PRINTER'S NO. 3384
No. 2569 Session of 1980
INTRODUCED BY WILSON, GRUPPO, PUNT, CORNELL, BRANDT, ROCKS,
MAIALE, SIEMINSKI, BROWN, COHEN, GREENFIELD, SWEET,
E. G. JOHNSON, CHESS AND B. D. CLARK, MAY 20, 1980
REFERRED TO COMMITTEE ON CONSUMER AFFAIRS, MAY 20, 1980
AN ACT
1 Amending Title 66 (Public Utilities) of the Pennsylvania
2 Consolidated Statutes, further defining "common carrier by
3 motor vehicle," further providing for the commission and its
4 members, for administrative law judges, for the assessment of
5 regulatory expenses, for certificates of public convenience,
6 for rates and for certain audits, accounts and records.
7 The General Assembly of the Commonwealth of Pennsylvania
8 hereby enacts as follows:
9 Section 1. The definition of "common carrier by motor
10 vehicle" in section 102, sections 301, 304(a), 332(h), 501(b),
11 510 and 511 of Title 66, act of November 25, 1970 (P.L.707,
12 No.230), known as the Pennsylvania Consolidated Statutes, are
13 amended and a definition is added to section 102 to read:
14 § 102. Definitions.
15 Subject to additional definitions contained in subsequent
16 provisions of this part which are applicable to specific
17 provisions of this part, the following words and phrases when
18 used in this part shall have, unless the context clearly
19 indicates otherwise, the meanings given to them in this section:
1 * * *
2 "Common carrier by motor vehicle." Any common carrier who or
3 which holds out or undertakes the transportation of passengers
4 or property, or both, or any class of passengers or property,
5 between points within this Commonwealth by motor vehicle for
6 compensation, whether or not the owner or operator of such motor
7 vehicle, or who or which provides or furnishes any motor
8 vehicle, with or without driver, for transportation or for use
9 in transportation of persons or property as aforesaid, and shall
10 include common carriers by rail, water, or air, and express or
11 forwarding public utilities insofar as such common carriers or
12 such public utilities are engaged in such motor vehicle
13 operations, but does not include:
14 (1) A lessor under a lease given on a bona fide sale of
15 a motor vehicle where the lessor retains or assumes no
16 responsibility for maintenance, supervision, or control of
17 the motor vehicles so sold.
18 (2) Transportation of school children for school
19 purposes or to and from school sponsored extra curricular
20 activities whether as participants or spectators, together
21 with chaperons who might accompany them as designated by the
22 board of school directors not exceeding five in number, or
23 between their homes and Sunday school in any motor vehicle
24 owned by the school district, private school or parochial
25 school, or transportation of school children between their
26 homes and school or to and from school-sponsored extra
27 curricular or educational activities whether as participants
28 or spectators, together with chaperons who might accompany
29 them as designated by the board of school directors not
30 exceeding five in number, if the person performing the extra
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1 curricular transportation has a contract for the
2 transportation of school children between their homes and
3 school, with the private or parochial school, with the school
4 district or jointure in which the school is located, or with
5 a school district that is a member of a jointure in which the
6 school is located if the jointure has no contracts with other
7 persons for the transportation of students between their
8 homes and school, and if the person maintains a copy of all
9 contracts in the vehicle at all times, or children between
10 their homes and Sunday school in any motor vehicle operated
11 under contract with the school district, private school or
12 parochial school.
13 (3) Any owner or operator of a farm transporting
14 agricultural products from, or farm supplies to, such farm,
15 or any independent contractor or cooperative agricultural
16 association hauling agricultural products or farm supplies
17 exclusively for one or more owners or operators of farms.
18 (4) Any person or corporation who or which uses, or
19 furnishes for use, dump trucks for the transportation of
20 [ashes, rubbish,] excavated and road construction materials.
21 (5) Transportation of property by the owner to himself,
22 or to purchasers directly from him, in vehicles owned and
23 operated by the owner of such property and not otherwise used
24 in transportation of property for compensation for others.
25 (6) Transportation of voting machines to and from
26 polling places by any person or corporation for or on behalf
27 of any political subdivision of this Commonwealth for use in
28 any primary, general, municipal or special election.
29 (7) Transportation of pulpwood, chemical wood, saw logs
30 or veneer logs from woodlots.
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1 (8) Transportation by towing of wrecked or disabled
2 motor vehicles.
3 (9) Any person or corporation who or which furnishes
4 transportation for any injured, ill or dead person.
5 (10) Any person or corporation who uses or furnishes for
6 use motor vehicles for the transportation for disposal of
7 ashes, rubbish or sewage.
8 * * *
9 "Fair value." The fair value of a utility's real property
10 may be determined as follows: The utility's gross potential
11 market income minus fixed and variable expenses (but not to
12 include expenses for debt retirement and products or energy
13 purchased for resale) equals the net income. Net income shall be
14 divided by the fair rate of return to determine the fair value.
15 The fair rate of return shall not exceed the previous six
16 months' average AA preferred utility bond rate. The commission
17 shall determine the bond rate as based on those published by
18 Moody's, Standard and Poore's, or a comparable publication. As
19 used in this definition "gross potential market income" means
20 the continuous maximum possible income the property can generate
21 at the current allowable rate. "Variable expenses" means those
22 expenses attributable to the subject property and tested as
23 being reasonable expenses in operating the subject property.
24 * * *
25 § 301. Establishment, members, qualifications and chairman.
