RULES AND REGULATIONS
Title 52—PUBLIC UTILITIES
PENNSYLVANIA PUBLIC UTILITY COMMISSION
[ 52 PA. CODE CH. 56 ]
[ L-00060182 ]
Standards and Billing Practices for Residential Utility Services
[41 Pa.B. 5473]
[Saturday, October 8, 2011]The Pennsylvania Public Utility Commission (Commission) on June 9, 2011, adopted a revised final rulemaking order which amends Chapter 56 to comply with the provisions of 66 Pa.C.S. Chapter 14.
Executive Summary
By Order entered September 26, 2008, at Docket No. L-00060182, the Commission adopted a Proposed Rulemaking Order which amends Chapter 56 of the Commission regulations, 52 Pa. Code §§ 56.1, et seq. By Order entered March 22, 2011, at this docket, the Commission adopted the Final Rulemaking Order. By Order entered June 13, 2011, at this docket, the Commission adopted the Revised Final Rulemaking Order.
The purpose of this Revised Final Rulemaking Order is to promulgate regulations to implement Chapter 14 (66 Pa.C.S. §§ 1401—1418, Responsible Utility Customer Protection). In particular, Section 6 of Act 201 requires the Commission to amend Chapter 56 to comply with the provisions of Chapter 14 and, if necessary, promulgate other regulations to administer and enforce Chapter 14.
On November 30, 2004, the Governor signed into law SB 677, or Act 201. This law went into effect on December 14, 2004. Act 201 amended Title 66 by adding Chapter 14 (66 Pa.C.S. §§ 1401—1418, Responsible Utility Customer Protection). Complying with the Section 6 obligation imposed by the Act is the main purpose of this rulemaking. In addition, the Commission reviewed the entire Chapter 56 to revise when necessary given our experience and the technological advances in the industries.
Act 201 is intended to protect responsible bill paying customers from rate increases attributable to the uncollectible accounts of customers that can afford to pay their bills, but choose not to pay. The legislation is applicable to electric distribution companies, water distribution companies and larger natural gas distribution companies (those having an annual operating income in excess of $6,000,000). Steam, wastewater utilities and victims under a protection from abuse (PFA) order are not covered by Chapter 14.
Public Meeting held
June 9, 2011Commissioners Present: Robert F. Powelson, Chairperson; John F. Coleman, Jr., Vice Chairperson; Tyrone J. Christy; Wayne E. Gardner; James H. Cawley
Rulemaking to Amend the Provisions of 52 Pa. Code, Chapter 56 to Comply with the Provisions of 66 Pa.C.S., Chapter 14; General Review of Regulations;
Doc. No. L-00060182
Revised Final Rulemaking Order By the Commission:
On September 26, 2008, the Commission issued a Proposed Rulemaking Order to amend our Chapter 56 Standards and Billing Practices for Residential Utility Service to comply with Chapter 14 of Title 66 and to undertake a general review of the regulations. On November 30, 2004, the Governor signed into law SB 677, or Act 201. This law went into effect on December 14, 2004. Act 201 amended Title 66 by adding Chapter 14 (66 Pa.C.S. §§ 1401—1418), Responsible Utility Customer Protection. The purpose of the Proposed Rulemaking Order was to promulgate regulations to implement Chapter 14. In particular, Section 6 of the Act requires the Commission to amend Chapter 56 to comply with the provisions of Chapter 14 and, if necessary, promulgate other regulations to administer and enforce Chapter 14.1 Complying with this obligation imposed by the Act is the main purpose of this rulemaking. In addition, we are taking this opportunity to review the entire Chapter 56 and make revisions when necessary given our experience and the technological advances in the industries.
Act 201 is intended to protect responsible bill paying customers from rate increases attributable to the uncollectible accounts of customers that can afford to pay their bills, but choose not to pay. The legislation is applicable to electric distribution companies, water distribution companies and larger natural gas distribution companies (those having an annual operating income in excess of $6,000,000).2 Steam, wastewater utilities and victims under a protection from abuse (PFA) order are not covered by Chapter 14.
In response to the disapproval order issued by the Independent Regulatory Review Commission (IRRC) of the Commission's Final Rulemaking Order adopted February 24, 2011, as well as the other comments to that order, the Commission is hereby adopting this Revised Final Rulemaking Order.
Background
Chapter 14 of the Public Utility Code seeks to eliminate opportunities for customers capable of paying to avoid paying their utility bills, and to provide utilities with the means to reduce their uncollectible accounts by modifying the procedures for delinquent account collections. The goal of these changes is to increase timely collections while ensuring that service is available to all customers based on equitable terms and conditions. 66 Pa.C.S. § 1402.
Chapter 14 supersedes certain Chapter 56 regulations, all ordinances of the City of Philadelphia and any other regulations that impose inconsistent requirements on the utilities. Chapter 14 expires on December 31, 2014, unless re-enacted. Two years after the effective date and every two years thereafter, the Commission must report to the General Assembly regarding the implementation and effectiveness of the Act.3
On January 28, 2005, the Commission issued a Secretarial Letter identifying general subject areas for discussion and encouraged interested parties to file written comments. In addition, on February 3, 2005, the Commission held a ''Roundtable Forum'' to address the implementation and application of Chapter 14.
Written comments were filed by the following interested parties: Energy Association of Pennsylvania (EAP), PECO Energy Company (PECO Energy), PPL Electric Utilities Corporation and PPL Gas Utilities Corporation (PPL), Philadelphia Gas Works (PGW), Aqua Pennsylvania, Inc. (Aqua), Pennsylvania-American Water Company (PAWC), Office of Consumer Advocate (OCA), Community Legal Services (CLS), Pennsylvania Utility Law Project (PULP), Pennsylvania Coalition Against Domestic Violence (PCADV), Pennsylvania Apartment Association, Housing Alliance of Pennsylvania, and American Association of Retired Persons (AARP).
