RULES AND REGULATIONS
[52 PA. CODE CH. 54]
[28 Pa.B. 3791] [L-970130]
Reporting Requirements for Universal Service and Energy Conservation Programs The Pennsylvania Public Utility Commission (Commission) on April 30, 1998, adopted a final rulemaking to establish standard reporting requirements for universal service and energy conservation programs. The data collected as a result of the reporting requirements will assist the Commission in monitoring the progress of the electric distribution companies (EDC) in achieving universal service in its service territory. The contact persons are Kathryn G. Sophy, Law Bureau (717) 772-8839 and Janice Hummel, Bureau of Consumer Services (717) 783-9088.
Executive Summary
On December 3, 1996, Governor Tom Ridge signed into law 66 Pa.C.S. §§ 2801--2812 (relating to Electricity Generation Customer Choice and Competition Act) (act). The act revised 66 Pa.C.S. (relating to Public Utility Code), by inter alia, adding Chapter 28 (relating to restructuring of the electric utility industry). The act is clear in its intent that electric distribution companies (EDCs) are to continue, at a minimum, the protections, policies and services that now assist customers who are low-income to afford electric service. Section 2804(9) of the act requires the Commission to ensure that universal service and energy conservation policies, activities and services are appropriately funded and available in each electric distribution territory.
The purpose of this rulemaking is to establish standard reporting requirements for universal service and energy conservation programs. The data collected as a result of the reporting requirements will assist the Commission in ensuring that universal service is available and appropriately funded as required by the act.
The regulations establish that the EDCs will report the following information to the Commission: 1) Annual reports on residential low-income collections and universal service and energy conservation programs; 2) Plans every 3 years for universal service and energy conservation programs; 3) Every 6 years an independent third-party evaluation that measures the degree that an EDC's universal service and energy conservation programs are working to provide affordable utility service at reasonable rates.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. §§ 745.5(a)), on January 16, 1998, the Commission submitted a copy of the final rulemaking, which was published as proposed at 28 Pa.B. 518 (January 31, 1998) to the Independent Regulatory Review Commission (IRRC) and the Chairpersons of the House Committee on Consumer Affairs and the Senate Committee on Consumer Protection and Professional Licensure for review and comment. Under section 5(c) of the Regulatory Review Act, the Commission also provided IRRC and the Committees with copies of all comments received, as well as other documentation.
In preparing these final-form regulations, the Commission has considered all comments received from IRRC, the Committees and the public.
Under section 5.1(d) of the Regulatory Review Act (71 P. S. § 745.5a(d)), these final-form regulations were deemed approved by the House and Senate Committees on June 8, 1998, and were approved by IRRC on June 18, 1998, in accordance with section 5.1(e) of the Regulatory Review Act.
Public Meeting held
April 30, 1998Commissioners Present: John M. Quain, Chairperson; Robert K. Bloom, Vice-Chairperson; John Hanger; David W. Rolka; Nora Mead Brownell
Final Rulemaking Order By the Commission:
At public meeting of December 4, 1997, the Commission issued an order adopting and directing publication of proposed regulations to establish reporting requirements for universal service and energy conservation programs.
On December 3, 1996, Governor Tom Ridge signed into law the act. The act is clear in its intent that the EDCs are to continue, at a minimum, the protections, policies and services that now assist customers who are low-income to afford electric service. Section 2804(9) of the act (relating to standards for restructuring of electric industry) requires the Commission to ensure that universal service and energy conservation policies, activities and services are appropriately funded and available in each electric distribution territory.
On July 10, 1997, the Commission issued a final order that established Guidelines for Universal Service and Energy Conservation Programs (Guidelines). As part of that order, the Commission issued temporary reporting requirements until we developed formal regulations through our normal rulemaking process. By order adopted December 4, 1997, and entered on December 10, 1997, at Docket No. L-00970130, we initiated a proposed rulemaking to establish reporting requirements for universal service and energy conservation programs, Chapter 54 (relating to universal service and energy conservation reporting). The purpose of this rulemaking is to establish standard reporting requirements for universal service and energy conservation programs. The data collected as a result of the reporting requirements will assist the Commission in ensuring that universal service is available and appropriately funded in each EDC's service territory. The reporting requirements will also ensure that the data is reported uniformly and consistently.
On January 7, 1998, the Office of Attorney General issued its approval of the proposed regulations as to form and legality. On January 16, 1998, the Commission delivered copies of the proposed rulemaking to the Chairperson of the House Committee on Consumer Affairs, the Chairperson of the Senate Committee on Consumer Protection and Professional Licensure, the Independent Regulatory Review Commission (IRRC) and to the Legislative Reference Bureau. The proposed rulemaking was published for comment in the Pennsylvania Bulletin, at 28 Pa.B. 518 for a 45-day comment period that ended March 17, 1998. The Commission also posted the order on the Commission's Internet website.
We also received written comments from the following parties; Roger Colton, Fisher, Sheehan and Colton (FSC); Duquesne Light Company (Duquesne); The Environmentalists; Equitable Gas Company (Equitable); GPU Energy; the Independent Regulatory Review Commission (IRRC); the Office of Consumer Advocate (OCA); the Office of Trial Staff (OTS); PP&L, Inc. (PP&L); PECO Energy; Pennsylvania Electric Association (PEA), on behalf of its member companies; Pennsylvania Gas Association (PGA); and UGI Utilities, Inc.--Electric Division (UGI-Electric).
We have considered all these comments. We appreciate and thank the commentators for suggestions to improve the proposed reporting requirements.
We have identified certain issues that were common to a number of the comments and will address them in a combined fashion. We begin by addressing the comments to specific sections. We address other non-section specific comments after our response to the specific section-by-section comments.
§ 54.71. Statement of purpose and policy.
PEA suggested the statement of purpose is not accurate. Section 2806(e) of the act requires each EDC to submit a universal service plan as part of its restructuring plan. Under the provisions of section 2806(f) of the act the Commission will have reviewed the plans, held hearings and issued an order that establishes each EDC's universal service component of the restructuring plans. Therefore, PEA stated the reports are not necessary to determine each EDC's progress in achieving universal service but are necessary to determine each EDC's compliance with their universal service plan. PP&L, UGI and Duquesne supported PEA's position that the reports are necessary to determine each EDC's compliance with their universal service plan. PP&L commented that if the Commission's intent is to define universal service programs as providing special programs to all low-income customers, then PP&L disagrees with that broad definition.
