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| PRIOR PRINTER'S NO. 1075 | PRINTER'S NO. 1576 |
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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| HOUSE BILL |
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| INTRODUCED BY McCALL, EACHUS, GEORGE, BRENNAN, BUXTON, CARROLL, CALTAGIRONE, CASORIO, CONKLIN, CRUZ, DONATUCCI, FREEMAN, GODSHALL, HALUSKA, HANNA, HARKINS, KIRKLAND, KORTZ, MANDERINO, MANN, MICOZZIE, MUNDY, MUSTIO, M. O'BRIEN, O'NEILL, PAYTON, READSHAW, SANTARSIERO, SANTONI, SCAVELLO, SCHRODER, SHAPIRO, SIPTROTH, K. SMITH, SOLOBAY, SWANGER, J. TAYLOR, THOMAS, WHITE, YUDICHAK, JOSEPHS, HORNAMAN, JOHNSON, MciLVAINE SMITH, MELIO, D. COSTA, CLYMER, BRIGGS, GABIG, HELM, KULA, BROOKS, HESS, YOUNGBLOOD, GALLOWAY, FRANKEL, BURNS, STABACK, BOYD, MURT, MAHONEY AND GEIST, MARCH 17, 2009 |
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| AS REPORTED FROM COMMITTEE ON CONSUMER AFFAIRS, HOUSE OF REPRESENTATIVES, AS AMENDED, APRIL 21, 2009 |
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| AN ACT |
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1 | Amending Title 66 (Public Utilities) of the Pennsylvania |
2 | Consolidated Statutes, further providing for the definition | <-- |
3 | of definitions; and providing for rate phase-in plans. | <-- |
4 | The General Assembly of the Commonwealth of Pennsylvania |
5 | hereby enacts as follows: |
6 | Section 1. Section 2803 of Title 66 of the Pennsylvania |
7 | Consolidated Statutes is amended by adding a definition | <-- |
8 | definitions to read: | <-- |
9 | § 2803. Definitions. |
10 | The following words and phrases when used in this chapter |
11 | shall have the meanings given to them in this section unless the |
12 | context clearly indicates otherwise: |
13 | * * * |
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1 | "Deferred amounts." The reasonable and prudent costs | <-- |
2 | incurred by an electric distribution company to procure power |
3 | for its default service obligation not recovered in current |
4 | customer rates and credits provided to customers who elect to |
5 | participate in a phase-in plan and obtain service from an |
6 | electric generation supplier, both including allowable costs as |
7 | defined under Statement of Financial Accounting Standards No. |
8 | 71, Accounting for the Effects of Certain Types of Regulation |
9 | (Financial Accounting Standards Board, issued December 1982, as |
10 | amended), provided that the cost of capital, for the purposes of |
11 | section 2816 (relating to rate phase-in plans), shall be equal |
12 | to the rate specified under section 202 of the act of January |
13 | 30, 1974 (P.L.13, No.6), referred to as the Loan Interest and |
14 | Protection Law. |
15 | * * * |
16 | "Overall rate." The sum of all retail rates charged by an |
17 | electric distribution company for electric service including all |
18 | applicable riders and surcharges. |
19 | "Phase-in plan." A plan filed with the Pennsylvania Public | <-- |
20 | Utility Commission by an electric distribution company that |
21 | provides the customer with the option to phase in any initial |
22 | increase in the GENERATION rate that may occur upon the |
23 | expiration of that electric distribution company's generation |
24 | rate cap. |
25 | "Prepayment plan." A plan filed with the Pennsylvania Public |
26 | Utility Commission by an electric distribution company that |
27 | provides the customer with the option to begin the phase-in |
28 | period prior to the expiration of that electric distribution |
29 | company's generation rate cap. |
30 | * * * |
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1 | Section 2. Title 66 is amended by adding a section to read: |
2 | § 2816. Rate phase-in plans. |
3 | (a) General rule.--Within 90 days of the effective date of |
4 | this section, each electric distribution company subject to a | <-- |
5 | generation rate cap as described under this chapter as of |
6 | December 31, 2009, shall file a competitively neutral phase-in |
7 | plan with the commission to provide residential and small |
8 | commercial customers the option to phase in any initial increase |
9 | in the price for generation service that may occur upon the |
10 | expiration of the generation rate cap for such provider |
11 | specified in section 2804(4) (relating to standards for |
12 | restructuring of electric industry) or a restructuring plan in |
13 | section 2806(f) (relating to implementation, pilot programs and |
14 | performance-based rates) and ending no later than three years |
15 | after such expiration date. Customer participation in any plan |
16 | approved under this subsection shall be voluntary and shall | <-- |
17 | require the affirmative consent of the customer. |
18 | (b) Conditions.--Each phase-in plan shall be subject to |
19 | commission approval and shall meet the following conditions: |
20 | (1) Such The phase-in plan shall offer a gradual | <-- |
21 | transition to prices at the level permitted pursuant to a |
22 | commission-approved procurement plan under section 2807(e) |
23 | (3.1) (relating to duties of electric distribution companies) |
24 | beginning on the expiration date of the generation rate cap |
25 | for the provider. |
26 | (2) The phase-in plan shall ensure that the annual | <-- |
27 | percentage increase in the overall generation rate charged to | <-- |
28 | each customer class under the plan shall, if greater than | <-- |
29 | 10%, be phased in in three equal annual percentage increases, |
30 | provided that the increase in any one year shall not exceed |
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1 | 15% 20% of the overall rate in effect for the customer class | <-- |
2 | on the last day before the expiration of the generation rate |
3 | caps during the three-year period specified in subsection |
4 | (a). After appropriate notice and opportunity for hearing, |
5 | the commission may provide for an additional three-year |
6 | period for the recovery of deferred amounts under this |
7 | section. |
8 | (3) Such plan may offer the customer the option to begin | <-- |
