[26 Pa.B. 5181]
[Continued from previous Web Page] Commissioners Present: John R. McGinley, Jr., Chairperson; Robert J. Harbison, III, Vice Chairperson; Arthur Coccodrilli; John F. Mizner; Irvin G. Zimmerman
Public meeting held
October 3, 1996Pennsylvania Public Utility Commission--Gas Transportation Tariffs; Doc. No. 57-150
Order On August 3, 1994, the Independent Regulatory Review Commission (Commission) received this proposed regulation from the Pennsylvania Public Utility Commission (PUC). This rulemaking would amend 52 Pa. Code Chapter 60. The authority for this regulation is contained in sections 501, 1301 and 1501--1508 of the Public Utility Code. The proposed regulation was published in the August 13, 1994 Pennsylvania Bulletin with a 45-day public comment period. The final-form regulation was submitted to the Commission on September 13, 1996.
In 1986, the PUC adopted a regulation which required utilities to offer natural gas transportation services and outlined the methods to establish the rates for this service. The intent of the initial rulemaking was to provide gas customers the ability to directly contract with gas producers and suppliers to obtain a more competitive rate for gas. With this rulemaking, the PUC is updating the gas transportation regulations to improve access for gas transportation customers and ensure that all transportation customers are paying their fair share for the service. The regulation modifies the rules for how the transportation rates will be determined, the provisions for the balancing of gas deliveries and withdrawals, and the stand-by requirements for essential human needs customers.
On September 25, 1996, the Senate Consumer Affairs Committee and Professional Licensure Committee disapproved the final-form regulation. On October 2, 1996, the House Consumer Affairs Committee also disapproved the final rulemaking.
We received letters from the Pennsylvania Gas Association, Columbia Gas, and National Fuel Gas Distribution Company opposing the regulation. The Independent Oil and Gas Producers of Pennsylvania submitted a letter indicating its support for the regulation.
We recognize the significant steps the PUC has taken to solicit public input and directly involve affected parties in the development of the regulation. Although the PUC has made some amendments in response to public comments, we still have several concerns with the regulation and believe the PUC must resolve these issues prior to final adoption.
First, our Comments on the proposed rulemaking and draft final-form regulation opposed the use of individual operational balancing agreements (OBA). These agreements will allow a utility, at its discretion, to contract with individual transportation customers for balancing provisions that are different than those contained in the regulation and a utility's tariff. The agreements will not be reviewed by the PUC nor will they be publicly available. Our Comments on the proposed rulemaking opposed individual OBAs because they could circumvent the intent of the rulemaking of avoiding cross subsidization between customers. In our Comments on the draft final form rulemaking, we continued to oppose the inclusion of individual OBAs because we believed it was the duty of the PUC to assure that a gas utility did not enter into a specific agreement which may result in cross subsidization between customers or is discriminatory. Therefore, our Comments on the draft final-form rulemaking recommend that if the PUC believes that individual OBAs are necessary, then it should amend the rulemaking to require these agreements be reviewed and approved by the PUC prior to their implementation. By requiring the PUB to review these agreements, the PUC can assure that an OBA is not discriminatory or results in cross subsidization between the customers of the utility.
The PUC did not agree with our recommendation and continues to permit individual OBAs. The PUC believes that OBAs will be of primary interest to large industrial customers with operating characteristics or requirements which present special or unusual service needs to the utility. Although the PUC intimates that we should not be concerned with the OBAs because they will be few in number, at the same time it also opposes reviewing these agreements because it would be an ''injudicious waste of regulatory resources for us (PUC) to review every such arrangement in the absence of the existence of a real and immediate controversy.'' In making this statement, the PUC did not detail the time or the costs that would be involved in reviewing these documents.
We continue to oppose the use of individual OBAs. The purpose of having balancing provisions is to ensure that the transportation customers properly balance their intake of gas. Failure of a transportation customer to properly balance their intake of gas can result in costs to the utility and ultimately the ratepayers. The regulation and the utility's tariff establish provisions that require the transportation customers to take the appropriate amount of gas and the penalties that will be imposed when a customer is not in balance. It is not in the public interest to allow a gas utility to ignore these standards that were reviewed and approved by the PUC and provide for potentially more lenient balancing provisions that may result in cross subsidization between customers. Therefore, we continue to believe that if the PUC believes individual OBAs are appropriate, it must, at a minimum, require that these agreements be reviewed and approved by the PUC prior to their implementation.
