PRINTER'S NO. 97
No. 103 Session of 1999
INTRODUCED BY SALVATORE, WHITE, BELL, THOMPSON AND TOMLINSON,
JANUARY 11, 1999
REFERRED TO CONSUMER PROTECTION AND PROFESSIONAL LICENSURE,
JANUARY 11, 1999
AN ACT
1 Amending Title 66 (Public Utilities) of the Pennsylvania
2 Consolidated Statutes, prohibiting anticompetitive practices
3 involving energy-related and other services by electric and
4 gas utilities using ratepayer-based assets.
5 The General Assembly of the Commonwealth of Pennsylvania
6 hereby enacts as follows:
7 Section 1. Title 66 of the Pennsylvania Consolidated
8 Statutes is amended by adding a chapter to read:
9 CHAPTER 22
10 ELECTRIC AND GAS UTILITY FAIR COMPETITION
11 Sec.
12 2201. Short title of chapter.
13 2202. Findings.
14 2203. Definitions.
15 2204. Prohibition of anticompetitive cross-subsidies.
16 2205. Applicability of Federal, State and local law.
17 2206. Enforcement.
18 2207. Applicability of antitrust laws.
1 2208. Penalties.
2 § 2201. Short title of chapter.
3 This chapter shall be known and may be cited as the Electric
4 and Gas Utility Fair Competition Act.
5 § 2202. Findings.
6 The General Assembly finds and declares as follows:
7 (1) Small business plays an important role in the
8 efficient functioning of a competitive market and allows
9 consumers to benefit from safe, reliable and high-quality
10 service at lower prices.
11 (2) The current statutory and regulatory regime,
12 including the antitrust laws, has been unsuccessful and has
13 effectively prevented anticompetitive practices such as
14 cross-subsidization of nonregulated enterprises employing
15 assets acquired through the provision of regulated services.
16 (3) In order to maintain a vigorous competitive
17 environment, the General Assembly finds that it is necessary
18 to prohibit cross-subsidization.
19 § 2203. Definitions.
20 The following words and phrases when used in this chapter
21 shall have the meanings given to them in this section unless the
22 context clearly indicates otherwise:
23 "Affiliate." An entity that directly or indirectly owns or
24 controls, is owned or controlled by or is under common ownership
25 and control with another entity.
26 "Cross-subsidization." The use of funds, personnel or other
27 assets derived from or paid for by regulated service activities
28 to reduce the cost of nonregulated construction and service
29 contracting provided by an affiliate of an electric or gas
30 utility, or the electric or gas utility directly, or the use of
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1 funds, personnel or other assets derived from or paid for by
2 nonregulated service activities to reduce the cost of regulated
3 services by an electric or gas utility.
4 "Electric or gas utility." An electric or gas utility
5 subject to regulation as a monopoly.
6 "Nonregulated services." Construction and services
7 contracting provided by a regulated electric or gas utility
8 through a subsidiary or affiliate not subject to the
9 jurisdiction of the commission.
10 "Regulated services." Electric or gas utility services
11 subject to the jurisdiction of the commission.
12 "Service." Includes a product.
13 "Utility contractor." A person, including an individual,
14 corporation, partnership, firm, incorporator or unincorporated
15 association, or other business or legal entity, which contracts
16 with an electric or gas utility, either orally or in writing, to
17 provide nonregulated services. The term also includes a
18 contractor, subcontractor, material supplier or other person.
19 The term does not include an officer, director or employee of an
20 electric or gas utility.
21 § 2204. Prohibition of anticompetitive cross-subsidies.
22 (a) General prohibitions.--
23 (1) No electric or gas utility, its affiliate or a
24 utility contractor shall, directly or indirectly, use
25 proceeds obtained from providing regulated service or assets
26 obtained with such proceeds to subsidize nonregulated
27 services. This prohibition shall include, but not be limited
28 to, the use of vehicles, service tools and instruments,
29 billing practices, office space or employees and the costs,
30 salaries and benefits attributable thereto.
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1 (2) No electric or gas utility shall allow the name,
2 logo, service mark, trademark or trade name of a separate
3 subsidiary or affiliate to resemble the name, logo, service
4 mark, trademark or trade name of the utility, and neither the
5 utility nor the separate subsidiary or affiliate may trade
6 upon, promote or advertise their affiliate or related status.