Based upon our review of the comments filed by interested parties pursuant to our January 28, 2005 Secretarial Letter and the oral comments expressed at the Roundtable Forum, we issued an Implementation Order on March 4, 2005 that addressed seven threshold issues. Although we considered these issues to be the most fundamental, we understood that this was an ongoing process and that other implementation issues would need to be resolved in the future.
Therefore, by Secretarial Letter issued June 27, 2005, we informed interested parties of the next Chapter 14 Roundtable, July 1, 2005, and established agenda items for this meeting. At this second Chapter 14 Roundtable, we again sought to engage in a discussion that promoted an exchange of ideas and views so that all interested parties would better understand differing positions and the rationales underlying them. It was intended that the parties would benefit from this discussion of the issues and assist in the effective development of procedures, interim guidelines and subsequent regulations necessary to implement the new requirements of Chapter 14.
Written comments were again submitted by the EAP, PECO Energy, PGW, OCA, CLS, and PULP. The comments were also intended to supplement oral representations at the July 1, 2005 Roundtable. Another Roundtable discussion was held on July 21, 2005 to discuss PGW-Specific Chapter 14 issues, and written comments were filed by PGW, the OCA, CLS, and PULP. On September 12, 2005, we issued the Second Implementation Order addressing unresolved issues identified for review and disposition as follows:
Section I—Termination/Reconnection
Section II—Payment Arrangements (PARS)
Section III—Applications—Deposits
Section IV—Protection from Abuse (PFA)/Consumer Edu cation
Section V—PGW-Specific IssuesThereafter, we continued to address issues at this docket number. On August 24, 2005, we issued a Section 703(g) Order Seeking Comments on one of these threshold issues—the interpretation of the payment agreement restrictions in Section 1405(d). On October 31, 2005, we issued the Reconsideration of Implementation Order (page 23) amending the Implementation Order by concluding ''that § 1405(d) permits the Commission (in addition to instances where there has been a change of income) to establish one payment agreement that meets the terms of Chapter 14 before the prohibition against a second payment agreement in § 1405(d) applies.'' Finally, on November 21, 2005, we issued a Declaratory Order pursuant to 66 Pa.C.S. § 331(f) that Chapter 14 does not authorize public utilities to require upfront payments greater than those amounts specified in § 1407(c)(2).
Up to this point in the implementation process, we had addressed and resolved numerous issues involving the application of Chapter 14 provisions. However, as indicated previously, we are required by the legislation to open a rulemaking proceeding. In order to facilitate the completion of our responsibility under the Act, we issued an Advance Notice of Proposed Rulemaking Order (Advance Notice) on December 4, 2006. This Advance Notice enabled us to gather input from the industry, consumer groups, and advocates before drafting the proposed revisions and provided us the opportunity to conduct a general review of this Chapter to identify, modify, and/or rescind certain provisions of Chapter 56. See, e.g., General Review of Regulations; Advance Notice of Proposed Rulemaking, Docket No. L-00950103, adopted April 27, 1995, 25 Pa. B. 2188 (June 3, 1995). We have offered all parties the opportunity to address other issues as well.
For example, we explained in the December 4, 2006 Advance Notice that since the most recent revision of Chapter 56, there have been technological advances including electronic billing and payment, email, the internet, etc. Parties were invited to comment as to how these technological advances should be addressed in the regulations, especially the billing and payment sections. Furthermore, we asserted that the rulemaking proceeding will also review all of our outstanding ad hoc reporting requirements for the same purpose.
In the Advance Notice, we recognized that Chapter 14 will necessitate significant changes to the winter termination rules at § 56.100; this is an area of crucial importance and is central to the Commission's obligation to protect the health and safety of all citizens of the Commonwealth.
Chapter 14 also changes the procedures utilities may use when screening applicants for service and credit worthiness. Related to this are provisions in Chapter 14 that expand a utility's ability to assign liability for account balances that may have accrued under the name of someone other than the customer or applicant. The Commission requested comments on these procedures of winter terminations and screening and asked for the assistance of all parties in formulating regulations to address these important areas.
The Commission sought comments on the most controversial and complex provisions of Chapter 14 identified in questions set forth in Appendix A to the Advance Notice. Comments were received from the following 22 parties: EAP, PECO Energy, Allegheny Power, PPL, Duquesne Light Company (DLC), the FirstEnergy Companies (FirstEnergy), PGW, Columbia Gas of Pennsylvania, Inc. (Columbia), TW Phillips Gas Company (TWP), National Fuel Gas Distribution Corporation (NFG), Equitable Gas Company Division of Equitable Resources, Inc. (Equitable), The National Association of Water Companies (NAWC), PAWC, Aqua, OCA, PULP, Action Alliance of Senior Citizens, Tenant Union Representative Network and ACORN (Action Alliance), AARP, PCADV, Women's Law Project (WLP), Women Against Abuse (WAA), and the Consumer Advisory Council (CAC). As indicated previously, we encouraged the commentators to raise any matters or issues that they feel we have overlooked or missed, including the need to revise Chapter 56 sections unrelated to Chapter 14.
Proposed Rulemaking Order
Upon consideration of the new requirements of Chapter 14 and all of the comments received to date, we proposed the adoption of the regulations set forth in Annex A to the September 26, 2008 Proposed Rulemaking Order. A summary of the comments along with discussion of such were attached to this Order as Attachment One. The Order was published February 14, 2009 at 39 Pa.B. 925 and the public comment period concluded on April 20, 2009. This action continued the process of revising our Chapter 56 regulations. As provided for under law, the Commission next sought to finalize the proposed regulations.
