Source: http://www.legis.state.pa.us/CFDOCS/Legis/PN/Public/btCheck.cfm?txtType=HTM&sessYr=2013&sessInd=0&billBody=S&billTyp=B&billNbr=1121&pn=1463
Timestamp: 2014-09-30 21:58:40
Document Index: 787036471

Matched Legal Cases: ['§ 510', '§ 2807', '§ 2807', '§ 69', '§ 510', '§ 2807']

Regular Session 2013-2014 Senate Bill 1121 P.N. 1463 PRINTER'S NO. 1463 THE GENERAL ASSEMBLY OF PENNSYLVANIA SENATE BILL No.1121 Session of 2013 INTRODUCED BY MENSCH, RAFFERTY, WAUGH, YUDICHAK, WHITE, FOLMER, CORMAN, ARGALL AND ALLOWAY, OCTOBER 10, 2013 REFERRED TO CONSUMER PROTECTION AND PROFESSIONAL LICENSURE, OCTOBER 10, 2013 AN ACT 1Amending Title 66 (Public Utilities) of the Pennsylvania2Consolidated Statutes, in powers and duties, further3providing for assessment for regulatory expenses upon public4utilities; in restructuring of electric utility industry,5further providing for duties of electric distribution6companies and providing for next generation default service;7and making a related repeal.8The General Assembly finds and declares as follows:9(1) The economic vitality of this Commonwealth and its10citizens will be advanced by innovative and competitively11priced electric generation products and services.12(2) The most economically efficient means of assuring13the availability of adequate, safe and efficient electric14generation at the most economically efficient prices is by15fully implementing the existing policy of the Commonwealth to16establish full and sustainable competitive retail electric17generation markets.18(3) The present provision of default service by electric19distribution companies has and will continue to prevent20retail electric generation markets from becoming fully and 20130SB1121PN1463
1sustainably competitive.2(4) The implementation of a default service structure3that relies on the competitive market, with necessary back-up4protections, will assure that all retail customers have5access to electric service and help deliver the jobs,6economic development and other benefits of competitive7markets to this Commonwealth.8The General Assembly of the Commonwealth of Pennsylvania9hereby enacts as follows:10Section 1. Section 510(a) of Title 66 of the Pennsylvania11Consolidated Statutes is amended and the section is amended by12adding subsections to read:13§ 510. Assessment for regulatory expenses upon public14utilities.15(a) [Determination of assessment] Assessment.--Before16November 1 of each year, the commission shall estimate its total17expenditures in the administration of this part for the fiscal18year beginning July of the following year, which estimate shall19not exceed three-tenths of 1% of the total gross intrastate20operating revenues of the public utilities, electric generation 21suppliers and natural gas suppliers under its jurisdiction for22the preceding calendar year. Such estimate shall be submitted to 23the Governor in accordance with section 610 of the act of April 249, 1929 (P.L.177, No.175), known as "The Administrative Code of 251929." At the same time the commission submits its estimate to 26the Governor, the commission shall also submit that estimate to27the General Assembly. The commission or its designated28representatives shall be afforded an opportunity to appear29before the Governor and the Senate and House Appropriations30Committees regarding their estimates. The commission shall 20130SB1121PN1463
1subtract from the final estimate:2(1) The estimated fees to be collected pursuant to3section 317 (relating to fees for services rendered by4commission) during such fiscal year.5(2) The estimated balance of the appropriation,6specified in section 511 (relating to disposition,7appropriation and disbursement of assessments and fees), to8be carried over into such fiscal year from the preceding one.9The remainder so determined, herein called the total assessment,10shall be allocated to, and paid by, such public utilities in the11manner prescribed. If the General Assembly fails to approve the12commission's budget for the purposes of this part, by March 30,13the commission shall assess public utilities on the basis of the14last approved operating budget. At such time as the General15Assembly approves the proposed budget the commission shall have16the authority to make an adjustment in the assessments to17reflect the approved budget. If, subsequent to the approval of18the budget, the commission determines that a supplemental budget19may be needed, the commission shall submit its request for that20supplemental budget simultaneously to the Governor and the21chairmen of the House and Senate Appropriations Committees.22(a.1) Electric generation supplier assessment.--The23commission may impose an annual assessment upon electric24generation suppliers. The assessment shall be used to reimburse25the commission for incremental expenditures associated with26carrying out the provisions of Chapter 28 (relating to27restructuring of electric utility industry), but the assessment28may not exceed $5,000 per licensed entity per year.29* * *30(h) Definitions.--As used in this section, the following 20130SB1121PN1463