Our second concern relates to a conflict between Subsections 60.3(c) and 60.3(e). Subsection (c) includes apartment buildings under the definition of residential human needs customers, thus requiring apartment buildings to obtain stand-by service from the utility. In contrast, Subsection (e) allows an owner of an apartment building to sign an affidavit indicating they will not be obtaining stand-by service for 100% of its maximum daily quantity. Therefore, the PUC needs to amend the regulation to provide consistent stand-by provisions for apartment buildings. Specifically, we recommend that the PUC delete apartment buildings from Subsection (e), thus clearly requiring apartment buildings to obtain stand-by service from the utility.
Our third concern is with the classification of nursing homes, hospitals and dormitories as non-residential human needs customers. The PUC's intent for creating the classification of nonresidential human needs customers is to recognize that individuals in these buildings can be easily housed elsewhere if the facility did not adequately contract for stand-by service from a third party or if alternative fuel capability is not sufficient to meet their energy needs. In contrast, the creation of the residential human needs customer category is to recognize that individuals in these buildings cannot be easily moved elsewhere and need reliable stand-by service. Thus, to avoid the situation of a gas utility terminating service to residential human needs customers, the PUC is requiring these customers to obtain stand-by service from the utility.
We do not believe that nursing homes, hospitals and dormitories meet the definition of non-residential human customers because these facilities house people for long periods of time and they cannot be easily moved elsewhere. As a practical matter, if the facility does not have an adequate supply of gas and does not have adequate alternative fuel capability, the facility will have to rely on the utility to supply gas in order to heat the facility. The utility may not be able to provide service, especially during high demand periods, because without a requirement to purchase stand-by service from the utility, it may not have an excess supply of gas. Therefore, given the potential implications of terminating service to nursing homes, hospitals and dormitories, we believe they must be defined as residential human needs customers, thus requiring them to obtain stand-by service from the gas utility.
In the draft-final-form rulemaking, the PUC added new provisions in section 60.3, relating to essential human needs customers. Our comments on the draft final-form rulemaking requested clarification on several terms contained in section 60.3(d) and believed they should be defined in the rulemaking. Specifically, we recommend that the terms essential human needs service, alternative fuel capability, equivalent service, and maximum daily quantity be defined in the rulemaking. The PUC did not define these terms and provided no explanation for not doing so.
We continue to believe that it is necessary to define these terms. Although the meaning of the terms may be clear to the PUC, they are specific regulatory terms that can impact the intent and clarity of the regulation. In fact, the PUC has already defined two of these terms, alternate fuel capability and essential human needs service, in its policy statement on gas curtailment. However, since a policy statement is not legally binding, the terms need to be defined in the regulation.
Finally, the Pennsylvania Gas Association has expressed a concern that the modifications made to the requirements for stand-by service will result in stranded costs to the utility. The PGA believes that since the regulation will increase the number of transportation customers who will not be required to obtain stand-by service from their local distribution company, gas utilities will be saddled with the costs associated with presently contracted pipeline capacity. In making this assertion, the PGA did not quantify the actual potential impact that may occur because of this new provision. Although we recognize that utilities may have some excess contracted pipeline capacity because of the change in stand-by service, we believe the impact can be mitigated outside the rulemaking. First, as the PGA stated at the Commission's October 3, 1996 public meeting, the excess contracted pipeline capacity can be sold to other utilities, albeit at a lower price than originally contracted. Second, the PUC stated at the Commission's public meeting that any resulting costs from unused pipeline capacity will be dealt with in the utility's tariff. We agree with the PUC's approach and encourage it to take careful consideration of these potential costs when a gas utility files a rate revision as a result of the provisions in the rulemaking.
The PGA also expressed concern with the use of a cost of service study for determining rates and the requirement that utilities provide unbundled services. However, we have previously commented in favor of a cost of service study and the unbundling of transportation services and continue to believe these specific provisions are in the public interest.
We have reviewed this regulation and find it not to be in the public interest. As discussed, we do not believe that utilities should be given the discretion to enter into OBAs without prior review and approval by the PUC. We also believe the PUC needs to delete apartment buildings from section 60.3(e), thus clearly requiring owners of apartment buildings to obtain stand-by service from the gas utility. In addition, we believe that hospitals, nursing homes, and dormitories should be classified as residential human needs customers. Finally, we believe the PUC should define the terms used in section 60.3(d) to improve the clarity of the rulemaking. These recommended amendments will enable the PUC to proceed with important revisions to its gas transportation regulation and allow gas transportation customers in the Commonwealth to obtain competitively priced gas, without shifting costs to the utilities' other customers.
