THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

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 AND YUDICHAK, MARCH 17, 2009

REFERRED TO COMMITTEE ON CONSUMER AFFAIRS, MARCH 17, 2009  

AN ACT

Amending Title 66 (Public Utilities) of the Pennsylvania

Consolidated Statutes, further providing for the definition

of "overall rate"; and providing for rate phase-in plans.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 2803 of Title 66 of the Pennsylvania

Consolidated Statutes is amended by adding a definition to read:

§ 2803.  Definitions.

The following words and phrases when used in this chapter

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

* * *

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

electric distribution company for electric service including all

applicable riders and surcharges.

* * *

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

§ 2816.  Rate phase-in plans.

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

this section, each electric distribution company shall file a

competitively neutral phase-in plan with the commission to

provide residential and small commercial customers the option to

phase in any initial increase in the price for generation

service that may occur upon the expiration of the generation

rate cap for such provider specified in section 2804(4)

(relating to standards for restructuring of electric industry)

or a restructuring plan in section 2806(f) (relating to

implementation, pilot programs and performance-based rates) and

ending no later than three years after such expiration date.

Customer participation in any plan approved under this

subsection shall be voluntary.

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

commission approval and shall meet the following conditions:

(1)  Such plan shall offer a gradual transition to prices

at the level permitted pursuant to a commission-approved

procurement plan under section 2807(e)(3.1) (relating to

duties of electric distribution companies) beginning on the

expiration date of the generation rate cap for the provider.

(2)  The plan shall ensure that the annual percentage

increase in the overall rate charged to each customer class

under the plan shall be phased in in three equal annual

percentage increases, provided that the increase in any one

year shall not exceed 15% of the overall rate in effect for

the customer class on the last day before the expiration of

the generation rate caps during the three-year period

specified in subsection (a). After appropriate notice and

opportunity for hearing, the commission may provide for an

additional three-year period for the recovery of deferred

amounts under this section.

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

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

rate cap, provided that the customer accrues interest on any

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

participation in any plan approved under this subsection

shall be voluntary.

(4)  Such plan shall specify the means of providing

notice to customers of the option to participate in such plan

on a voluntary basis.

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

eligible to fully recover the amount of the deferred payment

resulting from a customer's participation in the plan from such

customers by means of a nonbypassable charge to such customers

subject to the conditions established in subsection (b). The

charge shall be a reconcilable automatic adjustment charge under

section 1307 (relating to sliding scale of rates; adjustments),

shall be applied to participating customers on a customer class

basis, shall be included in other charges on the electric

distribution company's bill and shall not appear as a separate

line item on the customer's bill. Any plan approved by the

commission shall be considered a new service offered for the

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

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

deferred costs to be recorded for accounting purposes on an

electric distribution company's books of account as a regulatory

asset where the electric distribution company is the default

service provider.

(e)  Credit.--In the event a customer leaves the default

service provider's system prior to the full distribution of

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

final bill and any remainder shall be refunded to the customer.

(f)  Intangible transition property.--An electric

distribution company's right to recover costs under an approved

phase-in plan shall be deemed intangible transition property for

purposes of section 2812 (relating to approval of transition

bonds), but not for any other section of Chapter 28 (relating to

restructuring of electric utility industry), and the commission

is authorized to issue a qualified rate order under section 2812

with respect to such costs and to issue such other orders and

take such actions as may be necessary or proper for the electric

distribution company to issue transition bonds, as provided in

section 2812, secured by the electric distribution company's

right to recover such costs.

Section 3.  This act shall take effect immediately.