PRINTER'S NO. 1168
No. 1046 Session of 1997
INTRODUCED BY SCRIMENTI, SEYFERT, STABACK, SERAFINI, CURRY, BELARDI, TRAVAGLIO, READSHAW, YOUNGBLOOD, GRUITZA, TRELLO, MANDERINO, CAPPABIANCA, TIGUE, BEBKO-JONES, LEDERER, SHANER, WOJNAROSKI, OLASZ, MICHLOVIC, ROEBUCK, SURRA, JOSEPHS, MIHALICH AND RAMOS, MARCH 25, 1997
REFERRED TO COMMITTEE ON CONSUMER AFFAIRS, MARCH 25, 1997
AN ACT 1 Amending Title 66 (Public Utilities) of the Pennsylvania 2 Consolidated Statutes, further providing for rates. 3 The General Assembly of the Commonwealth of Pennsylvania 4 hereby enacts as follows: 5 Section 1. Section 102 of Title 66 of the Pennsylvania 6 Consolidated Statutes is amended by adding a definition to read: 7 § 102. Definitions. 8 Subject to additional definitions contained in subsequent 9 provisions of this part which are applicable to specific 10 provisions of this part, the following words and phrases when 11 used in this part shall have, unless the context clearly 12 indicates otherwise, the meanings given to them in this section: 13 "Affordable." Relating to the ability of customers to pay 14 their utility bills while maintaining an acceptable standard of 15 living, taking into consideration the financial circumstances of 16 customers and the community as indicated by factors such as
1 household income, age, family size, climate and other factors 2 bearing upon the cost of living in that particular community. 3 * * * 4 Section 2. Sections 315(a) and (c), 508, 523(a), 529(i), 5 1103(a), 1301, 1307(f)(3), 1308(c), 1309(a), 1318 heading and 6 (a), (b) and (d), 1324(c), 1325(a), 1327(b), 1703(c), 2107, 7 2904(a), 2906(b), 2914, 3004(a), 3005(d) and 3007 of Title 66 8 are amended to read: 9 § 315. Burden of proof. 10 (a) Reasonableness of rates.--In any proceeding upon the 11 motion of the commission, involving any proposed or existing 12 rate of any public utility, or in any proceedings upon complaint 13 involving any proposed increase in rates, the burden of proof to 14 show that the rate involved is just, affordable and reasonable 15 shall be upon the public utility. The commission shall give to 16 the hearing and decision of any such proceeding preference over 17 all other proceedings, and decide the same as speedily as 18 possible. 19 * * * 20 (c) Adequacy of services and facilities.--In any proceeding 21 upon the motion of the commission, involving the service or 22 facilities of any public utility, the burden of proof to show 23 that the service and facilities involved are adequate, 24 efficient, safe, affordable and reasonable shall be upon the 25 public utility. 26 * * * 27 § 508. Power of commission to vary, reform and revise 28 contracts. 29 The commission shall have power and authority to vary, 30 reform, or revise, upon a fair, reasonable, and equitable basis, 19970H1046B1168 - 2 -
1 any obligations, terms, or conditions of any contract heretofore 2 or hereafter entered into between any public utility and any 3 person, corporation, or municipal corporation, which embrace or 4 concern a public right, benefit, privilege, duty, or franchise, 5 or the grant thereof, or are otherwise affected or concerned 6 with the public interest and the general well-being of this 7 Commonwealth. Whenever the commission shall determine, after 8 reasonable notice and hearing, upon its own motion or upon 9 complaint, that any such obligations, terms, or conditions are 10 unjust, unreasonable, inequitable, unaffordable or otherwise 11 contrary or adverse to the public interest and the general well- 12 being of this Commonwealth, the commission shall determine and 13 prescribe, by findings and order, the just, reasonable, and 14 equitable, affordable obligations, terms, and conditions of such 15 contract. Such contract, as modified by the order of the 16 commission, shall become effective 30 days after service of such 17 order upon the parties to such contract. 18 § 523. Performance factor consideration. 19 (a) Considerations.--The commission shall consider, in 20 addition to all other relevant evidence of record, the 21 efficiency, effectiveness and adequacy of service of each 22 utility when determining just, affordable and reasonable rates 23 under this title. On the basis of the commission's consideration 24 of such evidence, it shall give effect to this section by making 25 such adjustments to specific components of the utility's claimed 26 cost of service as it may determine to be proper and 27 appropriate. Any adjustment made under this section shall be 28 made on the basis of specific findings upon evidence of record, 29 which findings shall be set forth explicitly, together with 30 their underlying rationale, in the final order of the 19970H1046B1168 - 3 -
1 commission.
