2010 Pennsylvania Code
Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS
Chapter 74 - Generation Choice for Customers of Electric Cooperatives
7406 - Competition by electric cooperatives.

     § 7406.  Competition by electric cooperatives.
        (a)  Service rights.--Electric cooperative corporations may
     provide generation electric service to any person and at any
     location within this Commonwealth. In the case where an electric
     cooperative corporation provides generation electric service at
     retail to a person located outside of its service territory and
     within the franchised territory of an electric utility subject
     to 66 Pa.C.S. (relating to public utilities), it must first have
     been certified by the commission pursuant to subsection (e) and,
     unless it is otherwise exempt under subsection (d), it shall
     comply with all relevant terms, conditions and obligations
     applicable to electric generation suppliers pursuant to 66
     Pa.C.S. Electric cooperative corporations shall not be required
     to be licensed by the commission and shall be exempt as
     otherwise provided for in this chapter in any and all other
     respects from the jurisdiction and control of the commission. To
     the extent such services are not provided for resale to others,
     such persons must be members of the electric cooperative
     corporation. It shall not be necessary for an electric
     cooperative corporation to amend its bylaws to permit it to
     provide service to any person at any location within this
     Commonwealth. All other utilities and persons owning, operating
     or controlling electric transmission or distribution facilities
     within this Commonwealth shall be obligated to transmit and
     deliver generation service by electric cooperative corporations
     at the same prices and at the same terms and conditions as are
     approved by the commission or the Federal Energy Regulatory
     Commission for similar service to others.
        (b)  New load termination conditions.--In the case where an
     electric cooperative corporation provides generation service
     under subsection (a) to a person not located within its
     exclusive retail electric service territory and, consistent with
     any then-existing contract rights of the electric cooperative
     corporation, such person subsequently desires to receive
     generation service from another source, the departing member
     shall have the right to do so, contingent upon the full advance
     satisfaction of the following conditions, unless waived by the
     electric cooperative corporation:
            (1)  The departing member must give written notice of
        intent to receive generation service from another source to
        the electric cooperative corporation prior to the initiation
        of the new generation service.
            (2)  The departing member must have made all payments for
        electric service or other services or products rendered to
        date by the electric cooperative corporation.
        (c)  Relation to utilities gross receipts tax.--
            (1)  To the extent that an electric cooperative
        corporation provides generation electric service at retail to
        a person in this Commonwealth and located outside of its
        service territory as set forth in subsection (a), then for
        that limited purpose and in that limited area it shall be
        deemed to be the statutory equivalent of an "electric light
        company," a "waterpower company" and a "hydro-electric
        company" for purposes of section 1101 of the act of March 4,
        1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
            (2)  To the extent that an electric cooperative
        corporation provides generation electric service at retail to
        a person in this Commonwealth and located outside of its
        service territory as set forth in subsection (a) and to the
        extent that the tax on sales of electric energy under section
        1101 of the Tax Reform Code of 1971 has not previously been
        imposed on such generation electric service or electric
        energy, then for that limited purpose and in that limited
        area such retail sales to end-use consumers under this
        chapter shall be deemed "sales of electric energy" for
        purposes of section 1101 of the Tax Reform Code of 1971.
        (d)  Small cooperative exceptions.--Because of the relatively
     small number of consumers which electric cooperative
     corporations serve, their relatively small electric loads, the
     nonprofit nature of their operations and their other unique
     characteristics, the General Assembly finds that it may be
     unduly burdensome and costly for small electric cooperative
     corporations to comply with the relevant terms, conditions and
     obligations applicable to electric generation suppliers pursuant
     to 52 Pa. Code Ch. 56 (relating to standards and billing
     practices for residential utility service) and regulations
     promulgated under 66 Pa.C.S. Ch. 28 (relating to restructuring
     of electric utility industry) when serving persons located
     outside of their service territories. Notwithstanding the
     provisions of subsection (a) requiring an electric cooperative
     corporation when serving persons outside of its territory to
     comply with relevant terms, conditions and obligations of
     electric generation suppliers pursuant to 52 Pa. Code Ch. 56 and
     regulations promulgated under 66 Pa.C.S. Ch. 28, an electric
     cooperative corporation may petition the commission to grant
     exemption from compliance with any or all such relevant terms,
     conditions or obligations or otherwise may petition the
     commission to establish and grant streamlined or reduced terms,
     conditions or standards. The commission shall approve such
     exemption, streamlining or reduction upon reaching a finding
     that the proposal is in the public interest. Exemptions shall
     not be transferable to any entity without prior commission
     approval. To the extent that an electric cooperative
     corporation, on its own or in partnership or combination with
     any other entity which operates on a for-profit basis, by sales
     outside of its service territory, increases its total net
     electric load by more than 20% of its total net electric load as
     of the effective date of this chapter, this subsection shall not
     apply. Nothing in this chapter shall be construed as allowing
     any entity, either through formation of a cooperative or through
     any other method described in this chapter, to avoid
     responsibility for paying a competitive transition charge that
     it would otherwise be required to pay pursuant to 66 Pa.C.S. Ch.
     28.
        (e)  Commission certification.--Prior to an electric
     cooperative corporation having the right to provide generation
     electric service at retail to a person located outside of its
     service territory as defined by Subchapter C of Chapter 73
     (relating to unincorporated area certified territory) and within
     the franchised territory of an electric utility subject to 66
     Pa.C.S., it must first have obtained from the commission a
     certification of its financial responsibility and technical
     capability, including the assurance that adequate reserve
     margins of electric supply are maintained. An application for
     certification by an electric cooperative corporation must be
     made to the commission in writing, be verified by oath or
     affirmation and be in such form and contain such information as
     the commission may require. A certification shall be issued by
     the commission to any qualified applicant if it is found that
     the applicant is fit, willing and able to perform properly the
     service proposed in conformity with the provisions of this
     chapter. No certification issued under this subsection may be
     transferred without prior commission approval.

        Cross References.  Section 7406 is referred to in section
     2810 of Title 66 (Public Utilities).