PRINTER'S NO. 822
No. 762 Session of 1987
INTRODUCED BY LAUGHLIN, TIGUE, CAWLEY, DOMBROWSKI, JOSEPHS,
VEON, KOSINSKI, TRELLO, OLASZ, KUKOVICH, ITKIN, MRKONIC AND
CAPPABIANCA, MARCH 10, 1987
REFERRED TO COMMITTEE ON CONSUMER AFFAIRS, MARCH 10, 1987
AN ACT
1 Amending Title 66 (Public Utilities) of the Pennsylvania
2 Consolidated Statutes, clarifying provisions relating to the
3 determination of just and reasonable natural gas rates.
4 The General Assembly of the Commonwealth of Pennsylvania
5 hereby enacts as follows:
6 Section 1. Section 1318 (a) of Title 66 of the Pennsylvania
7 Consolidated Statutes is amended to read:
8 § 1318. Determination of just and reasonable natural gas rates.
9 (a) General rule.--In establishing just and reasonable rates
10 for those natural gas distribution utilities with gross
11 intrastate operating revenues in excess of $40,000,000 under
12 section 1307(f) (relating to sliding scale of rates;
13 adjustments) or 1308(d) (relating to voluntary changes in rates)
14 or any other rate proceeding, the commission shall consider the
15 materials provided by the utilities pursuant to section 1317
16 (relating to regulation of natural gas costs). No rates for a
17 natural gas distribution utility shall be deemed just and
18 reasonable unless the commission finds that the utility is
1 pursuing a least cost fuel procurement policy, consistent with
2 the utility's obligation to provide safe, adequate and reliable
3 service to its customers. In determining whether any particular
4 purchase of natural gas meets the least cost requirement, the
5 commission shall also consider the nonprice value of the supply,
6 including, but not limited to, its proximity to Pennsylvania's
7 natural gas consumers, improved utilization of existing
8 gathering or other pipeline systems owned by the utility,
9 nonutility investment in facilities necessary to deliver such
10 supplies, built-in storage attributes of the supply, longevity
11 of the supply availability and such other factors as the
12 commission reasonably believes may improve the long-term
13 optimization of natural gas supplies for Pennsylvania consumers.
14 In this regard, there shall be a rebuttable presumption that
15 natural gas produced from wells located in this Commonwealth and
16 purchased by a utility complies with a least cost fuel
17 procurement policy due to the long-term reliability and
18 proximity of these natural gas supplies to Pennsylvania
19 consumers. In making [such a determination] its determination
20 with respect to a least cost fuel procurement policy, the
21 commission shall be required to make specific findings which
22 shall include, but need not be limited to, findings that:
23 (1) The utility has fully and vigorously represented the
24 interests of its ratepayers in proceedings before the Federal
25 Energy Regulatory Commission.
26 (2) The utility has taken all prudent steps necessary to
27 negotiate favorable gas supply contracts and to relieve the
28 utility from terms in existing contracts with its gas
29 suppliers which are or may be adverse to the interests of the
30 utility's ratepayers.
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1 (3) The utility has taken all prudent steps necessary to
2 obtain lower total cost gas supplies on both short-term and
3 long-term bases both within and outside the Commonwealth,
4 including the use of gas transportation arrangements with
5 pipelines and other distribution companies.
6 (4) The utility has not withheld from the market or
7 caused to be withheld from the market any gas supplies which
8 should have been utilized as part of a least cost fuel
9 procurement policy.
10 * * *
11 Section 2. This act shall take effect immediately.
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