PRINTER'S NO. 733
No. 695 Session of 1999
INTRODUCED BY SCRIMENTI, STABACK, READSHAW, SHANER, SURRA,
PETRARCA, CAPPABIANCA, BELARDI, YOUNGBLOOD, BEBKO-JONES,
ROEBUCK, DALEY, TIGUE, TRAVAGLIO, JOSEPHS, LEDERER,
MANDERINO, WOJNAROSKI, CURRY, CAWLEY AND MICHLOVIC,
MARCH 2, 1999
REFERRED TO COMMITTEE ON CONSUMER AFFAIRS, MARCH 2, 1999
AN ACT
1 Amending Title 66 (Public Utilities) of the Pennsylvania
2 Consolidated Statutes, further providing for rates.
3 The General Assembly of the Commonwealth of Pennsylvania
4 hereby enacts as follows:
5 Section 1. Section 102 of Title 66 of the Pennsylvania
6 Consolidated Statutes is amended by adding a definition to read:
7 § 102. Definitions.
8 Subject to additional definitions contained in subsequent
9 provisions of this part which are applicable to specific
10 provisions of this part, the following words and phrases when
11 used in this part shall have, unless the context clearly
12 indicates otherwise, the meanings given to them in this section:
13 "Affordable." Relating to the ability of customers to pay
14 their utility bills while maintaining an acceptable standard of
15 living, taking into consideration the financial circumstances of
16 customers and the community as indicated by factors such as
1 household income, age, family size, climate and other factors
2 bearing upon the cost of living in that particular community.
3 * * *
4 Section 2. Sections 315(a) and (c), 508, 523(a), 529(i),
5 1103(a), 1301, 1307(f)(3), 1308(c), 1309(a), 1318 heading and
6 (a), (b) and (d), 1324(c), 1325(a), 1327(b), 1703(c), 2107,
7 2904(a), 2906(b), 2914, 3004(a), 3005(d) and 3007 of Title 66
8 are amended to read:
9 § 315. Burden of proof.
10 (a) Reasonableness of rates.--In any proceeding upon the
11 motion of the commission, involving any proposed or existing
12 rate of any public utility, or in any proceedings upon complaint
13 involving any proposed increase in rates, the burden of proof to
14 show that the rate involved is just, affordable and reasonable
15 shall be upon the public utility. The commission shall give to
16 the hearing and decision of any such proceeding preference over
17 all other proceedings, and decide the same as speedily as
18 possible.
19 * * *
20 (c) Adequacy of services and facilities.--In any proceeding
21 upon the motion of the commission, involving the service or
22 facilities of any public utility, the burden of proof to show
23 that the service and facilities involved are adequate,
24 efficient, safe, affordable and reasonable shall be upon the
25 public utility.
26 * * *
27 § 508. Power of commission to vary, reform and revise
28 contracts.
29 The commission shall have power and authority to vary,
30 reform, or revise, upon a fair, reasonable, and equitable basis,
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1 any obligations, terms, or conditions of any contract heretofore
2 or hereafter entered into between any public utility and any
3 person, corporation, or municipal corporation, which embrace or
4 concern a public right, benefit, privilege, duty, or franchise,
5 or the grant thereof, or are otherwise affected or concerned
6 with the public interest and the general well-being of this
7 Commonwealth. Whenever the commission shall determine, after
8 reasonable notice and hearing, upon its own motion or upon
9 complaint, that any such obligations, terms, or conditions are
10 unjust, unreasonable, inequitable, unaffordable or otherwise
11 contrary or adverse to the public interest and the general well-
12 being of this Commonwealth, the commission shall determine and
13 prescribe, by findings and order, the just, reasonable, and
14 equitable, affordable obligations, terms, and conditions of such
15 contract. Such contract, as modified by the order of the
16 commission, shall become effective 30 days after service of such
17 order upon the parties to such contract.
18 § 523. Performance factor consideration.
19 (a) Considerations.--The commission shall consider, in
20 addition to all other relevant evidence of record, the
21 efficiency, effectiveness and adequacy of service of each
22 utility when determining just, affordable and reasonable rates
23 under this title. On the basis of the commission's consideration
24 of such evidence, it shall give effect to this section by making
25 such adjustments to specific components of the utility's claimed
26 cost of service as it may determine to be proper and
27 appropriate. Any adjustment made under this section shall be
28 made on the basis of specific findings upon evidence of record,
29 which findings shall be set forth explicitly, together with
30 their underlying rationale, in the final order of the
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1 commission.