First, we clarify that the Commission's intent is not to define universal service programs as providing special programs to all low-income customers. The Guidelines for Universal Service and Energy Conservation Programs (Guidelines) at M-00960890F0010 define eligible customers as customers whose household income is at or below 150% of the Federal poverty guidelines and who meet other nonincome criteria. Those nonincome criteria are defined for each universal service program component.
We agree with PEA's comments that the data submitted in the reporting requirements will assist the Commission in determining if each EDC is complying with its approved plan. However, we believe that a review of the collection and program data is also necessary to assist the Commission in ensuring that universal service is appropriately funded and available in each EDCs service territory, as required by the act. Section 2804(15) of the act states, ''At the time each utility files its restructuring plan with the Commission, the utility shall submit an initial plan that sets forth how it shall meet its universal service and energy conservation obligations.'' (emphasis added) By including the term ''initial,'' we believe the act envisioned that each EDC would file subsequent universal service plans. The number of low-income residential customers who are or may become payment troubled is not static. In order for universal service programs to be appropriately funded and available, EDCs and the Commission will need to continue to evaluate the relationship between need and program services. The Commission determined in the PECO restructuring order at R-00973953 that the Commission will not set an arbitrary limit on the number of customers who participate in universal service. The Commission will determine annually a schedule for achieving an appropriate level of participation. The universal service reports will be an important tool to assist the Commission in determining an appropriate level of participation.
IRRC commented that the last three sentences in this section contain extraneous information and duplicate other requirements. IRRC recommended that the Commission delete these sentences. We accept IRRC's recommendation.
FSC commented that the purpose ''seems to indicate that the universal service programs will be reviewed in some performance-based context.'' However, the reporting requirements measure activities and output. FSC recommended that the Commission evaluate universal service using performance-based criteria. Duquesne also commented that the Commission should measure an EDC's universal service performance rather than count activities. FSC included with its comments a document titled Performance-Based Evaluation of Maintaining Universal Service in a Competitive Utility Industry (1998). The document provided a framework for the Commission to use to measure the performance results of universal service programs. The framework included five separate measurements to assess the performance over time of universal service policies. The document relied on the performance measurement concept designed in the Government Performance and Results Act of 1993.
We believe the regulations will provide most of the data FSC recommends using to measure performance. We agree that measuring performance is superior to measuring activities. The framework proposed by FSC appears to provide a workable approach, and we will consider this framework as we develop tools to measure performance. The framework does not measure utilities against each other but instead measures their performance against a base period.
OCA commented that the language referencing the timeline for evaluations appears to be inconsistent with § 54.74(c). We accept OCA's comments and will delete § 54.74(c).
§ 54.72. Definitions.
CARES--Duquesne commented that the Commission does not clearly define eligibility. We do not intend that EDCs use the definitions in the rulemaking for the purpose of defining eligibility. The EDCs should use the eligibility criteria for universal service programs defined in the Guidelines.
Classification of accounts--Commentators overwhelmingly disagreed with including the ''nonconfirmed low-income residential accounts'' in ''classification of accounts.'' PEA commented the definition does not define two categories: confirmed low-income residential accounts and nonconfirmed low-income residential accounts. PEA stated the nonconfirmed category is not appropriate because it is too vague, unrealistic, speculative and unrelated to an EDC's compliance with its universal service plan. Equitable, PGA, PP&L and UGI all objected to this section for similar reasons to PEA. PGA argued that neither the act nor the intent of the act requires nonconfirmed low-income reporting. PGA commented that census data is unreliable for this type of reporting because different utilities (especially gas utilities in western Pennsylvania) provide service in the same counties. IRRC's comments echoed those of the other parties. Because ''nonconfirmed low-income residential accounts'' are not part of any established programs, IRRC questioned the value of obtaining the information.
Commentators have persuaded us to delete the nonconfirmed low-income residential category under ''classification of accounts.'' However, we will substitute a section that requests EDCs to estimate the number of low-income households in their service territory. The EDC should base these estimates, in part, on available census data. We will also define ''confirmed low-income residential accounts'' as ''Accounts where the EDC has obtained information that would reasonably place the customer in a low-income designation.'' Examples of such information are receipt of Low-Income Home Energy Assistance Program (LIHEAP) grants, income source noted as TANF or General Assistance on an application for service; or the customer's self-report of income in conjunction with establishing a payment arrangement or application for a utility low-income program.
Collection operating expenses--Duquesne commented that the definition appears to include all accounts. We will amend the definition to clarify that we are requesting data for residential accounts.
Customer Assistance Program--PEA requested the Commission to remove ''that are less than current bill'' from the definition. Both IRRC and PEA pointed out that a CAP bill is not always less than a current bill, such as a CAP customer who heats with electric will have low consumption months when their actual bill may be less than the CAP bill. The definition is also inconsistent with the Commission's Guidelines at M-0096098F0010. IRRC requested that the Commission delete the last sentence or remove ''affordable'' and ''that are less than current bill.'' The PGA, the Environmentalists and Equitable requested the Commission to remove ''affordable'' from the definition. They pointed out that the Commission's CAP Policy Statement does not use the subjective term ''affordable.'' OCA recommended the Commission to change ''alternative collection method'' to ''alternative billing method'' to reflect that a CAP is not merely a credit and collections method. We will amend the definition to use the same language as used in the Commission's CAP Policy Statement. The CAP Policy Statement definition does not include the term ''affordable'' and includes the term ''may be for an amount that is less than current bill.'' We believe using the same language as the Policy Statement addressed most of the parties' concerns.
Direct Dollars and Indirect Dollars--PEA requested the Commission delete these definitions from the regulations. PEA stated the definitions incorrectly suggest that LIHEAP, hardship fund grants and other grants are a part of a CARES program. EDCs do not have the resources to track results of referrals. PEA stated these definitions are not relevant because they do not measure an EDC's compliance with its universal service plan, and therefore, the Commission should delete them. PGA also objected to the reporting of indirect dollars. PGA commented that a customer's application for indirect benefits is ''afforded confidential protection.'' There is no cost-effective way for a utility to track these benefits. Equitable's comments were similar to PGA's. PP&L commented that the definitions are too restrictive and recommended that the Commission substitute ''low-income'' for ''CARES'' in both definitions. For reasons similar to other commentors, IRRC also requested that the Commission delete the ''indirect dollars'' category.
