Tenn. Comp. R. & Regs. 1220-04-13-.17 - MINIMUM REQUIREMENTS FOR NEW AND AMENDMENTS TO CERTIFICATE OF CONVENIENCE AND NECESSITY

(1) Any public wastewater utility requesting a Certificate of Public Convenience and Necessity ("CCN") in accordance with Tenn. Code Ann. §§ 65-4-201, et seq., shall file an application that complies with Rule 1220-01-01-.03 and this rule. Each applicant shall demonstrate to the Commission that it possesses sufficient managerial, financial, and technical capabilities to provide the wastewater services for which it has applied. Each application shall demonstrate that there exists a public need for wastewater service and include the required financial security consistent with Tenn. Code Ann § 65-4-201, and these rules.

(2) Applications for a new or expanded CCN shall include the following information:

(a) General information about the applicant and the proposed system:

1. The legal corporate name, physical address and mailing address of the applicant.

2. An organizational chart showing each officer and any other key personnel by name and tittle.

3. A list of owners, members and officers of the wastewater utility. Provide the address, telephone number, and percentage ownership of each individual. If different, list the names of owners, members and officers located in Tennessee.

4. If the applicant has affiliated companies, provide a corporate organization chart showing all affiliate relationships. Describe in detail any transactions, direct or indirect, that occur or are expected to occur between affiliated entities.

5. A copy of the applicant's articles of incorporation, partnership agreement, and/or by-laws.

6. A copy of the applicant's license to engage in business within the State of Tennessee registered with the Secretary of State, inclusive of any assumed names of the company.

7. A complete description of the geographic territory to be served by the applicant, including the name and location of development (subdivision) and the number of acres. Include the name of the subdivision or development and the name of the wastewater system as stated in the TDEC permit. In addition, provide a legible map of the area with the proposed service territory clearly and accurately plotted. The map should include:

(i) The location of the wastewater system, i.e., treatment plant, pre-application treatment facilities, collection infrastructure, building(s) for equipment, drip fields, disposal fields and/or wetland cells. Include the physical address of the wastewater system and the associated latitude and longitude coordinates.

(ii) The names of surrounding streets and roads.

(iii) A map to show access roads and names of access roads (if available) and other utilities necessary to provide wastewater service.

(iv) All residences and habitable structures served by the wastewater system.

(v) Any portion of the areas that will not be served when the wastewater system becomes operational. If the wastewater system will be operational in phases, show the phases on the map.

8. A description of the type of proposed wastewater system to be constructed including the design capacity and the maximum potential number of customers the public wastewater utility will service in the proposed service area. Indicate the technology used for the wastewater system (e.g., membrane, sand filter, wetland cell and/or lagoon). The type of system and design capacity should match the type and design capacity of the associated TDEC permit and permit application.

9. The estimated dates for the commencement and completion of the construction of the system and the estimated date the wastewater system will be placed into service. If the wastewater system will be constructed or placed into service in phases, provide the anticipated dates for each phase.

10. If portions of the wastewater system will be built in phases, state how many phases and the number of houses or units to be connected in each phase.

11. Identify the builder or developer that has requested the utility to provide wastewater service. Include name of company, name of primary contact, title, mailing address, email address, and phone number.

12. Respond completely to all information requests by Commission staff.

(b) Evidence that the requisite property rights and public need exists for wastewater services in the proposed service area:

1. A letter(s) from local government(s) and public wastewater utilities in or near the proposed service area stating that they do not provide wastewater service to the proposed service area and that they are unable or unwilling to provide wastewater service to the proposed service area within the ensuing twelve (12) months.

2. As applicable, a copy of any application for a franchise and the franchise agreement issued by a city of county.

3. All contracts or agreements between the builder(s) of the treatment and/or collection system, the utility, and the property and/or subdivision developer that show entitlement or ownership to the land, system specifications, costs for the wastewater system, timeline for the system to be built, and rights to the system once it is completed. Documents presented by the applicant should be signed by all parties and bear marks or stamps, such as those provided by notaries or public officials, as necessary.

(c) Evidence that the applicant possesses sufficient managerial ability:

1. Biographies of officers and/or key wastewater utility staff that demonstrate managerial ability. Include a list of certifications or professional licenses held by officers or wastewater utility staff with documentation.

2. Identify all states where the applicant is certified as a wastewater provider and/or the status of certification in states where an application is pending.

3. Copies of all contracts related to any pending merger or acquisition of the applicant, corporate parent or affiliate.

4. Proof that the party contracted to install the proposed system has a valid and current contractor's license by the applicable licensing board of the State of Tennessee.

