PUC Adopts Implementation Order for Act 58 of 2018; Provides Guidance on How Utilities May Establish Future Alternative Rate Mechanisms
Published on 4/25/2019
HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today approved an Implementation Order for Act 58 of 2018 (Act 58), putting forth procedures through which utilities may seek Commission approval of applications establishing alternative rates and rate mechanisms in future base rate proceedings.
The Commission voted 5-0 to adopt the order, which the PUC finalized after providing for an extended comment and review period on the Commission’s proposed interpretation and implementation of the new law. Act 58 gives the Commission express statutory authority to approve alternative rate mechanisms for electric, natural gas, and water and wastewater utilities, as well as what notices of such ratemaking requests are to be given to customers.
On June 28, 2018, Gov. Tom Wolf signed Act 58, which added Section 1330 to Chapter 13 of the Pennsylvania Public Utility Code (Chapter 13) and enabled utilities to seek PUC approval of alternative rates and rate mechanisms including, but not limited to: decoupling mechanisms, performance-based rates, formula rates, multiyear rate plans, or a combination of these alternatives.
In its Tentative Implementation Order of Aug. 23, 2018, the Commission proposed that the alternative ratemaking mechanisms authorized under Act 58 be proposed within the confines of a utility base rate case under Chapter 13. The PUC has a well-established process for reviewing base rate cases, which provides for hearings concerning the lawfulness and appropriateness of proposed rates, including proposed alternative rate mechanisms.
The Pennsylvania Public Utility Commission balances the needs of consumers and utilities; ensures safe and reliable utility service at reasonable rates; protects the public interest; educates consumers to make independent and informed utility choices; furthers economic development; and fosters new technologies and competitive markets in an environmentally sound manner.
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Docket No.: M-2018-3003269
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