THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY BOSCOLA, O'PAKE, FONTANA, HUGHES, WASHINGTON AND KITCHEN, MAY 27, 2009

REFERRED TO CONSUMER PROTECTION AND PROFESSIONAL LICENSURE, MAY 27, 2009  

AN ACT

Amending Title 66 (Public Utilities) of the Pennsylvania

Consolidated Statutes, providing for the definition of

"overall rate" and for rate phase-in plans.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 2803 of Title 66 of the Pennsylvania

Consolidated Statutes is amended by adding a definition to read:

§ 2803.  Definitions.

The following words and phrases when used in this chapter

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

* * *

"Overall rate."  The sum of all retail rate schedule

components including the generation and transmission charges

charged by an electric distribution company or a competitive

electric generating supplier for electric service and including

all applicable riders and surcharges.

* * *

Section 2.  Title 66 is amended by adding a section to read:

§ 2816.  Rate phase-in plans.

(a)  General rule.--Within 90 days of the effective date of

this section, each electric distribution company shall file a

competitively neutral phase-in plan with the commission to

provide all customers in each customer class the option to phase

in any initial increase in the price for generation service that

may occur upon the expiration of the generation rate cap for

such provider specified in section 2804(4) (relating to

standards for restructuring of electric industry) or a

restructuring plan in section 2806(f) (relating to

implementation, pilot programs and performance-based rates) and

ending no sooner than three years after such expiration date and

no later than five years after such expiration date. Customer

participation in any plan approved under this subsection shall

be voluntary.

(b)  Conditions.--Each phase-in plan shall be subject to

commission approval and shall meet the following conditions:

(1)  Such plan shall offer a gradual transition to prices

at the level permitted under a commission-approved

procurement plan under section 2807(e)(3.1) (relating to

duties of electric distribution companies) beginning on the

expiration date of the generation rate cap for the provider.

(2)  The plan shall ensure that the annual percentage

increase in the overall rate charged to each customer class

under the plan shall be phased in in equal annual percentage

increases, provided that the increase in any one year shall

not exceed 10% of the overall rate in effect for the customer

class on the last day before the expiration of the generation

rate caps during the period specified in subsection (a).

After appropriate notice and opportunity for hearing, the

commission may provide for an additional period of up to

three years for the recovery of deferred amounts under this

section.

(3)  Such plan may offer the customer the option to begin

the phase-in period prior to the expiration of the generation

rate cap, provided that the customer accrues interest on any

prepaid amount at a rate of no less than 6% compounded

annually. Customer participation in any plan approved under

this subsection shall be voluntary.

(4)  In the event a customer leaves the default service

provider's system prior to the full distribution of amounts

collected, a credit will be applied to the customer's final

bill and any remainder shall be refunded to the customer.

(5)  Such plan shall specify the means of providing

notice to customers of the option to participate in such plan

on a voluntary basis.

(c)  Recovery.--The default service provider shall be

eligible to fully recover the amount of the deferred payment

resulting from a customer's participation in the plan from such

customers. The charge shall be a reconcilable automatic

adjustment charge under section 1307 (relating to sliding scale

of rates; adjustments), shall be applied to participating

customers on a customer class basis, shall be included in other

charges on the electric distribution company's bill and shall

not appear as a separate line item on the customer's bill.

(d)  Carrying charge not permitted.--The commission shall not

permit any carrying charge or compounded annual interest to be

applied by an electric distribution company to the deferred cost

or deferred payments from such customers. Only the amount of the

deferred payment shall be eligible for recovery under

subsections (b) and (c).

(e)  Deferred costs.--The commission shall permit such

deferred costs to be recorded for accounting purposes on an

electric distribution company's books of account as a regulatory

asset where the electric distribution company is the default

service provider.

(f)  Intangible transition property.--An electric

distribution company's right to recover costs under an approved

phase-in plan shall be deemed intangible transition property for

purposes of section 2812 (relating to approval of transition

bonds), but not for any other section of Chapter 28 (relating to

restructuring of electric utility industry), and the commission

is authorized to issue a qualified rate order under section 2812

with respect to such costs and to issue such other orders and

take such actions as may be necessary or proper for the electric

distribution company to issue transition bonds, as provided in

section 2812, secured by the electric distribution company's

right to recover such costs.

Section 3.  The requirements of this act shall only apply to

electric distribution companies that, as of the effective date

of this act, are subject to a Pennsylvania Public Utility

Commission-approved generation rate cap that was initiated under

section 2804(4)(ii).

Section 4.  This act shall take effect immediately.