2 * * *
3 § 529. Power of commission to order acquisition of small water
4 and sewer utilities.
5 * * *
6 (i) Burden of proof.--The Law Bureau shall have the burden
7 of establishing a prima facie case that the acquisition of the
8 small water or sewer utility would be in the public interest and
9 in compliance with the provisions of this section. Once the
10 commission determines that a prima facie case has been
11 established:
12 (1) the small water or sewer utility shall have the
13 burden of proving its ability to render adequate, efficient,
14 safe and reasonable service at just, affordable and
15 reasonable rates; and
16 (2) a proximate public utility providing the same type
17 of service as the small water or sewer utility shall have the
18 opportunity and burden of proving its financial, managerial
19 or technical inability to acquire and operate the small water
20 or sewer utility.
21 * * *
22 § 1103. Procedure to obtain certificates of public convenience.
23 (a) General rule.--Every application for a certificate of
24 public convenience shall be made to the commission in writing,
25 be verified by oath or affirmation, and be in such form, and
26 contain such information, as the commission may require by its
27 regulations. A certificate of public convenience shall be
28 granted by order of the commission, only if the commission shall
29 find or determine that the granting of such certificate is
30 necessary or proper for the service, accommodation, convenience,
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1 or safety of the public. The commission, in granting such
2 certificate, may impose such conditions as it may deem to be
3 just, affordable and reasonable. In every case, the commission
4 shall make a finding or determination in writing, stating
5 whether or not its approval is granted. Any holder of a
6 certificate of public convenience, exercising the authority
7 conferred by such certificate, shall be deemed to have waived
8 any and all objections to the terms and conditions of such
9 certificate.
10 * * *
11 § 1301. Rates to be just, affordable and reasonable.
12 (a) General rule.--Every rate made, demanded, or received by
13 any public utility, or by any two or more public utilities
14 jointly, shall be just, affordable and reasonable, and in
15 conformity with regulations or orders of the commission.
16 (b) Municipal corporations.--Only public utility service
17 being furnished or rendered by a municipal corporation, or by
18 the operating agencies of any municipal corporation, beyond its
19 corporate limits, shall be subject to regulation and control by
20 the commission as to rates, with the same force, and in like
21 manner, as if such service were rendered by a public utility.
22 § 1307. Sliding scale of rates; adjustments.
23 * * *
24 (f) Recovery of natural gas costs.--
25 * * *
26 (3) Within 60 days following the end of such 12-month
27 period as the commission shall designate, each public utility
28 subject to this subsection shall file with the commission a
29 statement which specifies for such period:
30 (i) The total revenues received pursuant to this
19990H0695B0733 - 5 -
1 section.
2 (ii) The total gas expense incurred.
3 (iii) The difference between the amounts specified
4 by subparagraphs (i) and (ii).
5 (iv) Evidence explaining how actual costs incurred
6 differ from the costs allowed under paragraph (2) and why
7 such differences occurred.
8 (v) How these costs are consistent with a least cost
9 procurement policy as required by section 1318 (relating
10 to determination of just, affordable and reasonable
11 natural gas rates).
12 Such report shall be a matter of public record and copies
13 thereof shall be made available by the gas distributor to any
14 person upon request. Copies of the reports shall be filed with
15 the Office of Consumer Advocate at the same time as they are
16 filed with the commission.
17 * * *
18 § 1308. Voluntary changes in rates.
19 * * *
20 (c) Determination.--If, after such hearing, the commission
21 finds any such rate to be unjust, unaffordable or unreasonable,
22 or in anywise in violation of law, the commission shall
23 determine the just and reasonable rate to be charged or applied
24 by the public utility for the service in question, and shall fix
25 the same by order to be served upon the public utility and such
26 rate shall thereafter be observed until changed as provided by
27 this part.
28 * * *
29 § 1309. Rates fixed on complaint; investigation of costs of
30 production.
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1 (a) General rule.--Whenever the commission, after reasonable
2 notice and hearing, upon its own motion or upon complaint, finds
3 that the existing rates of any public utility for any service
4 are unjust, unaffordable, unreasonable, or in anywise in
5 violation of any provision of law, the commission shall
6 determine the just and reasonable rates, including maximum or
7 minimum rates, to be thereafter observed and in force, and shall
8 fix the same by order to be served upon the public utility, and
9 such rates shall constitute the legal rates of the public
10 utility until changed as provided in this part. Whenever a
11 public utility does not itself produce or generate that which it
12 distributes, transmits, or furnishes to the public for
13 compensation, but obtains the same from another source, the
14 commission shall have the power and authority to investigate the
15 cost of such production or generation in any investigation of
16 the reasonableness of the rates of such public utility.
