PUC Highlights PA One Call Changes, Drilling Impact Fee Appeal, Act 129 Energy Efficiency Savings, Growth Of Natural Gas

Public Utility Commission Chairman Gladys Brown told the House Consumer Affairs Committee Tuesday updating the PA One Call Law is a legislative priority for the Commission, including eliminating all exemptions from the law, like natural gas and crude oil gathering lines.  (Click Here for her written testimony.)

She noted this was a key recommendation of the Governor’s Pipeline Infrastructure Task Force Report in 2016.

Another important element in updating PA One Call, she said, is transferring enforcement authority of the One Call Law from the Department of Labor and Industry to the Commission since these functions closely align with the PUC’s existing duties.

[Note: The Senate Consumer Protection and Professional Licensure Committee Tuesday reported out Senate Bill 242 (Baker-R-Luzerne) that includes many of the changes recommended by the PUC. (Click Here for more information.)]

Act 13 Impact Fee Court Decision Appeal

Chairman Brown also said a critical issues for the PUC will be to address the March Commonwealth Court decision the Commission believes “significantly jeopardized the current and future fees generated by Act 13 drilling impact fees.

The PUC  notified Gov. Tom Wolf last week that it intends to appeal the decision.

This year alone, Brown said, the decision, if not reversed, would reduce the already declining revenue from the impact fee by $16 million or approximately, 10 percent of the total collection.  (Click Here for more information.)

Act 129 Energy Efficiency

Also highlighted in Chairman Brown’s testimony was the latest Act 129 Energy Efficiency Annual Report which noted the most recent phase of energy efficiency investments by electric utilities resulted in a savings to customers of $1.70 for every $1 invested by utilities.

She said between 2016 to 2021 utilities will invest another $1.8 billion with an expected return of $2.7 billion in consumer savings.  (Click Here for more information.)

Natural Gas Growth/Plant Retirements

While the PUC no longer regulates the wholesale electricity market, Chairman Brown noted the Commission does monitor power plant construction.

She said Shale natural gas has supported what she called an “evolution in the wholesale generation market,” driving construction of highly economic natural gas electric generation plants.

From 2007 to 2016, 5,500 megawatts of Pennsylvania-based coal electric generation was retired.  During that same time period 3,300 megawatts of Pennsylvania-based natural gas generation capacity was constructed.

An additional 5,000 megawatts of natural gas generation capacity is under construction in the state, she said.

“This is an example of market efficiency, as the wholesale market is working efficiently to support the least cost generation resource with feedstock produced domestically,” said Brown.  “Look no further than the PJM energy price for proof.  The price has dropped from $71.13 per megawatt hour in 2007 to $29.23 per MWh in 2016.  

“Additionally, this migration toward natural gas generation has significantly reduced the state’s carbon, nitrous oxide, mercury and sulfur dioxide emission,” noted Brown.

Renewable Energy

Chairman Brown noted 14.2 percent of the electricity sold to customers is from renewable energy sources marking a significant step toward the 18 percent required by the Alternative Energy Portfolio Standards Act by 2021.
She said a review of the Alternative Energy Credits used by utilities to comply with the AEPS found approximately 50 percent of the credits used were generated from hydro, geothermal, wind, solar or biomass facilities within Pennsylvania.  (Click Here for more information.)

PJM Fuel Diversity

In response to a question, Chairman Brown said the PUC is reviewing a recent study done by the PJM Interconnection on electric grid reliability and generation fuel diversity and has a meeting scheduled with PJM to discuss the study results.

One of the conclusions of the study was the addition of more natural gas and renewable generating capacity would not harm grid reliability. (Click Here for more information.)

Chairman Brown said the PUC has always supported a diverse generating fuel mix in the grid system.

Electric Choice

Chairman Brown said 2.1 million electric customers (or 36.9 percent) were using competitive electric suppliers to provide their electricity representing about 70 percent of the total electric power usage in Pennsylvania, a 2.3 percent increase over last year.  (Click Here for more information.)

A recent study by the Kleinman Center for Energy Policy at the University of Pennsylvania found residential customers saved over $818 million on their electricity supply costs in 2016 compared to 1996, before competition.

Rail & Pipeline Safety

Chairman Brown noted that while the overall number of employees at the PUC has been reduced since FY 2011-12, the Commission has increased staff to implement its natural gas safety and rail safety programs.

She said in 2016, the PUC’s Rail Safety Division inspected over 23,000 rail cars, 486 locomotives, and 1,263 miles of track while logging 135,499 trip miles.

The Gas Safety Division employs 15 Gas Safety Inspectors who monitor over 47,000 miles of distribution lines and over 1,100 miles of intrastate transmission lines. This responsibility entailed over 2,200 inspections in 2016.

A copy of Chairman Brown’s testimony is available online.

Brown was joined at the hearing by Commissioners Andrew Place, John Coleman, Robert Powelson and David Sweet.

Rep. Robert Godshall (R-Montgomery) serves as Majority Chair and can be contacted by sending email to: rgodshal@pahousegop.com and Rep. Thomas Caltagirone (D-Berks) serves as Minority Chair and can be contacted by sending email to: RepCaltagirone@pahouse.net.