(1) The term "energy conservation materials" as used in section 15-32-107 , MCA, includes the following materials:

(a) Caulking and weatherstripping of doors and windows;

(b) Furnace efficiency modifications including:

(i) Replacement burners, furnaces or boilers of any combination thereof which, as determined by the secretary of energy of the United States, substantially increase the energy efficiency of the heating system;

(ii) Devices for modifying flue openings which will increase the energy efficiency of the heating system; and

(iii) Electrical or mechanical furnace ignition systems which replace standing gas pilot lights;

(c) Clock thermostats;

(d) Ceiling, attic, wall and floor insulation;

(e) Water heater insulation;

(f) Storm windows and doors, multiglazed windows and doors, heat-absorbing or heat-reflective glazed windows, door materials and window replacement; and

(g) Outside air combustion sources.

(1) The term "prevailing average interest rate for home improvement loans" as used in section 15-32-107 , MCA means and is determined to be 12.50 percent per annum.

(1) The rate stated in the preceding section will be modified, as necessary, to reflect changes in the interest rate for home improvement loans made by lending institutions in Montana. The procedure for modification shall be that prescribed by the Administrative Procedure Act, section 2-4-305 , MCA and section 2-4-315 , MCA. .

(1) The natural gas utilities in Montana shall prepare individually with their major industrial and commercial natural gas users, (all customers who use over 50,000 mcf of gas a year) energy conservation plans aimed at improving the efficiency of energy usage, especially with regard to natural gas by those users.

(2) The commission authorizes a reasonable cost incurred by regulated utilities in compliance with this request to be included in the operating costs for rate making purposes.

(3) Specifically, the commission requires that itemized instances of energy savings be noted in such a way that they can be proven. For example, a user may not consume as much natural gas in a year as previously, but this would not necessarily indicate an energy savings if an alternative fuel were employed.

(4) Each regulated gas utility and large user, shall jointly submit these plans to the commission by September 15, 1975. These plans shall be detailed and shall include time tables and deadlines for the order, installation and operation, or faze out, of any equipment needed to effect the plan or for any other changes to be made in the operation of the gas user. These deadlines will then constitute part of a binding contract or stipulation and will be made part of this commission's rate tariff regarding that user.

(1) A public utility customer who does not file an emergency conservation plan by the due date or any such customer whose plan is not sufficient on the due date, or one that is not meeting conservation goals will face a gas energy waste service curtailment equivalent to ten (10) percent of the total natural gas delivered to that customer during the month, twelve months prior to the month, in which the violation occurred for each month its energy plan or compliance therewith is insufficient. The curtailments shall be monthly and shall begin the month after the findings of insufficiency.

(2) Each month after a finding of insufficiency, the utility serving a customer with an insufficient plan shall curtail the gas supplied to that customer according to the procedure expressed above. The waste curtailment will be assessed only after a hearing, conducted under the Montana Administrative Procedure Act contested case provisions, to determine what efforts have been made toward constructing or complying with an acceptable plan.

(3) If it is found that the utility is not assisting the customer in a sufficient good-faith manner to comply with this order, the utility will be issued an order to show cause why it is not complying with this order.

(1) Gas and electric utilities operating in Montana shall account for acceptable conservation expenditures in the following manner:

(a) Conservation costs in the following categories will be deferred in a subaccount of account 186, miscellaneous deferred debits, and subsequently amortized to a subaccount of account 557, other expenses (other power supply expenses) :

(i) Costs of conservation assets:

(A) Customer loans;

(B) Cash payments to customers;

(C) Measures installed at company's expense;

(D) Customer conservation investment decision assistance.

(ii) Asset acquisition costs:

(A) Specific acquisition program development, promotion, and labor costs;

(B) Associated general supervision rents, leases, overheads.

(b) Weatherization loan balances would continue to be reflected in account 124, other investments.

(c) Conservation costs in the following categories will be expensed as they are incurred in the proper expense account:

(i) Administrative costs:

(A) Conservation planning: supply curve, demand side

modeling;

(B) On-going research and development;

(C) General advertising;

(D) Program tracking and reporting;

(E) General training and staff development;

(F) Associated general supervision, rents, leases, overheads.

(ii) Other:

(A) Uncollectible accounts;

(B) Customer service activities: high bill complaints,

other inquiries;

(C) Miscellaneous items not acquisition related.

(2) AFUDC-like carrying charges will be allowed to accrue on deferred balances of conservation investments.

(3) Ratemaking may modify charges and balances made to and contained in the above accounts.