7 (3) No electric or gas utility shall provide any
8 affiliate, subsidiary or other commercial entity with the use
9 of its intangible assets, permits, licenses, exemptions or
10 variances granted to it by the Commonwealth or political
11 subdivisions, agencies or local and municipal governments
12 therein, including, but not limited to, mailing lists,
13 bonding ability, insurance, lines of credit, marketing and
14 other customer-related information unless the use of such
15 intangible assets is available to all commercial businesses
16 on a nondiscriminatory basis.
17 (4) No electric or gas utility shall grant a preference
18 or privilege to an affiliate in a transaction of business
19 between them or to a utility contractor in awarding a
20 contract.
21 (5) No electric or gas utility shall purchase, receive,
22 hold or otherwise acquire the stock, shares, bonds, real
23 estate debentures, notes or other securities or other
24 interests in an affiliate unless the utility pays at least
25 the fair market value for the interest acquired.
26 (6) No electric or gas utility or affiliate shall trade
27 upon, promote or advertise their affiliate status.
28 (7) No electric or gas utility or affiliate shall
29 commingle their accounts, books and records. The accounts,
30 books and records of an affiliate shall be separate and
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1 distinct from those of the utility.
2 (8) The affiliate shall not share the use of premises,
3 equipment, inventory, space or personnel.
4 (b) Nonregulated services.--A utility may only engage in the
5 provision of nonregulated services through a legally separate
6 affiliate which transacts its business in this Commonwealth
7 separate and independent of the utility. The affiliate shall
8 transact its business in this Commonwealth separate and
9 independent of the utility so as to gain no competitive
10 advantage by virtue of its status as an affiliate.
11 § 2205. Applicability of Federal, State and local law.
12 Any company subject to this chapter shall abide by all
13 applicable Federal, State and local laws.
14 § 2206. Enforcement.
15 (a) Powers of Attorney General.--It shall be the duty of the
16 Attorney General to enforce violations of this chapter.
17 (b) Criminal liability.--Any person who knowingly engages or
18 knowingly attempts to engage in an activity that is prohibited
19 by section 2204 (relating to prohibition of anticompetitive
20 cross-subsidies) commits a felony.
21 (c) Private right of action.--Any person who is injured in
22 that person's business or property by reason of a violation of
23 this chapter:
24 (1) May bring a civil action in the Commonwealth Court.
25 (2) Shall recover treble damages, together with the cost
26 of suit and reasonable attorney fees.
27 (d) Interest.--The court may award, pursuant to a motion by
28 a person who brings a timely private right of action under this
29 section, simple interest on actual damages for the period
30 beginning on the date of service of that person's pleading
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1 setting forth a claim under this chapter and ending on the date
2 of judgment or for any shorter period therein if the court finds
3 that the award of such interest for such period is just under
4 the circumstances.
5 (e) Private injunctive relief.--Any person shall be entitled
6 to sue for and have injunctive relief in any court of
7 appropriate jurisdiction over the parties against threatened
8 loss or damage by a violation of this chapter. In any action
9 under this subsection in which the plaintiff substantially
10 prevails, the court shall award the cost of suit, including a
11 reasonable attorney fee, to the plaintiff.
12 § 2207. Applicability of antitrust laws.
13 As the provision of nonregulated services is conducted in
14 competition with nonregulated entities, such activities are
15 neither conducted pursuant to a clearly articulated and
16 affirmatively expressed policy of the Commonwealth nor actively
17 supervised by the Commonwealth, and each electric or gas
18 utility, affiliate and utility contractor shall be subject to
19 all applicable Federal and State laws, rules and regulations
20 governing competitive practices of business entities.
21 § 2208. Penalties.
22 Any penalty imposed or relief granted under this chapter
23 shall be in addition to and not in lieu of any penalty or relief
24 authorized by any other law to be imposed with respect to the
25 conduct described in this chapter.
26 Section 2. All acts and parts of acts are repealed insofar
27 as they are inconsistent with this act.
28 Section 3. This act shall take effect in 60 days.
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