2010 Pennsylvania Code
Title 66 - PUBLIC UTILITIES
Chapter 28 - Restructuring of Electric Utility Industry
2807 - Duties of electric distribution companies.

     § 2807.  Duties of electric distribution companies.
        (a)  General rule.--Each electric distribution company shall
     maintain the integrity of the distribution system at least in
     conformity with the National Electric Safety Code and such other
     standards practiced by the industry in a manner sufficient to
     provide safe and reliable service to all customers connected to
     the system consistent with this title and the commission's
     regulations. In performing such duties, the electric
     distribution company shall implement procedures to require all
     electric generation suppliers to deliver energy to the electric
     distribution company at locations and in amounts which are
     adequate to meet the energy supplier's obligations to its
     customers. Subject to commission approval, the electric
     distribution company may require that the customer install, at
     the customer's expense, enhanced metering capability sufficient
     to match the energy delivered by the electric generation
     suppliers with consumption by the customer.
        (b)  Procedures for review by the commission.--There shall be
     a rebuttable presumption that the electric distribution company
     has the ability to receive energy at all points on its system
     sufficient to meet the needs of all electric generation
     suppliers' customers on its system. The electric distribution
     company shall not have an obligation to install nonstandard
     facilities, either as to type or location, for the purpose of
     receiving energy from the energy supplier unless the energy
     supplier or its customer pays the full cost of these facilities.
     Nothing in this chapter shall prevent the electric distribution
     company from upgrading its system to meet changing customer
     requirements consistent with the requirements of section 1501
     (relating to character of service and facilities), and the
     commission may establish incentive programs to encourage such
     system upgrades. Disputes concerning facilities shall be subject
     to the jurisdiction of the commission and may be initiated by
     the filing of a complaint under section 701 (relating to
     complaints) by the electric generation supplier or the customer.
        (c)  Customer billing.--Subject to the right of an end-use
     customer to choose to receive separate bills from its electric
     generation supplier, the electric distribution company may be
     responsible for billing customers for all electric services,
     consistent with the regulations of the commission, regardless of
     the identity of the provider of those services.
            (1)  Customer bills shall contain unbundled charges
        sufficient to enable the customer to determine the basis for
        those charges.
            (2)  If services are provided by an entity other than the
        electric distribution company, the entity that provides those
        services shall furnish to the electric distribution company
        billing data sufficient to enable the electric distribution
        company to bill customers.
            (3)  The electric distribution company shall not be
        required to forward payment to entities providing services to
        customers, and on whose behalf the electric distribution
        company is billing those customers, before the electric
        distribution company has received payment for those services
        from customers.
        (d)  Consumer protections and customer service.--The electric
     distribution company shall continue to provide customer service
     functions consistent with the regulations of the commission,
     including meter reading, complaint resolution and collections.
     Customer services shall, at a minimum, be maintained at the same
     level of quality under retail competition.
            (1)  The commission shall establish regulations to ensure
        that an electric distribution company does not change a
        customer's electricity supplier without direct oral
        confirmation from the customer of record or written evidence
        of the customer's consent to a change of supplier.
            (2)  The commission shall establish regulations to
        require each electric distribution company, electricity
        supplier, marketer, aggregator and broker to provide adequate
        and accurate customer information to enable customers to make
        informed choices regarding the purchase of all electricity
        services offered by that provider. Information shall be
        provided to consumers in an understandable format that
        enables consumers to compare prices and services on a uniform
        basis.
            (3)  Prior to the implementation of any restructuring
        plan under section 2806 (relating to implementation, pilot
        programs and performance-based rates), each electric
        distribution company, in conjunction with the commission,
        shall implement a consumer education program informing
        customers of the changes in the electric utility industry.
        The program shall provide consumers with information
        necessary to help them make appropriate choices as to their
        electric service. The education program shall be subject to
        approval by the commission.
        (e)  Obligation to serve.--A default service provider's
     obligation to provide electric generation supply service
     following the expiration of a generation rate cap specified
     under section 2804(4) (relating to standards for restructuring
     of electric industry) or a restructuring plan under section
     2806(f) is revised as follows:
            (1)  While an electric distribution company collects
        either a competitive transition charge or an intangible
        transition charge or until 100% of its customers have choice,
        whichever is longer, the electric distribution company shall
        continue to have the full obligation to serve, including the
        connection of customers, the delivery of electric energy and
        the production or acquisition of electric energy for
        customers.
