Evidentiary standards for affiliated transactions

(a) General standards. All gas company transactions with a CSC shall be by master service agreement. All other affiliate transactions involving non-tariffed goods or services shall be recorded in writing by means of such instruments as service agreements, contracts, billing invoices, vouchers, or work orders. All such written instruments shall contain adequate descriptions of the goods or services to be provided. An executed written contract or agreement is required of any affiliate transaction, including a transaction with a CSC, that: (1) is over $100,000; (2) involves any cost allocation between a gas company and any affiliate; or (3) materially impacts the operation of a gas company, provided, however, that such executed written contract or agreement is not required of any transaction with a CSC which is already covered under a master service agreement. Such contract or agreement shall be filed with the Department no later than 10 days after the execution of the contract or agreement, and shall be voidable on order of the Department, but may be enforced as between the parties unless disapproved. There shall be an arms length relationship between the parties representing a gas company and its affiliates on both sides of any affiliated transaction, contract or agreement. (b) For every affiliate transaction (other than the sale of tariffed goods or services) in which a gas company is the seller, a gas company shall demonstrate that it: (1) Considered all costs incurred to complete the transaction; (2) Calculated the costs at times relevant to the transaction; and (3) Allocated all joint and common costs appropriately. (c) Annual Affiliate Transactions Reports. (1) Reporting requirements for transactions between a gas company and a CSC. No later than March 31 of each year, each gas company shall submit to the Department the following information, for activity through December 31 of the preceding year: (A) A copy of all master service agreements; (B) Annual summary prices paid for services rendered or goods provided pursuant to such service agreement; and (C) A copy of "FERC Financial Report Form No. 60" filed pursuant to 18 C.F.R. § 366.23. (2) Reporting requirements for transactions between and among a gas company and an affiliate other than a CSC and transactions involving non-tariffed goods and services. No later than March 31 of each year, each gas company shall submit to the Department an affiliate transaction report for activities through December 31 of the preceding year. Each report shall provide, at minimum, the following information about each transaction: (A) The date of the transaction; (B) The nature and quantity of the information, assets, goods and services provided to or received from affiliates; (C) The total and itemized costs or price charged to each affiliate and a copy of any contract, agreement or work order with affiliates, if applicable; and (D) The basis used (e.g., fair market price or fully allocated cost) or an explanation of how the price was derived. (d) Affiliated Transactions Records. In addition to complying with subsection (c) of this section, each gas company shall maintain the following information, as applicable, regarding all affiliate transactions and produce such information upon the Department's request: (1) Records identifying the basis used (e.g., fair market price or fully allocated cost) to price all affiliate transactions; (2) Books of accounts and supporting records in sufficient detail to permit verification of compliance with the Gas Code of Conduct; (3) Copies of all contracts, agreements, work orders or related bids for the provision of work, goods or services for or from an affiliate; (4) A full and complete list of all affiliate transactions undertaken with affiliates without a written contract together with a brief explanation of why there was no contract; and (5) A log of all waivers of a contract provision, and discounts given by the gas company to an affiliate. (e) Audit of Affiliate Transactions. Every management audit performed pursuant to section 16-8 of the Connecticut General Statutes shall include an audit of affiliate transactions between a gas company and its affiliates and a gas company's written procedures in connection with this Gas Code of Conduct. The scope of the affiliate transactions audit shall include a review of a gas company's and its affiliates' compliance with the Gas Code of Conduct and all other related federal or state laws, and the summary and findings of such audit shall be detailed in a distinct section of any management audit report issued pursuant to section 16-8 of the Connecticut General Statutes.