Commentators have persuaded us to delete the reporting requirements for ''indirect dollars.'' Several EDCs currently provide information to the Commission on ''direct dollars.'' One of the purposes of a CARES program is to help customers pay utility bills. Direct dollars is a performance measure for the CARES program. The EDCs should report total dollars and numbers of grants received. We are not requesting EDCs to report on referrals or outcome of referrals.
EDC--We will comply with IRRC's request to add the full statutory definition of this term.
Payment rate--Duquesne suggested only full payments be used in the payment rate definition. We agree with Duquesne's suggestion and will amend the definition.
Payment troubled--IRRC questioned the use of a 2-year time period to define payment troubled. They recommended that the Commission reduce the 2-year period to a 1-year period that will allow a more reasonable period for EDCs to measure payment troubled. PEA stated the definition is not consistent with the Guidelines and requested us to use the same definition. PEA stated the Guidelines define ''payment troubled'' with four approaches. The Environmentalists recommended that the Commission delete this definition. Equitable objected to using this term to define non low-income customers whose lifestyle choices may cause delinquencies. PP&L commented the definition is too broad and recommended the Commission change the definition to the following: ''A household that has failed to maintain two or more payment arrangements in a two-year period.'' OCA recommended the Commission expand the definition of ''payment troubled'' to include more than one type of payment troubled customer. Finally, OCA recommended the definition include one of the following situations: non-payment of any portion of a bill in the last 12 months, or extraordinary financial pressure.
We accept IRRC's recommendation to reduce the time period from 2-years to 1-year. We clarify that the definition of payment troubled for reporting requirements is to provide information on the numbers of customers who are or may be potentially eligible for universal service programs. An increase in the number of low-income customers who are payment troubled may be one indication of the need for universal service programs. The definition does not change the eligibility criteria for CAP as PEA suggests. The Guidelines define ''payment troubled'' as an eligibility criterion for CAP. In the Guidelines, the Commission defines ''payment troubled'' as a household who has failed to maintain one or more payment arrangements. The four approaches listed by PEA are four options to prioritize the enrollment of eligible customers. The four options are not additional eligibility criteria. We believe the classification of payment troubled accounts addresses Equitable's concerns. We believe that the language of ''one or more'' failed payment arrangements addresses PP&L's concerns. Finally, we disagree with OCA to expand the definition. We believe the expansion proposed by OCA may be burdensome for EDCs to track.
Process evaluation--IRRC and PEA pointed out that the proposed regulations make no reference to a process evaluation, therefore the Commission should delete this definition. OCA recommended that the Commission expand the definition to include the purpose of determining whether the implementation of the program satisfies participants (customers, company representatives, CBOs and other interested parties). We accept IRRC and PEA's reason to delete this definition.
Residential account in arrears--IRRC recommended that ''30 days overdue'' is more reasonable than ''one day overdue'' and requested the Commission to make that change. PEA commented that each EDC defines ''residential account in arrears'' differently. PEA did not object to this definition if the Commission's purpose is to use it in universal service reporting requirements only. Duquesne, Equitable, PP&L and PGA all provided various alternatives to the proposed definition.
Unfortunately, each EDC appears to define ''residential account in arrears'' differently. However, we feel strongly that one standard is necessary. Therefore, we will amend the definition to read ''at least 30 days overdue.'' This revision appears more in line with current reporting practices and meets our goal of standardizing the data from the reports.
Universal Service and Energy Conservation--We will comply with IRRC's request to add the full statutory definition of this term.
Additional definitions
OCA recommended that the Commission add the following definition:
Program Benefits--CAP benefits include the average dollar and percentage reduction of bills from the expected bill for non-CAP customers. LIURP benefits include the kWh savings and bill savings stated as percentages and dollars. Hardship benefits are bill credits, cash or other benefits. CARES benefits are social services including counseling, referrals and education, and other benefits provided by CARES programs.
We accept OCA's recommendation with minor changes. We will delete the general category of program benefits and define specific program benefits for each universal service component. The EDCs currently provide this information to the Commission. The Commission also provides information on program benefits to the Department of Public Welfare (DPW). DPW uses the total dollar amount of benefits from these programs to leverage additional Federal energy assistance dollars from the Low-Income Home Energy Assistance Program (LIHEAP).
§ 54.73. Universal service and energy conservation program goals.
IRRC recommended that for clarity the Commission replace ''provide'' with ''establish'' in § 54.73(b)(4). We will make this change.
PEA stated the Commission misplaces universal service goals in regulations addressing reporting requirements and requested the Commission to delete them. We believe the data submitted from this rulemaking is necessary for the Commission to ensure that universal service programs are available and appropriately funded as required by the act. Finally, the goals are consistent with the goals in the Guidelines.
The Environmentalists recommended that the Commission add two goals relating to energy usage and referrals. We believe that the regulations in § 54.73(b)(3) cover the Environmentalists' concerns.
§ 54.74. Universal service and energy conservation plans.
a. Plan Submission
IRRC commented that requiring the first plan to be due in 1999 is unreasonable and recommended a more reasonable date to begin is the year 2000. PP&L also supported the date suggested by IRRC. Also objecting to the April 1999 date, PEA and Duquesne suggested alternative dates for the first plan to be submitted. Parties suggested that a later date will allow EDCs to apply the ''lessons learned'' from the pilot programs and phase-in. IRRC also suggested that the Commission establish a requirement that we act on these plans in a reasonable time such as 60 days. Duquesne suggested the Commission act within 90 days. Both IRRC and PP&L also requested the Commission to change the deadline for submitting a revised plan from 30 days to 45 days to allow the EDCs to respond more effectively. Finally, IRRC recommended that the Commission break out the requirements in § 54.74(a) into separate subsections to aid the clarity of these requirements. Commentors have persuaded us to use the year 2000 timeline for the first plan submission as IRRC and PP&L suggested. We accept IRRC and PP&L's suggestion to change the deadline for submitting a revised plan from 30 days to 45 days to allow the EDCs to respond more effectively. IRRC has also persuaded us to establish a 60-day time frame for the Commission to act on the plans. Finally, we will break out the requirements in § 54.74(a).
