[37 Pa.B. 4996]
[Saturday, September 15, 2007]
[Continued from previous Web Page] CONCLUSION
The Commission thanks the parties for their comments and participation in this proceeding. Given the high level of public interest in this matter, we offer the following information on the next steps in this rulemaking procedure. Upon the entry of this Final Order, the Commission will prepare this rule for delivery to the General Assembly and IRRC. If the rule is approved by IRRC, it will be forwarded to the Pennsylvania Attorney General for review as to form and legality. The Pennsylvania Attorney General has 30 days to review this final-form rule. If not rejected by the Pennsylvania Attorney General, the rule will become legally effective upon publication in the Pennsylvania Bulletin. This process should take approximately 2 to 3 months.
Accordingly, under sections 501 and 2807(e)(2) of the Public Utility Code (66 Pa.C.S. §§ 501 and 2807(e)(2)), sections 201 and 202 of the act of July 31, 1968 (P. L. 769 No. 240) (45 P. S. §§ 1201 and 1202), and the regulations promulgated thereunder at 1 Pa. Code §§ 7.1 and 7.2 and 7.5, the Commission adopts the regulations pertaining to the obligations of EDCs to connect, deliver and acquire electricity at the conclusion of the transition period, as noted and set forth in Annex A; Therefore,
It Is Ordered That:
1. The regulations of the Commission, 52 Pa. Code Chapters 54 and 57, are amended by amending §§ 54.4--54.6, 54.31, 54.32, 54.41 and 57.178 and by adding §§ 54.123 and 54.181--54.189 to read as set forth in Annex A.
2. The Secretary shall submit this order and Annex A to the Office of Attorney General for approval as to legality.
3. The Secretary shall submit this order and Annex A to the Governor's Budget Office for review of fiscal impact.
4. The Secretary shall submit this order and Annex A for review by the designated standing committees of both houses of the General Assembly, and for review and approval by the Independent Regulatory Review Commission.
5. The Secretary shall deposit this order and Annex A with the Legislative Reference Bureau for publication in the Pennsylvania Bulletin.
6. The final-form rulemaking becomes effective upon publication in the Pennsylvania Bulletin.
7. The contact person for this final-form rulemaking is Shane M. Rooney. Alternate formats of this document are available to persons with disabilities and may be obtained by contacting Sherri Delbiondo, Regulatory Coordinator, Law Bureau, (717) 772-4597.
JAMES J. MCNULTY,
Secretary(Editor's Note: This final-form rulemaking refers to the statement of policy published at 37 Pa.B. 5019 (September 15, 2007) (Fiscal Note #57-254).)
(Editor's Note: For the text of the order of the Independent Regulatory Review Commission, relating to this document, see 37 Pa.B. 4411 (August 4, 2007).)
Fiscal Note: Fiscal Note 57-237 remains valid for the final adoption of the subject regulations.
Annex A
TITLE 52. PUBLIC UTILITIES
PART I. PUBLIC UTILITY COMMISSION
Subpart C. FIXED SERVICE UTILITIES
CHAPTER 54. ELECTRICITY GENERATION CUSTOMER CHOICE
Subchapter A. CUSTOMER INFORMATION § 54.4. Bill format for residential and small business customers.
(a) EGS prices billed must reflect the marketed prices and the agreed upon prices in the disclosure statement.
(b) The following requirements apply only to the extent to which an entity has responsibility for billing customers, to the extent that the charges are applicable. The default service provider will be considered to be an EGS for the purposes of this section. Duplication of billing for the same or identical charges by both the EDC and EGS is not permitted.
(1) EDC charges must appear separately from EGS charges.
(2) Charges for basic services must appear before charges for nonbasic services, and appear distinctly separate.
(3) Customer bills must contain the following charges, if these charges are applicable, and these charges must appear in a distinct section of the bill. The designation or label of each charge as either a basic charge or nonbasic charge appears in parenthesis following the name of the charge. This label of either basic or nonbasic is not required to accompany the name of the charge on the bill.
(i) Generation charges (basic).
(A) Generation charges shall be presented in a standard pricing unit for electricity in actual dollars or cents per kWh, actual average dollars or cents per kWh, kW or other Commission-approved standard pricing unit.
(B) Generation charges shall appear first among the basic charges with one exception. EDCs may place the customer charge first among the basic charges.
(ii) Transmission charges (basic).
(iii) Distribution charges (basic).
(iv) Customer charge or basic charge (charge for basic service in § 56.15 (relating to billing information)) (basic).
(v) Advanced metering charges (basic).
(vi) Transition charges (basic).
(vii) Taxes (comply with § 56.15) (basic).
(viii) Late payment charges (basic).
(ix) Security deposit (basic).
(x) Reconnection fee (basic).
(xi) Itemization of nonbasic charges (nonbasic).
(xii) Overall billing total.
(4) The entity reading the meter for billing purposes shall provide the following electricity use data figures:
(i) The total annual electricity use for the past 12 months in kWh, including the current billing cycle. This is a single cumulative number.
(ii) The average monthly electricity use for the past 12 months in kWh, including the current billing cycle. This is a single cumulative number.
(5) The requirements of § 56.15 shall be incorporated in customer bills to the extent that they apply.