            (2)  (Deleted by amendment).
            (3)  (Deleted by amendment).
            (3.1)  Following the expiration of an electric
        distribution company's obligation to provide electric
        generation supply service to retail customers at capped
        rates, if a customer contracts for electric generation supply
        service and the chosen electric generation supplier does not
        provide the service or if a customer does not choose an
        alternative electric generation supplier, the default service
        provider shall provide electric generation supply service to
        that customer pursuant to a commission-approved competitive
        procurement plan. The electric power acquired shall be
        procured through competitive procurement processes and shall
        include one or more of the following:
                (i)  Auctions.
                (ii)  Requests for proposal.
                (iii)  Bilateral agreements entered into at the sole
            discretion of the default service provider which shall be
            at prices which are:
                    (A)  no greater than the cost of obtaining
                generation under comparable terms in the wholesale
                market, as determined by the commission at the time
                of execution of the contract; or
                    (B)  consistent with a commission-approved
                competition procurement process. Any agreement
                between affiliated parties shall be subject to review
                and approval of the commission under Chapter 21
                (relating to relations with affiliated interests). In
                no case shall the cost of obtaining generation from
                any affiliated interest be greater than the cost of
                obtaining generation under comparable terms in the
                wholesale market at the time of execution of the
                contract.
            (3.2)  The electric power procured pursuant to paragraph
        (3.1) shall include a prudent mix of the following:
                (i)  Spot market purchases.
                (ii)  Short-term contracts.
                (iii)  Long-term purchase contracts, entered into as
            a result of an auction, request for proposal or bilateral
            contract that is free of undue influence, duress or
            favoritism, of more than four and not more than 20 years.
            The default service provider shall have sole discretion
            to determine the source and fuel type. Long-term purchase
            contracts under this subparagraph may not constitute more
            than 25% of the default service provider's projected
            default service load unless the commission, after a
            hearing, determines for good cause that a greater portion
            of load is necessary to achieve least cost procurement.
            This subparagraph shall not apply to contracts executed
            under paragraph (5).
            (3.3)  The commission may determine that a contract is
        required to be extended for a longer term of up to 20 years,
        if the extension is necessary to ensure adequate and reliable
        service at least cost to customers over time.
            (3.4)  The prudent mix of contracts entered into pursuant
        to paragraphs (3.2) and (3.3) shall be designed to ensure:
                (i)  Adequate and reliable service.
                (ii)  The least cost to customers over time.
                (iii)  Compliance with the requirements of paragraph
            (3.1).
            (3.5)  Except as set forth in paragraph (5)(ii), the
        provisions of this section shall apply to any type of energy
        purchased by a default service provider to provide electric
        generation supply service, including energy or alternative
        energy portfolio standards credits required to be purchased
        under the act of November 30, 2004 (P.L.1672, No.213), known
        as the Alternative Energy Portfolio Standards Act. The
        commission shall apply paragraph (3.4) to comparable types of
        energy sources.
            (3.6)  The default service provider shall file a plan for
        competitive procurement with the commission and obtain
        commission approval of the plan considering the standards in
        paragraphs (3.1), (3.2), (3.3) and (3.4) before the
        competitive process is implemented. The commission shall hold
        hearings as necessary on the proposed plan. If the commission
        fails to issue a final order on the plan within nine months
        of the date that the plan is filed, the plan shall be deemed
        to be approved and the default service provider may implement
        the plan as filed. Costs incurred through an approved
        competitive procurement plan shall be deemed to be the least
        cost over time as required under paragraph (3.4)(ii).
            (3.7)  At the time the commission evaluates the plan and
        prior to approval, in determining if the default electric
        service provider's plan obtains generation supply at the
        least cost, the commission shall consider the default service
        provider's obligation to provide adequate and reliable
        service to customers and that the default service provider
        has obtained a prudent mix of contracts to obtain least cost
        on a long-term, short-term and spot market basis and shall
        make specific findings which shall include the following:
                (i)  The default service provider's plan includes
            prudent steps necessary to negotiate favorable generation
            supply contracts.