2 * * *
3 § 529. Power of commission to order acquisition of small water
4 and sewer utilities.
5 * * *
6 (i) Burden of proof.--The Law Bureau shall have the burden
7 of establishing a prima facie case that the acquisition of the
8 small water or sewer utility would be in the public interest and
9 in compliance with the provisions of this section. Once the
10 commission determines that a prima facie case has been
11 established:
12 (1) the small water or sewer utility shall have the
13 burden of proving its ability to render adequate, efficient,
14 safe and reasonable service at just, affordable and
15 reasonable rates; and
16 (2) a proximate public utility providing the same type
17 of service as the small water or sewer utility shall have the
18 opportunity and burden of proving its financial, managerial
19 or technical inability to acquire and operate the small water
20 or sewer utility.
21 * * *
22 § 1103. Procedure to obtain certificates of public convenience.
23 (a) General rule.--Every application for a certificate of
24 public convenience shall be made to the commission in writing,
25 be verified by oath or affirmation, and be in such form, and
26 contain such information, as the commission may require by its
27 regulations. A certificate of public convenience shall be
28 granted by order of the commission, only if the commission shall
29 find or determine that the granting of such certificate is
30 necessary or proper for the service, accommodation, convenience,
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1 or safety of the public. The commission, in granting such 2 certificate, may impose such conditions as it may deem to be 3 just, affordable and reasonable. In every case, the commission 4 shall make a finding or determination in writing, stating 5 whether or not its approval is granted. Any holder of a 6 certificate of public convenience, exercising the authority 7 conferred by such certificate, shall be deemed to have waived 8 any and all objections to the terms and conditions of such 9 certificate. 10 * * * 11 § 1301. Rates to be just, affordable and reasonable. 12 (a) General rule.--Every rate made, demanded, or received by 13 any public utility, or by any two or more public utilities 14 jointly, shall be just, affordable and reasonable, and in 15 conformity with regulations or orders of the commission. 16 (b) Municipal corporations.--Only public utility service 17 being furnished or rendered by a municipal corporation, or by 18 the operating agencies of any municipal corporation, beyond its 19 corporate limits, shall be subject to regulation and control by 20 the commission as to rates, with the same force, and in like 21 manner, as if such service were rendered by a public utility. 22 § 1307. Sliding scale of rates; adjustments. 23 * * * 24 (f) Recovery of natural gas costs.-- 25 * * * 26 (3) Within 60 days following the end of such 12-month 27 period as the commission shall designate, each public utility 28 subject to this subsection shall file with the commission a 29 statement which specifies for such period: 30 (i) The total revenues received pursuant to this 19970H1046B1168 - 5 -
1 section. 2 (ii) The total gas expense incurred. 3 (iii) The difference between the amounts specified 4 by subparagraphs (i) and (ii). 5 (iv) Evidence explaining how actual costs incurred 6 differ from the costs allowed under paragraph (2) and why 7 such differences occurred. 8 (v) How these costs are consistent with a least cost 9 procurement policy as required by section 1318 (relating 10 to determination of just, affordable and reasonable 11 natural gas rates). 12 Such report shall be a matter of public record and copies 13 thereof shall be made available by the gas distributor to any 14 person upon request. Copies of the reports shall be filed with 15 the Office of Consumer Advocate at the same time as they are 16 filed with the commission. 17 * * * 18 § 1308. Voluntary changes in rates. 19 * * * 20 (c) Determination.--If, after such hearing, the commission 21 finds any such rate to be unjust, unaffordable or unreasonable, 22 or in anywise in violation of law, the commission shall 23 determine the just and reasonable rate to be charged or applied 24 by the public utility for the service in question, and shall fix 25 the same by order to be served upon the public utility and such 26 rate shall thereafter be observed until changed as provided by 27 this part. 28 * * * 29 § 1309. Rates fixed on complaint; investigation of costs of 30 production. 19970H1046B1168 - 6 -
