PRINTER'S NO. 785
No. 716 Session of 2007
INTRODUCED BY MUSTO, FUMO, BOSCOLA, WASHINGTON, C. WILLIAMS, COSTA, FONTANA, MELLOW, KITCHEN, STACK AND FERLO, APRIL 2, 2007
REFERRED TO CONSUMER PROTECTION AND PROFESSIONAL LICENSURE, APRIL 2, 2007
AN ACT 1 Amending Title 66 (Public Utilities) of the Pennsylvania 2 Consolidated Statutes, further providing for the definition 3 of "public utility"; adding a definition of "micro-grid"; 4 further providing for duties of electric distribution 5 companies; and providing for micro-grids. 6 The General Assembly of the Commonwealth of Pennsylvania 7 hereby enacts as follows: 8 Section 1. The definition of "public utility" in section 102 9 of Title 66 of the Pennsylvania Consolidated Statutes is amended 10 to read: 11 § 102. Definitions. 12 Subject to additional definitions contained in subsequent 13 provisions of this part which are applicable to specific 14 provisions of this part, the following words and phrases when 15 used in this part shall have, unless the context clearly 16 indicates otherwise, the meanings given to them in this section: 17 * * * 18 "Public utility."
1 (1) Any person or [corporations] corporation now or
2 hereafter owning or operating in this Commonwealth equipment
3 or facilities for:
4 (i) Producing, generating, transmitting,
5 distributing or furnishing natural or artificial gas,
6 electricity, or steam for the production of light, heat,
7 or power to or for the public for compensation.
8 (ii) Diverting, developing, pumping, impounding,
9 distributing, or furnishing water to or for the public
10 for compensation.
11 (iii) Transporting passengers or property as a
12 common carrier.
13 (iv) Use as a canal, turnpike, tunnel, bridge,
14 wharf, and the like for the public for compensation.
15 (v) Transporting or conveying natural or artificial
16 gas, crude oil, gasoline, or petroleum products,
17 materials for refrigeration, or oxygen or nitrogen, or
18 other fluid substance, by pipeline or conduit, for the
19 public for compensation.
20 (vi) Conveying or transmitting messages or
21 communications, except as set forth in paragraph (2)(iv),
22 by telephone or telegraph or domestic public land mobile
23 radio service including, but not limited to, point-to-
24 point microwave radio service for the public for
25 compensation.
26 (vii) Sewage collection, treatment, or disposal for
27 the public for compensation.
28 (viii) Providing limousine service in a county of
29 the second class pursuant to Subchapter B of Chapter 11
30 (relating to limousine service in counties of the second
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1 class). 2 (2) The term does not include: 3 (i) Any person or corporation, not otherwise a 4 public utility, who or which furnishes service only to 5 himself or itself. 6 (ii) Any bona fide cooperative association which 7 furnishes service only to its stockholders or members on 8 a nonprofit basis. 9 (iii) Any producer of natural gas not engaged in 10 distributing such gas directly to the public for 11 compensation. 12 (iv) Any person or corporation, not otherwise a 13 public utility, who or which furnishes mobile domestic 14 cellular radio telecommunications service. 15 (v) Any building or facility owner/operators who 16 hold ownership over and manage the internal distribution 17 system serving such building or facility and who supply 18 electric power and other related electric power services 19 to occupants of the building or facility. 20 (vi) Electric generation supplier companies, except 21 for the limited purposes as described in sections 2809 22 (relating to requirements for electric generation 23 suppliers) and 2810 (relating to revenue-neutral 24 reconciliation). 25 (vii) Any person or corporation who or which 26 furnishes natural gas produced from alternative sources, 27 including, but not limited to, landfill gas, coal-mine 28 methane or coal-bed methane and synthetic natural gas 29 produced from the gasification of coal or other 30 feedstocks directly to no more than four customers. A 20070S0716B0785 - 3 -
