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1 COMMONWEALTH OF PENNSYLVANIA HOUSE OF REPRESENTATIVES CONSUMER AFFAIRS COMMITTEE MAIN CAPITOL BUILDING ROOM 140 HARRISBURG, PENNSYLVANIA PUBLIC HEARING ON MUNICI PAL ELECTRICITY AGGREGATION WEDNESDAY, MARCH 3, 2010 9:32 A.M. BEFORE: HONORABLE JOSEPH PRESTON, JR., MAJORITY CHAIR HONORABLE MARC J. GERGELY HONORABLE HARRY READSHAW HONORABLE BRYAN BARBI N HONORABLE JOSEPH A. PETRARCA HONORABLE ROBERT W. GODSHALL, MINORI TY CHAIR HONORABLE ROB W. KAUFFMAN HONORABLE TI NA PICKETT HONORABLE SHERYL M. DELOZIER HONORABLE BRIAN L. ELLIS HONORABLE SCOTT PERRY HONORABLE DOUGLAS G. REI CHLEY BRENDA J. PARDUN, RPR P. O. BOX 278 MAYTOWN, PA 17550 717-426-1596 PHONE/FAX 2 ALSO PRESENT: GAI L M. DAVI S, EXECUTIVE DI RECTOR (D) TIMOTHY A. SCOTT, RESEARCH ANALYST (D) ELI ZABETH A. ROSENTEL, RESEARCH ANALYST (D) MARCI L. SANTORO, LEGISLATI VE ASSISTANT (D) COLIN M. FITZSI MMONS, EXECUTIVE DIRECTOR (R) BRENDA J. PARDUN, RPR REPORTER - NOTARY PUBLIC 3 I NDEX NAME PAGE OPENING REMARKS AND I NTRODUCTI ONS 5 JAMES H. CAWLEY 11 CHAIRMAN PENNSYLVANIA PUBLI C UTILITY COMMI SSI ON TONY C. BANKS 50 VICE PRESIDENT PRODUCT AND MARKET DEVELOPMENT FIRSTENERGY SOLUTI ONS GENE ALESSANDRI NI 58 SENIOR VI CE PRESIDENT MARKETING PPL ENERGYPLUS IRWIN "SONNY" POPOWSKY 87 CONSUMER ADVOCATE PENNSYLVANIA OFFICE OF CONSUMER ADVOCATE DOUGLAS L. BIDEN 111 PRESIDENT ELECTRIC POWER GENERATION ASSOCIATION RONALD M. CERNI GLI A 121 DIRECTOR NATIONAL ADVOCACY GOVERNMENT AND REGULATORY AFFAIRS DIRECT ENERGY, LLC TERESA L. RI NGENBACH 125 MANAGER - MI DWEST GOVERNMENT AND REGULATORY AFFAIRS DIRECT ENERGY, LLC RICHARD J. HUDSON, JR. 136 DIRECTOR REGULATORY AND LEGISLATI VE AFFAIRS CONEDI SON SOLUTIONS EDWARD C. TROXELL 148 DIRECTOR GOVERNMENT AFFAIRS PENNSYLVANIA STATE ASSOCIATION OF BOROUGHS 4 WRI TTEN TESTIMONY SUBMITTED DONALD PEPE 158 PRESIDENT PENNSYLVANIA MUNICIPAL ELECTRI C ASSOCI ATI ON DUQUESNE LIGHT COMPANY 163 DOMINI ON RETAIL 167 CONSTELLATION ENERGY COMMODITI ES 174 GROUP, INC. 5 P R O C E E D I N G S CHAIRMAN PRESTON: Good morning. The hour of 9:00 having come and gone by 9:30, sorry -- 9 : 30 having come and gone by, I 'd like to call to order the meeting of the Consumer Affairs Committee. Before I make comments, I'd like to be able to start to my right and your left, the audience's left, and to the rear and we'll have the respective members introduce themselves. REPRESENTATI VE READSHAW: Good morning, everyone. I am Representative Harry Readshaw, representing the 36th Legislative District, Allegheny County. REPRESENTATI VE BARBIN: Good morning. I 'm Bryan Barbin. I represent Cambria County, the 71 st District. REPRESENTATI VE PICKETT: Tina Pickett, Bradford, Sullivan, and Susquehanna Counties. REPRESENTATI VE ELLIS: Brian Ellis, Butler County. REPRESENTATI VE PERRY: Scott Perry, 6 the great 9 2 nd, northern York and Cumberland Counties. REPRESENTATI VE GODSHALL: Bob Godshall, Montgomery County. REPRESENTATI VE PETRARCA: Joe Petrarca, Westmoreland. CHAIRMAN PRESTON: And I 'm Joe Preston. I work for Bob Godshall. First, I want to be able to say that if you would like electronic copies of today's testimony, there will be a sheet where we'll -- at the table there. If you put your address or leave your card down, we'll be able to get it to you. Today's subject is dealing with the aggregation I think is important. And I want to be able to help set the tone. If you notice, there's not a bill that was introduced here; it was a draft. And I think that Chairman Godshall and I have always tried to work together in a lot of things. So we want to be able to let you know that this is a concept that we're going to start off with, nobody's going to be for or directly against them for the members and the members of this 7 com mit tee . I've never, since we've been there, asked them how to vote or anything. But this is something that I think that Pennsylvania really needs to look at as far as a concept. Other people are doing it. Do we do it the same way or do we do something different? And I want to be able to say this to the peopl e i n the industry or interested parties, whether you are for or against the aggregation issue, if you have thoughts or ideas, don't hold them back. Put them on the table. Be able to talk to the respective staff about that the potential suggested changes. We anticipate at least having a little bit more formal