(6) Definitions for the following charges and terms are required in a customer's bill, if they appear as billing items, as contained in ''Common Electric Competition Terms'' and shall be in a distinctly separate section of the bill:
(i) Generation charges.
(ii) Transmission charges.
(iii) Distribution charges.
(iv) Customer charge/basic charge (charge for basic service in § 56.15).
(v) Advanced metering, if applicable.
(vi) Transition charges.
(7) ''General Information'' is the required title for customer contact information in a customer's bill.
(i) The name, address and telephone number for the EGS and EDC shall be included.
(ii) Both EDC and EGS information in subparagraph (i) is required on all customer bills with the billing entity's information first.
(8) When a customer chooses the option to receive a separate bill for generation supply, the EDC shall include in a customer's bill the following information where the EGS charges would normally appear:
(i) The EGS's name.
(ii) A statement that the customer's EGS is responsible for the billing of EGS charges.
(9) When a customer chooses the option to receive a single bill from the EDC, the EDC shall include in the customer's bill the name of the EGS where the EGS charges appear.
(10) For customers who have chosen electric generation services from a competitive supplier, the customer's bill shall include the following statements which may appear together in a paragraph:
(i) ''Generation prices and charges are set by the electric generation supplier you have chosen.''
(ii) ''The Public Utility Commission regulates distribution prices and services.''
(iii) ''The Federal Energy Regulatory Commission regulates transmission prices and services.''
(c) The billing entity shall provide samples of customer bills to the Commission for review.
§ 54.5. Disclosure statement for residential and small business customers.
(a) The agreed upon prices in the disclosure statement must reflect the marketed prices and the billed prices.
(b) The EGS shall provide the customer written disclosure of the terms of service at no charge whenever:
(1) The customer requests that an EGS initiate service.
(2) The EGS proposes to change the terms of service.
(3) Service commences from a default service provider.
(c) The contract's terms of service shall be disclosed, including the following terms and conditions, if applicable:
(1) Generation charges shall be disclosed according to the actual prices.
(2) The variable pricing statement, if applicable, must include:
(i) Conditions of variability (state on what basis prices will vary).
(ii) Limits on price variability.
(3) An itemization of basic and nonbasic charges distinctly separate and clearly labeled.
(4) The length of the agreement, which includes:
(i) The starting date.
(ii) The expiration date, if applicable.
(5) An explanation of sign-up bonuses, add-ons, limited time offers, other sales promotions and exclusions, if applicable.
(6) An explanation of prices, terms and conditions for special services, including advanced metering deployment, if applicable.
(7) The cancellation provisions, if applicable.
(8) The renewal provisions, if applicable.
(9) The name and telephone number of the default service provider.
(10) An explanation of penalties, fees or exceptions, printed in type size larger than the type size appearing in the terms of service.
(11) Customer contact information that includes the name of the EDC and EGS, and the EGS's address, telephone number, Commission license number and Internet address, if available. The EGS's information shall appear first and be prominent.
(12) A statement that directs a customer to the Commission if the customer is not satisfied after discussing the terms of service with the EGS.
(13) The name and telephone number for universal service program information.
(d) Customers shall be provided a 3-day right of rescission period following receipt of the disclosure statement.
(1) The 3-day right of rescission is 3 business days.
(2) The 3-day right of rescission begins when the customer receives the written disclosure.
(3) The customer may cancel in writing, orally or electronically, if available.
(4) Waivers of the 3-day right of rescission are not permitted.
(e) Definitions for generation charges and transmission charges, if applicable, are required and shall be defined in accordance with the ''Common Electric Competition Terms.'' Definitions for each of the nonbasic services, if applicable, are required. The definition section of the bill must be distinctly separate.
(f) The EGS shall include in the customer's disclosure statement the following statements which may appear together in a paragraph:
(1) ''Generation prices and charges are set by the electric generation supplier you have chosen.''
(2) ''The Public Utility Commission regulates distribution prices and services.''
(3) ''The Federal Energy Regulatory Commission regulates transmission prices and services.''
(g) Disclosure statements must include the following customer notification:
(1) ''If you have a fixed term agreement with us and it is approaching the expiration date or whenever we propose to change our terms of service in any type of agreement, you will receive written notification from us in each of our last three bills for supply charges or in corresponding separate mailings that precede either the expiration date or the effective date of the proposed changes. We will explain your options to you in these three advance notifications.''
(h) If the default service provider changes, the new default service provider shall notify customers of that change, and provide customers with its name, address, telephone number and Internet address, if available.
§ 54.6. Request for information about generation supply.
(a) EGSs shall respond to reasonable requests made by consumers for information concerning generation energy sources.
(1) EGSs shall respond by informing consumers that this information is included in the annual licensing report and that this report exists at the Commission. Providers shall explain that the report is available to them and offer to provide it, if requested.
(2) The default service provider shall file at the Commission the annual licensing report as required by the Commission's licensing regulations in this chapter and shall otherwise comply with paragraph (1).
(3) EGSs operating for less than 1 year may respond to customer inquiries about generation energy sources by furnishing the information as described in subsection (b).
