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Implementation - 66 Pa. Cons. Stat. § 2204Legal Research Home > Pennsylvania Statutes Sponsored Links
§ 2204. Implementation.
(a) Commencement of customer choice.--Beginning on November
1, 1999, unless the commission for good cause shown extends this
period by no more than eight months, consistent with this
chapter, all retail gas customers of natural gas distribution
companies other than city natural gas distribution operations
shall have the opportunity to purchase natural gas supply
services from a natural gas supplier or their natural gas
distribution company to the extent it offers such services. The
choice of natural gas suppliers shall rest with the retail gas
customer. The commission shall adopt orders, rules, regulations
and policies as shall be necessary and appropriate to implement
fully this chapter within the time frames specified in this
chapter, provided that the commission may, in the context of
each natural gas distribution company's restructuring
proceeding, establish the time frames for implementation of
specific components of each natural gas distribution company's
restructuring plan.
(b) Restructuring filings.--All natural gas distribution
companies in this Commonwealth, except city natural gas
distribution operations, shall file with the commission,
pursuant to a schedule to be determined by the commission in
consultation with the natural gas distribution companies, a
restructuring filing consistent with this chapter and with any
orders, rules or regulations adopted by the commission. A city
natural gas distribution operation shall file with the
commission its restructuring filing pursuant to section 2212
(relating to city natural gas distribution operations).
(c) Commission review.--
(1) The commission shall review the restructuring filing
of each natural gas distribution company and shall, after
open evidentiary hearings with proper notice and opportunity
for all parties to cross-examine witnesses and brief issues,
issue an order accepting, modifying or rejecting such filing
at the earliest date possible, but no later than nine months
from the filing date.
(2) In issuing the restructuring order, the commission
may consider the results of any collaborative process
previously engaged in during or prior to the restructuring
proceeding.
(3) If the commission modifies or rejects a
restructuring filing, it shall state the specific reasons for
modification or rejection and direct the natural gas
distribution company to address such objections with another
filing within 30 days of the entry date of the commission
order modifying or rejecting the prior filing.
(4) The commission shall review the alternative filing,
solicit comments and reply comments from interested parties
and issue a final order within 45 days of the revised filing.
(5) The restructuring filing for a city natural gas
distribution operation shall also include an initial tariff
filing.
(d) Release, assignment or transfer of capacity.--
(1) A natural gas distribution company holding contracts
for firm storage or transportation capacity, including gas
supply contracts with Pennsylvania producers, on the
effective date of this chapter, or a city natural gas
distribution operation on the date the commission assumes
jurisdiction over such city natural gas distribution
operation, may at its option release, assign or otherwise
transfer such capacity or Pennsylvania supply, in whole or
part, associated with those contracts on a nondiscriminatory
basis to licensed natural gas suppliers or large commercial
or industrial customers on its system.
(2) Contracts which by their terms must be renewed
within 150 days after the effective date of this chapter or,
with respect to a city natural gas distribution operation,
within 90 days after the date the commission assumes
jurisdiction over such city natural gas distribution
operation or contracts for which the last day for notice of
renewal or nonrenewal pursuant to the notice provision of the
contract has occurred or is within 150 days after the
effective date of this chapter or, with respect to a city
natural gas distribution operation, within 90 days after the
date the commission assumes jurisdiction over such city
natural gas distribution operation and which are renewed
pursuant to such notice requirements shall also be subject to
the provisions of this subsection.
(3) Such release, assignment or transfer shall be at the
applicable contract rate for such capacity or Pennsylvania
supply and shall be subject to applicable contractual
arrangements and tariffs. The amount so released, assigned or
transferred shall be sufficient to serve the level of the
customers' requirements for which the natural gas
distribution company has procured such capacity, determined
in accordance with the natural gas distribution company's
tariff or procedures approved in its restructuring
proceedings.
(4) The licensed natural gas supplier shall accept such
release, assignment or transfer of that capacity or
Pennsylvania supply and enter into all applicable contracts
or agreements as a condition of serving retail gas customers
on the natural gas distribution company's system.
(5) On or after July 1, 2002, or, in the case of a city
natural gas distribution operation, March 1, 2005, the
commission shall have the authority to prevent such
assignments, releases or transfers under either of the
following circumstances:
(i) the natural gas distribution company, alone or
together with one or more natural gas suppliers,
voluntarily proposes an alternative to such assignments,
releases or transfers and the commission finds such
alternative to be in the public interest; or
(ii) upon the petition of the licensed natural gas
supplier who desires to use alternate interstate storage
or transportation capacity to serve its customers on the
natural gas distribution company's system, the commission
makes the following findings and issues a final order as
to which all appeals have been exhausted in which:
(A) The commission finds that the alternate
capacity which the natural gas supplier seeks to
utilize meets the operational needs and reliability
standards of the natural gas distribution company.
