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        PRIOR PRINTER'S NOS. 3089, 3176               PRINTER'S NO. 3218

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 2200 Session of 2008


        INTRODUCED BY GEORGE, McCALL, BELFANTI, CALTAGIRONE, CONKLIN,
           DALEY, GOODMAN, HARHAI, HARKINS, KULA, MANDERINO, McGEEHAN,
           VITALI, J. WHITE, WALKO, SURRA, DeLUCA, DERMODY, GRUCELA,
           JOSEPHS, JAMES, GINGRICH, FREEMAN, K. SMITH, McILVAINE SMITH,
           YOUNGBLOOD AND FRANKEL, JANUARY 15, 2008

        AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES,
           FEBRUARY 11, 2008

                                     AN ACT

     1  Amending Title 66 (Public Utilities) of the Pennsylvania
     2     Consolidated Statutes, PROVIDING FOR RECOVERY OF CERTAIN       <--
     3     LABOR RELATIONS EXPENSES; further providing for definitions;
     4     and providing for adoption of energy efficiency and demand-    <--
     5     side response; AND FURTHER PROVIDING FOR DUTIES OF ELECTRIC    <--
     6     DISTRIBUTION COMPANIES.

     7     The General Assembly of the Commonwealth of Pennsylvania
     8  hereby enacts as follows:
     9     Section 1.  Section 2803 of Title 66 of the Pennsylvania       <--
    10  Consolidated Statutes is amended by adding definitions to read:
    11     SECTION 1.  TITLE 66 OF THE PENNSYLVANIA CONSOLIDATED          <--
    12  STATUTES IS AMENDED BY ADDING A SECTION TO READ:
    13  § 1329.  RECOVERY OF CERTAIN LABOR RELATIONS EXPENSES.
    14     NO PUBLIC UTILITY MAY CHARGE ITS CUSTOMERS AS A PERMISSIBLE
    15  OPERATING EXPENSE FOR RATEMAKING PURPOSES ANY PORTION OF THE
    16  DIRECT OR INDIRECT COST OF MEETINGS, PUBLICATIONS, CONSULTANTS,
    17  ATTORNEYS OR OTHER PROFESSIONAL SERVICES AND EXPENSES ASSOCIATED
    18  WITH THE UTILITY'S EFFORTS TO DISSUADE THE EMPLOYEES OF THE

     1  UTILITY, OR THE EMPLOYEES OF ANY AFFILIATED INTEREST OF THE
     2  UTILITY AS DEFINED IN SECTION 2101 (RELATING TO DEFINITION OF
     3  AFFILIATED INTEREST), FROM BECOMING OR REMAINING A MEMBER IN, OR
     4  OTHERWISE BEING REPRESENTED BY, ANY LABOR UNION.
     5     SECTION 2.  SECTION 2803 OF TITLE 66 IS AMENDED BY ADDING
     6  DEFINITIONS TO READ:
     7  § 2803.  Definitions.
     8     The following words and phrases when used in this chapter
     9  shall have the meanings given to them in this section unless the
    10  context clearly indicates otherwise:
    11     "Affiliated interest."  As defined in section 2101 (relating
    12  to definition of affiliated interest).
    13     * * *
    14     "Cost effective."  In relation to a program being evaluated,
    15  satisfaction of the total resource cost test.
    16     * * *
    17     "Demand-side response."  Load management technologies,
    18  management practices or other strategies employed by retail
    19  customers that decrease peak electricity demand or shift demand
    20  from on-peak to off-peak periods provided that:
    21         (1)  The measure is installed on or after the effective
    22     date of this section at the service location of a retail
    23     customer.
    24         (2)  The measure reduces the peak demand or cost of
    25     energy by the retail customer.
    26         (3)  The costs of the acquisition or installation of the
    27     measure are directly incurred in whole or in part by the
    28     electric distribution company.
    29     * * *
    30     "Energy efficiency."  Technologies, management practices or
    20080H2200B3218                  - 2 -     

