Pennsylvania Public Utility Commission

Lawyers, consultants and business leaders working in the rates and regulatory area will find the recently released Pennsylvania Public Utility Commission’s (PaPUC or Commission) Guide to Utility Ratemaking helpful, even if you don’t practice in Pennsylvania.

The original Rate Case Handbook was first published in 1983. The handbook served as a valuable resource for energy and utility practitioners. Just as before, the updated guidebook is well laid out and manages to make complex information easy to digest.

In the new edition, readers are given both a general overview of how each utility (water, gas, telecom and electric) service is produced, priced and delivered, as well as a thorough synopsis of the legal and administrative structure of the PaPUC. The 181 page handbook is comprehensive and provides information on the following:

While many of the foundational principles outlined in the original handbook have retained their applicability, technological advancements and discoveries from Marcellus Shale to smart meters and distributed generation commanded special attention in the new update. A big thank you to authors James H. Cawley, former PaPUC Commissioner, and Commissioner Norman Kennard, as well as to those who aided in the completion of the project. It provides a relevant discussion on modern ratemaking issues.

 

    

The EBA Demand-Side Resources and Smart Grid Committee present:
The FCC and State Regulators Discuss Radio Frequency and Smart Meters.

November 7, 2013
12:30 noon – 2:00 p.m. (EST)
Wilkinson Barker Knauer, LLP
2300 N St., N.W., Suite 700
Washington, DC 20037
 

Radio frequency (“RF”) is one of the main reasons customers request to opt-out of smart meters. Often, the number of people protesting smart meters is small compared to a utility’s total customer base. Despite these statistics, the vocal minority has successfully reversed policy in several states – imposing substantial costs on utilities. Are the RF emissions from smart meters really problematic? Are there policy reasons to allow opt-out? What are the FCC rules on RF emissions and should they be considered by PUCs and utilities? This meeting will feature Julius Knapp, the Chief of the FCC’s Office and Engineering and Technology, in a dialog with state regulators regarding smart meters and RF limits. The smart grid community will gather practical information to discuss smart meter health concerns with customers, regulators and other stakeholders.

The speaker panel includes: Julius Knapp, Chief Engineer, Federal Communications Commission; Wayne Gardner, Commissioner Emeritus, Pennsylvania Public Utility Commission; Chris Irwin, Smart Grid Standards and Interoperability Coordinator, Department of Energy; and Karen Lefkowitz, Vice President, Business Transformation, Pepco Holdings, Inc.

The panel will be moderated by Linda R. Evers, Shareholder, Stevens & Lee, and Scott Blake Harris, Managing Partner, Wilkinson Barker Knauer, LLP, and former General Counsel of the Department of Energy.

A networking lunch sponsored by Stevens & Lee and Wilkinson Barker Knauer, LLP will run from 12:30 noon – 1:00 p.m. The panel discussion and telephone participation will begin at 1:00 p.m. (EST).

CLE will not be provided.

REGISTRATION INFORMATION
Seating is limited, so please register now to secure your seat. Pre-registration is required by no later than November 1, 2013. If you have questions, please contact Marlo Brown-Carpenter at marlo@eba-net.org. Cancellations must be received in writing by November 1, 2013.

REGISTRATION FEES: On-Site or Teleconference (per person)
EBA Members: $25
Non-Members: $60
Full-Time EBA Student Members: FREE

If you have any questions, please do not hesitate to Linda Evers.

On January 24, 2013, the Pennsylvania Public Utility Commission (“PaPUC”) entered orders dismissing two formal complaints filed by PECO customers requesting to opt-out of smart meters. In the Theresa Gavin v PECO Energy Company case and Maria Povacz v PECO Energy Company, the Commission’s Orders adopt the Initial Decisions (“ID”) issued by the ALJs. In support of dismissing the complaints, here are some of the interesting points the orders make (emphasis added):

  • Section 2807(f)(2) of the Public Utility Code, states

(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.