1 person or corporation who or which wishes to furnish 2 natural gas produced from alternative sources to more 3 than four customers and be excluded from this definition 4 must request approval from the commission. The commission 5 shall approve the request if the person or corporation 6 provides a private rather than a public service. 7 (viii) Micro-grids, as that term is defined by 8 section 2803 (relating to definitions). 9 (3) For the purposes of sections 2702 (relating to 10 construction, relocation, suspension and abolition of 11 crossings), 2703 (relating to ejectment in crossing cases) 12 and 2704 (relating to compensation for damages occasioned by 13 construction, relocation or abolition of crossings) and those 14 portions of sections 1501 (relating to character of service 15 and facilities), 1505 (relating to proper service and 16 facilities established on complaint; authority to order 17 conservation and load management programs) and 1508 (relating 18 to reports of accidents), as those sections or portions 19 thereof relate to safety only, a municipal authority or 20 transportation authority organized under the laws of this 21 Commonwealth shall be considered a public utility when it 22 owns or operates, for the carriage of passengers or goods by 23 rail, a line of railroad composed of lines formerly owned or 24 operated by the Pennsylvania Railroad, the Penn-Central 25 Transportation Company, the Reading Company or the 26 Consolidated Rail Corporation. 27 * * * 28 Section 2. Section 2803 of Title 66 is amended by adding a 29 definition to read: 30 § 2803. Definitions. 20070S0716B0785 - 4 -
1 The following words and phrases when used in this chapter 2 shall have the meanings given to them in this section unless the 3 context clearly indicates otherwise: 4 * * * 5 "Micro-grid." A small power generation and distribution 6 network directly serving multiple consumers with the electric 7 generating facility located near or on the same site as the 8 consumers, that may be interconnected to the transmission and 9 distribution system and, if so, operates independently from it. 10 * * * 11 Section 3. Section 2807(e) of Title 66 is amended and the 12 section is amended by adding a subsection to read: 13 § 2807. Duties of electric distribution companies. 14 * * * 15 (e) Obligation to serve.--An electric distribution company's 16 obligation to provide electric service following implementation 17 of restructuring and the choice of alternative generation by a 18 customer is revised as follows: 19 (1) While an electric distribution company collects 20 either a competitive transition charge or an intangible 21 transition charge or until 100% of its customers have choice, 22 whichever is longer, the electric distribution company shall 23 continue to have the full obligation to serve, including the 24 connection of customers, the delivery of electric energy and 25 the production or acquisition of electric energy for 26 customers. 27 (2) At the end of the transition period, the commission 28 shall promulgate regulations to define the electric 29 distribution company's obligation to connect and deliver and 30 acquire electricity under paragraph (3) that will exist at 20070S0716B0785 - 5 -
1 the end of the phase-in period. 2 (3) [If a customer contracts for electric energy and it 3 is not delivered or if a customer does not choose an 4 alternative electric generation supplier, the] 5 (i) The electric distribution company or commission- 6 approved alternative supplier shall acquire [electric 7 energy at prevailing market prices to serve that customer 8 and shall recover fully all reasonable costs.] a 9 portfolio of resources through one or more competitive 10 procurement processes approved by the commission to serve 11 customers who contract for electric energy and do not 12 receive it or to customers who do not choose an 13 alternative electric generation supplier, and shall 14 recover fully all reasonable costs. The competitive 15 procurement process or processes to secure electricity 16 shall be conducted by customer rate class as determined 17 and approved by the commission. The generation rates 18 procured by the competitive procurement process or 19 processes may not allow the cross-subsidization of one 20 customer rate class by another. 21 (ii) In addition to complying with the requirements 22 of the act of November 30, 2004 (P.L.1672, No.213), known 23 as the Alternative Energy Portfolio Standards Act, the 24 resource portfolio acquired pursuant to this paragraph 25 shall be designed to produce the lowest reasonable rates 26 on a long-term basis and shall reflect a diversity of 27 supply-side and demand-side resources, a diversity of 28 fuel types and a prudent mix of long-term, short-term and 29 spot-market purchases. A long-term contract shall be 30 permitted only for newly constructed or proposed to be 20070S0716B0785 - 6 -
