PURC releases guidelines on refund of Capital Contribution; set to take effect in May

The Public Utilities Regulatory Commission (PURC) has released new guidelines for refund of capital contributions.

According to PURC, the guidelines which take effect on May 1, 2024, aim at providing consumers with an orderly approved calculation and refund of Capital Contributions paid by customers to utility companies.

The regulatory body explains that the Capital Contribution is the cost outside a utility’s budget borne by persons requesting a new connection adding that it is a form of utility companies extending connections to enable customers to conveniently access network services.

PURC in the statement released on Tuesday, April 23, 2024, cited that a 'Connection Agreement' must be signed before the commencement of a project.

"Upon payment of the amount quoted, the customer shall sign a Connection Agreement with the utility company before the implementation of the project," the statement cited.

The regulatory body also noted that, per the new guidelines, customers who acquire network service from the utility through the Capital Contribution are entitled to a 60% Capital Contribution Refund.

"A provision that the Customer shall be entitled to a Capital Contribution refund of sixty per cent (60%) of the amount paid by the Customer, in accordance with these Guidelines."

"A provision that payment of the refund shall be made by the utility either by cheque or credit to the Customer’s utility account, in the proportions stated in the Connection Agreement."

“The Capital Contribution is made with the approval of a utility company and the utility subsequently connects other customers to the newly developed part of the utility company’s network”.

Additionally, the guidelines established a five-year limitations requirement to how a Capital Contribution refund may or may not be paid.

"An application for a Capital Contribution refund shall be made within five years from the completion of the project to qualify for the sixty per cent refund. If the utility company makes no other connection to the newly developed part of the network within the five-year limitation period, the utility company shall pay. A discounted refund for connections made after the five-year limitation period. The discounted refund shall be sixty per cent of the Depreciated Value of the assets and shall be in the form of a one-time payment to the Customer. A dedicated connection to one Customer does not qualify for a Capital Contribution refund."


Read the full document including a provisional application form below:




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