Comments in response to the Order were submitted by Action Alliance, Allegheny Power, Aqua, Citizens' Electric Company (Citizens), Columbia, DLC, CAC, Dominion Peoples (Dominion), EAP, Equitable, FirstEnergy, MidPenn Legal Service (MidPenn), OCA, PULP, PECO Energy, PAWC, PGW, PPL, TWP, UGI Distribution Company (UGI), United Water (United), West Philadelphia Coalition of Neighborhoods and Businesses (WPCNB), York Water (York), as well as the Independent Regulatory Review Commission (IRRC). All comments are available at the Commission's public internet domain at www.puc.state.pa.us, as well as IRRC's at www.irrc.state.pa.us.
The Commission reviewed all the comments and the issues that developed in this rulemaking and issued a Final Rulemaking Order. The interested parties have now filed or had an opportunity to file comments on five separate occasions, including the December 4, 2006 Advance Notice. The issues have narrowed and the Commission's final order attempted to resolve the remaining issues. Many of the issues had already been the subject of previous Commission actions and the interested parties, as I have indicated, had numerous opportunities to comment on these issues, as set forth below:
• definition of customer (First Implementation Order)
• user without contract (First Implementation Order)
• landlord winter termination (First Implementation Order)
• PUC payment agreements (Reconsideration of Implementation Order)
• curing a payment agreement to avoid termination (First Implementation Order)
• verification of households eligible for winter termination (Second Implementation Order)
Final Rulemaking Order
By Order adopted February 24, 2011, and entered March 22, 2011, the Commission adopted a Final Rulemaking Order.
Our Final Rulemaking Order reflected changes in areas such as income definitions and CAP eligibility, winter surveys, paper receipts for electronic payments, budget billing payment arrangements, tariffs and credit scoring, etc. In some aspects, our Final Rulemaking Order represented substantial changes to the originally proposed amendment. We made changes in response to the issues and resolutions raised in comments by IRRC, consumer advocates and industry participants. We found merit with many of the comments and made the necessary changes.
The Commission believes that our implementation of Chapter 14 by amending Chapter 56 regulations to comply and be consistent with the statute will allow utilities to reduce their uncollectible accounts and provide additional collection tools to PGW. However, we did not draft proposed regulations that provide utilities and PGW additional methods or practices that were not specifically set forth or contemplated by the legislation. Although this was advocated by a few commentators, that is not the agency's role. The General Assembly enacted this legislation that provided these tools and the regulations implement the statute.
As previously indicated, we reviewed IRRC's comments and the Final Rulemaking Order attempted to address the concerns raised by IRRC. In addition, IRRC also made recommendations with respect to additional matters to be included and discussed in the Order. First, IRRC suggested that the Commission provide a section by section explanation of what revisions are being made. We addressed that request in Attachment Two, which provided a summary of the significant revisions to the Proposed Rulemaking Order. In addition, Attachment Three provided a regulatory analysis of the savings and efficiencies that will result from the revisions established in the Final Rulemaking Order. Furthermore, the Commission anticipated minimal additional costs to utilities reflecting possible computer software changes and increased training for customer service representatives and the additional reporting requirement costs. In Section 1402, the General Assembly declared that revision of the Chapter 56 rules would be in the public interest. We believe that the following substantive changes are consistent with that declaration of policy:
• Chapter 14 expanded the ability of a utility to ask for a deposit and we implemented this change.
• Chapter 14 expanded the ability of a utility to assign liability for an account without first seeking permission from the Commission or a court.
• The Commission expanded the ability of utilities and PGW to terminate in the winter.
• The Commission made the termination notice requirements less stringent than existing Chapter 56 requirements.
IRRC also suggested a cross-reference of Chapter 14 provisions that have been incorporated into Chapter 56 regulations. We also cross-referenced where Chapter 56 provisions have been revised to incorporate Chapter 14. These cross-references were provided in Attachment Four and Five, respectively. Finally, Attachment Six cross-referenced the traditional Chapter 56 subchapters with the new subchapters covering excluded utilities and PFA holders.
The Commission made these and other changes described above and below based on its oversight authority, experience in consumer service standards for residential service, and the requirements of Chapter 14. Chapter 14 (Section 4) supersedes inconsistent Chapter 56 regulations. We believed that this Order and Annex A did not reflect inconsistencies with Chapter 56 provisions or language. Although we amended 24 sections listed in Section 4, Chapter 56 addresses a number of topics that are not touched by Chapter 14, e.g., third-party notice, 4-year statute of limitation period for outstanding bills, make-up bills, existing customer deposits, unauthorized termination of service, procedures immediately prior to termination, post-termination notices, the right to petition the Commission to terminate customers protected by the winter termination prohibitions, and all the medical emergency provisions that are consistent with Chapter 14. We do not believe that these provisions are inconsistent with Chapter 14. We also made additional changes in response to comments from IRRC and other commentators that were intended to clarify and otherwise improve the rulemaking.
On April 7, 2011, the final-form regulation was delivered to the standing Committees of the Pennsylvania Senate and House of Representatives and (IRRC).
The next stage for the regulation within the Regulatory Review Act (Act) was review and approval at an IRRC public meeting. The regulation was scheduled for consideration and action at the May 19, 2011 public meeting. However, on May 13, 2011, the Commission issued a Secretarial Letter requesting disapproval of the regulation. The Secretarial Letter was served on all the parties to the rulemaking giving these parties an opportunity to file comments with IRRC. Notice of the May 19, 2011 public meeting was posted on IRRC's web site and the parties had an opportunity to provide oral comments at the meeting.