(b) Verification of the anticipated generation energy source, of the identifiable resources (if and when they have been ''claimed'') and the fact that energy characteristics were not sold more than once, shall be conducted by an independent auditor at the end of each calendar year and contained in the annual report to the Commission, relating to information disclosure requirements in subsection (a) and the licensing regulations in this chapter.
(c) Whenever EGSs market their generation as having special characteristics, such as ''produced in Pennsylvania'' or ''environmentally friendly'' and the like, providers shall have information available to substantiate their claims.
(1) Disclosure of generation energy sources shall be identifiable, which is defined as electricity transactions which are traceable to specific generation sources by any auditable contract trail or equivalent, such as a tradable commodity system, that provides verification that the electricity source claimed has been sold only once to a retail customer. If generation energy sources are not identifiable, the provider shall disclose this fact.
(d) Electricity providers, whether they make distinguishing claims or not, shall include in their general communications with consumers that electricity is the product of a mix of generation energy sources, that is delivered over a system of wires.
(e) Electricity providers shall respond to reasonable consumer requests for energy efficiency information, by indicating that these materials are available upon request from the Commission or the EDC.
(f) The use of general, unsubstantiated and unqualified claims of environmental benefits, such as ''green'' and ''environmentally friendly,'' is prohibited. The Commission supports the application of the Federal Trade Commission's (FTC) Guides for the Use of Environmental Marketing Claims (see 16 CFR 260.1--260.8 (relating to guides for the use of environmental marketing claims)), in the enforcement of this section and the following specific principles:
(1) Section 260.6(a) (relating to general principles) which states that qualifications or disclosure should be clear, prominent, and of relative type size and proximity to the claim being qualified. In addition, contrary assertions which undercut the qualifications should not appear.
(2) Section 260.6(c) which states that environmental claims should not overstate the environmental attribute or benefit, expressly or by implication.
(3) Section 260.6(d) which suggests that marketing materials which make comparative claims should clearly state the basis for the comparison, be able to be substantiated, and be accurate at the time they are made.
(4) Section 260.7(a) (relating to environmental marketing claims) which labels unqualified claims of environmental benefit as deceptive.
(5) Section 260.7(f) which addresses claims regarding source reduction, such as reduced toxicity or reductions of other environmentally negative effects.
(g) Residential and small business customers are entitled to receive at no charge and at least once a year, historical billing data from whomever reads the meter for billing purposes.
(1) The EDC is only obligated to provide information that is readily available in its billing system.
(2) The historical billing data shall be conveyed in terms of kWh, and kW, as applicable, and associated charges for the current billing period and for the year preceding the current billing period.
(3) The historical billing data will be updated with each billing cycle.
(h) Electricity providers shall notify consumers either in advertising materials, disclosure statements or bills that information on generation energy sources, energy efficiency, environmental impacts or historical billing data is available upon request.
Subchapter B. ELECTRIC GENERATION SUPPLIER LICENSING § 54.31. Definitions.
The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise.
Aggregator--An entity licensed by the Commission, that purchases electric energy and takes title to electric energy as an intermediary for sale to retail customers. See section 2803 of the code (relating to definitions).
Applicant--A person or entity seeking to obtain a license to supply retail electricity or electric generation service.
Broker--An entity, licensed by the Commission, that acts as an intermediary in the sale and purchase of electric energy but does not take title to electric energy. See section 2803 of the code.
Code--The Public Utility Code (66 Pa.C.S. Part I).
Default service provider--The incumbent EDC within a certificated service territory or a Commission approved alternative supplier of electric generation.
Department--The Department of Revenue of the Commonwealth.
EDC--Electric distribution company.
EGS--Electric generation supplier
--(i) A person or corporation, including municipal corporations which choose to provide service outside their municipal limits except to the extent provided prior to the effective date of this chapter (Editor's Note: The reference to ''this chapter'' refers to the code.), brokers and marketers, aggregators or any other entities, that sell to end-use customers electricity or related services utilizing the jurisdictional transmission and distribution facilities of an EDC, or that purchase, broker, arrange or market electricity or related services for sale to end-use customers utilizing the jurisdictional transmission and distribution facilities of an EDC.
(ii) The term excludes building or facility owner/operators that manage the internal distribution system serving the building or facility and that supply electric power and other related power services to occupants of the building or the facility.
(iii) The term excludes electric cooperative corporations except as provided in 15 Pa.C.S. Chapter 74 (relating to generation choice for customers of electric cooperatives). See section 2803 of the code.
Interim license--A temporary license granted to an EGS under interim standards adopted in the Commission's Final Order on Licensing Requirements for Electricity Generation Suppliers, entered February 13, 1997 at Dkt. No. M-00960890 F0004.
License--A license granted to an EGS under this subchapter.
Licensee--A person or entity which has obtained a license to provide retail electricity or electric generation service.
Market aggregator--An entity licensed by the Commission, that purchases electric energy and takes title to electric energy as an intermediary for sale to retail customers. See section 2803 of the code.
Marketer--An entity, licensed by the Commission, that acts as an intermediary in the sale and purchase of electric energy but does not take title to electric energy. See section 2803 of the code.
Marketing--The publication, dissemination or distribution of informational and advertising materials regarding the EGS's services and products to the public by print, broadcast, electronic media, direct mail or by telecommunication.
