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Highlights: PA PUC Public Session of December 5, 2012

Note: Audio from each public meeting is available on the Pennsylvania Public Utility Commission’s website for approximately six months.  To access the audio stream for this public meeting, please visit http://www.puc.state.pa.us/general/PMAudio.aspx.  The public meeting calendar and agendas may be viewed at http://www.puc.state.pa.us/general/public_meeting.aspx.

          At the December 5, 2012, Public Meeting of the Pennsylvania Public Utility Commission (“Commission”), the Commissioners adopted Staff’s recommendations for action by a vote of 5-0 on all items listed on the Main Agenda and Carry-In Agenda, except as reflected herein below under the respective Commission agenda headings.  Review of particular items addressed by the Commissioners at this Public Meeting which may be of interest are addressed under the respective Commission agenda headings below.  Any relevant motions and statements are attached hereto and to the original of this Session Memo filed in the Public Meeting Agenda and Session Memo binder.  The next regular Public Meeting is tentatively scheduled for December 20 at 10:00 a.m.  The minutes of the Public Meeting of October 24, 2012, were, by a vote of 5-0, approved without modification.

MAIN AGENDA

 CASES OF SPECIAL INTEREST

  • PPL Electric Utilities, 2290597-OSA, R-2012-2290597.  Supplement No. 118 to Tariff—Electric Pa. P.U.C. No. 201 filed on 3/30/12, containing changes in distribution rates calculated to produce additional intrastate operating revenues of approximately $104.6 million, to become effective 6/1/12.  Various Complaints were filed and the filing was suspended by operation of law until 1/1/13.  Public input hearings were held in Scranton, Wilkes-Barre, Bethlehem, and Allentown in June 2012.  Three days of evidentiary hearings were held in August.  On 10/19/12 the Commission issued the Recommended Decision of ALJ Colewell.  Exceptions were filed on 11/8/12, and Reply Exceptions were filed on 11/19/12.  RECOMMENDATION:  That the Commission conduct a BINDING POLL of the issues litigated in this proceeding.  The Binding Poll is attached.

