PROPOSED RULEMAKING
[ 52 PA. CODE CH. 121 ]
[ L-2012-2317274 ]
Review of Long-Term Infrastructure Improvement Plan
[43 Pa.B. 6206]
[Saturday, October 19, 2013]The Pennsylvania Public Utility Commission (Commission), on March 14, 2013, adopted a proposed rulemaking order which sets forth regulations for filing a Long-Term Infrastructure Improvement Plan to ensure that utilities are planning and executing expenditures that will maintain and improve safety, adequacy and reliability of existing distribution infrastructure.
Executive Summary
On February 14, 2012, Governor Corbett signed into law Act 11 of 2012 (Act 11), which, inter alia, authorizes water and wastewater utilities, electric distribution companies (EDCs), and natural gas distribution companies (NGDCs) or a city natural gas distribution operation to petition for a distribution system improvement charge (DSIC). See 66 Pa.C.S. § 1353.
The DSIC is a ratemaking mechanism that allows for the recovery of prudently incurred costs related to the repair, improvement and replacement of eligible utility infrastructure through a surcharge that is subject to reconciliation, audit and other consumer protections. A precondition to obtaining approval of a DSIC is the filing and approval of a long-term infrastructure improvement plan (LTIIP). 66 Pa.C.S. §§ 1352 and 1353(b)(3). The purpose of a LTIIP is to ensure that utilities are planning and executing capital expenditures that will maintain and improve the efficiency, safety, adequacy and reliability of existing distribution infrastructure at a faster pace than they have done historically.
On May 11, 2012, the Commission entered a Tentative Implementation Order at Docket No. M-2012-2293611 that proposed procedures and guidelines necessary to implement Act 11, including the elements of and standards for approval of a LTIIP, the ability to use previously approved plans, and the subsequent periodic review parameters of the LTIIP. The Tentative Implementation Order called for comments. Comments were received from various EDCs, NGDCs and water utilities. The Commission reviewed the comments and at its August 2, 2012 Public Meeting adopted a Final Implementation Order. Specifically, the Final Implementation Order, inter alia, set forth the elements a LTIIP must contain and outlined the procedures and process for the filing and review of LTIIPs. Accordingly, the proposed rulemaking incorporates many of the aspects already discussed in the Final Implementation Order.
Public Meeting held
March 14, 2013Commissioners Present: Robert F. Powelson, Chairperson; John F. Coleman, Jr., Vice Chairperson; Wayne E. Gardner; James H. Cawley; Pamela A. Witmer
Review of Long-Term Infrastructure Improvement Plan;
L-2012-2317274
Proposed Rulemaking Order By the Commission:
On February 14, 2012, Governor Corbett signed into law Act 11 of 2012 (Act 11), which amends Chapters 3, 13 and 33 of the Pennsylvania Public Utility (Code). 66 Pa.C.S. §§ 308, 1307, 1311, 1327 and 1350—1360. Act 11 authorizes water and wastewater utilities, electric distribution companies (EDCs), and natural gas distribution companies (NGDCs) or a city natural gas distribution operation to petition for a distribution system improvement charge (DSIC). See 66 Pa.C.S. § 1353.
The DSIC is a ratemaking mechanism that allows for the recovery of prudently incurred costs related to the repair, improvement and replacement of eligible utility infrastructure through a surcharge that is subject to reconciliation, audit and other consumer protections. A precondition to obtaining approval of a DSIC is the filing and approval of a long-term infrastructure improvement plan (LTIIP). 66 Pa.C.S. § 1352. This proposed rulemaking establishes the procedures and criteria for the filing and subsequent periodic review of LTIIPs.
Background
On April 5, 2012, the Commission held a working group meeting with stakeholders regarding implementation of Act 11. In particular, we sought input from the stakeholders on the following key topics in advance of issuing a Tentative Implementation Order:
• Elements of a model DSIC tariff, including the necessary computation, reconciliation and consumer protection provisions (audits, reconciliations, percent caps and re-set to zero);
• Elements of and standards for approval of a LTIIP, ability to use previously approved plans, and subsequent periodic review parameters;
• Establishing a baseline for the current rate of infrastructure improvement;
• Examination of the relationship between the LTIIP under Act 11 and the NGDC pipeline replacement and performance plans required by Commission order at Docket No. M-2011-2271982;
• Determination of the equity return rate when more than 2 years have elapsed between the effective date of a final order in a base rate case and the effective date of the DSIC; and
• Standards to establish and ensure that DSIC work is performed by ''qualified employees'' of either the utility or an independent contractor.
