Central Kentucky Transmission Company

Original Volume No. 1

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Effective Date: 05/01/2006, Docket: CP05- 48-002, Status: Effective

Original Sheet No. 228 Original Sheet No. 228 : Effective

 

GENERAL TERMS AND CONDITIONS

(Continued)

 

27. CONSTRUCTION OF FACILITIES

 

27.1 Arrangement for Construction of Transmission Facilities. Shipper may

request Transporter to construct, maintain and operate, either all or a

part of transmission facilities necessary to provide service to Shipper in

excess of Shipper's existing service rights. If Transporter, and co-owner

Columbia, shall determine that the granting of such request by Shipper is

necessary or desirable, that no undue burden will thereby be placed upon

Transporter, or Columbia, and that no impairment of Transporter's and

Columbia's ability to render adequate service0 to its Shippers will result

therefrom, Transporter, and Columbia, will construct or provide such

facilities if they can obtain proper, necessary authorization.

 

27.2 Method of Payment.

 

(a) In the event Transporter and Columbia shall provide a lateral

line or other transmission facilities at the request of Shipper, Shipper

will pay Transporter, and co-owner Columbia for the costs of such

facilities by paying in addition to the amount paid for transportation

services, a facility charge utilizing one of the following methods:

 

(1) The Shipper shall directly reimburse Transporter via

an advance payment(s) for all reasonable costs incurred by

Transporter to design, construct, own, operate, and maintain the

facilities, including depreciation computed at the annual accrued

rates being used by Transporter and Columbia for booking

depreciation, and a return computed at the latest rate allowed

Transporter by the Commission in a formal rate determination applied

to the original cost of the facilities less accrued depreciation and

plus necessary working capital applicable to such facilities, and

including as appropriate tax related charges and, if applicable,

associated operating and maintenance costs directly related to the

facilities; provided, however, that Transporter and Shipper may

mutually agree that the Shipper will pay Transporter for such costs

through an incremental facilities charge applicable to its firm

transportation service agreement(s) with Transporter which will

reflect, as appropriate, all of Transporter's capital costs

associated with such facilities, including without limitation

depreciation, return on equity, related income taxes and all other

taxes, and, if applicable, associated operating and maintenance

costs.