Pennsylvania Code › Title 52 - PUBLIC UTILITIES › Part I - Public Utility Commission › Subpart C - Fixed Service Utilities › Chapter 69 - GENERAL ORDERS, POLICY STATEMENTS AND GUIDELINES ON FIXED UTILITIES › POLICY STATEMENT ON NUCLEAR FUEL PROCUREMENT GUIDELINES › Section 69.201 - General

Current through Register Vol. 54, No. 28, July 13, 2024
(a) Since
					 66 Pa.C.S. §
												1307
					 (relating to sliding scale of rates; adjustments) enables a utility to collect
					 certain fuel costs on a dollar-for-dollar basis from its ratepayers, a utility
					 has the highest degree of responsibility to take aggressive action on behalf of
					 its ratepayers to control nuclear fuel costs. A utility should use every means
					 reasonably available to monitor and enforce vendor adherence to all aspects of
					 nuclear fuel procurement agreements. In addition to contract adherence, the
					 Pennsylvania Public Utility Commission (Commission) may exercise its
					 independent right to review each utility's purchasing practices, which may
					 include a review to determine if the utility is actively making every effort to
					 secure competitive sources for every phase of the nuclear fuel cycle and is
					 obtaining its nuclear fuel at the lowest reasonable cost. The Commission
					 defines "lowest reasonable cost," relating to nuclear fuel procurement, as
					 contracting for or purchasing nuclear fuel at the lowest available price
					 without sacrificing dependability or quality of service. The Commission may
					 make constructive suggestions with regard to an individual company's nuclear
					 fuel procurement policies and procedures from time to time. As the process of
					 acquiring nuclear fuel is somewhat more complex than fossil fuel, an
					 explanation has been included to describe in general terms the elements of the
					 nuclear fuel procurement process.
(b) The purpose of §
											§
											69.202-69.206 is to establish guidelines
					 that the Commission recommends an electric utility follow in its nuclear fuel
					 procurement activities. The Commission realizes that nuclear fuel procurement
					 policies of utilities may differ depending on individual circumstances. The
					 Commission believes that there are certain common practices that will result in
					 the lowest rea sonable nuclear fuel costs. Nuclear fuel procurement should be
					 consistent with regulatory requirements, and may or may not result in the
					 lowest priced nuclear fuel.
(c) If
					 a utility believes that a nuclear fuel procurement policy that differs from
					 that described in §
											§
											69.202-69.206 will, in the long term,
					 result in lower costs, the utility should submit the details of the policy for
					 review by the Commission prior to implementation.
(d) If it appears through Commission review,
					 that nuclear fuel procurement practices which differ from those described in
					 this section and §
											§
											69.202-69.207 have resulted in
					 unreasonable nuclear fuel costs, a utility may be requested by the Commission
					 to demonstrate the reasonableness of the costs.
(e) If the Commission determines after notice
					 and hearing that a utility's nuclear fuel procurement practices which differ
					 from those described in this section and §
											§
											69.202-69.207 have resulted in
					 unreasonable nuclear fuel costs, the utility will be required to apply credits
					 against the applicable energy cost rate or to make refunds to its
					 customers.
(f) Specifications for
					 the procurement of nuclear fuel should not be set at quantity levels which
					 would preclude competitive proposals from reliable and competent suppliers.
					 Investigations should be conducted to insure that potential vendors have
					 adequate owned or contracted supplies to fulfill all contract
					 provisions.
(g) Sections
					 69.202-69.206 represent the standard by
					 which the Commission intends to assess the reasonableness of a utility's
					 nuclear fuel purchasing policies and practices. Sections
					 69.202-69.206 serve as notice to electric
					 utilities of the Commission's expectations with regard to nuclear fuel
					 procurement policies and practices. Utilities should apply §
											§
											69.202-69.206 prospectively in planning
					 nuclear fuel purchases. If provisions of existing contracts are in conflict
					 with §
											§
											69.202-69.206, utilities need not seek to
					 immediately amend the contracts, but should move towards the policies in §
											§
											69.202-69.206 as contracts are modified,
					 renegotiated or extended. Prior imprudent activities are not deemed to be
					 exonerated with the promulgation of this section.
This section cited in 52 Pa. Code §
													69.205 (relating to purchasing
						  procedures); and 52 Pa. Code §
													69.206 (relating to inventory
						  management).