Offer to provide service--The extension of an offer to provide services or products communicated orally, or in writing to a customer.
Renewable resource--As defined in section 2803 of the code.
§ 54.32. Application process.
(a) An EGS may not engage in marketing, or may not offer to provide, or provide retail electricity or electric generation service until it is granted a license by the Commission.
(b) An application for a license shall be made on the form provided by the Commission. A copy of the application may be obtained from the Commission's Secretary. The application form will also be made available on the Commission's Internet web site. An application shall be verified by an oath or affirmation as required in § 1.36 (relating to verification). See section 2809(b) of the code (relating to requirements for electric generation suppliers).
(c) An original and eight copies of the completed application and supporting attachments shall be filed. An application for a license shall be accompanied by the application fee as established in § 1.43 (relating to schedule of fees payable to the Commission).
(d) Copies of the completed application with supporting documentation shall be served on the following: the Office of Consumer Advocate, the Office of Small Business Advocate, the Department and the Office of the Attorney General and the EDCs through whose transmission and distribution facilities the applicant intends to supply customers.
(e) Incomplete applications and those without supporting attachments, when needed, will be rejected without prejudice. The license application, with supporting attachments, shall be completed in its entirety.
(f) When an answer on the application requires the disclosure of privileged or confidential information not otherwise available to the public, the applicant may designate at each point in the application where information is disclosed that is confidential and privileged.
(1) One copy of this confidential or privileged information conspicuously marked at the top as ''CONFIDENTIAL'' may be submitted to the Office of the Secretary with the application. An applicant shall provide reasons for protecting this information.
(2) The request for confidentiality will be treated as a petition for protective order and will be ruled on by the Commission in conjunction with the license application.
(3) Pending disposition, the information will be used solely for the purpose of evaluating the license application, and the confidentiality of this information will be maintained consistent with regulations in this title pertaining to confidentiality.
(g) An EGS who has been granted an interim license shall apply for a license under this subchapter by updating its prior license application to include additional and updated information required by § 54.33 (relating to application form). An updated application shall be submitted by December 7, 1998.
(h) An EDC acting within its certificated service territory as a default service provider is not required to obtain a license.
§ 54.41. Transfer or abandonment of license.
(a) A license may not be transferred without prior Commission approval. See section 2809(d) of the code (relating to requirements for electric generation suppliers). Approval for transfer shall be obtained by petition to the Commission. The granting of such a petition does not eliminate the need for the transferee to complete and file with the Commission an application that demonstrates the transferee's financial and technical fitness to render service under the transferred license.
(b) A licensee may not abandon service without providing 90 days prior written notice to the Commission, the licensee's customers, the affected distribution utilities and default service providers prior to the abandonment of service. The licensee shall provide individual notice to its customers with each billing, in each of the three billing cycles preceding the effective date of the abandonment.
Subchapter E. COMPETITIVE SAFEGUARDS § 54.123. Transfer of customers to default service.
The following standards apply to the transfer of a retail customer's electric generation service from an EGS to a default service provider within the meaning of § 54.182 (relating to definitions):
(1) An EGS may not transfer a retail customer from its electric generation service to the default service provider without the consent of the default service provider, except in the following situations:
(i) Upon Commission approval of the abandonment, suspension or revocation of an EGS license, consistent with §§ 54.41 and 54.42 (relating to transfer or abandonment of license; and license suspension; license revocation).
(ii) Upon nonpayment by a retail customer for services rendered by the EGS.
(iii) To correct an unauthorized or inadvertent switch of a retail customer's account from default service to an alternative EGS's service, consistent with § 57.177 (relating to customer dispute procedures).
(iv) Upon the normal expiration of contracts.
(2) An EGS may initiate transfers in the situations in paragraph (1) through standard electronic data interchange protocols.
(3) The Commission may impose a penalty for every retail customer transferred to default service in violation of this section, consistent with 66 Pa.C.S. §§ 3301--3316 (relating to violations and penalties).
Subchapter G. DEFAULT SERVICE Sec.
54.181. Purpose. 54.182. Definitions. 54.183. Default service provider. 54.184. Default service provider obligations. 54.185. Default service programs and periods of service. 54.186. Default service procurement and implementation plans. 54.187. Default service rate design and the recovery of reasonable costs. 54.188. Commission review of default service programs and rates. 54.189. Default service customers. § 54.181. Purpose.
This subchapter implements 66 Pa.C.S. § 2807(e) (relating to duties of electric distribution companies), pertaining to an EDC's obligation to serve retail customers at the conclusion of the restructuring transition period. The provisions in this subchapter ensure that retail customers who do not choose an alternative EGS, or who contract for electric energy that is not delivered, have access to generation supply at prevailing market prices. The EDC or other approved entity shall fully recover all reasonable costs for acting as a default service provider of electric generation supply to all retail customers in its certificated distribution territory.
§ 54.182. Definitions.
The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise:
Alternative energy portfolio standards--A requirement that a certain percentage of electric energy sold to retail customers in this Commonwealth by EDCs and EGSs be derived from alternative energy sources, as defined in the Alternative Energy Portfolio Standards Act (73 P. S. §§ 1648.1--1648.8).