26 (a) Appointment and terms of members.--The Pennsylvania
27 Public Utility Commission, established by the act of March 31,
28 1937 (P.L.160, No.43), as an independent administrative
29 commission, is hereby continued as such and shall consist of
30 [five] nine members who shall be appointed by the Governor, by
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1 and with the advice and consent of two-thirds of all the members
2 of the Senate, for a term of [ten] five years. At the direction
3 of the Governor, the Commonwealth shall be divided into nine
4 geographic districts as nearly equal in population as possible.
5 Before the division shall become final, the Governor shall
6 submit the plan of division to the General Assembly for its
7 approval, which approval shall be evidenced by a concurrent
8 resolution. If the General Assembly fails to act within 60 days
9 of submission of the plan, the plan shall be deemed approved.
10 The boundaries of such districts shall be revised every ten
11 years within 12 months following the reporting of the Federal
12 decennial census and shall be approved by the General Assembly
13 as herein provided. Each member of the commission shall be a
14 resident of one of the districts. If a vacancy occurs subsequent
15 to the commission having reached its full complement of nine
16 members, and at such time there are less than three members of
17 the commission who are of the party which is the party opposite
18 the Governor's party, the Governor shall make an appointment
19 from a list of five nominees designated jointly by the
20 leadership of the party opposite the Governor's party in the
21 General Assembly. No commissioner upon the expiration of his
22 term shall continue to hold office until his successor shall be
23 duly appointed or shall be qualified.
24 (b) Qualifications and restrictions.--Each commissioner, at
25 the time of his appointment and qualification, shall be a
26 resident of this Commonwealth and the district for which he is
27 appointed and shall have been a qualified elector therein for a
28 period of at least one year next preceding his appointment, and
29 shall also be not less than 30 years of age. No person shall be
30 [appointed] confirmed as a member of the commission or hold any
19800H2569B3384 - 5 -
1 place, position or office under it, who holds an office in any
2 political party or occupies any official relation to any public
3 utility or who holds any other appointive or elected office of
4 the Commonwealth or any political subdivision thereof. No person
5 who holds any elective office shall take office as a
6 commissioner unless that person resigns from the elective office
7 upon confirmation. [Commencing July 1, 1977, commissioners]
8 Commissioners shall devote full time to their official duties.
9 No commissioner shall hold any office or position, the duties of
10 which are incompatible with the duties of his office as
11 commissioner, or be engaged in any business, employment or
12 vocation, for which he shall receive any remuneration, except as
13 provided in this chapter. No employee, appointee or official
14 engaged in the service of or in any manner connected with, the
15 commission shall hold any office or position, or be engaged in
16 any employment or vocation, the duties of which are incompatible
17 with his employment in the service of or in connection with the
18 work of the commission. No commissioner shall be paid or accept
19 for any service connected with the office, any fee or emolument
20 other than the salary and expenses provided by law. No
21 commissioner shall participate in any hearing or proceeding in
22 which he has any direct or indirect pecuniary interest. Within
23 90 days of confirmation, each commissioner shall disclose, at
24 that time and thereafter annually, the existence of all security
25 holdings in any public utility or its affiliates held by such
26 commissioner, his or her spouse and any minor or unemancipated
27 children and must either divest or place in a blind trust such
28 securities. As used in this part, blind trust means a trust over
29 which neither the commissioners, their spouses, nor any minor or
30 unemancipated children shall exercise any managerial control,
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1 and from which neither the commissioners, their spouses, nor any
2 minor or unemancipated children shall receive any income from
3 the trust during the commissioner's tenure of office. Such
4 disclosure statement shall be filed with the secretary of the
5 commission and shall be open to inspection by the public during
6 the normal business hours of the commission during the tenure of
7 the commissioner. Every commissioner, and every individual or
8 official, employed or appointed to office under, in the service
9 of, or in connection with, the work of the commission, is
10 forbidden, directly or indirectly, to solicit or request from,
11 or to suggest or recommend to any public utility, or to any
12 officer, attorney, agent or employee thereof, the appointment of
13 any individual to any office, place or position in, or the
14 employment of any individual in any capacity by, such public
15 utility. Every commissioner, every bureau director, [and] every
16 administrative law judge and every other officer and employee of
17 the commission included in the definition of "public employee"
18 as defined in section 2 of the act of October 4, 1978 (P.L.883,
19 No.170), referred to as the "Public Official and Employee Ethics
20 Law" employed or appointed to office under, in the service of or
21 in connection with the work of the commission, is prohibited
22 from [accepting employment with] contracting for employment or
23 other services any public utility subject to the rules and
24 regulations of the commission for a period of [one year] two
25 years after terminating employment or service with the
26 commission: Any person in violation of this restriction on
27 employment or service shall, after a hearing, forfeit any right
28 to a pension or other retirement benefits under the provisions
29 of 71 Pa.C.S. § 5101 et seq. (relating to retirement for State
30 employees and officers), except for a return of contributions.
19800H2569B3384 - 7 -
1 If any person employed or appointed in the service of the
2 commission violates any provision of this section, the
3 commission shall forthwith remove him from the office or
4 employment held by him.
5 (c) Chairman.--A member designated by the Governor shall be
6 the chairman of the commission during such member's term of
7 office. When present, the chairman shall preside at all
8 meetings, but in his absence a member, designated by the
9 chairman, shall preside and shall exercise, for the time being,
10 all the powers of the chairman. The chairman shall have such
11 powers and duties as authorized by the commission as provided in
12 section 331(b) (relating to powers of commission and
13 administrative law judges).
14 (d) Quorum.--A majority of the members of the commission
15 serving in accordance with law shall constitute a quorum and
16 such majority, acting unanimously, shall be required for any
17 action, including the making of any order or the ratification of
18 any act done or order made by one or more of the commissioners.