Binding Pole Issues and Results

  1. Rate Base: Depreciation Calculation.  Depreciation Reserve.  Vote 5-0 for the ALJ’s recommendation.
  1. Rate Base:  Cash Working Capital.  Expense Lag Days for Payments to Affiliates.  Vote 5-0 for the ALJ’s recommendation.
  1. Rate Base: Cash Working Capital.  CWC claim and the Prepayment of Postage Expense.  Vote 5-0 for the ALJ’s recommendation.
  1. Rate Base:  Cash Working Capital.  Prepayment of Regulatory Assessments.  Vote 5-0 for the ALJ’s recommendation.
  1. Expenses.  Incentive Compensation.  Vote 3-2 for the ALJ’s recommendation.
  1. PPL Services.  Environmental Management expense.  Vote 3-2 for the ALJ’s recommendation.
  1. PPL Services.  External Affairs Expense.  Vote 3-2 for PPL’s proposal.
  1. Storm Damage Expenses.  Storm Damage Insurance – Expenses/Reserve Account.  Vote 5-0 for PPL’s proposal.
  1. Payroll – Employee Complement.  PPL’s FTY Employee Complement.  Vote 3-2 for the ALJ’s Recommendation.
  1. Uncollectible Accounts Expense.  Appropriate Percentage for Uncollectible Accounts Expense.  Commissioner Cawley’s Partial Dissenting Statement is attached, which also affects Issue Nos. 11, 15-17, 19-20, and 22.  Vote 3-2 for PPL’s proposal.
  1. Rate Case Expense – Revised.  Normalization Period.  See Commissioner Cawley’s Dissenting Statement from Issue No. 10.  Vote 3-2 for PPL’s proposal.
  1. Low Income Usage Reduction Program – Funding Level.  CEO’s proposal to increase funding for Universal Service Programs.  Vote 5-0 for the ALJ’s recommendation.
  1. Consumer Education Program (CEP) Expenses.  Vote 5-0 for the ALJ’s recommendation.
  1. Rate of Return.  Capital Structure:  Hypothetical v. Actual.  Vote 5-0 for the ALJ’s recommendation.
  1. Rate of Return.  Cost Rate of Common Equity:  ALJ’s Sole Reliance on the Discounted Cash Flow Analysis.  Chairman Powelson’s Motion is attached, which also affects Issue Nos. 16 and 17.  See Commissioner Cawley’s Dissenting Statement from Issue No. 10.  Motion passes 4-1.
  1. Rate of Return.  Cost Rate of Common Equity; Leverage Adjustment.  See Chairman Powelson’s Motion from Issue No. 15 and Commissioner Cawley’s Dissenting Statement from Issue No. 10.  Motion passes 4-1. 
  1. Rate of Return.  Management Effectiveness Adjustment.  See Chairman Powelson’s Motion from Issue No. 15 and Commissioner Cawley’s Dissenting Statement from Issue No. 10.  Motion passes 4-1, with Commissioner Gardner concurring in the result only. 
  1. Taxes.  Gross Receipts Tax (GRT).  Vote 5-0 for the ALJ’s recommendation.
  1. Rate Structure:  Cost of Service.  Cost of Service Study (COSS).    Commissioner Gardner’s Dissenting Statement is attached, which also affects Issue Nos. 20 and 21.  See Commissioner Cawley’s Dissenting Statement from Issue No. 10.  Vote 3-2 for the ALJ’s recommendation.
  2. Rate Structure:  Cost of Service.  Revenue Allocation.  See Commissioner Gardner’s Dissenting Statement from Issue No. 19 and Commissioner Cawley’s Dissenting Statement from Issue No. 10.  Vote 3-2 for the ALJ’s recommendation.
  1. Rate Structure:  Cost of Service.  Scaleback From Proposed Revenue to Allowed Revenue.  See Commissioner Gardner’s Dissenting Statement from Issue No. 19.  Vote 4-1 for the ALJ’s recommendation.
  1. Rate Structure:  Tariff Structure.  Rate Design:  Residential Customer Charge.  See Commissioner Cawley’s Dissenting Statement from Issue No. 10.  Vote 3-2 for the ALJ’s recommendation.
  1. Rate Structure:  Tariff Structure.  Rate Design:  Non-Residential Customer Charges.  Vote 3-2 for PPL’s proposal.
  1. Rate Structure:  Tariff Structure.  Proposed Competitive Enhancement Rider.  Vote 5-0 for the ALJ’s recommendation.
  1. Rate Structure:  Tariff Structure – Purchase of Receivables (POR).  Recovery of Uncollectible Accounts via Non-bypassable Distribution Charge.  Vote 5-0 for PPL’s proposal.
  1. Rate Structure:  Tariff Structure (POR).  Uncollectible Accounts Expense Factor.  Vote 3-2 for the ALJ’s recommendation.
  1. Rate Structure:  Tariff Structure.  Late Payment Fee Offset to Uncollectible Accounts Expense.  Vote 5-0 for the ALJ’s recommendation.
  1. Rate Structure:  Tariff Structure.  Administrative Component of POR.  Commissioner Cawley’s Motion is attached.  Motion passes 5-0.
  • PECO Energy Company-Electric, 2320334-OSA, P-2012-2320334, M-2012-228941, M-2008-2069887.  Phase II Implementation Order adopted on 8/2/12, that established the standards for electric distribution companies’ (EDCs) Energy Efficiency and Conservation Plans for 6/1/13 to 5/31/16, pursuant to Act 129 of 2008. The Phase II Implementation Order established specific energy reduction targets for each EDC and provided an opportunity for the EDCs to contest their targets by filing a petition for an evidentiary hearing by 8/20/12. PECO filed its Petition on 8/20/12. The matter was assigned to the OALJ for hearing and ALJ Barnes certified the record to the Commission on 11/2/12.  RECOMMENDATION:  That the Commission adopt the proposed Opinion and Order that, inter alia, reaffirms PECO’s 2.9% energy reduction target.  Vote 5-0.
  • Met-Ed, Penelec, Penn Power & West Penn, 2320450-OSA, P-2012-2320450, M‑2012-2289411, M-2008-2069877, P-2012-2320468, P-2012-2320480, P-2012-2320484.  Phase II Implementation Order adopted on 8/2/12, that established the standards each electric distribution company's Energy Efficiency and Conservation Plan must meet and provided guidance on the procedures to be followed for submittal, review and approval of all aspects of those plans. Within the Phase II Implementation Order, the Commission tentatively adopted EDC-specific consumption reduction targets and provided that these targets would become final for any covered EDC that did not petition the Commission for an evidentiary hearing by 8/20/12. On 8/20/12, the FirstEnergy Companies filed a Petition for an Evidentiary Hearing on the Energy Efficiency Benchmarks Established for the Period June 1, 2013 through May 31, 2016 by the Phase II Implementation Order. A hearing was held on 10/19/12. On 11/02/12, ALJ Elizabeth Barnes issued an Order Certifying Record to the Commission.  RECOMMENDATION:  That the Commission adopt the proposed Opinion and Order which denies the Petition of FirstEnergy and affirms the Energy Efficiency Benchmarks established in the Phase II Implementation Order for each of the FirstEnergy Companies.  Vote 5-0.

