Tennessee Certificate of Public Convenience and Necessity (8-TN-c)
Certificate of Public Convenience and Necessity Process
8-TN-c.1 to 8-TN-c.2 – Is a Certificate of Public Convenience and Necessity Required?
A developer may need to obtain a Certificate of Public Convenience and Necessity (CCN) from the Tennessee Public Utility Commission (TPUC) to construct or operate a “line, plant, or system” for the public sale of electricity. Tenn. Code Ann. §65-4-201(a). If the project does not generate, transmit or distribute electricity for public sale, then the developer does not need a CCN.
In Tennessee, a developer must obtain a CCN:
- If the developer is a public utility that seeks to construct or operate a “line, plant, or system;” or “to route in or into a municipality or other territory already receiving a like service from another public utility;”
- If the developer is a person or corporation that seeks to construct a “line, plant, [or] system…to be operated as a public utility” or to be owned by a public a utility, Tenn. Code Ann. §65-4-201(a); or,
- If the developer is a person or corporation that seeks to “extend or construct transmission or distribution lines…into or within the state” to deliver electricity from outside Tennessee. Tenn. Code Ann. §65-4-208(a).
A public utility is defined as an “individual, copartnership, association, corporation, or joint stock company…that own[s], operate[s], manage[s] or control[s], within the state, any…electric light…[,]…power, …or any other like system, plant or equipment, affected by and dedicated to the public use, under privileges, franchises, licenses, or agreements, granted by the state or by any political subdivision.” Tenn. Code Ann. §65-4-101(6)(a).
The definition of public utility excludes:
- Federal agencies;
- State agencies and political subdivisions; and
- Certain homeowners associations where the associations “own, construct, operate or maintain…service systems for the exclusive use” if a subdivision” so long as the “subdivisions are unable to obtain such services from the local utility district.”
8-TN-c.3 – Is the Developer Exempt From Obtaining a CCN?
A developer does not need to obtain a CCN if the developer is:
- The federal government or any federal agency;
- The state of Tennessee or any agency or political subdivision of the state of Tennessee; or,
- Cooperative associations organized under the Electric Cooperative Act or Electric Membership Corporation Act.
8-TN-c.4 – Certificate of Public Convenience and Necessity Petition
The developer must submit a complete CCN Petition (Petition) to the TPUC pursuant to Tenn. Comp. R. & Regs. 1220-1-1-.03. In addition to completing a Petition, the developer should also submit the following supporting documents, if applicable:
- A description of the service the applicant proposes to render;
- A description of the territory to be served and a map showing the territory;
- A copy of the franchise granted by the city, if applicable;
- A description of any proposed franchise fee;
- Information regarding existing franchises for the same type of utility service in the same municipality or county, if applicable;
- A statement of public need for the service, which includes an estimate of the number of customers to be served initially and any estimates of growth;
- Documentation indicating that other public utilities, utility districts, or governmental units in or near the affected area are unable or unwilling to provide service to the affected area, if applicable;
- Documentation of notice, to be provided in conjunction with the filing of the petition, to any public utility operating in the municipality or territory affected whose route, plant, line, or system may be in competition with the proposed route, plant, line, or system, if applicable;
- Engineering and construction plans;
- A current financial statement of the company;
- A detailed estimate of the cost of construction of the system;
- Pro Forma statement of the cost of operating the system for the first five years;
- An analysis of projected customer growth for the first five years;
- Details of any proposed financing;
- A list of the rates the company proposes to charge its customers and how the rates were determined;
- A description of the type of entity that will own the system together with proof of the existence of the entity;
- If the entity is a corporation, partnership, or limited liability corporation, a copy of the Certificate of Good Standing from the State of Tennessee;
- The names and addresses of the owners of the company and the percentage of ownership of each; and
- Any other relevant information.
The developer must file the Petition and supporting documents to the TPUC Chair. The TPUC requires a “written original and four (4) written copies of all electronic documents” or “an unbounded, one sided original and thirteen (13) copies of all written documents” submitted to the TPUC Chair. Tenn. Comp. R. & Regs. 1220-1-1-.03(4).
The documents must conform to the formatting requirements pursuant to Tenn. Comp. R. & Regs. 1220-1-1-.03(1). The Chair may “refuse to accept any document which does not comply with” the rules. Tenn. Comp. R. & Regs. 1220-1-1-.03(6).
8-TN-c.5 to 8-TN-c.7 – Review Petition Materials for Completeness
The TPUC reviews CCN Petitions for administrative and technical completeness. If a Petition is incomplete, the TPUC may dismiss the Petition without further consideration. Tenn. Comp. R. & Regs. 1220-1-1-.03(6).
8-TN-c.8 to 8-TN-c.11 – Is a Public Hearing Ordered or Requested?
If an interested party requests a public hearing on the Petition, the TPUC must order a public hearing. Tenn. Code Ann. §65-4-204. The TPUC may also order a public hearing “upon its own initiative.” Tenn. Code Ann. §65-4-204.
Once the TPUC orders a public hearing, the TPUC holds a public hearing upon “due notice to all interested parties.” At the public hearing, the developer files, under oath, any pertinent evidence and other “reasonable information” about the project the TPUC requires. Tenn. Code Ann. §65-4-204. Members of the public and developer may offer comments about the project.
If no party requests a public hearing and if the TPUC does not order a public hearing on its own initiative, the TPUC proceeds with an adjudicatory hearing pursuant to Tenn. Code Ann. §65-4-201 and Tenn. Code Ann. §4-5-101 et seq..
8-TN-c.12 to 8-TN-c.14 – Publish Notice of Adjudicatory Hearing
The TPUC must provide “at least ten (10) days’ notice” of the adjudicatory hearing to interested parties. The TPUC conducts an adjudicatory hearing to determine whether to grant a CCN. Tenn. Code Ann. §65-4-203(b).
The TPUC conducts the adjudicatory hearing pursuant to Tenn. Code Ann. §4-5-307 and Tenn. Code Ann. §4-5-312. Unless prohibited by state or federal law, the adjudicatory hearing will be open to the public. Tenn. Code Ann. §4-5-312(d). The TPUC may allow public comment during the adjudicatory hearing. Tenn. Code Ann. §4-5-312(c).
8-TN-c.15 to 8-TN-c.16 – Assess Petition for Approval
After the adjudicatory hearing, the TPUC assesses the Petition and determines whether to grant the CCN.
If the proposed project will compete with another public utility’s existing “route, plant, line, or system,” the TPUC will not grant a CCN unless: (1) the existing “route, plant, line, or system are inadequate to meet the reasonable needs of the public,” or (2) the public utility operating the existing “route, plant, line, or system” refuses or neglects to make necessary additions after “reasonable opportunity after notice.” Tenn. Code Ann. §65-4-203(a).
If the proposed project interferes with an existing “route, line, plant or system” of another public utility, the affected public utility may file a complaint with the TPUC. After a hearing, the TPUC may prescribe “terms and conditions” that are “just and reasonable” to address the interference. The TPUC may require that the developer follow such terms and conditions in order to keep and exercise the rights granted by the CCN. Tenn. Code Ann. §65-4-202.
8-TN-c.17 – Certificate of Public Convenience and Necessity
If the TPUC approves the Petition, the TPUC issues a CCN to the developer. If the CCN contains additional terms and conditions, the developer must abide by the terms and conditions prescribed in the CCN. Otherwise, the developer risks forfeiting the CCN and any rights granted by the CCN. Tenn. Code Ann. §65-4-202.
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