1words and phrases shall have the meanings given to them in this 2subsection unless the context clearly indicates otherwise:3"Electric generation supplier." As defined in section 28034(relating to definitions).5"Natural gas supplier." As defined in section 2202 (relating6to definitions).7Section 2. Section 2807(e)(3.1) of Title 66 is repealed:8§ 2807. Duties of electric distribution companies.9* * *10(e) Obligation to serve.--A default service provider's11obligation to provide electric generation supply service12following the expiration of a generation rate cap specified13under section 2804(4) (relating to standards for restructuring14of electric industry) or a restructuring plan under section152806(f) is revised as follows:16* * *17[(3.1) Following the expiration of an electric18distribution company's obligation to provide electric19generation supply service to retail customers at capped20rates, if a customer contracts for electric generation supply21service and the chosen electric generation supplier does not22provide the service or if a customer does not choose an23alternative electric generation supplier, the default service24provider shall provide electric generation supply service to25that customer pursuant to a commission-approved competitive26procurement plan. The electric power acquired shall be27procured through competitive procurement processes and shall28include one or more of the following:29(i) Auctions.30(ii) Requests for proposal.	20130SB1121PN1463
1(iii) Bilateral agreements entered into at the sole2discretion of the default service provider which shall be3at prices which are:4(A) no greater than the cost of obtaining5generation under comparable terms in the wholesale6market, as determined by the commission at the time7of execution of the contract; or8(B) consistent with a commission-approved9competition procurement process. Any agreement10between affiliated parties shall be subject to review11and approval of the commission under Chapter 2112(relating to relations with affiliated interests). In13no case shall the cost of obtaining generation from14any affiliated interest be greater than the cost of15obtaining generation under comparable terms in the16wholesale market at the time of execution of the17contract.]18* * *19Section 3. Title 66 is amended by adding a section to read:20§ 2807.1. Next generation default service.21(a) General rule.--On and after June 1, 2015, service under22former section 2807(e)(3.1) (relating to duties of electric23distribution companies) shall no longer be provided, and next24generation default service shall be provided as set forth in25subsection (b). On June 1, 2015, the commission shall conduct a26competitive process for assigning existing default service27customers to qualified electric generation suppliers as set28forth in subsection (c). As set forth in subsection (c)(2),29beginning January 1, 2015, new and moving customers shall be30asked to select an electric generation supplier when initiating 20130SB1121PN1463
1electric service. Subject to the authority set forth in2subsection (f), on June 1, 2016, initiating or changing electric3generation and distribution service shall be the responsibility4of licensed electric generation suppliers.5(b) Next generation default service.--6(1) Next generation default service shall be provided by7one or more electric generation suppliers. The provider or8providers shall be selected for each electric distribution9company service territory by a process that shall be10established and conducted by the commission, and that shall11require an electric generation supplier to meet reasonable12and necessary financial fitness and bonding criteria to serve13in that role. If no electric generation supplier meets the14commission's requirements to provide next generation default15service, the commission shall make the provision of next16generation default service a condition of maintaining a17license to provide electric generation service. When next18generation default service is provided as a condition of19maintaining a license, the commission may not impose any20additional fees on electric generation suppliers providing21next generation default service, but it may require22additional financial fitness or bonding requirements. The23commission may not require an electric generation supplier to24provide next generation default service at rates that do not25fully compensate the electric generation supplier for all of26the costs and risks associated with providing the service.27(2) Next generation default service shall be available28to any customer:29(i) Who has contracted for electric generation30service with an electric generation supplier and whose 20130SB1121PN1463
1electric generation supplier becomes unable to deliver2service to the customer.3(ii) Who otherwise does not choose an electric4generation supplier.5(3) The commission shall establish a pricing formula for6the next generation default service rates that reflect the7projected market price for electric generation during the8time that the customer receives the service, together with9all direct and indirect costs and risks of providing next10generation default service, including cost of capital. The11rate shall be set prospectively and may not be subject to12reconciliation, but the electric generation supplier13providing next generation default service may offer a14customer an alternative generation product so long as the15rate offered is lower than the next generation default16service rate produced by the commission-established pricing17formula.18(4) A customer may receive next generation default19service at the formulaic price for a period of not more than2060 days or two billing cycles, whichever is shorter, after21which the customer shall arrange to receive electric22generation service from an electric generation supplier. A23customer remaining on next generation default service at the24end of the 60 days or two billing cycles shall be assigned to25an electric generation supplier on a rotating basis to be26determined by the commission and shall be transferred to that27service as soon as reasonably possible.28(5) At the time that a customer is placed on next29generation default service the electric generation supplier30providing the next generation default service shall provide 20130SB1121PN1463