BUREAU OF TECHNICAL UTILITY SERVICES (Transportation)

  • Alstar Medical Transportation Inc., 2290580-TAS, A-2012-2290580.  Application for the right to begin to transport as a common carrier by motor vehicle, persons in paratransit service. Bensalem, Bucks County RECOMMENDATION:  That the Commission adopt the proposed Order approving the application, as amended.  Vote 5-0.
  • Violet Phillips, Application for the right to begin to transport as a common carrier by motor vehicle, persons in paratransit service.  RECOMMENDATION:  That the Commission adopt the proposed Order approving the application, as amended.  Vote 5-0.

BUREAU OF AUDITS

  • All matters approved as submitted.

BUREAU OF CONSUMER SERVICES

  • All matters approved as submitted.

OFFICE OF SPECIAL ASSISTANTS

  • Core Communications vs. AT&T Pennsylvania, LLC and TCG Pittsburgh Inc., 2108186-OSA C-2009-2108186, C-2009-2108239.  The matter was postponed from the 10/24/2012 Public Meeting.  Two Formal Complaints filed on 5/19/09, alleging non-payment by AT&T for terminating AT&T transmissions from Verizon tandem switches to Core’s end-user customers. On 6/9/09, AT&T filed an Answer denying the allegations. On 11/18/10, an evidentiary hearing was held before ALJ Jones. Main Briefs and Reply Briefs were filed on 12/14/10 and 1/14/11, respectively by both Parties. On 5/24/11, the ALJ’s Initial Decision was issued. Exceptions were filed by both Parties on 1/13/11. Replies to Exceptions were filed by both parties on 6/23/11. On 7/20/11, Core filed a Motion for leave to update its Reply Exceptions. The Motion was granted by Secretarial Letter dated 7/15/11.  RECOMMENDATION:  That the Commission adopt the draft Opinion and Order that grants the Exceptions of the Parties in part and denies them in part, and adopts the ALJ’s Initial Decision, as modified consistent with the discussion therein.  Vote 5-0 with Commissioner Cawley concurring in the result only.
  • Peregrine Keystone Gas Pipeline LLC, 2200201-OSA, A-2010-2200201.  Application filed on 9/17/10. Evidentiary hearings were held on 1/10/12 and 1/11/12. ALJ Colwell’s Recommended Decision was issued on 5/23/12.  Peregrine filed a Petition to Withdraw Application on 6/8/12. By Order entered 9/13/12, the Commission granted the Petition to Withdraw Application and vacated the Recommended Decision. On 9/28/12, the Pennsylvania Independent Oil and Gas Association filed a Petition for Reconsideration of the 9/13/12 Order. Answers to the Petition for Reconsideration have not been filed.  RECOMMENDATION:  That the Commission adopt the proposed Opinion and Order which denies the Petition for Reconsideration.  Vote 4-1 with Commissioner Cawley dissenting.

