|
|
Court OpinionsState LawsAlabama US Code1 USC - General Provisions US Constitution |
Standards for restructuring of electric industry - 66 Pa. Cons. Stat. § 2804Legal Research Home > Pennsylvania Statutes
§ 2804. Standards for restructuring of electric industry.
The following interdependent standards shall govern the
commission's assessment and approval of each public utility's
restructuring plan, oversight of the transition process and
regulation of the restructured electric utility industry:
(1) The commission shall ensure continuation of safe and
reliable electric service to all consumers in the
Commonwealth, including:
(i) The maintenance of adequate reserve margins by
electric suppliers in conformity with the standards
required by the North American Electric Reliability
Council (NERC) and the regional reliability council
appropriate to each supplier, or any successors to those
reliability entities, and in conformity with established
industry standards and practices.
(ii) The installation and maintenance of
transmission and distribution facilities in conformity
with established industry standards and practices,
including the standards set forth in the National
Electric Safety Code.
(2) Consistent with the time line set forth in section
2806 (relating to implementation, pilot programs and
performance-based rates), the commission shall allow
customers to choose among electric generation suppliers in a
competitive generation market through direct access.
Customers should be able to choose among alternatives such as
firm and interruptible service, flexible pricing and
alternate generation sources, including reasonable and fair
opportunities to self-generate and interconnect. These
alternatives may be provided by different electric generation
suppliers.
(3) The commission shall require the unbundling of
electric utility services, tariffs and customer bills to
separate the charges for generation, transmission and
distribution. The commission may require the unbundling of
other services.
(4) The following caps on electric utility rates shall
apply:
(i) For a period of 54 months from the effective
date of this chapter or until an electric distribution
utility is no longer recovering its transition or
stranded costs through a competitive transition charge or
intangible transition charge and all the customers of an
electric distribution utility can choose an alternative
provider of electric generation, whichever is shorter:
(A) the total charges of an electric
distribution utility for service to any customer who
purchases generation from that utility shall not
exceed the total charges that have been approved by
the commission for such service as of the effective
date of this chapter; and
(B) for customers who purchase generation from a
supplier other than the electric distribution
utility, the charges of the utility for non-
generation services that are regulated as of the
effective date of this chapter, exclusive of the
competitive transition charge and intangible
transition charge, shall not exceed the non-
generation charges that have been approved by the
commission for such service as of the effective date
of this chapter.
(ii) In addition to the rate cap set forth in
subparagraph (i), for a period of nine years from the
effective date of this chapter or until an electric
distribution utility is no longer recovering its
transition or stranded costs through a competitive
transition charge or intangible transition charge and all
customers of an electric distribution utility can choose
an alternative provider of electric generation, whichever
is shorter, the generation component of a utility's
charges to customers who purchase generation from the
utility, including the competitive transition charge and
intangible transition charge, shall not exceed the
generation component charged to the customers that has
been approved by the commission for such service as of
the effective date of this chapter.
(iii) An electric distribution utility may seek, and
the commission may approve, an exception to the
limitations set forth in subparagraphs (i) and (ii) only
in any of the following circumstances:
(A) The electric distribution utility meets the
requirements for extraordinary rate relief under
section 1308(e) (relating to voluntary changes in
rates).
(B) Either the electric distribution utility is
required to begin payment under contracts with
nonutility generation projects that have received
commission orders, has been unable to mitigate such
costs, such costs are not recoverable in a
competitive generation market and such costs were not
previously covered in the competitive transition
charge or intangible transition charge, or the
utility prudently incurs costs related to
cancellation, buyout, buydown or renegotiation of
nonutility generating project obligations of the
utility consistent with section 527 (relating to
cogeneration rules and regulations) and such costs
were not previously covered in the competitive
transition charge or intangible transition charge.
Costs related to cancellation, buyout, buydown or
renegotiation shall be recovered from ratepayers over
a period not to exceed three years, unless the
commission determines within its discretion to
require a longer recovery period due to the magnitude
of such costs, but shall be accounted for by the
utility on a levelized basis over the total period in
which the generation portion of the utility's rates
are capped.
(C) The electric distribution utility is subject
to significant increases in the rates of Federal or
State taxes or other significant changes in law or
regulations that would not allow the utility to earn
a fair rate of return.
(D) The electric distribution utility is subject
to significant increases in the unit rate of fuel for
utility generation or the price of purchased power
that are outside of the control of the utility and
that would not allow the utility to earn a fair rate
of return.
(E) The electric distribution utility is
directed by the commission or an independent system
operator or its functional equivalent to make
expenditures to repair or upgrade its transmission or
distribution system.
(F) The electric distribution utility seeks to
increase its allowance for nuclear decommissioning
costs to reflect new information not available at the
time the utility's existing rates were determined,
and such costs are not recoverable in the competitive
generation market and are not covered in the
competitive transition charge or intangible
transition charge, and such costs would not allow the
utility to earn a fair rate of return.
(G) As permitted by paragraph (16).