     1  other strategies or measures employed by retail customers that
     2  reduce electricity consumption provided that:
     3         (1)  The measure is installed on or after the effective
     4     date of this definition at the service location of a retail
     5     customer.
     6         (2)  The measure reduces the consumption of energy by the
     7     retail customer.
     8         (3)  The costs of the acquisition or installation of the
     9     measure are directly incurred in whole or in part by the
    10     electric distribution company.
    11     "Independent entity."  An entity with no direct or indirect
    12  ownership, partnership or other affiliated interest with an
    13  electric distribution company.
    14     "Peak demand."  The highest electrical requirement occurring
    15  during a specified period. For an electric distribution company,
    16  the term means the sum of the metered consumption for all retail
    17  customers over that period.
    18     * * *                                                          <--
    19     "REAL-TIME PRICE."  A RATE THAT DIRECTLY REFLECTS THE          <--
    20  DIFFERENT COST OF ENERGY DURING EACH HOUR.
    21     * * *
    22     "SMART METER TECHNOLOGY."  TECHNOLOGY, INCLUDING, BUT NOT
    23  LIMITED TO, METERING TECHNOLOGY AND NETWORK COMMUNICATIONS
    24  TECHNOLOGY CAPABLE OF BIDIRECTIONAL COMMUNICATION AND THAT
    25  RECORDS ELECTRICITY USAGE ON AT LEAST AN HOURLY BASIS, INCLUDING
    26  RELATED ELECTRIC DISTRIBUTION SYSTEM UPGRADES TO ENABLE THE
    27  TECHNOLOGY. THE TECHNOLOGY SHALL PROVIDE CUSTOMERS WITH DIRECT
    28  ACCESS TO AND USE OF PRICE AND CONSUMPTION INFORMATION. THE
    29  TECHNOLOGY SHALL ALSO:
    30         (1)  DIRECTLY PROVIDE CUSTOMERS WITH INFORMATION ON THEIR
    20080H2200B3218                  - 3 -     

     1     HOURLY CONSUMPTION.
     2         (2)  ENABLE TIME-OF-USE RATES AND REAL-TIME PRICE
     3     PROGRAMS.
     4         (3)  EFFECTIVELY SUPPORT THE AUTOMATIC CONTROL OF THE
     5     CUSTOMER'S ELECTRICITY CONSUMPTION BY ONE OR MORE OF THE
     6     FOLLOWING AS SELECTED BY THE CUSTOMER:
     7             (I)  THE CUSTOMER;
     8             (II)  THE CUSTOMER'S UTILITY; OR
     9             (III)  A THIRD PARTY ENGAGED BY THE CUSTOMER OR THE
    10         CUSTOMER'S UTILITY.
    11     "TIME-OF-USE RATE."  A RATE THAT REFLECTS THE COSTS OF
    12  SERVING CUSTOMERS DURING DIFFERENT TIME PERIODS, INCLUDING OFF-
    13  PEAK AND ON-PEAK PERIODS, BUT NOT AS FREQUENTLY AS EACH HOUR.
    14     "Total resources cost test."  A standard test that is met if,
    15  over the effective life of the program, the avoided supply-side
    16  monetary costs are greater than the monetary costs of the
    17  demand-side programs borne by both the electric distribution
    18  company and the participants.
    19     * * *
    20     Section 2 3.  Title 66 is amended by adding a section to       <--
    21  read:
    22  § 2806.1.  Adoption of procedures encouraging energy efficiency
    23             and demand-side response.
    24     (a)  Program.--The commission shall develop a program to
    25  provide for the implementation of cost-effective programs that
    26  reduce energy demand and consumption within the service
    27  territories of all electric distribution companies throughout
    28  this Commonwealth. The program shall include, but is not limited
    29  to, the following:
    30         (1)  Selecting a program administrator to develop and
    20080H2200B3218                  - 4 -     