The Environmentalists recommended that EDCs submit their plans annually instead of biennially. We reject the Environmentalists recommendation as being too burdensome. PGA commented that the Commission and utilities could better accommodate staffing issues and program considerations if utilities filed universal service plans every 4 years using a staggered schedule. The utilities could then coordinate their plans with the independent evaluations. PGA commented that every other April 1 the proposed requirements to review and approve plans would inundate the Commission and interested parties. PGA pointed out that if the Commission does not stagger the reporting timelines for plans and evaluations, there may be a shortage of independent evaluators. Because of this shortage, evaluators may charge inflated prices for their evaluations. Equitable provided reasons why a new plan may not be necessary every other year. We accept PGA's suggestion to stagger the due dates of the universal service plans, with the first plan due 2/2000. We have also reconsidered the amount of time the plans should cover. PGA suggested plans cover a 4-year time frame. Although we believe 4 years may be too long a time frame, we have reconsidered that a plan submission every 2 years may be too often. Therefore, we are changing the time-frame that plans cover from 2 to 3 years. Appendix A shows the staggered schedule.
b. Plan Contents
OCA recommended that the Commission add a new subsection to § 54.74. OCA proposed that this new section will require EDCs to evaluate the differences between their approved plan and the results of the implementation of that plan. The EDC should explain the reason for the differences and a plan to address those differences. OCA recommended an EDC include the following: A description of the variances in program design, participation, budget, overall benefits, average benefits, disconnections, length of disconnections, timing of service losses, Percentage of Income Payment Plans of participants and nonparticipants. With minor modifications, we accept the OCA's suggestion to add this section.
FSC proposed that five new components regarding performance measures be added to this section. We have addressed this comment at § 54.71.
IRRC, PEA and UGI requested the Commission to amend the language in § 54.74(b) to read as follows, ''The components of universal service and energy conservation may include the following.'' Parties commented that language as proposed is inconsistent with language in the Guidelines. IRRC commented that we clarify our intent for ''other program, policies and protections.'' We will amend § 54.74(b) so that the language is consistent with the Guidelines. During the Commission's process to develop universal service guidelines, the EDCs requested the flexibility to include new programs that we have not envisioned as part of universal service programs. ''Other programs'' allows them the flexibility they requested.
The Environmentalists recommended that the Commission add two additional sections relating to assessment of eligible customers and estimates of energy savings and costs. We believe that § 54.74(b)(3) and (4) addresses the Environmentalists' request to add a section regarding assessment of eligible customers. We do not believe that every program element requires energy savings, therefore, we will not incorporate the Environmentalists' request regarding justification, energy costs and savings.
c. Cost-Effectiveness
Several commentators, IRRC, PEA, PP&L and the Environmentalists, requested the Commission to delete this section. PEA stated that cost-effectiveness is a subjective, internal measure. A cost-benefit analysis would be costly and complex and would not measure whether or not an EDC is complying with its universal service plan. The Environmentalists suggested this section properly belongs in the evaluation section. PP&L requested the Commission to clarify the intent of this section or delete it. OCA commented that this section is inconsistent with § 54.71. OCA recommended that an EDC conduct an independent evaluation every 4 years instead of every 6. We will delete this section and address cost-effectiveness in the evaluation section.
§ 54.75. Annual residential collection and universal service and energy conservation program reporting requirements.
PEA requested that the phrase ''on its progress on achieving universal service within its service territory'' be amended to ''regarding each EDC's compliance with its universal service plan.'' Section 2804(9) of the act imposes a duty on the Commission to ensure that universal service programs are available and appropriately funded. For this reason, we will modify the language in this section to place the emphasis on the Commission's duty to ensure that universal service programs are available and appropriately funded rather than on the EDC's ''progress on achieving universal service.''
Duquesne commented that April 2000 is too soon to submit a report. Duquesne suggested the first report is due no earlier than April 2001. PEA recommended that the first plans be submitted in 2003. We accept Duquesne's suggestion.
Collection reporting.
§ 54.75(1)(i)
OCA commented that allowing an EDC to define ''residential low-income customers'' at § 54.75(1)(i) may result in a different definition than the Commission's. IRRC also found this provision confusing. Considering IRRC and OCA's comment, we are deleting this requirement. These regulations will provide a definition for a low-income residential customer.
§ 54.75(1)(ii)
Equitable commented that tracking the activities in § 54.75(1)(ii) will be labor intensive and expensive. In response to Equitable's comment, we do not expect EDCs to provide an itemized break-down of the individual collection expenses noted in the section. Our intent in listing collection activities at § 54.75(1)(ii) is to provide examples of activities that EDCs may include in reporting operating expenses.
§ 54.75(1)(iii)
The OTS commented that § 54.75(1)(iii) should include net residential write-offs as well as gross residential write-offs in order to evaluate the effectiveness of collection activities included in write-offs. IRRC supported the OTS comment. We agree and amend this section to reflect the OTS suggestion.
§ 54.75(1)(iv)--(ix)
OCA recommended that an EDC report on sections § 54.75(1)(iv)--(ix) by month for the 12 months covered by the report. OCA recommended that the Commission modify § 54.75(1)(v) and (vi) to include reporting on arrears data by vintage and bands of arrears. OCA also recommended that EDC separate costs in connection with the following: bundled sales bills, EDC billing for the EDC and supplier, and EDC billing only its own account. Finally, OCA recommended that the Commission modify § 54.75(1)(viii)--(ix) to include the average length of time customers are off the system and the sales (dollars and kWh) lost a result of disconnection. We accept OCA's suggestion that an EDC report on § 54.75(1)(iv)--(ix) by month for the 12 months covered by the report. The EDCs currently collect monthly information for their own monitoring purposes. Monthly information will allow the Commission to average monthly figures where appropriate to allow for year to date comparisons with prior years. Monthly information will consider that collections are subject to seasonal variations and policy decisions of EDCs. However, we decline to expand the collection reporting relating to arrearage data as proposed by OCA in § 54.75(1)(v), (vi) and (viii)--(ix). An expansion of these requirements may be overly burdensome to the EDCs.
