An Act amending Title 66 (Public Utilities) of the Pennsylvania Consolidated Statutes, in restructuring of electric utility industry, providing for large load customers; and making editorial changes.

PRINTER'S NO. 1358
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 1114
Session of
2025
INTRODUCED BY MUTH, CAPPELLETTI, SAVAL, BROWN, KANE, KEARNEY,
COMITTA AND L. WILLIAMS, DECEMBER 15, 2025
REFERRED TO CONSUMER PROTECTION AND PROFESSIONAL LICENSURE,
DECEMBER 15, 2025
AN ACT
Amending Title 66 (Public Utilities) of the Pennsylvania
Consolidated Statutes, in restructuring of electric utility
industry, providing for large load customers; and making
editorial changes.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Chapter 28 heading of Title 66 of the
Pennsylvania Consolidated Statutes is amended to read:
CHAPTER 28
RESTRUCTURING OF ELECTRIC UTILITY INDUSTRY
AND LARGE LOAD CUSTOMERS
Section 2. Chapter 28 of Title 66 is amended by adding a
subchapter heading immediately preceding section 2801 to read:
SUBCHAPTER A
RESTRUCTURING OF ELECTRIC UTILITY INDUSTRY
Section 3. Sections 2801, 2802(12), (13), (14) and (15),
2803, 2804(4), (10) and (16)(i), 2805(b)(1)(i), 2806(a), (c) and
(g), 2807(b), 2808(b), (c)(1) and (5) and (e) introductory
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paragraph, 2809(a), (b), (c) and (d), 2810(h) and (j) and
2812(a)(2) introductory paragraph, (b)(5)(ii), (f) and (g) of
Title 66 are amended to read:
§ 2801. Short title of [chapter] subchapter.
This [chapter] subchapter shall be known and may be cited as
the Electricity Generation Customer Choice and Competition Act.
§ 2802. Declaration of policy.
The General Assembly finds and declares as follows:
* * *
(12) The purpose of this [chapter] subchapter is to
modify existing legislation and regulations and to establish
standards and procedures in order to create direct access by
retail customers to the competitive market for the generation
of electricity while maintaining the safety and reliability
of the electric system for all parties. Reliable electric
service is of the utmost importance to the health, safety and
welfare of the citizens of the Commonwealth. Electric
industry restructuring should ensure the reliability of the
interconnected electric system by maintaining the efficiency
of the transmission and distribution system.
(13) Under current law and regulation there exists some
competition in the wholesale market for the generation of
electricity, but the generation, transmission, distribution
and retail sale of electricity is provided generally by
public utilities under bundled rates regulated by the
commission. The procedures established under this [chapter]
subchapter provide for a fair and orderly transition from the
current regulated structure to a structure under which retail
customers will have direct access to a competitive market for
the generation and sale or purchase of electricity.
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(14) This [chapter] subchapter requires electric
utilities to unbundle their rates and services and to provide
open access over their transmission and distribution systems
to allow competitive suppliers to generate and sell
electricity directly to consumers in this Commonwealth. The
generation of electricity will no longer be regulated as a
public utility function except as otherwise provided for in
this chapter. Electric generation suppliers will be required
to obtain licenses, demonstrate financial responsibility and
comply with such other requirements concerning service as the
commission deems necessary for the protection of the public.
(15) In establishing the standards for the transition to
and creation of a competitive electric market, heretofore,
public utilities generally have had an obligation to serve
customers within their defined service territories;
consistent with that obligation, have undertaken long-term
investments in generation, transmission and distribution
facilities in order to meet the needs of their customers; and
have entered into long-term power supply agreements as
required by Federal law. In many instances, these investments
and agreements have created costs which may not be
recoverable in a competitive market. The commission is
empowered under this [chapter] subchapter to determine the
level of transition or stranded costs for each electric
utility and to provide a mechanism, the competitive
transition charge, for recovery of an appropriate amount of
such costs in accordance with the standards established in
this chapter.
* * *
§ 2803. Definitions.
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The following words and phrases when used in this [chapter]
subchapter shall have the meanings given to them in this section
unless the context clearly indicates otherwise:
"Aggregator" or "market aggregator." An entity, licensed by
the commission, that purchases electric energy and takes title
to electric energy as an intermediary for sale to retail
customers.
"Bilateral contract." An agreement, as approved by the
commission, reached by two parties, each acting in its own
independent self-interest, as a result of negotiations free of
undue influence, duress or favoritism, in which the electric
energy supplier agrees to sell and the electric distribution
company agrees to buy a quantity of electric energy at a
specified price for a specified period of time under terms
agreed to by both parties, and which follows a standard industry
template widely accepted in the industry or variations thereto
accepted by the parties. Standard industry templates may include
the EEI Master Agreement for physical energy purchases and sales
and the ISDA Master Agreement for financial energy purchases and
sales.
"Broker" or "marketer." An entity, licensed by the
commission, that acts as an agent or intermediary in the sale
and purchase of electric energy but that does not take title to
electric energy.
"Competitive transition charge." A nonbypassable charge
applied to the bill of every customer accessing the transmission
or distribution network which (charge) is designed to recover an
electric utility's transition or stranded costs as determined by
the commission under sections 2804 (relating to standards for
restructuring of electric industry) and 2808 (relating to
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competitive transition charge).
"Consumer." A retail electric customer.
"Customer." A retail electric customer.
"Default service provider." An electric distribution company
within its certified service territory or an alternative
supplier approved by the commission that provides generation
service to retail electric customers who:
(1) contract for electric power, including energy and
capacity, and the chosen electric generation supplier does
not supply the service; or
(2) do not choose an alternative electric generation
supplier.
