PRIOR PRINTER'S NOS. 1876, 2182 PRINTER'S NO. 2285
No. 1530 Session of 2007
INTRODUCED BY DERMODY, TURZAI, PALLONE, SOLOBAY, MAHONEY, WALKO, PETRARCA, TANGRETTI, READSHAW, BELFANTI, CAPPELLI, FABRIZIO, JOSEPHS, GEORGE, CALTAGIRONE, FAIRCHILD, HARHAI, YUDICHAK, COHEN, HARKINS, MARSHALL, J. WHITE, THOMAS, KULA, McCALL, LEVDANSKY, LONGIETTI, YOUNGBLOOD, GIBBONS, PYLE, CURRY, GOODMAN, KORTZ, MUNDY, WANSACZ, SCHRODER, MYERS, PASHINSKI AND K. SMITH, JUNE 8, 2007
AS AMENDED ON THIRD CONSIDERATION, HOUSE OF REPRESENTATIVES, JULY 10, 2007
AN ACT 1 Amending Title 66 (Public Utilities) of the Pennsylvania 2 Consolidated Statutes, in restructuring of electric utility 3 industry, further providing for duties of electric 4 distribution companies. 5 The General Assembly of the Commonwealth of Pennsylvania 6 hereby enacts as follows: 7 Section 1. Section 2807(e) of Title 66 of the Pennsylvania 8 Consolidated Statutes is amended to read: 9 § 2807. Duties of electric distribution companies. 10 * * * 11 (e) Obligation to serve.--An electric distribution company's 12 obligation to provide electric service following implementation 13 of restructuring and the choice of alternative generation by a 14 customer is revised as follows: 15 (1) While an electric distribution company collects 16 either a competitive transition charge or an intangible
1 transition charge or until 100% of its customers have choice, 2 whichever is longer, the electric distribution company shall 3 continue to have the full obligation to serve, including the 4 connection of customers, the delivery of electric energy and 5 the production or acquisition of electric energy for 6 customers. 7 (2) At the end of the transition period, the commission 8 shall promulgate regulations to define the electric 9 distribution company's obligation to connect and deliver and 10 acquire electricity under paragraph (3) that will exist at 11 the end of the phase-in period. 12 (3) (i) If a customer contracts for electric energy and <-- 13 it is not delivered or if a customer does not choose an 14 alternative electric generation supplier, the electric 15 distribution company or commission-approved alternative 16 supplier shall acquire electric energy at prevailing 17 market prices to serve that customer and shall recover 18 fully all reasonable costs. The electric distribution 19 company or commission-approved supplier shall adjust 20 rates at appropriate intervals as determined by the 21 commission. The electric energy acquired under this 22 paragraph shall be procured through competitive 23 procurement processes that may include one or more of the 24 following: 25 (A) Auctions. 26 (B) Requests for proposal. 27 (C) Bilateral contracts negotiated between the 28 electric distribution company or commission-approved 29 alternative supplier and a wholesale electric 30 supplier, except that the bilateral contracts shall 20070H1530B2285 - 2 -
1 be entered into at the sole discretion of the 2 electric distribution company or commission-approved 3 alternative supplier and the commission shall have no 4 authority to require the contracts and shall be at 5 prices no greater than reasonable forward market 6 prices. 7 (ii) The commission shall not modify contracts or 8 disallow costs associated with contracts entered into 9 pursuant to an approved competitive procurement process. 10 Prices obtained through the competitive procurement 11 processes shall be deemed to be prevailing market prices. 12 The resources procured pursuant to this paragraph may 13 reflect a mix of long-term, short-term and OR spot market <-- 14 purchases. 15 (4) If a customer that chooses an alternative supplier 16 and subsequently desires to return to the local distribution 17 company for generation service, the local distribution 18 company shall treat that customer exactly as it would any new 19 applicant for energy service. 20 (5) (i) Notwithstanding paragraph (3), the electric 21 distribution company or commission-approved alternative 22 supplier may, in its sole discretion, offer large 23 customers with a peak demand of 15 megawatts or greater 24 at one meter at a location in its service territory any 25 negotiated rate for service at all of the customers' 26 locations within the service territory for any duration 27 agreed upon by the electric distribution company or 28 commission-approved alternative supplier and the large 29 customer. The commission shall permit, but shall not 30 require, an electric distribution company or commission- 20070H1530B2285 - 3 -
1 approved alternative supplier to provide service to large 2 customers under this paragraph. Contract rates entered 3 into under this paragraph shall be subject to review by 4 the commission in order to ensure that all costs related 5 to the rates are borne by the parties to the contract and 6 that no costs related to the rates are borne by other 7 customers or customer classes. If no costs related to the 8 rates are borne by other customers or customer classes, 9 the commission shall approve the contract within 90 days 10 of its filing or it shall be deemed approved by operation 11 of law upon expiration of the 90 days. Information 12 submitted under this paragraph shall be subject to the 13 commission's procedures for the filing of confidential 14 and proprietary information. 15 (ii) For purposes of providing service under this 16 paragraph to customers with a peak demand of 20 megawatts 17 or greater at one meter at a location within that 18 distribution company's service territory, an electric 19 distribution company that has completed its restructuring 20 transition period as of the effective date of this 21 paragraph may, in its sole discretion, acquire an 22 interest in a generation facility or construct a 23 generation facility specifically to meet the energy 24 requirements of the customers including the electric 25 requirements of the customers' other billing locations 26 within its service territory. The electric distribution 27 company must commence construction of the generation 28 facility or contract to acquire the generation interest 29 within three years after the effective date of this 30 paragraph, except that the electric distribution company 20070H1530B2285 - 4 -
1 may add to the generation facilities it commenced 2 construction or contracted to acquire after this three- 3 year period to serve additional load of customers for 4 whom it commenced construction or contracted to acquire 5 generation within three years. Nothing in this paragraph 6 requires or authorized the commission to require an 7 electric distribution company to commence construction or 8 acquire an interest in a generation facility. The 9 electric distribution company's interest in the 10 generation facility it built or contracted to acquire 11 shall be no larger than necessary to meet peak demand of 12 customers served under this subparagraph. During times 13 when the customer's demand is less than the electric 14 distribution company's generation interest, the electric 15 distribution company may sell excess power on the 16 wholesale market. At no time shall the costs associated 17 with the generating facility interests be included in 18 rate base or otherwise reflected in rates. The generation 19 facility interests shall not be commission-regulated 20 assets. 21 Section 2. This act shall take effect in 60 days. E24L66BIL/20070H1530B2285 - 5 -