Procedures For Uncollected Gas Cost Recovery:

(1) Recovery of uncollected gas costs using the modified Refund Adjustment Formula is optional. Any Company electing to recover uncollected gas costs in its annual ACA filing using the modified Refund Adjustment Formula shall comply fully with the following procedures: (a) At the time a customer account balance is written-off, the gas cost and the margin portion of the uncollected amount for each customer account shall be specifically identified from actual amounts billed and a percentage of total gas costs to the total amount written-off established. (b) For purposes of the calculation in (a), other charges, such as late fees, applicable state and local taxes, and collection fees shall not be included in the calculation of the percentage of gas costs to the total amount written-off. (c) If the account balance written-off is later collected in full, the uncollected gas costs shall be credited with the full amount of the gas cost portion of the account. (d) If the account balance written-off is not collected in full, the partial payment shall be allocated and credited to uncollected gas costs using the same percentage established for gas costs in (a). (e) If a Company’s billing system (including both computer and manual functions) is not capable of accurately allocating a partial payment, the partial payment shall be credited 100% to uncollected gas costs first, with any remainder treated as recovered margin. (f) For those Companies whose allowance for uncollectible accounts (recovered in base rates) contains a gas cost portion, the amount of that portion shall be netted with the eligible uncollected gas costs included for recovery in the ACA. Each such Company PURCHASED GAS ADJUSTMENT RULES CHAPTER 1220-04-07 shall submit its calculation of the amount to be netted with actual uncollected gas cost amounts as part of the annual ACA filing. (g) The gas cost portion of written-off account balances and the amount of gas costs recovered from subsequent payments on these accounts shall be charged or credited, as appropriate, to the ACA account at least annually for inclusion in the ACA filing. (h) Any variance between amounts charged or credited in the annual filing of the ACA and the amounts recorded in the monthly reports required in subparagraph (2) shall be reconciled and documented by the Company for review by the TPUC Compliance Staff (Staff) during the annual audit of the ACA. (i) Each Company shall file its policy (internal procedures followed) for determining the uncollectibility of a customer account balance, disconnection of a customer’s service for non-payment, collection attempts made by the company both before and after an account balance is written-off, and conditions a customer must fulfill to be reconnected to the gas system. This written policy shall be filed with the TPUC within thirty (30) days of the effective date of this Rule part. (2) Each Company electing to recover uncollected gas costs in the ACA shall comply with the following reporting requirements: (a) Customer account balances written-off shall be tracked separately in sufficient detail, so as to permit the Staff to audit write-offs and subsequent payments on written-off accounts. (b) Each Company shall submit a monthly summary report detailing each write-off and each payment to a written-off account for that month and the total amount eligible for recovery in the ACA no later than the first business day of the third month following the reported month, using a format acceptable to the Staff. Corrections or adjustments to these monthly reports shall be timely filed. Failure to submit a required monthly report may result in disallowance of recovery in the ACA of the uncollected gas costs for that month. The Company is responsible for contacting Staff should an extraordinary event prevent the timely filing of this report. (c) Monthly reports shall be electronically filed in Excel format and shall contain, at a minimum, the following information: 1. Information reported at the time an uncollected account balance is written-off: (i) Customer account numbers, with spreadsheet data sorted by account number in ascending order; (ii) Date that account balance is written-off; (iii) Amount of total gas cost written-off; (iv) Amount of total margin written-off; (v) Total amount of gas cost and margin written-off ((iii) plus (iv)); (vi) Gas cost percentage of total amount written-off ((iii) divided by (v)); and (vii) Margin percentage of total amount written-off ((iv) divided by (v)). PURCHASED GAS ADJUSTMENT RULES CHAPTER 1220-04-07 2. Information reported at the time a full or partial payment is received on an account balance that has been written-off: (i) Customer account numbers, with spreadsheet data sorted by account number in ascending order; (ii) Date that payment was received; (iii) Original write-off date of the account balance applicable to this payment; (iv) Gas cost payment credited to written-off account balance; (v) Margin payment credited to written-off account balance; (vi) Total of gas cost payment (recovery) and margin payment (recovery) ((iv) plus (v)); (vii) Gas cost payment percentage of total amount recovered credited to customer account ((iv) divided by (vi)); and (viii) Margin payment percentage of total amount recovered ((v) divided by (vi)). (3) Each Company electing to recover uncollected gas costs in its annual ACA filing shall sufficiently demonstrate to Staff that it is making reasonable efforts to collect delinquent accounts prior to the account balance being written-off. As part of the ACA filing, the Company shall submit a report showing the amount of uncollected gas costs by month, the total revenues by month, and the percentage of uncollected gas costs compared to total revenues by month and in total. The Company shall provide an explanation of any significant increase in this percentage from one month to the next. (4) Failure of a Company to fully comply with the procedures and/or reporting requirements contained in this Rule part may result in the disallowance of all or a portion of uncollected gas costs eligible for recovery in the ACA during the annual ACA audit. (5) Once a Company makes the election to recover uncollected gas costs in the ACA, the Company must continue to file its uncollected gas costs for recovery in the ACA in compliance with this Rule.