1Amending Title 66 (Public Utilities) of the Pennsylvania
2Consolidated Statutes, further providing for sliding scale of
3rates and adjustments and for duties of natural gas
4distribution companies.

5The General Assembly of the Commonwealth of Pennsylvania
6hereby enacts as follows:

7Section 1. Section 1307(f)(5) and (6) of Title 66 of the
8Pennsylvania Consolidated Statutes are amended to read:

9§ 1307. Sliding scale of rates; adjustments.

10* * *

11(f) Recovery of natural gas costs.--

12* * *

13(5) The commission, after hearing, shall determine the
14portion of the company's natural gas distribution actual
15natural gas costs in the previous 12-month period which meet
16the standards set out in section 1318. The commission shall,
17by order, direct each natural gas distribution company
18subject to this subsection to refund to its customers gas
19revenues collected pursuant to paragraph (2) which exceed the

1amount of actual natural gas costs incurred consistent with
2the standards in section 1318 and to recover from its
3customers any amount by which the actual natural gas costs,
4which have been incurred consistent with the standards in
5section 1318, exceed the revenues collected pursuant to
6paragraph (2). Absent good reason to the contrary, the
7commission shall issue its order within six months following
8the filing of the statement described in paragraph (3).
9[Refunds to customers shall be made with interest, at the
10legal rate of interest plus two percent, during the period or
11periods for which the commission orders refunds, and
12recoveries from customers shall include interest at the legal
13rate of interest: Provided, That nothing contained herein
14shall limit the applicability of any defenses, principles or
15doctrines which would prohibit the commission's inquiry into
16any matters that were decided finally in the commission's
17order issued under paragraph (2).] Refunds to customers shall 
18be made with and recoveries from customers shall include 
19interest at the prime rate for commercial borrowing in effect 
2060 days prior to the tariff filing made under paragraph (1) 
21and as reported in a publicly available source identified by 
22the commission or at an interest rate which may be 
23established by the commission by regulation. Nothing under 
24this paragraph shall limit the applicability of a defense, 
25principle or doctrine which would prohibit the commission's 
26inquiry into matters that were decided finally in the 
27commission's order issued under paragraph (2).

28(6) [The commission shall require that customers
29transferring from sales to transportation service be subject
30to the over-or-under collection adjustment provided for in

1paragraph (5) and shall require further that customers
2transferring from transportation service to sales service not
3be subject to the over-or-under collection adjustment for an
4appropriate period following either such transfer.] If the 
5natural gas distribution company's actual natural gas costs 
6exceed the revenues collected under paragraph (2) by more 
7than 10% in the previous 12-month period provided for under 
8paragraph (5) due to customers switching from sales service 
9to transportation service, the natural gas distribution 
10company shall have the right to fully recover the under-
11collection through a nonbypassable charge. A request for 
12authorization to impose a nonbypassable charge shall be made 
13to the commission in a natural gas distribution company's 
14annual filing under this section or at the time of the 
15filing.

16* * *

17Section 2. Section 2205(c) of Title 66 is amended by adding
18a paragraph to read:

19§ 2205. Duties of natural gas distribution companies.

20* * *

21(c) Customer billing.--

22* * *

23(7) Natural gas distribution companies shall have the
24right to recover on a full and current basis all prudent and
25reasonable costs incurred to implement customer choice from
26retail natural gas customers or other entities as determined
27by the commission. Recovery from retail natural gas customers
28shall be made pursuant to a reconcilable automatic adjustment
29clause under section 1307 (relating to sliding scale of
30rates; adjustments).

1* * *

2Section 3. This act shall take effect in 60 days.