     1     oversee the delivery of energy efficiency and demand-side
     2     response programs within the service territory of each
     3     electric distribution company within this Commonwealth.
     4         (2)  Implementing the necessary administrative and
     5     financial mechanisms that will enable the program
     6     administrator to develop and oversee the provision of energy
     7     efficiency and demand-side response programs within the
     8     service territory of each electric distribution company
     9     within this Commonwealth, including the levying of
    10     assessments in accordance with sections 510 (relating to
    11     assessment for regulatory expenses upon public utilities),
    12     1307 (relating to sliding scale of rates; adjustments) and
    13     1308 (relating to voluntary changes in rates). The commission
    14     shall not approve or implement and shall not assess or charge
    15     to customers the costs of energy efficiency or demand-
    16     response programs to the extent that the costs of such
    17     programs exceed 2% of the total annual revenues of the
    18     electric distribution company in whose service territory the   <--
    19     programs are implemented. FROM ALL SOURCES, INCLUDING DEFAULT  <--
    20     SERVICE GENERATION REVENUES AS OF JANUARY 1, 2007. This
    21     funding limit shall not include amounts provided for by the
    22     low-income usage reduction programs established under
    23     regulations at 52 Pa. Code Ch. 58 (relating to residential
    24     low income usage reduction programs).
    25         (3)  Implementing the necessary administrative and
    26     financial mechanisms that facilitate a system of third-party
    27     entities to deliver all or portions of the energy efficiency
    28     and demand-side response programs within the service
    29     territory of each electric distribution company within this
    30     Commonwealth, including the levying of assessments in
    20080H2200B3218                  - 5 -     

     1     accordance with sections 510, 1307 and 1308. The commission
     2     may order the electric distribution company to pay the third-
     3     party entity for services rendered in an electric
     4     distribution company's respective service territory pursuant
     5     to this section. The electric distribution company may be a
     6     third-party entity.
     7     (b)  Selection of program administrator.--The commission
     8  shall implement the following procedures when selecting a
     9  program administrator:
    10         (1)  The commission shall prepare a request for proposals
    11     for a program administrator to provide for the development
    12     and delivery of the energy efficiency and demand-side
    13     response programs in the service territories of all electric
    14     distribution companies and shall make the request for
    15     proposals available for public comment.
    16         (2)  The commission shall, within 60 days of the
    17     completion of the public comment period, issue the final
    18     request for proposals.
    19         (3)  The commission shall, based on a competitive bid
    20     process, select an independent entity to serve as the energy
    21     efficiency and demand-side response program administrator.
    22         (4)  The commission shall include as a part of its
    23     agreement with the program administrator a system of
    24     performance parameters and a financial mechanism that
    25     provides incentives for exceeding established performance
    26     parameters and penalties for third parties not meeting
    27     established performance parameters.
    28     (c)  Powers and duties of program administrator.--The program
    29  administrator shall have powers and duties assigned by the
    30  commission. The powers and duties shall include, but not be
    20080H2200B3218                  - 6 -     

     1  limited to:
     2         (1)  Soliciting through a competitive procurement process
     3     within each electric distribution company service territory a
     4     program of providing energy efficiency and demand-side
     5     response programs to residential, commercial and industrial
     6     customers utilizing third-party entities.
     7         (2)  Ensuring that each proposal includes, but is not
     8     limited to:
     9             (i)  A clear delineation of how the program will be
    10         conducted.
    11             (ii)  The types of specific program measures to be
    12         offered.
    13             (iii)  The cost and benefit of each program to be
    14         offered.
    15             (iv)  A process for monitoring and verifying results,
    16         data collection and management procedures, program
    17         evaluation processes and financial management strategies.
    18         (3)  In its review of each proposal received:
    19             (i)  Taking into account the unique circumstances of
    20         each electric distribution company's service territory.
    21             (ii)  Finding that each program is cost effective and
    22         that the portfolio of programs is designed to provide
    23         every affected customer class with the opportunity to
    24         participate and benefit economically.
    25             (iii)  Determining the cost-effectiveness of energy
    26         efficiency and demand-side response measures using the
    27         total resource cost test.
    28         (4)  Recommending to the commission those entities best
    29     suited to provide energy efficiency and demand-side response
    30     programs within the service territory of each electric
    20080H2200B3218                  - 7 -     