"Direct access." The right of electric generation suppliers
and end-use customers to utilize and interconnect with the
electric transmission and distribution system on a
nondiscriminatory basis at rates, terms and conditions of
service comparable to the transmission and distribution
companies' own use of the system to transport electricity from
any generator of electricity to any end-use customer.
"Electric distribution company." The public utility
providing facilities for the jurisdictional transmission and
distribution of electricity to retail customers, except building
or facility owners/operators that manage the internal
distribution system serving such building or facility and that
supply electric power and other related electric power services
to occupants of the building or facility.
"Electric generation supplier" or "electricity supplier." A
person or corporation, including municipal corporations which
choose to provide service outside their municipal limits except
to the extent provided prior to the effective date of this
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[chapter] subchapter, brokers and marketers, aggregators or any
other entities, that sells to end-use customers electricity or
related services utilizing the jurisdictional transmission or
distribution facilities of an electric distribution company or
that purchases, brokers, arranges or markets electricity or
related services for sale to end-use customers utilizing the
jurisdictional transmission and distribution facilities of an
electric distribution company. The term excludes building or
facility owner/operators that manage the internal distribution
system serving such building or facility and that supply
electric power and other related power services to occupants of
the building or facility. The term excludes electric cooperative
corporations except as provided in 15 Pa.C.S. Ch. 74 (relating
to generation choice for customers of electric cooperatives).
"End-use customer." A retail electric customer.
"Reliability." Includes adequacy and security. As used in
this definition, "adequacy" means the provision of sufficient
generation, transmission and distribution capacity so as to
supply the aggregate electric power and energy requirements of
consumers, taking into account scheduled and unscheduled outages
of system facilities; and "security" means designing,
maintaining and operating a system so that it can handle
emergencies safely while continuing to operate.
"Renewable resource." Includes technologies such as solar
photovoltaic energy, solar thermal energy, wind power, low-head
hydropower, geothermal energy, landfill and mine-based methane
gas, energy from waste and sustainable biomass energy.
"Retail customer." A retail electric customer.
"Retail electric customer." A direct purchaser of electric
power. The term excludes an occupant of a building or facility
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where the owners/operators manage the internal distribution
system serving such building or facility and supply electric
power and other related power services to occupants of the
building or facility; where such owners/operators are direct
purchasers of electric power; and where the occupants are not
direct purchasers.
"Transition or stranded costs." An electric utility's known
and measurable net electric generation-related costs, determined
on a net present value basis over the life of the asset or
liability as part of its restructuring plan, which traditionally
would be recoverable under a regulated environment but which may
not be recoverable in a competitive electric generation market
and which the commission determines will remain following
mitigation by the electric utility. This term includes:
(1) Regulatory assets and other deferred charges
typically recoverable under current regulatory practice, the
unfunded portion of the utility's projected nuclear
generating plant decommissioning costs and cost obligations
under contracts with nonutility generating projects which
have received a commission order, the recoverability of which
shall be determined under section 2808(c)(1) (relating to
competitive transition charge).
(2) Prudently incurred costs related to cancellation,
buyout, buydown or renegotiation of nonutility generating
projects consistent with section 527 (relating to
cogeneration rules and regulations), the recoverability of
which shall be determined pursuant to section 2808(c)(2).
(3) The following costs, the recoverability of which
shall be determined pursuant to section 2808(c)(3):
(i) Net plant investments and costs attributable to
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the utility's existing generation plants and facilities.
(ii) The utility's disposal of spent nuclear fuel.
(iii) The utility's long-term purchase power
commitments other than the costs defined in paragraphs
(1) and (2).
(iv) Retirement costs attributable to the utility's
existing generating plants other than the costs defined
in paragraph (1).
(v) Other transition costs of the utility, including
costs of employee severance, retraining, early
retirement, outplacement and related expenses, at
reasonable levels, for employees who are affected by
changes that occur as a result of the restructuring of
the electric industry occasioned by this [chapter]
subchapter.
The term includes any costs attributable to physical plants no
longer used and useful because of the transition to retail
competition. The term excludes any amounts previously disallowed
by the commission as imprudently incurred. To the extent that
the recoverability of amounts that are sought to be included as
transition or stranded costs are subject to appellate review as
of the time of the commission determination, any determination
to include such costs shall be reversed to the extent required
by the results of that appellate review.
"Transmission and distribution costs." All costs directly or
indirectly incurred to provide transmission and distribution
services to retail electric customers. This includes the return
of and return on facilities and other capital investments
necessary to provide transmission and distribution services and
associated operating expenses, including applicable taxes.
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"Universal service and energy conservation." Policies,
protections and services that help low-income customers to
maintain electric service. The term includes customer assistance
programs, termination of service protection and policies and
services that help low-income customers to reduce or manage
energy consumption in a cost-effective manner, such as the low-
income usage reduction programs, application of renewable
resources and consumer education.
§ 2804. Standards for restructuring of electric industry.
The following interdependent standards shall govern the
commission's assessment and approval of each public utility's
restructuring plan, oversight of the transition process and
regulation of the restructured electric utility industry:
* * *
(4) The following caps on electric utility rates shall
apply:
(i) For a period of 54 months from the effective
date of this [chapter] subchapter or until an electric
distribution utility is no longer recovering its
transition or stranded costs through a competitive
transition charge or intangible transition charge and all
the customers of an electric distribution utility can
choose an alternative provider of electric generation,
whichever is shorter:
(A) the total charges of an electric
distribution utility for service to any customer who
purchases generation from that utility shall not
exceed the total charges that have been approved by
the commission for such service as of the effective
date of this [chapter] subchapter; and
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(B) for customers who purchase generation from a
supplier other than the electric distribution
utility, the charges of the utility for non-
generation services that are regulated as of the
effective date of this [chapter] subchapter,
exclusive of the competitive transition charge and
intangible transition charge, shall not exceed the
non-generation charges that have been approved by the
commission for such service as of the effective date
of this [chapter] subchapter.