Commission--The Pennsylvania Public Utility Commission.
Competitive bid solicitation process--A fair, transparent and nondiscriminatory process by which a default service provider awards contracts for electric generation supply to qualified suppliers who submit the lowest bids.
DSP--Default service provider--The incumbent EDC within a certificated service territory or a Commission approved alternative supplier of electric generation service.
Default service--Electric generation supply service provided pursuant to a default service program to a retail electric customer not receiving service from an EGS.
Default service implementation plan--The schedule of competitive bid solicitations and spot market energy purchases, technical requirements and related forms and agreements.
Default service procurement plan--The electric generation supply acquisition strategy a DSP will use in satisfying its default service obligations, including the manner of compliance with the alternative energy portfolio standards requirement.
Default service program--A filing submitted to the Commission by a DSP that identifies a procurement plan, an implementation plan, a rate design to recover all reasonable costs and other elements identified in § 54.185 (relating to default service programs and periods of service).
Default service rate--The rate billed to a default service customer resulting from compliance with a Commission approved default service program.
EDC--Electric distribution company--The term has the same meaning as defined in 66 Pa.C.S. § 2803 (relating to definitions).
EGS--Electric generation supplier--The term has the same meaning as defined in 66 Pa.C.S. § 2803.
FERC--The Federal Energy Regulatory Commission.
Maximum registered peak load--The highest level of demand for a particular customer, based on the PJM Interconnection, LLC, ''Peak Load Contribution Standard,'' or its equivalent, and as may be further defined by the EDC tariff in a particular service territory.
PTC--Price-to-compare--A line item that appears on a retail customer's monthly bill for default service. The PTC is equal to the sum of all unbundled generation and transmission related charges to a default service customer for that month of service.
Prevailing market price--The price that is available in the wholesale market at particular points in time for electric generation supply.
RTO--Regional transmission organization--A FERC-approved regional transmission organization.
Retail customer or retail electric customer--These terms have the same meaning as defined in 66 Pa.C.S. § 2803.
Spot market energy purchase--The purchase of an electric generation supply product in a FERC-approved real time or day ahead energy market.
§ 54.183. Default service provider.
(a) The DSP shall be the incumbent EDC in each certificated service territory, except as provided for under subsection (b).
(b) The DSP may be changed by one of the following processes:
(1) An EDC may petition the Commission to be relieved of the default service obligation.
(2) An EGS may petition the Commission to be assigned the default service role for a particular EDC service territory.
(3) The Commission may propose through its own motion that an EDC be relieved of the default service obligation.
(c) The Commission may reassign the default service obligation for the entire service territory, or for specific customer classes, to one or more alternative DSPs when it finds it to be necessary for the accommodation, safety and convenience of the public. A finding would include an evaluation of the incumbent EDC's operational and financial fitness to serve retail customers, and its ability to provide default service under reasonable rates and conditions. In these circumstances, the Commission will announce, through an order, a competitive process to determine the alternative DSP.
(d) When the Commission finds that an EDC should be relieved of the default service obligation, the competitive process for the replacement of the default service provider shall be as follows:
(1) An entity that wishes to be considered for the role of the alternative DSP shall file a petition under 66 Pa.C.S. § 2807(e)(3) (relating to duties of electric distribution companies).
(2) Petitioners shall demonstrate their operational and financial fitness to serve and their ability to comply with Commission regulations, orders and applicable laws pertaining to public utility service.
(3) If no petitioner can meet this standard, the incumbent EDC shall be required to continue the provision of default service.
(4) If one or more petitioners meets the standard provided in paragraph (2), the Commission will approve the DSP best able to fulfill the obligation in a safe, cost-effective and efficient manner, consistent with 66 Pa.C.S. §§ 1103 and 1501 (relating to procedure to obtain certificates of public convenience; and character of service and facilities) and 2807(e).
(5) A petitioner approved to act as an alternative DSP shall comply with applicable provisions of the code, regulations and conditions imposed in approving the petition to act as an alternative DSP.
§ 54.184. Default service provider obligations.
(a) A DSP shall be responsible for the reliable provision of default service to retail customers who are not receiving generation services from an alternative EGS within the certificated territory of the EDC that it serves or whose alternative EGS has failed to deliver electric energy.
(b) A DSP shall comply with the code and Chapter 1 (relating to rules of administrative practice and procedure) to the extent that the obligations are not modified by this subchapter or waived under § 5.43 (relating to petitions for issuance, amendment, repeal or waiver of regulations).
(c) A DSP shall continue the universal service and energy conservation program in effect in the EDC's certificated service territory or implement, subject to Commission approval, similar programs consistent with the 66 Pa.C.S. §§ 2801--2812 (relating to Electricity Generation Customer Choice and Competition Act). The Commission will determine the allocation of these responsibilities between an EDC and an alternative DSP when an EDC is relieved of its DSP obligation.
§ 54.185. Default service programs and periods of service.
(a) A DSP shall file a default service program with the Commission's Secretary's Bureau no later than 12 months prior to the conclusion of the currently effective default service program or Commission-approved generation rate cap for that particular EDC service territory, unless the Commission authorizes another filing date. Thereafter, the DSP shall file its programs consistent with schedules identified by the Commission.