1 (a) General rule.--Whenever the commission, after reasonable 2 notice and hearing, upon its own motion or upon complaint, finds 3 that the existing rates of any public utility for any service 4 are unjust, unaffordable, unreasonable, or in anywise in 5 violation of any provision of law, the commission shall 6 determine the just and reasonable rates, including maximum or 7 minimum rates, to be thereafter observed and in force, and shall 8 fix the same by order to be served upon the public utility, and 9 such rates shall constitute the legal rates of the public 10 utility until changed as provided in this part. Whenever a 11 public utility does not itself produce or generate that which it 12 distributes, transmits, or furnishes to the public for 13 compensation, but obtains the same from another source, the 14 commission shall have the power and authority to investigate the 15 cost of such production or generation in any investigation of 16 the reasonableness of the rates of such public utility. 17 * * * 18 § 1318. Determination of just, affordable and reasonable 19 natural gas rates. 20 (a) General rule.--In establishing just, affordable and 21 reasonable rates for those natural gas distribution utilities 22 with gross intrastate operating revenues in excess of 23 $40,000,000 under section 1307(f) (relating to sliding scale of 24 rates; adjustments) or 1308(d) (relating to voluntary changes in 25 rates) or any other rate proceeding, the commission shall 26 consider the materials provided by the utilities pursuant to 27 section 1317 (relating to regulation of natural gas costs). No 28 rates for a natural gas distribution utility shall be deemed 29 just, affordable and reasonable unless the commission finds that 30 the utility is pursuing a least cost fuel procurement policy, 19970H1046B1168 - 7 -
1 consistent with the utility's obligation to provide safe,
2 adequate and reliable service to its customers. In making such a
3 determination, the commission shall be required to make specific
4 findings which shall include, but need not be limited to,
5 findings that:
6 (1) The utility has fully and vigorously represented the
7 interests of its ratepayers in proceedings before the Federal
8 Energy Regulatory Commission.
9 (2) The utility has taken all prudent steps necessary to
10 negotiate favorable gas supply contracts and to relieve the
11 utility from terms in existing contracts with its gas
12 suppliers which are or may be adverse to the interests of the
13 utility's ratepayers.
14 (3) The utility has taken all prudent steps necessary to
15 obtain lower cost gas supplies on both short-term and long-
16 term bases both within and outside the Commonwealth,
17 including the use of gas transportation arrangements with
18 pipelines and other distribution companies.
19 (4) The utility has not withheld from the market or
20 caused to be withheld from the market any gas supplies which
21 should have been utilized as part of a least cost fuel
22 procurement policy.
23 (b) Limitation on gas purchased from affiliates.--In any
24 instance in which a gas distribution utility purchases all or
25 part of its gas supplies from an affiliated interest, as that
26 term is defined in section 2101 (relating to definition of
27 affiliated interest), the commission, in addition to the
28 determinations and findings set forth in subsection (a), shall
29 be required to make specific findings with regard to the
30 justness, affordability and reasonableness of all such
19970H1046B1168 - 8 -
1 purchases. Such findings shall include, but not be limited to 2 findings: 3 (1) That the utility has fully and vigorously attempted 4 to obtain less costly gas supplies on both short-term and 5 long-term bases from nonaffiliated interests. 6 (2) That each contract for the purchase of gas from its 7 affiliated interest is consistent with a least cost fuel 8 procurement policy. 9 (3) That neither the utility nor its affiliated interest 10 has withheld from the market any gas supplies which should 11 have been utilized as part of a least cost fuel procurement 12 policy. 13 * * * 14 (d) Other regulatory approvals.--The fact that a contract or 15 rate has been approved by a Federal regulatory agency for 16 interstate ratemaking purposes shall not, in and of itself, be 17 adequate to satisfy the utility's burden of proof that gas 18 prices and volumes associated with such contract or rate are 19 just, affordable and reasonable for purposes of this section. 20 * * * 21 § 1324. Residential telephone service rates based on duration 22 or distance of call. 23 * * * 24 (c) Rate relationship.--In addition to any other 25 requirements imposed by this title, the rates for services 26 required or permitted pursuant to subsections (a) and (b) shall 27 be maintained at just, affordable and reasonable levels in 28 comparison to one another. 29 * * * 30 § 1325. Local exchange service increases; limitation. 19970H1046B1168 - 9 -