(ii) In addition to the rate cap set forth in
subparagraph (i), for a period of nine years from the
effective date of this [chapter] subchapter or until an
electric distribution utility is no longer recovering its
transition or stranded costs through a competitive
transition charge or intangible transition charge and all
customers of an electric distribution utility can choose
an alternative provider of electric generation, whichever
is shorter, the generation component of a utility's
charges to customers who purchase generation from the
utility, including the competitive transition charge and
intangible transition charge, shall not exceed the
generation component charged to the customers that has
been approved by the commission for such service as of
the effective date of this [chapter] subchapter.
(iii) An electric distribution utility may seek, and
the commission may approve, an exception to the
limitations set forth in subparagraphs (i) and (ii) only
in any of the following circumstances:
(A) The electric distribution utility meets the
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requirements for extraordinary rate relief under
section 1308(e) (relating to voluntary changes in
rates).
(B) Either the electric distribution utility is
required to begin payment under contracts with
nonutility generation projects that have received
commission orders, has been unable to mitigate such
costs, such costs are not recoverable in a
competitive generation market and such costs were not
previously covered in the competitive transition
charge or intangible transition charge, or the
utility prudently incurs costs related to
cancellation, buyout, buydown or renegotiation of
nonutility generating project obligations of the
utility consistent with section 527 (relating to
cogeneration rules and regulations) and such costs
were not previously covered in the competitive
transition charge or intangible transition charge.
Costs related to cancellation, buyout, buydown or
renegotiation shall be recovered from ratepayers over
a period not to exceed three years, unless the
commission determines within its discretion to
require a longer recovery period due to the magnitude
of such costs, but shall be accounted for by the
utility on a levelized basis over the total period in
which the generation portion of the utility's rates
are capped.
(C) The electric distribution utility is subject
to significant increases in the rates of Federal or
State taxes or other significant changes in law or
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regulations that would not allow the utility to earn
a fair rate of return.
(D) The electric distribution utility is subject
to significant increases in the unit rate of fuel for
utility generation or the price of purchased power
that are outside of the control of the utility and
that would not allow the utility to earn a fair rate
of return.
(E) The electric distribution utility is
directed by the commission or an independent system
operator or its functional equivalent to make
expenditures to repair or upgrade its transmission or
distribution system.
(F) The electric distribution utility seeks to
increase its allowance for nuclear decommissioning
costs to reflect new information not available at the
time the utility's existing rates were determined,
and such costs are not recoverable in the competitive
generation market and are not covered in the
competitive transition charge or intangible
transition charge, and such costs would not allow the
utility to earn a fair rate of return.
(G) As permitted by paragraph (16).
(iv) Consistent with the requirements of due
process, the commission may expedite proceedings that
invoke the provisions of subparagraph (iii).
(v) If an electric distribution utility rolls its
energy cost rate into base rates at a combined level that
does not exceed its combined level of such rates which
have been approved by the commission as of the effective
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date of this [chapter] subchapter, the utility shall not
be required to reduce its capped rates below the capped
level upon the complaint of any party if the commission
determines that any excess earnings achieved under the
cap are being utilized to mitigate transition or stranded
costs for the benefit of ratepayers or to offset other
known and measurable cost increases that would be
recoverable under traditional ratemaking but are not
included within the capped rates.
(vi) This paragraph shall not apply to new services
offered for the first time after the effective date of
this [chapter] subchapter.
* * *
(10) The commission shall establish rates for
jurisdictional transmission and distribution services and
shall continue to regulate distribution services for new and
existing customers in accordance with this [chapter]
subchapter and Chapter 13 (relating to rates and rate
making).
* * *
(16) The following shall apply:
(i) The commission shall issue regulations that
permit the electric distribution company to recover any
change in its State tax liability under sections 2806(h),
2809(c) (relating to requirements for electric generation
suppliers) and 2810 (relating to revenue-neutral
reconciliation) or in its liability under 52 Pa. Code §§
69.51 through 69.56 (relating to inclusion of State taxes
and gross receipts taxes in base rates) to the extent
that the resulting rate does not exceed the rate cap
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established in this section except as provided in this
[chapter] subchapter.
* * *
§ 2805. Regionalism and reciprocity.
* * *
(b) Electric cooperatives, municipalities and other electric
generation suppliers.--
(1) In order to make the benefits of competition in the
generation and sale of electricity as widely available as
possible to retail customers and to provide open, fair and
nondiscriminatory access to all electric generation
suppliers:
(i) Consistent with 15 Pa.C.S. Ch. 74 (relating to
generation choice for customers of electric
cooperatives), no electric cooperative or municipality
which distributes electricity to end-use customers may
utilize the transmission or distribution system of an
electric utility regulated by the commission for the
purpose of supplying electricity to an end-use customer
unless the electric cooperative or municipality provides
open and nondiscriminatory access and allows other
electric generation suppliers to utilize its facilities,
including any facilities it is entitled to provide to
third parties pursuant to contract, to make sales to the
end-use customers it serves. A borough may prohibit
electric generation suppliers from serving end-use
customers within its borough limits; however, such a
borough shall be prohibited from providing generation
service to end-use customers outside of its borough
limits which it did not serve prior to the effective date
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of this [chapter] subchapter.
* * *
§ 2806. Implementation, pilot programs and performance-based
rates.
(a) General rule.--The generation of electricity shall no
longer be regulated as a public utility service or function
except as otherwise provided for in this [chapter] subchapter at
the conclusion of a transition and phase-in period beginning on
the effective date of this chapter and ending, consistent with
the commission's discretion under this section, January 1, 2001.
As of January 1, 2001, consistent with the commission's
discretion under this section, all customers of electric
distribution companies in this Commonwealth shall have the
opportunity to purchase electricity from their choice of
electric generation suppliers. The ultimate choice of the
electric generation supplier is to rest with the consumer.