(b) Default service programs must comply with Commission regulations pertaining to documentary filings in Chapter 1 (relating to rules of administrative practice and procedure), except when modified by this subchapter. The DSP shall serve copies of the default service program on the Pennsylvania Office of Consumer Advocate, Pennsylvania Office of Small Business Advocate, the Commission's Office of Trial Staff, EGSs registered in the service territory and the RTO or other entity in whose control area the DSP is operating. Copies shall be provided upon request to other EGSs and shall be available at the DSP's public internet domain.
(c) The first default service program shall be for a period of 2 to 3 years, or for a period necessary to comply with subsection (d)(4), unless another period is authorized by the Commission. Subsequent program terms will be determined by the Commission.
(d) A default service program must include the following elements:
(1) A procurement plan identifying the DSP's electric generation supply acquisition strategy for the period of service. The procurement plan should identify the means of satisfying the minimum portfolio requirements of the Alternative Energy Portfolio Standards Act (73 P. S. §§ 1648.1--1648.8) for the period of service.
(2) An implementation plan identifying the schedules and technical requirements of competitive bid solicitations and spot market energy purchases, consistent with § 54.186 (relating to default service procurement and implementation plans).
(3) A rate design plan recovering all reasonable costs of default service, including a schedule of rates, rules and conditions of default service in the form of proposed revisions to its tariff.
(4) Documentation that the program is consistent with the legal and technical requirements pertaining to the generation, sale and transmission of electricity of the RTO or other entity in whose control area the DSP is providing service. The default service procurement plan's period of service must align with the planning period of that RTO or other entity.
(5) Contingency plans to ensure the reliable provision of default service when a wholesale generation supplier fails to meet its contractual obligations.
(6) Copies of agreements or forms to be used in the procurement of electric generation supply for default service customers. This includes all documents used as part of the implementation plan, including supplier master agreements, request for proposal documents, credit documents and confidentiality agreements. When applicable, the default service provider shall use standardized forms and agreements that have been approved by the Commission.
(7) A schedule identifying generation contracts of greater than 2 years in effect between a DSP, when it is the incumbent EDC, and retail customers in that service territory. The schedule should identify the load size and end date of the contracts. The schedule shall only be provided to the Commission and will be treated as confidential.
(e) The Commission may, following notice and opportunity to be heard, direct that some or all DSPs file joint default service programs to acquire electric generation supply for all of their default service customers. In the absence of such a directive, some or all DSPs may jointly file default service programs or coordinate the scheduling of competitive bid solicitations to acquire electric generation for all of their default service customers. A multiservice territory procurement and implementation plan must comply with § 54.186.
(f) DSPs shall include requests for waivers from the provisions of this subchapter in their default service program filings. For DSPs with less than 50,000 retail customers, the Commission will grant waivers to the extent necessary to reduce the regulatory, financial or technical burden on the DSP or to the extent otherwise in the public interest.
§ 54.186. Default service procurement and implementation plans.
(a) A DSP shall acquire electric generation supply at prevailing market prices for default service customers in a manner consistent with procurement and implementation plans approved by the Commission.
(b) A DSP's procurement plan must adhere to the following standards:
(1) The procurement plan shall be designed to acquire electric generation supply at prevailing market prices to meet the DSP's anticipated default service obligation at reasonable costs.
(2) DSPs with loads of 50 mW or less shall evaluate the cost and benefits of joining with other DSPs or affiliates in contracting for electric supply.
(3) Procurement plans may include solicitations and contracts whose duration extends beyond the program period.
(4) Electric generation supply shall be acquired by competitive bid solicitation processes, spot market energy purchases or a combination of both.
(5) The DSP's supplier affiliate may participate in a competitive bid solicitation process used as part of the procurement plan subject to the following conditions:
(i) The DSP shall propose and implement protocols to ensure that its supplier affiliate does not receive an advantage in the solicitation and evaluation of competitive bids, or other aspect of the implementation plan.
(ii) The competitive bid solicitation process shall comply with the codes of conduct promulgated by the Commission in § 54.122 (relating to code of conduct).
(c) A DSP's implementation plan must adhere to the following standards:
(1) A competitive bid solicitation process used as part of the default service implementation plan must provide, to the extent applicable and at the appropriate time, the following information to suppliers:
(i) A bidding schedule.
(ii) A definition and description of the power supply products on which potential suppliers shall bid.
(iii) Bid price formats.
(iv) A time period during which the power will need to be supplied for each power supply product.
(v) Bid submission instructions and format.
(vi) Price-determinative bid evaluation criteria.
(vii) Current load data for rate schedules or maximum registered peak load groupings, including the following:
(A) Hourly usage data.
(B) Number of retail customers.
(C) Capacity peak load contribution figures.
(D) Historical monthly retention figures.
(E) Estimated loss factors.
(F) Customer size distribution.
(2) The default service implementation plan must include fair and nondiscriminatory bidder qualification requirements, including financial and operational qualifications, or other reasonable assurances of a supplier of electric generation services' ability to perform.