1 constructed alternative energy sources, as that term is 2 defined in section 2 of the Alternative Energy Portfolio 3 Standards Act, and new generation resources determined by 4 the commission to be required for reliability as set 5 forth in subparagraph (v). 6 (iii) An electric distribution company or 7 commission-approved alternative supplier may enter into a 8 long-term contract directly with a Tier I alternative 9 energy source, as that term is defined in section 2 of 10 the Alternative Energy Portfolio Standards Act, for 11 electricity, alternative energy credits, or both, without 12 engaging in a commission-approved competitive procurement 13 process. The costs associated with the contract must be 14 consistent with the average cost of Tier I alternative 15 energy credits in other jurisdictions of the PJM 16 Interconnection, L.L.C., regional transmission 17 organization or its successor, accounting for the effect 18 that public subsidies have on the price of the 19 alternative energy credit. The commission shall determine 20 when there is significant competition among Tier I 21 alternative energy sources that the acts authorized by 22 this subpart are no longer necessary. 23 (iv) An electric distribution company or commission- 24 approved alternative supplier shall enter into a contract 25 with energy efficiency and other demand-side resources, 26 instead of electric generation facilities, to meet any 27 increases in energy usage and peak demand so long as the 28 cost of energy efficiency and demand-side resources is 29 less than the cost of electric generation. To the extent 30 that electric generation is necessary to meet additional 20070S0716B0785 - 7 -
1 load growth, the electric distribution company or 2 commission-approved alternative supplier shall make a 3 good faith effort to procure electricity from alternative 4 energy sources specified in the Alternative Energy 5 Portfolio Standards Act. 6 (v) An electric distribution company or commission- 7 approved alternative supplier may enter into a contract 8 approved by the commission to enable the construction of 9 new electric generation resources upon a determination by 10 the commission that new electric generation resources are 11 required to ensure reliability. The commission shall 12 ensure that a contract for new electric generation 13 resources are the lowest cost option for ensuring 14 reliability. 15 (vi) The portfolio of resources acquired pursuant to 16 this subsection shall be acquired separately for 17 residential customers, small business customers and large 18 customers as those customer classes are defined by the 19 commission for each electric distribution company or 20 commission-approved alternative supplier. 21 (vii) For the purposes of this paragraph "long-term 22 contract" shall be defined as a contract length of more 23 than three years. "Short-term contract" shall be defined 24 as a contract length of three years or less. 25 (4) If a customer that chooses an alternative supplier 26 and subsequently desires to return to the local distribution 27 company for generation service, the local distribution 28 company shall treat that customer exactly as it would any new 29 applicant for energy service. 30 (5) No later than January 1, 2011, an electric 20070S0716B0785 - 8 -
1 distribution company or commission-approved alternative 2 supplier shall provide a rate that shall change no more 3 frequently than on an annual basis as the default option for 4 residential and small business customers. 5 (6) One year from the effective date of this paragraph 6 or at the end of the applicable generation rate cap period, 7 whichever is later, an electric distribution company and 8 commission-approved alternative supplier shall offer a time- 9 of-use pilot rate to residential and small business customers 10 voluntarily choosing to be part of the pilot program. An 11 electric distribution and commission-approved alternative 12 supplier shall provide to the commission a description of its 13 time-of-use pilot rate program and shall annually report on 14 the participation in the pilot program and the efficacy of 15 the pilot program in affecting energy demand and consumption. 16 (7) Within six years of the effective date of this 17 paragraph, an electric distribution company shall furnish its 18 customers with technology capable of allowing all customers 19 to participate in pricing programs that reflect time of use. 20 The electric distribution company may recover the net costs 21 associated with technology required to implement time-of-use 22 rates. Cost recovery shall reflect the operating cost savings 23 to the electric distribution company from the introduction of 24 technology to implement time-of-use rates. Customer 25 participation in time-of-use pricing shall be voluntary. 26 (8) By January 1, 2011, or at an electric distribution 27 company or commission-approved alternative supplier's next 28 default service offering, whichever is sooner, the electric 29 distribution company or commission-approved alternative 30 supplier may offer large customers any rate including, but 20070S0716B0785 - 9 -