17 * * *
18 § 1318. Determination of just, affordable and reasonable
19 natural gas rates.
20 (a) General rule.--In establishing just, affordable and
21 reasonable rates for those natural gas distribution utilities
22 with gross intrastate operating revenues in excess of
23 $40,000,000 under section 1307(f) (relating to sliding scale of
24 rates; adjustments) or 1308(d) (relating to voluntary changes in
25 rates) or any other rate proceeding, the commission shall
26 consider the materials provided by the utilities pursuant to
27 section 1317 (relating to regulation of natural gas costs). No
28 rates for a natural gas distribution utility shall be deemed
29 just, affordable and reasonable unless the commission finds that
30 the utility is pursuing a least cost fuel procurement policy,
19990H0695B0733 - 7 -
1 consistent with the utility's obligation to provide safe,
2 adequate and reliable service to its customers. In making such a
3 determination, the commission shall be required to make specific
4 findings which shall include, but need not be limited to,
5 findings that:
6 (1) The utility has fully and vigorously represented the
7 interests of its ratepayers in proceedings before the Federal
8 Energy Regulatory Commission.
9 (2) The utility has taken all prudent steps necessary to
10 negotiate favorable gas supply contracts and to relieve the
11 utility from terms in existing contracts with its gas
12 suppliers which are or may be adverse to the interests of the
13 utility's ratepayers.
14 (3) The utility has taken all prudent steps necessary to
15 obtain lower cost gas supplies on both short-term and long-
16 term bases both within and outside the Commonwealth,
17 including the use of gas transportation arrangements with
18 pipelines and other distribution companies.
19 (4) The utility has not withheld from the market or
20 caused to be withheld from the market any gas supplies which
21 should have been utilized as part of a least cost fuel
22 procurement policy.
23 (b) Limitation on gas purchased from affiliates.--In any
24 instance in which a gas distribution utility purchases all or
25 part of its gas supplies from an affiliated interest, as that
26 term is defined in section 2101 (relating to definition of
27 affiliated interest), the commission, in addition to the
28 determinations and findings set forth in subsection (a), shall
29 be required to make specific findings with regard to the
30 justness, affordability and reasonableness of all such
19990H0695B0733 - 8 -
1 purchases. Such findings shall include, but not be limited to
2 findings:
3 (1) That the utility has fully and vigorously attempted
4 to obtain less costly gas supplies on both short-term and
5 long-term bases from nonaffiliated interests.
6 (2) That each contract for the purchase of gas from its
7 affiliated interest is consistent with a least cost fuel
8 procurement policy.
9 (3) That neither the utility nor its affiliated interest
10 has withheld from the market any gas supplies which should
11 have been utilized as part of a least cost fuel procurement
12 policy.
13 * * *
14 (d) Other regulatory approvals.--The fact that a contract or
15 rate has been approved by a Federal regulatory agency for
16 interstate ratemaking purposes shall not, in and of itself, be
17 adequate to satisfy the utility's burden of proof that gas
18 prices and volumes associated with such contract or rate are
19 just, affordable and reasonable for purposes of this section.
20 * * *
21 § 1324. Residential telephone service rates based on duration
22 or distance of call.
23 * * *
24 (c) Rate relationship.--In addition to any other
25 requirements imposed by this title, the rates for services
26 required or permitted pursuant to subsections (a) and (b) shall
27 be maintained at just, affordable and reasonable levels in
28 comparison to one another.
29 * * *
30 § 1325. Local exchange service increases; limitation.
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1 (a) General rule.--In any rate proceeding pursuant to
2 section 1308 (relating to voluntary changes in rates), no public
3 utility shall be granted a percentage increase in local exchange
4 service unless that percentage increase is just, affordable and
5 reasonable. In no event shall the public utility be granted an
6 increase in local exchange rates which is greater than the
7 overall average percentage increase in total intrastate revenues
8 authorized by the commission unless the utility proves by record
9 evidence that a greater percentage increase for local exchange
10 service is justified based upon the cost of providing that
11 service.
12 * * *
13 § 1327. Acquisition of water and sewer utilities.
