on the Montana Consumer Counsel. The commission will provide notice using its general procedures.

(2) Not more than 45 days after receipt of a bona fide request for implementation of intraLATA equal access, if no waiver has been sought, or, not more than 45 days after filing its dialing parity implementation plan in the case of US West Communications, Inc., the local exchange carrier or primary toll carrier shall make available to all registered carriers that intend to offer intraLATA equal access presubscription a complete list, upon request, which may be provided electronically, of the primary toll carrier's customers by name, telephone number and address. The primary toll carrier shall also update the list upon request. Any charges for such lists shall be cost-based and nondiscriminatory. The registered carrier shall use such lists only for purposes of presubscription solicitation exclusively to its own end user subscribers of record and no longer than 180 days after implementation of dialing parity.

History: 69-3-103, 69-3-822, MCA; IMP, 69-3-102, 69-3-201, 69-3-834, MCA; NEW, 1998 MAR p. 983, Eff. 4/17/98.

38.5.4110   BALLOTING
(1) In exchanges with existing interLATA dialing parity, balloting will not be used to determine each customer's primary intraLATA carrier.

(2) In exchanges where interLATA dialing parity is not in place prior to receipt of a bona fide request for intraLATA equal access presubscription, balloting for both interLATA and intraLATA equal access presubscription shall be conducted concurrently. The balloting shall be carried out in accordance with the requirements for interLATA equal access presubscription established by the Federal Communications Commission in CC Docket 83-1145, Phase I.

(3) Interexchange carriers intending to be included in all informational materials of ballots furnished to customers in advance of initial implementation of intraLATA and interLATA equal access presubscription to be implemented concurrently in any exchange shall advise the local exchange carrier or primary toll carrier in writing at least 90 days prior to the scheduled implementation date. The local exchange carrier or primary toll carrier shall then include the interexchange carrier in all materials and forms listing providers.

History: 69-3-103, 69-3-822, MCA; IMP, 69-3-102, 69-3-201, 69-3-834, MCA; NEW, 1998 MAR p. 983, Eff. 4/17/98.

38.5.4111   CHARGES
(1) No charge shall be imposed for a customer's initial selection of a primary intraLATA carrier. Each local exchange carrier shall allow customers to change their selection of a primary intraLATA carrier one time only at no charge within 90 days following implementation of intraLATA dialing parity in an exchange. Any charges for subsequent changes shall be the same as those imposed for changing interLATA carriers.

(2) In cases in which customers change both their intraLATA PIC and their interLATA PIC at the same time to either the same carrier or to separate carriers, only one of the following PIC change charges shall apply:

(a) the associated intraLATA PIC change charge;

(b) the associated interLATA PIC change charge; or

(c) the total of one-half of the associated intraLATA PIC change charge plus one-half of the associated interLATA PIC change charge.

(i) Each one-half charge may be shown separately on the customer bill.

(3) No PIC change order shall be submitted to a local exchange carrier unless and until the order has been confirmed in accordance with 69-3-1303 , MCA and the rules adopted by the commission in ARM 38.5.3801 through 38.5.3810.

History: 69-3-103, 69-3-822, MCA; IMP, 69-3-102, 69-3-201, 69-3-834, MCA; NEW, 1998 MAR p. 983, Eff. 4/17/98; AMD, 2006 MAR p. 232, Eff. 1/27/06.

38.5.4112   SCOPE OF INTRALATA EQUAL ACCESS PRESUBSCRIPTION

(1) 0-, N11 type calls (e.g. 411, 611 and 911) , and 976 calling will continue to be processed by the local exchange carrier following the implementation of intraLATA equal access presubscription in any exchange. IntraLATA 0+ and 1+ calls will be routed to the customer's primary intraLATA carrier. Calls using dialing protocols such as 500, 700, 800 or 900 to route them to the appropriate carrier are not subject to intraLATA presubscription.

(2) Customers' intraLATA calling shall continue to be provided by their current primary intraLATA carrier until the customer selects a different primary intraLATA carrier.

(3) The application of intraLATA equal access presubscription shall extend to semi-public and public payphones within the converting exchanges and the payphone location provider shall be responsible for the selection of the intraLATA PIC(s) for payphones.

History: 69-3-103, 69-3-822, MCA; IMP, 69-3-102, 69-3-201, 69-3-834, MCA; NEW, 1998 MAR p. 983, Eff. 4/17/98.

38.5.4115   EQUAL ACCESS PRESUBSCRIPTION COST RECOVERY

(1) Each local exchange carrier may recover through its switched access rates the additional costs it incurs to provide intraLATA equal access presubscription. Such charge shall be calculated on an annual basis by dividing the intraLATA equal access presubscription costs incurred by the local exchange carrier by the projected annual total of all switched intraLATA originating minutes of use (including the local exchange carrier's) to arrive at a per minute of use rate. The per minute of use rate can be recovered on switched intraLATA minutes carried by interexchange carriers through the local exchange carrier's switched access rates. Local exchange carriers must impute the equal access implementation costs attributable to its own intraLATA minutes of use in its end user rates. Costs recoverable by the local exchange carrier for the implementation of intraLATA equal access presubscription include initial incremental expenditures for hardware and software related to the provision of equal access presubscription that would not be required to upgrade the switching capabilities of the office absent the provision of equal access presubscription. Those costs also may include administrative costs incurred in the approved customer education and presubscription efforts, training costs related to intraLATA dialing parity, modifications to information billing systems to accomplish intraLATA dialing parity, and the cost of capital for the duration of the recovery period.

(2) The costs of intraLATA equal access presubscription implementation shall be recovered over a three-year period, or at the option of the local exchange carrier and approval of the commission, some costs may be recovered over the three-year period and some costs may be expensed in the current year if they can be reasonably expected to occur only in the first year.

(3) The costs of intraLATA equal access presubscription implementation shall be recovered from all providers of intraLATA toll service in the exchange(s) through a charge and imputation of such charge applicable to all switched intraLATA minutes of use originating in the exchange(s) which are subject to intraLATA presubscription.

(4) The cost recovery process shall use periodic true-ups, based upon actual local exchange carrier incurred presubscription implementation costs and actual traffic volumes subject to the presubscription surcharge, to ensure against either overcollection or undercollection of recoverable costs.

History: 69-3-103, 69-3-822, MCA; IMP, 69-3-102, 69-3-201, 69-3-834, MCA; NEW, 1998 MAR p. 983, Eff. 4/17/98.

38.5.4116   SAFEGUARDS
(1) In order to insure that the development of intraLATA competition will not be impeded following intraLATA equal access presubscription the following practices shall be observed by the local exchange carrier toll service provider:

(a) Customers who initiate service in an exchange following the implementation of presubscription should be provided with information concerning their carrier selection options at the time they sign up for service. The material and procedures employed in this process must be competitively neutral and approved by the commission prior to their use.

(b) When handling customer-initiated contacts regarding local service matters such as a change in service, local exchange carrier business office personnel may not engage in promotional efforts for the local exchange carrier's toll service offerings.

(c) When a customer contacts a local exchange carrier's business office to change their PIC from the local exchange carrier to a competitor, the transaction must be handled in a neutral manner (i.e., in the same manner as a PIC change from one competitor to another) .

(d) Bills rendered to the customer shall identify the customer's presubscribed carrier(s) in a neutral manner.

(e) Letters of authorization (LOAs) submitted by a competitor prior to intraLATA presubscription implementation shall be accepted no earlier than 60 days prior to implementation. In case of multiple submission of LOAs, the last dated LOA shall be processed. LOAs must conform to ARM 38.5.3801 through 38.5.3810 and 69-3-1304 , MCA.

(f) The local exchange carrier shall assume that customers who have an interLATA PIC freeze on their account prior to implementation of intraLATA presubscription wish to have the freeze extend to intraLATA toll service following intraLATA presubscription implementation.

History: 69-3-103, 69-3-822, MCA; IMP, 69-3-102, 69-3-201, 69-3-834, MCA; NEW, 1998 MAR p. 983, Eff. 4/17/98.

38.5.4120   DIALING PARITY PLANS
(1) Local exchange carriers shall file their toll dialing parity plans carrying out the intraLATA equal access presubscription implementation rules set forth in ARM 38.5.4101 through 38.5.4116. US West Communications, Inc. shall file its implementation plan six months in advance of its expected entry into the interLATA market and no later than August 8, 1998. All other local exchange carriers shall file their implementation plans within 60 days of receiving a bona fide request for intraLATA equal access presubscription or within 60 days of termination of waiver, whichever is later. Interested parties who wish to comment upon a local exchange carrier's toll dialing parity plan shall have a reasonable opportunity to comment on the plan.

(2) The local exchange carrier's toll dialing parity plan must describe how ARM 38.5.4101 through 38.5.4116 will be carried out and include the following:

(a) detailed information explaining how and when carriers will be notified of the local exchange carrier's implementation schedule;

(b) include the language to be used in, and the manner of distribution of, the customer notification letter;

(c) describe the local exchange carrier's anticipated cost of implementation, including the local exchange carrier's specific intraLATA presubscription costs, the vehicle that the local exchange carrier intends to use to recover implementation costs, and the cost recovery time frame; and

(d) describe the proposed incumbent local exchange carrier business office practices and sample scripts that demonstrate how local exchange carrier business office personnel will handle customer-initiated business office contacts with the incumbent local exchange carrier in its role as a local exchange service provider in a competitively neutral manner following implementation.

(3) The implementation plan must provide notice to registered interexchange carriers operating in Montana of the implementation schedule no less than 120 days prior to the actual implementation date. The notice must include the implementation schedule, terms and conditions of participation, and ordering procedures. Following such notification, carriers wishing to participate in the process must respond to the local exchange carrier within 30 days. Only registered telecommunications providers may participate in the implementation.

History: 69-3-103, 69-3-822, MCA; IMP, 69-3-102, 69-3-201, 69-3-834, MCA; NEW, 1998 MAR p. 983, Eff. 4/17/98.

38.5.4201   REGISTRATION REQUIREMENTS AND OBLIGATIONS OF SERVICE PROVIDERS, BILLING AGGREGATORS, AND BILLING AGENTS

(1) A service provider may not offer a product or service to a customer, the charge for which appears on the bill of a billing agent, nor forward such a charge to a billing agent, unless the service provider is registered with the commission pursuant to this rule.

(2) A billing aggregator may not forward to a billing agent charges for a service or product offered by a service provider unless:

(a) the billing aggregator is registered with the commission pursuant to this rule; and

(b) the service provider is properly registered pursuant to these rules.

(3) A billing agent may not directly bill on behalf of a service provider or billing aggregator who is required to be registered, and who is not properly registered, under this rule.

(a) the commission will add new registrants to its list of service providers and billing aggregators within two business days of the effective date of the registration and said list will be posted to the commission's internet website.

(b) the commission will remove from its list within two business days of the revocation being final registrants whose registration has been revoked.

(c) a billing agent that directly bills on behalf of a service provider that has not properly registered with the commission must remove the charge from the customer's bill and will be liable to the customer for reimbursement of charges paid by the customer, subject to the limitations of ARM 38.5.3910.

(4) Each billing aggregator shall submit to the commission no later than April 1 of each year a list of service providers and other entities for which the billing aggregator provides billing services.  The billing aggregator's initial list will be submitted when the billing aggregator completes the registration form.  The billing aggregator's annual list of service providers shall include:

(a) the name and address of the service provider and every name under which the service provider's products will be billed by the aggregator; and

(b) a signed and notarized statement that the billing aggregator has verified that each service provider on the list is registered with the commission.

History: 69-3-1305, 69-3-1308, 69-3-1309, 69-3-1310, 69-3-1311, 69-3-1315 and 69-3-1316, MCA; IMP, 69-3-1304, MCA; NEW, 2003 MAR p. 2085, Eff. 9/26/03.

38.5.4202   REGISTRATION PROCEDURES FOR SERVICE PROVIDERS AND BILLING AGGREGATORS
(1) Billing aggregators and service providers must register on a form provided by the commission that is notarized and signed by two officers of the applicant. A copy of the application form is available from the commission or on the commission's internet website.

(2) Each applicant must file an original application, two paper copies and a copy in an electronic format specified by the commission.

(3) The applicant shall inform the commission of any change in the information provided in the application during the pendency of the application.

(4) When correspondence sent by the commission to a registered billing aggregator or service provider by mail or electronic mail to the mailing and electronic mailing addresses provided by the registrant is returned as undeliverable, the registrant will be removed from the list of registered providers and will no longer be registered.  The commission will notify all registered billing aggregators and telecommunications carriers of the removal of the billing aggregator's or service provider's registration within two business days of the removal.

(5) The commission may reject a registration request if the commission finds that:

(a) the application is incomplete and the applicant does not take reasonable steps to provide the missing information; or

(b) the applicant has knowingly misrepresented or omitted a material fact on the application.

(6) After notice and an opportunity for a hearing, the commission may revoke a registration in accordance with this rule.

(7) The commission may revoke the registration of a service provider who has:

(a) knowingly or repeatedly billed one or more customers for unauthorized service, provided that for the purposes of these rules, a service provider knowingly billed for unauthorized charges if it cannot verify the customer's authorization for such charges, pursuant to these rules; or

(b) engaged in any other false or deceptive billing practices.

(8) The commission may revoke the registration of a billing aggregator who has:

(a) knowingly or repeatedly forwarded the charge for a service or product to a billing agent on behalf of a service provider who was required to be registered with the commission under these rules and who was not registered, provided that:

(i) for purposes of these rules, a billing aggregator acted knowingly if it forwarded a charge and if the service provider's name was not on the commission's list of registered service providers at the time the charge was forwarded to the billing agent; or

(ii) if the service provider's registration had been revoked and properly noticed pursuant to these rules at the time the charge was forwarded to the billing agent; or

(b) engaged in any other false or deceptive billing practices.

(9) The commission shall provide notice of the revocation of a registration under this rule to all registered telecommunications carriers and billing aggregators doing business in Montana within two business days of the revocation becoming final.

History: 69-3-1305, 69-3-1308, 69-3-1309, 69-3-1310, 69-3-1311, 69-3-1315 and 69-3-1316, MCA; IMP, 69-3-1304, MCA; NEW, 2003 MAR p. 2085, Eff. 9/26/03.

38.5.6001   DEFINITIONS

(1) "Residential customer" means a residential customer of a distribution utility.

(2) "Small customer" means a residential customer or a small natural gas commercial customer of a distribution utility.

(3) "Small natural gas commercial customer" means a commercial natural gas customer with usage per year on an individual account which averages under 500 dekatherm units (dkts) or 500 mcf (each mcf unit is one thousand cubic feet) or a new commercial customer whose individual account is estimated to average a monthly usage under 500 dkts or mcf per year.

History: 69-3-1404, MCA; IMP, 69-3-1404, MCA; NEW, 1999 MAR p. 1233, Eff. 6/4/99; AMD, 2008 MAR p. 575, Eff. 3/28/08.

38.5.6002   VERIFICATION OF SMALL CUSTOMER CHOICE OF SUPPLIER

(1) A supplier may not initiate or effect a change in a small customer's choice of supplier except when the supplier initiating the change has obtained the customer's written authorization in a form that meets the requirements in this rule. The supplier must retain this authorization for at least 12 months from the date of initiation of service.

(2) The letter of authorization shall be a separate document (or an easily separable document) that is delivered to the prospective customer along with the service contract. The letter of authorization shall contain the authorizing language described in (4), the sole purpose of which is to authorize a natural gas supplier to initiate a change in the customer's choice of supplier. The letter of authorization must be signed and dated by the customer who is responsible for payment of the natural gas account.

(3) The letter of authorization shall not be a part of any sweepstakes, contest or similar promotional program.

(4) At a minimum, the letter of authorization must be printed with a readable type of sufficient size to be clearly legible and must contain clear and unambiguous language that confirms:

(a) The customer's billing name and address and each account number to be covered by the change order;

(b) The decision to change the customer's choice of supplier from the current supplier to the prospective supplier;

(c) The customer's designation to the supplier to act as the customer's agent for the supplier change;

(d) The customer's understanding that by authorizing a change in supplier he or she authorizes access by that supplier to his or her usage and account information; and

(e) The customer's acknowledgement of receipt of the supplier's service contract and agreement to its terms and conditions.

History: 69-3-1404, MCA; IMP, 69-3-1404, MCA; NEW, 1999 MAR p. 1233, Eff. 6/4/99; AMD, 2008 MAR p. 575, Eff. 3/28/08.

38.5.6003   COMPLAINTS OF UNAUTHORIZED SUPPLIER SWITCHES

(1) Upon receipt of a complaint alleging an unauthorized switch in a customer's supplier, or from the commission or its staff on behalf of a customer, the supplier that initiated the change shall produce the letter of authorization required by ARM 38.5.6002. If the supplier fails to provide the letter of authorization or if it provides documentation that does not conform to the requirements of ARM 38.5.6002, the supplier change will be deemed invalid.