According to Section 745.2(a) of the Regulatory Review Act, 71 P. S. § 745.2(a), the legislative intent of the Act is to encourage the resolution of objections to a regulation and the reaching of a consensus among IRRC, the standing committees, interested parties and the agency. At this final stage in the regulatory review process, we determined that it was necessary to revise the regulation. In order to accomplish this result, it was necessary to seek disapproval of the regulation.
The Commission submitted in its Secretarial Letter that the modifications will not improperly enlarge the scope of regulation. The Commission further submitted that the final-form regulation may be inconsistent with the intention of the General Assembly in the enactment of Chapter 14. Therefore, pursuant to Section 745.7(a), we requested that the IRRC disapprove the subject regulation which would allow this agency to revise the final-form rulemaking consistent with subsection (c). The response and recommendations contemplated by the agency shall be submitted in a report to the Committees and the IRRC, within 40 days of the agency's receipt of the IRRC's disapproval order. The matters to be addressed and identified in the Secretarial Letter are set forth below:
§ 56.2 Definition of Household Income
§ 56.17 Advance Payments
§ 56.111 General Provision
§ 56.191 Payment and Timing
§ 56.252 Definition of Household Income
§ 56.267 Advance Payments
Appendix BOn May 26, 2011, IRRC issued its Disapproval Order. In addition to the matters identified above, IRRC requested further explanation of the Commission's statutory authority for Subchapters L through V and a more detailed cost-benefit and fiscal impact analysis of the regulation. IRRC also noted that commentators have expressed concern with additional sections. IRRC's final concern related to clarity and lack of ambiguity with two sections. The Commission's Report to Independent Regulatory Review Commission: Disapproved Regulation Submitted with Revisions contains the final-form regulation, the findings of IRRC, and our response and recommendations regarding the revised regulation, including responses to the concerns expressed by IRRC and the commentators. The Commission respectfully submits that it has addressed the concerns expressed by the Independent Regulatory Review Commission in its Disapproval Order. The Commission made substantive changes to the revised final-form regulation to address IRRC's concerns, and has explained the basis for the changes in this Report. Based on the attached revised final-form regulation, the findings of the Independent Regulatory Review Commission and the Commission's response and recommendations regarding the regulation, the Commission submits that this Revised Final Rulemaking Order is in the public interest. This Order, Report, Attachments and Annex A will be published on the Commission's web site.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on February 4, 2009, the Commission submitted a copy of the notice of proposed rulemaking, published at 39 Pa.B. 925 (February 14, 2009), to 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, IRRC and the House and Senate Committees were provided with copies of the comments received during the public comment period, as well as other documents when requested. In preparing the final-form rulemaking, the Commission has considered all comments from IRRC, the House and Senate Committees and the public.
Under section 5.1(j.2) of the Regulatory Review Act (71 P. S. § 745.5a(j.2)), on July 20, 2011, the final-form rulemaking was deemed approved by the House and Senate Committees. Under section 5.1(e) of the Regulatory Review Act, IRRC met on May 19, 2011, and disapproved the final-form rulemaking. Under section 5.1(e) of the Regulatory Review Act, IRRC met on July 21, 2011, and approved the final-form rulemaking.
Conclusion
Accordingly, under Sections 501, 504, and 1401—1418 of the Public Utility Code, 66 Pa.C.S. §§ 501, 504 and 1401—1418; Sections 201 and 202 of the Act of July 31, 1968, P. L. 769 No. 240, 45 P. S. §§ 1201—1202, and the regulations promulgated thereunder at 1 Pa. Code §§ 7.1, 7.2, and 7.5; Section 204(b) of the Commonwealth Attorneys Act, 71 P. S. § 732.204(b); Sections 745.5 and 745.7 of the Regulatory Review Act, 71 P. S. §§ 745.5 and 745.7; and Section 612 of the Administrative Code of 1929, 71 P. S. § 232, and the regulations promulgated thereunder at 4 Pa. Code §§ 7.231—7.234, we are considering adopting the revised final regulations set forth in Annex A; Therefore,
It Is Ordered That:
1. The regulations of the Commission, 52 Pa. Code Chapter 56, are amended by adding §§ 56.25, 56.166, 56.251, 56.252, 56.261—56.267, 56.271—56.275, 56.281—56.288, 56.291, 56.292, 56.301—56.307, 56.311, 56.312, 56.321—56.323, 56.331—56.340, 56.351—56.358, 56.361, 56.371—56.374, 56.381, 56.382, 56.391—56.394, 56.401—56.404, 56.411, 56.421, 56.422, 56.431, 56.432, 56.441, 56.451, 56.452, 56.453 and 56.461, Appendix C, Appendix D and Appendix E; by deleting §§ 56.43, 56.54, 56.55, 56.101, 56.161 and 56.211; and by amending §§ 56.1, 56.2, 56.11—56.17, 56.21-56.24, 56.31—56.33, 56.35—56.38, 56.41, 56.42, 56.51, 56.53, 56.56—56.58, 56.71, 56.72, 56.81—56.83, 56.91—56.100, 56.111—56.118, 56.131, 56.140—56.143, 56.151, 56.152, 56.162—56.165, 56.172—56.174, 56.181, 56.191, 56.192, 56.201, 56.202, 56.221, 56.222 and 56.231, Appendix A and Appendix B to read as set forth in Annex A.
2. The Commission hereby adopts the Report to the Independent Regulatory Review Commission: Disapproved Regulation Submitted with Revisions (Report to IRRC).
3. The Secretary shall submit this order, Report to IRRC, Attachments One through Six and Annex A to the Office of Attorney General for review as to form and legality and to the Governor's Budget Office for review for fiscal impact.
