CORRECTIVE REPRINT

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE RESOLUTION

INTRODUCED BY GEORGE, BELFANTI, CALTAGIRONE, DELUCA, GOODMAN, HALUSKA, HARHAI, JOSEPHS, MAHONEY, MUNDY, MURPHY, SIPTROTH, THOMAS AND YOUNGBLOOD, MAY 26, 2010

REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY, MAY 26, 2010   

A RESOLUTION

Directing the Environmental Resources and Energy Committee of

the House of Representatives to investigate whether electric

utilities overcollected or undercollected in stranded cost

payments under the Electricity Generation Customer Choice and

Competition Act of 1996 to Pennsylvania ratepayers, including

industrial manufacturers and the government of the

Commonwealth, whether refunds in cases of overcollection or

surcharges in cases of undercollection may be necessary and

whether those utilities' generation affiliates which received

formerly regulated generation assets of the utilities at

little to no cost may have been unjustly enriched in those

transactions.

WHEREAS, By enacting 66 Pa.C.S. Ch. 28, known as the

Electricity Generation Customer Choice and Competition Act, on

December 3, 1996, the General Assembly sought to resolve certain

transitional issues in a manner fair to customers, investors,

electric utilities and their employees, local communities,

nonutility generators and other affected parties; and

WHEREAS, The Electricity Generation Customer Choice and

Competition Act defines "competitive transition charge" as "[a]

nonbypassable charge applied to the bill of every customer

accessing the transmission or distribution network which

(charge) is designed to recover an electric utility's transition

or stranded costs as determined by the commission under sections

2804 and 2808"; and

WHEREAS, The act defines "transition or stranded costs," in

part, as "[an] electric utility's known and measurable net

electric generation-related costs, determined on a net present

value basis over the life of the asset or liability as part of

its restructuring plan, which traditionally would be recoverable

under a regulated environment but which may not be recoverable

in a competitive electric generation market and which the

commission determines will remain following mitigation by the

electric utility"; and

WHEREAS, Since the implementation of the Electricity

Generation Customer Choice and Competition Act, there has not

been a final analysis by the Pennsylvania Public Utility

Commission or other governmental entity of the commission-

approved stranded costs by electric utilities; and

WHEREAS, In forecasting the future prices of electricity,

electric utilities may have grossly overestimated the costs that

may have been stranded under the act; and

WHEREAS, Electric utilities have been collecting stranded

cost payments from all classes of ratepayers during the period

where electric rates were capped based on the projected price of

electricity; and

WHEREAS, With the expirations of electric rate caps, a

complete and certain analysis is both possible and necessary to

determine whether electric utilities overcollected in stranded

cost payments from their ratepayers by comparing the projected

cost of electricity as outlined in the stranded cost agreements

with the actual cost of electricity charged to ratepayers; and

WHEREAS, The Environmental Resources and Energy Committee of

the House of Representatives desires to investigate whether

electric utilities overcollected millions or billions of dollars

in stranded cost payments from Pennsylvania ratepayers and were

unjustly enriched in doing so and whether their unregulated

generation affiliates (UGAs) which received formerly regulated

generation assets at little to no cost from electric utilities

that grossly undervalued those assets were unjustly enriched in

those transactions; and        

WHEREAS, In order to effectively investigate and to find the

answers to the above questions, it is imperative the

Environmental Resources and Energy Committee has the power to

obtain testimony and documents; therefore be it

RESOLVED, That the House of Representatives direct the

Environmental Resources and Energy Committee to conduct an

investigation on whether more than $18 billion of stranded costs

paid by Pennsylvania ratepayers were justified and whether some

electric utilities and their UGAs, which received formerly

regulated generation assets of the electric utilities at little

to no cost, were unjustly enriched in those transactions and

whether there should be refunds to ratepayers in cases of

overcollection or surcharges in cases of undercollection; and be

it further

RESOLVED, That the committee may hold hearings and conduct

investigations at such places as necessary in this Commonwealth;

and be it further

RESOLVED, That it may issue subpoenas under the hand and seal

of its chairman commanding any person to appear before the

committee and to testify on matters relevant to the committee's

inquiries and to produce such books, papers, records and

documents as the committee deems necessary; and be it further

RESOLVED, That any person who neglects or refuses to testify

or to produce any books, papers, records or documents may be

subject to the penalties provided by the laws of this

Commonwealth in such case, and each member of the committee

shall have power to administer oaths and affirmations to

witnesses appearing before the committee; and be it further

RESOLVED, That the committee make a report of its

investigation and recommendations to the House of

Representatives by September 15, 2010.