* * *
(c) Additional time.--
(1) The commission may determine that an additional six-
month transition period is necessary prior to the January 1,
1999, implementation date. A determination under this
subsection must be made at least 45 days in advance of the
scheduled date for implementation and must be based on one or
more of the following considerations:
(i) Implementation would materially affect the
reliability of the electric system.
(ii) Federal approvals necessary for the
implementation of the provisions of this [chapter]
subchapter have not been granted.
(iii) Communications and information systems
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necessary for the implementation of retail access have
not been installed for reasons beyond the utility's
control, as measured by appropriate industry standards.
(iv) Pennsylvania generators would be disadvantaged
due to lack of regional reciprocity with respect to
direct access.
(v) The interests of Pennsylvania consumers and the
competitive position of Pennsylvania business and
industry would be materially affected.
(vi) Such other consideration as would materially
affect the orderly implementation of the legislative
purpose of this [chapter] subchapter under section
2802(12) through (21) (relating to declaration of
policy).
(2) Consistent with the considerations listed in
paragraph (1), the commission may determine that an
additional six-month transition period is necessary. This
determination must be made by the commission by May 15, 1999.
* * *
(g) Retail access pilot programs.--As of the effective date
of this [chapter] subchapter, the commission has authority to
order electric utilities to submit proposals for retail access
pilot programs to begin April 1, 1997. The commission shall
provide guidelines for retail access pilot programs by order.
(1) In order to determine whether all customers classes
can benefit from competitive markets, utilities shall tailor
proposed retail access pilot programs to accommodate the
specific geographic, demographic and socioeconomic
characteristics of their customer base. Retail access pilot
programs must include an equal opportunity for the broadest
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practical direct access by all customer classes to electric
generation suppliers.
(2) The minimum period of time for a retail access pilot
program shall be one year and shall include an evaluation
process as directed by the commission.
(3) In order to ensure the safety and reliability of the
generation of electricity in this Commonwealth, participation
in the retail access pilot programs shall be limited to
electricity suppliers subject to commission licensure or
certification.
(i) Each participating electricity supplier shall do
all of the following:
(A) Certify to the commission that it will pay
and in subsequent years has paid the full amount of
taxes imposed by Articles II and XI of the act of
March 4, 1971 (P.L.6, No.2), known as the Tax Reform
Code of 1971, and any tax imposed by this [chapter]
subchapter.
(B) Provide the commission with the address of
the participant's principal office in this
Commonwealth or the address of the participant's
registered agent in this Commonwealth, the latter
being the address at which the participant may be
served process.
(C) Agree that it shall be subject to all taxes
imposed by the Tax Reform Code of 1971 and any tax
imposed by this [chapter] subchapter.
(ii) Failure of an electricity supplier to pay a tax
referred to in subparagraph (i) or to otherwise comply
with the provisions of this paragraph shall be cause for
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the commission to revoke the license of the electricity
supplier.
(iii) If an electricity supplier, other than an
electric distribution company, does not pay the tax
imposed upon gross receipts under section 1101 of the Tax
Reform Code of 1971 or this [chapter] subchapter, the
electric distribution company to whose retail customer
the electricity supplier provided generation service
shall remit the unpaid tax, as a tax on the use of
electricity in this Commonwealth, to the Department of
Revenue and may collect or seek reimbursement of the tax
so paid from the electricity provider or any other
appropriate party that used the electricity in this
Commonwealth. The department shall collect and enforce
the use tax herein provided under section 1102 of the Tax
Reform Code of 1971. Failure of the electric distribution
company to pay the amount within 30 days after notice
provided by the department shall cause interest to be
imposed on the electric distribution company in
accordance with Article XI of the Tax Reform Code of
1971. Interest shall be calculated from the 31st day
after the department gives the notice required in this
subparagraph. An electric distribution company or other
appropriate person may challenge the imposition of the
tax and interest by filing a petition with the department
not later than 30 days after the date on which the tax
became due.
(4) The percentage of utility load committed to a retail
access pilot program must be approximately 5% of utility's
peak load for each customer class. Waivers of this condition
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may be considered by the commission for economic development
purposes or special circumstances.
* * *
§ 2807. Duties of electric distribution companies.
* * *
(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] subchapter 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.
* * *
§ 2808. Competitive transition charge.
* * *
(b) Period for collecting competitive transition charge.--
The competitive transition charge shall be included on bills to
customers for a period not to exceed nine years from the
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effective date of this [chapter] subchapter unless an
alternative payment methodology is mutually agreed upon by the
customer and the utility or unless the commission in its
discretion and for good cause shown orders an alternative
payment period. In establishing the length of the period for
collection of the competitive transition charge, the commission
shall consider the effect on the ability of the Commonwealth to
compete in attracting industry and jobs, on the financial health
of electric utilities and other relevant factors.
(c) Determination of competitive transition charge.--In
determining the level of transition or stranded costs that an
electric utility may recover through the competitive transition
charge, the commission shall apply the following principles:
(1) The commission shall allow recovery of regulatory
assets and other deferred charges typically recoverable under
current regulatory practice, the unfunded portion of the
utility's projected nuclear generating plant decommissioning
costs and cost obligations under contracts with nonutility
generating projects that have received a commission order.
Nothing in this [chapter] subchapter shall be construed as
requiring an electric utility or a nonutility generating
project to enter into an arrangement to buy down, buy out and
terminate or otherwise restructure a contract or as
authorizing the commission to require a utility to pursue
such an arrangement with a nonutility generating project.
* * *
(5) Of equal importance to the mitigation efforts under
paragraph (4), the commission shall consider efforts
undertaken over time, prior to the enactment of this
[chapter] subchapter, to reduce or moderate customer rate
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levels while maintaining safe and efficient operations.