(iv) Consistent with the requirements of due
process, the commission may expedite proceedings that
invoke the provisions of subparagraph (iii).
(v) If an electric distribution utility rolls its
energy cost rate into base rates at a combined level that
does not exceed its combined level of such rates which
have been approved by the commission as of the effective
date of this chapter, the utility shall not be required
to reduce its capped rates below the capped level upon
the complaint of any party if the commission determines
that any excess earnings achieved under the cap are being
utilized to mitigate transition or stranded costs for the
benefit of ratepayers or to offset other known and
measurable cost increases that would be recoverable under
traditional ratemaking but are not included within the
capped rates.
(vi) This paragraph shall not apply to new services
offered for the first time after the effective date of
this chapter.
(5) The commission may permit, but shall not require, an
electric utility to divest itself of facilities or to
reorganize its corporate structure.
(6) Consistent with the provision of section 2806, the
commission shall require that a public utility that owns or
operates jurisdictional transmission and distribution
facilities shall provide transmission and distribution
service to all retail electric customers in their service
territory and to electric cooperative corporations and
electric generation suppliers, affiliated or nonaffiliated,
on rates, terms of access and conditions that are comparable
to the utility's own use of its system.
(7) The commission shall require that restructuring of
the electric utility industry be implemented in a manner that
does not unreasonably discriminate against one customer class
to the benefit of another.
(8) The commission shall establish for each electric
utility an appropriate cost-recovery mechanism which is
designed to fully recover the electric utility's universal
service and energy conservation costs over the life of these
programs.
(9) The commission shall ensure that universal service
and energy conservation policies, activities and services are
appropriately funded and available in each electric
distribution territory. Policies, activities and services
under this paragraph shall be funded in each electric
distribution territory by nonbypassable, competitively
neutral cost-recovery mechanisms that fully recover the costs
of universal service and energy conservation services. The
commission shall encourage the use of community-based
organizations that have the necessary technical and
administrative experience to be the direct providers of
services or programs which reduce energy consumption or
otherwise assist low-income customers to afford electric
service. Programs under this paragraph shall be subject to
the administrative oversight of the commission which will
ensure that the programs are operated in a cost-effective
manner.
(10) The commission shall establish rates for
jurisdictional transmission and distribution services and
shall continue to regulate distribution services for new and
existing customers in accordance with this chapter and
Chapter 13 (relating to rates and rate making).
(11) The time line for the transition to and phase-in of
direct access to competitive electric generation shall be in
accordance with section 2806.
(12) The commission has the authority to order utility
participation in retail access pilot programs as set forth in
section 2806 and as further implemented or modified by the
commission, with direct access to begin on April 1, 1997. The
commission shall conduct milestone reviews of the transition
to retail electric generation competition to assure a
technically workable and equitable transition period.
(13) Consistent with section 2808 (relating to
competitive transition charge), the commission has the power
and duty to approve a competitive transition charge for the
recovery of transition or stranded costs it determines to be
just and reasonable to recover from ratepayers.
(14) The transition to a competitive generation market
shall be orderly, protect electric system reliability, be
fair to ratepayers and provide the investors in Pennsylvania
electric utilities with a fair opportunity to fully recover
the amount of transition or stranded costs that the
commission determines to be just and reasonable.
(15) At the time each utility files its restructuring
plan with the commission, the utility shall submit an initial
plan that sets forth how it shall meet its universal service
and energy conservation obligations.
(16) The following shall apply:
(i) The commission shall issue regulations that
permit the electric distribution company to recover any
change in its State tax liability under sections 2806(h),
2809(c) (relating to requirements for electric generation
suppliers) and 2810 (relating to revenue-neutral
reconciliation) or in its liability under 52 Pa. Code §§
69.51 through 69.56 (relating to inclusion of State taxes
and gross receipts taxes in base rates) to the extent
that the resulting rate does not exceed the rate cap
established in this section except as provided in this
chapter.
(ii) With regard to any portion of the change in an
electric distribution company's tax liability under
section 2810 which would cause it to exceed the rate cap,
the electric distribution company may file a single issue
rate proceeding under section 1308(a) to recover that
amount. The commission shall adjudicate, within 60 days,
whether the resulting rates are just and reasonable.
(iii) With regard to any portion of the change in an
electric distribution company's tax liability under
sections 2806(h) and 2809(c) which would cause it to
exceed the price cap, upon certification to the
commission by affidavit that the electric distribution
company has not collected the taxes due pursuant to the
tariff indemnification provisions required by section
2810(m) and that the electric distribution company and
the Department of Revenue have not collected the taxes
due pursuant to the other means set forth in sections
2806(g)(3)(i) and (ii) and 2809(c) to recover the taxes
due and any interest thereon, the electric distribution
utility shall be permitted to recover that amount in the
State Tax Adjustment Surcharge.
Cross References. Section 2804 is referred to in sections
2803, 2806, 2812 of this title.
Section: Previous 2706 2707 2708 2709 2801 2802 2803 2804 2805 2806 2807 2808 2809 2810 2811 Next
Last modified: November 27, 2007 |
|