On May 11, 2012, the Commission entered a Tentative Implementation Order at Docket No. M-2012-2293611 that reflected stakeholders' concerns; set out a model draft tariff; proposed procedures and guidelines necessary to implement Act 11, including a DSIC process for investor-owned energy utilities, city natural gas distribution operations, and wastewater utilities; and set forth procedures to facilitate the transition from Section 1307(g) water DSIC procedures to Act 11 DSIC procedures.
The Tentative Implementation Order called for comments. Comments were received from various EDCs, NGDCs and water utilities. The Commission reviewed the comments and at its August 2, 2012 Public Meeting adopted a Final Implementation Order, which established procedures and guidelines to carry out the ratemaking provisions of Act 11 in Chapters 3 and 13.
Discussion
The DSIC mechanism, enacted via Act 11, now allows EDCs, NGDCs, wastewater utilities, and city natural gas operations, like water utilities previously, to recover the reasonable and prudently incurred costs related to the repair, improvement, and replacement of utility infrastructure. The LTIIP is a necessary component of a DSIC petition. 66 Pa.C.S. § 1353(b)(3). The purpose of a LTIIP is to ensure that utilities are planning and executing capital expenditures that will maintain and improve the efficiency, safety, adequacy and reliability of existing distribution infrastructure at a faster pace than they have done historically. However, water utilities with a previously-approved DSIC are not required to file a LTIIP unless otherwise directed by the Commission. See 66 Pa.C.S. § 1360.
As mentioned above, the Final Implementation Order addressed various procedures and guidelines regarding the implementation of Act 11. Specifically, the Final Implementation Order set forth the elements a LTIIP must contain and outlined the procedures and process for the filing and review of LTIIPs. Accordingly, this proposed rulemaking will incorporate many of the aspects already discussed in the Final Implementation Order.
In the Final Implementation Order, the Commission determined that the following six elements must be included in a proposed LTIIP: (1) types and age of eligible property; (2) schedule for its planned repair and replacement; (3) location of the eligible property; (4) reasonable estimate of the quantity of property to be improved; (5) projected annual expenditures and measures to ensure that the plan is cost effective; and (6) manner in which replacement of aging infrastructure will be accelerated and how repair, improvement or replacement will maintain and ensure adequate, efficient, safe, reliable and reasonable service to customers. Additionally, the Commission highlighted the importance of including workforce management plans in a LTIIP and its view that the acquisition of qualified personnel is essential to the successful implementation of any long-term plan to improve infrastructure. Accordingly, we stated that a workforce management and training plan designed to ensure that a utility will have access to a qualified workforce to perform work in a cost-effective, safe and reliable manner is also a necessary element of a LTIIP.
While the Commission recently decided against establishing a separate Pipeline Replacement and Performance Plan filing process at Docket M-2011-2271982,1 because it would be duplicative of the Act 11 DSIC regulatory process, specifically, the filing of LTIIIPs; we nevertheless determined that we would order additional actions from NGDCs if necessary in order to safeguard the public. Accordingly, we determine that each NGDC filing a LTIIP should also include as an element of their respective LTIIP, a description of its plan to address damage prevention, corrosion control, emergency response times and identification of critical valves. Given the age of the existing natural gas distribution infrastructure throughout the Commonwealth, we believe that it is necessary that the NGDCs submit this information and indicate how their LTIIPs prioritize gas system safety and reliability. This particular element will be incorporated into proposed section 121.3 and will apply only to NGDCs.
Additionally, we note the implementation of a DSIC mechanism may lead to numerous maintenance and construction projects by the utilities. This could lead to significant disruptions as utilities perform work in the right of ways of the roadways and streets across the Commonwealth in order to replace or repair their infrastructure. We believe it is prudent for utilities to coordinate their maintenance efforts so they can minimize multiple disruptions to location where projects may overlap. Therefore, we will direct that a utility, as a part of its LTIIP, should provide a description of its outreach and coordination activities with other utilities, Pennsylvania Department of Transportation (PennDOT) and local governments regarding their planned maintenance/construction projects and roadways that may be impacted by the plan.