19 No vacancy in the commission shall impair the right of a quorum
20 of the commissioners to exercise all the rights and perform all
21 the duties of the commission.
22 (e) Compensation.--Each of the commissioners shall receive
23 an annual salary of [$35,000, as of January 1, 1977, and
24 $40,000, as of January 1, 1978, except the chairman, who shall
25 receive an annual salary of $37,500, as of January 1, 1977, and
26 $42,500, as of January 1, 1978.] $45,000 and the chairman shall
27 receive an annual salary of $47,500.
28 (f) Open proceedings.--The proceedings of the commission
29 shall be conducted in accordance with the provisions of the act
30 of July 19, 1974 (P.L.486, No.175), referred to as the Public
19800H2569B3384 - 8 -
1 Agency Open Meeting Law.
2 (g) Monitoring cases.--Each commissioner shall be
3 responsible for monitoring specified cases as shall be assigned
4 to him in a manner determined by the commission. All proceedings
5 properly before the commission shall be assigned immediately
6 upon filing.
7 § 304. Administrative law judges.
8 (a) General rule.--The office of administrative law judge to
9 the Pennsylvania Public Utility Commission is hereby created.
10 The commission shall have the power to appoint as many qualified
11 and competent administrative law judges as may be necessary for
12 proceedings pursuant to this part[, and who shall devote full
13 time to their official duties and who shall perform no duties
14 inconsistent with their duties and responsibilities as
15 administrative law judges] who:
16 (1) Shall devote full time to their official duties.
17 (2) Shall perform no duties inconsistent with their
18 duties and responsibilities as administrative law judges.
19 (3) May not hold office in any political party.
20 Administrative law judges shall be afforded employment security
21 as provided by the act of August 5, 1941 (P.L.752, No.286),
22 known as the "Civil Service Act." Compensation for
23 administrative law judges shall be established by the commission
24 within [a range of $25,000 to $35,000] pay range numbers 49 to
25 54 of the Commonwealth's 37.5-hour standard pay schedule, but in
26 no event to exceed the salary paid to commissioners. If the
27 commission is occasionally and temporarily understaffed of
28 administrative law judges, the commission may appoint qualified
29 and competent persons who meet the minimum standards established
30 by this part to temporarily serve as such judges, who shall
19800H2569B3384 - 9 -
1 serve at the pleasure of the commission and shall receive such
2 compensation as the commission may establish.
3 * * *
4 § 332. Procedures in general.
5 * * *
6 (h) Exceptions and appeal procedure.--Any party to a
7 proceeding referred to an administrative law judge under section
8 331(b) may file exceptions to the decision of the administrative
9 law judge within 15 days after such decision is issued, in a
10 form and manner to be prescribed by the commission. The
11 administrative law judge shall rule upon such exceptions within
12 30 days after filing. Any party to the proceeding may appeal to
13 the commission from the ruling of the administrative law judge
14 on the exceptions within 15 days after such ruling is issued. If
15 no exceptions are filed or if no appeal is taken from the ruling
16 on the exceptions within 15 days after any such decision or
17 ruling is issued, the decision or ruling shall become final,
18 without further commission action, unless [two] four or more
19 commissioners within [15] 25 days after the decision or ruling
20 on the exceptions request that the commission review the
21 decision and make such other order, within 90 days of such
22 request, as it shall determine. Prosecutory counsel of the Law
23 Bureau shall be deemed to have automatic standing as a party to
24 such proceeding and may file exceptions to any decision of the
25 administrative law judge under this subsection. Upon exception
26 or appeal of the initial decision the commission shall have all
27 the powers which it would have in making the initial decision
28 except as it may limit the issues on notice or by rule.
29 § 501. General powers.
30 * * *
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1 (b) Administrative authority and regulations.--[The] In
2 order to protect the rights and interests of the general public
3 and of those persons who rely on the services provided by public
4 utilities, the commission shall have general administrative
5 power and authority to supervise and regulate all public
6 utilities doing business within this Commonwealth. The
7 commission may make such regulations, not inconsistent with law,
8 as may be necessary or proper in the exercise of its powers or
9 for the performance of its duties.
10 * * *
11 § 510. Assessment for regulatory expenses upon public
12 utilities and contract carriers by motor vehicles.
13 (a) Determination of assessment.--Before March 1 of each
14 year, the commission shall estimate its total expenditures in
15 the administration of this part for the fiscal year beginning
16 July of that year, which estimate shall not exceed [three-
17 tenths] one-half of 1% of the total gross intrastate operating
18 revenues of the public utilities and contract carriers by motor
19 vehicles under its jurisdiction for the preceding calendar year.
20 Such estimate shall be approved by a two-thirds majority of the
21 members serving on the commission before it is submitted to the
22 Governor and the General Assembly for approval. Such estimate
23 shall be submitted to the Governor, and to the appropriation
24 committees of the House and Senate through their respective
25 chairmen, for their respective approvals of such estimate in the
26 amount submitted or such lesser amount as each of them may
27 determine. Unless the Governor, or either committee through its
28 chairman, shall notify the commission in writing of his or its
29 action within 30 days after such submission, the estimate as
30 submitted shall be deemed approved by him or by the committee.
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1 The least of the amounts so approved by the three approving
2 authorities shall be the final estimate; and approval of such
3 least amount shall constitute compliance with section 604 of the
4 act of April 9, 1929 (P.L.177, No.175), known as "The
5 Administrative Code of 1929." The commission or its designated
6 representatives shall be afforded an opportunity to appear
7 before the Senate and House Appropriations Committees regarding
8 their estimates. The commission shall subtract from the final
9 estimate:
10 (1) the estimated fees to be collected pursuant to
11 section 317 (relating to fees for services rendered by
12 commission); and
13 (2) the estimated balance of the appropriation,
14 specified in section 511 (relating to disposition,
15 appropriation and disbursement of assessments and fees), to
16 be carried over into such fiscal year from the preceding one.