     1     distribution company.
     2         (5)  In the event no qualified proposals are received
     3     that meet the required plan goals in an electric distribution
     4     company service territory to conduct the program activities:
     5             (i)  Issuing a subsequent request for proposals with
     6         plan goals that are reduced no more than necessary to
     7         obtain qualified proposals to provide program activities.
     8         The lowered plan goals for energy efficiency and demand-
     9         side response shall only be in effect for that year.
    10             (ii)  In subsequent years, utilizing the plan goals
    11         unless no qualified proposals are received to conduct the
    12         program activities that meet the plan goals, the program
    13         administrator shall issue a subsequent request for
    14         proposals in accordance with the procedures identified in
    15         this subparagraph.
    16         (6)  Executing agreements on behalf of the commission
    17     with the selected entity in each electric distribution
    18     company service territory to conduct the energy efficiency
    19     and demand-side response program. As part of these agreements
    20     the program administrator shall ensure that:
    21             (i)  The programs offered by the selected entity are
    22         provided equitably across all customer classes.
    23             (ii)  A clearly defined process for financial
    24         compensation for the entity delivering the program which
    25         is tied to defined goals for performance regarding
    26         program activities accomplished, energy cost savings on a
    27         per-customer basis and utility-wide basis and overall
    28         energy and peak demand reduction is established.
    29             (iii)  A system of incentives and penalties for
    30         performance of contractual activities above and below
    20080H2200B3218                  - 8 -     

     1         predetermined levels is in place.
     2             (iv)  There is a set contract term which may include
     3         an initial three-year term with renewal terms of varied
     4         length.
     5         (7)  Submitting reports to the commission at such times
     6     and in such manner as the commission directs.
     7     (d)  Commission review of recommendations.--The commission
     8  shall review the recommendations made by the program
     9  administrator regarding those entities best suited to provide
    10  energy efficiency and demand-side response programs within the
    11  service territory of each electric distribution company. The
    12  commission shall approve or disapprove the recommendations made
    13  by the program administrator.
    14         (1)  The commission review of the recommendations of the
    15     program administrator shall be limited to ensuring that:
    16             (i)  There is no evidence of fraud or market abuse.
    17             (ii)  Any costs entered into are borne by the
    18         appropriate parties and that costs, including the costs
    19         of subsection (c)(6)(iv) incentives, related to the
    20         provision of the contracted services are borne by the
    21         appropriate customer class.
    22             (iii)  There will be provided, in a cost-effective
    23         manner, a program that provides energy efficiency and
    24         demand-side response measures to all customer classes
    25         throughout the service territory of each electric
    26         distribution company.
    27         (2)  If the commission approves a third-party entity to
    28     conduct the program, the commission shall ensure the program
    29     administrator finalizes the agreement between the commission
    30     and the third-party entity selected to provide the program of
    20080H2200B3218                  - 9 -     

     1     energy efficiency and demand-side response.
     2         (3)  In the event the commission disapproves the
     3     recommendation of the program administrator, the commission
     4     shall provide a rationale for this decision and direct the
     5     program administrator on a course of action.
     6     (e)  Plan goals.--The program administrator shall ensure that
     7  each proposal submitted by a third-party entity to deliver a
     8  program of energy efficiency and demand-side response measures
     9  includes meeting the following energy saving goals:
    10         (1)  The following relate to energy efficiency goals:
    11             (I)  BY MAY 31, 2011, TOTAL ANNUAL DELIVERIES TO       <--
    12         RETAIL CUSTOMERS OF ELECTRIC DISTRIBUTION COMPANIES SHALL
    13         BE REDUCED BY A MINIMUM OF 1%. THIS LOAD REDUCTION SHALL
    14         BE MEASURED AGAINST THE EXPECTED LOAD FORECASTED BY THE
    15         COMMISSION FOR JUNE 1, 2010, THROUGH MAY 31, 2011, BASED
    16         ON LOAD FOR THE PERIOD JUNE 1, 2007, THROUGH MAY 31,
    17         2008, WITH PROVISION MADE FOR WEATHER ADJUSTMENTS AND
    18         EXTRAORDINARY LOAD THAT THE ELECTRIC DISTRIBUTION COMPANY
    19         MUST SERVE. THE COMMISSION SHALL DETERMINE AND MAKE
    20         PUBLIC THE FORECASTS TO BE USED FOR EACH ELECTRIC
    21         DISTRIBUTION COMPANY NO LATER THAN AUGUST 31, 2008. THE
    22         PROGRAM ADMINISTRATOR SHALL ENSURE THAT A THIRD-PARTY
    23         ENTITY MEETS THE GOALS CONTAINED IN THIS SECTION THROUGH
    24         THE IMPLEMENTATION OF A PROGRAM OF ENERGY EFFICIENCY
    25         MEASURES THROUGHOUT THE SERVICE TERRITORY OF THE ELECTRIC
    26         DISTRIBUTION COMPANY.
    27             (i) (II)  By May 31, 2013, total annual deliveries to  <--
    28         retail customers of electric distribution companies shall
    29         be reduced by a minimum of 2.5%. , with provision made     <--
    30         for weather adjustments and extraordinary load that the
    20080H2200B3218                 - 10 -     