Additional Subsections
FSC and the Environmentalists recommended that the Commission add a new section that requests the total number of deferred payment arrangements along with the total number of unsuccessful deferred payment arrangements. The number of successful payment arrangements will be a useful performance measure. Therefore, we accept this recommendation from FSC and the Environmentalists.
Program reporting
§ 54.75(2)(i)(A)
OCA recommended that the Commission expand § 54.75(2)(i)(A) to include the filing requirements at Section P in the restructuring filings. We believe that this rulemaking includes most of the restructuring filing requirements of Section P. However, we will add the following sections to § 54.74(b): the organizational structure of staff responsible for universal service programs and the EDCs plans for using community-based organizations (CBOs) to help administer universal service programs. The act encourages EDCs to use CBOs.
§ 54.75(2)(i)(B)
OCA recommended that the Commission expand § 54.75(2)(i)(B) to include a demographic breakdown of the potential eligible population and the proportion of households who own their homes as opposed to renting them. PEA, PGA, and UGI commented that EDCs do not currently collect all the data for each universal service program component that the Commission proposes in § 54.75(2)(i)(B). They argued that collecting this data will burden EDCs and is not necessary to determine if an EDC is complying with its universal service plan. Therefore, these parties requested the Commission to remove this section. Equitable also pointed out it does not track information related to gender of head of household as proposed in § 54.75(2)(i)(B). Finally, PP&L recommended that the Commission condense the data requirements in § 54.75(2)(i)(B). PP&L suggested it is more useful to use the following categories: children under five and adults over 60. These two groups identify those customers who may be most vulnerable. Sharing the concerns of the utilities, IRRC recommended that the Commission either justify or delete the requirements relating to ''age of family members'' and ''gender of head of household.''
Under § 54.75(2)(i)(B), we will delete ''gender'' and amend ''age of family members'' to include two categories: the number of members under age 18, and the number of members age 60 or over. We will not require EDCs to provide ages for every household member unless they fall into these two categories. Reviewing demographic information helps the Commission determine that universal service programs are appropriately targeted to eligible households. We reject OCA's request to expand the reporting requirements for demographics as burdensome.
§ 54.75(2)(i)(C)
OCA recommended that the Commission require EDCs to report participation levels at § 54.75(2)(i)(C) by month for the 12 months covered by the report. We accept OCA's recommendation.
§ 54.75(2)(i)(D)
IRRC, PEA and PP&L requested the Commission to define ''program benefits'' at § 54.75(2)(i)(D). OCA recommended that the Commission adopt their proposed definition of ''program benefits.'' We have adopted OCA's recommendation with modification. We will delete ''program benefits'' under this section and define specific benefits under the individual universal service components (CAP, LIURP and CARES).
§ 54.75(2)(ii)(A)
OCA recommended that the Commission expand the requirements at § 54.75(2)(ii)(A) to include the technical potential for energy savings in low-income households. EDCs should also report on the number of homes that need weatherization and the number that need other energy conservation measures. We reject the OCA's recommendation to expand this section. The EDCs have convinced us to focus our data requests so the requests are not excessively burdensome to collect.
Finally, we will clarify that LIURP reporting data is due by April 30. Each EDC currently voluntarily provides to the Commission actual production and spending data for the recently completed program year as well as projections for the upcoming program year by the end of February. We will include this data request in the final regulations.
§ 54.75(2)(ii)(B)
FSC recommended that to measure performance the Commission include four new categories in § 54.75(2)(ii)(B): 1) Total cash payments by CAP customers; 2) Number of full, on-time payments; 3) Percentage of CAP bill paid; and 4) Contribution to fixed costs. In part, we accept FSC's recommendation and will add the first three categories.
§ 54.75(2)(ii)(B)(I) and (C)(I)
IRRC and PEA also requested the Commission define ''energy assistance benefits'' in § 54.75(2)(ii)(B)(I) and (C)(I). OCA recommended that reports on energy assistance benefits include the following: the total gross billing deficiency, maximum dollar/percent bill reductions, mean, median and mode bill reductions ($ and %) and mean percentage of income for participants and eligible non-participants. OCA also recommended that energy assistance benefits include the following information: distribution and transmission revenues, program costs (CAP and LIURP separately) as a percentage of revenues, the manner of cost recovery, allocation to classes and other details regarding surcharges or cost recovery mechanisms. We will define energy assistance benefits as discussed under definitions. For the reasons stated before, we believe expanding these sections will be excessively burdensome and reject OCA's recommendation.
§ 54.75(2)(ii)(D)(IV)
IRRC and PEA requested the Commission define ''outreach contacts'' in § 54.75(2)(ii)(D)(IV). EDCs do not always track referrals and their outcomes. PEA commented that without a narrow definition of this section, EDCs will not be able to report this information. Finally, PEA commented that this information will not assist the Commission in determining if an EDC is in compliance with its universal service plan. PEA and PP&L requested the Commission to remove this section. We will define ''outreach contacts'' as follows: ''Address and telephone number that a customer would call to apply for the hardship fund, specific to each county in the EDC's service territory, if applicable.''
§ 54.76. Evaluation reporting requirements.
PEA and Duquesne did not disagree with the need to evaluate universal service programs or the interval the Commission proposes. However, both PEA and Duquesne strongly disagreed with the provision to hire an independent evaluator and requested the Commission to remove this section. PEA commented that evaluations are expensive ($20,000--$50,000 for an evaluation of a single universal service component) and the EDCs did not include these costs in universal service budgets in the restructuring plans. Therefore, PEA suggested that the EDCs would need to reduce program services to budget for evaluations. Finally, PEA commented the BCS should be charged with evaluating EDC's compliance with their universal service plans. UGI's comments were similar to PEA's.
However, PP&L supported the proposed timelines and the use of an independent evaluator to assess the impact of universal service programs. PP&L did not support a Statewide evaluator, and recommends that each EDC choose its own evaluator. PP&L recommended that the Commission, in collaboration with the EDCs, develop general guidelines for evaluation reporting requirements. PP&L suggested the BCS lead the work group. The group could also develop the format for submitting the annual reports electronically.