17 The remainder so determined, herein called the total assessment,
18 shall be allocated to, and paid by, such public utilities and
19 contract carriers by motor vehicles in the manner prescribed in
20 this part.
21 (b) Allocation of assessment.--On or before March 31 of each
22 year, every public utility and contract carrier by motor vehicle
23 shall file with the commission a statement under oath showing
24 its gross intrastate operating revenues for the preceding
25 calendar year. If any public utility and contract carrier by
26 motor vehicle shall fail to file such statement on or before
27 March 31, the commission shall estimate such revenues, which
28 estimate shall be binding upon the public utility and contract
29 carrier by motor vehicle for the purposes of this section. For
30 each fiscal year, the allocation shall be made as follows:
19800H2569B3384 - 12 -
1 (1) The commission shall determine for the preceding
2 calendar year the amount of its expenditures directly
3 attributable to the regulation of each group of utilities and
4 contract carriers by motor vehicles furnishing the same kind
5 of service, and debit the amount so determined to such group.
6 (2) The commission shall also determine for the
7 preceding calendar year the balance of its expenditures, not
8 debited as aforesaid, and allocate such balance to each group
9 in the proportion which the gross intrastate operating
10 revenues of such group for that year bear to the gross
11 intrastate operating revenues of all groups for that year.
12 (3) The commission shall then allocate the total
13 assessment prescribed by subsection (a) to each group in the
14 proportion which the sum of the debits made to it bears to
15 the sum of the debits made to all groups.
16 (4) Each public utility and contract carrier by motor
17 vehicle within a group shall then be assessed for and shall
18 pay to the commission such proportion of the amount allocated
19 to its group as the gross intrastate operating revenues of
20 the public utility and contract carrier by motor vehicle for
21 the preceding calendar year bear to the total gross
22 intrastate operating revenues of its group for that year.
23 (c) Notice, hearing and payment.--The commission shall give
24 notice by registered or certified mail to each public utility
25 and contract carrier by motor vehicle of the amount lawfully
26 charged against it under the provisions of this section, which
27 amount shall be paid by the public utility and contract carrier
28 by motor vehicle within 30 days of receipt of such notice,
29 unless the commission specifies on the notices sent to all
30 public utilities and contract carriers by motor vehicles an
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1 installment plan of payment, in which case each public utility
2 and contract carrier by motor vehicle shall pay each installment
3 on or before the date specified therefor by the commission.
4 Within 15 days after receipt of such notice, the public utility
5 and contract carrier by motor vehicle against which such
6 assessment has been made may file with the commission objections
7 setting out in detail the grounds upon which the objector
8 regards such assessment to be excessive, erroneous, unlawful or
9 invalid. The commission, after notice to the objector, shall
10 hold a hearing upon such objections. After such hearing, the
11 commission shall record upon its minutes its findings on the
12 objections and shall transmit to the objector, by registered or
13 certified mail, notice of the amount, if any, charged against it
14 in accordance with such findings, which amount or any
15 installment thereof then due, shall be paid by the objector
16 within ten days after receipt of notice of the findings of the
17 commission with respect to such objections. If any payment
18 prescribed by this subsection is not made as aforesaid, the
19 commission may suspend or revoke certificates of public
20 convenience, certify automobile registrations to the Department
21 of Transportation for suspension or revocation or, through the
22 Department of Justice, may institute an appropriate action at
23 law for the amount lawfully assessed, together with any
24 additional cost incurred by the commission or the Department of
25 Justice by virtue of such failure to pay.
26 (d) Suits by public utilities.--No suit or proceeding shall
27 be maintained in any court for the purpose of restraining or in
28 anywise delaying the collection or payment of any assessment
29 made under subsections (a), (b) and (c), but every public
30 utility and contract carrier by motor vehicle against which an
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1 assessment is made shall pay the same as provided in subsection
2 (c). Any public utility or contract carrier by motor vehicle
3 making any such payment may, at any time within two years from
4 the date of payment, sue the Commonwealth in an action at law to
5 recover the amount paid, or any part thereof, upon the ground
6 that the assessment was excessive, erroneous, unlawful, or
7 invalid, in whole or in part, provided objections, as
8 hereinbefore provided, were filed with the commission, and
9 payment of the assessment was made under protest either as to
10 all or part thereof. In any action for recovery of any payments
11 made under this section, the claimant shall be entitled to raise
12 every relevant issue of law, but the findings of fact made by
13 the commission, pursuant to this section, shall be prima facie
14 evidence of the facts therein stated. Any records, books, data,
15 documents, and memoranda relating to the expenses of the
16 commission shall be admissible in evidence in any court and
17 shall be prima facie evidence of the truth of their contents. If
18 it is finally determined in any such action that all or any part
19 of the assessment for which payment was made under protest was
20 excessive, erroneous, unlawful, or invalid, the commission shall
21 make a refund to the claimant out of the appropriation specified
22 in section 511 as directed by the court.
23 (e) Certain provisions not applicable.--The provisions of
24 this part relating to the judicial review of orders and
25 determinations of the commission shall not be applicable to any
26 findings, determinations, or assessments made under this
27 section. The procedure in this section providing for the
28 determination of the lawfulness of assessments and the recovery
29 back of payments made pursuant to such assessment shall be
30 exclusive of all other remedies and procedures.
