NOTICES

PENNSYLVANIA PUBLIC UTILITY COMMISSION

Investigation Order

[39 Pa.B. 2515]
[Saturday, May 16, 2009]

Public Meeting held
April 16, 2009

Commissioners Present: James H. Cawley, Chairperson; Tyrone J. Christy, Vice Chairperson; Robert F. Powelson; Kim Pizzingrilli; Wayne E. Gardner

Compliance of Commwealth of Pennsylvania with Section 410(a) of the American Recovery and Reinvestment
Act of 2009; Doc. No. I-2009-2099881

Investigation Order

By the Commisison:

   Pursuant to the Commission's authority under sections 501, 1301, 1501 and Chapters 22 and 29 (relating to Natural Gas Choice and Competition Act; and Electricity Generation Customer Choice and Competition Act) of the Public Utility Code, 66 Pa.C.S. §§ 501, 1301, 1501, 2201--2212 and 2801--2815, the Commission hereby initiates an investigation regarding the Commission policies and actions that should be implemented to ensure compliance with the requirements of Section 410(a) of the American Recovery and Reinvestment Act of 2009¹ (''Recovery Act'') which, in general, requires the Commission to consider rate making policies that align with the promotion of energy efficiency and conservation. The investigation will consist of the Commission soliciting and reviewing comments by interested parties. In addition, the Commission will hold a technical conference following the comment period.

Discussion

   Section 410(a) of the Recovery Act authorizes grants to States if certain conditions are met. The Governor of the State must notify the Secretary of Energy, in writing, that:

The applicable State regulatory authority will seek to implement, in appropriate proceedings for each electric and gas utility, with respect to which the State regulatory authority has ratemaking authority, a general policy that ensures that utility financial incentives are aligned with helping their customers use energy more efficiently and that provide timely cost recovery and a timely earnings opportunity for utilities associated with cost-effective measurable and verifiable efficiency savings, in a way that sustains or enhances utility customers' incentives to use energy more efficiently.²

   In response to this requirement, Governor Rendell sent a letter dated March 23, 2009, to the Honorable Stephen Chu, Secretary of the U.S. Department of Energy, certifying that he had written to the Pennsylvania Public Utility Commission asking that it ensure adoption of the general policy described in Section 410(a) of the Recovery Act.

   On the same day, Governor Rendell sent a letter to Commission Chairperson Cawley requesting that the Commission take specific steps to ensure that Pennsylvania meet the conditions of the Recovery Act. In his letter, Governor Rendell asked that the Commission:

[C]onsider additional steps the Commonwealth can take to establish appropriate incentives in electric and natural gas utility rates for energy efficiency programs, consistent with State law, the attached statute [the Recovery Act], and relevant PURPA requirements. These include policies to align interests of utilities to support conservation without raising the cost of conservation and increasing the cost to ratepayers of measurable, verifiable efficiency savings.³

Governor Rendell further asked the Secretary of the Pennsylvania Department of Environmental Protection to work with the Commission on this matter.

   In compliance with the Recovery Act, and at the request of the Governor, the Commission commences this investigation into the requirements of section 410(a) of the Recovery Act. In particular, this investigation will consider the various policies and actions the Commission should implement to ensure that appropriate incentives are in place to align utility financial incentives with the promotion of energy efficiency and conservation by consumers.

   The Commission also recognizes that proposed Federal energy legislation may mandate that Pennsylvania electric and gas utilities reduce the amount of energy that they sell to conserve resources and protect the environment. Therefore, this investigation will also evaluate the potential effect that such Federal energy legislation may have on Pennsylvania electric and natural gas utilities' business models.

   In addition to addressing these issues, comments should also address the requirements of existing State law and, in particular, section 2806.1(k)(2) and (3) (recovery of costs related to energy efficiency and conservation plans), section 2807(f)(4) (recovery of costs related to use of smart meter technology), section 1505(b) (Commission authority to order conservation or load management programs) and section 2802 (declaration of legislative policies regarding competitive market for electric generation service) of the Public Utility Code, 66 Pa.C.S. § 2806.1(k)(2) and (3), 66 Pa.C.S. § 2807(f)(4), 66 Pa.C.S. § 1505(b), 66 Pa.C.S. § 2802, as well as any other provisions of the Public Utility Code which may be affected. Effects on the Commission's existing regulations and policy statements should also be addressed.

Therfore,

   It Is Ordered that:

   1.  An investigation is hereby instituted to address compliance with section 410(a) of the American Recovery and Reinvestment Act of 2009 and the actions the Commission should implement; by this investigation we are seeking to implement, in appropriate proceedings, general rate making policies that ensure that utility financial incentives are aligned with helping their customers use energy more efficiently and that provide timely cost recovery and a timely earnings opportunity for utilities associated with cost-effective measurable and verifiable efficiency savings, in a way that sustains or enhances utility customers' incentives to use energy more efficiently.

   2.  Initial comments must be submitted by interested parties within 60 days of entry of this Order and reply comments 30 days thereafter. Comments should address any appropriate actions, orders, policy statements or regulations that the Commission should adopt to ensure compliance with Section 410(a) of the American Recovery and Reinvestment Act of 2009 or to respond to the potential effect of proposed Federal energy legislation, including the issue of rate decoupling and all such measures that have the potential to encourage utility energy efficiency and conservation while ensuring the financial viability of the utilities.

   3.  The Law Bureau is designated as the lead bureau to oversee the investigation and, based on review of the filed comments, to prepare a recommendation for Commission action.

   4.  The Commission conduct a technical conference following the submission of comments and reply comments.

   5.  A copy of this investigation order shall be served upon all jurisdictional electric and gas utilities, the Office of Consumer Advocate, the Office of Trial Staff, and the Office of Small Business Advocate, the Secretary of the Pennsylvania Department of Environmental Protection and shall be published in the Pennsylvania Bulletin.

   6.  The contact person for this investigation is Steven Bainbridge, Law Bureau, Pennsylvania Public Utility Commission, P. O. Box 3265, Harrisburg, PA 17105-3265 sbainbridg@state.pa.us, (717) 783-6165.

   7.  The contact person for this investigation for technical matters is Ed Berzonsky, Bureau of Fixed Utility Services, Pennsylvania Public Utility Commission, P. O. Box 3265, Harrisburg, PA 17105-3265, eberzonsky@state.pa.us.

   8.  Alternate forms of this document are available to persons with disabilities and may be obtained by contacting Sherri DelBiondo, Regulatory Coordinator, Law Bureau, (717) 772-4597.

By the Commission

JAMES J. MCNULTY,   
Secretary

[Pa.B. Doc. No. 09-913. Filed for public inspection May 15, 2009, 9:00 a.m.]

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¹  American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5 §  410(a), 123 Stat. 115 (2009).

²  American Recovery and Reinvestment Act of 2009, Pub.  L. No. 111-5 § 410(a), 123 Stat. 115 (2009).

³  Letter of Governor Edward G. Rendell to Chairperson James H. Cawley, March 23, 2009.

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