Legislation

10/07

Special Legislative Session on Energy Policy. Proposed House Bill 40 would provide for low-interest loans to utilities to replace deficient and aging pipeline facilities. House Bill 41 would give the PUC authority to mandate acquisition of Philadelphia Gas Works (PGW) by a capable public utility if considered necessary. It would also establish a distribution surcharge for all LDCs in the State, with a special surcharge provision for PGW.

12/04

Responsible Utility Consumer Protection Act (Senate Bill 677). The Act amended Title 66 by adding Chapter 14 (sections 1401-1418), which is intended to protect responsible bill paying customers from rate increases attributable to the uncollectible accounts of customers that can afford to pay their bills but choose not to pay. The legislation is applicable to electric distribution companies, water distribution companies, and larger natural gas distribution companies (annual operating income in excess of $6 million). It requires the PUC to report to the General Assembly every 2 years as to the degree to which the law's requirements are being implemented; the effect upon the utilities' cash flow, uncollectible levels, and collections; the level of access to utility services by residential customers; and the effect upon the level of consumer complaints and mediations. The report may also contain recommendations about legislative or other changes.

06/99

Natural Gas Choice and Competition Act (HB 1331). Provides for restructuring of the natural gas industry so that consumers can choose their own gas supplier. The act also deletes a 5.1-percent gross receipts tax on gas utility sales, effective 1/1/2000. A 6-percent "sales" tax will remain applicable to certain nonresidential customers. LDCs must file restructuring plans that unbundle all natural gas supply services and that specify system reliability standards and capacity contract mitigation guidelines. LDCs must also specify provisions for billing, dispute resolution, customer information, slamming prevention, etc. LDCs can continue merchant services and their affiliates can participate as marketers, abiding by code of conduct rules (interim rules adopted 11/18/99). Until 7/1/2002, an LDC can assign, release, or transfer capacity to licensed gas suppliers who in turn must accept the existing contract terms if they serve customers on the LDC's system. After 7/1/2002, the PUC can prevent assignments if it considers it warranted. Rates charged by LDCs are frozen until 2001, but LDCs can request permission to capitalize and defer costs over an "appropriate" period. LDCs can recover all costs incurred under transportation pilot programs approved before 2/1/99. Costs incurred under these pilots through 10/31/04 may be recovered if the volumetric charge does not exceed 1% of the LDC's approved volumetric charge for residential sales service. In 5 years (2004), the PUC is to evaluate the competitiveness of natural gas supply services in the State and report its findings to the General Assembly. If the market is not sufficiently competitive, further actions will be considered.

Regulatory Action

12/07

New Case and Document Management System. The system will permit electronic filings, which will require PUC procedural changes. Proposed revisions were published on Nov. 17, 2007, with comments due by Jan. 16, 2008.

09/07

PUC Rejected Philadelphia Gas Works' (PGW) Request to Remove Capacity Release Credits and Off-System Sales Margins from the PGW Rate. The PUC approved an increase in residential rates but rejected PGW's proposal to include certain revenues in base rates to offset long-term debt borrowing.

09/07

The PUC Reported that PPL Corp. Intends to Sell Its Distribution Company, PPL Gas Utilities Corp. in 2008. The company serves about 77,000 natural gas customers in 34 Pennsylvania counties.

06/06

Stakeholders Working Group Renamed SEARCH (Stakeholders Exploring Avenues for Removing Competition Hurdles). The PUC-led task force includes natural gas distribution companies (LDCs), marketers, and consumers. The group is examining issues related to mandatory capacity assignments, purchase of receivables, consumer education, consumer protection rules, and costs of retail supply services and also considering possible incentives that might result in LDCs exiting the merchant function. The group's report will be submitted to the PUC sometime in early 2007.

03/06

PUC Adds Fourth Subgroup to Stakeholders Working Group: Competition Monitoring. The PUC confirmed the previously announced subgroups as well as a fourth one, Competition Monitoring. The subgroups will meet independently and provide updates at meetings of the entire working group.