4. The Secretary shall submit this order, Report to IRRC, Attachments and Annex A for review by the Legislative Standing Committees and for review and approval by IRRC.
5. The Secretary shall certify this order, Report to IRRC and Annex A and deposit them with the Legislative Reference Bureau to be published in the Pennsylvania Bulletin.
6. The regulations in Annex A shall become effective upon publication in the Pennsylvania Bulletin.
7. The Secretary shall serve this order upon all jurisdictional electric utilities, natural gas utilities, steam, water and wastewater utilities, electric generation suppliers, natural gas suppliers, the Office of Consumer Advocate, the Office of Small Business Advocate and all parties that submitted comments at this Docket. The Report to IRRC, order, attachments and Annex A shall be posted and made available electronically on the Commission's web site.
8. The contact persons for this matter are Daniel Mumford, Manager, Field Review, Bureau of Consumer Services, (717) 783-1957, dmumford@state.pa.us; Terrence J. Buda, Assistant Counsel, Law Bureau, (717) 783-3459, tbuda@state.pa.us; and Patricia Wiedt, Assistant Counsel, Law Bureau, (717) 787-5755, pwiedt@state.pa.us. 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, sdelbiondo@state.pa.us.
ROSEMARY CHIAVETTA,
Secretary(Editor's Note: For the text of the order of the Independent Regulatory Review Commission relating to this document, see 41 Pa.B. 4265 (August 6, 2011).)
Fiscal Note: Fiscal Note 57-265 remains valid for the final adoption of the subject regulations.
Report to the Independent Regulatory Review Commission: Disapproved Regulation
Submitted with RevisionsThe Commission is submitting this Report to the Independent Regulatory Review Commission (IRRC) and the standing Committees of the Pennsylvania Senate and House of Representatives pursuant to Section 745.7(c) of the Regulatory Review Act, 71 P. S. § 745.7(c), and regulatory requirements at 1 Pa. Code Chapter 311 (relating to procedures for review of disapproved final regulations). The Commission has decided to revise this disapproved final-form regulation in order to respond to objections raised by IRRC and adopt this regulation with revisions. This Report contains the attached revised final-form regulation which includes the Revised Final Rulemaking Order, Annex A, and Attachments One through Six. In addition, this Report contains the findings of IRRC, and our response and recommendations regarding the final-form regulation. The regulation is identified by IRRC as Regulation No. 57-265 (#2743).
Background
By Order adopted February 24, 2011, and entered March 22, 2011, the Commission adopted the Final Rulemaking Order. On April 7, 2011, the final-form regulation was delivered to the standing Committees of the Pennsylvania Senate and House of Representatives and IRRC.
The next stage for the regulation with the Regulatory Review Act (ACT) was review and approval at an IRRC meeting. The regulation was scheduled for consideration and action at the May 19, 2011 public meeting. However, on May 13, 2011, the Commission issued a Secretarial Letter requesting disapproval of the regulation. The Secretarial Letter was served on all the parties to the rulemaking giving these parties an opportunity to file comments with IRRC. Notice of the May 19, 2011 public meeting was posted on IRRC's website and the parties had an opportunity to provide oral comments at the meeting.
According to Section 745.2(a) of the Regulatory Review Act, 71 P. S. § 745.2(a), the legislative intent of the Act is to encourage the resolution of objections to a regulation and the reaching of a consensus among IRRC, the standing committees, interested parties and the agency. At this final stage in the regulatory review process, we determined that it was necessary to revise the regulation. In order to accomplish this result, it was necessary to seek disapproval of the regulation.
The Commission submitted in the Secretarial Letter that the modifications will not improperly enlarge the scope of regulation. The Commission further submitted that the final-form regulation may be inconsistent with the intention of the General Assembly in the enactment of Chapter 14. Therefore, pursuant to Section 745.7(a), we requested that IRRC disapprove the subject regulation which will then allow this agency to revise the final-form rulemaking consistent with subsection (c). The response and recommendations contemplated by the agency shall be submitted in the report to the Committees and the IRRC, within 40 days of the agency's receipt of the IRRC's disapproval order. The matters to be addressed and identified in the Secretarial Letter are set forth below:
§ 56.2 Definition of Household Income
§ 56.17 Advance Payments
§ 56.111 General Provision
§ 56.191 Payment and Timing
§ 56.252 Definition of Household Income
§ 56.267 Advance Payments
Appendix BOn May 26, 2011, IRRC issued its Disapproval Order. A true and correct copy of the subject Disapproval Order is appended to this report as ''Exhibit A'' and is incorporated herein.
Disapproval Order and Findings
In the Disapproval Order, IRRC first cites the Commission's acknowledgement that certain sections of the regulation may be inconsistent with Chapter 14. IRRC then cited the sections of the rulemaking identified in the Commission's May 13, 2011 Secretarial Letter. The basis of IRRC's disapproval is that without support from the promulgating agency, this regulation does not meet the reasonableness criterion set forth in the Regulatory Review Act and is not in the public interest. 71 P. S. § 745.5b(b)(3).
In addition to this conclusion, IRRC expressed other concerns with the rulemaking. First, IRRC requests further explanation of the Commission's statutory authority for promulgating Subchapters L through V. 71 P. S. § 745.5b(a).
Second, IRRC requests a more detailed fiscal impact analysis that includes actual dollar amounts to determine the true economic or fiscal impact the regulation will have on the Commonwealth, political subdivisions and the private sector. 71 P. S. § 745.5b(b)(1).