9 | the phase-in period prior to the expiration of the generation |
10 | rate cap In addition to the phase-in plan provided under | <-- |
11 | paragraph (2), an electric distribution company may offer |
12 | customers the option to participate in a rate increase |
13 | prepayment plan, provided that the customer accrues interest |
14 | on any prepaid amount at a rate of at least 6% compounded | <-- |
15 | annually. Customer participation in any plan approved under |
16 | this subsection shall be voluntary and shall require the | <-- |
17 | affirmative consent of the customer. |
18 | (4) Such The following shall apply: | <-- |
19 | (i) The phase-in plan shall specify the means of |
20 | providing notice to customers of the option to |
21 | participate in such the plan on a voluntary basis. The | <-- |
22 | electric distribution company shall provide notice of the |
23 | phase-in plan in at least four billing statements prior |
24 | to the expiration of the generation rate cap. Notice |
25 | shall also be posted on the electric distribution |
26 | company's Internet website. The notice shall include all |
27 | of the following: |
28 | (A) Specific information on the phase-in plan |
29 | including potential benefits and costs with regard to |
30 | participating in the plan. |
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1 | (B) A form to elect participation in the phase- |
2 | in plan. |
3 | (C) A toll-free telephone number to allow a |
4 | customer to elect participation in the phase-in plan |
5 | by telephone or to receive additional information. |
6 | (ii) In order to participate in the phase-in plan, |
7 | the customer shall file a written or electronic election |
8 | to participate. |
9 | (5) In order to ensure competitive neutrality, the |
10 | phase-in plan or prepayment plan shall be implemented through |
11 | nonbypassable charges and credits on customer's bills |
12 | separate from the default generation charge, and the plans |
13 | shall be available to customers whether the customer chooses |
14 | to take electric generation service from the electric |
15 | distribution company or from an electric generation supplier. |
16 | (6) A customer participating in the phase-in plan can |
17 | elect to withdraw at any time by notifying the electric |
18 | distribution company by filing a written or electronic |
19 | election to withdraw. |
20 | (c) Recovery.--The default service provider shall be |
21 | eligible to fully recover the amount of the deferred payment | <-- |
22 | deferred amounts resulting from a customer's participation in | <-- |
23 | the phase-in plan from such customers by means of a | <-- |
24 | nonbypassable charge to such customers subject to the conditions |
25 | established in subsection (b). The charge shall be a |
26 | reconcilable automatic adjustment charge under section 1307 |
27 | (relating to sliding scale of rates; adjustments), shall be |
28 | applied to participating customers on a customer class basis, |
29 | shall not be included in other charges on the electric | <-- |
30 | distribution company's bill and shall not appear as a separate | <-- |
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1 | line item on the customer's bill. The recovery authorized under | <-- |
2 | this subsection may not be applied to customers who are not |
3 | participating in a plan under this section. Any plan approved by |
4 | the commission shall be considered a new service offered for the |
5 | first time under section 2804(f)(vi). 2804(4)(vi). | <-- |
6 | (d) Notice and collection of deferred payments.-- | <-- |
7 | (1) The default service provider shall provide adequate |
8 | notice to all customers participating in the phase-in plan of |
9 | the intent to collect deferred amounts provided for in |
10 | subsection (c). The default service provider shall provide |
11 | notice at least 90 days prior to collecting such deferred |
12 | amounts and continue to provide notice at 30-day intervals |
13 | thereafter. |
14 | (2) The default service provider shall charge a customer |
15 | for the current balance of the customer's deferred amounts at |
16 | the time the customer: |
17 | (i) leaves the default service provider's service |
18 | territory; |
19 | (ii) elects to withdraw from the phase-in plan as |
20 | provided under subsection (b)(6); or |
21 | (iii) chooses an electric generation supplier for |
22 | their electric generation service. |
23 | (e) Deferred costs amounts.--The For purposes of this | <-- |
24 | chapter, the commission shall permit such deferred costs amounts | <-- |
25 | to be recorded for accounting purposes on an electric |
26 | distribution company's books of account as a regulatory asset |
27 | where the electric distribution company is the default service | <-- |
28 | provider. |
29 | (e) (f) Credit.--In For customers participating in a | <-- |
30 | prepayment plan, in the event a customer leaves the default |
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1 | service provider's system service territory prior to the full | <-- |
2 | distribution of amounts collected, a credit, with interest, will | <-- |
3 | be applied to the customer's final bill and any remainder, with | <-- |
4 | interest, shall be refunded to the customer. |
5 | (f) (g) Intangible transition property.--An electric | <-- |
6 | distribution company's right to recover costs under an approved |
7 | phase-in plan shall be deemed intangible transition property for |
8 | purposes of section 2812 (relating to approval of transition |
9 | bonds), but not for any other section of Chapter 28 (relating to |
10 | restructuring of electric utility industry), and the commission |
11 | is authorized to issue a qualified rate order under section 2812 |
12 | with respect to such costs and to issue such other orders and |
13 | take such actions as may be necessary or proper for the electric |
14 | distribution company to issue transition bonds, as provided in |
15 | section 2812, secured by the electric distribution company's |
16 | right to recover such costs. |
17 | Section 3. This act shall take effect immediately. |
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