01/06

Stakeholders Working Group Meeting Scheduled and Subgroups Formed. The PUC proposed three subgroups to study specific issues and asked for volunteers to participate in each group. These subgroups are: Inter-Company Activity; Customer Interface; and Cost of Service.

10/05

Report on Competition Submitted to General Assembly. The PUC found that effective competition does not exist in the retail natural gas supply market statewide and that the PUC should reconvene stakeholders in the industry to explore additional ways to increase competition. The group is expected to meet by the end of the year. One commissioner (Shane) objected to reconvening the stakeholders group and instead recommended repeal of the Natural Gas Choice and Competition Act.

09/04

Special Hearing Held to Determine Competition Level. The PUC heard comments from natural gas suppliers, natural gas distribution companies, consumer advocates, and industry representatives as to the status of competition in the retail natural gas market. In general, companies cited a falloff in the number of participating marketers and customers.

05/04

Investigation Launched into Status of Retail Competition. The PUC directed LDCs and suppliers to provide data on gas sales, transportation volumes, and the number of customers served since 1999, as part of its investigation into the competitiveness of natural gas supply services in the State. The data and any comments are due by August 27, 2004, and a hearing is scheduled for September 30, 2004. At the conclusion of the investigation, the PUC is to report its findings to the General Assembly.

10/03

Interagency Coordination Working Group Formed. The PUC voted to create a working group for enhanced interagency coordination on natural gas matters. The PUC is also joining with the Council for Utility Choice to educate consumers about rising gas prices and payment plan options.

09/03

Permanent Standards of Conduct Proposed. The PUC adopted an order to start the formal rulemaking process for permanent standards of conduct to govern relationships between LDCs and affiliated suppliers. The proposed standards are essentially the same as the interim standards adopted in November 1999. If approved by the PUC, the standards will be reviewed by the General Assembly and the Independent Regulatory Review Commission before becoming effective.

03/03

Approval of Pennsylvania Gas Work's (PGW) Restructuring Settlement. The PUC approved customer choice for all PGW customers, as of September 2003.

01/00

Hearing Set on Approval of National Fuel Gas Distribution Corporation's Restructuring Settlement. Public hearing scheduled on customer choice program for all National Fuel Gas customers, which is set to begin on July 2000.

12/99

Approval of Columbia Gas Restructuring Settlement. The PUC approved customer choice for all Columbia Gas customers, as of November 1999. Customers can enroll over the Internet, by mail, or by telephone. The company will conduct a consumer education program and redesign its bill to allow easier price comparisons. The company also continues its obligation as the supplier of last resort.

11/99

Standards of Conduct. Order Re Binding Interim Standards, Docket M-00991249 F0004. A utility may not give its affiliates any preference in providing regulated services; may not tie regulated service to any other product; and may not disclose any customer-specific information (unless requested by customer). Utilities and affiliates must maintain separate books and records and any use of a utility's logo by an affiliate in the State must be accompanied by a disclaimer stating that the companies are separate entities and that the affiliate is unregulated.

11/99

Slamming Prevention. Proposed Rulemaking Re Procedures To Ensure Customer Consent to Change of Natural Gas Suppliers, Docket M-00991249F0006. Customers need to contact NGSs directly to initiate a provider change. If an intended switch has been verified (oral or written confirmation), the NGS is to notify the LDC by the end of the next business day. By the end of the next business day after receipt of the notification, the LDC is to send a written confirmation to the customer that includes notice of a 10-day waiting period in which the switch can be canceled. If a customer alleges that a switch occurred without consent, the matter is considered to be a customer registered dispute. The utility company must investigate and respond consistent with the PUC's regulations applicable to utility company dispute procedures. Unauthorized switching could result in fines being assessed and/or licenses being revoked. Companies are to keep records related to a switching dispute for 3 years.

