THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY SOLOBAY, COSTA AND BREWSTER, AUGUST 2, 2011

REFERRED TO CONSUMER PROTECTION AND PROFESSIONAL LICENSURE, AUGUST 2, 2011  

AN ACT

Amending Title 66 (Public Utilities) of the Pennsylvania

Consolidated Statutes, further providing for definitions; in

rates and ratemaking, further providing for sliding scale of

rates and adjustments; and, in service and facilities,

further providing for ownership and maintenance of natural

gas and artificial gas service lines.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  The definitions of "customer's service line" and

"service line" in section 102 of Title 66 of the Pennsylvania

Consolidated Statutes are amended to read:

§ 102.  Definitions.

Subject to additional definitions contained in subsequent

provisions of this part which are applicable to specific

provisions of this part, the following words and phrases when

used in this part shall have, unless the context clearly

indicates otherwise, the meanings given to them in this section:

* * *

["Customer's service line."  The pipe and appurtenances owned

by the customer extending from the service connection of the gas

utility to the inlet of the meter serving the customer.]

* * *

"Service line."  The pipe and all appurtenances [of the gas

utility which connect any main with either the point of

connection of a customer's service line or the meter of the

public utility if the utility owns all the pipe and

appurtenances between its main and meter.] extending from the

main line of the natural gas distribution company to the inlet

of the meter serving the customer.

* * *

Section 2.  Section 1307 of Title 66 is amended by adding

subsections to read:

§ 1307.  Sliding scale of rates; adjustments.

* * *

(g.2)  Recovery of costs for natural gas distribution company

related to distribution system improvement projects designed to

enhance natural gas distribution reliability and safety.--

(1)  Natural gas distribution companies may file tariffs

establishing a sliding scale of rates or other method for the

automatic adjustment of the rates in order to provide for

recovery of the fixed costs, including depreciation and

pretax return, of certain infrastructure distribution

projects as approved by the commission, that are designed to

enhance distribution system reliability or safety and are

completed and placed in service between base rate

proceedings.

(2)  The commission, by regulation or order, shall

prescribe the specific procedures to be followed in

establishing the sliding scale or other automatic adjustment

mechanism.

(g.3)  Recovery of costs for city natural gas distribution

operation related to distribution system improvement projects

designed to enhance natural gas distribution reliability and

safety.--

(1)  A city natural gas distribution operation may file

tariffs establishing a sliding scale of rates or other

methods for the automatic adjustment of its rates as shall

provide for recovery of the fixed costs, depreciation, costs

of issuance, annual debt service, annual debt service

coverage requirements and any other related costs associated

with the financing of certain capital projects designed to

enhance distribution system reliability or safety that are

completed and placed in service between base rate

proceedings.

(2)  The financing may be by the city natural gas

distribution operation or any other qualified entity

authorized by it to act on its behalf and may be structured

in any manner determined by the city natural gas distribution

operation to reduce the cost of the financing.

(3)  Notwithstanding any other provision of law, the

revenues recovered pursuant to a tariff authorized by this

section shall not constitute project revenues under the act

of October 18, 1972 (P.L.955, No.234), known as The First

Class City Revenue Bond Act, or utility revenues under the

act of December 7, 1982 (P.L.827, No.231), known as The City

of Philadelphia Municipal Utility Inventory and Receivables

Financing Act, but the city natural gas distribution

operation shall be authorized to assign, transfer, pledge,

sell or otherwise dispose of such revenues in order to

finance capital projects described in this subsection.

(4)  At the request of the city natural gas distribution

operation, and notwithstanding any other provision of law,

the commission may issue an order authorizing a sliding scale

of rates or other automatic rate adjustment method permitted

by this section and acknowledging the assignment, transfer,

pledge, sale or other disposition of the revenues received

from a tariff approved under this section and shall include

terms and conditions requested by the city natural gas

distribution operation to the extent necessary to permit the

financing of the capital projects at the lowest cost and on

terms and conditions most favorable to the city natural gas

distribution operation.

(5)  Any such order shall be:

(i)  irrevocable; and

(ii)  in accordance with section 1307(e), include a

reconciliation mechanism which shall permit the city

natural gas distribution operation to recover in rates

any prior period undercollection of costs authorized to

be collected by this subsection.

(6)  Neither the order nor the charges authorized to be

collected under the order by the city natural gas

distribution operation on its behalf or on behalf of any

financing entity shall be subject to reduction, postponement,

impairment or termination by any subsequent action of the

commission, either directly or indirectly.

(g.4)  Industry standards.--

(1)  For the purposes of recovery provided for in

subsections (g.2) and (g.3), in order to ensure safety and

reliability, natural gas distribution system improvement

projects shall comply with industry standards by operator-

qualified workers as required by 49 CFR Pt. 192 (relating to

transportation of natural and other gas by pipeline: minimum

Federal safety standards).

(2)  Natural gas distribution companies shall work with

applicable private and public sector entities to employ and

maintain an adequate trained and qualified work force.

(3)  All contractor work shall be done by a qualified

contractor who is authorized to do business in this

Commonwealth to complete said projects. All contractor work

shall be inspected by an appropriate operator-qualified

individual.

(4)  This subsection is not intended to limit or modify

current or future collective bargaining agreements.

* * *

Section 3.  Section 1510 of Title 66 is amended to read:

§ 1510.  [Ownership and maintenance of natural and artificial] 

Natural gas service lines.

[When connecting the premises of the customer with the gas

utility distribution mains, the public utility shall furnish,

install and maintain the service line or connection according to

the rules and regulations of the filed tariff. A public utility

shall not be authorized or required to acquire or assume

ownership of any customer's service line. A public utility shall

not be authorized or required to acquire or assume ownership of

any pipe or appurtenances installed after the effective date of

this section between its main and the meter unless the utility

would have been authorized or required to do so according to the

rules and regulations of its filed tariff if the pipe or

appurtenances had been installed on or before the effective date

of this section. Maintenance of service lines shall be the

responsibility of the owner of the service line.]

(a)  Duty to furnish, install, operate and maintain.--When

initially connecting the premises of the customer with the main

line of the natural gas distribution company as defined by

section 2202 (relating to definitions) the natural gas

distribution company shall furnish and install the service line.

After the initial installation, the natural gas distribution

company shall own and be responsible for operating and

maintaining the service line.

(b)  Assumption of financial responsibility.--For a service

line in use on the effective date of this subsection, a natural

gas distribution company shall be required to assume financial

responsibility and the operating and maintenance obligations for

all such service lines, without regard to the date of

installation of the service line.

(c)  Replacement.--Upon replacement of any service line by a

natural gas distribution company, a natural gas distribution

company shall own and be responsible for operating and

maintaining such facilities.

Section 4.  This act shall take effect in 60 days.