introduction of the bill reasonably in time. But at the same time, I think that we're going to be able to look at -- for the municipalities, from the industry, and especially for the consumer, as they look at what's coming in the future. And I want to be able to set this, because this is the year -- and last year was spend time, especially since 50 percent of the committee were new, so we spent a lot of the 8 time away from just voting on some of the bills that we dealt with, but familiarizing them with the process of dealing with all of the aspects that this committee has insight over, with deal ing wi th the PUC and some of the other different safety issues and consumer issues. In addition, in the next six months, is the thought that do we make changes in different substances that we have dealt with in the past. And I think now that we have a background, as I've always told the members, because we want to eliminate the questions ahead of time, so when we do have a bill in front of us, everybody's had a chance to be able to address those issues. And I know that sometimes, we have people who come in now from outside the state, other levels of executives, who may have compared or dealt with other state systems. But I'd like to think that in this committee, and I don't think any member would say that we haven't had a chance to ask a question. And the same thing with the industry. Every issue we've ever taken, we've made sure that all 9 sides have been equally represented, whether or not we were for or against the is sues. And I want to be able to help set that tone to be able to make this perfectly clear. So I encourage you, instead of the last minute to come up, that this is what we want to be able to do and this is what we have problems with. And I encourage you also to deal with -- most of your -- all of you have good governmental representatives. And I encourage you to be able to talk to them just as well, because all of us have a good level of trust wi t h t hem. Chairman Godshall, do you have any comments? REPRESENTATIVE GODSHALL: I think what you just said, we're not going to try to do things the way they do things in Was hington. We're going to do things they way we do it in Harrisburg. Is that right? We're going to -- there's not going to be a twenty- seven-hundred-page bill that we start with and then you look at certain pages and say, we don't like this or we don't like that. But 10 it's going to be that way anyway. So, no, we do want to work with you all. And it's a new concept, a concept I believe in very strongly, the same with Chairman Preston. And I think that it's, you know, something for the future, benefit a lot of our constituents, and it's the way to go here in Pennsylvania to help a lot of people with the rate caps coming off. I t's a new and innovative way of treating the problems. CHAIRMAN PRESTON: And like to think, s i n c e we a r e go i ng t o s t a r t o f f wi t h t he chairman of the Public Utility Commission, and this is going to be broadcast on PCN. This will be a good issue where an awful lot of the consumers will be watching to be able to see exactl y what we're going to be doing. And then, to the members of the committee, I anticipate, in the coming months, that we will been in different parts of the state addressing this issue and introducing it to the local elected officials before they have -- people get a chance to say I 'm for or against something. That this is a concept that we're going to look at. 11 That being said, we have Chairman James Cawley of the Public Utility Commission for the Commonwealth of Pennsylvania. And, Mr. Chairman, welcome, and we have the opportuni ty now to set the tone for where we're going to tomorrow. CHAIRMAN CAWLEY: Well, thank you, Chairman Preston and Chairman Godshall and members of the committee. I appreci ate the opportunity to be here today to testify about this discussion draft which would grant legislative authority for municipalities to be a municipal aggregator of customers under Chapter 28, which is the electric choice chapter of the Public Utility Code, and would provide for opt-out municipal aggregation of electric generation supply within a municipality's boundaries. I thank you for calling this hearing and commend you for your leadership to provide an open and honest forum for discussion of this issue.
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