2010 Pennsylvania Code
Title 66 - PUBLIC UTILITIES
Chapter 22 - Natural Gas Competition
2207 - Obligation to serve.

     § 2207.  Obligation to serve.
        (a)  Supplier of last resort.--
            (1)  After the effective date of this chapter, the
        natural gas distribution company shall serve as the supplier
        of last resort for residential, small commercial, small
        industrial and essential human needs customers and any other
        customer classes determined by the commission in the natural
        gas distribution company's restructuring proceeding until
        such time as the commission, pursuant to this section,
        approves an alternative supplier or suppliers to provide such
        services to any or all of the natural gas distribution
        company's customers.
            (2)  For purposes of this section, a supplier of last
        resort is a natural gas distribution company or natural gas
        supplier which is designated by the commission to provide
        natural gas supply service with respect to one or more of the
        following services:
                (i)  natural gas supply services to those customers
            who have not chosen an alternative natural gas supplier
            or who choose to be served by their supplier of last
            resort;
                (ii)  natural gas supply services to those customers
            who are refused supply service from a natural gas
            supplier; or
                (iii)  natural gas supply services to those customers
            whose natural gas supplier has failed to deliver its
            requirements.
        No customer shall have more than one supplier of last resort
        designated for any of the services set forth in this
        paragraph.
        (b)  Consumer protection.--Service by the supplier of last
     resort shall be subject to all consumer protection standards,
     including those contained in 52 Pa. Code Ch. 56 (relating to
     standards and billing practices for residential utility service)
     and to all universal service obligations.
        (c)  Natural gas distribution company.--The natural gas
     distribution company shall deliver natural gas to the extent
     that it is provided by all natural gas suppliers, or suppliers
     of last resort, as the case may be, in accordance with the
     natural gas distribution company's tariff.
        (d)  Standards of service.--Consistent with the standards set
     forth in section 1501 (relating to character of service and
     facilities) and applicable orders of the commission, a supplier
     of last resort under subsection (a)(2)(iii) shall provide
     sufficient supplies as to quantity, quality, pressure and
     location to meet the operational reliability requirements of the
     natural gas distribution company's system, including, but not
     limited to, a failure of one or more natural gas suppliers to:
            (1)  supply natural gas to their retail gas customers in
        conformance with their contractual obligations to such
        customers; or
            (2)  satisfy applicable reliability standards and
        obligations.
        (e)  Discontinuation of service.--The natural gas
     distribution company shall continue providing services as the
     supplier of last resort to all of its customers for all of the
     natural gas supply services described in subsection (a)(2)
     unless, at its discretion, it requests and receives commission
     approval to discontinue providing one or more such supplier of
     last resort obligation. In approving such a petition, the
     commission shall also approve another party as the alternative
     supplier of last resort for each customer or customer group for
     which the natural gas distribution company no longer provides
     such natural gas supply services.
        (f)  Regulations.--The commission shall promulgate
     regulations setting forth the standards for approving an
     alternative supplier of last resort consistent with the
     provisions of this title, including a mechanism to ensure that
     the rates charged by any alternate supplier of last resort are
     just and reasonable.
        (g)  Organized labor.--During the five-year period following
     the effective date of this chapter, approval of an alternative
     supplier of last resort pursuant to subsection (e) shall not be
     granted unless the entity designated by the commission to
     succeed the natural gas distribution company in the provision
     of service to these customers agrees to recognize relevant union
     and collective bargaining agreements of the natural gas
     distribution company then in place.
        (h)  Petition to become supplier of last resort.--After the
     five-year period following the effective date of this chapter,
     any party may petition the commission to become the supplier of
     last resort to some or all customers except for those customers
     identified in subsection (a)(2)(i).
        (i)  Notice required prior to market exit.--
            (1)  A natural gas supplier may not exit the market
        without providing notice as determined by the commission in
        the restructuring proceeding of the natural gas distribution
        company to its customers, the supplier of last resort and the
        natural gas distribution company.
            (2)  If firm gas supply contracts with Pennsylvania
        natural gas producers or storage or transportation capacity
        contracts used by the natural gas supplier to serve such
        retail gas customers were either assigned or released to the
        natural gas supplier or constitute capacity which was
        acquired by the natural gas supplier as the result of
        nonrenewal of a storage or transportation capacity contract
        previously held by the natural gas distribution company, the
        natural gas supplier shall offer the supplier of last resort
        or successor natural gas supplier a right of first refusal to
        utilize such Pennsylvania supply contracts or storage or
        transportation capacity contracts at its contract cost as
        long as needed to serve those customers.
            (3)  If the storage or transportation capacity contracts
        held by the natural gas supplier were acquired in another
        manner, and there was not sufficient notice given to the
        supplier of last resort and the natural gas distribution
        company, or if there is not alternative storage or
        transportation capacity available which is operationally
        sufficient to serve the market the natural gas supplier was
        serving, then the supplier of last resort shall be provided
        with a right to use such storage or transportation capacity
        as designated by the natural gas supplier, at the contract
        cost, until the supplier of last resort is able to acquire
        replacement capacity sufficient to serve its customers using
        reasonable and diligent efforts to do so.
            (4)  If a dispute arises under this subsection, the
        aggrieved party may file a complaint with the commission for
        resolution within 45 days.
        (j)  Duty involving lost customers.--To the extent that a
     natural gas supplier loses retail gas customers such that its
     capacity requirements to a natural gas distribution company are
     reduced below the level established by the commission for such
     purpose in the natural gas distribution company's restructuring
     proceeding, the natural gas supplier shall have the same
     obligations set forth in subsection (i).
        (k)  Rate after service discontinued.--In the event the
     natural gas supplier discontinues service or defaults before its
     contract with the customer expires, the retail gas customer
     shall be served by the supplier of last resort at the
     commission-approved supplier of last resort rate commencing with
     the next billing cycle. However, the retail gas customer shall
     continue to be charged the rate the customer negotiated with the
     discontinuing or defaulting natural gas supplier for the
     remainder of the billing cycle. Any difference between the cost
     incurred by the supplier of last resort and the amount payable
     by the retail gas customer shall be recovered from the natural
     gas supplier or from the bond or other security provided by the
     natural gas supplier without recourse to any retail gas customer
     not otherwise contractually committed for the difference.

        Cross References.  Section 2207 is referred to in section
     2208 of this title.