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1 (f) Intent of section.--It is the intent and purpose of this
2 section that each public utility and contract carrier by motor
3 vehicle subject to this part shall advance to the commission its
4 reasonable share of the cost of administering this part. The
5 commission shall keep records of the costs incurred in
6 connection with the administration and enforcement of this part
7 or any other statute. The commission shall also keep a record of
8 the manner in which it shall have computed the amount assessed
9 against every public utility and contract carrier by motor
10 vehicle. Such records shall be open to inspection by all
11 interested parties. The determination of such costs and
12 assessments by the commission, and the records and data upon
13 which the same are made, shall be considered prima facie
14 correct; and in any proceeding instituted to challenge the
15 reasonableness or correctness of any assessment under this
16 section, the party challenging the same shall have the burden of
17 proof.
18 (g) Saving provision.--This section does not affect or
19 repeal any of the provisions of the act of July 31, 1968
20 (P.L.769, No.240), known as the "Commonwealth Documents Law."
21 § 511. Disposition, appropriation and disbursement of
22 assessments and fees.
23 (a) Payment into General Fund.--All assessments and fees
24 received, collected or recovered under this chapter shall be
25 paid by the commission into the General Fund of the State
26 Treasury through the Department of Revenue.
27 (b) Use and appropriation of funds.--All such assessments
28 and fees, having been advanced by public utilities and contract
29 carriers by motor vehicles for the purpose of defraying the cost
30 of administering this part, shall be held in trust solely for
19800H2569B3384 - 16 -
1 that purpose, and shall be earmarked for the use of, and are
2 hereby appropriated to, the commission for disbursement solely
3 for that purpose.
4 (c) Requisition of funds.--All requisitions upon such
5 appropriation shall be signed by the chairman and secretary of
6 the commission, or such deputies as they may designate in
7 writing to the State Treasurer, and shall be presented to the
8 State Treasurer and dealt with by him and the Treasury
9 Department in the manner prescribed by the act of April 9, 1929
10 (P.L.343, No.176), known as "The Fiscal Code."
11 Section 2. Subsection (a) of section 1102 of Title 66 is
12 amended by adding a paragraph to read:
13 § 1102. Enumeration of acts requiring certificate.
14 (a) General rule.--Upon the application of any public
15 utility and the approval of such application by the commission,
16 evidenced by its certificate of public convenience first had and
17 obtained, and upon compliance with existing laws, it shall be
18 lawful:
19 * * *
20 (6) For any public utility to undertake major capital
21 expansion or construction of its facilities resulting in
22 spending in excess of 10% of its gross annual revenues.
23 Approval of the commission shall be required prior to both
24 the preliminary planning stage and the beginning of actual
25 construction. Cost overruns in excess of 10% of the original
26 estimate must have prior approval of the commission. Prior
27 approval by the commission shall not be construed to indicate
28 that costs incurred by a utility for expansion or
29 construction will automatically be approved by the commission
30 for recovery in the rate base.
19800H2569B3384 - 17 -
1 * * *
2 Section 3. Sections 1307, 1308(b), (c) and (d), 1308.1,
3 1701, 1702 and 1704 of Title 66 are amended or added to read:
4 [§ 1307. Sliding scale of rates; adjustments.
5 (a) General rule.--Any public utility, except a common
6 carrier, may establish a sliding scale of rates or such other
7 method for the automatic adjustment of the rates of the public
8 utility as shall provide a just and reasonable return on the
9 fair value of the property used and useful in the public
10 service, to be determined upon such equitable or reasonable
11 basis as shall provide such fair return. A tariff showing the
12 scale of rates under such arrangement shall first be filed with
13 the commission, and such tariff, and each rate set out therein,
14 approved by it. The commission may revoke its approval at any
15 time and fix other rates for any such public utility if, after
16 notice and hearing, the commission finds the existing rates
17 unjust or unreasonable.
18 (b) Mandatory system for automatic adjustment.--The
19 commission, by regulation or order, upon reasonable notice and
20 after hearing, may prescribe for any class of public utilities,
21 except a common carrier, a mandatory system for the automatic
22 adjustment of their rates, by means of a sliding scale of rates
23 or other method, on the same basis as provided in subsection
24 (a), to become effective when and in the manner prescribed in
25 such regulation or order. Every such public utility shall,
26 within such time as shall be prescribed by the commission, file
27 tariffs showing the rates established in accordance with such
28 regulation or order.
29 (c) Fuel cost adjustment.--In any method automatically
30 adjusting rates to reflect changes in fossil fuel cost under
19800H2569B3384 - 18 -
1 this section, the fuel cost used in computing the adjustment
2 shall be limited, in the case of an electric utility, to the
3 cost of such fuel delivered to the utility at the generating
4 site at which it is to be consumed, and the cost of disposing of
5 solid waste from scrubbers or other devices designed so that the
6 consumption of Pennsylvania-mined coal at the generating site
7 would comply with the sulfur oxide emission standards prescribed
8 by the Commonwealth. The cost of fuel handling after such
9 delivery, or of waste disposal, other than as prescribed in this
10 section, shall be excluded from such computation. In any method
11 automatically adjusting rates to reflect changes in fuel cost
12 other than fossil fuel cost under this section, the fuel cost
13 used in computing the adjustment shall be limited, in the case
14 of an electric utility, to the cost of such fuel delivered to
15 the utility at the generating site at which it is to be consumed
16 after deducting therefrom the present salvage or reuse value of
17 such fuel, as shall be established by commission rule or order.
