Understanding My Line Extension Contract

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Submitted by ILShin on

Line Extension Contract

Your Line Extension Contract consists of one key component:

  • Key #1 - Construction Costs
  • Eligible Projects (see Tariff Rules 20 and 21) and new business customers who applied for gas line extension(s) before July 1, 2023 may also have another key component on their Line Extension Contract:
  • Key #2 - Allowances (Credit for Gas Usage)

Key #1 - Construction Costs

Construction cost estimates are broken into the following categories:

  • Gas "Main" Pipe
  • Gas "Service" Pipe
  • "MSA" (Meter)

Each category consists of the following estimated costs:

  • Material
  • Pipe/Fittings/Meter
  • Equipment
  • Labor
  • Trenching

To generate a cost estimate, your Southern California Gas Company (SoCalGas®) planning representative will:

  • Determine if a "Main" extension is required (if no main pipeline exists, SoCalGas estimates the cost of extending the pipeline from the closest location of an existing main pipeline).
  • Estimate "Service" piping requirements.
  • Determine "MSA" (Meter) size and the cost to serve your gas appliance needs.

Key #2 - Allowances (Credit for Natural Gas Usage)

For Eligible Projects (see Tariff Rules 20 and 21) and for new business customers who applied for gas line extension(s) before July 1, 2023, the type of gas appliances/equipment you plan to install will help determine the amount of credit that may reduce your construction costs.

The residential natural gas appliance types qualifying for allowance (for new business customers who applied for gas line extension(s) prior to July 1, 2023) are:

  • Water Heating
  • Space Heating
  • Cooktop and Oven
  • Dryer Stub

If qualified, commercial allowances are based on the total estimated annual gas usage and verified after 3 years.

Example:

Key #1 Construction Costs

SoCalGas® estimated your costs at $1,000 for Service and MSA installation

Key #2 Allowances

$800 in qualifying allowances based on appliances/equipment installed

From example above:

Key #1 Construction Cost

$1,000

Key #2 Allowances

-$800

Your Cost1

$200

 

1Applicable tax to be added to your cost

Reducing Construction Costs

Having your trench excavated by someone other than SoCalGas, participating in our residential new construction 2 PSIG program, and/or pursuing Applicant Install (see Tariff Rule 20) may significantly reduce the cost of your overall line extension contract.

Will SoCalGas Request More Money?

If you change the scope of your contracted project, additional monies may be due during or after your project installation. For those receiving allowances, additional monies may be due if you fail to contact SoCalGas to request your meter set and turn-on per the following reconciliation schedule:

RESIDENTIAL

  • If your project required SoCalGas to install both main and service pipe, the meter must be set and turned-on within 6 months of construction completion.
  • If your project required SoCalGas to install service only pipe, the meter must be set and turned on within 12 months of construction completion.

COMMERCIAL/INDUSTRIAL

  • If your project required SoCalGas to install both main and service pipe, the meter must be set and turned-on within 6 months of construction completion.
  • If your project required SoCalGas to install service only pipe, the meter must be set and turned on within 12 months of construction completion.

For Eligible Projects (see Tariff Rules 20 and 21) and for commercial/industrial new business customers who applied for gas line extension(s) before July 1, 2023, your annual gas usage versus your contracted equipment estimated usage, will be verified at 36 months to determine if a refund or bill is due. In either case, if your meter is not set and turned-on, allowances will be removed. Your estimated construction costs plus tax will be billed.

Lastly, applicants who submit a new application for gas line extension(s) on or after July 1, 2023, must pay SoCalGas® the actual cost, but the estimated amount is due and payable in advance. Because of unforeseen contingencies and other factors, the actual cost may be considerably higher (or lower) than the estimate. Therefore, the estimate is not a warranty by SoCalGas® of the actual cost. If additional monies are due, applicant agrees to pay them within 30 days after invoice. Estimated and actual cost excludes Betterments and Utility Convenience.

More Details - Contact Information

For more information, contact us at NewBusinessProcessTeam@socalgas.com

See Tariff Rules 20 & 21 for comprehensive information regarding gas installation, allowances and reconciliation.

New construction projects require considerable foresight to ensure your job runs smoothly. Coordinate your new service in a timely manner for best results.