IRRC agreed with the Commission that impact evaluations are an important tool to determine if each EDC's universal service program is meeting its goals. Further, IRRC supported the time frame for evaluations being due every 6 years. However, IRRC recommended that the Commission review the evaluations to determine if there is overlap among the reports because of program similarities. If the Commission finds the results are similar, IRRC recommends that the Commission reevaluate the frequency of the impact evaluations. We believe that an independent evaluation is critical to improve the efficiency and cost-effectiveness of universal service programs and appreciate IRRC's support in this matter. To address IRRC's concern regarding costs of evaluations, we expect that as a result of recommendations from early impact evaluations that EDCs will implement cost-effective measures in their universal service programs. As programs achieve cost-efficiencies and become established, we expect that evaluations will be more narrowly focused and may be less costly. We also accept PP&L's suggestion that the BCS and EDC's develop guidelines for the evaluation. The BCS will lead this group.
Equitable commented it would be difficult for them to evaluate their low-income programs together because each program has different goals and objectives. Equitable recommended a staggered evaluation timeline for individual program components. Equitable also cautioned that there may be a shortage of qualified evaluators if all of the evaluations are due at the same time. We accept Equitable's suggestion to stagger the due dates of the evaluations, with the first evaluation due October 31, 2002. Appendix A shows the staggered schedule.
IRRC, PEA and Duquesne requested the Commission to remove § 54.76(2) and (3). PP&L recommended that the Commission delete § 54.76(2) because it is inappropriate for the Commission to provide comments or input to a draft evaluation. IRRC commented that the Commission has no jurisdiction over evaluators and providing status reports may be burdensome to EDCs. To address the concerns the EDCs have regarding § 54.76(2) and (3), we will delete the language in those sections. We expect that the codification of the reporting requirements will ensure that evaluations will be completed in a timely manner. To address our concerns that evaluations are independent we propose to add the following language to the § 54.76: ''To ensure an independent evaluation, neither the EDC or the Commission shall exercise control over content or recommendations contained in the independent evaluation report. The EDCs may provide the Commission with a companion report that expresses where they agree or disagree with the independent evaluation report content or recommendations.''
The Environmentalists recommended that the Commission direct that impact evaluations begin January 1, 2001, at 2 year intervals. OCA recommended that evaluations occur every 4 years. We reject comments to conduct more frequent evaluations.
PGA commented that the Commission's Bureau of Audits has expertise in organizing and overseeing performance audits and therefore, the Bureau of Audits is the logical bureau to oversee the regulation under § 54.76. We believe that the BCS has the appropriate expertise in universal service matters and oversight of this section will remain with the BCS.
§ 54.77. Electric distribution companies with less than 55,000 residential accounts.
The OCA and the Environmentalists recommended that EDCs report to the Commission annually. OCA would support a waiver of the following sections for smaller EDCs: § 54.75(1)(ii), § 54.75(2)(i)(B) and the additional items at § 54.75 proposed by OCA. We amend this section to include EDCs with fewer than 60,000 residential accounts. Because we continue to believe reporting requirements for EDCs with fewer residential accounts may be excessively burdensome, we reject OCA and the Environmentalist's comments that these EDCs should provide the same reports as larger EDCs.
§ 54.78. Public Information.
Based on the recommendations of the Environmentalists and IRRC, we added a new section that requires the Commission to release the information collected by the reporting requirements to the public. The Environmentalists suggested that the individual EDC reports be made public, be sent to the OCA and to the Office of Small Business Advocate, and be posted on the Commission's Internet web site. We do not believe that the individual EDC reports should be released to the public for a variety of reasons, including the fact that often data needs to be verified and sometimes revised after the Commission has carefully reviewed the submissions. We also believe that individual reports will be of limited use to the public or to the specified agencies. In our opinion a report that summarizes 1) the individual reports of the EDCs; and 2) the BCS statistics will have the greatest value to those interested in the customer service performance of the EDCs. Therefore, the language of the regulation reads that the Commission will annually produce a document that summarizes and reports universal service information, by EDC. We agree that posting the document on the Commission's Internet web site is ''user friendly'' and we included language to that effect. The language also requires that the Commission will supply the report to any interested party, rather than limiting the recipients to OCA and OSBA. We believe that a comprehensive report produced annually will adequately satisfy the needs of the public and will accommodate the different reporting timetables of the various sections of the requirements.
Other Issues
Many parties, including IRRC, expressed concerns that these regulations duplicate existing reports that EDCs currently provide to the Commission. Developing new reports is labor intensive, and EDCs have not budgeted these expenses in their restructuring filings. These costs will draw funding from universal service programs and other operations. PEA requested the Commission to make clear that these reports will replace current reporting requirements. IRRC echoes the comments of PEA. Our intent is to streamline the reporting process. The universal service reports will eventually replace most of the universal service program reports that EDCs now provide to us. However, we believe this process will evolve with input from the EDCs rather than an abrupt elimination of existing reports. The EDCs will also need time to provide standard data, and we have pushed back the timeline when the first reports are due. Existing reports will fill the gaps until the new reports are filed. We will add language in the ordering paragraph that directs the BCS to, when appropriate, eliminate and/or consolidate existing reports that address the same content as the reporting requirements in these regulations.
The Environmentalists and PGA restate issues from the Guidelines Final Order. The Environmentalists continue to advocate that nonprofit agencies should administer universal service programs and urge the Commission to consider this option as it reviews universal service program plans, reports and evaluations. PGA continues to question whether section 2802(10) of the act means the Commonwealth or utilities are responsible for universal service policies. PGA comments that the sole purpose of proposed regulations is to implement the act. We have already addressed these issues in the Guidelines Final Order.
Accordingly, under section 501 of the Public Utility Code, and the Commonwealth Documents Law (45 P. S. §§ 1201 et seq.) and regulations promulgated thereunder at 1 Pa. Code §§ 7.1--7.4, we adopted §§ 54.71-- 54.76 as noted above and as set forth in Annex A; Therefore,
It is Ordered that:
1. The Commission's regulations, 52 Pa. Code Chapter 54 are hereby amended by adding §§ 54.71--54.76 to read as set forth in Annex A.
