shall consist of depreciation and pretax return, incurred to
extend a facility to serve an unserved or underserved area.
For city natural gas distribution operations, recoverable
costs shall be amounts reasonably expended or incurred to
extend a facility to serve an unserved or underserved area
and associated financing costs, if any, including debt
service, debt service coverage and issuance costs.
(2) The distribution system extension charge may recover
only those costs to extend a facility that are uneconomic
under the criteria for main extension in the tariff of the
natural gas distribution company as approved by the
commission.
(3) Any capital costs and expenses recovered through the
distribution system extension charge shall be reasonable,
prudent and used and useful in providing service.
(4) The distribution system extension charge shall be
reset at zero as of the effective date of new base rates that
provide for prospective recovery of the annual costs
previously recovered under the distribution system extension
charge.
(b) Petition.--A petition for commission approval of a
distribution system extension charge shall include all of the
following:
(1) An initial tariff that includes a description of the
types of facility to be constructed, which may include
service lines, and the manner in which the costs will be
recovered through the distribution system extension charge.
(2) Testimony, affidavits, exhibits or other evidence
that demonstrates that a distribution system extension charge
is in the public interest and will facilitate economically
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