1 not limited to, a cost-based rate for any duration agreed 2 upon by the electric distribution company or commission- 3 approved alternative supplier and the large customer. 4 Contract rates entered into pursuant to this paragraph shall 5 be subject to review by the commission in order to ensure 6 that no costs related to the rates are borne by other 7 customers or customer classes. 8 (9) The commission shall require an electric 9 distribution company to offer customers the choice of 10 phasing-in over a period of up to three years any generation 11 rate increases resulting from the end of existing generation 12 rate caps which are approved by the commission. 13 (f) Retail electricity surcharge.-- 14 (1) Each electric distribution company shall apply and 15 collect a charge of $0.0005 per kWh for each kWh of retail 16 electricity sold in this Commonwealth and shall pay that 17 charge to the State Treasurer through the Department of 18 Revenue on a quarterly basis within 30 days after the close 19 of the quarter in which collected. 20 (2) Notwithstanding the provisions in paragraph (1), in 21 no event shall the annual payment from any single customer 22 exceed $10,000. 23 (3) The State Treasurer shall transfer all funds 24 received pursuant to this subsection to the Energy 25 Development Fund within 30 days of receipt of the funds. 26 (4) The charge shall appear as a separate charge on the 27 distribution bill of each retail electricity customer. The 28 charge shall be applied beginning 90 days after the effective 29 date of this subsection and shall expire on the 30th 30 anniversary of the date it was first applied. 20070S0716B0785 - 10 -
1 (5) Funds collected under this subsection shall be used 2 by the Pennsylvania Energy Development Authority, 3 Redevelopment Capital Assistance Program and the Ben Franklin 4 Technology Development Authority for the following purposes: 5 (i) To fulfill the obligations of a bond for 6 alternative energy projects, including: 7 (A) Funding for alternative and renewable energy 8 projects, including alternative and renewable 9 transportation fuels. 10 (B) Funding for the purchase of tradable 11 instruments, including, but not limited to, 12 alternative and renewable energy credits. 13 (C) Funding for demand-side management measures 14 for all customer classes, including, but not limited 15 to, energy efficiency building construction, 16 equipment and renovation. 17 (D) Rebates or grants for solar photovoltaic, 18 other solar electric or solar thermal installations. 19 (E) Production grants or rebates to solar 20 equipment manufacturers. 21 (F) Funding for weatherization and other usage 22 reduction measures for low-income electricity and 23 natural gas customers. 24 (G) To acquire, through purchase or otherwise, 25 hold, sell, transfer and redistribute electric power, 26 natural gas, liquid fuel, transportation fuel and any 27 other energy commodity. 28 (2) Reasonable administrative costs associated with 29 utilizing the funds. 30 Section 4. Title 66 is amended by adding a section to read: 20070S0716B0785 - 11 -
1 § 2813. Micro-grids. 2 Customers may have their electricity supplied by micro-grids 3 subject to the following: 4 (1) A micro-grid shall be limited to four customers. 5 Micro-grids seeking to supply electricity to more than four 6 customers may be approved by the commission on a case-by-case 7 basis. The commission shall approve such requests if the 8 micro-grid, while serving more than four customers, provides 9 a private rather than a public service. 10 (2) The commission shall promulgate regulations on the 11 fees related to micro-grid interconnection, standby power and 12 other services related to the reliable and safe functioning 13 of micro-grids. Fees associated with this section shall be 14 the lowest cost necessary to ensure adequate system 15 reliability and safety. 16 (3) Micro-grids may sell power back to the electric 17 transmission and distribution system at the spot or hourly 18 wholesale price of electricity at the nearest appropriate 19 node that is part of the regional transmission organization. 20 Section 5. This act shall take effect immediately. B22L66RLE/20070S0716B0785 - 12 -