PRINTER'S NO. 2887
No. 2049 Session of 2007
INTRODUCED BY DERMODY, TURZAI, PRESTON, BENNINGTON, BIANCUCCI, COSTA, DeLUCA, FRANKEL, GERGELY, KORTZ, KOTIK, LEVDANSKY, MARKOSEK, MARSHALL, MUSTIO, PETRARCA, PETRONE, PYLE, RAMALEY, READSHAW, M. SMITH, VULAKOVICH, WAGNER, WALKO, WHEATLEY, BELFANTI, CALTAGIRONE, CAPPELLI, DePASQUALE, HARKINS, HORNAMAN, JOSEPHS, McCALL, McILHATTAN, MENSCH, PASHINSKI, PAYNE, SIPTROTH, S. H. SMITH, SOLOBAY AND SURRA, NOVEMBER 21, 2007
REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY, NOVEMBER 21, 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
1 either a competitive transition charge or an intangible 2 transition charge or until 100% of its customers have choice, 3 whichever is longer, the electric distribution company shall 4 continue to have the full obligation to serve, including the 5 connection of customers, the delivery of electric energy and 6 the production or acquisition of electric energy for 7 customers. 8 (2) At the end of the transition period, the commission 9 shall promulgate regulations to define the electric 10 distribution company's obligation to connect and deliver and 11 acquire electricity under paragraph (3) that will exist at 12 the end of the phase-in period. 13 (3) If a customer contracts for electric energy and it 14 is not delivered or if a customer does not choose an 15 alternative electric generation supplier, the electric 16 distribution company or commission-approved alternative 17 supplier shall acquire electric energy [at prevailing market 18 prices] through a portfolio of electric generation to serve 19 [that customer] those customers and shall recover fully all 20 reasonable costs. The electric energy procurement proposed by 21 the electric distribution company should be designed to 22 provide customers: 23 (i) Safe and reliable service. 24 (ii) The lowest reasonable retail prices to 25 customers over time. 26 (iii) Compliance with the requirements of the act of 27 November 30, 2004 (P.L.1672, No.213), known as the 28 Alternative Energy Portfolio Act. 29 (3.1) The procurement strategy in paragraph (3) may 30 include an appropriate mix of long-term, short-term and spot 20070H2049B2887 - 2 -
1 market purchases and may include one or more of the 2 following: 3 (i) Auctions. 4 (ii) Requests for proposal. 5 (iii) Spot market purchases. 6 (iv) Long-term purchase power agreements to support 7 construction of new generation facilities, including 8 generation that meets the requirements of the Alternative 9 Energy Portfolio Standards Act. 10 (v) Bilateral contracts negotiated between the 11 electric distribution company or commission-approved 12 alternative supplier and a wholesale electric supplier. 13 (3.2) The commission shall not modify contracts or 14 disallow costs associated with contracts entered into 15 pursuant to a commission-approved procurement plan unless the 16 commission determines that: 17 (i) the contract does not comply with the 18 commission-approved portfolio plan; or 19 (ii) there has been fraud, collusion, market 20 manipulation or abuse of market power. 21 (3.3) In addition to any voluntary rates offered to all 22 customers, such as a time-of-use rate, the electric 23 distribution company or commission-approved alternative 24 supplier shall offer all customers a fixed rate that shall 25 change no more frequently than on an annual basis. All rates 26 shall be reviewed by the commission to ensure that the costs 27 of providing service to each customer class are borne solely 28 by that customer class. 29 (4) If a customer that chooses an alternative supplier 30 and subsequently desires to return to the local distribution 20070H2049B2887 - 3 -
1 company for generation service, the local distribution 2 company shall treat that customer exactly as it would any new 3 applicant for energy service. 4 (5) (i) Notwithstanding paragraph (3), the electric 5 distribution company or commission-approved alternative 6 supplier may, in its sole discretion, offer large 7 customers with a peak demand of 15 megawatts or greater 8 at one meter at a location in its service territory any 9 negotiated rate for service at all of the customers' 10 locations within the service territory for any duration 11 agreed upon by the electric distribution company or 12 commission-approved alternative supplier and the large 13 customer. The commission shall permit, but shall not 14 require, an electric distribution company or commission- 15 approved alternative supplier to provide service to large 16 customers under this paragraph. Contract rates entered 17 into under this paragraph shall be subject to review by 18 the commission in order to ensure that all costs related 19 to the rates are borne by the parties to the contract and 20 that no costs related to the rates are borne by other 21 customers or customer classes. If no costs related to the 22 rates are borne by other customers or customer classes, 23 the commission shall approve the contract within 90 days 24 of its filing, or it shall be deemed approved by 25 operation of law upon expiration of the 90 days. 26 Information submitted under this paragraph shall be 27 subject to the commission's procedures for the filing of 28 confidential and proprietary information. 29 (ii) For purposes of providing service under this 30 paragraph to customers with a peak demand of 20 megawatts 20070H2049B2887 - 4 -
1 or greater at one meter at a location within that 2 distribution company's service territory, an electric 3 distribution company that has completed its restructuring 4 transition period as of the effective date of this 5 paragraph may, in its sole discretion, acquire an 6 interest in a generation facility or construct a 7 generation facility specifically to meet the energy 8 requirements of the customers, including the electric 9 requirements of the customers' other billing locations 10 within its service territory. The electric distribution 11 company must commence construction of the generation 12 facility or contract to acquire the generation interest 13 within three years after the effective date of this 14 paragraph, except that the electric distribution company 15 may add to the generation facilities it commenced 16 construction or contracted to acquire after this three- 17 year period to serve additional load of customers for 18 whom it commenced construction or contracted to acquire 19 generation within three years. Nothing in this paragraph 20 requires or authorizes the commission to require an 21 electric distribution company to commence construction or 22 acquire an interest in a generation facility. The 23 electric distribution company's interest in the 24 generation facility it built or contracted to acquire 25 shall be no larger than necessary to meet peak demand of 26 customers served under this subparagraph. During times 27 when the customer's demand is less than the electric 28 distribution company's generation interest, the electric 29 distribution company may sell excess power on the 30 wholesale market. At no time shall the costs associated 20070H2049B2887 - 5 -
1 with the generating facility interests be included in 2 rate base or otherwise reflected in rates. The generation 3 facility interests shall not be commission-regulated 4 assets. 5 Section 2. This act shall take effect in 60 days. K15L66SFL/20070H2049B2887 - 6 -