Bill Text: PA SB754 | 2009-2010 | Regular Session | Introduced

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Bill Title: Providing for an extension of rate caps.

Spectrum: Partisan Bill (Democrat 9-0)

Status: (Introduced - Dead) 2009-04-03 - Referred to CONSUMER PROTECTION AND PROFESSIONAL LICENSURE [SB754 Detail]

Download: Pennsylvania-2009-SB754-Introduced.html

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PRINTER'S NO. 849
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 754 Session of2009
INTRODUCED BY BOSCOLA, FERLO, LOGAN, HUGHES, WILLIAMS, FONTANA, KITCHEN, TARTAGLIONE AND O'PAKE, APRIL 3, 2009
REFERRED TO CONSUMER PROTECTION AND PROFESSIONAL LICENSURE, APRIL 3, 2009
AN ACT
Amending Title 66 (Public Utilities) of the Pennsylvania
Consolidated Statutes, providing for an extension of rate
caps.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 2804(4) of Title 66 of the Pennsylvania
Consolidated Statutes is amended to read:
§ 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:
* * *
(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] until January 1, 2013, the generation
component of a utility's charges to customers who
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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] on December 31, 2007.
(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
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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
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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.
(vii) Notwithstanding the provisions of subparagraph
(ii), if the commission approves an increase in the
generation component of a utility's charge to customers
prior to December 31, 2007, the utility may increase the
generation component charged to customers under the
commission's approval, and such increased charge shall be
capped until January 1, 2013.
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* * *
Section 2. This act shall take effect in 60 days.
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