     1         electric distribution company must serve. This load
     2         reduction shall be measured against the expected load
     3         forecasted by the commission for June 1, 2012, through
     4         May 31, 2013, based on load for the period June 1, 2007,
     5         through May 31, 2008, WITH PROVISION MADE FOR WEATHER      <--
     6         ADJUSTMENTS AND EXTRAORDINARY LOAD THAT THE ELECTRIC
     7         DISTRIBUTION COMPANY MUST SERVE. The commission shall
     8         determine and make public the forecasts to be used for
     9         each electric distribution company no later than August
    10         31, 2008. The program administrator shall ensure that a
    11         third-party entity meets the goals contained in this
    12         section through the implementation of a program of energy
    13         efficiency measures throughout the service territory of
    14         the electric distribution company.
    15             (ii) (III)  By November 30, 2013, the program          <--
    16         administrator shall evaluate the costs and benefits of
    17         these energy efficiency and conservation programs. If the
    18         benefits have been shown to exceed the costs, consistent
    19         with the total resource cost test, the program
    20         administrator, in consultation with the commission, shall
    21         set additional, incremental energy efficiency and
    22         conservation goals for the period ending May 31, 2018.
    23             (iii) (IV)  After May 31, 2018, the program            <--
    24         administrator shall continue to evaluate the costs and
    25         benefits of efficiency and conservation measures and, in
    26         consultation with the commission, may adopt additional
    27         incremental load reduction standards for electric
    28         distribution companies.
    29         (2)  The following relate to demand-side response
    30     measures:
    20080H2200B3218                 - 11 -     

     1             (i)  Cost-effective demand-side response measures to
     2         reduce peak demand by a minimum of 4% in the 100 hours of
     3         highest demand with provision made for weather
     4         adjustments and extraordinary load that the electric
     5         distribution company must serve shall be implemented in
     6         each electric distribution company's service territory.
     7         This reduction will be measured against the electric
     8         distribution company's peak demand in the 100 hours of
     9         greatest demand for June 1, 2007, through May 31, 2008.
    10         The reductions shall be accomplished by May 31, 2012.
    11             (ii)  By November 30, 2012, the program administrator
    12         shall compare the total costs of these demand-side
    13         response measures to the total savings in energy and
    14         capacity costs to retail customers of this Commonwealth.
    15         If the benefits have been shown to exceed the costs,
    16         consistent with the total resource cost test, the
    17         commission shall order additional peak demand reductions
    18         for the 100 hours of greatest demand or an alternative
    19         measure adopted by the commission. The reductions shall
    20         be measured from the electric distribution company's peak
    21         demand for the period from June 1, 2011, through May 31,
    22         2012. The mandated reductions shall be accomplished no
    23         later than May 31, 2017.
    24             (iii)  After May 31, 2017, the program administrator
    25         shall continue to evaluate the costs and benefits of
    26         demand-side response measures and may, in consultation
    27         with the commission, adopt additional incremental peak
    28         load reduction standards.
    29     (f)  Measurements and verification.--The commission shall
    30  establish standards by which the program administrator submits
    20080H2200B3218                 - 12 -     