10/99

Customer Information. Order Re Customer Information Disclosure Requirements, Docket M-009991249 F0005. Provides interim guidelines on customer information so that prices and services can be compared. Defines terminology to be used and gives guidelines for bill format, marketing materials, and disclosure statements. Companies sending customer bills must first have their sample bills reviewed by the PUC. Bills must separate the gas distribution company (LDC) charges from the gas supplier (marketer) charges and list basic charges (for services required for physical delivery of the gas to the customer) before nonbasic (for optional recurring services) ones. Disclosure statements for residential and small business customers shall include contract's terms of service, including agreed upon prices, start and end dates, specific price terms (such as variable terms), details of any promotions, exclusions, cancellation and renewal provisions, name and phone number of supplier of last resort, penalties, fees or exceptions, and definition of basic charges. Written disclosure statements shall be provided free of charge when a customer asks a company to start service or when a company proposes to change service terms. Customers are entitled to receive historical billing information at no charge at least once a year. Information about a customer cannot be provided to a third party unless the customer has been notified and given the opportunity to restrict the release of information. Customers must also be notified about the process for settling disputes.

10/99

Safety and Reliability. Interim Order on Safety and Reliability Guidelines, Docket L-00990144. Natural gas suppliers (NGSs) must deliver gas according to the LDC's existing tariff terms and guarantee that they have sufficient capacity for their firm service customers. LDCs are the supplier of last resort and function as system operators. They can impose non-performance penalties on NGSs, can set "critical day" procedures, and establish communication protocols. Each LDC is to establish an Operational and Capacity Council in an attempt to achieve consensus on outstanding operational and capacity issues.

08/99

Service Quality. Order Re Guidelines for Maintaining Service Quality, Docket M-00991249F0003. Provides guidelines for maintaining service quality under retail competition at the same level as at enactment date of the Natural Gas Choice and Competition Act and in compliance with mandated standards and billing practices. LDCs are to handle all applications for new service and develop procedures for giving customers a choice of an alternative gas supplier, giving all NGSs equal treatment. LDCs are to provide service in the interim. LDCs and NGSs are to coordinate procedures related to customer requests for the discontinuation of service and account transfers, as per existing legislation. The order also provides guidelines on dispute resolution and the application of partial payments.

07/99

Restructuring Filings. Order: Natural Gas Choice and Competition Act Filing Requirements, Docket M-00991249. Provides framework for LDCs restructuring filings. Requires LDCs to address how supply services will be unbundled and the methodology proposed to identify and separate costs. LDCs are to provide a monthly and annual breakdown of actual throughput volumes by rate schedule for calendar year 1998, or the company's most recent fiscal year, and an annual summary of the 12 months preceding the selected year. LDCs must specify provisions for: (1) billing, including formats for customers who wish a single bill for supply and distribution services and for those who wish separate bills; (2) compliance with supplier of last resort requirements; (3) resolving customer complaints about billing and about NGSs; (4) compliance with safety and reliability standards, including how system's balancing services operate; (5) addressing any limitations associated with receiving supplies at a receipt point; (6) assessing non-performance penalties, (7) proposed standards of conduct for LDC marketing activities; (8) universal service and energy conservation programs; (9) establishing working groups; (10) consumer education programs, including expected costs and proposed cost recovery mechanism; and (11) recovery of deferred costs.

07/99

Licensing of Natural Gas Suppliers. Order: Requirements for Natural Gas Suppliers, Docket M-00991248F0002. All NGSs must have a license issued by the PUC, including those companies operating in pilot programs in the State. Applicants must meet bonding requirements of the LDC in whose delivery area they are providing services and show that they are financially and technically fit to meet system reliability standards "consistent with the public interest" and the LDC's supplier-of-last-resort obligation. NGSs who are currently providing retail service in the State will be considered technically fit. The PUC may limit its oversight of NGSs to bonding, reliability, and consumer services and protections (which include compliance with legislated standards and billing practices for residential utility service). The standards of conduct approved for the State's electric restructuring will serve as a guide for drafting specific interim standards of conduct applicable to the natural gas industry.