The House Consumer Affairs Committee is scheduled to meet April 11 to consider House Bill 1782 (Delozier-R-Cumberland) authorizing alternative ratemaking for electric and natural distribution companies to encourage energy efficiency improvements, distributed and renewable energy projects (sponsor summary).
The Committee held a hearing on the legislation November 20 and heard a variety of conflicting comments on the proposal.
Public Utility Commissioner Andrew Place told the Committee the Commission has been actively studying the alternative ratemaking issue since it approved a Secretarial Letter in December of 2015 soliciting comments on the issue.
Place said the PUC is neutral on the legislation, but urged the Committee to review the language of the bill to determine how to resolve conflicts with existing law on issues like improper single-issue ratemaking, retroactive ratemaking and violation of the just and reasonable rate standard.
Terry Fitzpatrick, President of the Energy Association of PA, said his group supports the legislation because it modernizes the state’s current utility ratemaking system, but notes the bill does not mandate alternative ratemaking and the flexibility for more competitive pricing of energy.
Greg Dudkin, President of PPL Utilities, supported the legislation saying decoupling with multi-year rates will best provide for consumers because of the reliability of pricing, price-adjustment refunds and accessibility to energy conservation measures. Click Here for more.
Bill Roland, Director of Government Affairs for Peoples Natural Gas, said they see House Bill 1782 as a way to help customers and expand the economy, adding because of the changing dynamics of energy use, flexibility in pricing is needed for customers.
Eric Miller, Director of Policy for the Keystone Energy Efficiency Alliance, said the legislation is a critical step to getting away from a rate model that compensates utilities based on how much energy they sell and not necessarily the other services like energy conservation.
Tanya McCoskey, Acting PUC Consumer Advocate, said alternative ratemaking mechanisms “pose significant risks to Pennsylvania ratepayers by disrupting this careful balance” of utility benefits and consumer protections.
John Evans, PUC Small Business Advocate, echoed McCoskey’s concerns and said the legislation is not needed.
John Cox, Director of Rates and Regulatory Affairs at PA American Water, also supported the bill recommending the bill be expanded to operators of water and wastewater facilities.
He added because of the overall decrease in water use, the current utility rate structure penalizes conserving water because the price minimizes the effect of being resourceful. Decoupling also limits rate shock and provides revenue directly for infrastructure improvements.
The meeting will be held in Room B-31 Main Capitol and will be called Off the Floor Wednesday when the House takes a break. Committee meetings are typically webcast through the House Republican Caucus website.
Rep. Robert Godshall (R-Montgomery) serves as Majority Chair of the Committee and can be contacted by calling 717-783-6428 or sending email to: rgodshal@pahousegop.com. Rep. Thomas Caltagirone (D-Berks) serves as Minority Chair and can be contacted by calling 717-787-3525 or sending email to: RepCaltagirone@pahouse.net.
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