(2) A supplier which initiates a supplier change without authorization from the customer in accordance with these rules shall issue to the customer full credit or refund the entire amount of such customer's supply charges attributable to the supplier's service for the period during which the unauthorized service was provided. In addition, any charges incurred by the customer to re-establish supply service or to change the customer's supplier after the unauthorized switch shall be refunded or credited to the customer by the unauthorized supplier. The appropriate credit or refund must be issued within a period not to exceed 60 days from the date of the initial complaint from the customer, commission, or staff.

History: 69-3-1404 and 69-8-403, MCA; IMP, 69-3-1404 and 69-8-410, MCA; NEW, 1999 MAR p. 1233, Eff. 6/4/99.

38.5.6004   SMALL CUSTOMER SERVICE CONTRACT

(1) All rates, terms, and conditions for supply service must be provided to a small customer in a service contract, written in plain language. The service contract must include the letter of authorization required by ARM 38.5.6002 and the letter of authorization must be returned by the customer to the supplier before any supply service is provided. The front page of a service contract shall prominently and clearly disclose in a uniform information label prescribed by the commission and as available on the commission's internet web site:

(a) the length of time the contract will be in effect;

(b) the effective price for supply service, in price per either dekatherm or mcf, whichever billing unit is used by the distribution services provider, for various levels of consumption typical for the customer's customer segment;

(c) whether the price is fixed or variable and, if variable, a general description of the potential range and possible causes of price variations and the pricing formula or index, as applicable; and

(d) the toll-free telephone number for customer inquiries and the hours during which the customer can contact the supplier at that number.

(2) The service contract must include the information required to appear on the information label and:

(a) an explanation of conditions under which the supplier will terminate the supply agreement;

(b) a prominent identification and explanation of any and all charges, fees and penalties; and

(c) a conspicuous disclosure that there is a 3-day grace period during which the customer may rescind the contract without penalty and explicit information how to do so.

(3) No supplier, regulated distribution utility, transmission service provider, energy service provider, metering service provider, billing service provider, or other company or individual involved in the sale or delivery of natural gas, may disclose individual customer information to others without prior written consent from the customer except as provided by commission rule or order.

(4) Small customers shall have a 3-day grace period from the time of entering into a service contract to notify the supplier of termination of the contract without incurring liability for supply services not consumed or taken under the contract. A supplier may not inform the distribution utility of the customer's decision to change suppliers until after the 3-day grace period elapses.

(5) Small customers may terminate a service contract without incurring liability for supply services not consumed or taken under the contract by notifying the supplier that the customer is relocating outside the geographic area served by the supplier, or is moving to a location where the customer is not responsible for payment of the service consumed.

(6) A supplier must notify its affected customers, the commission and the distribution companies in writing at least 60 days prior to ceasing business under an existing license or terminating service to an entire customer segment.

(7) The contract must clearly explain that distribution and transmission charges remain regulated, are not provided by the supplier, and shall identify which entity, the distribution utility or the supplier, will bill the customer for distribution and transmission charges.

(8) Each supplier must provide its service contract to a customer upon request.

(9) At least 60 days prior to the expiration date of the customer's service contract, the supplier must provide written notice to the customer of either:

(a) the existence and operation of an automatic renewal provision present in the customer's contract; or

(b) the need for the customer to affirmatively renew to retain service from the supplier at the end of the contract term.

(10) If the service contract contains an automatic renewal provision, the supplier may not change the terms and conditions of the contract upon the renewal date unless the customer has been provided with written notice of the changes at least 60 days in advance of their effective date and of his or her right to change suppliers rather than renew the contract. With the written notice of contract changes, the supplier must provide the customer a letter of authorization approving the contract changes to return to the supplier. Without a signed letter of authorization, the supplier may not renew the contract.

History: 69-3-1404, MCA; IMP, 69-3-1404, MCA; NEW, 1999 MAR p. 1233, Eff. 6/4/99; AMD, 2008 MAR p. 575, Eff. 3/28/08.

38.5.6005   SUPPLIER TERMINATION OF SMALL CUSTOMER CONTRACT DUE TO CUSTOMER'S NONPAYMENT
(1) A supplier terminating a small customer's service contract because of nonpayment shall provide written notice to the customer and the customer's distribution services provider at least 14 days in advance of termination. The notice of contract termination to the customer must clearly state:

(a) the reasons for termination;

(b) the name, address and telephone number of the supplier representative or department who can address questions concerning the contract termination; and

(c) the date on which the supplier will terminate the service contract.

(2) A supplier's notice to a customer that the supplier is terminating the contract shall inform the customer that a default provider will continue providing the customer's electric or natural gas supply in the event of contract termination.

(3) The notice of contract termination to the customer must be mailed or provided separately from the bill.

(4) The supplier must notify the distribution utility at least one day in advance of the scheduled contract termination date if the customer and the supplier make arrangements which void or otherwise alter the scheduled termination.

History: 69-3-1404 and 69-8-409, MCA; IMP, 69-3-1404 and 69-8-409, MCA; NEW, 1999 MAR p. 1233, Eff. 6/4/99.

38.5.6006   BILLS TO SMALL CUSTOMERS

(1) If charges for unregulated supply and energy services are combined with regulated charges on a single bill, the unregulated charges must be identified as unregulated and presented as separate line items.

(2) Bills must prominently identify the name of each company for which charges are billed in close proximity to each company's charges. Bills for small customers must provide each company's toll-free telephone number for billing inquiries.

(3) The commission's address and toll-free telephone number for customer complaints must appear on all bills for small customers.

(4) The payment due date must appear on all bills.

(5) Natural gas distribution utilities may enter into agreements with natural gas suppliers for billings and collections. The two companies must establish an efficient method of resolving customer inquiries and disputes. The billing entity must be able to provide the customer with the name, address, and telephone number of an employee or department responsible for customer dispute resolution.

(6) Bills for natural gas services must clearly itemize each service component and the charge associated with each service component, including:

(a) electricity supply;

(b) transmission and distribution;

(i) if charges for transmission and ancillary services are paid by a supplier and passed on to a retail customer in electricity supply charges, the supplier must identify the transmission portion of the charges;

(c) transition charges; and

(d) universal system benefits.

(7) Bills must separately subtotal charges for regulated and unregulated services. Bills combining charges for both electric and natural gas services must separate the electricity-related portion of the bill from the natural gas-related portion and separately subtotal the regulated and unregulated charges for each.

(8) Bills must provide the actual cents per mcf/dkt charged to the customer for the customer's usage of natural gas supply for the current billing period, calculated by dividing the total charge for supply service by the customer's usage for the current billing period.

(9) Undesignated partial payments of a bill must be applied first to regulated service, then to service other than regulated service in the percentage of each service provider's charges to the total charges to the customer for services other than regulated service. Regulated service may not be affected by billing disputes over unregulated service or service provided by other companies.

(10) A for-profit affiliate of a cooperative utility that uses a regulated distribution utility's facilities to supply natural gas to customers outside the cooperative utility's distribution service territory must satisfy the billing provisions of this rule.

History: 69-3-1404, MCA; IMP, 69-3-1404, MCA; NEW, 1999 MAR p. 1233, Eff. 6/4/99; AMD, 2008 MAR p. 575, Eff. 3/28/08.

38.5.6007   DEFAULT SUPPLIER

(1) The regulated natural gas distribution utility shall serve as the default supplier in its distribution service territory when a small customer is without supply service because the customer has not selected a competitive supplier or due to contract termination by a natural gas supplier, including termination for nonpayment.

(2) A customer receiving default supply service must remain in that service until his account is cleared with the default supplier. Once a customer's past due account is cleared, the customer may select a competitive service option from an alternative supplier. A default supplier may disconnect service to a customer who has not paid for its distribution services or default natural gas supply services. The deposit and termination rules of the commission apply to a default supplier (see ARM 38.5.1101 through 38.5.1112 and ARM 38.5.1401 through 38.5.1418).

(3) After a competitive bid solicitation, a regulated natural gas distribution utility may contract with a third-party supplier to acquire the necessary natural gas supply to allow the distribution provider to meet its default supplier obligations. The regulated natural gas distribution utility is responsible for ensuring compliance with the commission's deposit and termination rules.

History: 69-3-1404, MCA; IMP, 69-3-1404, MCA; NEW, 1999 MAR p. 1233, Eff. 6/4/99; AMD, 2008 MAR p. 575, Eff. 3/28/08.

38.5.6008   SERVICE DISCONNECTION

(1) A regulated natural gas distribution utility may not shut off or deny regulated natural gas distribution service to a customer due to the customer's failure to pay for unregulated service or service provided by another entity.

(2) Regulated distribution utilities may offer agreements to landlord small customers to allow them to authorize the utility to switch a rental unit's natural gas service to the default supplier or to a specified competitive supplier in the event of a tenant customer's service termination.

History: 69-3-1404, MCA; IMP, 69-3-1404, MCA; NEW, 1999 MAR p. 1233, Eff. 6/4/99; AMD, 2008 MAR p. 575, Eff. 3/28/08.

38.5.6009   SUPPLIER COMPLAINT PROCEDURE
(1) Each licensed supplier shall have an internal customer complaint procedure which allows for complete, fair and timely decisions and responses regarding complaints by customers. Suppliers shall keep a record of customer complaints.

(2) The commission shall resolve disputes among suppliers and small customers regarding the provisions of this rule according to the following procedures:

(a) Each supplier must provide at least one employee, (whose duties need not be limited to this obligation) during business hours to respond to questions and resolve complaints from customers and to work with the commission and its staff on complaint resolution;

(b) When a supplier becomes aware of a complaint by a customer, the supplier must investigate the complaint, report the results of its investigation to the customer and attempt in good faith to resolve the complaint; and

(c) If the supplier cannot resolve the dispute with the customer, the supplier must orally inform the customer of his or her right to file an informal complaint with the commission and provide the commission's toll-free consumer complaints telephone number.

History: 69-3-1404 and 69-8-403, MCA; IMP, 69-3-1404 and 69-8-403, MCA; NEW, 1999 MAR p. 1233, Eff. 6/4/99.

38.5.6010   CLAIMS MADE IN MARKETING NATURAL GAS

(1) A supplier shall include in its license application and in its annual reports sufficient documentation to substantiate any claims made to customers in advertising, marketing, promoting, or representing that natural gas purchased from the supplier is environmentally beneficial, environmentally benign, preserves or enhances environmental quality, is produced primarily with renewable energy sources, or is produced with specific resources or technologies.

(2) The commission may, on its own motion or in response to a complaint from a customer or another supplier, initiate a proceeding to investigate any claims made by a supplier in advertising, marketing, promoting, and representing its services to customers. On determining that a supplier's claims are misleading, deceptive, false, or fraudulent, the commission may apply appropriate penalties, including license revocation, pursuant to 69-3-1405, MCA.

History: 69-3-1404, MCA; IMP, 69-3-1404, MCA; NEW, 1999 MAR p. 1233, Eff. 6/4/99; AMD, 2008 MAR p. 575, Eff. 3/28/08.

38.5.7001   CONTEXT AND DEFINITIONS
(1) These rules implement Montana's Natural Gas Utility Restructuring and Customer Choice Act, 69-3-1401 through 69-3-1409, MCA, and shall be construed in that context. Except in administration of 69-3-1408, MCA (universal system benefits program) , the commission does not intend these rules to apply to a "natural gas utility" as defined at 69-3-1401, MCA, so long as the utility does not restructure as described at 69-3-1403, MCA, or become a "natural gas supplier" as defined at 69-3-1401, MCA. Unless otherwise provided through rule or through order of the commission, these rules shall apply in all gas utility restructurings, including in periods of transition to customer choice and pilot programs which may be a part of a restructuring plan.

(2) Words used in these rules shall have the meanings assigned in 69-3-1402, MCA, and, if not defined there, shall have their common meanings in the context of gas utility and gas pipeline regulation and restructuring. Words used in these rules also have the meanings assigned by this rule, unless the context otherwise clearly demands:

(a) "affiliate" means a parent, subsidiary, division, or the like, regardless of designation, owning or controlling the provider, owned or controlled by the provider, under common ownership with the provider, or under common control with the provider;

(b) "provider" means a system services provider;

(c) "service" generally includes all incidents to service (e.g., applying for service, communicating in regard to service) ;

(d) "supplier" means "natural gas supplier," as defined at 69-3-1402, MCA, which includes any person offering to sell gas to end-use customers but not if the offering is by a public utility as a public utility and in accordance with commission-approved tariffs;

(e) "supply service" means providing natural gas for enduse, whether or not regulated by the commission;

(f) "system services" includes gas transmission services, distribution services, storage services, and all other gas services regulated by the commission, directly or indirectly, excluding supply services;

(g) "utility" means a "public utility" as defined at 69-3-101, MCA.

History: 69-3-103, MCA; IMP, 69-3-103, 69-3-1402, 69-3-1404, 69-3-1405, 69-3-1408, MCA; NEW, 1998 MAR p. 1506, Eff. 6/12/98.

38.5.7002   GENERAL -- PROCEDURES IN GENERAL -- PROPRIETARY INFORMATION

(1) Compliance, enforcement, and other administrative proceedings before the commission which may result from implementation of these rules or the statutes upon which they are based shall be in accordance with applicable statutes (e.g., Title 2, chapter 4, MCA (Montana Administrative Procedure Act) ) and rules (e.g., ARM Title 38, chapter 2) governing proceedings before the commission.

(2) In accordance with 69-3-105, MCA, supplier license applicants, supplier licensees, and others who may be participating in any procedure before the commission arising from these rules, may request that qualifying trade secret information submitted to the commission (e.g., through licensing, annual report, compliance, or investigation procedures, or other requirements of statute, rule, or order) be protected by the commission from public disclosure through protective order. Requests for a protective order must clearly identify the information to be protected and, in detail, identify the factual and legal basis upon which the information is asserted to qualify as trade secret and be entitled to protection.

History: Secs. 69-3-103, 69-3-1405, MCA; IMP, Secs. 69-3-105, 69-3-1405, MCA; NEW, 1998 MAR p. 1506, Eff. 6/12/98.

38.5.7005   SERVICE PROVIDERS -- STANDARDS OF CONDUCT

(1) Except as provided in (2) , a commission-regulated system services provider shall:

(a) apply all discretionary tariff provisions in the same manner to all persons to whom the tariff provisions apply;

(b) process all similar requests for service in the same manner and period of time;

(c) strictly enforce all mandatory tariff provisions;

(d) prevent any discrimination in favor of its own supply, other services, divisions, or affiliates;

(e) prevent all forms of self-dealing that could result in noncompetitive prices to consumers;

(f) grant others (e.g., consumers, suppliers) access to retail transmission, storage, and distribution on a nondiscriminatory basis at rates, terms, and conditions comparable to that which its affiliates have;

(g) disclose no service or market information received from a non-affiliate to others, including an affiliate (information received from an affiliate may be treated in the same fashion, unless otherwise required by these rules) ;

(h) disclose at the same time to all non-affiliates all service and market information disclosed to an affiliate (a non-affiliate may agree to limit the scope of information to be provided by the system services provider and may agree that information need be provided only on request) ;

(i) for customers requesting information on available supply, if identifying any supplier, identify all licensed gas suppliers serving in the service area in which the customer resides, and, in providing information to customers on behalf of any supplier, offer to provide information on behalf of all other suppliers on the same terms;

(j) make known to non-affiliates at the same time any discounts offered to an affiliate, the terms and conditions under which the discount is offered, and the means through which the non-affiliates can obtain a comparable offer (affiliates may be advised in the same fashion, unless otherwise prohibited by these rules) ; and

(k) function independently of its affiliate suppliers and cause its employees and employees of its affiliate suppliers to function independently, to the maximum extent practicable.

(2) A commission-regulated system services provider having or applying for commission-approved standards of conduct to be tariffed in accordance with 69-3-1404, MCA, may request that a tariffed standard depart from the standards in this rule. The commission may grant a waiver of the requirements in this rule upon a showing of good cause and circumstances unique to the provider's operations which justify the waiver.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-1404, MCA; NEW, 1998 MAR p. 1506, Eff. 6/12/98.

38.5.7006   SERVICE PROVIDERS -- STANDARDS OF CONDUCT -- REVIEW OF SERVICE POLICIES

(1) Through request by the system services provider, or complaint by any other provider, supplier, customer, or other interested person, or on its own motion, the commission may review a system service provider's service rule or policy, tariffed or otherwise, to determine whether the rule or policy as applied is just and reasonable under the circumstances, including in regard to whether it results in abusive or anticompetitive practices.

History: Sec. 69-3-103, MCA; IMP, Sec. 69-3-1404, MCA; NEW, 1998 MAR p. 1506, Eff. 6/12/98.