2. The Bureau of Consumer Services is directed, when appropriate, to eliminate and/or consolidate existing universal service program reports that address the same content as the reporting requirements in these regulations to comply with the Commission's intent to streamline universal service reporting requirements.
3. The Secretary shall submit a copy of this order and Annex A to the Office of Attorney General for review as to legality.
4. The Secretary shall submit a copy of this order and Annex A to the Governor's Budget Office for review of fiscal impact.
5. The Secretary shall submit this order and Annex A for formal review by the designated standing committees of both Houses of the General Assembly, and for formal review and approval by the Independent Regulatory Review Commission.
6. The Secretary shall deposit the original certified order and Annex A with the Legislative Reference Bureau for publication in the Pennsylvania Bulletin.
7. This regulation shall become effective upon publication in the Pennsylvania Bulletin.
8. A copy of this Order, Annex A and the Appendix shall be served upon all persons who submitted comments in this rulemaking proceeding.
9. The contact persons for this matter are Janice K. Hummel, Bureau of Consumer Services (717) 783-9088 and Kathryn G. Sophy, Law Bureau (717) 782-8839.
JAMES J. MCNULTY,
Secretary
Appendix Universal service and Energy Conservation Programs
Due Date EDC Plan Evaluation PECO 2/28/2000 10/31/2002 PP&L 2/28/2000 10/31/2002 Duquesne 2/28/2001 10/31/2003 West Penn 2/28/2001 10/31/2003 GPU Energy 2/28/2002 10/31/2004 Penn Power 2/28/2002 10/31/2004 (Editor's Note: For the text of the order of the Independent Regulatory Review Commission relating to this document, see 28 Pa.B. 3338 (July 11, 1998).)
Fiscal Note: Fiscal Note 57-193 remains valid for the final adoption of the subject regulations.
Annex A
TITLE 52. PUBLIC UTILITIES
PART I. PENNSYLVANIA PUBLIC UTILITY COMMISSION
Subpart C. FIXED UTILITIES
CHAPTER 54. ELECTRICITY GENERATION CUSTOMER CHOICE
Subchapter C. UNIVERSAL SERVICE AND ENERGY CONSERVATION REPORTING REQUIREMENTS Sec.
54.71. Statement of purpose and policy. 54.72. Definitions. 54.73. Universal service and energy conservation program goals. 54.74. Universal service and energy conservation plans. 54.75. Annual residential collection universal service and energy conservation program reporting requirements. 54.76. Evaluation reporting requirements. 54.77. Electric distribution companies with less than 60,000 residential accounts. 54.78. Public information. § 54.71. Statement of purpose and policy.
Section 2804(9) of the code (relating to standards for restructing of electric industry) mandates that the Commission ensure universal service and energy conservation policies, activities and services for residential electric customers are appropriately funded and available in each EDC territory. This subchapter requires covered EDCs to establish uniform reporting requirements for universal service and energy conservation policies, programs and protections and to report this information to the Commission.
§ 54.72. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
CAP--Customer Assistance Program--An alternative collection method that provides payment assistance to low-income, payment troubled utility customers. CAP participants agree to make regular monthly payments that may be for an amount that is less than the current bill in exchange for continued provision of electric utility services.
CAP benefits--The average CAP bill, average CAP credits and average arrearage forgiveness.
CARES--A program that provides a cost-effective service that helps selected, payment-troubled customers maximize their ability to pay utility bills. A CARES program provides a casework approach to help customers secure energy assistance funds and other needed services.
CARES benefits--The number and kinds of referrals to CARES.
Classification of accounts--Accounts are classified by the following categories: all residential accounts and confirmed low-income residential accounts.
Code--The Public Utility Code, 66 Pa.C.S. §§ 101--3316.
Collection operating expenses--Expenses directly associated with collection of payments due for residential accounts.
Confirmed low-income residential account--Accounts where the EDC has obtained information that would reasonably place the customer in a low-income designation.
Direct dollars--Dollars which are applied to a CARES customer's electric utility account, including all sources of energy assistance applied to utility bills such as LIHEAP, hardship fund grants and local agencies' grants.
EDC--Electric distribution company--The public utility providing facilities for the jurisdictional transmission and distribution of electricity to retail customers, except building or facility owners/operators that manage the internal distribution system serving the building or facility and that supply electric power and other related electric power services to occupants of the building or facility.
Energy assistance benefits--The total number and dollar amount of LIHEAP grants.
Hardship fund--A fund that provides cash assistance to utility customers to help them pay their utility bills.
Hardship fund benefits--The total number and dollar amount of cash benefits or bill credits.
Impact evaluation--An evaluation that focuses on the degree to which a program achieves the continuation of utility service to program participants at a reasonable cost level and otherwise meets program goals.
LIURP--Low-income usage reduction program--An energy usage reduction program that assists low-income customers conserve energy and reduce residential energy bills.
Low-income customer--A residential utility customer whose household income is at or below 150% of the Federal poverty guidelines.
Outreach referral contacts--Addresses and telephone numbers that a customer would call or write to apply for the hardship fund. Contact information should be specific to each county in the EDC's service territory, if applicable.
Payment rate--Payment rate is the total number of full monthly payments received from CAP participants in a given period divided by the total number of monthly bills issued to CAP participants.
Payment troubled--A household that has failed to maintain one or more payment arrangements in a 1-year period.
Residential account in arrears--A residential account that is at least 30 days overdue. This classification includes all customer accounts which have payment arrangements.
Successful payment arrangements--A payment arrangement in which the agreed upon number of payments have been made in full in the preceeding 12 months.
Universal service and energy conservation--Policies, protections and services that help low-income customers to maintain electric service. The term includes customer assistance programs, termination of service protection and policies and services that help low-income customers to reduce or manage energy consumption in a cost-effective manner, such as the low-income usage reduction programs, application of renewable resources and consumer education.
§ 54.73. Universal service and energy conservation program goals.
(a) The Commission will determine if the EDC meets the goals of universal service and energy conservation programs.
(b) The general goals of universal service and energy conservation programs include the following:
(1) To protect consumers' health and safety by helping low-income customers maintain electric service.
(2) To provide for affordable electric service by making available payment assistance to low-income customers.
