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Legal Memorandum: Retirement of Long-lived Assets in ND

Issue: What are the legal obligations for the retirement of long-lived assets for a public utility company in North Dakota?

Area of Law: Environmental Law
Keywords: Public utility operators; Abandonment of a long-lived asset; Legal obligations
Jurisdiction: North Dakota
Cited Cases: None
Cited Statutes: N.D. Cent. Code § 49-04-05 (2008), §§ 17-05-05, -11; N.D. Admin. Code § 69-09-03-02 (2008); N.D. Cent. Code §§ 54-17.7-04, -11 (2008); Id. § 49-02-27; N.D. Admin. Code § 69-09-09-06 (2008); Id. § 69-09-09-07; Id. §§ 69-09-09-04, -05; N.D. Admin. Code § 43-02-07-15 (2008); Grand Forks, N.D., Code § 16-0414 (2008); Fargo, N.D., Code § 18-0908(F) (2008); Minot, N.D., Code App. B, Sub-Part III (2008); Dickinson, N.D. Code § 33.12.250 (2008), § 40.02.090; N.D. Cent. Code § 49-23-04 (2008)
Date: 12/01/2008

A general provision governing the duties of public utilities in North Dakota provides that a public utility may not “dispose of” its works or system necessary or useful to perform its duties to the public without the Public Service Commission’s prior approval.  N.D. Cent. Code § 49-04-05 (2008).  This approval requirement does not apply to the disposal of tangible property valued at less than $500,000.  Id.  “Disposal” is not defined, so it is unknown whether the term encompasses abandonment.  Legislation enacted in 2005, which creates the North Dakota transmission authority, references the disposal of electric transmission facilities and related infrastructure.  The act gives the authority the power to dispose of transmission facilities owned pursuant to the chapter, but does not address a power company’s obligations regarding disposal or abandonment of its facilities  Id. §§ 17-05-05, -11.  With respect to gas pipelines, North Dakota has adopted many of the federal pipeline safety standards set forth in 49 C.F.R. Parts 190–192; 199.  See N.D. Admin. Code § 69-09-03-02 (2008).  Effective April 11, 2007, the legislation that created the North Dakota pipeline authority references pipeline-system disposal and gives the authority the power to dispose of pipeline facilities, but it does not address a power company’s obligations regarding pipeline disposal or abandonment.  N.D. Cent. Code §§ 54-17.7-04, -11 (2008).  

Effective August 1, 2007, the North Dakota legislature authorized the public service commission to adopt rules governing the decommissioning of commercial wind energy conversion facilities.  Id. § 49-02-27.  […]

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