1Amending Title 66 (Public Utilities) of the Pennsylvania
2Consolidated Statutes, providing for a program to extend
3natural gas delivery to unserved or underserved areas.

4The General Assembly of the Commonwealth of Pennsylvania
5hereby enacts as follows:

6Section 1. Title 66 of the Pennsylvania Consolidated
7Statutes is amended by adding a chapter to read:

8Chapter 22-A

9PROGRAM TO EXTEND NATURAL GAS DELIVERY TO UNSERVED OR
10UNDERSERVED AREAS

11Sec.

<-122200-A. Definitions.

132201-A. Petition.

142202-A. Program requirements.

152203-A. Commission review.

<-16§ 2200-A. Definitions.

17The following words and phrases when used in this chapter
18shall have the meanings given to them in this section unless the

1context clearly indicates otherwise:

2"Natural gas distribution company." As defined in section
31307(f) (relating to recovery of natural gas costs).

4§ 2201-A. Petition.

5No later than January 1, 2015, or 60 days after the effective
6date of this chapter, whichever is later, each natural gas
7distribution company shall file a petition with the commission
8proposing a pilot or permanent program, including any necessary
9tariffs, <-intended to provide an opportunity to extend natural
10gas distribution service to unserved or underserved areas within
11its certificated service territory. <-where economically feasible.
12A natural gas distribution company with an existing filed or
13approved program on the effective date of this section which
14meets the requirements of section 2202-A (relating to program
15requirements) shall be exempt from the filing requirement under
16this section.

17§ 2202-A. Program requirements.

18A proposed program shall include:

19(1) A process for managing and prioritizing customer
20requests for extensions of the natural gas distribution
21system.

22(2) A cost-benefit analysis to determine if a customer
23contribution is required.

24(3) A method for determining the amount of a required
25customer contribution in aid of construction.

26(4) A program to enhance the affordability of required
27contributions in aid of construction to <-residential
28customers, including the following provisions:

29(i) The program shall provide for on-bill <-financing
<-30payment for a term of no less than five years.

1(ii) A customer shall be able to pay a required
2customer contribution in full at any time, without
3incurring penalties or fees.

4(iii) The form of <-financing payment may include a
5surcharge<-, third-party financing or any other method of
6recovery approved by the commission<-, including third-
7party financing.

8(5) A provision outlining <-whether and how refunds or
9credits will be provided to customers as other customers
10receive service from a completed distribution system
11extension project.

12(6) A provision addressing the treatment and eligibility
13of customers participating in a customer assistance program
14who request and receive service from a distribution system
15extension project.

<-16(7) A provision addressing situations where a customer
17fails to pay a required surcharge or other on-bill financing
18mechanism.

19(8) A customer's natural gas distribution service shall
20not be terminated solely for nonpayment of a surcharge or
21other on-bill financing mechanism.

<-22(7) A customer's natural gas distribution service may be
23terminated for failure to pay a charge related to a program
24to extend natural gas service to an unserved or underserved
25area in the same manner as permitted for basic utility
26service charges.

<-27(9) (8) Any other provisions that will promote economic
28distribution system extension to unserved and underserved
29areas in a manner that is affordable to customers.

30§ 2203-A. Commission review.

<-1The commission:

2(1) shall review a petition filed pursuant to section
32201-A (relating to petition), after providing notice and an
4opportunity to be heard and may approve, disapprove or modify
5the filing pursuant to its procedural rules;

6(2) may establish periodic reporting requirements as
7authorized by section 504 (relating to reports by public
8utilities) to review the performance and effectiveness of a
9program; and

10(3) shall not require a natural gas distribution company
11to extend its distribution system to any area or customer
12that does not provide the opportunity to earn a reasonable
13return on investment.

<-14(a) Powers and duties.--The commission:

15(1) Shall review a petition filed under section 2201-A
16(relating to petition) after providing notice and an
17opportunity to be heard and may approve, approve subject to a
18natural gas distribution company's acceptance of conditions
19or disapprove the filing pursuant to its procedural rules.

20(2) May establish periodic reporting requirements as
21authorized under section 504 (relating to reports by public
22utilities) to review the performance and effectiveness of a
23program.

24(3) May not require a natural gas distribution company
25to extend its distribution system to an area or customer that
26does not provide the opportunity to earn a reasonable return
27on investment or does not allow adequate cash flows under the
28ratemaking methodology of a city natural gas distribution
29operation.

30(4) Shall permit full recovery of all just and

1reasonable costs to implement a program to extend natural gas
2service to an unserved or underserved area through base rates
3or an alternative mechanism.

4(b) Recovery.--

5(1) Recovery through an alternative mechanism shall be
6permitted during the time that a pilot program is in effect.

7(2) Beginning at the time that a pilot program is
8implemented on a permanent basis, recovery shall be through
9base rates.

10Section 2. This act shall take effect in 60 days.