     1  to the commission an annual report, which includes that
     2  information relating to the actions and results of the energy
     3  efficiency and demand-side response programs undertaken within
     4  each electric distribution service territory by each third-party
     5  entity.
     6         (1)  The report shall include, but not be limited to:
     7             (i)  Documentation of program expenditures.
     8             (ii)  Measurement and verification of savings
     9         resulting from programs.
    10             (iii)  Evaluation of the cost-effectiveness of
    11         expenditures.
    12             (iv)  Any other information the commission may
    13         require pursuant to its rulemaking authority.
    14         (2)  The program administrator, upon consultation with
    15     the commission, shall direct a third-party entity to modify
    16     or terminate a particular energy efficiency or a demand-side
    17     response program if, after an adequate period for
    18     implementation of the program, the commission determines the
    19     program is not sufficiently meeting its goals and purposes.
    20         (3)  In the event an energy efficiency or demand-side
    21     response program is terminated, the program administrator
    22     shall require the third-party entity to submit a revised
    23     program describing the actions to be undertaken to either
    24     offer a substitute program or increase the availability of
    25     existing programs to make up for the effect of the terminated
    26     program on its overall program goals.
    27     (g)  Responsibilities of electric distribution companies.--
    28  Each electric distribution company that does not seek to be a
    29  third-party entity shall:
    30         (1)  Cooperate with the program administrator as needed
    20080H2200B3218                 - 13 -     

     1     in its efforts to competitively procure the services of a
     2     third-party entity to provide an energy efficiency and
     3     demand-side response program within the service territory of
     4     the electric distribution company.
     5         (2)  Provide information necessary to effectively
     6     facilitate the work of the selected third-party entity in
     7     conducting the energy efficiency and demand-side response
     8     program.
     9         (3)  Provide assistance as may be requested by the
    10     program administrator in reviewing proposals from third-party
    11     entities seeking to provide energy efficiency and demand-side
    12     response programs within their service territories.
    13         (4)  Provide assistance as may be requested by the
    14     program administrator to facilitate the successful execution
    15     of the contract agreement with the third-party entities to
    16     provide an energy efficiency and demand-side response program
    17     within their service territories.
    18     (h)  Recovery of administrative and program costs.--An
    19  electric distribution company may fully recover all
    20  administrative costs, including, but not limited to, costs
    21  incurred under subsections (a)(3) and (g)(1), (2), (3) and (4),
    22  that the commission determines are prudently incurred and
    23  reasonable in amount pursuant to implementing a program to
    24  deliver cost-effective energy efficiency and demand-side
    25  response activities through a third-party entity. Program and
    26  administrative costs shall be recovered on a full and current
    27  basis by the electric distribution company from customers
    28  through a reconcilable automatic adjustment clause pursuant to
    29  section 1307. Energy efficiency and demand-side resource
    30  programs shall be deemed to be a new service offered for the
    20080H2200B3218                 - 14 -     

     1  first time under section 2804(4)(vi) (relating to standards for
     2  restructuring of electric industry).
     3     (i)  Reporting.--The commission shall submit an annual report
     4  to the General Assembly describing the results of the programs
     5  implemented by each of the electric distribution companies,
     6  including, but not limited to:
     7         (1)  The costs, benefits and reductions in energy costs.
     8         (2)  Energy use by customer class within this
     9     Commonwealth.
    10         (3)  Reductions in overall peak demand and projections
    11     toward complying with the overall target reduction goals of
    12     this section.
    13     (j)  Definitions.--For purposes of this section, the term
    14  "electric distribution company" shall mean a public utility
    15  providing facilities for the jurisdictional transmission and
    16  distribution of electricity to 100,000 or more retail customers
    17  in this Commonwealth.
    18     SECTION 4.  SECTION 2807(E) OF TITLE 66 IS AMENDED BY ADDING   <--
    19  A PARAGRAPH TO READ:
    20  § 2807.  DUTIES OF ELECTRIC DISTRIBUTION COMPANIES.
    21     * * *
    22     (E)  OBLIGATION TO SERVE.--* * *
    23         (6)  (I)  WITHIN NINE MONTHS AFTER THE EFFECTIVE DATE OF
    24         THIS PARAGRAPH, ELECTRIC DISTRIBUTION COMPANIES SHALL
    25         FILE A SMART METER TECHNOLOGY PROCUREMENT AND
    26         INSTALLATION PLAN WITH THE COMMISSION FOR APPROVAL AND
    27         MAKE THE PLAN AVAILABLE FOR PUBLIC COMMENT FOR A MINIMUM
    28         OF 30 DAYS. THE PLAN SHALL DESCRIBE THE SMART METER
    29         TECHNOLOGIES THE ELECTRIC DISTRIBUTION COMPANY PROPOSES
    30         TO INSTALL, HOW THE SMART METER TECHNOLOGY MEETS THE
    20080H2200B3218                 - 15 -     