(3) To assist low-income customers conserve energy and reduce residential utility bills.
(4) To establish universal service and energy conservation programs are operated in a cost-effective and efficient manner.
§ 54.74. Universal service and energy conservation plans.
(a) Plan submission.
(1) Each EDC shall submit to the Commission for approval an updated universal service and energy conservation plan every 3 years beginning February 28, 2000, on a staggered schedule.
(2) The plan should cover the next 3-calendar years.
(3) The plan should state how it differs from the previously approved plan.
(4) The plan should include revisions based on analysis of program experiences and evaluations.
(5) If the Commission rejects the plan, the EDC shall submit a revised plan under the order rejecting or directing modification of the plan as previously filed. If the order rejecting the plan does not state a timeline, the EDC shall file its revised plan within 45 days of the entry of the order.
(6) The Commission will act on the plans within 90 days of the EDC filing date.
(b) Plan contents. The components of universal service and energy conservation may include the following: CAP, LIURP, CARES, Hardship Funds and other programs, policies and protections. For each component of universal service and energy conservation, the plan shall include, but not be limited to, the following:
(1) Program description.
(2) Eligibility criteria.
(3) Projected needs assessment.
(4) Projected enrollment levels.
(5) Program budget.
(6) Plans to use community-based organizations.
(7) Organizational structure of staff responsible for universal service programs.
(8) Explanation of any differences between the EDC's approved plan and the implementation of that plan. The EDC should include a plan to address those differences.
§ 54.75. Annual residential collection and universal service and energy conservation program reporting requirements.
Each EDC shall report annually to the Commission on the degree to which universal service and energy conservation programs within its service territory are available and appropriately funded. Annual EDC reports shall contain information on programs and collections for the prior calendar year. Unless otherwise stated, the report shall be due April 1 each year, beginning April 1, 2001. Where noted, the data shall be reported by classification of accounts. Each EDC's report shall contain the following information:
(1) Collection reporting shall be categorized as follows:
(i) The total number of payment arrangements and the total number of successful payment arrangements. To ensure that successful payment arrangements are not overstated, EDCs should report on the calendar year prior to the reporting year.
(ii) Annual collection operating expenses by classification of accounts. Collection operating expenses include administrative expenses associated with termination activity, negotiating payment arrangements, budget counseling, investigation and resolving informal and formal complaints associated with payment arrangements, securing and maintaining deposits, tracking delinquent accounts, collection agencies' expenses, litigation expenses other than Commission related, dunning expenses and winter survey expenses.
(iii) The total dollar amount of the gross residential write-offs and total dollar amount of the net residential write-offs, by classification of accounts.
(iv) The total number of residential customers by month for the 12 months covered by the report, by classification of accounts.
(v) The total number of residential accounts in arrears by month for the 12 months covered by the report, by classification of accounts.
(vi) The total dollar amount of residential accounts in arrears by month for the 12 months covered by the report, by classification of accounts.
(vii) The total number of residential customers who are payment troubled by month for the 12 months covered by the report, by classification of accounts.
(viii) The total number of terminations completed by month for the 12 months covered by the report, by classification of accounts.
(ix) The total number of reconnections by month for the 12 months covered by the report, by classification of accounts.
(x) The total number of low-income households. EDCs may estimate this number using census data or other information the EDC finds appropriate.
(2) Program reporting shall be categorized as follows:
(i) For each universal service and energy conservation component, program data shall include information on the following:
(A) Program costs.
(B) Program recipient demographics, including the number of family members under age 18 and over age 62, family size, income and source of income.
(C) Participation levels by month for the 12 months covered by the report.
(ii) Additional program data for individual universal service and energy conservation components shall include the following information:
(A) LIURP. Reporting requirements as established at § 58.15 (relating to program evaluation).
(I) LIURP reporting data shall be due by April 30.
(II) Actual production and spending data for the recently completed program year and projections for the current year shall be due annually by the end of February.
(B) CAP.
(I) Energy assistance benefits.
(II) Average CAP bills.
(III) Payment rate.
(IV) CAP benefits.
(V) Total cash payments by CAP customers.
(VI) Number of full, on-time payments
(VII) Percentage of CAP bill paid by customer.
(C) CARES.
(I) Energy assistance benefits.
(II) Direct dollars applied to CARES accounts.
(III) CARES benefits.
(D) Hardship funds.
(I) Ratepayer contributions.
(II) Special contributions.
(III) Utility contributions.
(IV) Outreach contacts.
(V) Hardship fund benefits.
§ 54.76. Evaluation reporting requirements.
(a) Each EDC shall have an independent third-party conduct an impact evaluation of its universal service and energy conservation programs and provide a report of findings and recommendations to the Commission and EDC.
(b) The first impact evaluation will be due beginning October 31, 2002, on a staggered schedule. Subsequent evaluation reports shall be presented to the EDC and the Commission at no more than 6 year intervals.
(c) To ensure an independent evaluation, neither the EDC nor the Commission shall exercise control over content or recommendations contained in the independent evaluation report. The EDCs may provide the Commission with a companion report that expresses where they agree or disagree with independent evaluation report content or recommendations.
(d) An independent third-party evaluator shall conduct the impact evaluation.
§ 54.77. Electric distribution companies with less than 60,000 residential accounts.
Beginning March 1, 2000, each EDC with less than 60,000 accounts shall report to the Commission every 3 years the following information in lieu of §§ 54.74--54.76 (relating to universal service and energy conservation plans; annual residential collection and universal service and energy conservation program reporting requirements; and evaluation reporting requirements):
(1) The universal service and energy conservation plan.
(2) Expenses associated with low-income customers.
(3) A description of the universal service and energy conservation services provided to low-income residential customers.
(4) The number of services or benefits provided to low-income residential customers.
(5) The dollar amount of services or benefits provided to low-income residential customers.
§ 54.78. Public information.
The Commission will annually produce a summary report on the universal service performance of each EDC using the statistics collected as a result of these reporting requirements. The reports will be public information. The Commission will provide the reports to any interested party and post the reports on the Commission's Internet Website.
[Pa.B. Doc. No. 98-1273. Filed for public inspection August 7, 1998, 9:00 a.m.]
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