BUREAU OF TECHNICAL UTILITY SERVICES

  • Smart Meter Technology, 2092655-FUS, M-2009-2092655.  The matter was postponed from the 11/08/12 Public Meeting.  Smart Meter Procurement and Installation Implementation Order adopted on 6/18/09 that, among other things, required the electric distribution companies to work through the Electronic Data Exchange Working Group (EDEWG) to develop electronic data interchange transactions to fully achieve the capabilities of smart meter technology. On 12/7/09, EDEWG submitted a proposal to develop the smart meter data exchange standards. On 6/30/11, the Commission adopted a Tentative Order proposing further direction and clarification about the role of EDEWG and EDCs in the development of statewide smart meter data exchange standards and formats. The Commission received comments and reply comments on the Tentative Order proposal.  RECOMMENDATION:  That the Commission adopt the proposed Final Order.  Vote 5‑0.
  • C E Dunmire Gas Company, Inc., 2278280-FUS, A-2011-2278280.  Application filed on 12/9/11, for approval to abandon natural gas distribution service to one residential customer located in North Buffalo Township, Armstrong County. The application was filed pursuant to Sections 1102(a)(2) and 1103(a) of the Public Utility Code, 66 Pa.C.S. §§ 1102(a)(2) and 1103(a).  RECOMMENDATION:  That the Commission adopt the proposed Order approving the application.  Vote 5-0.
  • UGI Central Penn Gas, Inc., 2289607-FUS, A-2012-2289607, G-2012-2289623.  The matter has been postponed from the 11/08/12 Public Meeting.  Application filed on 2/21/12, for approval of the transfer by sale of an approximately 11 mile natural gas pipeline, appurtenant facilities and rights of way located in Tioga County, to UGI Storage Company; for approval of associated reduction in base rates; and, for approval of a related affiliated interest agreement between CPG and UGI Storage Company. On 3/12/12, the OSBA filed a Notice of Appearance, Notice of Intervention and Protest, and a Public Statement; and, the OCA filed a Protest and Public Statement. On 5/18/12, a Joint Petition for approval of Settlement of All Issues was filed by CPG, OCA and OSBA, all of the parties to the proceeding requesting Commission approval of the Settlement.  RECOMMENDATION:  That the Commission approve the settlement, the application and the affiliated interest agreement consistent with the proposed Order.  Vote 5-0 with Commissioner Gardner concurring in result only.
  • Verizon Pennsylvania LLC, 2332603-FUS, R-2012-2332603.  2013 Annual Price Change Opportunity Filing and Tariff Changes to Telephone Tariff PA PUC Nos. 180A, 182, 182A, 185B, 185C, and 304. The Company requests a $3,576,600 increase in rates from the implementation of its Price Change Opportunity. The report was filed on 11/1/12. No protests were filed and no hearings were held.  RECOMMENDATION:  The Commission adopt the proposed Order approving the proposed rate increase.  Vote 5-0.
  • Verizon North LLC, 2332608-FUS, R-2012-2332608.  2013 Annual Price Change Opportunity Filing and Tariff Changes to Telephone Tariff PA PUC Nos. 1, 3, 5, and 6. The Company requests an $893,900 increase in rates from the implementation of its Price Change Opportunity. The report was filed on 11/1/12. No protests were filed and no hearings were held.  RECOMMENDATION:  The Commission adopt the proposed Order approving the proposed rate increase.  Vote 5-0.