                (ii)  The default service provider's plan includes
            prudent steps necessary to obtain least cost generation
            supply contracts on a long-term, short-term and spot
            market basis.
                (iii)  Neither the default service provider nor its
            affiliated interest has withheld from the market any
            generation supply in a manner that violates Federal law.
            (3.8)  Notwithstanding sections 508 (relating to power of
        the commission to vary, reform and revise contracts) and 2102
        (relating to approval of contracts with affiliated
        interests), the commission may modify contracts or disallow
        costs only when the party seeking recovery of the costs of a
        procurement plan is, after hearing, found to be at fault for
        the following:
                (i)  not complying with the commission-approved
            procurement plan; or
                (ii)  the commission of fraud, collusion or market
            manipulation with regard to these contracts.
            (3.9)  The default service provider shall have the right
        to recover on a full and current basis, pursuant to a
        reconcilable automatic adjustment clause under section 1307
        (relating to sliding scale of rates; adjustments), all
        reasonable costs incurred under this section and a
        commission-approved competitive procurement plan.
            (4)  If a customer that chooses an alternative supplier
        and subsequently desires to return to the local distribution
        company for generation service, the local distribution
        company shall treat that customer exactly as it would any new
        applicant for energy service.
            (5)  (i)  Notwithstanding paragraph (3.1), the electric
            distribution company or commission-approved alternative
            supplier may, in its sole discretion, offer large
            customers with a peak demand of 15 megawatts or greater
            at one meter at a location in its service territory any
            negotiated rate for service at all of the customers'
            locations within the service territory for any duration
            agreed upon by the electric distribution company or
            commission-approved alternative supplier and the large
            customer. The commission shall permit, but shall not
            require, an electric distribution company or commission-
            approved alternative supplier to provide service to large
            customers under this paragraph. Contract rates entered
            into under this paragraph shall be subject to review by
            the commission in order to ensure that all costs related
            to the rates are borne by the parties to the contract and
            that no costs related to the rates are borne by other
            customers or customer classes. If no costs related to the
            rates are borne by other customers or customer classes,
            the commission shall approve the contract within 90 days
            of its filing, or it shall be deemed approved by
            operation of law upon expiration of the 90 days.
            Information submitted under this paragraph shall be
            subject to the commission's procedures for the filing of
            confidential and proprietary information.
                (ii)  For purposes of providing service under this
            paragraph to customers with a peak demand of 20 megawatts
            or greater at one meter at a location within that
            distribution company's service territory, an electric
            distribution company that has completed its restructuring
            transition period as of the effective date of this
            paragraph may, in its sole discretion, acquire an
            interest in a generation facility or construct a
            generation facility specifically to meet the energy
            requirements of the customers, including the electric
            requirements of the customers' other billing locations
            within its service territory. The electric distribution
            company must commence construction of the generation
            facility or contract to acquire the generation interest
            within three years after the effective date of this
            paragraph, except that the electric distribution company
            may add to the generation facilities it commenced
            construction or contracted to acquire after this three-
            year period to serve additional load of customers for
            whom it commenced construction or contracted to acquire
            generation within three years. Nothing in this paragraph
            requires or authorizes the commission to require an
            electric distribution company to commence construction or
            acquire an interest in a generation facility. The
            electric distribution company's interest in the
            generation facility it built or contracted to acquire
            shall be no larger than necessary to meet peak demand of
            customers served under this subparagraph. During times
            when the customer's demand is less than the electric
            distribution company's generation interest, the electric
            distribution company may sell excess power on the
            wholesale market. At no time shall the costs associated
            with the generating facility interests be included in
            rate base or otherwise reflected in rates. The generation
            facility interests shall not be commission-regulated
            assets.
            (6)  A default service plan approved by the commission
        prior to the effective date of this section shall remain in
        effect through its approved term. At its sole discretion, the
        default service provider may propose amendments to its
        approved plan that are consistent with this section, and the
        commission shall issue a decision whether to approve or
        disapprove the proposed amendments within nine months of the
        date that the amendments are filed. If the commission fails
        to issue a final order within nine months, the amendments
        shall be deemed to be approved and the default service
        provider may implement the amendments as filed.
