Ind. Admin. Code tit. 170, r. 5-1-27 – Extension of distribution mains; variances

Sec. 27. Extension of Distribution Mains. (A) Jurisdiction of Commission. The provisions of this rule [this section] shall govern the Commission in determining all matters relative thereto coming before it.

(B) Responsibility of Gas Utilities. In addition to its statutory responsibilities, each gas public utility shall, upon proper application for service, have the authority and obligation subject to the provisions below and in keeping with the filings approved by the Commission as to the availability of gas service, to make free of charge an extension necessary to give service when the estimated total revenue, for a period of three (3) years, from the prospective customer or customers, is at least equal to the estimated cost of such extension.

(C) Extension Exceeding the Costs Limits Set Forth in (B) Above. If the estimated cost of the extension required to furnish service is greater than the total estimated revenue from such extension specified herein, such an extension shall be made under the following conditions:

(1) Upon proper application for such extension and (i) receipt by the gas public utility of a cash deposit in an amount equal to the cost of such extension in excess of the amount which would have qualified as provided in (B) above or (ii) receipt by the gas public utility of adequate provision, mutually acceptable to the parties, for payment of such cash deposit upon completion of the construction of the extension, the gas utility shall proceed with such extension, without specific approval of the agreement by the Commission, or
(2) If (a) in the opinion of the gas utility the estimated cost of such extension and the prospective revenue to be received from it is so meager as to make it doubtful whether the revenue from the extension would ever pay a fair return on the investment involved in such extension, or (b) in a case of real estate development, with slight or no immediate demand for service, or (c) in the case of an installation requiring extensive equipment with slight or irregular service; then in any of these cases the gas utility shall submit the agreement for such an extension to the Commission for investigation and determination as to the public convenience and necessity of such extension, and if so required, the conditions under which it shall be made, and
(3) For each customer, exclusive of the initial applicants considered in the making of an extension, connected to such an extension within the period of six years from the completion of such extension, the gas utility shall refund to such initial applicants, in proportion to their respective contributions toward the cost of such extension, an amount equal to three (3) times the estimated annual revenue from such new customer, less the cost of service such new customer, but the total of all refunds to any such applicant shall in no event exceed the aforesaid contribution of such applicant.

(D) Information. (1) All estimates of cost as required in (B) above shall be determined by the utility from actual experience, and each gas utility shall within the first quarter of each year submit to the Commission information used to establish the basis for the above amounts.

(2) In estimating the cost of an extension, the estimate shall be based on the diameter of the pipe to be used; provided, however, the estimated cost to the customer or customers shall not be based on a pipe diameter in excess of four (4) inches, unless actual consumption estimated for the proposed customer(s) requires a larger pipe.
(3) In the event that the applicant is required by (C) above to make any payment, the utility shall upon request make available to the applicant:
1. (a) the information used to establish the basis for the applicable amount as submitted to the Commission in compliance with this rule; and
2. (b) the information used to establish the basis for the "estimated total revenue for a period of three (3) years to be realized by the utility from permanent and continuing customers on such extension" as required by this rule.

(E) Contract for Service. A gas utility shall not be required to make extension as provided in this Rule 25 [this section] unless the customers to be initially served by such extension upon its installation have entered into an agreement with the gas utility setting forth the obligations and commitments of the parties, which may require the customer to provide a satisfactory guaranty to the gas utility of the performance of the customer's obligations thereunder.

(F) Variations from Rule. This Rule 25 [this section] shall not be construed as prohibiting a gas utility from (1) making extensions without charge where the cost of the same is greater than is provided in (B) above, or (2) providing an alternate plan to be approved by the Commission; provided that in the application of this subsection (F) no discrimination is practiced between customers whose service requirements are similar.

(G) The utility shall use good utility and engineering practices in determining the route for the main extension required to serve a petitioner(s). If it is unreasonable to use public rights-of-way or it is otherwise unavailable for the utilities' use, the petitioner shall give all reasonable assistance in obtaining private rights-of-way for the main extension; however, if such a negotiated acquisition is impossible, then the utility shall use its power of eminent domain to obtain the needed right-of-way for installation of the extension where the extension is proposed to or will be capable of serving two or more users.

(Indiana Utility Regulatory Commission; No. 34613: Standards of Service For Gas Public Utilities Rule 25; filed Oct 14, 1976, 10:20 am: Rules and Regs. 1977, p. 411; readopted filed Jul 11, 2001, 4:30 p.m.: 24 IR 4233; readopted filed Apr 24, 2007, 8:21 a.m.: 20070509-IR-170070147RFA; readopted filed Aug 2, 2013, 2:16 p.m.: 20130828-IR-170130227RFA; readopted filed Apr 11, 2019, 9:04 a.m.: 20190508-IR-170190136RFA; readopted filed Sep 12, 2025, 11:43 a.m.: 20251001-IR-170240381RFA)