1 (a) General rule.--In any rate proceeding pursuant to 2 section 1308 (relating to voluntary changes in rates), no public 3 utility shall be granted a percentage increase in local exchange 4 service unless that percentage increase is just, affordable and 5 reasonable. In no event shall the public utility be granted an 6 increase in local exchange rates which is greater than the 7 overall average percentage increase in total intrastate revenues 8 authorized by the commission unless the utility proves by record 9 evidence that a greater percentage increase for local exchange 10 service is justified based upon the cost of providing that 11 service. 12 * * * 13 § 1327. Acquisition of water and sewer utilities. 14 * * * 15 (b) Procedure.--The commission, upon application by a public 16 utility, person or corporation which has agreed to acquire 17 property from another public utility, municipal corporation or 18 person, may approve an inclusion in rate base in accordance with 19 subsection (a) prior to the acquisition and prior to a 20 proceeding under this chapter to determine just, affordable and 21 reasonable rates if: 22 (1) the applicant has provided notice of the proposed 23 acquisition and any proposed increase in rates to the 24 customers served by the property to be acquired, in such form 25 and manner as the commission, by regulation, shall require; 26 (2) the applicant has provided notice to its customers, 27 in such form and manner as the commission, by regulation, 28 shall require, if the proposed acquisition would increase 29 rates to the acquiring public utility's customers by an 30 amount in excess of 1% of the acquiring public utility's base 19970H1046B1168 - 10 -
1 annual revenue; 2 (3) the applicant has provided notice of the application 3 to the Director of Trial Staff and the Consumer Advocate; and 4 (4) in addition to any other information required by the 5 commission, the application includes a full description of 6 the proposed acquisition and a plan for reasonable and 7 prudent investments to assure that the customers served by 8 the property to be acquired will receive adequate, efficient, 9 safe and reasonable service. 10 * * * 11 § 1703. Depreciation accounts; reports. 12 * * * 13 (c) Use of estimates.--The commission shall not be bound in 14 rate proceedings to accept, as just, affordable and reasonable 15 for rate-making purposes, estimates of annual depreciation 16 established under the provisions of this section, but in such 17 rate proceedings it shall give consideration to statements 18 submitted under this section, in addition to such other factors 19 as may be relevant. 20 § 2107. Federal regulatory agencies. 21 The provisions of this chapter shall not be applicable to the 22 rates and related terms and conditions for the interstate 23 transmission of electricity, natural gas, liquified natural gas, 24 substitute natural gas, liquified propane gas or naphtha which 25 have been submitted to and approved by a Federal regulatory 26 agency having jurisdiction thereof, except that the commission 27 may regulate the volume of such purchases. This section shall 28 not apply to any proceeding under section 1317 (relating to 29 regulation of natural gas costs) or 1318 (relating to 30 determination of just, affordable and reasonable natural gas 19970H1046B1168 - 11 -
1 rates).
2 § 2904. Joint use of telephone and telegraph facilities.
3 (a) Through lines for continuous service.--The commission
4 may, upon complaint or upon its own motion, after reasonable
5 notice and hearing, by order, require any two or more public
6 utilities, whose lines or wires form a continuous line of
7 communication, or could be made to do so by the construction and
8 maintenance of suitable connections or the joint use of
9 facilities, or the transfer of messages at common points,
10 between different localities which cannot be communicated with,
11 or reached by, the lines of either public utility alone, where
12 such service is not already established or provided, to
13 establish and maintain through lines within this Commonwealth
14 between two or more such localities. The rate for such service
15 shall be just, affordable and reasonable and the commission
16 shall have power to establish the same, and declare the portion
17 thereof to which each company affected thereby is entitled and
18 the manner in which the same must be secured and paid. All
19 facilities necessary to establish such service shall be
20 constructed and maintained in such manner and under such rules,
21 with such division of expense and labor, as may be required by
22 the commission.
23 * * *
24 § 2906. Dissemination of telephone numbers and other
25 identifying information.