1notice to the customer:2(i) That the customer may take next generation3default service for a maximum period of 60 days or4two billing cycles, whichever is shorter.5(ii) The current price of the next generation6default service that the customer will be charged.7(iii) The options available to the customer to8select an alternative electric generation supplier,9including notice that the customer may switch at any10time without penalty.11(6) A customer who does not choose an alternative12electric generation supplier at the end of the customer's13contract term shall remain a customer of the electric14generation supplier on a month-to-month basis. The customer15shall be permitted to shop for an alternative electric16generation supplier without penalty or restriction, unless17the customer affirmatively chooses another product offered by18the customer's current electric generation supplier, or19chooses an alternative supplier. An electric generation20supplier shall provide such notices as the commission shall21require, prior to the end of the customer's term of service,22that explain the customer's options.23(c) Transition process.--The following transition process24shall apply:25(1) The commission shall conduct a competitive26assignment process of existing default service customers in27sufficient time to allow customers to be transferred to28winning electric generation suppliers beginning on the29customer's first meter read date on or after June 1, 2015.30(i) The assignment of customers and the prices at 20130SB1121PN1463
1which the participating electric generation supplier2shall serve assigned customers by customer class shall be3determined for each electric distribution company service4territory through a competitive solicitation process that5shall be administered by the commission. A response to6the competitive solicitation shall include the following:7(A) An agreement by the electric generation8supplier to remit a $100 customer acquisition fee for9each customer that is assigned to and enrolls with10the participating electric generation supplier. All11due and payable customer acquisition fees shall be12paid to the commission and shall be remitted by the13commission into the General Fund of the State14Treasury through the Department of Revenue.15(B) An agreement by the electric generation16supplier to remit a $50 bonus to each customer that17enrolls with the participating electric generation18supplier pursuant to the assignment process.19(C) A proposed price, per kilowatt hour and per20rate class, at which the electric generation supplier21offers to serve customers that enroll with the22electric generation supplier pursuant to the23competitive assignment process and the number of24tranches which the electric generation supplier25proposes to serve.26(D) An agreement to provide service pursuant to27a fixed price, 12-month contract with no early28termination or cancellation fees.29(E) In addition to the payments under this30subsection, each electric generation supplier 20130SB1121PN1463
1participating in the competitive assignment process2shall remit $2 per customer assigned to fund the3commission's consumer education program under4subsection (e). Any amounts to be paid under this5clause shall be offset by the amount of any6application fees not refunded pursuant to clause (F).7(F) An application fee that shall be the lesser8of the product of the number of customers in each9tranche bid multiplied by one dollar, or $5,000 per10tranche bid. Application fees shall be retained by11the commission only for tranches actually assigned,12and application fees collected from electric13generation suppliers for tranches bid but not14assigned to them shall be refunded at the conclusion15of the competitive assignment process. The16application fee shall be used:17(I) To reimburse the commission for the18costs of conducting the competitive assignment19process.20(II) By the commission to educate customers21about the assignment process.22(G) An agreement that at the end of the initial2312-month term, and for the subsequent 24 months, the24electric generation supplier will publicly post the25prices charged to customers who were assigned under26this process, who continue to take service from the27electric generation supplier, and who have not28affirmatively chosen a different product from that29electric generation supplier, in a manner to be30required by the commission to ensure price 20130SB1121PN1463
1transparency and to avoid customer confusion.2(ii) The commission shall select no fewer than four3successful electric generation suppliers for each4electric distribution utility on the basis of the lowest5electric generation price bid in a single clearing price,6single day process as determined by rate class. All7customers in the same rate class and service territory8receiving service under this process shall be served at9the same price. No bidder may be awarded in excess of 25%10of the number of tranches to be awarded for each rate11class and service territory, except that the commission12may waive this limitation if necessary to assure that all13tranches are awarded. The commission may retain an14independent third-party evaluator to assist in the15conduct of the assignment process.16(iii) Subject to the commission's authority to17revise the tranche size to reflect the customer base of18the electric distribution company or to enhance the19chances of success of the competitive assignment process,20the response to the competitive solicitation shall21reflect tranche sizes of 5% of the total default service22received by residential customers and tranches of23comparable load size for nonresidential customers,24subject to minimum successful supplier requirements under25subparagraph (ii).26(iv) The commission may establish additional27financial fitness and bonding requirements as a condition28of an electric generation supplier's participation in the29competitive assignment process.30(v) The commission shall conduct the competitive 20130SB1121PN1463