* * *
(e) Use of transition bonds.--After the effective date of
this [chapter] subchapter, a utility may apply to the commission
for a qualified rate order under section 2812 for some or all of
its transition or stranded costs.
* * *
§ 2809. Requirements for electric generation suppliers.
(a) License requirement.--No person or corporation,
including municipal corporations which choose to provide service
outside their municipal limits except to the extent provided
prior to the effective date of this [chapter] subchapter,
brokers and marketers, aggregators and other entities, shall
engage in the business of an electric generation supplier in
this Commonwealth unless the person or corporation holds a
license issued by the commission. Consistent with 15 Pa.C.S. Ch.
74 (relating to generation choice for customers of electric
cooperatives), electric cooperative corporations must possess a
certificate for service to supply generation services beyond
their territorial limits.
(b) License application and issuance.--An application for an
electric generation supplier license 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
by its regulations require. A license shall be issued to any
qualified applicant, authorizing the whole or any part of the
service covered by the application, if it is found that the
applicant is fit, willing and able to perform properly the
service proposed and to conform to the provisions of this title
and the lawful orders and regulations of the commission under
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this title, including the commission's regulations regarding
standards and billing practices, and that the proposed service,
to the extent authorized by the license, will be consistent with
the public interest and the policy declared in this [chapter]
subchapter; otherwise, such application shall be denied.
(c) Financial responsibility.--
(1) In order to ensure the safety and reliability of the
generation of electricity in this Commonwealth, no energy
supplier license shall be issued or remain in force unless
the holder complies with all of the following:
(i) Furnishes a bond or other security approved by
the commission in form and amount to ensure the financial
responsibility of the electric generation supplier and
the supply of electricity at retail in accordance with
contracts, agreements or arrangements.
(ii) Certifies to the commission that it will pay
and in subsequent years has paid the full amount of taxes
imposed by Articles II and XI of the act of March 4, 1971
(P.L.6, No.2), known as the Tax Reform Code of 1971, and
any tax imposed by this [chapter] subchapter.
(iii) Provides the commission with the address of
the participant's principal office in this Commonwealth
or the address of the participant's registered agent in
this Commonwealth, the latter being the address at which
the participant may be served process.
(iv) Agrees that it shall be subject to all taxes
imposed by the Tax Reform Code of 1971 and any tax
imposed by this chapter.
Failure of an electricity supplier to pay a tax referred to
in this paragraph or to otherwise comply with the provisions
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of this paragraph shall be cause for the commission to revoke
the license of the electricity supplier.
(2) If an electricity supplier other than an electric
distribution company does not pay the tax imposed upon gross
receipts under section 1101 of the Tax Reform Code of 1971 or
this [chapter] subchapter, the electric distribution company
to whose retail customer the electricity supplier provided
generation service shall remit the unpaid tax, as a tax on
the use of electricity in this Commonwealth, to the
Department of Revenue and may collect or seek reimbursement
of the tax so paid from the electricity provider or any other
appropriate party that used the electricity in this
Commonwealth. The department shall collect and enforce the
use tax herein provided under section 1102 of the Tax Reform
Code of 1971. Failure of the electric distribution company to
pay the amount within 30 days after notice provided by the
department shall cause interest to be imposed on the electric
distribution company in accordance with Article XI of the Tax
Reform Code of 1971. Interest shall be calculated from the
31st day after the department gives the notice required in
this paragraph. An electric distribution company or other
appropriate person may challenge the imposition of the tax
and interest by filing a petition with the department not
later than 30 days after the date on which the tax became
due.
(d) Transferability of licenses.--No license issued under
this [chapter] subchapter may be transferred without prior
commission approval.
* * *
§ 2810. Revenue-neutral reconciliation.
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* * *
(h) Procedure, enforcement and penalties.--Parts III, IV, VI
and VII of Article IV and Article XXX of the Tax Reform Code of
1971 shall apply to this section insofar as they are consistent
with this section and applicable to the tax imposed under
subsection (b). Notwithstanding the provisions of section 403(d)
of the Tax Reform Code of 1971, if the officers of any
corporation subject to tax under this [chapter] subchapter
neglect or refuse to make a report as required in this [chapter]
subchapter or knowingly make a false report, the department
shall add to the tax determined to be due a penalty of 5% of the
amount of tax due for each month or fraction of a month until
the penalty has reached 25% and thereafter a penalty of 1% of
the amount of tax due for each month or fraction of a month.
Penalties added to the tax shall not bear interest.
* * *
(j) Sales of electric energy.--Retail sales of electric
generation, transmission, distribution or supply of electric
energy, dispatching services, customer services, competitive
transition charges, intangible transition charges and universal
service and energy conservation charges and such other retail
sales in this Commonwealth the receipts of which, if bundled,
would have been deemed to be sales of electric energy prior to
the effective date of this [chapter] subchapter shall be deemed
sales of electric energy for purposes of section 1101 of the Tax
Reform Code of 1971. The phrases "doing business in this
Commonwealth" and "engaged in electric light and power business,
waterpower business and hydro-electric business in this
Commonwealth," as such terms are used in section 1101(b) of the
Tax Reform Code of 1971 and in this chapter, shall be construed
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to include the direct or indirect engaging in, transacting or
conducting of activity in this Commonwealth for the purpose of
establishing or maintaining a market for the sales of electric
energy and include obtaining a license or certification from the
commission to supply electric energy. Retail sales of generation
shall be deemed to occur at the meter of the retail consumer.
* * *
§ 2812. Approval of transition bonds.
(a) Qualified rate orders.--Notwithstanding any other
provision of law, the commission is authorized to issue
qualified rate orders in accordance with the provisions of this
subsection to facilitate the recovery or financing of qualified
transition expenses of an electric utility or assignee.