  • In 66 Pa. C.S. §2807(f)(2), the use of the word “shall” in the statute indicates the General Assembly’s direction that all customers will receive a smart meter. The statute does not have a provision for customers to “opt out” of the smart meter installation. 
  • The Commission has interpreted current law to require smart meter installation. The Commission cannot regulate in violation of a statute.
  • Pennsylvania electric utilities are following the law by not permitting customers to opt-out.

Yes, there are some jurisdictions who have said no to opt-out. Maybe this will be a new trend.

I recently had the opportunity to interview the Chairman of the Pennsylvania Public Utility Commission, Robert F. Powelson, regarding his views on smart meter opt-outs and other issues affecting Pennsylvania’s energy future. Because I live and practice in Pennsylvania, I may be biased but I think Smart Grid Legal News readers will agree it is refreshing and rare to hear regulators like Chairman Powelson promote smart meters, energy efficiency and other practices that advance our energy future.

Evers: Chairman Powelson, thank you for taking the time to discuss smart meters with me. Why is it important for customers to have smart meters?

Powelson: Act 129 of 2008 has really paved the way for the rollout of smart meters, also referred to as Advanced Metering Infrastructure (AMI), and the implementation of Act 129 continues to benefit Pennsylvania customers. As I see it, smart meter technology is a “win-win” situation for the Commonwealth – both electricity customers and electricity providers alike reap the benefits of advanced meters. 

Smart meters give customers greater control over their energy consumption by allowing them to measure their energy usage, monitor real-time electricity prices, and adjust their consumption and behavior in order to realize significant savings on monthly bills. Customers can even shut down appliances during peak periods or pre-program appliances and devices to operate only at predetermined (and lower cost) timeframes if they so choose.

Similarly, electricity providers also benefit from increased smart meter deployment. The two key concepts here are efficiency and reliability. AMI makes meter reading quicker and more efficient by eliminating the current practice of estimated meter readings. Additionally, with smart meters, utilities have the ability to monitor distribution networks to allow for the immediate detection of irregularities, which leads to drastically reduced response time in addressing outages. 

Finally, smart meters can help reduce both overall electricity use and peak demand use, leading to lower emissions from fossil power plants that will not have to generate as much power – a direct environmental benefit.

Evers: Chairman, across the country several states have implemented an opt-out process due to customers concerns about health and privacy. I am concerned about the impact of an opt-out process as people relocate in and out of homes with smart meters. I call it a smart meter mosaic. I joke that real estate disclosure forms will soon have to start indicating the home’s level of smartness. Seriously, I think the implementation and long-term management of such a process could eventually put upward pressure on rates for everyone. What are your views regarding a smart meter opt-out process?

Powelson: In May, I testified before the Pennsylvania House of Representatives Consumer Affairs Committee on a proposal to partially repeal Act 129 and permit smart meter “opt-out” programs in the Commonwealth. My testimony addressed two pieces of legislation – House Bill 2186, which would allow consumers to opt out of having smart meters installed at their premises, and House Bill 2188, which would require consumer consent in order to share information from electric meters with government agencies. These bills represent a significant step backward in policy, with the potential to negate all of the reductions already achieved under Act 129.

The proliferation of opt-out requirements for AMI deployment has the potential to cripple efforts to modernize grid technology. Maine has received a lot of attention regarding its AMI opt-out, and Central Maine Power (CMP) has considered, analyzed and provided substantial cost information relating to a variety of potential solutions or mitigation measures for customers seeking to opt out of CMP’s Smart Meter Program. CMP estimates these incremental infrastructure and support costs to be as high as $70 million over the life of the AMI project – and that is assuming only 1 to 2 percent of CMP customers opt out. At an opt-out level of 10 percent, these incremental costs grow to hundreds of millions of dollars – exceeding the costs of CMP’s advanced meter project.

While I appreciate that there are consumers who have security and privacy concerns with respect to AMI, the PUC, legislature, and Electric Distribution Companies (EDCs) may be able to help alleviate these concerns through increased education and outreach. It is worth noting that many EDCs and their customers have had AMI in place for years, namely PPL and PECO. Additionally, we are already facilitating the continued implementation of smart grid technology by establishing rules that more precisely address conduct in the areas of reliability, privacy and security. California and Ontario have undertaken similar efforts through a “Privacy by Design” rulebook, which was integral to customer support for advanced meter roll out.