1assignment process set forth in this subsection so that2customers can be physically transferred to the assigned3electric generation suppliers in accordance with the time4frame set forth in subsection (c)(1). Between January 1,52015, and June 1, 2015, each electric distribution6company shall provide at least three notices to its7existing default customers, at least one of which shall8be a separate notice sent by first class mail, informing9default service customers of the scheduled competitive10assignment process and their options both prior to and as11a result of the process. Customers initiating service on12or after June 1, 2015, and before June 1, 2016, shall be13assigned to the electric generation suppliers serving14assigned customers under this subsection, in the same15proportion as the number of tranches served by each16assigned electric generation supplier to the total number17of tranches, per rate class, in each electric18distribution company service territory.19(vi) Selected electric generation suppliers shall20remit the amounts required under subparagraphs (i)(A) and21(i)(E) to the commission after all customers are enrolled22with an electric generation supplier under the assignment23authorized in this section. All amounts required to be24paid to customers under subparagraph (i)(B) shall be due25after the customer has remained with that electric26generation supplier for three complete billing cycles.27The amount shall be remitted within 30 days after the28amount becomes due.29(2) As set forth in subsection (a), the commission shall30establish a procedure whereby, on or after January 1, 2015, and 20130SB1121PN1463
1through May 31, 2015, applicants for electric service and2existing default customers moving from within the service3territory of an electric distribution company shall be directed4by the electric distribution company to select an electric5generation supplier to supply electric generation service. If6the applicant or customer fails to select an electric generation7supplier, or declines to do so after no fewer than three8requests by the electric distribution company, the applicant or9customer shall be assigned to the default service provided by10the electric distribution company.11(3) The following shall apply during the transition12period:13(i) The commission may consider structures that14minimize adverse effects on wholesale generation15suppliers or any entity that has entered into a bona fide16contractual relationship with an electric distribution17company that is adversely affected by this section.18(ii) An affected entity under subparagraph (i),19including a wholesale generation supplier, an electric20generation supplier or an electric distribution utility,21may make a claim with the commission to recover costs,22including foregone profits, resulting from the transition23to next generation default service. The commission shall24consider only those transition costs shown to have25occurred, or that are likely to occur, that are26established on the record after a hearing and that the27wholesale generation supplier or other entity meet all of28the following:29(A) Were proximately caused by the transition to30next generation default service.	20130SB1121PN1463
1(B) Were not a risk that existed at the time2that the entity entered into the contract.3(C) Could not reasonably be avoided by the4entity.5(iii) An electric distribution company shall, after6taking reasonable steps to reduce transition costs,7reimburse the wholesale generation supplier or other8counterparty for the costs or for amounts that the9commission determines will not be recovered due to the10transition under this subsection. Any reimbursements11shall be recoverable by electric distribution companies12under subsection (h).13(iv) For any wholesale power supply contract for14which a claim is made under subparagraph (ii), a15reimbursable transition cost shall be the difference16between the amount that the wholesale supplier actually17supplies under the contract and the amount that it would18have supplied absent the transition under this19subsection, multiplied by the price for power set forth20in the wholesale power supply contract. The commission21shall make a determination of the amount of load by22customer class that the wholesale supplier would have23supplied absent the transition under this subsection and24shall assume that the customer class default service load25level absent the transition would be no less than the26average default load in the previous 12 months. Absent27clear and convincing evidence demonstrating that the28claimed loss was caused by fraud or illegal activity, the29commission shall direct the electric distribution company30to reimburse the wholesale supplier for any unrecovered 20130SB1121PN1463
1transition cost. Any reimbursements shall be recoverable2under subsection (h).3(d) Customer billing and other services.--The following4shall apply:5(1) On and after June 1, 2016, electric generation6suppliers shall be permitted to utilize full supplier-7consolidated billing where the electric generation supplier8bills the customer for generation service, delivery and other9charges currently billed by an electric distribution10company. When an electric generation supplier provides a11supplier-consolidated bill, it shall purchase the utility's12distribution charges for service rendered on or after June 1,132016, on a nonrecourse basis and remit payment to the14electric distribution utility without discount and on15schedules approved by the commission. An electric generation16supplier providing a supplier-consolidated bill shall also17receive a credit from the electric distribution company, in18an amount determined to be reasonable by the commission, for19the electric distribution company's avoided cost of providing20a bill for the delivery and other charges currently billed by21the electric distribution company.22(2) Upon petition of an electric distribution company23and, after June 1, 2018, by any party, the commission may24order an electric distribution company to provide billing25functions and activities through a structurally separate26affiliate, if the order is found to be in the public interest27and to further advance the benefits of competition. The28commission shall ensure that the electric distribution29company allocates all direct and indirect costs of providing30billing services to its structurally separate billing 20130SB1121PN1463
1subsidiary by utilizing reasonable cost allocation2principles. The corresponding costs of providing billing3services included in the electric distribution company's base4rates shall be identified and removed. The structurally5separate billing subsidiary shall provide billing services to6electric distribution companies and to electric generation7suppliers at the same rates, terms and conditions set forth8in tariffs filed with and approved by the commission. The9electric distribution company's structurally separate billing10subsidiary may also provide unregulated billing services so11long as the incremental costs and revenues of providing the12services are removed and separated from the costs and13revenues of providing regulated billing services for14distribution and electric generation service.15(3) Unless the commission determines otherwise, an16electric distribution company shall continue to be17responsible for metering, scheduling, settlements, service18termination and reinstatement, compliance with energy19efficiency requirements and any other actions or activities20necessary to provide safe and adequate electric distribution21service.22(4) On and after June 1, 2016, unless an earlier date is23selected by the commission, electric generation suppliers24shall be responsible for providing net metering to customer25generators pursuant to the act of November 30, 200426(P.L.1672, No.213), known as the Alternative Energy Portfolio27Standards Act, and consistent with commission rules regarding28payments made to customer generators to purchase excess29energy under the net-metering rules.30(5) On and after June 1, 2015, electric generation 20130SB1121PN1463
1suppliers shall be responsible for compliance with the2Alternative Energy Portfolio Standards Act.3(e) Consumer education.--The commission shall also establish4a multimedia consumer education campaign designed to educate5consumers about the changes directed by the implementation of6next generation default service and implement the consumer7education campaign sufficiently in advance of the implementation8of next generation default service. The consumer education9planning process shall solicit the views of electric10distribution companies, electric generation suppliers and11representatives of residential and small commercial customers.12(f) Consumer protection and commission implementation.--The13following shall apply:14(1) The commission may have the authority to issue15regulations or policy statements necessary to implement this16section and may establish consumer protections for the17initiatives mandated by this section, including:18(i) Requiring periodic electric generation supplier19license renewal.20(ii) Imposing fines and penalties upon electric21generation suppliers for noncompliance with commission22rules and regulations, after providing appropriate notice23and opportunity for hearing.24(iii) Promulgating a consumer bill of rights setting25forth rules for customer disclosure statements, marketing26and advertising.27(iv) Creating and publishing, at least annually, an28electric generation supplier report card that includes,29but is not necessarily limited to, levels of sustained30informal complaints and formal complaints against 20130SB1121PN1463
1electric generation suppliers.2(2) On or after June 1, 2016, and to the extent3applicable, Chapter 14 (relating to responsible utility4customer protection) and any regulations or orders5promulgated by the commission pursuant to Chapter 14 shall6apply to electric generation suppliers to the same extent as7electric distribution companies, except that electric8distribution companies shall continue to be responsible for9physically terminating or discontinuing service to a customer10at the direction of the customer's electric generation11supplier.12(g) Preservation of universal service.--After the13implementation of next generation default service and the14conduct of the competitive assignment process, the commission15shall continue to provide for universal service support in16accordance with its existing customer assistance program17policies, as set forth in 52 Pa. Code § 69.261 (relating to18general). Any universal service support shall be structured so19as to insure that the program permits low-income customers to20participate in the competitive process to the same degree as21other customers. This subsection does not limit the authority of22the commission to alter or amend its existing policies as23necessary to assure that they are just, reasonable and in the24public interest.25(h) Cost recovery.--Electric distribution companies shall26file tariffs establishing methods for the automatic adjustment27of its rates for the recovery on a nonbypassable basis of all28costs incurred to implement the provisions of this section and29ongoing associated administrative costs.30Section 4. All acts and parts of acts are repealed insofar 20130SB1121PN1463
1as they are inconsistent with the amendment or addition of 662Pa.C.S. §§ 510, 2807(e)(3.1) and 2807.1.3Section 5. This act shall take effect as follows:4(1) The repeal of 66 Pa.C.S. § 2807(e)(3.1) shall take5effect June 1, 2015.6(2) The remainder of this act shall take effect7immediately.	20130SB1121PN1463