* * *
(2) After the effective date of this [chapter]
subchapter, an electric utility may file an application for a
qualified rate order pursuant to the following procedures:
* * *
(b) Expedited review procedures.--
* * *
(5) Notwithstanding any other provision of law, on such
conditions as the commission may approve, all or portions of
the interest of an electric utility in intangible transition
property may be assigned, sold or transferred to an assignee
and may be pledged or assigned as security by an electric
utility or assignee to or for the benefit of a financing
party. To the extent that an interest is assigned, sold or
transferred or is pledged or assigned as security, the
commission shall authorize the electric utility to contract
with the assignee or financing party that the electric
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utility will continue to operate its system to provide
service to its customers, will impose and collect the
applicable intangible transition charges for the benefit and
account of the assignee or financing party and will account
for and remit the applicable intangible transition charge to
or for the account of the assignee or financing party. If the
qualified rate order so provides, the obligations of the
electric utility:
* * *
(ii) shall be required by the commission to be
undertaken and performed by the electric utility and any
other entity which provides electric service to a person
that was a customer of an electric utility located within
the certificated territory of the electric utility on the
effective date of this chapter or that became a customer
of electric services within such territory after the
effective date of this [chapter] subchapter and is still
located within such territory, as a condition to the
provision of service to such customer by such electric
utility or other entity, unless the customer has paid a
termination charge in the manner and on the basis
specified in the qualified rate order.
* * *
(f) Actions with respect to intangible transition charges.--
(1) Nothing in this chapter shall entitle any person to
bring an action against a retail electric customer for
nonpayment of intangible transition charges, other than the
electric utility, its successor or any other entity which
provides electric service to a person that was a customer of
an electric utility located within the certificated territory
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of the electric utility on the effective date of this chapter
or that became a customer of electric services within such
territory after the effective date of this [chapter]
subchapter and is still located within such territory.
(2) The commission has exclusive jurisdiction over any
dispute arising out of the obligations to impose and collect
intangible transition charges of an electric utility, its
successor or any other entity which provides electric service
to a person that was a customer of an electric utility
located within the certificated territory of the electric
utility on the effective date of this [chapter] subchapter or
that became a customer of electric services within such
territory after the effective date of this [chapter]
subchapter and is still located within such territory.
(g) Definitions.--As used in this section, the following
words and phrases shall have the meanings given to them in this
subsection:
"Assignee." An entity, including a corporation, public
authority, trust or financing vehicle, to which an electric
utility assigns, sells or transfers other than as security all
or a portion of its interest in or right to intangible
transition property. The term includes an entity, including a
corporation, public authority, trust or financing vehicle to
which a direct assignee of an electric utility may assign, sell
or transfer other than as security its interest in or right to
intangible transition property.
"Financing party." A holder of transition bonds, including
trustees, collateral agents and other entities acting for the
benefit of such a holder.
"Intangible transition charges." The amounts authorized to
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be imposed on all customer bills and collected, through a
nonbypassable mechanism by the electric utility or its successor
or by any other entity which provides electric service to a
person that was a customer of an electric utility located within
the certificated territory of the electric utility on the
effective date of this [chapter] subchapter or that, after this
effective date of this [chapter] subchapter, became a customer
of electric services within such territory and is still located
within such territory, to recover qualified transition expenses
pursuant to a qualified rate order. The amounts shall be
allocated to customer classes in a manner that does not shift
interclass or intraclass costs and maintains consistency with
the allocation methodology for utility production plant accepted
by the commission in the electric utility's most recent base
rate proceeding.
"Intangible transition property."
(1) The property right created under this section
representing the irrevocable right of the electric utility or
an assignee to receive through intangible transition charges
amounts sufficient to recover all of its qualified transition
expenses. The term includes all right, title and interest of
the electric utility or assignee in the qualified rate order
and in all revenues, collections, claims, payments, money or
proceeds of or arising from intangible transition charges
pursuant to the order to the extent that, in accordance with
this [chapter] subchapter, the order and the rates and other
charges authorized under the order are declared to be
irrevocable.
(2) Intangible transition property shall arise and exist
only when, as and to the extent that an electric utility or
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assignee has qualified transition expenses for which
intangible transition charges are authorized in a qualified
rate order that has become effective in accordance with
subsection (a) and shall thereafter continuously exist to the
extent provided in the order.
"Qualified rate order." An order of the commission
adopted in accordance with this section, authorizing the
imposition and collection of intangible transition charges.
"Qualified transition expenses." The transition or
stranded costs of an electric utility approved by the
commission for recovery under sections 2804 (relating to
standards for restructuring of electric industry) and 2808
(relating to competitive transition charge) through the
issuance of transition bonds; the costs of retiring existing
debt or equity capital of the electric utility or its holding
company parent, including accrued interest and acquisition or
redemption premium, costs of defeasance, and other related
fees, costs and charges relating to, through the issuance of
transition bonds or the assignment, sale or other transfer of
intangible transition property; and the costs incurred to
issue, service or refinance the transition bonds, including
accrued interest and acquisition or redemption premium, and
other related fees, costs and charges, or to assign, sell or
otherwise transfer intangible transition property.
"Transition bonds." Bonds, debentures, notes,
certificates of participation or of beneficial interest or
other evidences of indebtedness or ownership which:
(1) are issued by or on behalf of the electric utility
or assignee pursuant to a qualified rate order;
(2) are secured by or payable from intangible transition
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property; and
(3) reach final maturity in no longer than ten years.
Section 4. Chapter 28 of Title 66 is amended by adding a
subchapter to read:
SUBCHAPTER B
LARGE LOAD CUSTOMERS
Sec.