26 * * *
27 (b) Charge prohibited.--There shall be no charge to the
28 caller who requests that the caller's telephone number and other
29 identifying information be withheld on a per-call basis. The
30 commission may approve a charge to the caller who requests that
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1 the caller's telephone number and other identifying information 2 be withheld on a per-line basis if the commission finds, after 3 notice to all customers and an opportunity for hearing, that the 4 charge is just, affordable and reasonable and that the charge 5 should be imposed on the caller. Tariff rates shall not apply to 6 victims of domestic violence receiving services from a domestic 7 violence program or protected by a court order nor to social 8 welfare agencies, such as women's shelters, health and 9 counseling centers, public service hotlines and their staffs. In 10 addition, the commission shall direct that the tariff rates 11 shall not apply to customers who order the per-line blocking 12 service within 60 days of its introduction or within 60 days of 13 any request for new telephone service or transfer of existing 14 telephone service. The commission shall also direct that, as 15 soon as practicable, any public utility or any other person, 16 partnership, association or corporation that makes use of the 17 facilities of a public utility which provides this service shall 18 also provide to the calling party only the ability to 19 selectively unblock at no charge on a per-call basis a blocked 20 line using a means which differs from the means to activate per- 21 call blocking. The commission, in the interest of balancing 22 respective privacy interests, shall also permit a tariffed 23 service that automatically prevents the completion of telephone 24 calls to customers who do not wish to receive calls from callers 25 that withhold their telephone number or other identifying 26 information; the terms and conditions of such a tariff shall be 27 subject to commission approval. 28 * * * 29 § 2914. Establishment of just, affordable and reasonable rates. 30 The commission shall ensure that all public and semipublic 19970H1046B1168 - 13 -
1 coin telephone service rates for local and intrastate calls are 2 just, affordable and reasonable. 3 § 3004. Commission review and approval of petition and plan. 4 (a) Authorization.--In determining just, affordable and 5 reasonable rates in accordance with section 1301 (relating to 6 rates to be just, affordable and reasonable), the commission may 7 authorize a local exchange telecommunications company to set 8 rates based on an alternative form of regulation pursuant to a 9 plan approved by the commission under this chapter. 10 * * * 11 § 3005. Competitive services. 12 * * * 13 (d) Reclassification.--The commission shall have the 14 authority to reclassify a telecommunications service or other 15 service or business activity that it has previously found to be 16 competitive if, after notice and hearing, it determines, upon 17 application of the criteria set forth in this chapter, that 18 sufficient competition is no longer present, that the local 19 exchange company has engaged in unfair competition with respect 20 to the service or that the local exchange company has failed to 21 provide nondiscriminatory access in the provision of the 22 service. If the commission finds that a reclassification is 23 necessary, the commission must determine whether the rate for 24 the telecommunications service or other service or business 25 activity is just, affordable and reasonable in accordance with 26 section 1301 (relating to rates to be just, affordable and 27 reasonable). If the telecommunications service or other service 28 or business activity subsequently becomes competitive, the local 29 exchange telecommunications company shall petition the 30 commission to make a determination of competitiveness for the 19970H1046B1168 - 14 -
1 service under the provisions of this chapter.
2 * * *
3 § 3007. Determination of access charges.
4 Local exchange telecommunications companies serving more than
5 250,000 access lines in this Commonwealth as of the effective
6 date of this chapter shall comply with the following provisions:
7 (1) Local exchange telecommunications companies shall
8 have an effective per-minute switched-access service price
9 that shall not exceed 12¢ for the first five years from the
10 implementation date of the petition and plan, unless the
11 company can justify a higher rate based on the total cost of
12 switched-access services. The per-minute switched-access
13 service price includes both originating and terminating rates
14 and excludes nonrecurring rates. A local exchange
15 telecommunications company with an effective per-minute
16 switched-access service price greater than 12¢ on the
17 implementation date of the petition and plan shall provide
18 for a revenue-neutral phasedown to not more than 12¢ in not
19 more than three equal annual increments commencing with the
20 implementation of the petition and plan. Upon the sixth year
21 from the implementation date of the plan, the commission
22 shall review the per-minute switched-access service price
23 and, after notice and hearing, determine a just, affordable
24 and reasonable per-minute switched-access service price.
25 (2) Local exchange telecommunications companies with an
26 effective per-minute switched-access service price at or
27 below 12¢, including both originating and terminating rates
28 and excluding nonrecurring rates, may not increase switched-
29 access prices either in conjunction with the filing or
30 consideration of a petition and plan or for four years from
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1 the approval date of a petition, not to extend beyond 2 December 31, 1999, unless the company can show that, absent 3 an increase, total switched-access revenues would be below 4 total switched-access cost. Revenue-neutral access tariff 5 rate changes and restructures may be proposed subject to 6 commission approval. 7 (3) Upon the commission's evaluation of the consistency 8 of tariff rates and structures with the interstate access 9 service tariff, revenue-neutral tariff rate changes and 10 restructures may be proposed by local exchange 11 telecommunications companies in order to implement the 12 results of the commission evaluation. No rate change or 13 restructure shall be approved if it constitutes or promotes 14 unfair competition. Rate changes and restructures for access 15 services submitted in accordance with this paragraph are 16 subject to commission approval, after notice and hearing. 17 (4) Any existing limits, by tariff or otherwise, on the 18 amount of revenue that a local exchange telecommunications 19 company may recover from the carrier common line rate shall 20 continue at the effective date of this chapter. At the 21 conclusion of any phasedown period provided in paragraph (1), 22 the annual revenues to be derived from carrier common line 23 rates shall be no more than the total carrier common line 24 revenues applicable to the final 12 months of any phasedown 25 period. 26 Section 3. This act shall take effect in 60 days. B6L66DMS/19970H1046B1168 - 16 -