In the Final Implementation Order, we also stated that a LTIIP should include a review of all eligible distribution plant property, as defined in 66 Pa.C.S. § 1351, including its inventory, age, functionalities, reliability and performance. By limiting the plan to only ''eligible property,'' we mean eligible property for which DSIC treatment is sought (DSIC-eligible plant). We determined that it was unnecessary for a utility to provide extensive data regarding components of its distribution system for which it is not seeking DSIC recovery. Accordingly, LTIIPs need only address the specific property eligible for DSIC recovery.
In the Final Implementation Order, we established the time frame that a LTIIP must cover. We determined that a five-to-ten year term for a LTIIP is appropriate as this time period is forward-looking enough for utilities to make accurate predictions and also provides sufficient time for long-term planning of planned repairs and replacement of eligible property. However, we also suggested that any such plan should coincide with longer term plans that address specific goals, including cast iron replacement plans and bare steel replacement plans, and that such plans meet overall system replacement goals.
A proposed LTIIP plan must include a schedule for the planned repair and replacement of eligible property. See 66 Pa.C.S. § 1352(a)(2). A proposed LTIIP should also reflect and maintain an acceleration of infrastructure replacement over the utility's historic level of capital improvement. As we noted in the Final Implementation Order, some utilities have taken substantial steps recently to increase prudent capital investment to address their aging infrastructure and we believe that the five-to-ten year timeframe established for a LTIIP should reflect how the DSIC will maintain or augment acceleration of infrastructure replacement and prudent capital investment.
The utility has the burden of proof to demonstrate, in accordance with section 1352(a), that the proposed LTIIP and associated expenditures are reasonable and cost effective and are designed to ensure and maintain adequate, efficient, safe, reliable and reasonable service to customers. This burden of proof is also consistent with section 1501 of the Code, 66 Pa.C.S. § 1501.
Furthermore, we believe that a utility must always have a LTIIP on file so that the Commission has a means to determine whether a utility's DSIC mechanism is serving its intended purpose. Accordingly, we determine that a utility shall file a new proposed LTIIP at least 120 days prior to the expiration of its currently filed LTIIP. This will allow the Commission and interested persons adequate time to review the new proposed LTIIP before the existing LTIIP term expires. Any new plan filed subsequent to the first Commission-approved LTIIP must also include the elements set forth in 66 Pa.C.S. § 1352. The proposed regulations will adopt this schedule in section 121.5.
Lastly, we required utilities to serve copies of their proposed LTIIPs on the statutory advocates as well as all of the active parties in the utility's most recent base rate proceeding.2 We also determined that the proposed LTIIP will be initially assigned to staff of the Bureau of Technical Utility Services (TUS) for analysis and a recommendation to the Commission. Interested parties will be given 20 days to file comments to the proposed LTIIP. If, upon review, the comments raise material factual issues, the proposed LTIIP will then be referred to the Office of Administrative Law Judge (OALJ) for hearing and the issuance of a recommended decision. Regardless, we generally established a period of 120 days for review of each proposed LTIIP.
A Commission-approved LTIIP is subject to a periodic subsequent review by the Commission. In the Final Implementation Order, we acknowledged that there may be a need for utility management to have the flexibility to deviate from a previously approved LTIIP, if certain circumstances arise, such as when variations in construction expenditures occur within a given year. Accordingly, the proposed regulations will allow utility management the flexibility and discretion to make major and minor changes as needed, so long as the utility identifies reasonable operational, financial, or other justifications for deviating from its approved plan.
However, major modifications or deviations to the LTIIP necessitate the filing of a Petition for Modification that will be subject to public notice and Commission approval. In the Commission's judgment, major changes, modifications or deviations from the LTIIP are those that: (1) eliminate a category of eligible property from the plan; (2) extend the schedule for repair, improvement or replacement of a category of eligible property by more than 2 years; (3) increase the total estimated cost of the plan by more than 15%; or (4) otherwise reflect a substantial change to the current Commission-approved LTIIP.3 Conversely, minor modifications to a LTIIP that are changes that do not qualify as major changes as defined in proposed section 121.2 can and will be addressed concurrent with Staff's review of the utility's Annual Asset Optimization Plan.