18 (d) Fuel cost adjustment audits.--The commission shall
19 conduct or cause to be conducted, at such times as it may order,
20 but at least annually, an audit of each public utility which, by
21 any method described in this section, automatically adjusts its
22 rates to reflect changes in its fuel costs, which audit shall
23 enable the commission to determine the propriety and correctness
24 of amounts billed and collected under this section. Whoever
25 performs the audit shall be a person knowledgeable in the
26 subject matter encompassed within the operation of the automatic
27 adjustment clause. The auditors report shall be in a form and
28 manner directed by the commission.
29 (e) Automatic adjustment reports and proceedings.--
30 (1) Within 30 days following the end of such 12-month
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1 period as the commission shall designate, each public utility
2 using an automatic adjustment clause shall file with the
3 commission a statement which shall specify for such period:
4 (i) the total revenues received pursuant to the
5 automatic adjustment clause;
6 (ii) the total amount of that expense or class of
7 expenses incurred which is the basis of the automatic
8 adjustment clause; and
9 (iii) the difference between the amounts specified
10 by subparagraphs (i) and (ii).
11 Such report shall be a matter of public record and copies
12 thereof shall be made available to any person upon request to
13 the commission.
14 (2) Within 60 days following the submission of such
15 report by a public utility, the commission shall hold a
16 public hearing on the substance of the report and any matters
17 pertaining to the use by such public utility of such
18 automatic adjustment clause in the preceding period and may
19 include the present and subsequent periods.
20 (3) Absent good reason being shown to the contrary, the
21 commission shall, within 60 days following such hearing, by
22 order direct each such public utility to, over an appropriate
23 12-month period, refund to its patrons an amount equal to
24 that by which its revenues received pursuant to such
25 automatic adjustment clause exceeded the amount of such
26 expense or class of expenses, or recover from its patrons an
27 amount equal to that by which such expense or class of
28 expenses exceeded the revenues received pursuant to such
29 automatic adjustment clause.
30 (4) For the purpose of this subsection, where a 12-month
19800H2569B3384 - 20 -
1 report period and 12-month refund or recovery period shall
2 have been previously established or designated, nothing in
3 this section shall impair the continued use of such
4 previously established or designated periods nor shall
5 anything in this section prevent the commission from amending
6 at any time any method used by any utility in automatically
7 adjusting its rates, so as to provide the commission more
8 adequate supervision of the administration by a utility of
9 such method and to decrease the likelihood of collection by a
10 utility, in subsequent periods, of amounts greater or less
11 than that to which it is entitled, or, in the event that such
12 deficiency or surplus in collected amounts is found, more
13 prompt readjustment thereof.]
14 § 1307. Fuel and energy adjustments.
15 (a) General rule.--Any public utility, except a common
16 carrier, which appeals for an adjustment more than once in any
17 12-month period may petition the commission for approval of a
18 rate adjustment no more often than every six months. Such
19 adjustment shall be for the purpose of allowing for changes in
20 fuel costs and energy purchases, but shall not include fuel
21 products purchased by a utility for resale. The commission shall
22 make a decision on each petition within 30 days. The commission
23 may revoke its approval at any time and fix other rates for any
24 such public utility if, after notice and hearing, the commission
25 finds the existing rates unjust and unreasonable.
26 (b) Readjustment procedure.--Rate adjustments shall be
27 computed considering the average fuel and energy purchase cost
28 over the prior six months and the anticipated costs for the same
29 over the next 12 months.
30 (c) Adjustment limit.--The commission shall not approve a
19800H2569B3384 - 21 -
1 rate adjustment in excess of one-half of the percentage
2 differential of any annual increase or decrease in the Fuels and
3 Related Products and Power Index (Code 05) of the Producer's
4 Price Index as computed and published by the United States
5 Department of Labor for the immediately preceding 12-month
6 period for which such figures are immediately available.
7 (d) Refunds and surcharges.--Absent good reason being shown
8 to the contrary, the commission shall, within 60 days following
9 such adjustment, by order direct each such public utility to,
10 over an appropriate 12-month period, refund to its patrons an
11 amount equal to that by which its revenues received pursuant to
12 such adjustment exceeded the amount of such expense or class of
13 expenses, or recover from its patrons an amount equal to that by
14 which such expense or class of expenses exceeded the revenues
15 received pursuant to such adjustment.
16 (e) Adjustment audits.--The commission may conduct or cause
17 to be conducted, at such times as it may order, an audit of each
18 public utility which, by the method described in this section,
19 adjusts its rates to reflect changes in its fuel costs, which
20 audit shall enable the commission to determine the propriety and
21 correctness of amounts billed and collected under this section.
22 Whoever performs the audit shall be a person knowledgeable in
23 the subject matter encompassed within the operation of the
24 adjustment. The auditor's report shall be in a form and manner
25 directed by the commission.
26 § 1308. Voluntary changes in rates.
27 * * *
28 (b) Hearing and suspension of rate change.--Whenever there
29 is filed with the commission by any public utility any tariff
30 stating a new rate, the commission [may] shall, either upon
19800H2569B3384 - 22 -
1 complaint or upon its own motion, when the new rate exceeds the
2 old rate by an amount greater than the percentage increase in
3 the Fuels and Related Products and Power Index of the Producers
4 Price Index between the effective date of the old rate and the
5 date the new tariff is filed, upon reasonable notice, enter upon
6 a hearing concerning the lawfulness of such rate[, and pending].
