Thursday, December 18, 2014

PUC Seeks Comments On Proposal For Annual Fees For Electric, Gas Suppliers

The Public Utility Commission Thursday voted to adopt a Tentative Implementation Order for Act 155 of 2014 (Act 155), which, among other things, allows the Commission to assess electric generation suppliers (EGSs) and natural gas suppliers (NGSs).
“We must ensure that any fees and assessments on EGSs and NGSs are not discriminatory and do not skew competitive pricing,” said Commissioner James H. Cawley in a joint statement with Chairman Robert F. Powelson. “Utilities usually recover assessments through base rates, not in the price-to-compare, while NGSs and EGSs must recover any fees and assessments in their prices for electric and natural gas supply offers.”
The Commission is funded by assessments of the regulated entities based upon intrastate revenues. Assessments are paid into the state treasury’s General Fund for use solely by the Commission.
The Commission voted 5-0 to determine the methodology for:
— Establishing annual fees related to PUC oversight of NGSs and EGSs, as permitted by Act 155 and Sections 2208 and 2809 of the Public Utility Code;
— The treatment of fees collected pursuant to the Federal Unified Carrier Registration Act; and
— Removal of the gross intrastate operating revenues associated with the Federal Unified Carrier Registration Act.
In the case of EGSs, Commissioner Cawley noted there is a question as to whether the traditional method of allocating indirect costs is consistent with the legislative requirements that any fees imposed be consistent with the “reasonable cost basis” standard.
EGSs’ gross intrastate revenues are composed primarily of electric distribution company transmission charges, and electric generation-related energy, capacity and ancillary charges, all of which are wholesale pass-through costs for EGSs.
“Given these gross revenue realities and competitive issues, we are interested in receiving comments on other, perhaps more accurate, methods of meeting the statutory requirement of establishing EGS and NGS fees on a reasonable cost basis, while ensuring competitive equity for supply services,” said Commissioner Cawley.
Interested parties have 30 days from the publication of the Order in the Pennsylvania Bulletin to provide written comments to the Pennsylvania Public Utility Commission, Attn: Secretary, P.O. Box 3265, Harrisburg, PA 17105-3265.
Act 155 was signed into law on Oct. 22, 2014, by Gov. Tom Corbett. It amends Chapters 5, 14, 22 and 28 of the Public Utility Code to allow the PUC to establish annual fees to fund the Commission’s oversight of NGSs and EGSs.
Act 155 also allows the Commission to include the intrastate operating revenues of licensed entities in determining its budget cap, and to exclude from the budget cap funds received from the federal government and other sources to perform functions unrelated to the Commission’s jurisdictional regulation.

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