Sec.16-47a-2. General standards of conduct

(a) Required Conduct.

Except as otherwise provided by or allowed under any federal or Connecticut law, under this Gas Code of Conduct or otherwise approved by the Department:

(1) All transfer prices charged for assets, goods or services, including the use or transfer of personnel, exchanged or shared between and among a gas company and its affiliates, shall meet the requirements of section 16-47a-7(a) of this Gas Code of Conduct, and be consistent with the Cost Allocation Manual submitted to the Department pursuant to section 16-47a-9(b)(3) of this Gas Code of Conduct;

(2) A gas company shall refuse goods or services provided by an affiliate, including a CSC, or other provider if the gas company determines that such goods or services are inferior, overpriced or would be detrimental to its ability to operate and maintain a safe gas system;

(3) A gas company shall have the burden of proving that all goods and services provided to its affiliates have been provided on the terms and conditions comparable to the most favorable terms and conditions reasonably available to the market, which shall include a showing upon the Department's request that such goods or services have been provided at a price that is consistent with the requirements of the Gas Code of Conduct;

(4) If any affiliate of a gas company experiences a default on an obligation that is material to a gas company or files for bankruptcy, and such bankruptcy is material to a gas company, the gas company shall notify the Department in advance, if possible, or as soon as possible, but not later than 10 days after such event; and

(5) Except as otherwise provided by any federal law or state statute, a gas company shall file notice with the Department no later than 45 days after the transfer of any services, functions, departments, employees, rights, obligations, assets, or liabilities between the gas company and its affiliates that would have a material effect on the gas company's public utility operations.

(b) Prohibited Conduct.

Except as otherwise provided by or allowed under any federal or Connecticut law, under this Gas Code of Conduct or otherwise approved by the Department:

(1) Cross-subsidies involving a gas company and any of its affiliates are strictly prohibited. All costs incurred by gas company personnel for or on behalf of an affiliate shall be charged to the affiliate responsible for the costs;

(2) Except as allowed in subdivision (3) of this subsection, a gas company shall not provide a financial advantage to any affiliate. For purposes of the Gas Code of Conduct, a gas company shall be deemed to provide a financial advantage to an affiliate if the gas company engages in any affiliate purchase or sales transaction that does not meet the requirements of section 16-47a-7(a) of this Gas Code of Conduct;

(3) Affiliate Financial Transactions. Except as otherwise provided in this Gas Code of Conduct or in other applicable law or as otherwise approved by the Department, a gas company shall not engage in any affiliate transaction in which the gas company: (A) provides to or shares with any affiliate any financial resource or financial benefit, including but not limited to any: (i) loan, extension of credit, guarantee or assumption of debt, indemnification, pledge of collateral; or (ii) encumbrance of or restriction on the disposition of any gas company; or (B) incurs any debt for purposes of investing in, or otherwise supporting, any business other than the provision of gas utility services in Connecticut as regulated by the Department. Nothing in this section, however, shall prohibit a gas company from entering into money pool arrangements with its affiliates;

(4) Neither a gas company nor its affiliates may directly, or by implication, falsely and unfairly represent to a customer, gas marketer or third-party that an advantage may accrue to a party through use of the gas company's affiliates or subsidiary. Prohibited representations include, but are not limited to, the following: (A) The Department regulated services provided by the gas company are of a superior quality when services are purchased from the gas company's affiliates; (B) The merchant services for natural gas are being provided by the gas company when they are in fact being provided by an affiliate; (C) The natural gas purchased from a gas marketer shall not be reliably delivered; and (D) Natural gas must be purchased from an affiliate to receive Department regulated services;

(5) Except as authorized by the Department, a gas company shall not bill customers on behalf of an affiliate. In no circumstance may a gas company include on customer bills any reference to or information about any of its affiliates, or allow an affiliate to include billing inserts or any marketing or promotional materials in the gas company's bills to its customers without providing similar service to non-affiliates and receive same and equal compensation from both the affiliates and non-affiliates;

(6) A gas company shall not give any preference to an affiliate or a customer of an affiliate in providing regulated gas service, or conduct business in such a way as to provide preferential service, information or treatment to an affiliate over another entity at any time;

(7) A gas company shall not seek to recover from its retail customers any costs that exceed fair market value for any service provided to the gas company from its affiliates;

(8) Neither a gas company nor its affiliates may engage in any cost shifting, cross subsidies, or anticompetitive behavior with affiliates;

(9) A gas company shall not condition or tie the provision of regulated gas service to any other good or service on the purchase of any other goods or services from any of its affiliates, or allow any of its affiliates to condition the provision of any services on the purchase of any other goods or services from the gas company;