(B) The commission confirms that the natural gas
distribution company's specific transportation and
storage capacity contracts to be displaced are no
longer needed to serve firm customers of the natural
gas distribution company.
(C) The commission authorizes the natural gas
distribution company to follow a specific, written
mitigation plan approved by the commission or, if
such a plan is not approved or applicable, to post
the displaced capacity for release in accordance with
the rules and regulations of the Federal Energy
Regulatory Commission and applicable requirements of
interstate pipelines.
(D) The commission authorizes the natural gas
distribution company to recover the difference
between the amount the natural gas distribution
company is required to pay under the applicable
contract terms for the capacity released, assigned or
transferred pursuant to clause (C) and the amount the
natural gas distribution company receives from an
entity, if any, that acquires such capacity. Under no
circumstances, however, shall such recovery result in
shifting of costs between customer classes or in any
increase in rates to customers who continue to
purchase natural gas supplies from the natural gas
distribution company acting in its supplier of last
resort function.
(6) Prior to making the filing provided for in paragraph
(5), the natural gas supplier shall meet with the natural gas
distribution company to discuss the natural gas supplier's
proposed alternatives to the existing gas supply or capacity
contracts or to their mandatory assignment.
(7) Those natural gas distribution companies having gas
supply contracts with Pennsylvania producers may address the
issue of post-July 1, 2002, assignment of such contracts in
their restructuring proceeding or thereafter.
(e) New and renewed capacity.--
(1) Subject to the service obligations imposed by this
title, and to the extent such capacity is not needed to meet
the natural gas distribution company's least-cost fuel
procurement and other applicable standards pursuant to this
title, prior to entering into new or renewed contracts for
firm storage or transportation capacity not subject to
subsection (d)(1), (2), (3) or (4), each natural gas
distribution company shall offer on a nondiscriminatory basis
to each natural gas supplier licensed to do business on its
system, and to large volume industrial or commercial
customers of the natural gas distribution company being
served by such contracts, the opportunity to renew such
contracts, pursuant to the rules and regulations of the
Federal Energy Regulatory Commission, or to enter into other
contracts for capacity.
(2) The capacity shall meet the reliability criteria of
the natural gas distribution company and, in the case of
large volume industrial and commercial customers being served
by such contracts, shall meet their current requirements.
(3) Each natural gas distribution company shall utilize
the collaborative process established pursuant to subsection
(f) to address its capacity requirements.
(4) Absent the natural gas supplier or large volume
industrial or commercial customer taking or providing such
capacity, the natural gas distribution company shall file
with and obtain approval from the commission for such
contracts necessary to ensure sufficient capacity to meet
current and projected customer requirements considering the
commitments of natural gas suppliers.
(5) Prior to being displaced by a natural gas supplier's
alternate interstate storage or transportation capacity,
contracts renewed or entered into by the natural gas
distribution company pursuant to this subsection shall be
subject to the process set forth in subsection (d).
(f) Working group and collaborative process.--In its
restructuring proceeding, a natural gas distribution company
shall set forth a process to establish a working group of
licensed natural gas suppliers having customers on the natural
gas distribution company's system and representatives of the
residential, commercial and industrial customer classes to:
(1) Meet on a scheduled basis.
(2) Seek resolution of operational and capacity issues
related to customer choice.
The final determination of operational and reliability issues
resides with the natural gas distribution company. In addition,
the natural gas distribution company shall include in its
restructuring filing a collaborative process to address broader
issues relating to unbundling, customer choice and deregulation.
(g) Investigation and report to General Assembly.--Five
years after the effective date of this chapter, the commission
shall initiate an investigation or other appropriate proceeding,
in which all interested parties are invited to participate, to
determine whether effective competition for natural gas supply
services exists on the natural gas distribution companies'
systems in this Commonwealth. The commission shall report its
findings to the General Assembly. Should the commission conclude
that effective competition does not exist, the commission shall
reconvene the stakeholders in the natural gas industry in this
Commonwealth to explore avenues, including legislative, for
encouraging increased competition in this Commonwealth.
(h) Displaced employee program.--The Department of Labor and
Industry shall establish and implement a program to assist the
natural gas distribution company employees who are displaced by
the transition to retail competition precipitated by this
chapter. The program shall be designed to assist employees in
obtaining employment and shall consist of utilizing the Federal
funds available for the purpose of retraining and outplacement
services for such employees.
(i) Audit requirement.--Prior to the commencement of the
restructuring proceeding of a city natural gas distribution
operation, the commission shall provide for an independent
management audit of all employees, records, equipment,
contracts, assets, liabilities, appropriations and obligations
related to a city natural gas distribution operation pursuant to
section 516 (relating to audits of certain utilities). The city
natural gas distribution operation shall have a 60-day period to
submit written comments on the audit report to the commission.
Cross References. Section 2204 is referred to in sections
2203, 2206, 2211, 2212 of this title.
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Last modified: November 27, 2007 |