Annual Fees May Be Coming for Electric Generation Suppliers and Natural Gas Suppliers in Pennsylvania
October 13, 2014
Legislation is poised to be passed by the Pennsylvania General Assembly that would, among other things, require suppliers to pay an annual fee to the Pennsylvania Public Utility Commission (PUC).
With respect to annual fees, the proposed legislation (House Bill 939, Printer No. 4250[1]) would amend the Public Utility Code as follows:
66 Pa. C.S. § 2208. Requirements For Natural Gas Suppliers.
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(h) ANNUAL FEES.–THE COMMISSION MAY ESTABLISH, BY ORDER OR RULE, ON A REASONABLE COST BASIS, FEES TO BE CHARGED FOR ANNUAL ACTIVITIES RELATED TO THE OVERSIGHT OF NATURAL GAS SUPPLIERS.
66 PA. C.S. § 2809. Requirements For Electric Generation Suppliers.
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(g) ANNUAL FEES.–THE COMMISSION MAY ESTABLISH, BY ORDER OF RULE, ON A REASONABLE COST BASIS, FEES TO BE CHARGED FOR ANNUAL ACTIVITIES RELATED TO THE OVERSIGHT OF ELECTRIC GENERATION SUPPLIERS.
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The proposed language is substantially similar to the PUC’s general authorization to charge fees for services rendered by the PUC.[2] The fees under Section 317 are set in a regulation.[3] And, it would appear likely that fees under the proposed legislation would also require a regulation.[4] Regulations must be promulgated under a state-wide rulemaking process.
Right now, it is not clear how the PUC will set the fee “on a reasonable cost basis.” The PUC has, however, suggested that it could implement a $1,000 flat fee on all suppliers, brokers and marketers.[5] That being said, we would note that the PUC uses assessments to collect “annual fees” from public utilities.[6] But, suppliers are not public utilities for purposes of assessments under Section 510.[7] The inability to assess suppliers appears to be the driving force behind the proposed language,
The proposed legislation must still be concurred in by the House. Once passed in final form by both the House and the Senate, the legislation will be sent to the Governor for his consideration. The Governor, after referring the bill to the Attorney General to certify its legality and constitutionality, can either sign, veto, or take no action on the legislation. We do not expect any problems with HB 939 becoming law.
[1] https://www.legis.state.pa.us/cfdocs/billInfo/billInfo.cfm?sYear=2013&sInd=0&body=H&type=B&bn=0939
[2] See 66 Pa. C.S. § 317(a) (“The commission shall by rule establish on a reasonable cost basis the fees to be charged and collected for the following services …:”).
[3] 52 Pa. Code § 1.43.
[4] See 45 Pa. C.S. § 501 (relating to the definition of regulation); Pa. Human Relations Comm’n v. Norristown Area School District, 473 Pa. 334, 374 A.2d 671 (1977) (enforceable binding norms constitute “regulations”). See also 1 Pa. C.S. §§ 1921, 1922 (relating to rules for statutory construction).
[5] Investigation of Pennsylvania’s Retail Electricity Market, End State of Default Service, PUC Docket No. I-2011-2237952, Final Order entered February 15, 2013 at p. 107. A copy of the Final Order is available at: https://www.puc.state.pa.us/pcdocs/1214105.docx.
[6] 66 Pa. C.S. § 508.
[7] Delmarva Power & Light Co. v. Commonwealth, 870 A.2d 901, 911 (Pa. 2005). See Equitable Gas Co. v. Commonwealth, 880 A.2d 48 (Pa. Cmwlth. 2005)(Holding that the Commission properly allocated the costs of regulating natural gas suppliers (NGSs) to natural gas distribution companies (NGDCs), because the costs of regulating NGSs were directly related to the gas industry).