     1         REQUIREMENTS OF THIS PARAGRAPH AND HOW THE SMART METER
     2         TECHNOLOGY SHALL BE INSTALLED ACCORDING TO THIS
     3         PARAGRAPH. IN ADDITION, THE PLAN SHALL ENSURE THAT ALL
     4         SMART METER TECHNOLOGY INSTALLATION AND MAINTENANCE WORK
     5         SHALL BE PERFORMED BY ADEQUATELY TRAINED AND QUALIFIED
     6         PERSONNEL AND THAT, TO THE EXTENT PRACTICAL, SUCH WORK
     7         SHALL BE OFFERED INITIALLY TO EMPLOYEES OF THE ELECTRIC
     8         DISTRIBUTION COMPANY.
     9             (II)  ELECTRIC DISTRIBUTION COMPANIES SHALL FURNISH
    10         SMART METER TECHNOLOGY TO:
    11                 (A)  CUSTOMERS RESPONSIBLE FOR 40% OF THE
    12             DISTRIBUTION COMPANY'S ANNUAL PEAK DEMAND WITHIN FOUR
    13             YEARS AFTER THE EFFECTIVE DATE OF THIS PARAGRAPH.
    14                 (B)  CUSTOMERS RESPONSIBLE FOR 75% OF THE
    15             DISTRIBUTION COMPANY'S ANNUAL PEAK DEMAND WITHIN SIX
    16             YEARS AFTER THE EFFECTIVE DATE OF THIS PARAGRAPH.
    17                 (C)  ONE HUNDRED PERCENT OF ITS CUSTOMERS WITHIN
    18             TEN YEARS AFTER THE EFFECTIVE DATE OF THIS PARAGRAPH.
    19         ELECTRIC DISTRIBUTION COMPANIES SHALL, WITH CUSTOMER
    20         CONSENT, MAKE AVAILABLE ELECTRONIC ACCESS TO CUSTOMER
    21         METER DATA TO THIRD PARTIES, INCLUDING ELECTRIC
    22         GENERATION SUPPLIERS AND PROVIDERS OF CONSERVATION AND
    23         LOAD MANAGEMENT SERVICES.
    24             (III)  ELECTRIC DISTRIBUTION COMPANIES SHALL BE
    25         PERMITTED TO RECOVER ALL REASONABLE AND PRUDENT COSTS, AS
    26         DETERMINED BY THE COMMISSION, OF PROVIDING SMART METER
    27         TECHNOLOGY, INCLUDING ANNUAL DEPRECATION AND CAPITAL
    28         COSTS OVER THE LIFE OF THE SMART METER TECHNOLOGY, THAT
    29         ARE INCURRED AFTER THE EFFECTIVE DATE OF THIS PARAGRAPH,
    30         LESS ALL OPERATING AND CAPITAL COSTS SAVINGS REALIZED BY
    20080H2200B3218                 - 16 -     