Third, IRRC notes that commentators have expressed concern with sections of the rulemaking not included in the Commission's Secretarial Letter of May 13, 2011. These commentators share similar concerns pertaining to the manual reading of utility meters and a utility communicating with non-English and non-Spanish speaking customers. IRRC submits that the sections cited by the commentators are as follows:
§ 56.12, pertaining to meter reading, estimated billing and customer readings
§ 56.91, pertaining to general notice provisions and con tents of termination notice
§§ 56.93 and 56.333, pertaining to personal contact
§§ 56.201 and 56.431, pertaining to public information
§ 56.331, pertaining to general notice provisions and contents of termination notice.According to IRRC, the commentators believe that the language in these sections does not adequately protect the public health, safety and welfare of the citizens of the Commonwealth. In the report submitted with our revised final-form regulation, IRRC requests that the Commission analyze the sections noted above in conjunction with the comments and explain how the regulation adequately protects the public health, safety and welfare of the citizens of the Commonwealth. 71 P. S. § 745.5b(b)(2).
Finally, IRRC expresses a concern that relates to clarity and lack of ambiguity. 71 P. S. § 745.5b(b)(3)(ii). IRRC explains that under § 56.13, a cross-reference to § 56.83(3) would improve the clarity of the regulation. Also, under § 56.36, IRRC notes the comment and response document submitted with the final regulation states that references to ''customer'' in subsection (b)(1) were deleted. However, IRRC points out that the references are still in the regulation.
Revised Final-form rulemaking
A true and correct copy of the revised final-form regulation is attached in front of this report and is incorporated herein. The inclusion of the revised final-form regulation is in accordance with Section 745.7(c) of the Regulatory Review Act and IRRC's regulation at 1 Pa. Code § 311.4(1). Although the entire final-form regulation is attached, the only changes to the final-form regulation appear on the following pages:
5 (household income 56.2)
12 (inserted cross-reference in 56.13)
14-15 (advance payment 56.17)
22 (removed the word customer 56.36)
35 (term notice languages 56.91)
43 (med cert 56.111)
57 (med cert—restoration 56.191)
69 (household income 56.252)
75 (inserted cross reference in 56.263)
77-78 (advance payment 56.267)
83 (removed the word customer 56.286)
92 (term notice, changed reference to appendix B 56.331)
92-93 (term notice languages 56.331)
95 (post-term notice; changed reference to appendix B 56.336)
115 (appendix B)
122 (appendix F)Commission Response and Recommendations Regarding the Final Regulation
Pursuant to Section 745.7(c), this Commission has decided to revise the final-form regulation in order to respond to objections raised by IRRC in the Disapproval Order and adopt the regulation with revisions or modifications. In addition, pursuant to Section 7(c), the Commission is submitting this agency report to contain the revised final-form regulation, the findings of the IRRC and the agency's response and recommendations regarding the revised final-form. This response and recommendation is also offered in accordance with IRRC's regulation at 1 Pa. Code § 311.4(3).
First, the Commission submits that it has revised the final-form regulation to address the issues raised in the May 13, 2011 Secretarial Letter and the other objections raised by IRRC in its May 26, 2011 Disapproval Order. In summary, the definition of ''Household income'' will be revised to mirror the definition provided in 66 Pa.C.S. § 1403. Additional guidance as to what is not to be included in the definition will be deleted. The section on ''Advanced payments'' will be revised to restore the traditional prohibition on low-income customers participating in these programs. The section on medical certifications in the Emergency Provisions will be revised to restore the traditional language that allows a medical certificate to be used to restore a customer's service. In addition, the section on Payment and Timing will be revised to align it with the revisions to § 56.111, in that medical certificates may be used to restore a customer's service that has been terminated. Additionally, the section on Payment and Timing will be revised to set forth different provisions for customer and applicant. The revisions to the definition of ''Household income'' and the restoration of the traditional prohibition on low-income customers participating in advance payment programs will also be made in subchapters L-V that cover small gas companies, wastewater, steam heat and PFA customers. Finally, Appendix B, the Medical Emergency Notice, attached to Annex A, will be revised to align it with the revisions in § 56.111 and § 56.191 that allow a medical certificate to be used to restore a customer's service. Given that Appendix B will apply to all customers, Appendix F (applying to small gas companies, wastewater, steam heat and PFA customers) will be removed. We have made the necessary revisions to Annex A and Attachment One to implement these revisions.
In addition, to respond to IRRC's two other concerns, we have first revised the Discussion section in Attachment One, § 56.251 Statement of purpose and policy, to provide further explanation and justification that the Commission has statutory authority for promulgating Subchapters L through V. With respect to IRRC's request that we provide a detailed fiscal impact analysis that includes actual dollar amounts to determine the true economic or fiscal impact of the regulation, we shall address IRRC's concern in the Regulatory Analysis Form, under Section III: Cost and Impact Analysis.
As indicated previously, IRRC identified additional concerns that were raised by commentators. The comments of Action Alliance of Senior Citizens and Tenant Union Representative Network (Action Alliance) raised the issue of ''Automatic meter readings'' and its definition in Section 1411 that ''[a]ll readings by an automatic reading device shall be deemed actual readings for purposes of this title.'' Action Alliance believes that this statutory language would supersede and override all existing statutory provisions and Commission regulations designed to ensure accurate billings. Citing Section 1922(1) of the Regulatory Construction Act, 1 Pa. C.S. § 1922(1), Action Alliance believes that interpreting Section 1411 to override long-settled consumer protections is an absurd result and would constitute an unwarranted repeal by implication. Action Alliance further believes that § 56.12(5) as modified in the Proposed Rulemaking Order now requires no manual, physical meter reading to ensure accuracy because, by definition, a remote reading obtained through an AMR is an actual meter reading. Action Alliance asserts that the General Assembly did not intend to relieve public utilities from their responsibility to ensure accurate billing. Finally, Action Alliance concludes that there appears to be no conflict or repugnancy between Chapter 14 and Section 1504 (Standards of service and facilities.) and Commission regulations designed to ensure accurate billing. Similarly, Representative W. Curtis Thomas believes it is absurd to not require a manual, physical meter reading to ensure accuracy.
