PULP News & Recent Developments

PUC to Hold Special Hearing on Energy Prices

The Pennsylvania Public Utility Commission (PUC) will hold a public hearing to increase consumer awareness of rising energy prices, explore ways to reduce energy usage, and discuss potential policies and strategies to help consumers prepare for rising energy prices.

The Hearing, open to the public, is scheduled for Thursday, Sept. 11, 2008 at 12:30 p.m. in Hearing Room 1 of the Commonwealth Keystone Building in Harrisburg.

The five PUC Commissioners will conduct the hearing to solicit comments from interested parties, including the PUC Consumer Advisory Council, consumer advocates, other government agencies, and utilities. Comments on the expected price rise of electric and natural gas service and how those increases may affect Pennsylvania consumers will be received by the Commissioners. As part of the informal en banc hearing process, the Commissioners will pose questions to the speakers after their testimony.

LIHEAP

Public Hearings to receive comments regarding the Pennsylvania Department of Public Welfare’s Proposed LIHEAP State Plan for 2008-2009 were held in Philadelphia, Harrisburg and Pittsburgh in July. Although the Final State Plan has not yet been published, DPW indicated to its LIHEAP Advisory Committee in August that the following changes are likely for this coming LIHEAP year of 2008-2009:

• The Cash & Crisis components are scheduled to open on November 3, 2008 and to close March 31, 2009.
• DPW will be streamlining the application process to those households for which it already has information indicating eligibility. For these households, letters will be mailed out as early as September 2008.
• DPW has clarified that a household that heats with a deliverable fuel will be considered to be in a home-heating emergency and therefore eligible for LIHEAP Crisis if their heating fuel supply will last less than 15 calendar days.
• DPW will be requesting verification of income for the last 90 days prior to application for the purpose of determining eligibility, abandoning the past practice of permitting use of the income level for the prior 30 days.

Electric Utility Education Plans To Mitigate Rate Increases

The PUC has acted on the rate mitigation education plans of 8 electric utilities. Final approval has been provided for the plans of PPL, PECO, UGI Electric, Citizens, Wellsboro, Pike County, Duquesne Light Co. and the FirstEnergy Companies of Met-Ed, Penelec and Penn Power.

These plans are in response to the May 17, 2007 Commission Order, at Docket No. M-00061957, which directed all electric distribution companies (EDCs) to prepare and file a consumer education plan to mitigate potential electricity price increases that could follow the expiration of generation rate caps. The intention is to prepare Pennsylvanians for removal of electric rate caps and to enable consumers to make informed decisions regarding their levels of electric use.

he plans are required to include specific education elements which inform consumers that:

• Rate caps of their electric providers have or will expire on a certain date;
• When rates change there may be significant increases;
• Customers may be able to take steps to control the size of their electric bills;
• Customers may benefit from utilizing energy efficiency, conservation and demand side response measures;
• Information about these measures is readily available;
• Customers may reduce the size of their electric bills, or receive service options more suited to their needs, by purchasing generation service from an alternative electric generation supplier;
• Current information that will allow customers to make informed choices about competitive generation alternatives is readily available; and
• Programs exist to help low income customers maintain their utility service, and information about them is readily available.
  

PPL Gains Approval of a Settlement Implementing a Rate Stabilization Plan (RSP)

On August 7, 2008, PPL Electric Utilities Corporation (PPL) gained approval from the Pa. Public Utility Commission of a settlement implementing a Rate Stabilization Plan (RSP) for its electric customers. The RSP is a voluntary prepayment plan available to residential, small commercial, small industrial, and certain street lighting customers. The RSP is intended by PPL to ease the impact on its customers of the increased cost of electricity generation supply when PPL’s generation rate caps expire on December 31, 2009. PPL is projecting a 34.5 percent increase for the average residential customer using 1,000 kWh per month.

Beginning on October 1, 2008, customers will be given the opportunity to start paying small, additional payments each month on top of their existing electric bill. These additional payments will be held by PPL in an individual account for each customer and earn 6% annual interest. These added payments will stop on December 31, 2009. On January 1, 2010, PPL will begin drawing money from this individual account to credit each customer’s monthly bill. This crediting will occur each month until December 31, 2011.

