(a) All lost and unaccounted for gas shall be presumed to be
lost gas unless the portion represented by unaccounted for gas, including
but not limited to losses to company used gas, liquids extraction, and meter
errors due to inaccurate calibration or temperature and pressure fluctuations,
is proven by a preponderance of the evidence in a given ratemaking proceeding.
(b) All expenses for lost gas in excess of the maximum allowable
shall be disallowed for ratemaking purposes.
(1) The maximum allowable for a distribution system is 5.0%
of the amount metered in, and the maximum allowable for a transmission system
is 3.0% of the amount metered in, except as provided in subsection (c) of
this section.
(2) The calculation of the percentage of lost and unaccounted
for gas shall be based on an annual period. Notwithstanding the choice of
test year for other aspects of ratemaking, and unless a more appropriate period
can be demonstrated by a preponderance of the evidence in a given ratemaking
proceeding, the annual period ends June 30, and is the most recent such period
for which data are available.
(c) The Commission may allow a greater percentage of lost gas
than that specified in subsection (b) of this section based on special facts
and circumstances including, where appropriate, the cost of effecting a reduction
of the actual amount of lost gas, as may be demonstrated in a given ratemaking
proceeding.
(d) Nothing in this section shall be construed to limit the
Commission's authority to evaluate the reasonableness of gas expense figures,
including those for unaccounted for gas, and incorporating that evaluation
into its rate setting orders.
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