14 * * *
15 (b) Procedure.--The commission, upon application by a public
16 utility, person or corporation which has agreed to acquire
17 property from another public utility, municipal corporation or
18 person, may approve an inclusion in rate base in accordance with
19 subsection (a) prior to the acquisition and prior to a
20 proceeding under this chapter to determine just, affordable and
21 reasonable rates if:
22 (1) the applicant has provided notice of the proposed
23 acquisition and any proposed increase in rates to the
24 customers served by the property to be acquired, in such form
25 and manner as the commission, by regulation, shall require;
26 (2) the applicant has provided notice to its customers,
27 in such form and manner as the commission, by regulation,
28 shall require, if the proposed acquisition would increase
29 rates to the acquiring public utility's customers by an
30 amount in excess of 1% of the acquiring public utility's base
19990H0695B0733 - 10 -
1 annual revenue;
2 (3) the applicant has provided notice of the application
3 to the Director of Trial Staff and the Consumer Advocate; and
4 (4) in addition to any other information required by the
5 commission, the application includes a full description of
6 the proposed acquisition and a plan for reasonable and
7 prudent investments to assure that the customers served by
8 the property to be acquired will receive adequate, efficient,
9 safe and reasonable service.
10 * * *
11 § 1703. Depreciation accounts; reports.
12 * * *
13 (c) Use of estimates.--The commission shall not be bound in
14 rate proceedings to accept, as just, affordable and reasonable
15 for rate-making purposes, estimates of annual depreciation
16 established under the provisions of this section, but in such
17 rate proceedings it shall give consideration to statements
18 submitted under this section, in addition to such other factors
19 as may be relevant.
20 § 2107. Federal regulatory agencies.
21 The provisions of this chapter shall not be applicable to the
22 rates and related terms and conditions for the interstate
23 transmission of electricity, natural gas, liquified natural gas,
24 substitute natural gas, liquified propane gas or naphtha which
25 have been submitted to and approved by a Federal regulatory
26 agency having jurisdiction thereof, except that the commission
27 may regulate the volume of such purchases. This section shall
28 not apply to any proceeding under section 1317 (relating to
29 regulation of natural gas costs) or 1318 (relating to
30 determination of just, affordable and reasonable natural gas
19990H0695B0733 - 11 -
1 rates).
2 § 2904. Joint use of telephone and telegraph facilities.
3 (a) Through lines for continuous service.--The commission
4 may, upon complaint or upon its own motion, after reasonable
5 notice and hearing, by order, require any two or more public
6 utilities, whose lines or wires form a continuous line of
7 communication, or could be made to do so by the construction and
8 maintenance of suitable connections or the joint use of
9 facilities, or the transfer of messages at common points,
10 between different localities which cannot be communicated with,
11 or reached by, the lines of either public utility alone, where
12 such service is not already established or provided, to
13 establish and maintain through lines within this Commonwealth
14 between two or more such localities. The rate for such service
15 shall be just, affordable and reasonable and the commission
16 shall have power to establish the same, and declare the portion
17 thereof to which each company affected thereby is entitled and
18 the manner in which the same must be secured and paid. All
19 facilities necessary to establish such service shall be
20 constructed and maintained in such manner and under such rules,
21 with such division of expense and labor, as may be required by
22 the commission.
23 * * *
24 § 2906. Dissemination of telephone numbers and other
25 identifying information.
26 * * *
27 (b) Charge prohibited.--There shall be no charge to the
28 caller who requests that the caller's telephone number and other
29 identifying information be withheld on a per-call basis. The
30 commission may approve a charge to the caller who requests that
19990H0695B0733 - 12 -
1 the caller's telephone number and other identifying information
2 be withheld on a per-line basis if the commission finds, after
3 notice to all customers and an opportunity for hearing, that the
4 charge is just, affordable and reasonable and that the charge
5 should be imposed on the caller. Tariff rates shall not apply to
6 victims of domestic violence receiving services from a domestic
7 violence program or protected by a court order nor to social
8 welfare agencies, such as women's shelters, health and
9 counseling centers, public service hotlines and their staffs. In
10 addition, the commission shall direct that the tariff rates
11 shall not apply to customers who order the per-line blocking
12 service within 60 days of its introduction or within 60 days of
13 any request for new telephone service or transfer of existing
14 telephone service. The commission shall also direct that, as
15 soon as practicable, any public utility or any other person,
16 partnership, association or corporation that makes use of the
17 facilities of a public utility which provides this service shall
18 also provide to the calling party only the ability to
19 selectively unblock at no charge on a per-call basis a blocked
20 line using a means which differs from the means to activate per-
21 call blocking. The commission, in the interest of balancing
22 respective privacy interests, shall also permit a tariffed
23 service that automatically prevents the completion of telephone
24 calls to customers who do not wish to receive calls from callers
25 that withhold their telephone number or other identifying
26 information; the terms and conditions of such a tariff shall be
27 subject to commission approval.