2821. Short title of subchapter.
2822. Scope of subchapter.
2823. Definitions.
2824. Classification of service.
2825. Tariffs.
2826. Contracts.
2826.1. Emergency Load Shedding Procedures.
2826.2. Obligation to serve.
2827. Annual reports.
2828. Regulations and orders.
2829. Additional ratepayer protections.
§ 2821. Short title of subchapter.
This subchapter shall be known and may be cited as the
Pennsylvania Ratepayer Protection Act.
§ 2822. Scope of subchapter.
This subchapter shall provide for a separate and distinct
classification of service for retail electric customers that are
large load customers and a regulatory framework to govern public
utility service to large load customers.
§ 2823. Definitions.
The following words and phrases when used in this subchapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
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"Electric distribution company." As defined in section 2803
(relating to definitions).
"Facility." Includes all buildings, equipment, structures
and other stationary items that are located on a single site or
on contiguous or adjacent sites and that are owned or operated
by the same person or by any person who controls, is controlled
by or is under common control with such person.
"Large load customer."
(1) A retail electric customer that has an aggregate
monthly maximum demand of either of the following minimum
thresholds:
(i) for electric distribution companies whose peak
load is equal to or above 2,500 megawatts, 20 megawatts
or more; or
(ii) for electric distribution companies whose peak
load is less than 2,500 megawatts, 1 megawatt or more.
(2) For purposes of calculating the aggregate minimum
thresholds under this definition, the sum of all load of the
retail electric customer's affiliated companies and companies
with common ownership shall be included in the calculation.
If there are multiple facilities at a single location of less
than the applicable minimum thresholds, but the aggregate
total load is greater than the minimum thresholds, all of
those facilities shall be included in the calculation.
"Retail electric customers." As defined in section 2803.
"Universal Service and Energy Conservation." As defined in
section 2803.
§ 2824. Classification of service.
The commission shall provide for a classification of service
for retail electric customers that are large load customers. The
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classification of service shall be separate and distinct from
classifications for other commercial or industrial customers and
require a separate tariff.
§ 2825. Tariffs.
(a) Tariff requirements.--Within 180 days of the effective
date of this subsection, the commission shall adopt an order
establishing a model tariff for large load customers that must:
(1) Do one of the following:
(i) allocate the costs of serving the class of large
load customers to the class in a manner that is equal to
the costs of serving the class , including all direct and
indirect customer costs associated with providing service
to large load customers; or
(ii) directly assign the costs of serving a large
load customer to the large load customer.
(2) Meet the same conditions the commission requires for
a contract under section 2826(b)(1) (relating to contracts).
(3) Mitigate the risk of:
(i) other classes of retail electric customers
paying costs associated with providing service to large
load customers where the costs do not benefit other
classes of customers; and
(ii) shifting the costs of serving a large load
customer to other classes of retail electric customers,
including costs of an electric distribution company to
meet load requirements resulting from the provision of
electric service to a large load customer.
(4) Include the following commercial terms and
conditions for service:
(i) Minimum contract terms to ensure that in the
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event the large load ceases operations prior to the end
of the contract term the large load must take a minimum
level of service to generate expected revenues that will
protect other customers.
(ii) Calculations of contribution in aid of
construction for distribution infrastructure required
from the large load, which must be consistent,
transparent and equitably applied as determined by the
commission.
(iii) Security deposit or other financial security
required from the large load, which must be consistent,
transparent and equitably applied as determined by the
commission.
(iv) Load ramping schedules to ensure infrastructure
adequacy.
(v) Exit or early termination fees.
(vi) Measures to prevent circumvention of the large
load threshold through multiple facilities,
interconnection points or metering points.
(5) Provide for the electric distribution company's
recovery of costs incurred in connection with the development
and implementation of Universal Service and Energy
Conservation programs consistent with the requirements for
those programs under the following provisions through a
tariff rate approved to recover the costs from ratepayers:
(i) Section 2203(6), (7), (8), (9) and (10)
(relating to standards for restructuring of natural gas
utility industry).
(ii) Section 2804(8) and (9) (relating to standards
for restructuring of electric industry).
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(6) Include any other information required by the
commission.
(b) Submission.--Within 180 days of the commission's
adoption of the model tariff under subsection (a), an electric
distribution company shall file a proposed tariff that complies
with the model tariff adopted under subsection (a) in such
manner as the commission prescribes.
(c) Review of proposed tariff.--The commission shall, after
notice and opportunity to be heard, approve, modify or
reject the proposed tariff by a final order entered no later
than 12 months following the filing date of the electric
distribution company's proposed tariff. The following shall
apply:
(1) In determining whether to approve, modify or reject
a proposed tariff, the commission shall consider whether the
tariff:
(i) r esults in, or has the potential to result in,
rates that include increased costs or other risks to
other retail electric customers in connection with
serving the large load customer class;
(ii) p rovides for equitable contributions in rates
to grid efficiency, reliability and resiliency benefits;
(iii) i mpedes the electric distribution company's
ability to meet the energy or alternative energy
portfolio standards required under the act of November
30, 2004 (P.L.1672, No.213), known as the Alternative
Energy Portfolio Standards Act, for default service
customers, or reduce the emissions of greenhouse gases
consistent with State policy;
(iv) allows for procurement of, or contracts for,
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generation resources that support the electric
distribution company's ability to meet the energy or
alternative energy portfolio standards required under the
Alternative Energy Portfolio Standards Act for default
service customers, or reduce the emissions of greenhouse
gases consistent with State policy; and
(v) meets any other conditions required by the
commission.
(2) The commission shall review all rates to ensure that
the costs of providing service to the large load customer
class are not subsidized by any other customer class.
(d) Applicability.--If the commission rejects the proposed
tariff filed by the electric distribution company for the
classification of service, the commission shall direct further
proceedings within the same formal record and the electric
distribution company shall propose a conforming tariff for
subsequent approval.
