PRINTER'S NO.  610

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

SENATE BILL

 

No.

580

Session of

2009

  

  

INTRODUCED BY BROWNE, GORDNER, BRUBAKER, ALLOWAY, RAFFERTY, WAUGH AND MUSTO, MARCH 6, 2009

  

  

REFERRED TO CONSUMER PROTECTION AND PROFESSIONAL LICENSURE, MARCH 6, 2009  

  

  

  

AN ACT

  

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Amending Title 66 (Public Utilities) of the Pennsylvania

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Consolidated Statutes, defining "overall rate" and "rate

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phase-in plan"; and providing for rate phase-in plans.

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The General Assembly of the Commonwealth of Pennsylvania

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hereby enacts as follows:

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Section 1.  Section 102 of Title 66 of the Pennsylvania

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Consolidated Statutes is amended by adding definitions to read:

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§ 102.  Definitions.

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Subject to additional definitions contained in subsequent

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provisions of this part which are applicable to specific

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provisions of this part, the following words and phrases when

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used in this part shall have, unless the context clearly

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indicates otherwise, the meanings given to them in this section:

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* * *

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"Overall rate."  The sum of all retail rates charged by an

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electric distribution company for electric service, including

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all applicable riders and surcharges.

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"Rate phase-in plan" or "plan."  A plan filed with the

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Pennsylvania Public Utility Commission by an electric

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distribution company solely to phase in any initial increase in

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the rate for generation service that may occur upon the

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expiration of that electric distribution company's generation

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rate cap. Such plan shall not address or affect any other rate

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changes filed by the electric distribution company.

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* * *

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Section 2.  Title 66 is amended by adding a section to read:

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§ 2816.  Rate phase-in plan.

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(a)  General rule.--Within 90 days of the effective date of

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this section, each electric distribution company shall file a

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rate phase-in plan with the commission to provide residential

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and small commercial customers that take service from a default

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service provider the option to phase in any initial increase in

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the price for generation service that may occur upon the

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expiration of the generation rate cap for such provider

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specified in section 2804(4) (relating to standards for

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restructuring of electric industry) or a restructuring plan in

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section 2806(f) (relating to implementation, pilot programs and

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performance-based rates) and ending no later than three years

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after such expiration date. Customer participation in any plan

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approved under this subsection shall be voluntary.

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(b)  Conditions.--Each rate phase-in plan shall be subject to

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commission approval and shall meet the following conditions:

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(1)  The plan shall offer a transition to prices at the

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level permitted pursuant to a commission-approved procurement

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plan beginning on the expiration date of the generation rate

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cap for the provider.

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(2)  The plan shall ensure that the initial increase in

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the rate for generation service charged to each customer

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class under the plan shall be phased in in annual percentage

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increases, provided that the increase in any one year shall

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not exceed 15% of the overall rate in effect for that

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customer class on the last day of the prior calendar year

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during the three-year period specified in subsection (a). The

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commission shall provide for no more than an additional

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three-year period, at the option of the electric distribution

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company, for the recovery of all amounts recoverable under

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section 2807(e)(3) (relating to duties of electric

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distribution companies) and deferred amounts with carrying

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charges under this section.

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(3)  The plan may offer the customer the option to begin

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the phase-in period prior to the expiration of the generation

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rate cap, provided that the customer accrues interest on any

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prepaid amount at a rate of 6% compounded annually. Customer

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participation in any plan approved under this subsection

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shall be voluntary.

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(4)  The plan shall specify the means of providing notice

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to customers of the option to participate in such plan on a

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voluntary basis.

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(c)  Recovery.--The default service provider shall fully

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recover the expenses associated with implementing a plan and the

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amount of the deferred payments resulting from customers'

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participation in the plan and a carrying charge of 6% compounded

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annually on the deferred payments from such customers by means

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of a nonbypassable charge to each customer class, subject to the

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conditions established under subsection (b). Such charge shall

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be a reconcilable automatic adjustment charge under section 1307

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(relating to sliding scale of rates; adjustments), shall be

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applied to participating customers on a customer class basis,

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shall be included in other charges on the electric distribution

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company's bill and shall not appear as a separate line item on a

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customer's bill. Any rate phase-in plan approved by the

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commission shall be considered a new service offered for the

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first time under section 2804(4)(vi).

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(d)  Deferred amounts.--The commission shall permit such

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deferred costs and associated carrying charges to be recorded

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for accounting purposes on an electric distribution company's

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books of account as a regulatory asset where the electric

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distribution company is the default service provider.

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(e)  Credit.--In the event a customer enrolled in a plan that

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begins prior to the expiration of the electric distribution

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company's generation rate cap leaves the default service

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provider's system prior to the full distribution of amounts

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collected, a credit will be applied to the customer's final bill

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and any remainder shall be refunded to the customer.

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(f)  Intangible transition property.--An electric company's

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right to recover costs under an approved phase-in plan shall be

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deemed intangible transition property for the purposes of

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section 2812 (relating to approval of transition bonds), but not

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for any other section of Chapter 28 (relating to restructuring

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of electric utility industry), and the commission is authorized

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to issue a qualified rate order under section 2812 with respect

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to such costs and to issue such other orders and take such

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actions as may be necessary or proper for the electric

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distribution company to issue transition bonds, as provided in

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section 2812, secured by the electric distribution company's

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right to recover such costs.

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Section 3.  This act shall take effect in 60 days.

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