Additionally, in regard to any future dispute as to whether the utility has adhered to the Commission-approved LTIIP, which is a condition for the ability to maintain its DSIC mechanism, 66 Pa.C.S. § 1353(b)(2), a utility will be afforded notice and an opportunity to be heard before its DSIC is terminated for non-compliance with an approved LTIIP or other violations of Act 11. The proposed regulations set forth the procedures for the periodic review of an approved LTIIP.
Furthermore, we note that section 1356 of Act 11, 66 Pa.C.S. § 1356, requires a utility with an approved DSIC to file an Annual Asset Optimization Plan (AAO plan). The AAO plan elements are as follows: (1) a description of all eligible property repaired, improved and replaced in the preceding 12 months and (2) a detailed description of all facilities to be improved in the upcoming 12 months. Since the AAO plan is to be filed annually, the Commission believes it is appropriate to set a uniform filing date of March 1 for all utilities with a DSIC to file their AAO plans with the Commission, rather than adopting the anniversary of the utility's implementation of its DSIC, which will vary from utility to utility.
As we stated in the Final Implementation Order, the AAO plan is intended to provide the Commission and the public with an overall status report regarding a utility's progress in making infrastructure improvements pursuant to its Commission-approved LTIIP. We also believe that the AAO plans will be a beneficial tool for the Commission when it conducts its overall periodic review of a utility's approved LTIIP. The Commission expects the AAO plan to demonstrate a utility's compliance and progress in meeting its LTIIP and to identify the utility's near-term construction projects that will be funded by the DSIC, consistent with the LTIIP. Additionally, if a utility determines that a major modification to its LTIIP is necessary once it has finalized its AAO plan, it can submit a separate petition for modification at the time it submits its annual filing of its AAO plan to the Commission. Such modification(s) will be subject to notice and an opportunity to be heard by interested parties. The proposed regulations set forth the procedures for major modifications to an approved LTIIP. However, as noted above, minor modifications can and will be addressed by Staff during its review of the AAO plan.
Summary of Proposed Regulations
Based upon these considerations, the proposed regulations will include the following sections:
§ 121.1. Purpose.
This section of the proposed regulations sets forth the general purposes for filing a LTIIP, which must be filed and approved before a utility can implement a DSIC. Additionally, this section highlights that a LTIIP is intended to ensure that utilities are planning and executing capital expenditures that will maintain and improve safety, adequacy and reliability of existing distribution infrastructure.
§ 121.2. Definitions.
This section of the proposed regulations sets forth the definitions of the key terms that will be used throughout the proposed regulations.
§ 121.3. Long Term Infrastructure Improvement Plan.
This section of the proposed regulations sets forth the specific elements that must be contained in a utility's proposed LTIIP.
§ 121.4. Filing and Commission Review Procedures.
This section of the proposed regulations sets forth the filing procedures for LTIIPs, the public comment period, and the manner in which the Commission will review a utility's plan.
§ 121.5. Modification to and expiration of a LTIIP.
This section of the proposed regulations sets forth the procedures for modifying a Commission-approved LTIIP and filing a new LTIIP prior to the expiration of a filed plan. Major modifications or changes to the LTIIP will require the filing of a separate petition that is subject to comment from interested parties, while minor modifications will be considered along with the AAO and disposed of via Staff action.
§ 121.6. Asset Optimization Plan Filings.
This section of the proposed regulations sets forth the procedures for filing the Annual Asset Optimization Plan and the elements of the AAO plan. This section also states that the AAO plan will be reviewed to determine whether the utility has adhered to its LTIIP and whether any changes to the initial LTIIP are necessary in order to maintain and improve the safety, adequacy and reliability of its existing distribution infrastructure. Absent any major modifications or changes, adverse comments or Commission action within 60 days, the filing will be deemed approved.
§ 121.7. Periodic Review of an LTIIP.
This section of the proposed regulations sets forth the procedures for the periodic review of the LTIIP, as required by Act 11. The section states that a periodic review will be conducted every five years or more frequently if deemed necessary, and, upon such review, the utility may have to revise or update its LTIIP.
§ 121.8. Enforcement of LTIIP Implementation.
This section of the proposed regulations addresses the enforcement of Act 11 and the remedies the Commission may prescribe for a utility's noncompliance with its Commission-approved LTIIP. The section also provides that variations in individual years and non-material changes from the Commission-approved LTIIP will not be a basis for an enforcement action. Any enforcement actions filed will be referred to the Office of Administrative Law Judge (OALJ) for hearing and decision.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on October 3, 2013, the Commission submitted a copy of this proposed rulemaking and a copy of a Regulatory Analysis Form to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the House Consumer Affairs Committee and the Senate Consumer Protection and Professional Licensure Committee. A copy of this material is available to the public upon request.