38.5.7010   GAS SUPPLIERS -- APPLICATION FOR LICENSE

(1) The application to the commission for a natural gas supplier license shall include the following provisions, complete and in detail (except as provided in (5) ) :

(a) the business name of the applicant;

(b) the street address and the mailing address of the applicant;

(c) the telephone number of the applicant;

(d) a description of the applicant's business organization (e.g., sole proprietorship, partnership, corporation) , including a diagram of organization, an identification of the state in which organized, and a statement as to whether the applicant owns or operates gas distribution, transmission, or storage facilities, where those facilities are located, and whether those facilities are open and accessible on a nondiscriminatory basis to all gas suppliers, a list of the applicant's affiliates, a description of each affiliate's business activities and purposes, a statement as to whether any affiliate owns or operates gas distribution, transmission, or storage facilities, and an explanation of where those facilities are located and whether the facilities are open and accessible on a nondiscriminatory basis to all gas suppliers;

(e) the name, address, and telephone number of the supplier representative to be contacted regarding the application;

(f) the name, address, and toll-free telephone number of the supplier representative or office that may be contacted by consumers in regard to supply;

(g) the name, mailing address, street address, and telephone number of the applicant's agent for service of process in Montana, if required by law to designate such agent;

(h) information demonstrating the gas supply offered or to be offered by the applicant will be provided as offered;

(i) information demonstrating the gas supply offered or to be offered by the applicant will be adequate in terms of quality, safety, and reliability;

(j) information demonstrating the applicant's financial integrity as a gas supplier, including a current and detailed balance sheet, income and profit and loss statement, statement of cash flows, and the most recent of the applicant's annual reports to owners (e.g., stockholders) ;

(k) information demonstrating adequate firm deliverability (including supply, pipeline capacity, and interconnection agreements) to meet load requirements;

(l) a brief description of all federal and state judicial and administrative actions pending against the applicant (including on appeal) in which judgment is sought in an amount of 10 percent or more of the applicant's net worth; and

(m) identification of all federal and state judicial and administrative actions, if any, whether pending at the time of application (including on appeal) or concluded within 5 years prior to the time of application, which involve the applicant's authority to supply, market, and broker natural gas.

(2) Applicants shall also file a sample of each type of contract intended to be used in the providing of supply to residential and small commercial consumers.

(3) At the time of making application to the commission for a supplier license, applicants shall notify distribution services providers in accordance with 69-3-1405, MCA.

(4) All information provided by the applicant in regard to the application shall be updated by the licensee each time any change in that information occurs.

(5) Some of the above requirements may not apply to certain types of suppliers. If an applicant believes that to be the case in regard to an application, the applicant shall clearly state that and the reason supporting such determination, in lieu of the information requested.

History: Secs. 69-3-103, 69-3-1405, MCA; IMP, Sec. 69-3-1405, MCA; NEW, 1998 MAR P. 1928, Eff. 6/12/98.

38.5.7011   GAS SUPPLIER -- ELECTRONIC REGISTRATION

(1) All applicants and licensed suppliers must complete and maintain an electronic registration established by the commission on its internet web site as a condition of becoming and remaining licensed. Applicants and suppliers must provide the following information electronically:

(a) a complete business name, and all other names (complete) that may be used when marketing natural gas and other unregulated energy services to consumers;

(b) the complete street address and mailing address of the principal office;

(c) the name, address, direct telephone number, fax number, and e-mail address of the supplier representative or office to be contacted regarding the license application and the license; and

(d) a listing of customer segments served.

(2) If residential and small commercial customers are solicited or served, applicants and suppliers must also provide the following information:

(a) a toll-free customer service telephone number; and

(b) a listing of the principal geographic areas served, including a list of Montana cities where residential and small commercial customers are solicited and served.

History: Secs. 69-3-103, 69-3-1405, MCA; IMP, Sec. 69-3-1405, MCA; NEW, 1998 MAR p. 1506, Eff. 6/12/98.

38.5.7012   GAS SUPPLIER -- LICENSES
(1) Except as otherwise allowed or required by operation of law or order of the commission, gas suppliers may commence operations in the Montana service areas of restructured utilities, and those areas otherwise allowing a competitive supply, upon issuance of a license by the commission.

(2) Upon issuance of a license, the gas supplier shall notify all distribution service providers serving in the area of the gas supplier's intended operations.

History: Sec. 69-3-103, 69-3-1405, MCA; IMP, Sec. 69-3-1405, MCA; NEW, 1998 MAR p. 1506, Eff. 6/12/98.

38.5.7014   GAS SUPPLIER -- ANNUAL REPORTS
(1) Annual

reports must be filed by each licensee at calendar year end.

(2) Annual reports shall be on a form approved by the commission and include the following information (the commission may require that information from suppliers be filed more frequently, if deemed necessary) :

(a) a descriptive list of all services offered during the year and at the end of the year;

(b) quality and reliability-of-service reports (e.g., Btu content, outages, customer quality and reliability-of-service complaints) , itemized by month; and

(c) an organization chart showing ownership and control relationships among any holding companies and subsidiaries.

History: Sec. 69-3-103, 69-3-1405, MCA; IMP, Sec. 69-3-1405, MCA; NEW, 1998 MAR p. 1506, Eff. 6/12/98.

38.5.7016   GAS SUPPLIER -- LICENSE REVOCATION

(1) The commission may revoke the license of a gas supplier if the gas supplier:

(a) violates any federal or state law which has as its purpose, directly or indirectly, fair competition among suppliers;

(b) violates any federal or state law which has as its purpose, directly or indirectly, protection of consumers;

(c) violates any rule of the commission;

(d) provides false information or materially incomplete information to the commission in regard to licensing or reporting;

(e) fails to file an annual report;

(f) otherwise fails to abide by the laws of the United States and the state of Montana which pertain to business, business structure, antitrust, trade, contracts, truth in labeling, consumer protection, privacy, and like laws which are applicable, generally or specifically, to the provision of gas supply;

(g) fails to supply gas in accordance with its agreements with customers and representations to the commission; or

(h) engages in anticompetitive or abusive practices.

History: Secs. 69-3-103, 69-3-1405, MCA; IMP, Sec. 69-3-1405, MCA; NEW, 1998 MAR p. 1506, Eff. 6/12/98.

38.5.7020   UNIVERSAL SYSTEM BENEFITS PROGRAM
(1) Pursuant to 69-3-1408, MCA, natural gas utilities shall implement a universal system benefits program (USBP) , a public purpose program for cost-effective local energy conservation, low-income weatherization, and low-income energy bill assistance ( 69-3-1402, MCA) . The USBP shall be funded through a universal systems benefit charge (USBC) , a nonbypassable rate or charge to be imposed on each customer ( 69-3-1402, MCA) .

(2) The USBC shall be an amount, per dekatherm or Mcf of natural gas delivered to each end user, whether by utility, distribution services provider, or transmission services provider (if for end use) , collected through a rate or charge (per dekatherm or Mcf) to each end user, and, except as provided in ARM 38.5.7021, established so as to generate, system-wide, an annual amount no less than 1.12 percent of the utility's, distribution services provider's, or transmission services provider's annual revenues derived from natural gas services to end users. From the amount collected system wide an amount at least equal to .42 percent of the annual revenues must be applied to low-income weatherization and bill assistance.

(3) The USBP may be administered by each utility, distribution services provider, or transmission services provider implementing a USBP or by another on its behalf. A USBP may be done in coordination with a federal, state, or local government agency or otherwise. Examples of acceptable USBPs include energy share and low income energy assistance program.

History: Secs. 69-3-103, 69-3-1408, MCA; IMP, Sec. 69-3-1408, MCA; NEW, 1998 MAR p. 1506, Eff. 6/12/98.

38.5.7021   UNIVERSAL SYSTEM BENEFITS PROGRAM -- PROCEDURE

(1) Each utility, distribution services provider, and transmission service provider (if delivering gas for end-use) shall file with the commission a USBP plan no later than August 5, 1998.

(2) The filing shall include:

(a) a description of the proposed USBP plan, with supporting testimony;

(b) proposed tariffs reflecting changes to rates, if required, to fund the USBP at no less than the minimum annual amount (percentage of annual revenues) established in ARM 38.5.7020;

(c) if the utility objects to the minimum annual amount established in ARM 38.5.7020, the utility may also file, in addition the requirements of (2) (a) and (b) , above, an alternative proposal, with supporting testimony; and

(d) a description of the utility's or provider's USBP, formal or informal, in place for the period May 2, 1997, to August 5, 1998, identifying the amount (in percentage of annual revenues) at which the program was funded and the amount (in percentage of annual revenues) which was applied to low-income weatherization and bill assistance, and a proposal for implementing (4) , if applicable.

(3) The commission may approve the plan on an interim basis and commence contested case proceedings to determine whether the plan should be approved on a final basis, and, if the utility has objected to minimum annual amount pursuant to (2) (c) , above, whether good cause has been shown to adjust that amount.

(4) Utilities and providers not having a program in place on May 2, 1997, and thereafter, funded to at least .42 percent of annual revenues and from which at least .42 percent of annual revenues was applied to low-income weatherization and bill assistance shall, in the USBP filing and in addition to establishing a USBC to generate, system-wide, an annual amount as established in ARM 38.5.7020, establish USBP accounting reserve computed by applying .42 percent of annual revenues from May 2, 1997, to August 5, 1998. The reserve will be allocated to approved ongoing USBPs, one time USBPs, USBP start-up expenses for new programs, and like expenses, all relating to low-income weatherization and bill assistance. At such time as these are implemented recovery of the reserve will be allowed over a one year period.

History: Secs. 69-3-103, 69-3-1408, MCA; IMP, Sec. 69-3-1408, MCA; NEW, 1998 MAR p. 1506, Eff. 6/12/98.

38.5.7101   MINIMUM FILING REQUIREMENTS FOR RESTRUCTURED GAS UTILITY APPLICATIONS FOR APPROVAL OF NATURAL GAS PRODUCTION OR GATHERING RESOURCES
(1)  An application by a utility for approval of the acquisition of a natural gas production or gathering resource that is not yet procured must include, as applicable:

(a) a statement explaining fully the type and nature of the acquisition;

(b) testimony and supporting work papers describing the resource and stating the facts (not conclusory statements) that show that acquiring the resource is in the public interest and is consistent with the requirements in 69-3-201 and 69-3-1413 through 69-3-1416, MCA, the utility's most recent natural gas supply procurement plan, if applicable, and these rules;

(c) testimony and supporting work papers demonstrating the utility's analysis of the cost of the acquired production or gathering resource over the short and long term compared to the market cost of natural gas and to all other potential production or gathering resources evaluated by the utility;

(d) a copy of any contract(s) or agreement(s) related to the acquisition, including all appendices and attachments;

(e) testimony providing a thorough explanation and justification for any terms in any contract or ownership agreement for which the utility is requesting approval;

(f) testimony and work papers describing all of the utility's due diligence related to the acquisition;

(g) a copy of any request for proposals issued in connection with acquisition of the natural gas production or gathering resource;

(h) testimony and supporting work papers comparing all bids received in connection with any request for proposals;

(i) testimony and supporting work papers concerning the utility's bid evaluation in connection with any request for proposals, including the ranking of bids and reliance on management judgment;

(j) a complete description of each aspect and all infrastructure of the production or gathering resource for which the utility requests approval;

(k) if the application concerns acquisition of an existing natural gas production resource, records demonstrating the production history of the resource;

(l) an attestation as to the accuracy of the potential gas reserves being considered for acquisition from a licensed petroleum engineer or a licensed petroleum geologist;

(m) financial statements of the utility demonstrating adequate financial capacity to support the acquisition of the natural gas production or gathering resource, and information concerning any proposed financing arrangements necessary to finance the proposed assets;

(n) the estimated effect of the transaction on current and future utility rates and charges, including specific tariff rate impacts; and

(o) other information as the commission may require.

History: 69-3-1415, MCA; IMP, 69-3-1415, MCA; NEW, 2010 MAR p. 653, Eff. 3/12/10.

38.5.8001   GENERAL REQUIREMENT TO OBTAIN LICENSE TO SUPPLY ELECTRICITY

This rule has been repealed.

History: 69-8-403, MCA; IMP, 69-8-404, MCA; NEW, 1998 MAR p. 1929, Eff. 7/17/98; AMD, 2002 MAR p. 1512, Eff. 5/17/02; REP, 2008 MAR p. 575, Eff. 3/28/08.

38.5.8002   CONTENTS OF APPLICATION FOR LICENSE TO SUPPLY ELECTRICITY

This rule has been repealed.

History: 69-8-403, MCA; IMP, 69-8-404, MCA; NEW, 1998 MAR 1929, Eff. 7/17/98; REP, 2008 MAR p. 575, Eff. 3/28/08.

38.5.8003   ELECTRONIC REGISTRATION

This rule has been repealed.

History: 69-8-403, MCA; IMP, 69-8-404, MCA; NEW, 1998 MAR p. 1929, Eff. 7/17/98; REP, 2008 MAR p. 575, Eff. 3/28/08.

38.5.8004   ANNUAL REPORTS

This rule has been repealed.

History: 69-8-403, MCA; IMP, 69-8-404, MCA; NEW, 1998 MAR p. 1929, Eff. 7/17/98; REP, 2008 MAR p. 575, Eff. 3/28/08.

38.5.8005   STANDARD SERVICE OFFER

This rule has been repealed.

History: 69-8-403, MCA; IMP, 69-8-404, MCA; NEW, 1998 MAR p. 1929, Eff. 7/17/98; REP, 2008 MAR p. 575, Eff. 3/28/08.

38.5.8006   SERVICE CONTRACT

This rule has been repealed.

History: 69-8-403, MCA; IMP, 69-8-404, 69-8-408, 69-8-409 and 69-8-410, MCA; NEW, 1998 MAR p. 1929, Eff. 7/17/98; REP, 1999 MAR p. 1233, Eff. 6/4/99.

38.5.8101   DEFINITIONS

This rule has been repealed.

History: 69-8-403, MCA; IMP, 69-8-203, 69-8-416, MCA; NEW, 1999 MAR p. 2770, Eff. 12/3/99; REP, 2008 MAR p. 575, Eff. 3/28/08.

38.5.8102   APPLICATION FOR ELIGIBILITY TO BE A DEFAULT SUPPLIER

This rule has been repealed.

History: 69-8-403, MCA; IMP, 69-8-203, 69-8-416, MCA; NEW, 1999 MAR p. 2770, Eff. 12/3/99; REP, 2008 MAR p. 575, Eff. 3/28/08.

38.5.8201   INTRODUCTION AND APPLICABILITY

(1) These guidelines apply to electric utilities subject to the provisions of 69-8-419 through 69-8-421, MCA.

(2) These guidelines provide policy guidance on long-term electricity supply resource planning and procurement. With the exception of ARM 38.5.8301, the guidelines do not impose specific resource procurement processes or mandate particular resource acquisitions. Instead, the guidelines describe a process framework for considering resource needs and suggest optimal ways of meeting those needs. Electricity supply resource decisions affect the public interest. A utility can better fulfill its obligations, mitigate risks, and achieve resource procurement goals if it includes the public in the electricity supply resource portfolio planning process. An independent advisory committee of respected technical and public policy experts may offer the utility an excellent source of up-front, substantive input that would help mitigate risk and improve resource procurement outcomes in a manner consistent with these guidelines. Consistent with these guidelines, and after an opportunity for public input, the utility must ultimately make electricity supply resource acquisition decisions based on economics, reliability, management expertise, and sound judgment.

(3) A utility should thoroughly document its portfolio planning processes, resource procurement processes, and management decision-making so that it can fully demonstrate to the commission and stakeholders the prudence of supply-related costs and/or justify requests for approval of electricity supply resources. A utility should routinely communicate with the commission and stakeholders regarding portfolio planning and resource procurement activities.

(4) These guidelines provide the basis for commission review and consideration of the prudence of a utility's electricity supply resource planning and procurement actions, and are the standards against which the commission will evaluate electricity supply resources for which a utility requests approval under 69-8-421, MCA. As such, the guidelines should assist utilities in making prudent decisions and in fully recovering supply-related costs. Successful application of the guidelines will require a commitment from the commission, utilities, and stakeholders to honor the spirit and intent of the guidelines.

(5) These guidelines supersede the commission's electric least cost planning rules (ARM 38.5.2001 through 38.5.2012) solely with respect to electricity supply resource planning and procurement functions.

History: 69-3-2006, 69-8-403, 69-8-419, MCA; IMP, 69-3-2004, 69-3-2005, 69-8-403, MCA; NEW, 2003 MAR p. 654, Eff. 4/11/03; AMD, 2003 MAR p. 2894, Eff. 12/25/03; AMD, 2006 MAR p. 1461, Eff. 6/2/06; AMD, 2008 MAR p. 575, Eff. 3/28/08.

38.5.8202   DEFINITIONS
For the purpose of this subchapter, the following definitions are applicable:

(1) "Carbon offset provider" means a third party entity that:

(a) arranges for projects or actions that either reduce carbon dioxide emissions or that increase the absorption of carbon dioxide; and

(b) has been determined to be qualified by the commission in an order addressing a utility's application for approval of an acquisition of an equity interest or lease in a facility or equipment constructed after January 1, 2007 that generates electricity primarily by combusting natural or synthetic gas.

(2) "Cost-effective carbon offsets" means actions taken by a utility or a carbon offset provider on behalf of a utility or both which reduce carbon dioxide emissions or increase the absorption of carbon dioxide and which collectively do not increase the annual cost of producing electricity from a facility or equipment that generates electricity primarily by combusting natural or synthetic gas by more than 2.5%.