            (7)  The default service provider shall offer residential
        and small business customers a generation supply service rate
        that shall change no more frequently than on a quarterly
        basis. All default service rates shall be reviewed by the
        commission to ensure that the costs of providing service to
        each customer class are not subsidized by any other class.
        (f)  Smart meter technology and time of use rates.--
            (1)  Within nine months after the effective date of this
        paragraph, electric distribution companies shall file a smart
        meter technology procurement and installation plan with the
        commission for approval. The plan shall describe the smart
        meter technologies the electric distribution company proposes
        to install in accordance with paragraph (2).
            (2)  Electric distribution companies shall furnish smart
        meter technology as follows:
                (i)  Upon request from a customer that agrees to pay
            the cost of the smart meter at the time of the request.
                (ii)  In new building construction.
                (iii)  In accordance with a depreciation schedule not
            to exceed 15 years.
            (3)  Electric distribution companies shall, with customer
        consent, make available direct meter access and electronic
        access to customer meter data to third parties, including
        electric generation suppliers and providers of conservation
        and load management services.
            (4)  In no event shall lost or decreased revenues by an
        electric distribution company due to reduced electricity
        consumption or shifting energy demand be considered any of
        the following:
                (i)  A cost of smart meter technology recoverable
            under a reconcilable automatic adjustment clause under
            section 1307(b), except that decreased revenues and
            reduced energy consumption may be reflected in the
            revenue and sales data used to calculate rates in a
            distribution rate base rate proceeding filed under
            section 1308 (relating to voluntary changes in rates).
                (ii)  A recoverable cost.
            (5)  By January 1, 2010, or at the end of the applicable
        generation rate cap period, whichever is later, a default
        service provider shall submit to the commission one or more
        proposed time-of-use rates and real-time price plans. The
        commission shall approve or modify the time-of-use rates and
        real-time price plan within six months of submittal. The
        default service provider shall offer the time-of-use rates
        and real-time price plan to all customers that have been
        provided with smart meter technology under paragraph
        (2)(iii). Residential or commercial customers may elect to
        participate in time-of-use rates or real-time pricing. The
        default service provider shall submit an annual report to the
        price programs and the efficacy of the programs in affecting
        energy demand and consumption and the effect on wholesale
        market prices.
            (6)  The provisions of this subsection shall not apply to
        an electric distribution company with 100,000 or fewer
        customers.
            (7)  An electric distribution company may recover
        reasonable and prudent costs of providing smart meter
        technology under paragraph (2)(ii) and (iii), as determined
        by the commission. This paragraph includes annual
        depreciation and capital costs over the life of the smart
        meter technology and the cost of any system upgrades that the
        electric distribution company may require to enable the use
        of the smart meter technology which are incurred after the
        effective date of this paragraph, less operating and capital
        cost savings realized by the electric distribution company
        from the installation and use of the smart meter technology.
        Smart meter technology shall be deemed to be a new service
        offered for the first time under section 2804(4)(vi). An
        electric distribution company may recover smart meter
        technology costs:
                (i)  through base rates, including a deferral for
            future base rate recovery of current basis with carrying
            charge as determined by the commission; or
                (ii)  on a full and current basis through a
            reconcilable automatic adjustment clause under section
            1307.
        (g)  Definition.--As used in this section, the term "smart
     meter technology" means technology, including metering
     technology and network communications technology capable of
     bidirectional communication, that records electricity usage on
     at least an hourly basis, including related electric
     distribution system upgrades to enable the technology. The
     technology shall provide customers with direct access to and use
     of price and consumption information. The technology shall also:
            (1)  Directly provide customers with information on their
        hourly consumption.
            (2)  Enable time-of-use rates and real-time price
        programs.
            (3)  Effectively support the automatic control of the
        customer's electricity consumption by one or more of the
        following as selected by the customer:
                (i)  the customer;
                (ii)  the customer's utility; or
                (iii)  a third party engaged by the customer or the
            customer's utility.
     (July 17, 2007, P.L.120, No.36, eff. imd.; Oct. 15, 2008,
     P.L.1592, No.129, eff. 30 days)

        2008 Amendment.  Act 129 amended subsec. (e) and added
     subsecs. (f) and (g).