Under section 5(g) of the Regulatory Review Act, IRRC may convey any comments, recommendations or objections to the proposed rulemaking within 30 days of the close of the public comment period. The comments, recommendations or objections must specify the regulatory review criteria which have not been met. The Regulatory Review Act specifies detailed procedures for review, prior to final publication of the rulemaking, by the Commission, the General Assembly and the Governor of comments, recommendations or objections raised.
We invite interested parties to file comments on the proposed subsections of the regulation. Accordingly, under sections 501, 1350—1360 and 1501 of the Public Utility Code (66 Pa.C.S. §§ 501, 1350—1360, and 1501) and the Commonwealth Documents Law (Act of July 31, 1968, P. L. 769) (45 P. S. §§ 1201, et seq.) as amended, and the regulations promulgated thereunder, at 1 Pa. Code §§ 7.1—7.4, we add the regulations at 52 Pa. Code §§ 121.1—121.7 as noted above and as set forth in Annex A; Therefore,
It Is Ordered That:
1. The proposed rulemaking at the previously-captioned docket will consider the regulations set forth in Annex A.
2. The Secretary shall submit this Order 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 of fiscal impact.
3. The Secretary shall submit this Order and Annex A for review and comment to the Independent Regulatory Review Commission and Legislative Standing Committees.
4. The Secretary shall certify this Order and Annex A, and deposit them with the Legislative Reference Bureau to be published in the Pennsylvania Bulletin.
5. An original copy of any comments referencing the docket number of the proposed regulations, be submitted within 45 days of publication in the Pennsylvania Bulletin, to the Pennsylvania Public Utility Commission, Attn: Secretary, P.O. Box 3265, Harrisburg, PA 17105-3265.
6. The contact person for this rulemaking is Assistant Counsel David E. Screven, Law Bureau (717) 787-2126, dscreven@pa.gov. Alternate formats of this document are available for persons with disabilities and may be obtained by contacting Sherri DelBiondo, Regulatory Coordinator, (717) 772-4597.
7. A copy of this Order and Annex A shall be served upon the Energy Association of Pennsylvania, all jurisdictional electric distribution companies, natural gas utili-ties, all water and wastewater utilities, the Bureau of Investigation and Enforcement, the Office of Consumer Advocate, and the Office of Small Business Advocate.
ROSEMARY CHIAVETTA,
SecretaryFiscal Note: 57-294. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 52. PUBLIC UTILITIES
PART I. PUBLIC UTILITY COMMISSION
Subpart G. DISTRIBUTION SYSTEM IMPROVEMENT CHARGE Chap.
121. LONG-TERM INFRASTRUCTURE IMPROVEMENT PLAN
CHAPTER 121. LONG-TERM INFRASTRUCTURE IMPROVEMENT PLAN Sec.
121.1. Purpose. 121.2. Definitions. 121.3. LTIIP. 121.4. Filing and Commission review procedures. 121.5. Modifications to and expiration of an LTIIP. 121.6. AAO plan filings. 121.7. Periodic review of an LTIIP. 121.8. Enforcement of LTIIP implementation. § 121.1. Purpose.
To be eligible to recover the reasonable and prudently incurred costs regarding the repair, improvement and replacement of eligible property from a DSIC, a utility shall submit an LTIIP to be approved by the Commission. See 66 Pa.C.S. § 1353 (relating to distribution system improvement charge). The LTIIP must show the acceleration of the replacement of aging infrastructure by the utility and be sufficient to ensure and maintain adequate, efficient, safe, reliable and reasonable service to customers.
§ 121.2. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
AAO plan—Annual asset optimization plan—The plan and supporting documents identified in 66 Pa.C.S. § 1356 (relating to asset optimization plans) that specify the eligible property repaired, improved or replaced by a utility under its Commission-approved LTIIP.
DSIC—Distribution system improvement charge—A charge imposed by a utility to recover the reasonable and prudent costs incurred to repair, improve or replace eligible property that is part of the utility's distribution system under 66 Pa.C.S. § 1353 (relating to distribution system improvement charge).