(3) "Electricity supply costs" means the actual costs incurred in providing electricity supply service through power purchase agreements, demand-side management, and energy efficiency programs, including but not limited to: capacity costs, energy costs, fuel costs, ancillary service costs, transmission costs (including congestion and losses), planning and administrative costs, and any other costs directly related to the purchase of electricity and the management and provision of power purchase agreements.

(4) "Electricity supply resource" means:

(a) a wholesale power transaction, including bilateral contracts, however structured, and spot energy purchases;

(b) a plant or equipment owned or leased, in whole or in part, by a utility for purposes of generating electricity and used to serve the utility's native load;

(c) a demand-side management activity, including energy efficiency and conservation programs, load control programs, and pricing mechanisms; or

(d) a combination of (4)(a), (b), and (c).

(5) "Environmentally responsible" means explicitly recognizing and incorporating into electricity supply resource portfolio planning, management, and procurement processes and decision-making the policy of the state of Montana to encourage utilities to acquire resources in a manner that will help ensure a clean, healthful, safe, and economically productive environment.

(6) "External costs" means costs incurred by society but not incorporated directly into electricity production and delivery activities, or retail prices for electricity services directly paid by consumers.

(7) "Long-term" means a time period at least as long as a utility's electricity supply resource planning horizon.

(8) "Planning horizon" means the longer of:

(a) the longest remaining contract term in a utility's electricity supply resource portfolio;

(b) the period of the longest lived electricity supply resource being considered for acquisition; or

(c) ten years.

(9) "Pre-filing communication" means, with respect to an application by a utility for approval of a electricity supply resource, informal information exchange, including oral dialogue and written discovery, between the utility and members of its stakeholder advisory committee, the Montana Consumer Counsel,

other stakeholders, and commission staff that occurs after the utility files a notice of intent to request approval of a new electricity supply resource pursuant to ARM 38.5.8228 up to the date the utility files the application.

(10) "Rate stability" means minimal price variation, both month-to-month and year-to-year, and minimal price inflation over time.

(11) "Stakeholder" means a member of the public (individual, corporation, organization, group, etc.) who may have a special interest in, or may be especially affected by, these rules.

History: 69-8-403, MCA; IMP, 69-8-403, MCA; NEW, 2003 MAR p. 654, Eff. 4/11/03; AMD, 2003 MAR p. 2894, Eff. 12/25/03; AMD, 2008 MAR p. 575, Eff. 3/28/08.

38.5.8203   GOALS

(1) The goals of these electricity supply resource planning and procurement guidelines are:

(a) to facilitate a utility's provision of adequate and reliable electricity supply services, stably and reasonably priced, at the lowest long-term total cost;

(b) to promote economic efficiency and environmental responsibility;

(c) to facilitate a utility's financial health;

(d) to facilitate a process through which a utility identifies and cost-effectively manages and mitigates risks related to its obligation to provide electricity supply service; and

(e) to build on the fundamental rate making relationship between the commission and the utility to advance these goals.

History: 69-8-403, MCA; IMP, 69-8-403, MCA; NEW, 2003 MAR p. 654, Eff. 4/11/03; AMD, 2008 MAR p. 575, Eff. 3/28/08.

38.5.8204   OBJECTIVES

(1) In order to satisfy its electricity supply service responsibilities, a utility should pursue the following objectives in assembling and managing an electricity supply resource portfolio:

(a) provide customers adequate and reliable electricity supply services, stably and reasonably priced, at the lowest long-term total cost;

(b) design rates that are equitable and promote rational, economically efficient consumption decisions;

(c) assemble and maintain a balanced, environmentally responsible portfolio of electricity supply resources coordinated with economically efficient cost allocation and rate design that most efficiently provides electricity supply services to customers over the planning horizon;

(d) maintain an optimal mix of electricity supply resources with respect to underlying fuels, technologies, and associated environmental impacts, and a diverse mix of long, medium, and short duration power supply contracts with staggered start and expiration dates; and

(e) maximize the dissemination of information to customers regarding the mix of resources and the corresponding level of emissions and other environmental impacts associated with electricity supply service through itemized labeling and reporting of the portfolio's energy products.

(2) These objectives are listed in order of importance, but no single objective should be pursued such that others are ignored. Simultaneously achieving these multiple objectives will require a balanced approach. A utility should apply the recommendations in ARM 38.5.8209 through 38.5.8213, 38.5.8218 through 38.5.8221, 38.5.8225, and 38.5.8226, in addition to relevant commission orders, to achieve these goals and objectives.

 

History: 69-8-403, MCA; IMP, 69-8-403, MCA; NEW, 2003 MAR p. 654, Eff. 4/11/03; AMD, 2008 MAR p. 575, Eff. 3/28/08.

38.5.8209   UTILITY EMERGENCY SERVICE RESPONSIBILITY

(1) A utility's electricity supply service responsibility is to provide all or a substantial amount of the emergency electricity supply requirements of retail customers who have electricity supply service contracts with a nonutility electricity supplier or marketer that has failed to deliver the required electricity supply. (A utility is not required to maintain a reserve of electricity supply to fulfill its emergency supply responsibilities. To the greatest extent practicable, a utility should recover the costs of providing emergency service from the supplier or marketer that failed to deliver the required electricity or the customers that directly benefited from the utility's provision of emergency service. A utility must provide emergency service according to commission-approved tariff schedules.).

History: 69-8-403, 69-8-419, MCA; IMP, 69-8-403, MCA; NEW, 2003 MAR p. 654, Eff. 4/11/03; AMD, 2006 MAR p. 1461, Eff. 6/2/06; AMD, 2008 MAR p. 575, Eff. 3/28/08.

38.5.8210   RESOURCE NEEDS ASSESSMENT

(1) Before acquiring multi-year electricity supply resources, a utility should evaluate its existing resources and analyze future resource needs in the context of the goals and objectives of these guidelines. A utility should use a planning horizon as defined in these rules.

(2) A utility's resource needs assessment should include:

(a) analyses of customer loads including base load, intermediate load, peak load and ancillary service requirements, seasonal and daily load shapes and variability, the number and type of customers, load growth, trends in customer choice and retail markets, technology that may lead to substitutes for grid-based electricity service, impacts of demand-side management, and price elasticity of demand;

(b) an assessment of the types of resources that are available and could contribute to meeting portfolio needs, including demand-side resources, supply-side resources, distributed resources, and rate design improvements;

(c) an assessment of the types of wholesale electricity products that could effectively and efficiently contribute to meeting portfolio needs including base load, heavy load, peak, dispatchable, curtailable, assignable, firm, full requirements, load following, unit contingent, slice of the system (fixed percentage of hourly system load requirements), and others;

(d) an assessment of resource diversity within the existing portfolio with respect to generation fuel and generation technology (e.g., conventional coal, clean coal, hydro, natural gas combined cycle, natural gas simple cycle, wind, fuel cell, etc.); and

(e) an assessment of the flexibility of the existing portfolio with respect to generation resources, suppliers, demand-side management resources, electricity products, contract lengths, contract terms and conditions, and market conditions.

(3) A utility's resource needs assessment should include analyses of how cost allocation and rate design decisions might impact future loads and resource needs. A utility's cost allocation and rate design practices should support and complement the goals and objectives of these guidelines.

History: 69-8-403, MCA; IMP, 69-8-403, MCA; NEW, 2003 MAR p. 654, Eff. 4/11/03; AMD, 2008 MAR p. 575, Eff. 3/28/08.

38.5.8211   COST ALLOCATION AND RATE DESIGN

(1) A utility's cost allocation and rate design practices and rate case proposals should support and complement the goals and objectives of these guidelines. Different approaches to allocating costs and designing rates have different advantages and disadvantages. A utility should consider these advantages and disadvantages in the context of the goals and objectives of these guidelines when proposing particular cost allocations and rate designs. A utility should evaluate and consider the following items when allocating costs and designing rates:

(a) the ability of opportunity cost-based prices to increase economic efficiency;

(b) cost allocation among customer segments and services based on cost causation and equity considerations;

(c) customer desire for long-term rate stability and understandable price structures;

(d) costs and benefits of implementing various rate types/structures consistent with recognized rate design principles, including:

(i) time-of-use;

(ii) seasonal;

(iii) blocked;

(iv) tiered;

(v) commitment-based; and

(vi) other structures as may be reasonable and consistent with the goals and objectives of these guidelines;

(e) the potential for retail demand-response to cost-effectively enhance economic efficiency and promote the other goals and objectives of these guidelines; and

(f) the potential for direct load control to cost-effectively contribute to retail demand response.

History: 69-8-403, MCA; IMP, 69-8-403, MCA; NEW, 2003 MAR p. 654, Eff. 4/11/03; AMD, 2008 MAR p. 575, Eff. 3/28/08.

38.5.8212   RESOURCE ACQUISITION

(1) A utility should apply industry standard procurement practices to acquire electricity supply resources. The commission cannot prescribe in advance the precise industry standards a utility must apply since industry standards vary depending on context and circumstances. Generally, an acceptable approach to resource procurement should encompass the following basic steps:

(a) obtain and consider upfront input and recommendations from an advisory committee throughout planning and procurement processes, as described in ARM 38.5.8225;

(b) explore a wide variety of alternative electricity supply resources;

(c) collect proposals from various parties offering electricity supply resources;

(d) analyze the feasibility and economic costs, risks, and benefits of rate basing versus alternative electricity supply arrangements;

(e) analyze alternative electricity supply resources with respect to price and nonprice factors in the context of the goals and objectives of these guidelines;

(f) select the most appropriate options and develop a shortlist;

(g) refine the analysis of short-listed options and select the most appropriate option; and

(h) anticipate changing circumstances and remain flexible.

(2) Although these basic steps could be achieved through a variety of methods, a utility should use competitive solicitations with short-list negotiations as a preferred procurement method. A utility should design requests for proposals based on its resource needs assessment. Competitive solicitations should treat bidders fairly, promote transparent portfolio planning and electricity supply resource procurement processes and contribute to achieving the goals and objectives of these guidelines. A utility's resource acquisition process should conform to the following principles:

(a) A utility should clearly define the resources, products, and services it needs before issuing a resource solicitation and clearly communicate these needs to potential bidders in the request(s) for proposals. Multiple solicitations and/or solicitations for multiple resources, products, and services may be necessary to obtain information sufficient for prudent analyses and decision-making;

(b) A utility should establish bid evaluation and bidder qualification standards and criteria it will use to select from among offers before issuing a resource solicitation and clearly communicate these standards and criteria to potential bidders in the request for proposals. Once bids are received, a utility should apply its bid evaluation and bidder qualification standards and criteria firmly and consistently;

(c) A utility should develop a systematic rating mechanism that allows it to objectively rank bids with respect to price and nonprice attributes. A utility is not required to reveal to bidders the specific ranking method used to select preferred bids, however a utility should thoroughly document the development and use of the method for later presentation to the commission;

(d) A utility should establish a shortlist of offers from bidders with which the utility will pursue contract negotiations. A utility should complete due diligence regarding bid qualifications, bidder credit worthiness and experience and project feasibility before selecting an offer for the shortlist. A utility should not indicate to a bidder that its offer is being considered for the shortlist while performing initial due diligence;

(e) If, in evaluating offers, a utility determines that a previously unidentified resource attribute should be considered in the bid evaluation, or that additional evaluation criteria should be used, all bidders should be given an opportunity to supplement their offering to address the utility's desire for the new attribute or the new criteria. The utility should attempt to minimize such occurrences;

(f) A utility should not reassign or "flip" supply contracts to an additional third party(ies) after the original bid activity and during the evaluation of bids. A utility must notify the commission before reassigning any fully executed contract;

(g) During competitive solicitation and resource acquisition processes, a utility should not publicly disclose specific information related to particular bids, including price, before the utility completes its resource acquisition process and has signed contracts with the selected bidder(s);

(h) The utility should obtain input and recommendations from an advisory committee regarding any procurement process that may involve projects or proposals by an affiliate of the utility. The utility should employ an independent third party to develop competitive solicitations if affiliate interests could be involved. An independent third party should review the contract terms and conditions in any power purchase agreement between a utility and an affiliate before the utility signs the agreement. A utility should consult with its advisory committee before selecting the independent third party and should evaluate the third party's findings with the advisory committee. The utility should be prepared to offer substantially the same form of contract to other bidders for similar products to the extent procuring such products is otherwise justified under the goals, objectives, and procedures established in these guidelines; and

(i) A utility should not provide any information to an affiliate with respect to the utility's resource needs assessment, evaluation criteria, bidder qualification criteria, due diligence, or any other relevant resource procurement information unless such information is simultaneously provided to all other prospective bidders.

(3) To the extent a utility does not use competitive solicitations to acquire electricity supply resources it should thoroughly document the exercise of its judgment in evaluating and selecting resource options, including the decision not to use competitive solicitations.

(4) A decision by a utility regarding the acquisition of an equity interest in an electricity generating plant or equipment or the construction of such a resource on its own should be thoroughly evaluated against available market-based alternatives.

(5) Use of competitive solicitations as the preferred method for procuring electricity supply resources may not adequately achieve the goals and objectives of these guidelines with respect to demand-side resources. A utility should design programs and associated marketing and verification measures, as necessary, to ensure that its procurement of demand-side resources is optimized in the context of the goals and objectives of these guidelines.

History: 69-8-403, MCA; IMP, 69-8-403, MCA; NEW, 2003 MAR p. 654, Eff. 4/11/03; AMD, 2008 MAR p. 575, Eff. 3/28/08.

38.5.8213   MODELING AND ANALYSIS

(1) A utility's electricity supply resource planning, procurement, and decision-making processes should incorporate proven, cost-effective computer modeling and rigorous analyses. A utility should use modeling and analyses to:

(a) evaluate and quantify probable load characteristics, including trends in load shapes, load growth, and price elasticity of demand;

(b) evaluate the potential effect of various rate designs and demand-side management methods on future loads and resource needs;

(c) evaluate and quantify projected electricity supply resource requirements over the planning horizon;

(d) develop competitive resource solicitations, including associated bid evaluation and selection criteria, and/or develop alternative candidate resources for utility construction and ownership;

(e) develop methods for weighting resource attributes and ranking bid offers and alternative candidate owned resources. Resource attributes may include, but are not necessarily limited to:

(i) underlying fuel source and associated price volatility and risk, including risks related to future regulatory constraints on environmental impacts such as emissions of carbon dioxide, sulfur dioxide, nitrogen oxides and mercury;

(ii) contributions to achieving the lowest, long-term portfolio cost;

(iii) total life cycle resource costs;

(iv) contributions to achieving optimal resource diversity;

(v) external costs related to environmental emissions and intrusions;

(vi) direct or indirect transmission costs and/or benefits;

(vii) project feasibility, including engineering, development and financing;

(viii) resource availability, reliability and dispatchability;

(ix) supplier/developer creditworthiness; and

(x) supplier/developer experience;

(f) evaluate the performance of alternative resources under various loads and resource combinations through:

(i) scenario analyses;

(ii) portfolio analyses;

(iii) sensitivity analyses; and

(iv) risk analyses;

(g) help the utility, with input from an advisory committee, inject prudent and informed judgments into the electricity supply resource planning and acquisition process;

(h) optimize the mix of electricity supply resources in the context of the goals and objectives of these guidelines; and

(i) meet the utility's burden of proof in prudence and cost recovery filings before the commission.

History: 69-8-403, MCA; IMP, 69-8-403, MCA; NEW, 2003 MAR p. 654, Eff. 4/11/03; AMD, 2008 MAR p. 575, Eff. 3/28/08.

38.5.8218   DEMAND-SIDE RESOURCES

(1) Energy efficiency and conservation measures can effectively contribute to serving total electricity load requirements at the lowest long-term total cost. A utility should develop a comprehensive inventory of all potentially cost-effective demand-side resources available in its service area and optimize the acquisition of demand-side resources over its planning horizon.

(2) A utility should evaluate the cost-effectiveness of demand-side resources and programs based on its long-term avoidable costs. Cost-effectiveness evaluations of demand-side resources should encompass avoidable electricity supply, transmission, and distribution costs.

(3) A nonparticipant (no-losers) test considers utility-sponsored demand-side management programs cost effective only if rates to customers that do not participate in the program are not affected by the program. A utility should not evaluate the cost-effectiveness of demand-side resources using a nonparticipant test.

(4) A utility should develop and strive to achieve targets for steady, sustainable investments in cost-effective, long-term demand-side resources. A utility's investment in demand-side resources should be coordinated with and complement its universal system benefits activities.

(5) Except when the entire resource would otherwise be lost, a utility's demand-side management programs should not be focused on "cream skimming;" the least expensive and most readily obtainable resource potential should be acquired in conjunction with other measures that are cost-effective only if acquired in a package with the least expensive, most readily available resources.

(6) Prudently incurred costs related to procuring demand-side resources are fully recoverable in rates. The commission will evaluate the prudence with which demand-side resources are procured, including resources acquired through programs, subcontractors, and competitive solicitations consistent with evaluations of supply-side resources.