In sum, opt-outs cause operational gaps that will lead to additional costs for companies and their customers, defeating the stated purposes of Act 129. Such a system reduces reliability for all customers, as well as the benefits of a completely modernized electric grid. Simply put, there is no compelling reason for an “opt-out” program.

Evers: Smart meters have received a lot of attention but there is so much more to the concept of smart grid. Beyond smart meters, what do you see as other benefits as utilities upgrade their systems?

Powelson: Nationally, billions of dollars are being invested in smart grid technology because of the many benefits to consumers and utilities, as well as the positive impact on the environment through increased energy efficiency. (By way of background, federal support for the development of smart meter systems began with the Energy Policy Act of 2005, was supplemented with passage of the Energy Independence and Security Act of 2007, and funded by the American Recovery and Reinvestment Act of 2009 – which set aside $11 billion for the creation of a smart grid.)

For me it is not just about the technology. The most important objective is to better serve the needs of consumers and build stronger, more vibrant communities in which to live, work, and play. Smart meter and smart grid programs will be much more efficient in delivering electricity to homes and businesses; responding to outages and other emergencies; monitoring and seeking to curtail usage, especially during peak periods; preventing theft and fraud; and helping electric customers save dollars on their monthly bill. In short, the benefits to Pennsylvanians will continue to grow.

Evers: Recently many utilities have partnered with Opower and Facebook to allow customers to form teams for energy saving contests and compare energy usage with friends, hopefully creating positive peer pressure. Why are innovations like this important to our energy future?

Powelson: Any method of educating consumers and raising consumer awareness is vital. The real benefits will come when people start to realize that we are all in this together, and everyone contributing a little adds up to significant decreases in demand, which then puts a downward pressure on prices.

I particularly like this idea of comparing energy usage with neighbors and friends, as it dovetails nicely with the idea of “competition” in Pennsylvania’s electricity market. The more customers learn about competitive electricity providers, and the benefits and potential price savings available in the marketplace, the better. Increased dialogue that leads to decreased energy usage is exactly what we are looking for under Act 129.

Evers: Are there any other thoughts regarding Pennsylvania’s energy future you would like to share?

Powelson: Pennsylvania has really embraced a two-pronged approach in considering its energy future. On one hand, we are doing all that we can as regulators, providers, and consumers to comply with Act 129 and become more energy efficient. On the other hand, we are strengthening Pennsylvania’s competitive marketplace to increase competition among electric generation suppliers and produce better pricing and greater savings for the Commonwealth’s 5.6 million electric customers.

In addition to fulfilling its regulatory and oversight responsibilities, the Pennsylvania PUC will continue to educate consumers on the benefits of both energy efficiency and conservation, including smart meter technology, as well the advantages of shopping with competitive suppliers for their electric generation.

Green Button is an industry-led effort that allows electricity customers to download their household or building energy-use data in a consumer- and computer-friendly format. PaPUC Chairman Powelson and Commissioner Witmer recently issued a statement encouraging Pennsylvania electric utilities not already involved to take part in this important initiative that empowers customers. Green-Button-enabled web and smartphone applications promise to help consumers choose the most economical rate plan for their use patterns. With this information at their fingertips, consumers would be enabled to make more informed decisions about their energy use and, when coupled with opportunities to take action, be empowered to more actively manage their energy use. Furthermore, making this information available in standardized file format will help spur innovative new consumer applications and devices. Here are just a few ways the Green Button might be put to use today:

  • Insight: entrepreneur-created web portals to analyze usage and provide actionable tips;
  • Heating and Cooling: customizing thermostats for savings and comfort;
  • Education: community and student energy efficiency competitions;
  • Retrofits: improved decision-support tools to facilitate energy efficiency retrofits;
  • Verification: measurement of structural energy efficiency investments;
  • Real Estate: energy costs for tenants and/or new home purchasers; and
  • Solar: optimizing the size of rooftop solar panels.

Currently, the following 15 utility providers formally support Green Button: