2010 Pennsylvania Code
Title 66 - PUBLIC UTILITIES
Chapter 22 - Natural Gas Competition
2211 - Rate caps.

     § 2211.  Rate caps.
        (a)  General rule.--Except as provided under subsections (d),
     (e), (f) and (g) and section 2212 (relating to city natural gas
     distribution operations), for a period from the effective date
     of this chapter until January 1, 2001, the total nongas cost
     charges of a natural gas distribution company for service to any
     retail gas customer shall not exceed the maximum nongas cost
     charges that are contained in the natural gas distribution
     company's tariff as of the effective date of this chapter.
        (b)  Recovery of deferred costs.--
            (1)  In a restructuring proceeding, the natural gas
        distribution company may identify categories of costs
        resulting from this chapter.
            (2)  The natural gas distribution company may seek
        permission in its restructuring proceeding to capitalize and
        to amortize such costs over an appropriate period to be
        determined by the commission. The amortization shall commence
        at the time when restructuring orders are issued. The natural
        gas distribution company may seek recovery of the unamortized
        balance of such costs in a future rate proceeding, and the
        commission shall allow recovery of such costs provided that
        the commission determines that such costs are reasonable and
        that the resulting rates are just and reasonable.
        (c)  Deferral of costs.--Costs recoverable under sections
     2203(6) (relating to standards for restructuring of natural gas
     utility industry) and 2206(e) (relating to consumer protections
     and customer service) in excess of amounts already reflected in
     a natural gas distribution company's rates, which are incurred
     between the date of entry of the commission's restructuring
     order and the earlier of the date on which the commission
     authorizes commencement of recovery or June 30, 2002, may be
     deferred for recovery in the future. Such deferrals shall be
     without interest.
        (d)  Circumstances for exceptions.--A natural gas
     distribution company may seek and the commission may approve an
     exception to the limitations set forth in this section under any
     of the following circumstances:
            (1)  The natural gas distribution company meets the
        requirements for extraordinary relief under section 1308(e)
        (relating to voluntary changes in rates).
            (2)  The natural gas distribution company demonstrates
        that a rate increase is necessary in order to preserve the
        reliability of the natural gas distribution system.
            (3)  The natural gas distribution company is subject to
        significant increases in the rate of Federal taxes or other
        significant increases in costs resulting from changes in law
        or regulations that would not allow the natural gas
        distribution company to earn a fair rate of return.
        (e)  Interclass and intraclass cost shifts.--Except as
     provided in section 2212, for the period from the effective date
     of this chapter until January 1, 2001, interclass or intraclass
     cost shifts are prohibited. This prohibition against cost
     shifting may be accomplished by maintaining the cost allocation
     methodology accepted by the commission for each natural gas
     distribution company in the company's most recent base rate
     proceeding.
        (f)  State tax adjustment surcharge.--The natural gas
     distribution company, other than a city natural gas distribution
     operation, shall remain subject to the State tax adjustment
     surcharge and shall be permitted to adjust its State tax
     adjustment surcharge mechanism to reflect State tax changes or
     additions. The natural gas distribution company shall also
     remain subject to existing riders or surcharges for the
     collection of nongas transition costs pursuant to Federal Energy
     Regulatory Commission decisions.
        (g)  Provisions relating to interstate pipelines.--
            (1)  Notwithstanding any other provisions of this
        chapter, if a natural gas distribution company's current base
        rate revenues reflect the margins realized through the
        utilization of firm interstate pipeline transportation and
        storage capacity to serve the interruptible market when such
        capacity is not needed to make firm retail deliveries, then
        the natural gas distribution company shall be permitted to
        increase base rates and, at the same time, reduce purchased
        gas cost rates, as described in this chapter.
            (2)  The natural gas distribution company may propose
        such a change in treatment, consistent with the following
        requirements:
                (i)  Base rates of customers who pay purchased gas
            cost rates pursuant to section 1307(f) (relating to
            sliding scale of rates; adjustments) shall be increased
            by an amount equal to the margin received for service
            provided to existing interruptible sales and
            transportation service customers using capacity reflected
            in rates established under section 1307(f) based upon the
            revenue for such services for the most recent 12-month
            period immediately preceding the application.
                (ii)  Purchased gas cost rates established pursuant
            to section 1307(f) shall be decreased by an amount equal
            to the amount by which base rates are increased in
            subparagraph (i).
                (iii)  Purchased gas cost rates established pursuant
            to section 1307(f) shall thereafter be reconciled to
            reflect the margins realized from interruptible sales and
            interruptible transportation customers utilizing capacity
            reflected in rates established under section 1307(f).
        (h)  Interstate pipeline transportation.--
            (1)  Except as specifically set forth in this subsection,
        nothing in this section or section 2204(d) (relating to
        implementation) shall prevent a natural gas distribution
        company from recovering costs paid under the terms of
        interstate pipeline transportation and storage capacity
        contracts which are not fully recovered through a release,
        assignment or transfer of such capacity to another natural
        gas supplier if such unrecovered costs arise under the terms
        of a natural gas transportation pilot program approved by the
        commission for such company on or before February 1, 1999.
            (2)  Such unrecovered interstate pipeline transportation
        and capacity costs incurred under such programs through
        October 31, 2004, may be recovered from a class or classes of
        customers in accordance with such program provided that the
        total volumetric charge for such costs does not exceed 1% of
        the volumetric charge for residential natural gas sales
        service set forth in the natural gas distribution company's
        tariff in effect at the time.
            (3)  With respect to such pilot programs, the commission
        may determine to extend such programs to include all
        customers of that company pursuant to the requirements of
        this chapter, and nothing in this section or section 2204(d)
        shall prevent unrecovered interstate pipeline and
        transportation capacity costs incurred through October 31,
        2004, under such programs from being recovered in accordance
        with such programs provided that the total volumetric charge
        for such costs does not exceed the 1% limit specified in
        paragraph (2) for pilot programs.