(7) A utility's development of demand-side resources should include an examination of innovative methods to address cost recovery issues related to demand-side resource investments and expenses, including undesirable effects on revenues related to the provision of transmission and distribution services.

History: 69-8-403, MCA; IMP, 69-8-403, MCA; NEW, 2003 MAR p. 654, Eff. 4/11/03; AMD, 2008 MAR p. 575, Eff. 3/28/08.

38.5.8219   RISK MANAGEMENT AND MITIGATION

(1) Prudent electricity supply resource planning and procurement includes evaluating, managing, and mitigating risks associated with the inherent uncertainty of wholesale electricity markets and customer load. A utility should identify and analyze sources of risk using its own techniques, market intelligence, risk management policies, and judgment. The utility should apply industry standard instruments and strategies, document decisions to use various instruments and strategies, and monitor the ongoing appropriateness of such instruments and strategies. Sources of risk that should be evaluated may include, but are not limited to:

 

Underlying                                                                                        Price/Cost                   Load

Risk                                                                                                   Uncertainty            Uncertainty

Factor                                                                                                     Risk                          Risk      

 

(a) Fuel prices and price volatility                                                                X                                X

(b) Environmental regulations and taxes                                                     X                                X

(c) Retail supply rates                                                                                    X                                X

(d) Competitive suppliers' prices                                                                 X

(e) Transmission constraints                                                                        X

(f) Weather                                                                                                      X                                 X

(g) Supplier capabilities                                                                                X                                 X

(h) Supplier creditworthiness                                                                        X

      (i) Contract terms and conditions                                                                 X                                 X

      (j) Construction costs                                                                                     X                                 X

 

(2) A utility's strategy for managing and mitigating risks associated with the identified risk factors should be developed in the context of the goals and objectives of these guidelines and include an evaluation of relevant opportunity costs.

(3) A utility should manage and mitigate risk through adequate utility staffing and technical resources (e.g., computer modeling), diversity (fuels, technology, contract terms), and contingency planning.

(4) A utility should use an independent advisory committee of respected technical and public policy experts as a source of upfront, substantive input to mitigate risk and optimize resource procurement outcomes in a manner consistent with these guidelines.

(5) A utility should use cost-effective resource planning and acquisition techniques to manage and mitigate risks associated with the above identified risk factors, including, but not limited to:

(a) modeling and analyzing the relative risks of alternative resources, individually and integrated with all portfolio resources;

(b) acquiring resources which enhance scheduling flexibility;

(c) acquiring an optimal mix of small, short lead-time resources that better match load requirements;

(d) diversifying the resource portfolio to accommodate a broad range of future outcomes; and

(e) maintaining a transparent planning and procurement process (i.e., one which produces resource plans that can be reasonably understood by the public and the commission.)

History: 69-8-403, MCA; IMP, 69-8-403, MCA; NEW, 2003 MAR p. 654, Eff. 4/11/03; AMD, 2008 MAR p. 575, Eff. 3/28/08.

38.5.8220   TRANSPARENCY AND DOCUMENTATION

(1) A utility should thoroughly document the exercise of its judgment in implementing all aspects of the guidelines, including any deviations from the framework set forth in these guidelines.

(2) A utility must procure and manage a portfolio of electricity supply resources to serve the full load requirements of its customers. The commission must allow a utility to recover all costs it prudently incurs to perform this function. Whether the costs a utility incurs are prudent is, in part, directly related to whether its resource procurement process was conducted prudently. It is vital that a utility document its portfolio planning, management and electricity supply resource procurement activities to justify the prudence of its resource procurement decisions. The better a utility documents the steps involved in its resource procurement process and explains how and why decisions were made during procurement and in developing management strategies, the easier it is to satisfy its burden of proof. When a utility requests cost recovery related to the procurement of electricity supply resources it should, as applicable:

(a) document and explain all due diligence regarding the qualification of bidders and resource offers, including why selected bidders were sufficiently qualified financially and technically to warrant further evaluation of the offer based on the resource needs assessment;

(b) provide and explain the calculation of all cost estimates for all resource alternatives considered;

(c) list and describe all resource attributes considered in evaluating resource alternatives and how the attributes are relevant to the evaluation of potential resources based on the resource needs assessment;

(d) explain how the identified resource attributes were weighted as part of the resource evaluation and discuss the trade-offs between alternative resources that have different attributes and various weights;

(e) document and explain the use of the ranking methodology and decision criteria used to evaluate resource alternatives;

(f) document and explain computer modeling and analysis designed to assess how various potential resources fit with existing resources and contribute to optimizing the overall portfolio;

(g) document relevant industry practices, instruments, and actions to procure resources and manage risk observed in other utilities in the Western Electricity Coordinating Council regarding portfolio design, to the extent such practices form the basis for a utility's decisions;

(h) document and explain how and when management injected its judgment onto analyses of resource alternatives, final selection, and contract negotiations, and the impact of management judgment; and

(i) document the discussion and recommendations of the utility's advisory committee.

History: 69-8-403, MCA; IMP, 69-8-403, MCA; NEW, 2003 MAR p. 654, Eff. 4/11/03; AMD, 2008 MAR p. 575, Eff. 3/28/08.

38.5.8221   AFFILIATE TRANSACTIONS

(1) The commission subjects transactions between a utility and any of its affiliates to close scrutiny. A utility should not acquire resources involving affiliate transactions except through competitive solicitations that are consistent with these guidelines. A utility should sufficiently demonstrate through transparent, documented modeling, analysis, and judgment that any resource acquired from an affiliate corresponds to a predetermined portfolio need.

(2) To the extent a utility procures resources involving affiliate transactions it should respond to the following primary regulatory concerns:

(a) A utility should demonstrate that it has not subordinated its electricity supply service obligations in favor of an affiliate;

(b) The burden of proof is on a utility to demonstrate that costs it incurs through any affiliate transactions are just and reasonable and in the public interest and, as such, are recoverable through regulated rates. Since, by definition, such transactions cannot be presumed to be conducted on a truly arm's-length basis, inevitably leaving room for gaming, self dealing, and certain subsidies, the commission will subject these transactions to greater scrutiny to reasonably protect ratepayers served under regulated rates from harm. This higher level of protection is referred to as the "no harm to ratepayer" standard. This standard has evolved over time from long standing regulatory practices and policies that require affiliated transactions to be fair, reasonable, and in the public interest before the associated costs are recoverable through rates. In keeping with the "no harm to ratepayer" standard, the commission generally will judge the reasonableness of affiliate transactions-related costs in relation to the lower of cost or market at the time of contract execution. For purposes of this rule, cost, by definition, is the applicable regulated cost of service structure, including a return on the capital invested, to provide the relevant affiliated services;

(c) A utility must reasonably assure that costs and revenues are accurately and properly segregated between regulated and nonregulated affiliated entities in order to protect captive customers served under regulated rates, and avoid subsidies to, and excess charges by, nonregulated affiliates;

(d) The "no harm to ratepayer" standard requires that the books of account and related records of any affiliate transacting business with the utility must be available for audit and review purposes. A utility should impute the estimated costs of necessary audit activity into affiliate resource costs when evaluating resource alternatives according to these guidelines. As reasonable and necessary and when lawful, the commission will protect affiliate information through confidentiality agreements;

(e) In order to provide for ongoing regulatory review, a utility should separately report on its on-going affiliated transactions and relationships in the context of the issues identified in this rule. Such reporting should be sufficient to allow the commission to adequately monitor whether affiliate transactions-related costs are prudent and, therefore, recoverable through regulated rates; and

(f) A utility must implement a code of conduct to guide management and other employees regarding standards for day-to-day business activities with affiliates and to guard against self-dealing, gaming, and resulting subsidies.

History: 69-8-403, MCA; IMP, 69-8-403, MCA; NEW, 2003 MAR p. 654, Eff. 4/11/03; AMD, 2008 MAR p. 575, Eff. 3/28/08.

38.5.8225   STAKEHOLDER INPUT

(1) A utility should maintain a broad-based advisory committee to review, evaluate, and make recommendations on technical, economic, and policy issues related to electricity supply resource portfolio planning, management, and procurement. An independent advisory committee of respected technical and public policy experts may provide an excellent source of upfront, substantive input to mitigate risk and optimize resource procurement outcomes consistent with these guidelines. Maintaining an effective advisory committee could involve funding certain member participation. A utility should also facilitate processes that provide opportunities for a broader array of stakeholders to comment. Such processes could include:

(a) public meetings;

(b) customer surveys (large and small customers);

(c) other processes that may provide a utility information about public opinion on resource procurement matters.

History: 69-8-403, MCA; IMP, 69-8-403, MCA; NEW, 2003 MAR p. 654, Eff. 4/11/03; AMD, 2008 MAR p. 575, Eff. 3/28/08.

38.5.8226   ELECTRICITY SUPPLY RESOURCE PLANNING AND PROCUREMENT FILINGS

(1) A utility must file a comprehensive, long-term portfolio management and electricity supply resource procurement plan by December 15 in each odd-numbered year.

(2) As necessary, a utility's periodic electricity supply cost tracking filings should include the information, analyses, and documentation recommended in these guidelines to support its request for cost recovery related to electricity supply cost additions or changes.

(3) A periodic cost tracking filing should document the status of on-going portfolio planning, management, and electricity supply resource procurement activities and include rolling three-year action plans. Action plans should include a discussion of activities involving transmission and distribution functions and services.

(4) The commission may implement a utility's periodic electricity supply cost recovery request on an interim basis, subject to retroactive adjustment, to allow adequate time to process such requests and render a final order.

History: 69-8-403, MCA; IMP, 69-8-403, MCA; NEW, 2003 MAR p. 654, Eff. 4/11/03; AMD, 2003 MAR p. 2894, Eff. 12/25/03; AMD, 2008 MAR p. 575, Eff. 3/28/08.

38.5.8227   REWARD FOR SUPERIOR ELECTRICITY SUPPLY SERVICE

(1) The commission will evaluate a utility's performance in providing service pursuant to the goals and objectives of these guidelines and may reward the utility monetarily for superior performance at a level commensurate with such performance.

History: 69-8-403, MCA; IMP, 69-8-403, MCA; NEW, 2003 MAR p. 654, Eff. 4/11/03; AMD, 2008 MAR p. 575, Eff. 3/28/08.

38.5.8228   MINIMUM FILING REQUIREMENTS FOR UTILITY APPLICATIONS FOR APPROVAL OF ELECTRICITY SUPPLY RESOURCES

(1) If a utility intends to file an application for approval of a electricity supply resource that is not yet procured, it must notify the commission and the Montana Consumer Counsel far enough in advance of filing to accommodate adequate pre-filing communication. If the resource will result from a competitive solicitation, notice must be provided before the utility issues a request for proposals.

(2) An application by a utility for approval of a electricity supply resource must include, as applicable:

(a) a complete and thorough explanation and justification of all changes to the utility's most recent long-term resource plan and three year action plan, including how the utility has responded to all commission written comments;

(b) a statement explaining whether the application pertains to a power purchase agreement with an existing generating resource, a lease or acquisition of an equity interest in a new or existing generating resource, or a power purchase agreement for which approval will result in construction of a new generating resource;

(c) testimony and supporting work papers describing the resource and stating the facts (not conclusory statements) that show that acquiring the resource is in the public interest and is consistent with the requirements in 69-3-201 and 69-8-419, MCA, the utility's most recent long-term resource plan (as modified by (2)(a)), and these rules;

(d) testimony and supporting work papers demonstrating the utility's estimates of the cost of the resource compared to the cost of each alternative resource the utility considered and all relevant functional differences between each alternative;

(e) testimony and supporting work papers demonstrating the implementation of cost-effective carbon offsets for a electricity supply resource fueled primarily by natural or synthetic gas constructed after January 1, 2007;

(f) testimony and supporting work papers demonstrating the capture and sequestration of 50% of the carbon dioxide produced by a electricity supply resource fueled primarily by coal constructed after January 1, 2007;

(g) a copy of the proposed power purchase agreement, including all appendices and attachments;

(h) a copy of any request for proposals issued in connection with acquisition of the electricity supply resource;

(i) testimony and supporting work papers comparing all bids received in connection with any request for proposals with respect to price and nonprice factors;

(j) testimony and work papers describing all due diligence and bid evaluation in connection with any request for proposals, including the ranking of bids and reliance on management judgment;

(k) thorough explanation and justification for any terms, other than price, quantity, and contract duration, in a power purchase agreement for which the utility is requesting approval;

(l) a complete description of each aspect of the resource for which the utility requests approval; and

(m) testimony and supporting documentation describing all pre-filing communication.

History: 69-8-403, 69-8-419, MCA; IMP, 69-8-403, 69-8-419, MCA; NEW, 2003 MAR p. 2894, Eff. 12/25/03; AMD, 2008 MAR p. 575, Eff. 3/28/08.

38.5.8229   CONSULTANT FEES

(1) When the commission engages independent consultants or advisory services to evaluate a utility's resource procurement plans and proposed electricity supply resources pursuant to 69-8-421, MCA, the commission will charge the utility a fee commensurate with the costs of the consultant or advisory services. The utility, at the commission's direction, will deposit the fee into the commission's account in the special revenue fund pursuant to 69-8-421, MCA. The initial fee charged to the utility will be based upon the commission's estimate of costs for the consultant or advisory services. The commission may revise the fee amount as the actual costs become known.

History: 69-8-403, MCA; IMP, 69-1-114, 69-8-421, MCA; NEW, 2003 MAR p. 2894, Eff. 12/25/03; AMD, 2008 MAR p. 575, Eff. 3/28/08.

38.5.8301   RENEWABLE ENERGY RESOURCE STANDARD – PUBLIC UTILITIES

(1) A public utility's resource procurement plan pursuant to ARM 38.5.8201 through 38.5.8227 or integrated least cost resource plan pursuant to ARM 38.5.2001 through 38.5.2012 must thoroughly document compliance with the Montana Renewable Power Production and Rural Economic Development Act, 69-3-2001, et seq, MCA, hereafter renewable resource standards. Public utilities must consider the requirements of this rule an integral part of the planning and procurement processes described in ARM 38.5.8201 through 38.5.8227 and 38.5.2001 through 38.5.2012.

(2) For public utilities operating in Montana within the geographic boundaries of the Western Electricity Coordinating Council, all renewable energy credits used to comply with the renewable resource standards must be tracked and verified through the Western Renewable Energy Generation Information System (WREGIS). For public utilities operating in Montana within the geographic boundaries of Midwest Reliability Organization, all renewable energy credits used to comply with the renewable resource standards must be tracked and verified through the Midwest Renewable Energy Tracking System (MRETS).

(3) Before entering into a long-term contract to purchase renewable energy credits, with or without associated electricity, for purposes of complying with the renewable resource standards, a public utility must petition the commission to certify that the renewable energy credits were produced by an eligible renewable resource. The petition may stand on its own or may be part of a request for advanced approval of the price(s), term, and quantity in a proposed contract to purchase renewable energy credits, either with or without associated electricity. If the applicable renewable energy tracking system in (2) provides a mechanism for ensuring that renewable energy credits are produced by eligible renewable resources, as defined in 69-3-2003, MCA, a public utility may rely on that mechanism. Otherwise a public utility's petition must contain sufficient information on the source of the renewable energy credits to allow the commission to determine whether the source is an eligible renewable resource.

(4) A public utility may petition the commission for a waiver from full compliance with the renewable energy portfolio standards. The petition must include documentation and evidence showing that the public utility has undertaken all reasonable steps to procure renewable energy credits sufficient to comply with the applicable portfolio standards and could not achieve full compliance due to one or more of the following:

(a) the unavailability of sufficient renewable energy credits;

(b) a determination that integrating additional eligible renewable resources into the electrical grid would jeopardize the reliability of the electrical system despite reasonable efforts to mitigate reliability concerns;

(c) full compliance would cause the public utility to exceed the cost caps in 69-3-2007, MCA; and

(d) other documented reasons beyond the public utility's control.

(5) The commission will rule on a petition for a waiver from full compliance with the renewable portfolio standards after noticing the petition and allowing an opportunity for a public hearing.

(6) A public utility may apply to the commission for advanced approval of a contract for the purchase of renewable energy credits with or without the associated electricity. An application by a public utility for advanced approval must incorporate by reference the public utility's most recent long-term resource plan, must include the public utility's most recent near-term action plan, and must provide:

(a) a complete explanation and justification of all changes, if any, to the public utility's most recent long-term resource plan and near-term action plan, including how the public utility has responded to all commission written comments on the long-term plan relevant to compliance with the renewable resource standards;

(b) a copy of the proposed contract, including all appendices and attachments, if any;

(c) testimony and supporting work papers demonstrating that the contract enables the public utility's compliance with the renewable resource standards in a manner that, to the fullest extent possible, is consistent with ARM Title 38, chapter 5, subchapter 20 or subchapter 82, whichever is applicable to the filing public utility;

(d) a copy of the request for proposals which preceded the proposed contract;

(e) a copy of all bids received;

(f) testimony and work papers demonstrating all due diligence and bid evaluation conducted by the public utility, including the application of bid rating mechanisms and management judgment;

(g) testimony and supporting work papers demonstrating that the price(s), term, and quantity associated with the power purchase agreement are reasonable and in the public interest;

(h) testimony and supporting work papers demonstrating the calculation of the utility's avoided costs and associated cost caps provided for in 69-3-2007, MCA;

(i) a thorough explanation and justification for any other terms in the power purchase agreement for which the public utility is requesting approval; and

(j) testimony and supporting documentation related to any advice received from the public utility's stakeholder advisory committee regarding the proposed contract or the underlying resource/product and actions taken or not taken by the public utility in response to such advice.