7 Pending such hearing and the decision thereon, the commission,
8 upon filing with such tariff and delivering to the public
9 utility affected thereby a statement in writing of its reasons
10 therefor, may, at any time before it becomes effective, suspend
11 the operation of such rate for a period not longer than six
12 months from the time such rate would otherwise become effective,
13 and an additional period of not more than three months pending
14 such decision. The rate in force when the tariff stating the new
15 rate was filed shall continue in force during the period of
16 suspension, unless the commission shall establish a temporary
17 rate as authorized in section 1310 (relating to temporary
18 rates). The commission shall consider the effect of such
19 suspension in finally determining and prescribing the rates to
20 be thereafter charged and collected by such public utility. This
21 subsection shall not apply to any tariff stating a new rate
22 which constitutes a general rate increase as defined in
23 subsection (d).
24 (c) Determination.--If the new rate does not exceed the old
25 rate by an amount greater than the percentage increase in the
26 Fuels and Related Products and Power Index as described in
27 subsection (b), the commission may refer the hearing to an
28 administrative law judge if a hearing is required. If, after
29 such hearing, the commission finds any such rate to be unjust or
30 unreasonable, or in anywise in violation of law, the commission
19800H2569B3384 - 23 -
1 giving due consideration to the recommendations of the
2 administrative law judge shall determine the just and reasonable
3 rate to be charged or applied by the public utility for the
4 service in question, and shall fix the same by order to be
5 served upon the public utility and such rate shall thereafter be
6 observed until changed as provided by this part. Findings of an
7 administrative law judge shall be subject to the exceptions and
8 appeal procedure defined in section 332(h) (relating to
9 procedures in general).
10 (d) General rate increases.--Whenever there is filed with
11 the commission by any public utility described in paragraph
12 (1)(i), (ii), (vi) or (vii) of the definition of "public
13 utility" in section 102 (relating to definitions), and such
14 other public utility as the commission may by rule or regulation
15 direct, any tariff stating a new rate which constitutes a
16 general rate increase, the commission shall promptly enter into
17 an investigation and analysis of said tariff filing and [may] by
18 order setting forth its reasons therefor, upon complaint or upon
19 its own motion, shall, when the new rate exceeds the old rate by
20 an amount greater than the percentage increase in the Fuels and
21 Related Products and Power Index between the effective date of
22 the old rate and the date the new tariff is filed, upon
23 reasonable notice, enter upon a hearing concerning the
24 lawfulness of such rate[, and the]. The commission may, at any
25 time by vote of a majority of the members of the commission
26 serving in accordance with law, permit such tariff to become
27 effective, except that absent such order such tariff shall be
28 suspended for a period not to exceed seven months from the time
29 such rate would otherwise become effective. Before the
30 expiration of such seven-month period, a majority of the members
19800H2569B3384 - 24 -
1 of the commission serving in accordance with law[, acting
2 unanimously,] shall make a final decision and order, setting
3 forth its reasons therefor, granting or denying, in whole or in
4 part, the general rate increase requested. If, however, such an
5 order has not been made at the expiration of such seven-month
6 period, the proposed general rate increase shall go into effect
7 at the end of such period, but the commission may by order
8 require the interested public utility to refund, in accordance
9 with section 1312 (relating to refunds), to the persons in whose
10 behalf such amounts were paid, such portion of such increased
11 rates as by its decision shall be found not justified, plus
12 interest, which shall be the average rate of interest specified
13 for residential mortgage lending by the Secretary of Banking in
14 accordance with the act of January 30, 1974 (P.L.13, No.6),
15 referred to as the Loan Interest and Protection Law, during the
16 period or periods for which the commission orders refunds. The
17 rate in force when the tariff stating such new rate was filed
18 shall continue in force during the period of suspension unless
19 the commission shall grant extraordinary rate relief as
20 prescribed in subsection (e). The commission shall consider the
21 effect of such suspension in finally determining and prescribing
22 the rates to be thereafter charged and collected by such public
23 utility, except that the commission shall have no authority to
24 prescribe, determine or fix, at any time during the pendency of
25 a general rate increase proceeding or prior to a final
26 determination of a general rate increase request, temporary
27 rates as provided in section 1310, which rates may provide
28 retroactive increases through recoupment. If the new rate does
29 not exceed the old rate by more than the percentage increase in
30 the Fuels and Related Products and Power Index as described in
19800H2569B3384 - 25 -
1 subsection (b), the commission may refer the hearing to an
2 administrative law judge for a determination. Any determination
3 by an administrative law judge shall be subject to the
4 exceptions and appeal procedure defined in section 332(h)
5 (relating to procedures in general). The commission shall give
6 due consideration to the recommendations of the administrative
7 law judge. As used in this part general rate increase means a
8 tariff filing which affects more than 5% of the customers and
9 amounts to in excess of 3% of the total gross annual intrastate
10 operating revenues of the public utility. If the public utility
11 furnishes two or more types of service, the foregoing
12 percentages shall be determined only on the basis of the
13 customers receiving, and the revenues derived from, the type of
14 service to which the tariff filing pertains.
15 * * *
16 § 1308.1. Rates of common carriers by aircraft.
17 (a) Specific regulatory authorization.--In addition to the
18 other provisions of this title which generally authorize the
19 commission to review and approve the rates of common carriers,
20 the commission may review and approve, in the same manner as the
21 rates of other common carriers are reviewed and approved, the
22 rates of all common carriers by aircraft in respect to all
23 intrastate flights which originate and terminate within the
24 Commonwealth and in respect to those interstate flights which
25 have segments that both originate and terminate at airports in
26 the Commonwealth.
27 (b) Construction.--The provisions of this section and the
28 other provisions of this title insofar as they relate to the
29 commission's authority to review and approve the rates of common
30 carriers by aircraft shall be liberally construed to the fullest
19800H2569B3384 - 26 -
1 extent consistent with the Federal Constitution and other
2 applicable Federal law.
3 § 1701. Mandatory systems of accounts.