(10) A gas company shall not offer discounts, rebates, fee waivers, penalty waivers, or other special provisions for a tariff service to an affiliate or a customer of an affiliate, unless the gas company makes the offer available to all similarly situated persons, and makes the offer in a manner designed to allow all an equal ability to utilize the offering;

(11) A gas company shall not provide sales leads to its affiliates;

(12) Neither a gas company nor its affiliates may speak or appear to speak on behalf of one another in any and all contacts or communications with customers or potential customers;

(13) Except as otherwise provided in the Gas Code of Conduct, a gas company shall not acquire information on behalf of or to provide to an affiliate;

(14) A gas company shall not participate in any affiliated transactions which are not in compliance with the Gas Code of Conduct, except as otherwise provided in § 16-47a-11 of this Gas Code of Conduct; and

(15) Neither a gas company nor its affiliates may utilize permitted communications or take any other actions either directly or indirectly through a third party to circumvent the Gas Code of Conduct.

(c) Nondiscrimination. Nondiscrimination standards under this subsection apply in conjunction with all the standards under the Gas Code of Conduct when a similar standard overlaps:

(1) A gas company's employees shall not unduly discriminate against non-affiliated entities;

(2) A gas company shall not provide any preference to an affiliate, nor to any customers of an affiliate, as compared to non-affiliates or their customers, in responding to requests for services or in providing services. No affiliates of a gas company shall represent to any person or entity that the affiliates will receive any such preference;

(3) A gas company shall apply the provisions of its tariffs equally and in the same manner to every customer or other entity whether such customer or other entity (A) is the gas company's affiliate or non-affiliate, (B) is a customer of the gas company's affiliate or non-affiliate, or (C) uses affiliated or nonaffiliated marketers or brokers;

(4) A gas company shall not give any customer using its affiliate's preference with respect to any tariff provisions that provide discretionary waivers;

(5) A gas company shall process all similar requests for gas services in the same timely manner, whether requested on behalf of its affiliates or non-affiliates;

(6) A gas company shall uniformly enforce its tariff provisions;

(7) A gas company shall not, through a tariff provision or otherwise, give its marketing affiliate and/or its customers any preference over a customer using a nonaffiliated marketer in matters relating to transportation or curtailment priority;

(8) No employees of a gas company shall indicate, represent, or otherwise give the appearance to another party that any affiliate of the gas company speaks on behalf of the gas company, provided however, that this prohibition does not apply to employees of an affiliate providing shared services to the gas company and its affiliates to the extent explicitly provided for in an affiliate or service agreement. No personnel of any affiliate of a gas company shall indicate, represent, or otherwise give the appearance to another party that they speak on behalf of the gas company;

(9) No employees of a gas company or its affiliates shall indicate, represent, or otherwise give appearance to another party that any advantage to that party with regard to gas services exists as the result of that party dealing with the affiliate, as compared with a non-affiliate;

(10) A gas company shall not disclose or cause to be disclosed to its marketing affiliate or any nonaffiliated marketer any information that it receives through its processing of requests for or provision of gas services;

(11) A gas company shall not condition or otherwise tie the provision or terms of any gas services or agreements (including prearranged capacity release) for the release of interstate or intrastate pipeline capacity to the purchasing of any goods or services from, or the engagement in business of any kind with, any affiliate of a gas company; and

(12) When an employee of a gas company receives a request for information from or provided information to a customer about goods or services available from an affiliate, the employee of the gas company shall decline to provide such information.

(d) Transparency. A gas company shall not offer or sell un-tariffed distribution or gas assets or services to its affiliates without contemporaneously making sufficient offers thereof to the market pursuant to a method approved or prescribed by the Department. A gas company shall maintain a chronological log of these public disseminations. The chronological log shall be open for public inspection during normal business hours.

(e) Unlawful Affiliate Transactions. All affiliate transactions involving a gas company shall be subject to review by the Department in accordance with section 16-8c and section 16-47a(c) of the Connecticut General Statutes and shall be declared void if found to be unjust or unreasonable and made for the purpose or with the effect of concealing, transferring or dissipating the earnings of a gas company. All such affiliated costs and expenses shall be subject to being audited in accordance with section 16-8 of the Connecticut General Statutes and disallowed within the context of a general rate case in accordance with section 16-19 of the Connecticut General Statutes.

(f) Emergencies. Nothing in this Gas Code of Conduct shall prohibit a gas company from taking any actions necessary to ensure public safety and system reliability, or prohibit communications between a gas company and its affiliates necessary to restore gas company service or to prevent or respond to emergency conditions.

(Adopted effective February 8, 2011)