(3) A competitive bid solicitation process used as part of the implementation plan will be subject to monitoring by the Commission or an independent third party evaluator selected by the DSP in consultation with the Commission. A third party evaluator shall operate at the direction of the Commission. Commission staff and a third party evaluator involved in monitoring the procurement process shall have full access to all information pertaining to the competitive procurement process, either remotely or where the process is administered. A third party evaluator retained for purposes of monitoring the competitive procurement process shall be subject to confidentiality agreements identified in § 54.185(d)(6) (relating to default service programs and periods of service).
(4) The DSP or third party evaluator shall review and select winning bids procured through a competitive bid solicitation process in a nondiscriminatory manner based on the price determinative bid evaluation criteria set forth consistent with paragraph (1)(vi).
(5) The bids submitted by a supplier in response to a competitive bid solicitation process shall be treated as confidential pursuant to the confidentiality agreement approved by the Commission under § 54.185(d)(6). The DSP, the Commission and a third party involved in the administration, review or monitoring of the bid solicitation process shall be subject to this confidentiality provision.
(d) The DSP may petition for modifications to the approved procurement and implementation plans when material changes in wholesale energy markets occur to ensure the acquisition of sufficient supply at prevailing market prices. The DSP shall monitor changes in wholesale energy markets to ensure that its procurement plan continues to reflect the incurrence of reasonable costs, consistent with 66 Pa.C.S. § 2807(e)(3) (relating to duties of electric distribution companies).
§ 54.187. Default service rate design and the recovery of reasonable costs.
(a) The costs incurred for providing default service shall be recovered through a default service rate schedule. The rate schedule shall be designed to recover fully all reasonable costs incurred by the DSP during the period default service is provided to customers, based on the average cost to acquire supply for each customer class.
(b) Except for rates available consistent with subsection (f), a default service customer shall be offered a single rate option, which shall be identified as the PTC and displayed as a separate line item on a customer's monthly bill.
(c) The rates charged for default service may not decline with the increase in kilowatt hours of electricity used by a default service customer in a billing period.
(d) The PTC shall be designed to recover all default service costs, including generation, transmission and other default service cost elements, incurred in serving the average member of a customer class. An EDC's default service costs may not be recovered through the distribution rate. Costs currently recovered through the distribution rate, which are reallocated to the default service rate, may not be recovered through the distribution rate. The distribution rate shall be reduced to reflect costs reallocated to the default service rate.
(e) A DSP shall use an automatic energy adjustment clause, consistent with 66 Pa.C.S. § 1307 (relating to sliding scale of rates; adjustments) and Chapter 75 (relating to alternate energy portfolio standards), to recover all reasonable costs incurred through compliance with the Alternative Energy Portfolio Standards Act (73 P. S. §§ 1648.1--1648.8). The use of an automatic adjustment clause shall be subject to audit and annual review, consistent with 66 Pa.C.S. § 1307(d) and (e), regarding fuel cost adjustment audits and automatic adjustment reports and proceedings.
(f) A DSP may use an automatic energy adjustment clause to recover reasonable nonalternative energy default service costs. The use of an automatic adjustment clause shall be subject to audit and annual review, consistent with 66 Pa.C.S. § 1307(d) and (e). A DSP may collect interest from retail customers on the recoveries of under collection of default service costs at the legal rate of interest. Refunds to customers for over recoveries shall be made with interest, at the legal rate of interest plus 2%.
(g) The default service rate schedule must include rates that correspond to demand side response and demand side management programs, as defined in section 2 of the Alternative Energy Portfolio Standards Act (73 P. S. § 1648.2), when the Commission mandates these rates pursuant to its authority under 66 Pa.C.S. Chapter 1 (relating to general provisions).
(h) Default service rates shall be adjusted on a quarterly basis, or more frequently, for all customer classes with a maximum registered peak load up to 25 kW, to ensure the recovery of costs reasonably incurred in acquiring electricity at prevailing market prices and to reflect the seasonal cost of electricity. DSPs may propose alternative divisions of customers by maximum registered peak load to preserve existing customer classes.
(i) Default service rates shall be adjusted on a quarterly basis, or more frequently, for all customer classes with a maximum registered peak load of 25 kW to 500 kW, to ensure the recovery of costs reasonably incurred in acquiring electricity at prevailing market prices and to reflect the seasonal cost of electricity. DSPs may propose alternative divisions of customers by maximum registered peak load to preserve existing customer classes.
(j) Default service rates shall be adjusted on a monthly basis, or more frequently, for all customer classes with a registered peak load of equal to or greater than 500 kW to ensure the recovery of costs reasonably incurred in acquiring electricity at prevailing market prices and to reflect the seasonal cost of electricity. DSPs may propose alternative divisions of customers by registered peak load to preserve existing customer classes.
(k) When a supplier fails to deliver electric generation supply to a DSP, the DSP shall be responsible for acquiring replacement electric generation supply consistent with its Commission-approved contingency plan. When necessary to procure electric generation supply before the implementation of a contingency plan, a DSP shall acquire supply at prevailing market prices and fully recover all reasonable costs associated with this activity that are not otherwise recovered through its contract terms with the default supplier. The DSP shall follow acquisition strategies that reflect the incurrence of reasonable costs, consistent with 66 Pa.C.S. § 2807(e)(3) (relating to duties of electric distribution companies), when selecting from the various options available in these energy markets.