Eligible property—''Property'' as defined in 66 Pa.C.S. § 1351 (relating to definitions).
LTIIP—Long-term infrastructure improvement plan—The plan and supporting documents identified in 66 Pa.C.S. § 1352(a) (relating to long-term infrastructure improvement plan) that shall be submitted to and approved by the Commission for a utility to be eligible to recover costs from a DSIC mechanism, which includes information regarding the utility's eligible property and its repair and replacement schedule.
Major modification—A change or deviation to a utility's previously approved LTIIP which:
(i) Eliminates a category of eligible property from the LTIIP.
(ii) Extends the schedule for repair, improvement or replacement of a category of eligible property by more than 2 years.
(iii) Increases the total estimated cost of the LTIIP by more than 15%.
(iv) Otherwise reflects a substantial change to the current Commission-approved LTIIP.
Utility—A natural gas distribution company, electric distribution company, water utility, wastewater utility or city natural gas distribution operation subject to the jurisdiction of the Commission.
§ 121.3. LTIIP.
(a) An LTIIP shall be filed by a utility and include the following elements:
(1) Identification of types and age of eligible property owned and operated by the utility for which it is seeking DSIC recovery.
(2) An initial schedule for planned repair and replacement of eligible property.
(3) A general description of location of eligible property.
(4) A reasonable estimate of quantity of eligible property to be improved or repaired.
(5) Projected annual expenditures and means to finance the expenditures.
(6) A description of the manner in which infrastructure replacement will be accelerated and how repair, improvement or replacement will ensure and maintain adequate, efficient, safe, reliable and reasonable service to customers.
(7) A workforce management and training program designed to ensure that the utility will have access to a qualified workforce to perform work in a cost-effective, safe and reliable manner.
(8) A description of a utility's outreach and coordination activities with other utilities, Department of Transportation and local governments regarding their planned maintenance/construction projects and roadways that may be impacted by the LTIIP.
(9) For a natural gas distribution company, a description of the LTIIP to address damage prevention, corrosion control, emergency response times and identification of the natural gas distribution company's critical valves.
(b) The LTIIP must address only the specific property eligible for DSIC recovery.
§ 121.4. Filing and Commission review procedures.
(a) An LTIIP shall be filed with the Commission's Secretary's Bureau with copies served upon the Bureau of Investigation and Enforcement, the Office of Consumer Advocate, the Office of Small Business Advocate and the parties in the utility's most recent base rate case. Service is evidenced by a certificate of service filed with the LTIIP.
(b) An LTIIP is a public document. If a utility believes that a portion of the information in the LTIIP qualifies as confidential security information under section 2 of the Public Utility Confidential Security Information Disclosure Protection Act (35 P. S. § 2141.2) or should be afforded proprietary and confidential treatment, the utility shall request proprietary treatment of the information pursuant to a protective order. See §§ 5.423 and 102.1—102.4 (relating to orders to limit availability of proprietary information; and confidential security information). Confidential security information in the LTIIP shall be marked confidential by the utility and excluded from the public version of the filing.
(c) LTIIP filings are subject to a 20-day comment period. The LTIIP will be reviewed by Commission staff. The LTIIP will be referred to the Office of Administrative Law Judge for hearings and a decision if comments raise material factual issues.
(d) A utility has the burden of proof to demonstrate that its proposed LTIIP and associated expenditures are reasonable, cost effective and are designed to ensure and maintain efficient, safe, adequate, reliable and reasonable service to consumers.
(e) The Commission will review the LTIIP and determine if the LTIIP:
(1) Accelerates or maintains an accelerated rate of infrastructure replacement.
(2) Is sufficient to ensure and maintain adequate, efficient, safe, reliable and reasonable service.
(f) The Commission will order the utility to file a new or revised LTIIP if the LTIIP does not meet the criteria in this section.
§ 121.5. Modifications to and expiration of an LTIIP.
(a) If a utility seeks to modify a Commission-approved LTIIP during its term to incorporate a major modification to any of the elements in § 121.3(a) (relating to LTIIP), the utility shall file a separate petition for modification. The utility shall clearly identify the change and explain the operational, financial or other justifications for the change in its petition. The petition will be subject to notice and an opportunity to be heard by interested parties. Parties shall have 20 days to file comments to the petition.