The intended effect of the RSP is to smooth out the increase in cost to the customer over a period of years. Rather than having a single, shocking increase when the generation rate caps expire, the RSP is intended to introduce the increases more gradually over a longer period of time.

Governor Signs into Law the Alternative Energy Investment Act

Governor Rendell signed into law the Alternative Energy Investment Act (AEIA), Pa. H. Bill No. 1, Printer’s No. 86 on July 9, 2008. The law provides a $650 million package of loans, grants, and tax credits to spur residential and business investment in alternative energy, energy efficiency, and energy conservation. It also includes $40 million for an Emergency Energy Assistance Fund.

The AEIA creates a series of different funds targeted to different constituencies and to different types of alternative energy approaches including:

• The Alternative Energy Development Program will make available $500 million in loans and grants to residential and business customers to spur investment in, development of, and use of alternative energy sources.
  
• The Consumer Energy Program will make available $100 million for conservation and fuel efficiency projects.
• The Alternative Energy Production Tax Credit Program will make available $50 million in tax credits for qualifying projects related to energy efficiency.
• The Emergency Energy Assistance Fund will receive $10 million annually for fiscal years 2008 through 2012 for emergency energy assistance to be administered by the Department of Public Welfare in the event that the Governor declares an energy emergency due to weather conditions or energy costs or a combination of both.

Several agencies and authorities have been charged with promulgating regulations and implementing programs as a result of the AEIA, including the Commonwealth Financing Authority, Department of Public Welfare, Department of Environmental Protection, and Pennsylvania Housing Finance Authority.

Changes at the PUC

On August 19, 2008, Governor Edward G. Rendell announced the appointment of James H. Cawley as chairman of the Public Utility Commission (PUC). After serving as a member of the PUC from 1979 to 1985, Cawley returned to the Commission in April, 2005. His term ends March 31, 2010. As a private practice lawyer, his clients included a wide array of public utilities and competitive telephone, electric and natural gas providers. He currently serves as Adjunct Professor of Administrative Law at Widener University School of Law. Upon being appointed chairman, Cawley stated, “I look forward to working with the administration to protect consumers, especially through expanded energy conservation and efficiency programs and programs that aid low-income families.”

On August 21, 2008, Tyrone J. Christy was elected vice-chairman of the Commission by his fellow commissioners. Having first worked at the Commission in the mid 1980s, Christy began his current term, which expires March 31, 2011, in June 2007. He has served in executive positions with various private and public companies, as well as regulated utilities and unregulated utility affiliates. He also served as the treasurer of the Pennsylvania Energy Development Authority from 2004 until 2007.

On July 1, 2008, two new commissioners were confirmed by the Pennsylvania State Senate to serve on the PUC. Robert F. Powelson will serve through April 1, 2009, completing the term of Terrance Fitzpatrick, who resigned. Wayne E. Gardner will serve through April 1, 2013, succeeding Wendell Holland, whose term expired. Powelson has served as president and CEO of the Chester County Chamber of Business and Industry since 1995. Gardner has most recently been involved as a development and management consultant and entrepreneur in the fields of power generation and renewable and clean energy technologies, following a 22-year career with PECO Energy. Governor Rendell, who nominated both men, stated: “The Public Utility Commission’s decisions affect every Pennsylvania resident – from protecting consumers from skyrocketing rates and insisting instead on the lowest possible prices for utility service, increasing energy conservation, and regulating utilities to shift energy production to renewable sources. I am confident that Wayne Gardner and Robert Powelson will serve the best interest of Pennsylvania consumers in their new roles on the PUC.”

The fifth member of the PUC is Kim Pizzingrilli who was sworn in as a commissioner on February 6, 2002. Her second five-year term will expire April 1, 2012. In her Senate confirmation hearings, Pizzingrilli pledged to be an independent voice for Pennsylvania’s consumers and to continue her long-term commitment to public protection and responsible regulation. Before joining the Commission, she served as Secretary of the Commonwealth.