28 * * *
29 § 2914. Establishment of just, affordable and reasonable rates.
30 The commission shall ensure that all public and semipublic
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1 coin telephone service rates for local and intrastate calls are
2 just, affordable and reasonable.
3 § 3004. Commission review and approval of petition and plan.
4 (a) Authorization.--In determining just, affordable and
5 reasonable rates in accordance with section 1301 (relating to
6 rates to be just, affordable and reasonable), the commission may
7 authorize a local exchange telecommunications company to set
8 rates based on an alternative form of regulation pursuant to a
9 plan approved by the commission under this chapter.
10 * * *
11 § 3005. Competitive services.
12 * * *
13 (d) Reclassification.--The commission shall have the
14 authority to reclassify a telecommunications service or other
15 service or business activity that it has previously found to be
16 competitive if, after notice and hearing, it determines, upon
17 application of the criteria set forth in this chapter, that
18 sufficient competition is no longer present, that the local
19 exchange company has engaged in unfair competition with respect
20 to the service or that the local exchange company has failed to
21 provide nondiscriminatory access in the provision of the
22 service. If the commission finds that a reclassification is
23 necessary, the commission must determine whether the rate for
24 the telecommunications service or other service or business
25 activity is just, affordable and reasonable in accordance with
26 section 1301 (relating to rates to be just, affordable and
27 reasonable). If the telecommunications service or other service
28 or business activity subsequently becomes competitive, the local
29 exchange telecommunications company shall petition the
30 commission to make a determination of competitiveness for the
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1 service under the provisions of this chapter.
2 * * *
3 § 3007. Determination of access charges.
4 Local exchange telecommunications companies serving more than
5 250,000 access lines in this Commonwealth as of the effective
6 date of this chapter shall comply with the following provisions:
7 (1) Local exchange telecommunications companies shall
8 have an effective per-minute switched-access service price
9 that shall not exceed 12¢ for the first five years from the
10 implementation date of the petition and plan, unless the
11 company can justify a higher rate based on the total cost of
12 switched-access services. The per-minute switched-access
13 service price includes both originating and terminating rates
14 and excludes nonrecurring rates. A local exchange
15 telecommunications company with an effective per-minute
16 switched-access service price greater than 12¢ on the
17 implementation date of the petition and plan shall provide
18 for a revenue-neutral phasedown to not more than 12¢ in not
19 more than three equal annual increments commencing with the
20 implementation of the petition and plan. Upon the sixth year
21 from the implementation date of the plan, the commission
22 shall review the per-minute switched-access service price
23 and, after notice and hearing, determine a just, affordable
24 and reasonable per-minute switched-access service price.
25 (2) Local exchange telecommunications companies with an
26 effective per-minute switched-access service price at or
27 below 12¢, including both originating and terminating rates
28 and excluding nonrecurring rates, may not increase switched-
29 access prices either in conjunction with the filing or
30 consideration of a petition and plan or for four years from
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1 the approval date of a petition, not to extend beyond
2 December 31, 1999, unless the company can show that, absent
3 an increase, total switched-access revenues would be below
4 total switched-access cost. Revenue-neutral access tariff
5 rate changes and restructures may be proposed subject to
6 commission approval.
7 (3) Upon the commission's evaluation of the consistency
8 of tariff rates and structures with the interstate access
9 service tariff, revenue-neutral tariff rate changes and
10 restructures may be proposed by local exchange
11 telecommunications companies in order to implement the
12 results of the commission evaluation. No rate change or
13 restructure shall be approved if it constitutes or promotes
14 unfair competition. Rate changes and restructures for access
15 services submitted in accordance with this paragraph are
16 subject to commission approval, after notice and hearing.
17 (4) Any existing limits, by tariff or otherwise, on the
18 amount of revenue that a local exchange telecommunications
19 company may recover from the carrier common line rate shall
20 continue at the effective date of this chapter. At the
21 conclusion of any phasedown period provided in paragraph (1),
22 the annual revenues to be derived from carrier common line
23 rates shall be no more than the total carrier common line
24 revenues applicable to the final 12 months of any phasedown
25 period.
26 Section 3. This act shall take effect in 60 days.
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