§ 54.188. Commission review of default service programs and rates.
(a) A default service program will initially be referred to the Office of Administrative Law Judge for further proceedings as may be required.
(b) The Commission will issue an order within 7 months of a program's filing with the Commission on whether the default service program demonstrates compliance with this subchapter and 66 Pa.C.S. §§ 2801--2812 (relating to the Electricity Generation Customer Choice and Competition Act).
(c) Upon entry of the Commission's final order, a DSP shall acquire generation supply for the period of service in a manner consistent with the terms of the approved procurement and implementation plans and consistent with the standards identified in § 54.186 (relating to default service procurement and implementation plans).
(d) Upon receiving written notice, the Commission will have 1 business day, to approve or disapprove the results of a competitive bid solicitation process used by a DSP as part of its procurement plan. When the Commission does not act within 1 business day the results of the process will be deemed approved. The Commission will not certify or otherwise approve or disapprove a DSP's spot market energy purchases made pursuant to a Commission-approved procurement plan. The Commission will monitor the DSP's adherence to the terms of the approved default service program and 66 Pa.C.S. §§ 2801--2812 (relating to the Electricity Generation Customer Choice and Competition Act). The Commission may initiate an investigation regarding implementation of the DSP's default service program and, at the conclusion of the investigation, order remedies as may be lawful and appropriate. the Commission will not deny the DSP the recovery of its reasonable costs for purchases made pursuant to an approved competitive procurement process unless the DSP concealed or misled the Commission regarding its adherence to the program, or otherwise violated the provisions of this subchapter or the code.
(e) A DSP shall adhere to the following procedures in obtaining approval of default service rates and providing notice to default service customers:
(1) A DSP shall provide all customers notice of the filing of a default service program in a similar manner as found in § 53.68 (relating to notice requirements).
(2) A DSP shall provide all customers notice of the initial default service rates and terms and conditions of service 60 days before their effective date, or 30 days after bidding has concluded, whichever is sooner, unless another time period is approved by the Commission. The DSP shall provide written notice to the named parties identified in § 54.185(b) (relating to default service programs and periods of service) containing an explanation of the methodology used to calculate the price for electric service.
(3) After the initial steps of a default service procurement and implementation plan are completed, the DSP shall file with the Commission tariff supplements designed to reflect, for each customer class, the rates to be charged for default service. The tariff supplements shall be accompanied by supporting documentation adequate to demonstrate adherence to the procurement plan approved by the Commission, the procurement plan results and the translation of those results into customer rates.
(4) A customer or party identified in § 54.185(b) may file exceptions to the initial default service tariffs within 20 days of the date the tariffs are filed with the Commission. The exceptions shall be limited to whether the DSP properly implemented the procurement plan approved by the Commission and accurately calculated the rates. The Commission will resolve filed exceptions by order. The Commission may allow the default rates to become effective pending the resolution of those exceptions.
(f) A DSP shall submit tariff supplements on a quarterly or more frequent basis, consistent with § 54.187(h) and (i) (pertaining to default service rate design and recovery of reasonable costs), to revise default service rates to ensure the recovery of costs reasonably incurred in acquiring electricity at prevailing market prices. The DSP shall provide written notice to the named parties identified in § 54.185(b) of the proposed rates at the time of the tariff filings. The tariff supplements shall be posted to the DSP's public internet domain at the time they are filed with the Commission. A customer or the parties identified in § 54.185(b) may file exceptions to the default service tariffs within 20 days of the date the tariffs are filed with the Commission. The exceptions shall be limited to whether the DSP has properly implemented the procurement plan approved by the Commission and accurately calculated the rates. The DSP shall post the revised PTC for each customer class within 1 business day of its effective date to its public internet domain to enable customers to make an informed decision about electric generation supply options.
§ 54.189. Default service customers.
(a) At the conclusion of an EDC's Commission approved generation rate cap, retail customers who are not receiving generation service from an EGS shall be assigned to the Commission-approved DSP in that service territory.
(b) A DSP shall accept applications for default service from new retail customers when the customers comply with Commission regulations pertaining to applications for service, including those in Chapter 56 (relating to standards and billing practices for residential utility service) and accept all retail customers assigned to its default service who switch from an EGS.
(c) A DSP shall treat a customer who leaves an EGS as it would a new applicant for default service.
(d) A default service customer may choose to receive its generation service from an EGS at any time, if the customer complies with all Commission regulations pertaining to changing generation service providers in Chapter 57 (relating to electric service).
(e) A DSP may not charge a fee to a retail customer for changing its generation service provider in a manner consistent with Commission regulations.
CHAPTER 57. ELECTRIC SERVICE
Subchapter M. STANDARDS FOR CHANGING A CUSTOMER'S ELECTRICITY GENERATION SUPPLIER § 57.178. Default service provider.
This subchapter does not apply when the customer's service is discontinued by the EGS and subsequently provided by the default service provider because no other EGS is willing to provide service to the customer.
[Pa.B. Doc. No. 07-1697. Filed for public inspection September 14, 2007, 9:00 a.m.]
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