     1         THE ELECTRIC DISTRIBUTION COMPANY FROM THE INTRODUCTION
     2         AND USE OF THE SMART METER TECHNOLOGY. AN ELECTRIC
     3         DISTRIBUTION COMPANY MAY, AT ITS OPTION, RECOVER SUCH
     4         SMART METER TECHNOLOGY COSTS:
     5                 (A)  THROUGH BASE RATES, INCLUDING A DEFERRAL FOR
     6             FUTURE BASE RATE RECOVERY OF CURRENT COSTS, WITH
     7             CARRYING CHARGES EQUAL TO 6%; OR
     8                 (B)  ON A FULL AND CURRENT BASIS THROUGH A
     9             RECONCILABLE AUTOMATIC ADJUSTMENT CLAUSE UNDER
    10             SECTION 1307 (RELATING TO SLIDING SCALE OF RATES;
    11             ADJUSTMENTS).
    12         IN NO EVENT SHALL LOST OR DECREASED REVENUES BY AN
    13         ELECTRIC DISTRIBUTION COMPANY DUE TO REDUCED ELECTRICITY
    14         CONSUMPTION OR SHIFTING ENERGY DEMAND BE CONSIDERED A
    15         COST OF SMART METER TECHNOLOGY. SMART METER TECHNOLOGY
    16         SHALL BE DEEMED TO BE A NEW SERVICE OFFERED FOR THE FIRST
    17         TIME UNDER SECTION 2804(4)(VI) (RELATING TO STANDARDS FOR
    18         RESTRUCTURING OF ELECTRIC INDUSTRY).
    19             (IV)  BY JANUARY 1, 2010, OR AT THE END OF THE
    20         APPLICABLE GENERATION RATE CAP PERIOD, WHICHEVER IS
    21         LATER, A DEFAULT SERVICE PROVIDER SHALL SUBMIT TO THE
    22         COMMISSION ONE OR MORE PROPOSED TIME-OF-USE RATES AND A
    23         REAL-TIME PRICE PLAN. THE COMMISSION SHALL APPROVE OR
    24         MODIFY THE TIME-OF-USE RATES AND REAL-TIME PRICE PLAN
    25         WITHIN SIX MONTHS OF SUBMITTAL. THE DEFAULT SERVICE
    26         PROVIDER SHALL OFFER COMMISSION-APPROVED TIME-OF-USE
    27         RATES AND A REAL-TIME PRICE PLAN TO ALL RESIDENTIAL AND
    28         COMMERCIAL CUSTOMERS THAT HAVE BEEN PROVIDED WITH SMART
    29         METER TECHNOLOGY WITHIN 60 DAYS OF INSTALLATION OF THE
    30         SMART METER TECHNOLOGY OR COMMISSION APPROVAL OF THE
    20080H2200B3218                 - 17 -     

     1         TIME-OF-USE RATES AND A REAL-TIME PRICE PLAN, WHICHEVER
     2         IS LATER. CUSTOMER PARTICIPATION IN TIME-OF-USE RATES OR
     3         REAL-TIME PRICING SHALL BE VOLUNTARY AND SHALL ONLY BE
     4         PROVIDED WITH THE AFFIRMATIVE CONSENT OF THE CUSTOMER.
     5         THE DEFAULT SERVICE PROVIDER SHALL SUBMIT AN ANNUAL
     6         REPORT TO THE COMMISSION ON THE PARTICIPATION IN THE
     7         TIME-OF-USE AND REAL-TIME PRICE PROGRAMS AND THE EFFICACY
     8         OF THE PROGRAMS IN AFFECTING ENERGY DEMAND AND
     9         CONSUMPTION AND THE EFFECT ON WHOLESALE MARKET PRICES.
    10             (V)  FOR PURPOSES OF THIS PARAGRAPH, THE TERM
    11         "ELECTRIC DISTRIBUTION COMPANY" SHALL MEAN A PUBLIC
    12         UTILITY PROVIDING FACILITIES FOR THE JURISDICTIONAL
    13         TRANSMISSION AND DISTRIBUTION OF ELECTRICITY TO 100,000
    14         OR MORE RETAIL CUSTOMERS IN THIS COMMONWEALTH.
    15     Section 3 5.  This act shall take effect immediately.          <--










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