(d) Evidence that the applicant possesses sufficient technical ability:

1. A copy of the application for the State Operating Permit ("SOP") filed with TDEC. Include the letter from TDEC indicating the receipt of a complete application. Include any engineering and/or design reports submitted to TDEC, such as the Design Development Report and the Detailed Soils Investigation Report. If an operating permit has been issued, provide a copy of the permit. The utility shall file a copy of the TDEC permit in the docket file prior to providing service.

2. A copy of the State Operator Certificate for the wastewater system operator of record. If the operator is a contract employee of the utility, provide a copy of the employment contract.

3. The name, address, and telephone number of the technical contact person responsible for and knowledgeable about the applicant's proposed operations in Tennessee.

4. A list of any complaint(s), notices of violation or administrative action filed with or issued by a regulatory agency. Identify the nature of the complaint notices of violation or administrative action, which agency is involved, and how the issue was or is being resolved.

5. A certification from a design engineer that the wastewater system was constructed in accordance with the TDEC-approved construction plans and specifications. The certification shall be filed in the docket file prior to providing service.

(e) Evidence that the applicant possesses sufficient financial capability:

1. Financial statements for the applicant covering the most recent year ended. Include a balance sheet, income statement, and statement of cash flows.

2. Pro forma income statements for the wastewater utility for the first three (3) years of operations or for an expanded amended CCN, the first three years after the latest year-end financials. In the calculations of utility revenues show the number of consumers and the rates used in the calculations. Show operation and maintenance expenses by account number and provide the basis and/or assumptions used to arrive at these amounts.

3. A chart of accounts for the wastewater utility, following the NARUC Uniform System of Accounts (USA) for wastewater utilities.

4. A list of all plant-in-service account numbers with account names and estimated account balances as of the state of operations.

5. The depreciation rates the applicant intends to use for each plant account that will be on the wastewater utility's books. Include the estimated useful life of each account. If no depreciation study has been performed, explain the basis for these rates.

6. The total estimated detailed cost of construction of the wastewater system to be constructed for the proposed service area. If the wastewater system will be constructed in phases, provide detailed construction cost estimates for each phase. Indicate whether the developer or the applicant will pay for the construction of the system.

7. Indicate the identity of the owner(s) of the wastewater system once construction is complete. If a party other than the utility pays the cost of construction and transfers ownership of the wastewater system to the applicant, provide a detailed breakdown of the estimated amount of contributed capital that will be recorded on the applicant's financial books.

8. A tariff showing products, services, terms, conditions and proposed rates to be charged for wastewater service. A tariff should include all pass-through fees, including but not limited to, customer deposits, disconnect or reconnect fees, late fees, tap fees, escrow fees, bond fees, franchise fees and taxes.

9. Provide estimates of costs and customers added by month for the first five (5) years based upon the construction build-out schedule for developers in the service area of the proposed wastewater system. For each year, by month, provided an estimated number of customers by customer class anticipated to be served by the wastewater system. Include the utility's basis and assumptions used for this projection. Provide this information in a spreadsheet in Microsoft Excel format with all assumptions clearly documented.

10. Documentation describing bonding requirements imposed by municipal governments for the proposed wastewater system.

11. Demonstrate that the applicant has acquired a performance bond from the developer or builder of the wastewater system made payable to the Utility to ensure construction of the wastewater system. The performance bond should be for an amount equal to or greater than the cost of the system as provided in contracts between builder, developer and/or utility.

12. List all funding sources available to the applicant for the wastewater system proposed by the applicant.

13. Provide information demonstrating compliance with the financial security requirement of Rule 1220-04-13-.07.

(f) Sworn pre-filed written testimony by the applicant's owner, member, officer or other principal having knowledge of the applicant's operations and the proposed wastewater system. The testimony should, at a minimum, include the following information:

1. Evidence that a public need exists for wastewater services in the proposed service area.

2. A description of the wastewater system and the services to be provided.

3. A statement that the applicant is aware of and will abide by all applicable Tennessee statutes and TPUC Rules.

4. A discussion and demonstration of technical, managerial, and financial capability of the applicant to provide the proposed wastewater service.

5. A statement that the applicant is aware of the requirement of Rule 1220-04-13-.09(7) concerning the completion of the construction of the wastewater system within three years of TPUC's written approval of the CCN.

6. A signed affidavit stating that all information submitted concerning the wastewater CCN application is true and correct to the best of the witness' knowledge and belief.

Notes

Tenn. Comp. R. & Regs. 1220-04-13-.17

Original rule filed September 5, 2018; effective 12/4/2018.

Authority: T.C.A §§ 65-2-102, 65-4-104, 65-4-201, and 65-4-204.