(7) The commission will process a petition for approval under the contested case procedures of the Montana Administrative Procedure Act. The commission will consider requests for expedited processing of petitions for advanced approval, but petitions submitted pursuant to this rule are not subject to the 180 day limit in 69-8-421, MCA.

(8) If a public utility determines in its ongoing long-term planning process pursuant to ARM 38.5.8201 through 38.5.8227 or 38.5.2001 through 38.5.2012 that the cost of complying with the renewable resource standards will likely exceed the cost caps in 69-3-2007, MCA, the public utility must submit an application to the commission no later than 180 days prior to the beginning of the compliance year. The application must thoroughly document the public utility's efforts to procure the required renewable energy credits, the calculated cost of compliance, work papers showing the most current calculation of the cost caps, an explanation of the methodology that underlies the calculation of the cost caps, and the amount by which the cost cap would be exceeded if the public utility were to comply with the renewable resource standards. Following notice of the application and an opportunity for a public hearing, the commission will issue an order authorizing or denying full or partial forbearance from the renewable resource standard for that compliance year.

(9) On an annual basis on or before March 31, public utilities subject to the retail choice provisions in 69-8-201, MCA, must submit to the commission a report disclosing:

(a) Each electricity supplier that uses the public utility's transmission and/or distribution facilities to deliver electricity to retail customers in the state;

(b) For each electricity supplier, the information required in ARM 38.5.8302(3). A public utility must assign a unique number to each retail customer of an electricity supplier with respect to the information in ARM 38.5.8302(3)(c) and (3)(d) to protect the customer's identity.

History: 69-3-103, 69-3-2006, 69-8-1006, MCA; IMP, 69-3-2003, 69-3-2004, 69-3-2005, 69-3-2006, 69-8-1004, 69-8-1005, 69-8-1006, 69-8-1007, MCA; NEW, 2006 MAR p. 1461, Eff. 6/2/06; AMD, 2007 MAR p. 2146, Eff. 12/21/07.

38.5.8302   RENEWABLE ENERGY STANDARD -- ELECTRICITY SUPPLIERS

(1) This rule applies to any electricity supplier that supplied electricity to one or more retail customers at any time during the twelve month period immediately preceding a compliance year.

(2) The following definitions apply to this rule:

(a) "billing demand" means actual metered demand or, if service is not metered, an engineering calculation of demand;

(b) "electricity supplier" means any person, corporation, business entity, or government entity that sells electricity to retail customers in the state of Montana and that is not a public utility or cooperative utility;

(c) "individual load" means the sum of the billing demands of each metered and/or unmetered account of a retail customer;

(d) "retail customer" means:

(i) any customer that purchases electricity supply for residential, commercial, or industrial end-use purposes, does not resell electricity to others, and is separately identified in a public utility's billing system as a person or entity to which bills are sent for service to:

(A) metered and/or unmetered facilities located on contiguous property;

(B) public street and/or highway lights; and

(C) any combination of (2)(d)(i)(A) and (d)(i)(B); or

(ii) any customer determined by the Public Service Commission to be a retail customer on petition for such determination by either the electricity supplier or the customer.

(3) On an annual basis on or before March 31, an electricity supplier must submit to the commission a report disclosing:

(a) total number of retail customers served by month for the twelve month period ending December 31 of the prior year;

(b) total billed retail sales of electrical energy, measured in kilowatt-hours, by month for the twelve month period ending December 31 of the prior year;

(c) for each retail customer, billed sales of electrical energy, measured in kilowatt-hours, by month for the twelve month period ending December 31 of the prior year; and

(d) for each demand-metered retail customer, individual load by month for the twelve month period ending December 31 of the prior year.

(4) An electricity supplier may assign a unique number to each retail customer subject to the reporting requirement in (3)(c) and (3)(d) to protect the customer's identity. Based on the information in an electricity supplier's annual report, an officer must attest to whether or not the electricity supplier was a competitive electricity supplier during the period covered by the annual report. An electricity supplier must consent by signature of an officer to release by a public utility of the electricity supplier's retail customer load information to the commission for purposes of verifying information in an electricity supplier's annual report.

(5) If an electricity supplier is a competitive electricity supplier in any compliance year, the electricity supplier's annual report must demonstrate compliance with the renewable energy standards. Pursuant to 69-3-2004, MCA, a competitive electricity supplier must satisfy the renewable energy standard for all retail sales of electricity in Montana, which may exceed sales to small retail customers. Report blanks for demonstrating compliance are available from the commission.

(6) Renewable energy credits used to comply with the renewable energy standards must be generated by eligible renewable resources, as defined in 69-3-2003(7), MCA. A competitive electricity supplier must petition the commission to certify any source of renewable energy credits used to comply with the renewable energy standards.

(7) Renewable energy credits used to comply with the renewable resource standards must be tracked and verified through WREGIS unless otherwise specifically authorized by the commission. A competitive electricity supplier may request authorization to use a renewable energy credit tracking and verification mechanism other than WREGIS by submitting a written request to the commission. The commission will consider the request after noticing the request and providing interested persons an opportunity to comment and/or request a hearing.

(8) A competitive electricity supplier may petition the commission for a waiver from full compliance with the renewable resource standards. The petition must include documentation and evidence showing that the competitive electricity supplier has undertaken all reasonable steps to procure renewable energy credits sufficient to comply with the applicable standards and could not achieve full compliance due to one or more of the following:

(a) the unavailability of sufficient renewable energy credits;

(b) a determination by a public utility that integrating additional eligible renewable resources into the electrical grid would jeopardize the reliability of the electrical system despite reasonable efforts to mitigate reliability concerns;

(c) full compliance would cause the competitive electricity supplier to exceed the cost caps in 69-3-2007, MCA; and

(d) other documented reasons beyond the competitive supplier's control.

(9) An electricity supplier that is a competitive electricity supplier in any compliance year must submit a renewable energy procurement plan as part of its annual report. The renewable energy procurement plan must explain whether the electricity supplier expects to be a competitive electricity supplier in the upcoming compliance year and, if so, provide:

(a) an estimate of the competitive electricity supplier's total retail sales for the next compliance year;

(b) an estimate of the quantity of renewable energy credits needed to comply with the renewable energy standards; and

(c) the anticipated source(s) of the renewable energy credits.

History: 69-3-103, 69-3-2006, MCA; IMP, 69-3-2003, 69-3-2004, 69-3-2005, 69-3-2006, MCA; NEW, 2007 MAR p. 2146, Eff. 12/21/07.

38.5.8401   DEFINITIONS
Terminology used in these rules has the following meanings, except where the context clearly indicates otherwise:

(1) "Applicant" means a person or entity that has filed an application to interconnect a customer-generator facility to an EDS. An applicant may include a third party who owns and operates a small generator facility under agreement with a customer or leases a small generator facility to a customer.

(2) "Area Network" means a type of electric system served by multiple transformers interconnected in an electrical network circuit.

(3) "Commission" means the Montana Public Service Commission.

(4) "Customer" means any entity connected to the utility system for the purpose of receiving electric power from the EDS.

(5) " Customer-generator" means a customer that generates electricity, typically on the customer's side of the meter.

(6) "Electric Distribution System" or "EDS" (i) means the infrastructure constructed and maintained by an EDC. (ii) Electric Distribution System has the same meaning as the term Area EPS, as defined in 3.1.6.1 of IEEE Standard 1547-2003.

(7) "Electric Distribution Company" or "EDC" means an electric utility that distributes electricity to end users within Montana and is subject to regulation by the commission.

(8) "Export" means power flows past the point of interconnection onto the EDS.

(9) "Good Standing" means a customer's account is not in arrears.

(10) "IEEE" means the Institute of Electrical and Electronics Engineers.

(11) "IEEE Standards" means the standards published by the Institute of Electrical and Electronics Engineers.

(12) "Interconnect" means to connect a utility customer's generator to the EDS.

(13) "Interconnection" is the result of connecting a utility customer's generator to the electric distribution company's electric distribution system.

(14) "Interconnection Customer" means an applicant that has entered into an interconnection agreement with an EDC to interconnect a small generator facility and has interconnected that small generator facility.

(15) "Line Section" means the portion of a radial distribution circuit to which an applicant seeks to interconnect and is bounded by automatic sectionalizing devices or the end of a distribution line.

(16) "Nameplate Capacity" means the maximum rated output of a generator, prime mover, or other electric power production equipment under specific conditions designated by the manufacturer and is usually indicated on a nameplate physically attached to the power production equipment.

(17) "Nationally Recognized Testing Laboratory" or "NRTL" means a testing laboratory that is recognized by the United States Occupational Safety and Health Administration to test and certify interconnection equipment pursuant to the relevant codes and standards.

(18) "Radial Distribution Circuit" means a circuit configuration in which independent feeders branch out radially from a common source of supply. From the standpoint of a utility system, the area described is between the generating source or intervening substations and the customer's electric service entrance equipment. In a radial distribution system, power flows in one direction from the utility to the load.

(19) "Small Generator Facility" means a generator or a group of generators located on the utility customer's premises that have an aggregate nameplate capacity that is less than or equal to 10 MW and is designed to operate in parallel with the electric distribution system.

History: 69-3-103, MCA; IMP, 69-3-102, MCA; NEW, 2010 MAR p. 1801, Eff. 8/13/10.

38.5.8402   APPLICABILITY
(1) The interconnection procedures set forth in this subchapter apply to applicants proposing to install and interconnect a small generator facility to an EDC's system that satisfies the following criteria:

(a) The small generator facility must be sited on the utility customer's premises;

(b) The customer installing the small generator facility must be in good standing with the utility;

(c) The proposed small generator facility's point of interconnection may not be on a transmission line;

(d) The power produced from the small generator facility must be contained on the EDS and not flow onto the transmission system; and

(e) The power exported by an interconnection customer can only be sold to the EDC.

History: 69-3-103, MCA; IMP, 69-3-102, MCA; NEW, 2010 MAR p. 1801, Eff. 8/13/10.

38.5.8403   INTERCONNECTION REQUESTS
(1) Applicants seeking to interconnect a small generator facility shall submit an interconnection request using a standard form filed with the commission by the EDC that owns the electric distribution system to which interconnection is sought. All fees for processing interconnection requests must be paid prior to acceptance of the interconnection request by the utility.
History: 69-3-103, MCA; IMP, 69-3-102, MCA; NEW, 2010 MAR p. 1801, Eff. 8/13/10.

38.5.8404   AGREEMENTS, FORMS, AND FEES
(1) The EDC shall file standard applications for interconnection requests, standard agreements required by the interconnection rules, a schedule of fees for processing interconnection requests, and a schedule of rates for performing the various studies required by these rules with the commission.

(2) All agreements, forms, fees, and rates must be filed with and approved by the commission after public notice and opportunity for comment.

(3) Utilities may not deviate from the standard agreements and fees filed with the commission without commission approval.

(4) A customer may petition the commission to require the utility to amend its agreements, forms, fees, and rates.

(5) The commission on its own, may require the utility to amend its agreements, forms, fees, and rates.

History: 69-3-103, MCA; IMP, 69-3-102, MCA; NEW, 2010 MAR p. 1801, Eff. 8/13/10.

38.5.8405   CERTIFIED EQUIPMENT
(1) An interconnection request may be eligible for expedited interconnection review as determined under ARM 38.5.8404 if the small generator facility uses certified interconnection equipment. Interconnection equipment shall be deemed certified upon establishment of all of the following:

(a) The interconnection equipment has been labeled and is publicly listed by a NRTL at the time of the interconnection application;

(b) The NRTL testing the interconnection equipment makes readily available for verification all test standards and procedures it utilized in performing such equipment certification, and, with consumer approval, the test data itself. The NRTL may make such information available on its web site and by encouraging such information to be included in the manufacturer's literature accompanying the equipment;

(c) The applicant verifies that the intended use of the interconnection equipment falls within the use or uses for which the interconnection equipment was labeled, and listed by the NRTL.

(2) If the interconnection equipment is an integrated equipment package such as an inverter, then the applicant must show that the generator or other electric source being utilized is compatible with the interconnection equipment and is consistent with the testing and listing specified for this type of interconnection equipment.

(3) If the interconnection equipment includes only interface components (switchgear, multifunction relays, or other interface devices), then the applicant must show that the generator or other electric source being utilized is compatible with the interconnection equipment and is consistent with the testing and listing specified for this type of interconnection equipment.

(4) Interconnection equipment must be evaluated by a NRTL in accordance with the following codes and standards:

(a) IEEE 1547-2003 Standard for Interconnecting Distributed Resources with Electric Power Systems (including use of IEEE 1547.1-2005 testing protocols to establish conformity); and

(b) UL 1741 Inverters, Converters, and Controllers for Use in Independent Power Systems. 

(5) Certified interconnection equipment shall not require further design testing or production testing, as specified by IEEE Standard 1547-2003 Sections 5.1 and 5.2, or additional interconnection equipment modification to meet the requirements for expedited review; however, nothing herein shall preclude the need for an interconnection installation evaluation, commissioning tests or periodic testing as specified by IEEE Standard 1547-2003 Sections 5.3, 5.4, and 5.5, or for a witness test that may be conducted by the EDC.

History: 69-3-103, MCA; IMP, 69-3-102, MCA; NEW, 2010 MAR p. 1801, Eff. 8/13/10.

38.5.8406   REVIEW PROCEDURES
(1) An EDC shall review interconnection requests using one or more of the following review procedures:

(a) An EDC shall use Level 1 procedures for evaluation of all interconnection requests to connect inverter-based small generation facilities if:

(i) The small generator facility has a nameplate capacity of 50 kW or less; and

(ii) The customer interconnection equipment proposed for the small generator facility is certified.

(b) An EDC shall use Level 2 procedures for evaluating interconnection requests if:

(i) The small generator facility has a nameplate capacity of 2 MW or less; and

(ii) The interconnection equipment proposed for the small generator facility is certified; or

(iii) The small generator facility was reviewed under Level 1 review procedures but not approved and the applicant has submitted a new interconnection request for consideration.

(c) An EDC shall use Level 3 review procedures for evaluating interconnection requests where power will not be exported.

(d) An EDC shall use the Level 4 study procedures for evaluating interconnection requests if:

(i) The interconnection request was not approved under a Level 1, Level 2, or Level 3 expedited review and the applicant has submitted an interconnection request for consideration under a Level 4 study review; or

(ii) The interconnection request does not meet the criteria for expedited review under Level 1, Level 2, or Level 3 review procedures.

History: 69-3-103, MCA; IMP, 69-3-102, MCA; NEW, 2010 MAR p. 1801, Eff. 8/13/10.

38.5.8407   TECHNICAL STANDARDS
(1) Unless otherwise provided in these rules, IEEE Standard 1547-2003 is to be used in evaluating all interconnection requests under Level 1, Level 2, Level 3, and Level 4 reviews. IEEE Standard 1547.1-2005 is to be used for testing interconnection equipment to ensure it complies with IEEE 1547-2003.
History: 69-3-103, MCA; IMP, 69-3-102, MCA; NEW, 2010 MAR p. 1801, Eff. 8/13/10.

38.5.8408   ADDITIONAL REQUIREMENTS
(1) The interconnection applicant is responsible for construction of all generator facilities and obtaining any necessary local code official approval.

(2) To assist customers in the interconnection process, the EDC must:

(a) Maintain all interconnection related documents on their proprietary web site;

(b) Designate an employee or office from which basic information on the application can be obtained through an informal process and prominently display the contact information on the proprietary web site required in (a); and

(c) Upon the customer's request, meet with the customer prior to submission of an application for expedited interconnection.

(3) When an interconnection request for a small generator facility includes multiple energy production devices at a site for which the applicant seeks a single point of interconnection, the interconnection request shall be evaluated on the basis of the aggregate nameplate capacity of multiple devices.

(4) When an interconnection request is for an increase in capacity for an existing small generator facility, the interconnection request shall be evaluated on the basis of the new total nameplate capacity of the small generator facility.

(5) When an interconnection request is deemed complete, any modification that is not agreed to in writing by the EDC shall require submission of a new interconnection request.

(6) Small generator facilities shall be capable of being isolated from the EDC by means of a lockable, visible-break isolation device accessible by the EDC. The isolation device shall be installed, owned, and maintained by the owner of the small generation facility and located between the small generation facility and the point of interconnection.

(7) Any metering necessitated by a small generator interconnection shall be installed, operated, and maintained in accordance with applicable tariffs. Any such metering requirements must be clearly identified as part of the standard generator interconnection agreement executed by the interconnection customer and the EDC. 