4 [The commission may, after reasonable notice and hearing,
5 establish systems of accounts, including cost finding
6 procedures, to be kept by public utilities, or may classify
7 public utilities and establish a system of accounts for each
8 class, and prescribe the manner and form in which such accounts
9 shall be kept. Every public utility shall establish such systems
10 of accounting, and shall keep such accounts in the manner and
11 form required by the commission. The accounting system of any
12 public utility also subject to the jurisdiction of a Federal
13 regulatory body shall correspond, as far as practicable, to the
14 system prescribed by such Federal regulatory body. The
15 commission may require any such public utility to keep and
16 maintain supplemental or additional accounts to those required
17 by any such regulatory body.]
18 (a) Commission authorization to establish.--The commission
19 shall establish a uniform system of accounts to be kept by
20 public utilities and to classify public utilities according to
21 the type of service provided. The commission shall establish a
22 uniform system of accounts for each class and prescribe the
23 manner in which such accounts shall be kept. It may also, in its
24 discretion, prescribe the forms of accounts to be kept by public
25 utilities, including records of service, as well as accounts of
26 earnings and expenses, and any other forms, records and
27 memoranda which in the judgment of the commission may be
28 necessary to carry out any of the provisions of this part. The
29 system of accounts established by the commission and the forms
30 of accounts prescribed by it shall not be inconsistent with the
19800H2569B3384 - 27 -
1 systems and forms from time to time established by any Federal
2 regulatory body having jurisdiction over the same class of
3 public utilities, but nothing herein contained shall prevent the
4 commission from requiring supplemental or additional information
5 accounts and records from such public utilities.
6 (b) Other systems unlawful.--When the commission has
7 prescribed the forms of accounts to be kept by any public
8 utility for any of its business, it shall thereafter be unlawful
9 for such public utility to keep any accounts for such business
10 other than those prescribed or approved by the commission, or
11 those prescribed under the authority of any other state or of
12 the United States.
13 (c) Conformity required.--The commission shall not hear any
14 rate request unless the public utility in question is in
15 conformity with the uniform system of accounts.
16 § 1702. Continuing property records.
17 The commission [may] shall require [any] every public utility
18 to establish, provide, and maintain as a part of its system of
19 accounts, continuing property records, including a list or
20 inventory of all the units of tangible property used or useful
21 in the public service, showing the current location of such
22 property units by definite reference to the specific land
23 parcels upon which such units are located or stored. The
24 commission [may] shall require [any] every public utility to
25 keep accounts and records in such manner as to show, currently,
26 the original cost of such property when first devoted to the
27 public service, and the reserve accumulated to provide for the
28 depreciation thereof.
29 § 1704. Records and accounts to be kept in Commonwealth.
30 (a) General rule.--Every public utility shall keep such
19800H2569B3384 - 28 -
1 books, accounts, papers, records, Federal and State tax returns
2 and memoranda, as shall be required by the commission, in an
3 office within this Commonwealth, and shall not remove the same,
4 or any of them, from this Commonwealth, except upon such terms
5 and conditions as may be prescribed by the commission.
6 (b) Exceptions.--This section does not apply to a public
7 utility of another state, engaged in interstate commerce, whose
8 accounts are kept at its principal place of business without
9 this Commonwealth, in the manner prescribed by any Federal
10 regulatory body. Nor does it apply to a Pennsylvania public
11 utility which is a member of an affiliated group whose accounts
12 are kept at the accounting headquarters of the affiliated group
13 without this Commonwealth, in the manner prescribed by the
14 commission. Such public utility, when required by the
15 commission, shall furnish to the commission, within such
16 reasonable time as it shall fix, certified copies of its books,
17 accounts, papers, records, Federal and State tax returns and
18 memoranda relating to the business done by such public utility
19 within this Commonwealth.
20 Section 4. Title 66 is amended by adding a section to read:
21 § 1707. Management audits.
22 (a) Audits mandated.--The commission shall at intervals not
23 less than three years nor greater than five years apart:
24 (1) Make a complete performance audit of every public
25 utility.
26 (2) Investigate the quality of service provided by every
27 public utility.
28 (3) Ensure, as a result of the performance audit, that
29 the utility is operating at maximum efficiency in providing
30 service to the public.
19800H2569B3384 - 29 -
1 (4) Publish a report of its findings in the Pennsylvania
2 Bulletin, after the utility in question has had an
3 opportunity to review and respond to the audit report.
4 (b) Outside audit authorized.--In lieu of performing the
5 audits mandated by subsection (a) itself, the commission may,
6 after competitive bidding, contract with one or more independent
7 accounting firms for the performance of the required audits. Any
8 firm performing any such audit shall, as a condition of the
9 contract, refrain from any affiliation or employment with the
10 audited public utility for a period of two years following the
11 completion of the audit.
12 Section 5. Upon the effective date of this act, the Governor
13 shall within two years appoint the additional members of the
14 commission authorized by this act. Any member serving on the
15 commission upon the effective date of this act shall continue on
16 the commission for the remainder of the term for which such
17 member was appointed. The Governor shall designate which region
18 each current member shall be deemed to represent. To the extent
19 possible, current members shall be assigned to the district of
20 their residence. The Governor in appointing persons to fill the
21 initial vacancies on the commission shall nominate individuals
22 qualified to represent the remaining districts in accordance
23 with 66 Pa.C.S. § 301 (relating to establishment, members,
24 qualifications and chairman). Of the initial appointments, two
25 shall be for five years and two for three years. Any additional
26 appointments necessitated by existing vacancies which are made
27 to bring the commission to its full complement of nine members
28 shall be for four years.
29 Section 6. This act shall take effect in 60 days.
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