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Universal Service Fund

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The commission shall create for each electing distribution company a universal service fund for the purpose of:
1. Assuring that gas is available for sale by marketers to firm retail customers within the territory certificated to each such marketer;
2. Enabling the electing distribution company to expand its facilities and service in the public interest. Such expansion of facilities may include a natural gas fueling infrastructure for motor vehicles at the discretion of the commission; and
3. Assisting low-income residential consumers in times of emergency as determined by the commission, and consumers of the regulated provider of natural gas in accordance with Code Section 46-4-166.
The fund shall be administered by the commission under rules to be promulgated by the commission in accordance with the provisions of this Code section. Prior to the beginning of each fiscal year of the electing distribution company, the commission shall determine the amount of the fund appropriate for such fiscal year, which amount shall not exceed $25 million for that fiscal year. In making such determination, the commission shall consider the following:
1. The amount required to provide sufficient contributions in aid of construction to permit the electing distribution company to extend and expand its facilities from time to time as the commission deems to be in the public interest; and
2. The amount required to assist low-income residential consumers in times of emergency as determined by the commission and consumers of the regulated provider of natural gas in accordance with Code Section 46-4-166.
The fund shall be created and maintained from time to time from the following sources:
1. Rate refunds to the electing distribution company from its interstate pipeline suppliers;
2. Any earnings allocable to ratepayers under performance based rates of the electing distribution company authorized by this article;
3. A surcharge to the rates for firm distribution service of the electing distribution company authorized for such purpose by the commission from time to time;
4. Surcharges on customers receiving interruptible service over the electing distribution company's distribution system imposed by the commission in accordance with Code Section 46-4-154;
5. Refunds of deposits required by marketers as a condition for service, if such refunds have not been delivered to or claimed by the consumer within two years;
6. Funds deposited by marketers in accordance with Code Section 46-4-160.3;
7. The proceeds from the sale or lease of facilities financed from the universal service fund; and
8. Any other payments to the fund as provided by law or by order of the commission.
Any amounts remaining in such fund at the end of a fiscal year in excess of $3 million shall be available for refund to retail customers in such manner as the commission shall deem equitable. The balance at fiscal year end, whether positive or negative, after such refund, if any, shall become the initial balance of the fund for the ensuing fiscal year.
Moneys in the fund shall be deposited in a separate, interest-bearing escrow account maintained by the electing distribution company at any state or federally chartered bank, trust company, or savings and loan association located in this state. Upon application to the commission, the commission shall order the distribution of an appropriate portion of such moneys on a quarterly basis and in accordance with the provisions of this Code section. Interest earned on moneys in the fund shall accrue to the benefit of the fund.
Distributions to the regulated provider shall be made in accordance with Code Section 46-4-166.
1. In determining whether to grant the application of an electing distribution company for a distribution from the fund in whole or in part, the commission shall consider:
  1. The capital budget of the electing distribution company for the relevant fiscal year;
  2. The estimated total overall applicable cost of the proposed extension, including construction costs, financing costs, working capital requirements, and engineering and contracting fees, as well as all other costs that are necessary and reasonable;
  3. The projected initial service date of the new facilities, the estimated revenues to the electing distribution company during the first five fiscal years following the initial service date, and the estimated rate of return to the electing distribution company produced by such revenues during each such fiscal year;
  4. The amount of the contribution in aid of construction required for the revenues from the proposed new facility to produce a just and reasonable return to the electing distribution company; and
  5. Whether the proposed new facility is in the public interest.
2. In no event shall the distribution to an electing distribution company from the fund for facilities and service expansion during any fiscal year exceed 5 percent of the capital budget of such company for such fiscal year.
3. Any investment in new facilities financed from the universal service fund shall be accounted for as a contribution in aid of construction.
In no event shall an electing distribution company, who receives a distribution from the fund, sell or lease any facilities financed by the fund to an affiliate for less than the higher of the net book value or fair market value of such facility without approval by the commission.

(Code 1981, §46-4-161, enacted by Ga. L. 1997, p. 798, § 4; Ga. L. 2001, p. 1084, § 5; Ga. L. 2001, p. 1206, § 5; Ga. L. 2002, p. 475, § 19; Ga. L. 2011, p. 475, §§ 2-4/SB 108.)

The 2002 amendment, effective April 25, 2002, rewrote this Code section.

The 2011 amendment, effective May 11, 2011, inserted ". Such expansion of facilities may include a natural gas fueling infrastructure for motor vehicles at the discretion of the commission" in paragraph (a)(2); in subsection (c), deleted "and" at the end of paragraph (c)(6), added present paragraph (c)(7), redesignated former paragraph (c)(7) as paragraph (c)(8), and, in paragraph (c)(8), inserted "as" and added "or by order of the commission" at the end; and added subsection (h).

Editor's notes.

- Ga. L. 2002, p. 475, § 1, not codified by the General Assembly, provides that: "This Act shall be known and may be cited as the 'Natural Gas Consumers' Relief Act.'"

Ga. L. 2011, p. 475, § 1, not codified by the General Assembly, provides that: "This Act shall be known and may be cited as the 'Energy Independence and Rate Payer Protection Act.'"

Administrative Rules and Regulations.

- Universal Service Fund, Official Compilation of Rules and Regulations of State of Georgia Public Service Commission, Gas Utilities, Chapter 515-7-5.

Law reviews.

- For note on the 2001 amendment to O.C.G.A. § 46-4-161, see 18 Ga. St. U.L. Rev. 273 (2001).

JUDICIAL DECISIONS

Allocation of universal service fund to shortfall.

- Some evidence supported the superior court's conclusion that the Georgia Public Service Commission's decision to allocate a portion of the universal service fund to the shortfall of a natural gas limited liability company (LLC) was a regulatory business issue and a question of regulatory policy because evidence was presented that, in the context of its duty to protect natural gas consumers under the Natural Gas Competition and Deregulation Act, O.C.G.A. § 46-4-151(a)(4), the Commission intended to moderate the increase in costs resulting from the LLC's inability to supply its customers, to encourage marketers to "be diligent" in addressing business risks, and to prevent the affected marketers from passing on to their customers all the costs of making up the LLC's shortfall. MXenergy Inc. v. Ga. PSC, 310 Ga. App. 630, 714 S.E.2d 132 (2011). For note on the 2001 amendment to O.C.G.A. § 46-4-161, see 18 Ga. St. U.L. Rev. 277 (2001).

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