Therefore, It Is Ordered That:
1. Regulation No. 57-150 from the Pennsylvania Public Utility Commission, as submitted to the Commission on September 13, 1996, is disapproved;
2. The Pennsylvania Public Utility Commission shall, within 7 days of receipt of this Order, notify the Governor, the designated Standing Committees of the House of Representatives and the Senate, and the Commission of its intention to either proceed with the promulgation of the regulation without revisions, to revise the regulation, or to withdraw the regulation. Failure to submit notification within the 7-day period shall constitute withdrawal of the regulation;
3. The Commission will transmit a copy of this Order to the Legislative Reference Bureau; and
4. This Order constitutes a bar to final publication of Regulation No. 57-150 under section 6(b) of the Regulatory Review Act (71 P. S. § 745.6(b)).
Commissioners Present: John R. McGinley, Jr., Chairperson; Robert J. Harbison, III, Vice Chairperson; Arthur Coccodrilli; John F. Mizner; Irvin G. Zimmerman
Public meeting held
October 3, 1996Environmental Quality Board--General Conformity; Doc. No. 7-295
Order On March 5, 1996, the Independent Regulatory Review Commission (Commission) received this proposed regulation from the Environmental Quality Board. This rulemaking would amend 25 Pa. Code Chapter 127, Subchapter J. The authority for this regulation is found in section 5 of the Air Pollution Control Act (35 P. S. § 4005). The proposed regulation was published in the March 16, 1996 Pennsylvania Bulletin with a 60-day public comment period. The final-form regulation was submitted to the Commission on September 3, 1996.
Section 176(c) of the Federal Clean Air Act Amendments of 1990 (CAA) requires that Federal departments and agencies ensure the projects they undertake or provide financial support for conform to the applicable State Implementation Plan (SIP). The SIP is the State's plan to achieve or maintain National Ambient Air Quality Standards (NAAQS). Section 176(c) of the CAA also requires that the State amend its SIP to incorporate the criteria and procedures for conformity designations. In response to the mandates in section 176(c) of the CAA, the proposed regulation adopts by reference the Federal General Conformity Rule (40 CFR Part 93, Subpart B) promulgated by the United States Environmental Protection Agency under section 176(c) of the CAA.
General conformity is designed to make the sponsoring agency for an activity responsible for the emissions that result from the activity. The goal is to prevent Federal actions from undermining the State's air pollution prevention or reduction programs. According to the Department of Environmental Protection, the proposed regulation will ensure that Federal actions do not interfere with Pennsylvania's timely attainment of NAAQS or with emission reduction plans leading to attainment.
Prior to taking any action on a project in Pennsylvania, the sponsoring Federal agency will be required to determine that the proposed action conforms to Pennsylvania's SIP and to make the determination available for public review. The conformity determination addresses direct and indirect emissions of criteria pollutants which are caused by Federal action, are reasonably foreseeable, and can be controlled by the Federal agency. Criteria pollutants include carbon monoxide, lead, nitrogen, ozone, particulate matter and sulfur dioxide.
Examples of Federal actions which must conform to the State SIP include:
* leasing of Federal land;
* airport construction/modification grants;
* private construction on Federal land;
* construction of Federal office buildings;
* prescribed burning;
* reuse of military bases; and
* water treatment plants.
The final-form regulation contains no changes from the proposed regulation. We did not file any comments on the proposed regulation. Furthermore, we did not receive any negative recommendations on the final-form regulation from the House or Senate Environmental Resources and Energy Committees.
Therefore:
The Commission will notify the Legislative Reference Bureau that Regulation No. 7-295 from the Environmental Quality Board, as submitted to the Commission on September 3, 1996, was deemed approved under section 5(b.3) of the Regulatory Review Act (71 P. S. § 745.5(b.3)) on September 24, 1996.
Commissioners Present: John R. McGinley, Jr., Chairperson; Robert J. Harbison, III, Vice Chairperson; Arthur Coccodrilli; John F. Mizner; Irvin G. Zimmerman
Public meeting held
October 3, 1996State Board of Certified Real Estate Appraisers--Fees; Application Process; Doc. No. 16A-703
Order On November 28, 1995, the Independent Regulatory Review Commission (Commission) received this proposed regulation from the State Board of Certified Real Estate Appraisers (Board). This rulemaking would amend the application process for certified evaluators under section 36.203 of 49 Pa. Code by adding new Subsections (c) and (d) and deleting the reapplication fee of $35 under section 36.6. The authority for these revisions is found in section 3 of the Assessors Certification Act (act) (63 P. S. § 458.3) which empowers the Board to promulgate rules and regulations consistent with the statutes of the Commonwealth to administer and enforce the provisions of the act. The proposed regulation was published in the December 9, 1995 Pennsylvania Bulletin with a 30-day public comment period. The final-form regulation was submitted to the Commission on September 13, 1996.