We first want to clarify the definition of automatic meter reading (AMR). Per the definition we are providing at §§ 56.2 and 56.252, an AMR is ''Metering using technologies that automatically read and collect data from metering devices and transfer the data to a central database for billing and other purposes.'' Basically, the meter reads itself and automatically transmits the reading (using various technologies) to the utility. An AMR system allows a utility to obtain regular meter readings without sending a company employee to physically interrogate the meter for obtaining a meter read. The technology also eliminates the need for issuing customer bills based on an estimated meter reading when the utility is not able to obtain a meter reading (for example, when a meter read is not possible because of poor weather or the meter is not accessible because it is in a basement or behind a locked fence, etc.). The cost-saving benefits for the utility, in that they no longer have to deploy meter readers, are obvious. However, customers also benefit in that they no longer receive bills based on estimated meter readings.
The commentators identified by IRRC appear to have concerns with the accuracy of AMR meters. Of course an AMR meter, like any other meter, may malfunction, rare as this may be. As a result, there are Commission regulations that address the testing, accuracy and replacement of meters (electric, refer to 52 Pa. Code §§ 57.20—57.25; gas §§ 59.16—59.22; water §§ 65.7—65.9). We stress that nothing in this rulemaking impacts these meter testing, accuracy and replacement standards. Concerning the accuracy of AMR meters as opposed to conventional meters, we believe this question is well beyond the scope of this rulemaking. Any party with concerns along these lines should bring the matter to the Commission in a separate proceeding.
If these commentators want AMR metering to be treated the same as ''remote metering devices'' under § 56.12(5), again, we believe at this point, this is beyond the scope of this rulemaking. This would in effect require examination of every AMR meter every five years. This would be a dramatic and costly expansion of current meter inspection requirements found in the above mentioned regulations. For example, the electric meter inspection requirements at 52 Pa Code § 57.20 require meters manufactured after 1940 to be tested every 8—20 years (depending on the type of meter). Shortening these timeframes to five years, and using this rulemaking to do so, would be inappropriate, especially given the significant costs involved and the fact that this subject was not fully aired in this proceeding. Again, if a party wants to bring this matter to the attention of the Commission, they should do so in a separate proceeding.
We believe that the General Assembly's intent in Section 1411 was clear. The General Assembly is clearly convinced of the benefits of AMR metering for both utilities and consumers, and want the cost-saving benefits and billing accuracy benefits to be fully realized. That is why Section 1411 clearly states that ''All readings by an automatic meter reader device shall be deemed actual readings for the purposes of this title.'' We believe that any attempt by us to impose costly additional testing and inspection requirements on these metering systems would thwart the intention of the General Assembly, and would not be legally supportable.
IRRC also notes that commentators shared concerns about a utility communicating with non-English and non-Spanish speaking customers. Nationalities Service Center, SEAMAAC, Inc., Welcoming Center for New Pennsylvanians, and the Pennsylvania Immigration and Citizenship Coalition raised this issue. The commentators identified § 56.91(b)(17), § 56.331(b)(13), § 56.201, § 56.431, § 56.93 and § 56.333 for revision. In particular, it was commented that the Proposed Rulemaking Order under § 56.91(b)(17) and § 56.331(b)(13), included termination notice information directing customers to a number to call for information and translation assistance in Spanish and in non-Spanish ''languages when census data indicates a significant population using that language resides in the public utility's service territory.'' The IRRC recommended that the Commission clarify what constitutes a ''significant population.'' Instead, the commentators submit that the Commission, in the final regulation, eliminated the entire non-Spanish language proposal, as follows:
(17) Information in Spanish, directing Spanish-speaking customers to the numbers to call for information and translation assistance. Similar information shall be included in other languages when census data indicates a significant population using that language resides in the public utility's service territory.The commentators recommend the following amendments to the regulations at § 56.91(b)(17) and § 56.331(b)(13):
Information in Spanish, directing Spanish-speaking customers to the numbers to call for information and translation assistance. Similar information shall be included in other languages when census data indicates a significant population using that language resides in the public utility's service territory. A SIGNIFICANT POPULATION CONSTITUTES 5% OF PERSONS ELIGIBLE TO BE SERVED OR 1,000 MEMBERS OF THE LANGUAGE GROUP, WHICHEVER IS LESS.The commentators recommend the same amendment for billing information under § 56.201 and § 56.431 as follows:
. . . A public utility which serves a substantial number of Spanish-speaking [ratepayers] customers shall provide billing information in English, [and] in Spanish, AND IN OTHER LANGUAGES WHEN CENSUS DATA INDICATES THAT A SIGNIFICANT POPULATION USING THE PARTICULAR LANGUAGE RESIDES IN THE PUBLIC UTILITY'S SERVICE TERRITORY. A SIGNIFICANT POPULATION CONSTITUTES 5% OF PERSONS ELIGIBLE TO BE SERVED OR 1,000 MEMBERS OF THE LANGUAGE GROUP, WHICHEVER IS LESS.Finally, the commentators believe that § 56.93 and § 56.333, which describe a utility employee's personal contact with customers, should be amended to require the personal contact, whether in person or by phone, be in the primary language of the customer.