(8) EDC monitoring and control of a small generator facility is permitted only if the nameplate capacity rating of the small generator facility interconnecting to the EDS, or the aggregate nameplate capacity of all small generator facilities on the line section in combination with the small generator facility interconnecting to the EDS, is greater than 15% of the line section annual peak load as most recently measured at the substation or exceeds the annual minimum load of the line section. Any monitoring and control requirements shall be consistent with the EDC's written and published requirements and must be clearly identified as part of an interconnection agreement executed by the interconnection customer and EDC.

(9) The EDC shall have the option of performing a witness test to verify the small generator facility complies with the standards listed in ARM 38.5.8407 after construction of the small generator facility is completed. The applicant shall provide the EDC at least 20 business days notice of the planned commissioning test for the small generator facility. If the EDC elects to perform a witness test, it shall contact the applicant to schedule the witness test at a mutually agreeable time within ten business days of the scheduled commissioning test. If the EDC does not perform the witness test within ten business days of the commissioning test, the witness test is deemed waived. If the witness test is not acceptable to the EDC, the EDC must document all deficiencies and provide a written report identifying the deficiencies to the applicant within five business days of the witness test. The applicant shall be granted a period of 30 business days to address and resolve any deficiencies. If the applicant fails to address and resolve the deficiencies to the satisfaction of the EDC, the interconnection request shall be deemed withdrawn. If a witness test is not performed by the EDC or an entity approved by the EDC, the applicant must still satisfy the interconnection test specifications and requirements set forth in IEEE standard 1547-2003 Section 5. The applicant shall, if requested by the EDC, provide a copy of all documentation in its possession regarding testing conducted pursuant to IEEE Standard 1547.1-2005.

(10) Once an interconnection has been approved under this rule, the EDC may not require a customer-generator to test its facility except for the following:

(a) For Levels 2 and 3, an annual test in which the customer-generator's facility is disconnected from the EDC's equipment to ensure that the generator stops delivering power to the grid, and any manufacturer recommended testing; and

(b) For Level 4, all interconnection related protective functions and associated batteries shall be periodically tested according to the following:

(i) Intervals specified by the manufacturer; or

(ii) Intervals agreed upon by the EDC and customer-generator; and

(c) Customer-generators shall maintain periodic test reports or an inspection log for Level 4 interconnections.

(11) An EDC shall have the right to inspect a customer-generator's facility before and after interconnection approval is granted, at reasonable hours and with reasonable prior notice provided to the customer-generator. If the EDC discovers the customer-generator's facility is not in compliance with the requirements of IEEE Standard 1547-2003, and the noncompliance adversely affects the safety or reliability of the electric system, the EDC may require disconnection of the customer-generator's facility until it complies. Immediately upon disconnection of the customer-generator's facility, the EDC shall provide a written report detailing how the customer-generator's facility is not complying with IEEE Standard 1547-2003 or these rules.

History: 69-3-103, MCA; IMP, 69-3-102, MCA; NEW, 2010 MAR p. 1801, Eff. 8/13/10.

38.5.8409   LEVEL 1 EXPEDITED REVIEW
(1) An EDC shall use the Level 1 interconnection review procedure for an interconnection request that meets the criteria in 38.5.8406(1)(a). An EDC shall not impose additional requirements for Level 1 reviews not specifically authorized under this rule unless the EDC and the applicant mutually agree to do so.

(2) The EDC shall evaluate the potential for adverse system impacts using the following screens which must be satisfied:

(a) For interconnection of a proposed small generator facility to a radial distribution line section, the aggregated generation on the line section, including the proposed small generator facility, may not exceed:

(i) 15% of the line section annual peak load as most recently measured at the substation; or

(ii) the annual minimum load of the line section.

(b) For interconnection of a proposed small generator facility to a spot network circuit where the generator or aggregate of total generation exceeds 5% of the spot network's maximum load, the generator must utilize a protective scheme that will ensure that its current flow will not affect the network protective devices, including reverse power relays or a comparable function;

(c) When a proposed small generator facility is to be interconnected on a single-phase shared secondary line section, the aggregate generation capacity on the shared secondary line, including the proposed small generator facility, may not exceed 20 kilovolt-amps (kVA);

(d) When a proposed small generator facility is single-phase and is to be interconnected on a center tap neutral of a 240 volt service, its addition may not create an imbalance between the two sides of the 240 volt service of more than 20% of the nameplate rating of the service transformer;

(e) The generator cannot exceed the capacity of the customer's existing electrical service; and

(f) Construction of facilities by the EDC on its own system is not required to accommodate the small generator facility. 

(3) The Level 1 interconnection review must be conducted in accordance with the following procedures:

(a) An EDC shall, within ten business days after receipt of the interconnection request, inform the applicant that the interconnection request is complete or incomplete and what materials are missing;

(b) When an interconnection request is complete, the EDC shall assign a line section queue position if there is more than one interconnection request pending for the same line section. The line section queue position of the interconnection request shall be used to determine the potential adverse system impact of the small generator facility based on the relevant screening criteria. The EDC shall notify the applicant about other higher line section queued applicants on the same line section or spot network for which interconnection is sought. Line section queue position shall not be forfeited or otherwise impacted by any pending dispute submitted under the provisions of ARM 38.5.8413

(c) The EDC shall, within 15 business days after the end of the ten business days noted in (3)(a), verify that the small generator facility equipment can be interconnected safely and reliably using Level 1 screens;

(d) Unless the EDC determines and demonstrates that a small generator facility cannot be interconnected safely or reliably to its system and provides a letter to the applicant explaining its reasons for denying an interconnection request, the EDC shall provide the applicant with a small generator interconnection agreement within five business days and approve the interconnection request subject to the following conditions:

(i) The small generator facility has been approved by local or municipal electric code officials with jurisdiction over the interconnection;

(ii) A certificate of completion has been returned to the EDC. Completion of local inspections may be designated on inspection forms used by local inspecting authorities;

(iii) The witness test has been successfully completed or waived; and

(iv) The applicant has signed a standard small generator interconnection agreement. When an applicant does not sign the agreement within 30 business days after receipt from the EDC, the interconnection request shall be deemed withdrawn.

(e) If the small generator facility is not approved under a Level 1 review, the EDC shall provide the applicant a letter explaining its reasons for denying the interconnection request. The applicant may submit a new interconnection request for consideration under a Level 2, Level 3, or Level 4 interconnection review; however, the line section queue position assigned to the Level 1 interconnection request shall be retained provided the request is made within 15 business days after notification that the current interconnection request has not been approved.

History: 69-3-103, MCA; IMP, 69-3-102, MCA; NEW, 2010 MAR p. 1801, Eff. 8/13/10.

38.5.8410   LEVEL 2 EXPEDITED REVIEW
(1) An EDC shall use the Level 2 interconnection review procedure for an interconnection request that meets the criteria in ARM 38.5.8406(1)(b). An EDC shall not impose additional requirements for Level 2 reviews not specifically authorized under this section unless the EDC and the applicant mutually agree to do so.

(2) The EDC shall evaluate the potential for adverse system impacts using the following screens which must be satisfied:

(a) For interconnection of a proposed small generator facility to a radial distribution circuit, the aggregated generation on the circuit, including the proposed small generator facility, may not exceed:

(i) 15% of the line section annual peak load as most recently measured at the substation; or

(ii) the annual minimum load of the line section.

(b) For interconnection of a proposed small generator facility to a spot network circuit where the generator or aggregate of total generation exceeds 5% of the spot network's maximum load, the generator must utilize a protective scheme that will ensure that its current flow will not affect the network protective devices, including reverse power relays or a comparable function;

(c) For interconnection of a proposed small generator facility that utilizes inverter-based protective functions to an area network, the generator facility, in aggregate with other exporting generator facilities interconnected on the load side of network protective devices, will not exceed the lesser of 10% of the minimum annual load on the network or 500 kW. For a photovoltaic generator facility without batteries, the 10% minimum shall be determined as a function of the minimum load occurring during an off-peak daylight period;

(d) For interconnection of generators to area networks that do not utilize inverter-based protective functions or inverter-based generators that do not meet the requirements of (2)(c), the generator must utilize reverse power relays or other protection devices and/or methods that ensure power is not exported from the customer's site including any inadvertent export (e.g. under fault conditions) that could adversely affect protective devices on the network circuit;

(e) The proposed small generator facility, in aggregation with other generation on the distribution circuit, may not contribute more than 10% to the distribution circuit's maximum fault current at the point on the primary line nearest the point of interconnection;

(f) The proposed small generator facility, in aggregate with other generation on the distribution circuit, may not cause any distribution protective devices and equipment (including substation breakers, fuse cutouts, and line reclosers), or other customer equipment on the electric distribution system to be exposed to fault currents exceeding 90% of the short circuit interrupting capability including X/R effects;

(g) When a customer-generator facility is to be connected to 3-phase, three wire primary EDC distribution lines, a 3-phase or single-phase generator will be connected phase-to-phase;

(h) When a customer-generator facility is to be connected to 3-phase, four wire primary EDC distribution lines, a 3-phase or single phase generator will be connected line-to-neutral and will be effectively grounded;

(i) When the proposed small generator facility is to be interconnected on single-phase shared secondary line, the aggregate generation capacity on the shared secondary line, including the proposed small generator facility, shall not exceed 20 kVA;

(j) When a proposed small generator facility is single-phase and is to be interconnected on a center tap neutral of a 240 volt service, its addition may not create an imbalance between the two sides of the 240 volt service of more than 20% of the nameplate rating of the service transformer;

(k) A small generator facility, in aggregate with other generation interconnected to the distribution side of a substation transformer feeding the circuit where the small generator facility proposes to interconnect, may not exceed 10 MW in an area where there are known or posted transient stability limitations to generating units located in the general electrical vicinity (for example, three or four distribution busses from the point of interconnection);

(l) The generator cannot exceed the capacity of the customer's existing electrical service; and

(m) Construction of facilities by the EDC on its own system is not required to accommodate the small generator facility.

(3) The Level 2 interconnection review must be conducted in accordance with the following procedures:

(a) An EDC shall, within ten business days after receipt of the interconnection request, inform the applicant that the interconnection request is complete or incomplete and what materials are missing;

(b) When an interconnection request is complete, the EDC shall assign a line section queue position if there is more than one interconnection request pending for the same line section. The line section queue position of the interconnection request shall be used to determine the potential adverse system impact of the small generator facility based on the relevant screening criteria. The EDC shall notify the applicant about other higher line section queued applicants on the same line section or spot network for which interconnection is sought. Line section queue position shall not be forfeited or otherwise impacted by any pending dispute submitted under the provisions of ARM 38.5.8413;

(c) Within 20 business days after the EDC notifies the applicant it has received a completed interconnection request, the EDC shall:

(i) Evaluate the interconnection request using the Level 2 review criteria;

(ii) Review the applicant's analysis, if provided by applicant, using the same criteria; and 

(iii) Provide the applicant with the EDC's evaluation, including a comparison of the results of its own analyses with those of applicant, if applicable. When an EDC does not have a record of receipt of the interconnection request and the applicant can demonstrate that the original interconnection request was delivered, the EDC shall expedite its review to complete the evaluation of the interconnection request within 20 business days of the applicant's resubmission of the interconnection request; but

(iv) The EDC shall not be obligated to meet the timeline for reviewing the interconnection request as provided for in (3)(c) until such time as the EDC has completed the review of all other interconnection requests that have a higher line section queue position.

(4) When an EDC determines that the interconnection request passes the Level 2 screening criteria, or fails one or more of the Level 2 screening criteria but determines that the small generator facility can be interconnected safely and reliably, it shall provide the applicant a standard small generator interconnection agreement within five business days after the determination.

(5) Additional review may be appropriate when a small generator facility has failed to meet one or more of the Level 2 screens. An EDC shall offer to perform additional reviews to determine whether minor modifications to the electric distribution system would enable the interconnection to be made consistent with safety, reliability, and power quality criteria. The EDC shall provide the applicant with a nonbinding, good faith estimate of the costs of additional review and minor modifications. The EDC shall undertake the additional review only after the applicant consents to pay for the review. If the review identifies the need for modifications, the EDC shall make the necessary modifications only if the interconnection customer agrees to pay for them.

(6) An applicant shall have 30 business days after receipt of an interconnection agreement to sign and return the agreement. When an applicant does not sign the agreement within 30 business days, the interconnection request shall be deemed withdrawn. If construction is required under the provisions of (5), the interconnection of the small generator facility shall proceed according to any milestones agreed to by the parties in the standard small generator interconnection agreement. The standard small generator interconnection agreement may not become final until:

(a) The milestones agreed to in the standard small generator interconnection agreement are satisfied;

(b) The small generator facility is approved by electric code officials with jurisdiction over the interconnection;

(c) The applicant provides a certificate of completion to the EDC. Completion of local inspections may be designated on inspection forms used by local inspecting authorities; and

(d) There is a successful completion of the witness test, unless waived. 

(7) If the small generator facility is not approved under a Level 2 review, the EDC shall provide the applicant a letter explaining its reasons for denying the interconnection request. The applicant may submit a new interconnection request for consideration under a Level 3 or Level 4 interconnection review; however, the line section queue position assigned to the Level 2 interconnection request shall be retained provided the request is made within 15 business days after notification that the current interconnection request has not been approved.

History: 69-3-103, MCA; IMP, 69-3-102, MCA; NEW, 2010 MAR p. 1801, Eff. 8/13/10.

38.5.8411   LEVEL 3 EXPEDITED REVIEW
(1) An EDC shall use the Level 3 interconnection review procedure for an interconnection request that meets the criteria in ARM 38.5.8406(1)(c). An EDC shall not impose additional requirements for Level 3 reviews not specifically authorized under this section unless the EDC and the applicant mutually agree to do so.

(2) Once the interconnection request is deemed complete by the EDC, the EDC shall assign a line section queue position based upon the date and time the interconnection request is determined to be complete if there is more than one interconnection request pending for the same line section. The line section queue position of each interconnection request shall be used to determine the potential adverse system impact of the small generator facility based on the relevant screening criteria. The applicant will proceed under the timeframes of this section. The EDC shall notify the applicant about other higher line section queued applicants on the same radial line or area network that the applicant is seeking to interconnect to. Line section queue position shall not be forfeited or otherwise impacted by any pending dispute submitted under the provisions of ARM 38.5.8413.

(3) For interconnection requests to the load side of an area network, the following criteria must be satisfied:

(a) The nameplate capacity of the small generator facility is less than or equal to 50 kW;

(b) The proposed small generator facility utilizes a certified inverter-based equipment package;

(c) The small generator utilizes reverse power relays and/or other protection functions that prevent the export of power into the area network;

(d) The aggregate of all generation on the area network does not exceed the smaller of 5% of an area network's maximum load or 50 kW; and

(e) No construction of the facilities by the electric distribution company shall be required to accommodate the small generator facility.

(4) Interconnection requests meeting the requirements set forth in ARM 38.5.8411(3) for small generator facilities interconnecting to an area network shall be presumed to be appropriate for interconnection. The EDC shall process the interconnection request to area networks using the following procedures:

(a) The EDC shall evaluate the interconnection request under Level 2 interconnection review procedures as set forth in ARM 38.5.8410(3) except that the EDC may have 25 business days to conduct an area network impact study to determine any potential adverse system impacts of interconnecting to the EDC's area network; however, the EDC shall not be obligated to meet the timeline for reviewing the interconnection request as provided for herein until such time as the EDC has completed the review of all other interconnection requests that have a higher line section queue position;

(b) In the event the area network impact study identifies potential adverse system impacts, the EDC may determine at its sole discretion that it is inappropriate for the small generator facility to interconnect to the area network in which case the interconnection request shall be denied; however, the applicant may elect to submit a new interconnection request for consideration under Level 4 procedures in which case the line section queue position assigned to the Level 3 interconnection request will be retained provided the request is made within 15 business days after notification that the current application is denied; and

(c) In the event the EDC denies the interconnection request, the EDC shall provide the applicant with a copy of its area network impact study and written justification for denying the interconnection request.

(5) For interconnection requests to a radial distribution circuit, the following criteria must be satisfied:

(a) The aggregated total of the nameplate capacity of all of the generators on the circuit, including the proposed small generator facility, is 10 MW or less;

(b) The small generator will use reverse power relays or other protection functions that prevent power flow onto the electric distribution system;

(c) The small generator is not served by a shared transformer; and

(d) No construction of facilities by the EDC on its own system shall be required to accommodate the small generator facility.

(6) For an interconnection request meeting the requirements of ARM 38.5.8411(5) for small generator facilities interconnecting to a radial distribution circuit, the EDC shall evaluate the interconnection request under the Level 2 expedited review in ARM 38.5.8410. The EDC shall approve the interconnection request if all of the applicable screens in ARM 38.5.8410(2) are satisfied.

(7) For a small generator facility that satisfies the criteria in (4) or (5) of this rule, the EDC shall approve the interconnection request and provide a standard interconnection agreement for the applicant to sign within five business days.