(b) Minor modifications to an LTIIP that are changes that do not qualify as major changes as defined in § 121.2 (relating to definitions) will be addressed concurrent with Commission staff's review of the utility's AAO plan.
(c) A utility shall file a new LTIIP with the Commission at least 120 days prior to the expiration of a currently-effective LTIIP. The new LTIIP must contain the elements in § 121.3(a).
§ 121.6. AAO plan filings.
(a) A utility with an approved DSIC shall file with the Commission, for informational purposes, an AAO plan. The AAO plan shall be filed on or before March 1st of each year following the implementation of the utility's DSIC mechanism. The utility shall file copies of the AAO plan with the Commission's Bureau of Investigation and Enforcement, the Office of Consumer Advocate, the Office of Small Business Advocate and the interested parties that were a part of the proceeding in which the initial LTIIP was approved.
(b) An AAO plan must include:
(1) A description of the eligible property repaired, improved and replaced in the prior 12-month period under its LTIIP.
(2) A description of the eligible property to be improved in the upcoming 12-month period.
(3) System reliability data for the prior 5 years.
(c) If a utility determines that a major modification to its LTIIP is necessary once it has finalized its AAO plan, it shall submit a separate petition for modification as set forth in § 121.5(a) (relating to modifications to and expiration of an LTIIP) to the Commission.
(d) An AAO plan will be reviewed by the Commission to determine whether the utility has adhered to its approved LTIIP. If the Commission determines that a major modification to the LTIIP is necessary to maintain and improve the safety, adequacy and reliability of its existing distribution infrastructure, the Commission will direct the utility to file a petition for modification as outlined in § 121.5(a).
(e) Absent any major modifications, adverse comments or Commission action within 60 days, the AAO plan will be deemed approved. The Commission may extend its consideration period if necessary.
§ 121.7. Periodic review of an LTIIP.
(a) The Commission will review a utility's LTIIP at least once every 5 years or more frequently if deemed necessary to address safety, reliability or other issues related to the approved LTIIP.
(b) The Commission's review will determine:
(1) If the utility has adhered to its LTIIP.
(2) If changes to the LTIIP are necessary to maintain and improve the efficiency, safety, adequacy and reliability of its existing distribution infrastructure.
(c) Unless otherwise directed, the Commission's periodic review will begin at the midpoint of the term of the current LTIIP. The Commission will, by means of a Secretarial Letter, establish a schedule for comments and reply comments to aid in its periodic review.
(d) If the Commission determines, based upon its review, that a utility's approved LTIIP is no longer adequate to ensure and maintain efficient, adequate, safe, reliable and reasonable service, the Commission will direct the utility to revise, update or resubmit its LTIIP as appropriate.
§ 121.8. Enforcement of LTIIP implementation.
(a) A utility with a Commission-approved LTIIP is obligated to comply with the infrastructure replacement schedule and elements of that LTIIP. Compliance with the LTIIP will be evaluated on a multiyear basis over the life of the LTIIP. Construction expenditure variations in individual years and minor changes or deviations from the Commission-approved LTIIP may not be the basis for an enforcement complaint.
(b) A Commission-approved LTIIP may be subject to enforcement complaints brought by statutory advocates and other interested persons. Enforcement complaints may be referred to the Office of Administrative Law Judge for hearings and a decision, as appropriate.
(c) The remedies for noncompliance with an approved LTIIP may include civil penalties, revocation of the DSIC and other remedies as may be appropriate based on the record developed in the enforcement proceeding.
[Pa.B. Doc. No. 13-1958. Filed for public inspection October 18, 2013, 9:00 a.m.] _______
1 Natural Gas Pipeline Replacement and Performance Plans, Docket No. M-2011-2271982 (Order entered February 28, 2013).
2 While we believe that a LTIIP is subject to public review, if a utility believes that any portion of the information contained in the LTIIP qualifies as Confidential Security Information under 35 P. S. § 2141 or should be afforded proprietary and confidential treatment, the utility must request proprietary treatment of such information pursuant to a protective order. See 52 Pa. Code § 5.423 (Propriety Information) and 52 Pa. Code §§ 102.1—102.4 (Confidential Security Information). A LTIIP will not automatically receive proprietary and confidential status.
3 Comments are invited regarding these proposed parameters for the definition of ''major'' modification to a Commission-approved LTIIP.
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