IRRC asked us to consider the comments of various parties about the utilization of languages other than English in utility communications with consumers. We first want to note that IRRC and some other parties had concerns with what the Commission proposed in our September 2008 Proposed Rulemaking Order concerning the use of other languages on 10-day written termination notices (§§ 56.91 and 56.331). We had proposed that utilities should provide taglines in other languages ''when census data indicates a significant population using that language resides in the public utility's service territory.'' IRRC and others suggested that the requirement was too ''vague,'' and we agreed.
We want to clarify by what the Commission intended in its original proposal. It was never intended or proposed that the entire termination notice be provided in different languages. The intent was to just include a line in the foreign language directing the reader to the phone number to call for assistance. As PPL and PGW pointed out in their comments, utilities retain foreign language translation services. The line on the termination notice would simply direct the reader to call this service for assistance. Regardless, we admitted that the original proposal was too vague, and we removed the proposed requirement in the February 2011 Final Order.
We must also note that the use of Spanish is not at issue. Current termination notices, and the proposed regulations, continue to require that termination notices contain taglines in Spanish that direct Spanish speakers where they can call for assistance. This has not been an issue of debate in this rulemaking and no change in this current practice was ever proposed. Instead, the issue has been providing similar information in languages other than English and Spanish.
Upon reconsideration, we now believe that we can revise this requirement while at the same time making it less vague. We will do this revising § 56.91 and § 56.331 by adding to the requirement a threshold of 5% of the population, based on census data, as advocated by parties such as Action Alliance. The requirement will now read ''Information in Spanish, directing Spanish-speaking customers to the numbers to call for information and translation assistance. Similar information shall be included in other languages when census data indicates that 5 % or more of the residents of the utility's service territory are using that language.''
However, we do not agree with the recommendations of various parties to also incorporate a minimum threshold of 1,000 customers (5 percent or 1,000 customers, whichever is less). We believe that a minimum threshold of 1,000 is too low. As PECO and PGW pointed out in their comments, the City of Philadelphia has a very diverse population with many different languages being spoken. A 1,000 threshold could have the effect of requiring several different taglines on the termination notices; further crowding an already crowded 2-page written notice. PPL points out that such a requirement could even lead to an additional notice page, significantly increasing costs. Expanding the notice to a 3-page document would also not serve consumers well from a plain-language perspective. The longer a document is, the less likely it is to be fully read and comprehended. We believe the five percent threshold (1 out of every 20), is a reasonable middle ground that will help protect significant vulnerable populations while not imposing additional burdensome costs on the utilities.
Some of the parties also want us to go further still and to require the provision of 3-day personal contact termination notices (§§ 56.93, 56.333) in the language of the customer. This would require a utility, when calling or visiting a customer's residence to provide a notice of termination, to provide such in the customer's language. We believe that this has serious practical concerns (such as necessitating the utility to somehow know and keep record of each customer's language) and cost issues, none of which have been fully aired in this proceeding. As such, we believe it is inappropriate to expand the scope of this rulemaking in this direction at this time. Furthermore, we believe this requirement is unnecessary in that, as we have discussed above, we are revising § 56.91 and § 56.331 to direct that the 10-day written notice of termination include information in other languages if five percent or more of the customer base uses that language. We believe it is more important that the 10-day written notice (which every customer facing termination receives) contains this information, so that the customer has the information and phone number to call in writing, in their language, making it less likely they will forget. The 3-day personal contact notice is not nearly as critical, especially considering that a utility only has to attempt to deliver a 3-day notice; meaning that not every customer facing termination actually receives a 3-day notice. As such, we believe providing the information in other languages on the 10-day written notice is far more effective from a public health and safety perspective, and is also the more cost-conscious solution.
Concerning the request of some of the parties that the Commission require utilities to provide other customer communications in other languages (§§ 56.201 and 56.431), we note that the current regulation and the proposed regulations require this for Spanish. However, we believe that expanding this requirement to include other languages presents significant cost issues for both utilities and the Commission. Given the costs and the fact that this issue has not been fully aired in this proceeding, we believe it is inappropriate to expand the scope of this rulemaking in this direction at this time. Parties with concerns such as these can bring them to the attention of the Commission through other proceedings. We point to the Commission's Policy Statement on Plain Language Guidelines (52 Pa Code § 69.251) as an example of possible other alternative methods of addressing concerns with utility communications.
IRRC's last concern expressed in its Disapproval Order addressed clarity and a lack of ambiguity. We agree and will cross-reference § 56.83(3) in § 56.13 and delete the reference to ''customer'' in § 56.36(b)(1).
Conclusion
The Commission respectfully submits that it has addressed the concerns expressed by the Independent Regulatory Review Commission in its Disapproval Order. The Commission made substantive changes to the revised final-form regulation to address IRRC's concerns, and has explained the basis for the changes in this Report. The Commission respectfully requests IRRC's approval of this Report, in accordance with Section 7(c.1) of the Regulatory Review Act (71 P. S. § 745.7(c.1)). Based on the attached revised final-form regulation, the findings of the Independent Regulatory Review Commission and the Commission's response and recommendations regarding the regulation, the Commission further requests that the Independent Regulatory Review Commission find that promulgation of the regulation is in the public interest.
''Exhibit A''
Independent Regulatory Review Commission
Disapproval Order
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1 Section 6 further provides that ''promulgation of any such regulation shall not act to delay the implementation or effectiveness of this chapter.''
2 Small natural gas companies may voluntarily ''opt in'' to Chapter 14. 66 Pa.C.S. § 1403.
3 On December 14, 2006, the Commission issued the First Biennial Report to the General Assembly and the Governor pursuant to Section 1415. On December 14, 2008, the Commission issued the Second Biennial Report. On January 14, 2011, the Commission issued the Third Biennial Report.
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