(8) The applicant shall have 30 business days after receipt of an interconnection agreement to sign and return the standard small generator interconnection agreement. If the applicant does not sign the standard small generator interconnection agreement within 30 business days, the request shall be deemed withdrawn. After the standard small generator interconnection agreement is signed by the parties, interconnection of the small generator facility shall proceed according to any milestones agreed to by the parties in the standard small generator interconnection agreement.

(9) The interconnection agreement will not be final until:

(a) Any milestones agreed to in the standard small generator interconnection agreement are satisfied;

(b) The small generator facility is approved by electric code officials with jurisdiction over the interconnection;

(c) The applicant provides a certificate of completion to the EDC; and

(d) There is a successful completion of the witness test, if conducted by the EDC.

(10) If the small generator facility is not approved under a Level 3 review, the applicant may submit a new interconnection request for consideration under the Level 4 procedures specified in ARM 38.5.8406(1)(d) without sacrificing the original line section queue position provided the revised interconnection request is submitted within 15 business days of notice that the current request has not been approved.

History: 69-3-103, MCA; IMP, 69-3-102, MCA; NEW, 2010 MAR p. 1801, Eff. 8/13/10.

38.5.8412   LEVEL 4 STUDY REVIEW
(1) An EDC shall use the Level 4 study review procedure for an interconnection request that meets the criteria in ARM 38.5.8406(1)(d).

(2) Within ten business days from receipt of an interconnection request, the EDC shall notify the applicant whether the request is complete. When the interconnection request is not complete, the EDC shall provide the applicant a written list detailing information that shall be provided to complete the interconnection request. The applicant shall have ten business days to provide appropriate data in order to complete the interconnection request or the interconnection request shall be considered withdrawn. The interconnection request shall be deemed complete when the required information has been provided by the applicant.

(3) When an interconnection request is complete, the EDC shall assign a line section queue position if there is more than one interconnection request pending for the same line section. The line section queue position of an interconnection request shall be used to determine the cost responsibility necessary for the facilities to accommodate the interconnection. The EDC shall notify the applicant about other higher line section queued applicants. Any required interconnection studies shall not begin until the EDC has completed its review of all other interconnection requests that have a higher line section queue position. Line section queue position shall not be forfeited or otherwise impacted by any pending dispute submitted under the provisions of ARM 38.5.8413

(4) The following procedures shall be followed in performing a Level 4 study review:

(a) By mutual agreement of the parties, the scoping meeting, interconnection feasibility study, interconnection impact study, or interconnection facilities studies provided for in a Level 4 review and discussed in this section may be waived;

(b) If agreed to by the parties, a scoping meeting will be held within ten business days after the EDC has notified the applicant that the interconnection request is deemed complete, or the applicant has requested that its interconnection request proceed after failing the requirements of a Level 2 review or Level 3 review. The purpose of the meeting must be to review the interconnection request, existing studies relevant to the interconnection request, and the results of the Level 1, Level 2, or Level 3 screening criteria;

(c) If the parties agree at a scoping meeting that an interconnection feasibility study shall be performed, the EDC shall provide to the applicant, no later than five business days after the scoping meeting, an interconnection feasibility study agreement, including an outline of the scope of the study and a nonbinding good faith estimate of the cost to perform the study;

(d) If the parties agree at a scoping meeting that an interconnection feasibility study is not required, the EDC shall provide to the applicant, no later than five business days after the scoping meeting, an interconnection system impact study agreement, including an outline of the scope of the study and a nonbinding good faith estimate of the cost to perform the study; or

(e) If the parties agree at the scoping meeting that an interconnection feasibility study and system impact study are not required, the EDC shall provide to the applicant, no later than five business days after the scoping meeting, an interconnection facilities study agreement including an outline of the scope of the study and a nonbinding good faith estimate of the cost to perform the study.

(5) The following guidelines shall be followed in conducting all required interconnection studies:

(a) An interconnection feasibility study shall include any of the following analyses necessary for the purpose of identifying a potential adverse system impact to the EDC's electric distribution system that would result from the interconnection:

(i) Initial identification of any circuit breaker short circuit capability limits exceeded as a result of the interconnection;

(ii) Initial identification of any thermal overload or voltage limit violations resulting from the interconnection;

(iii) Initial review of grounding requirements and system protection; and

(iv) Description and nonbinding estimated cost of facilities required to interconnect the small generator facility to the EDC's electric distribution system in a safe and reliable manner.

(b) If an applicant requests that the interconnection feasibility study evaluate multiple potential points of interconnection, additional evaluations may be required. Additional evaluations shall be paid by the applicant.

(c) An interconnection system impact study is not required if the interconnection feasibility study concludes there is no adverse system impact, or if the study identifies an adverse system impact, but the EDC is able to identify a remedy without the need for an interconnection system impact study.

(d) The parties shall use a form of interconnection feasibility study agreement approved by the commission.

(e) An interconnection system impact study shall evaluate the impact of the proposed interconnection on both the safety and reliability of the EDC's electric distribution system. The study shall identify and detail the system impacts that result when a small generator facility is interconnected without project or system modifications, focusing on the adverse system impacts identified in the interconnection feasibility study, or potential impacts including those identified in the scoping meeting. The study shall consider all generating facilities that, on the date the interconnection system impact study is commenced, are directly interconnected with the EDC's system, have a pending higher line section queue position to interconnect to the system, or have a signed a standard small generator interconnection agreement. As part of its impact study, the EDC shall agree to evaluate and consider any separate studies prepared by the applicant that evaluate alternatives for interconnecting the small generator facility including the applicant's assessment of potential impacts of the small generator facility on the electric distribution system. The EDC shall provide the applicant with the EDC's final impact study evaluation including a comparison of the results of its own analyses with those provided by the applicant.

(i) A distribution interconnection system impact study shall be performed when a potential distribution system adverse system impact is identified in the interconnection feasibility study. The EDC shall send the applicant an interconnection system impact study agreement within five business days of transmittal of the interconnection feasibility study report. The agreement will include an outline of the scope of the study and a good faith estimate of the cost to perform the study. The impact study shall include any necessary elements from among the following:

(A) A load flow study;

(B) Identification of affected systems;

(C) An analysis of equipment interrupting ratings;

(D) A protection coordination study;

(E) Voltage drop and flicker studies;

(F) Protection and set point coordination studies;

(G) Grounding reviews; and

(H) Impact on system operation.

(ii) An interconnection system impact study shall consider any necessary criteria from among the following:

(A) A short circuit analysis;

(B) A stability analysis;

(C) Alternatives for mitigating adverse system impacts on affected systems;

(D) Voltage drop and flicker studies;

(E) Protection and set point coordination studies; and

(F) Grounding reviews.

(iii) The final interconnection system impact study must provide the following:

(A) The underlying assumptions of the study;

(B) The results of the analyses;

(C) A list of any potential impediments to providing the requested interconnection service;

(D) Required distribution upgrades; and

(E) A nonbinding good faith estimate of cost and time to construct any required distribution upgrades.

(iv) The parties shall use an interconnection impact study agreement as approved by the commission.

(f) The interconnection facilities study shall be conducted as follows:

(i) Within five business days of completion of the interconnection system impact study, a report shall be transmitted to the applicant with an interconnection facilities study agreement, which includes an outline of the scope of the study and a nonbinding good faith estimate of the cost to perform the study.

(ii) The interconnection facilities study shall estimate the cost of the equipment, engineering, procurement and construction work, including overheads, needed to implement the conclusions of the interconnection feasibility study and the interconnection system impact study to interconnect the small generator facility. The interconnection facilities study shall identify:

(A) The electrical switching configuration of the equipment, including transformer, switchgear, meters, and other station equipment;

(B) The nature and estimated cost of the EDC's interconnection facilities and distribution upgrades necessary to accomplish the interconnection; and

(C) An estimate of the time required to complete the construction and installation of the facilities.

(iii) The parties may agree to permit an applicant to separately arrange for a third party to design and construct the required interconnection facilities. The EDC may review the design of the facilities under the interconnection facilities study agreement. When the parties agree to separately arrange for design and construction, and to comply with security and confidentiality requirements, the EDC shall make all relevant information and required specifications available to the applicant to permit the applicant to obtain an independent design and cost estimate for the facilities, which must be built in accordance with the specifications.

(iv) In the event that distribution upgrades are identified in the impact study that must be added only in the event that higher line section queued customers not yet interconnected eventually complete and interconnect their generation facilities, an applicant may elect to interconnect without paying for such upgrades at the time of the interconnection under the condition that the customer shall pay for such upgrades at the time the higher line section queued customer is ready to interconnect. If the customer does not pay for such upgrades at that time, the EDC will require the customer to immediately disconnect its generating facility so that the higher line section queued customer can be accommodated.

(v) The parties shall use an interconnection facility study agreement approved by the commission.

(6) When an EDC determines, as a result of the studies conducted under a Level 4 review, that it is appropriate to interconnect the small generator facility, the EDC shall provide the applicant with a standard small generator interconnection agreement. If the interconnection request is denied, the EDC shall provide the applicant a written explanation.

(7) An applicant shall have 30 business days after receipt of an interconnection agreement to sign and return the agreement. When an applicant does not sign the agreement within 30 business days, the interconnection request shall be deemed withdrawn. When construction is required, the interconnection of the small generator facility shall proceed according to milestones agreed to by the parties in the standard small generator interconnection agreement. The standard small generator interconnection agreement may not be final until:

(a) The milestones agreed to in the standard small generator interconnection agreement are satisfied;

(b) The small generator facility is approved by electric code officials with jurisdiction over the interconnection;

(c) The applicant provides a certificate of completion to the EDC. Completion of local inspections may be designated on inspection forms used by local inspecting authorities; and

(d) There is a successful completion of the witness test, unless waived by the EDC.

History: 69-3-103, MCA; IMP, 69-3-102, MCA; NEW, 2010 MAR p. 1801, Eff. 8/13/10.

38.5.8413   DISPUTE RESOLUTION
(1) A party shall attempt to resolve all disputes regarding interconnection as provided in ARM 38.5.8401 through 38.5.8412 promptly, equitably, and in a good faith manner.

(2) When a dispute arises, a party may seek immediate resolution through complaint procedures available through the commission, or an alternative dispute resolution process approved by the commission, by providing written notice to the commission and the other party stating the issues in dispute. Dispute resolution shall be conducted in an informal, expeditious manner to reach resolution with minimal costs and delay. When available, dispute resolution may be conducted by phone.

(3) When disputes relate to the technical application of this section, the commission may designate a technical master to resolve the dispute. Upon commission designation, the parties shall use the technical master to resolve disputes related to interconnection. Costs for a dispute resolution conducted by the technical master shall be established and allocated by the technical master, subject to review and approval or disapproval by the commission.

(4) Pursuit of dispute resolution may not affect an applicant with regard to consideration of an interconnection request or an applicant's line section queue position.

History: 69-3-103, MCA; IMP, 69-3-102, MCA; NEW, 2010 MAR p. 1801, Eff. 8/13/10.

38.5.8601   DEFINITIONS

In this subchapter the following definitions shall apply unless the context otherwise clearly demands:

(1) "Interruption" means a loss of service to one or more customers.

(2) "Interruption duration" means the period of time, in minutes, between the time an electric utility first becomes aware of a service interruption and the time of restoration of service to the customer(s).

(3) "Major event" means a catastrophic event that:

(a) for regulated electric utilities that have adopted the Institute of Electrical and Electronic Engineers Guide for Electric Power Distribution Reliability Indices, meets the definition of "major event day," standard 1366-2003; or

(b) for regulated electric utilities that have not adopted the Institute of Electrical and Electronic Engineers Guide for Electric Power Distribution Reliability Indices:

(i) exceeds the design limits of the electric power system;

(ii) causes extensive damage to the electric power system; and

(iii) results in a simultaneous sustained electric service interruption to more than 10% of the customers in an operating area.

(4) "Operating area" means a geographical subdivision of an electric utility's Montana service territory that is a distinct area for administration, operation, or data collection. These areas may also be referred to as regions, divisions, or districts.

 

History: 69-3-103, MCA; IMP, 69-3-201, MCA; NEW, 2005 MAR p. 1404, Eff. 7/29/05.

38.5.8604   ENERGY UTILITY SERVICE INTERRUPTION NOTIFICATION

(1) Each energy utility shall report promptly to news media that are capable of timely dissemination of information on any specific occurrence or development which interrupts or is likely to interrupt the utility's natural gas and/or electric service to 500 or more of its customers for a time period longer than two hours.

History: 69-3-103, MCA; IMP, 69-3-201, MCA; NEW, 2005 MAR p. 1404, Eff. 7/29/05.

38.5.8607   ENERGY UTILITY PLANNED OUTAGES
(1) In the event that service must be interrupted for more than two hours for planned work on utility facilities or equipment, the work shall be done at a time which will cause minimal inconvenience to customers, including consideration of weather conditions.  The utility shall attempt to notify each affected customer at least 24 hours in advance of the interruption, either personally or, when personal notification would be impractical, by advance notice in local media outlets.
History: 69-3-103, MCA; IMP, 69-3-201, MCA; NEW, 2005 MAR p. 1404, Eff. 7/29/05.

38.5.8610   GENERAL OBLIGATIONS OF ENERGY UTILITIES

(1) Each energy utility shall make reasonable efforts to avoid and prevent interruptions of service.  However, when interruptions occur, service shall be reestablished within the shortest time practicable, consistent with safety and good utility practices.

(2) Each energy utility's transmission and distribution facilities shall be designed, constructed, maintained, reinforced, and supplemented as required to reliably perform the natural gas and power delivery burden placed upon them in the storm and traffic hazard environment in which they are located.

(3) Each energy utility shall carry on an effective preventive maintenance program and shall be capable of emergency repair work on a scale which its storm and traffic damage record indicates as appropriate to its scope of operations and to the physical condition of its transmission and distribution facilities.

(4) In appraising the reliability of the electric utility's transmission and distribution system, the commission will consider the condition of the physical property and the size, training, supervision, availability, equipment, and mobility of the maintenance forces, all as demonstrated in actual cases of storm and traffic damage to the facilities.

(5) Each energy utility shall keep records of interruptions of service on its primary distribution system and shall make an analysis of the records for the purpose of determining steps to be taken to prevent recurrence of such interruptions.

(6) Each energy utility shall make reasonable efforts to reduce the risk of future interruptions by taking into account the age, condition, design, and performance of transmission and distribution facilities and providing adequate investment in the maintenance, repair, replacement, and upgrade of facilities and equipment.

History: 69-3-103, MCA; IMP, 69-3-201, MCA; NEW, 2005 MAR p. 1404, Eff. 7/29/05.

38.5.8613   ELECTRIC UTILITY SYSTEM RELIABILITY
(1) The following service reliability indices measure the frequency and duration of service interruptions.  They are recognized as standard reliability indices for the electric utility industry and may be applied to entire distribution systems and operating areas.  For purposes of this rule, "interruption" means the loss of service for more than five minutes.

(a) "Customer average interruption duration index" is the average interruption duration for those customers of electricity service who experience interruptions during the year.  It is calculated by dividing the annual sum of all customer interruption durations by the total number of customer interruptions.

(b) "System average interruption duration index" is the average interruption duration per customer served during the year.  It is calculated by dividing the sum of the customer interruption durations by the total number of customers served during the year.

(c) "System average interruption frequency index" is the average number of interruptions per customer during the year.  It is calculated by dividing the total annual number of customer interruptions by the total number of customers served during the year.

History: 69-3-103, MCA; IMP, 69-3-201, MCA; NEW, 2005 MAR p. 1404, Eff. 7/29/05.

38.5.8616   RECORDKEEPING REQUIREMENTS FOR ELECTRIC UTILITIES
(1) Each electric utility shall maintain and record complete records of service interruptions on the distribution system as a whole and for each operating area on the distribution system.  These records shall enable the utility to calculate the customer average interruption duration index, system average interruption duration index, and system average interruption frequency index, both with and without the data associated with major events.

(2) An electric utility shall retain the records required by this rule for a minimum of five years and shall provide them to the commission upon request.

History: 69-3-103, MCA; IMP, 69-3-201, MCA; NEW, 2005 MAR p. 1404, Eff. 7/29/05.

38.5.8619   ANNUAL ELECTRIC RELIABILITY REPORT
(1) Each electric utility shall submit to the commission on or before March 1 of each year an annual reliability report for the previous calendar year for the Montana jurisdiction.  The report shall include the following information:

(a)  aggregate system reliability performance, comprised of customer average interruption duration index, system average interruption duration index, and system average interruption frequency index for the previous calendar year for the Montana service territory and each defined Montana operating area.  These indices shall be calculated twice, once with the data associated with major events and once without. This assessment should contain tabular and graphical presentations of the trend for each index as well as the trends of the major causes of interruptions; and

(b)  the customer average interruption duration index, system average interruption duration index, and system average interruption frequency index reliability average values for the previous three calendar years for the Montana service territory and each defined Montana operating area.  These average values shall be calculated twice, once with the data associated with major events and once without.

History: 69-3-103, MCA; IMP, 69-3-201, MCA; NEW, 2005 MAR p. 1404, Eff. 7/29/05.