The proposed amendments address how long an approved application (which authorizes an applicant to report for the certification examination at their leisure) is valid, and how long an applicant (whose application has been disapproved) has to correct the deficiencies without having to file a new application. These regulatory changes are consistent with the currently established procedures for certifying certified real estate appraisers.
The proposed rulemaking amendments are designed to remedy some inadequacies in the current regulation. First, current Board regulations do not address how long an approved application is valid. Second, there is no regulatory provision governing how long an applicant has to correct deficiencies, which resulted in the disapproval of the application, before being required to file a new application under criteria then in effect. As a consequence, the Board has been unable to determine with certainty that applicants who report for certification examinations on given dates actually meet the then current minimum education and experience requirements.
The proposed new language of section 36.203(c) relates to ''approved applications.'' The rulemaking provides that approval of a candidate's application for certification will be valid for 1 year from the date of the Board's approval. This means that if the Board approves a candidate's application, the approval only authorizes the candidate to take the certification examination at any time during the year following the date of approval. If an applicant fails to report for the certification examination within this 1-year period, the applicant's application will be considered to have been withdrawn. Should the applicant wish to take the examination after 1 year from the date of approval, a new application accompanied by the appropriate fee would be required. As proposed, the application would then be reviewed in accordance with the act and regulations in effect at the time that the new application is received by the Board.
The Board believes that establishing a 1-year cutoff limit is reasonable for an applicant while affording itself the opportunity to ensure that applicants reporting for the certification examination have met the current minimum education and experience requirements.
Under proposed section 36.203(d), which deals with ''disapproved applications,'' an applicant whose application has been disapproved by the Board will be notified in writing of the reasons for disapproval and be given 1 year from the date of disapproval to file a request for reconsideration. If an applicant's request for reconsideration is denied, or an applicant is unable to correct the deficiencies within 1 year from the date of disapproval, a new application accompanied by the prescribed fee will be required. As proposed, the application would then be reviewed in accordance with the act and regulations in effect at the time that the new application is received by the Board.
Also, under proposed section 36.203(d), requests for reconsideration of a disapproved application must include a reason for the request and be accompanied by any relevant documentation not previously submitted. In addition, the applicant may request an informal interview with the Board.
Lastly, the Board proposes to amend section 36.6 by deleting the reference to a reapplication fee of $35. The reapplication fee is unnecessary because the Board has proposed new Subsections (c) and (d) which address circumstances under which applicants who fail to report for the certification examination within 1 year from the date of an approved application or who fail to correct a deficiency within 1 year from the date of a disapproved application will be required to file a new application with the Board if they wish to take the exam. The reapplication fee, which was originally intended to cover only the cost associated with a review of updated information, will no longer be applicable.
The rulemaking will affect two types of applicants: those who fail to take the certification examination within 1 year of receiving the Board's approval to take the examination; and those who fail to cure a deficiency in an application within 1 year of the date of notification of the Board's disapproval of their application.
First, additional paperwork requirements will be imposed on applicants because of the need to file an entirely new application. Second, in doing away with the present reapplication fee of $35, the proposed rulemaking will increase by $20 (from $35 to $55) the fee to file a new application for certification.
The proposed new procedures, when finalized, will enable the Board to send out notification letters to all of the potentially affected applicants advising them of the need to take appropriate action within 1 year or be faced with starting all over again by filing a whole new application (accompanied by the $55 application fee). Initially, the new procedures will increase the paperwork and processing time for the Board's staff. The Board notes that it receives approximately 20 new and corrected applications per month.
There are no issues or problems presented by this proposed rulemaking. The added requirements will clarify the procedures that applicants must follow in the event that they have missed the reasonable 1-year deadline to utilize a Board approved application or respond to a Board disapproved application to become certified Pennsylvania evaluators. This proposal implements procedures for applicants to become certified Pennsylvania evaluators which are already in place for applicants to become certified Pennsylvania real estate appraisers and are consistent with the statutory limitations on certified Pennsylvania real estate appraisers.
The final-form regulation contains no changes from the proposed regulation. We did not file any comments on the proposed regulation. Furthermore, the final-form regulation was approved by the Senate Consumer Protection and Professional Licensure Committee on September 25, 1996, and by the House Professional Licensure Committee on October 1, 1996.
Therefore:
The Commission will notify the Legislative Reference Bureau that Regulation No. 16A-703 from the State Board of Certified Real Estate Appraisers, as submitted to the Commission on September 13, 1996, was deemed approved under section 5(b.3) of the Regulatory Review Act (71 P. S. § 745.5(b.3)) on October 1, 1996.
JOHN R. MCGINLEY, Jr.,
Chairperson
[Pa.B. Doc. No. 96-1810. Filed for public inspection October 25, 1996, 9:00 a.m.]
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