LAW BUREAU

  • Rulemaking-Marketing & Sales, Practices, M-2010-2185981, 2208332-LAW L-2010-2208332.  Petition for Reconsideration and/or Clarification of the Commission’s 10/24/12, Final Rulemaking Order filed by the Retail Energy Supply Association and Pennsylvania Electric Caucus. Due to the fact that the 30 day period to act on the Petition for Reconsideration closed on 11/23/12, we granted the petition pending review of, and consideration on, the merits. A Final Order was adopted by notational vote on 11/19/12 and served the same day.  RECOMMENDATION:  That the Commission, consistent with 4 Pa. Code § 1.43(c), record and enter this action in the minutes of this Public Meeting.  Vote 5-0.
  • Columbia Gas of Pa Inc., 2319920-LAW, P-2012-2319920.  Petition pursuant to 66 Pa. Code § 1701 to defer costs associated with start-up expenses attributable to installation of new computer software related to financial processes. Estimated costs as of the Petition are $2 million. These costs are requested to be deferred for accounting purposes only. OCA filed an Answer, and requests the Commission deny the petition, or in the alternative, conditions be imposed if the Commission grants the petition.  RECOMMENDATION:  That the Commission adopt the proposed Order.  Vote 5-0.
  • Office of Consumer Advocate & David K. Ebersole Jr., 2323362-LAW, P-2012-2323362.  The matter has been postponed from the 11/08/2012 Public Meeting.  Joint Petition for a Declaratory Order that Verizon PA has not met its legal obligation to the Greensburg Community Service Area 1125 Bona Fide Retail Request Group for accelerated deployment of advanced services pursuant to 66 Pa. C.S. § 3014(c) by directing the BFRR applicants to apply to Verizon Wireless for wireless 4G LTE broadband services instead of providing the applicants the lower priced DSL service they had requested in their applications.  RECOMMENDATION:  That the Commission adopt the proposed Order denying the petition.  Chairman Powelson and Vice Chairman Coleman’s Joint Motion is attached.  Commissioner Gardner’s Concurring Statement is attached.  Commissioner Cawley’s Dissenting Statement is attached.  Vote 4-1.
  • WINDSTREAM COMMUNICATIONS, INC., 2327799-LAW, P-2012-2327799, P-2012-2327798, P-2012-2327787, P-2012-2327792, P-2012-2327797, P-2012-2327812.  Six Windstream competitive local exchange carriers filed on 10/2/12, for a waiver of the Commission’s regulations at 52 Pa. Code §§ 53.58 and 53.59 relative to their operations in the service areas of three incumbent local exchange carriers. The companies seek: (a) the same regulatory flexibility available to ILECs to detariff and classify as competitive nonprotected services; (b) the same regulatory flexibility granted to Verizon Access and AT&T as CLECs to detariff and to classify as competitive nonprotected services; and (c) the same regulatory flexibility granted to Verizon Access and AT&T as CLECs to detariff protected basic dial tone service.  RECOMMENDATION:  That the Commission adopt the proposed Order.  Vote 5-0.
  • Windstream Pennsylvania LLC., 2329063-LAW, P-2012-2329063.  Petitions for a bona fide retail request deployment extension of six months to 5/24/13, relating to its Sheffield CSA 09 exchange pursuant to 66 Pa. C.S. § 3014(c)(5). Windstream asserts that the delay in completing the project is attributable to a 9,000 foot segment in the middle of the route that must be rebuilt, including replacing about half of the existing poles along the roadway.  RECOMMENDATION:  That the Commission adopt the proposed Order granting the petition.  Commissioner Gardner’s Statement is attached.  Vote 5-0.
  • United Telephone d/b/a Centurylink, 2332569-LAW, P-2012-2332569Petition for a bona fide retail request deployment extension until 1/31/13, relating to its Osterburg 006-Wallacks Branch Creek CSA, pursuant to 66 Pa. C.S. § 3014(c)(5). Century Link asserts that acquisition of the right-of-way for completion of the deployment is taking much longer than planned.  RECOMMENDATION:  That the Commission adopt the proposed Order.  Vote 5-0.

OFFICE OF ADMINISTRATIVE LAW JUDGE

  • All matters approved as submitted.

CARRY-IN AGENDA

OFFICE OF SPECIAL ASSISTANTS

  • All matters approved as submitted.

LAW BUREAU

  • Pa Universal Service Fund, 1151742-LAW, M-00001337.  Solix, Inc., filed on 10/22/12, its Administrator’s Report with recommendations about the PaUSF’s fund size for calendar year 2013. No objections were filed to the report.  RECOMMENDATION:  That the Commission adopt the Administrator’s Report and establishing the PaUSF size at $35,310,021.98.  Vote 5-0.

NO ANNOUNCEMENTS

NEXT PUBLIC MEETING IS TENTATIVELY SCHEDULED FOR THURSDAY, DECEMBER 20, 2012 AT 10:00 A.M.

* Denotes Order

 

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