PUC Moves To Clarify Distribution System Improvement Charge Procedures

The Public Utility Commission Thursday voted to seek comments on a Supplemental Tentative Implementation Order, intended to develop additional procedures and guidelines related to the Distribution System Improvement Charge (DSIC).

The Commission voted 5-0 to approve the Supplemental Tentative Implementation Order.

A DSIC can be used by utilities to recover costs related to the accelerated repair, replacement or improvement of eligible distribution property. Initially available only to water utilities, Act 11 of 2012 expanded the DSIC to energy utilities, city natural gas distribution operations and wastewater utilities in order to increase the pace of infrastructure replacement and improvements across Pennsylvania.

Since the passage of Act 11, the PUC has approved DSIC surcharges for 10 Pennsylvania utilities, including one electric distribution company, six natural gas distribution companies, one city natural gas distribution system, and two wastewater companies.

Additionally, the Commission has approved DSIC surcharges for seven water companies.

In August 2012, the Commission issued a Final Implementation Order regarding Act 11, establishing procedures and guidelines for DSIC filings, but since that time additional questions have arisen.

Today’s action by the Commission begins the process of developing new procedures and guidelines to clarify concerns related to the DSIC.

Specifically, the Commission’s order seeks comment on the following:

-- Requiring quarterly financial reports for all utilities that use the DSIC mechanism;

-- Filing and computation issues for when the DSIC is reset to zero;

-- Treatment of over/under collections, or E-factor, after the DSIC is reset to zero;

-- Computation issues for determining the DSIC rate cap; and

-- Requirement to file an LTIIP by water utilities that use the DSIC

Any interested party may submit comments regarding this Tentative Implementation Order within 30 days of entry of publication in the Pennsylvania Bulletin.

A copy of this Tentative Supplemental Implementation Order also will be served on all jurisdictional water and wastewater companies, electric distribution companies, natural gas distribution companies and Philadelphia Gas Works, as well as the statutory advocates.

For more information, visit the PUC’s Act 11 DSIC webpage.