(e) Determination of compliance with act.-- Providing
electric generation service to a large load customer shall not
be considered force majeure under the Alternative Energy
Portfolio Standards Act, for the purposes of determining whether
an electric distribution company or electric generation supplier
has complied with the requirements of that act and has made a
good faith effort to acquire sufficient alternative energy to
comply with their obligations.
(f) Regulations.--Within one year from the effective date of
this subsection, the commission shall issue a notice of proposed
rulemaking for the purpose of establishing regulations regarding
the implementation of this subchapter to take effect by January
2, 2028.
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§ 2826. Contracts.
(a) General rule.--At a time and manner established by the
commission, the commission shall require an electric
distribution company that is providing electric service to a
large load customer to enter into a contract with the large load
customer that covers the provision of the electric distribution
service.
(b) Contract requirements.--A contract for the provision of
electric service between an electr ic distribution company and a
large load customer shall comply with all of the following. The
contract shall:
(1) be consistent with the criteria listed under section
2825(c) (relating to tariffs);
(2) specify the duration of the contract, which may be
for no less than 20 years;
(3) require the large load customer to notify the
electr ic distribution company in writing, within five years
of the expiration date of the current contract, of the large
load customer's intent to renew or not renew the contract for
an additional 20-year period;
(4) specify the date or estimated date that the electric
distribution company will begin to provide electric service
to the large load customer;
(5) obligate the large load customer to pay a minimum
amount or percentage as determined by the commission, based
on the customer's projected electric usage for the electric
services the electric distribution company is contracted to
provide for the duration of the contract;
(6) contain commercial terms and conditions consistent
with section 2825(a)(4)(i), (ii), (iii) and (vi); and
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(7) meet any other conditions required by the
commission.
(c) D elay.--If an electric distribution company fails to
provide electric service on or by the date or estimated date
specified in a contract entered into under this section due to
causes within the electric distribution company's reasonable
control, the electric distribution company shall provide the
large load customer notice of delay as soon as reasonably
practicable. A contract entered into under this section may
include terms and conditions that address the possibility of a
delay due to causes within the reasonable control of the parties
to the contract.
(d) Void contract provisions.--Any provision of a contract
described in this section shall be void and unenforceable if the
provision has the purpose and effect of either:
(1) preventing the commission from carrying out the
commission's duties under this subchapter; or
(2) preventing or restricting the disclosure of any
terms of the contract.
(e) Applicability.--This section applies to large load
customers that enter into a contract for electric service with
an electric distribution company:
(1) on or after the effective date of this subsection;
and
(2) before the effective date of this subsection, if the
provision of electric service requires the electric
distribution company to make significant investments or incur
costs after the effective date of this subsection that could
result in increased costs or risks to other retail electric
customers of the electric distribution company.
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(f) Statutory advocates. -- A public utility shall provide a
copy of a contract filed under this section to the Office of
Consumer Advocate, Office of Small Business Advocate and Bureau
of Investigation and Enforcement subject to appropriate
confidentiality protective agreements or orders.
§ 2826.1. Emergency load shedding procedures.
(a) Oversight of emergency load shedding procedures.--
Consistent with the commission's existing authority under
sections 501 (relating to general powers) and 1501 (relating to
character of service and facilities), the commission shall have
the authority to review, direct modifications and approve the
emergency retail load shedding procedures and plans of electric
distribution companies that are used to comply with a regional
transmission organization-determined manual load shedding in
emergency conditions.
(b) Regulations during emergency conditions.-- The commission
shall promulgate temporary and final regulations relating to all
of the following during emergency conditions:
(1) Ensuring compliance by the electric distribution
company with the load shedding allocations assigned by the
regional transmission organization in which the electric
distribution company is a member.
(2) Designating critical load within the electric
distribution company's service area and requiring curtailment
of noncritical load prior to curtailment of critical load.
(3) Requiring curtailment of noncritical load
attributable to large loads prior to and to the extent of
preventing the curtailment of noncritical load attributable
to residential, commercial and industrial customers.
(4) After curtailments of noncritical load attributable
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to large loads are performed, if additional curtailments are
necessary, requiring each electric distribution company to
perform rotating curtailments among residential, commercial
and industrial customers.
(5) Ensuring that the electric distribution company can
isolate and curtail large loads without affecting service to
other customers.
§ 2826.2. Obligation to serve.
The commission shall promulgate temporary and final
regulations relating to conditions under which new large load is
permitted to interconnect to the electric distribution system as
new retail load while ensuring the electric distribution
company's continued provision of electric public utility service
to existing customers that is adequate, reasonable, reasonably
continuous, without unreasonable interruptions or delay and
reliable.
§ 2827. Annual reports.
No later than September 1 of each year, the commission shall
submit a report to the members of the Consumer Protection and
Professional Licensure Committee of the Senate, the Consumer
Protection, Technology and Utilities Committee of the House of
Representatives, the Environmental Resources and Energy
Committee of the Senate, the Environmental and Natural Resource
Protection Committee of the House of Representatives and the
Energy Committee of the House of Representatives. The report
shall review the trends in load requirements and other
implications from large load customers and other retail electric
customers that use large amounts of electric. In providing the
report, the commission shall protect proprietary information as
provided for under rules, regulations or orders of the
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commission.
§ 2828. Regulations and orders.
The commission is authorized to prescribe rules and
regulations necessary to effectuate this subchapter and issue
orders as it deems necessary to administer and enforce this
subchapter.
§ 2829. Additional ratepayer protections.
Any provision of any contract, agreement or similar
instrument entered into between a large load customer and
another party on or after the effective date of this section
shall be void and unenforceable if the provision has the purpose
or effect of preventing or restricting the disclosure of any of
the terms, or factual information related to the purpose, of the
contract, agreement or similar instrument.
Section 5. This act shall take effect immediately.
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