Keystone Utility News Connection in Pennsylvania A newsletter published by the Pennsylvania Public Utility Commission regarding utility news in the telecommunications, energy, transportation and water markets. Autumn 2006 PUC-Unisys Team Forging Ahead Connecting in Pennsylvania Welcome to the fifth issue of Keystone Connection, a publication of the Pennsylvania Public Utility Commission (PUC) that gives a “snapshot” view of the utility markets under the The Public Utility Commission’s (PUC’s) Information Management and jurisdiction of the Commission: Access Project (InfoMAP) is well under way. Unisys is working closely with electric, natural gas, transporta- the PUC staff to overhaul our case management system, which currently relies tion, telecommunications, water on COBOL technology that was developed in-house over 25 years ago. and the major issues that affect Upon arriving at the PUC in March, Unisys began the Discovery Phase by each industry. holding joint application design sessions with all offices and bureaus. During The publication contains cover- those sessions, Unisys focused on ensuring that all work flows are age of all utilities, including news documented accurately. To complete the Discovery Phase, Unisys developed on consumer issues and general documents to reflect their understanding of that work flow, which the bureaus information on PUC happenings. have reviewed for accuracy. This part of the process is extremely important to The PUC balances the the future success of the project, and PUC staff has been commended for needs of consumers and utilities contributing their time and expertise to this phase. to ensure safe and reliable utility Around mid-October, Unisys embarked upon the Design Phase. During this service at reasonable rates; pro- part, Unisys has been designing the technical solution that satisfies the tect the public interest; educate business and functional requirements identified and documented during the consumers to make independent Discovery Phase. These technical solutions will serve as the foundation for the and informed utility choices; InfoMAP construction team to configure solutions during the Construction further economic development; Phase, which will commence in December. and foster new technologies and The case management system and automated workflow elements of InfoMAP competitive markets in an are projected to go-live in 2007. Electronic access and filing capabilities, along environmentally sound manner. with e-commerce, are expected to be implemented in spring 2008. Currently, the PUC staff is drafting proposed regulations to address the electronic filing requirements. When a draft is completed, the stakeholder ON THE INSIDE group convened in June will be given an opportunity to offer feedback to those proposals before they are submitted to the PUC for review. The topics of the 2-4 Electric rulemaking include: 5-8 Water & Wastewater • Whether paper copies will be required; 9-11 Telecommunications • How service on parties will be handled; • The time of day when electronic filings will be due; and 12-14 Natural Gas • A method for addressing affidavits, verifications and electronic 15 Transportation signatures. 16 Federal News More information about InfoMAP is available on the PUC’s Web site at www.puc.state.pa.us/general/infomap.aspx. Any questions, concerns or 17 Consumer News suggestions may be directed to [email protected]. 19-20 Commission News 21-22 Utility News Keystone Connection - Electric PPL Electric’s Bridge Plan PUC Investigates Energy On Aug. 2, 2006, PPL Electric filed a petition for approval of a competitive bridge plan (CBP). This Efficiency and Conservation plan would establish the terms and conditions under which PPL will begin to supply provider of last resort The Commission commenced an investigation of demand (POLR) services during 2010. Several elements of side response (DSR), energy efficiency and conservation the CBP are: through a motion adopted at the public meeting of Sept. 28, • Competitive procurement of POLR supply for 2006. The Commission took this action as part of its 2010; continuing efforts to mitigate the impact of anticipated • Upgraded demand side response (DSR) electric price increases on retail customers. Through this plan; investigation, opened at Docket No. M-00061984, the • Enhanced consumer education program Commission directed that the Demand Side Response starting in 2007; and Working Group be reconvened. • Additional assistance for low-income The objective of the investigation is to identify reasonable, customers beginning in 2010. cost-effective programs that electric distribution companies In regards to the competitive procurement process, and other parties can implement to enable retail customers PPL plans to implement a three-year program to use energy more efficiently. This investigation includes starting in 2007 to procure the necessary supply to the study of the advanced metering infrastructure necessary meet its POLR obligations in 2010. PPL plans to for the implementation of dynamic pricing programs. The obtain POLR supply for 2010 on the competitive investigation also will consider ratemaking methodologies, market at prevailing market rates through six such as revenue decoupling that eliminates disincentives to individual procurements over the period 2007 through the deployment of energy conservation and efficiency 2009. The procurement will consist of 60 tranches measures by utilities. for residential (six solicitations of 10 tranches each), The initial meeting of the DSR Working Group was held 42 tranches for small commercial and industrial (six on Nov. 16. At that meeting, led by Commission staff, solicitations of seven tranches each) and 38 stakeholders representing a variety of issues identified the tranches for the large commercial and industrial specific tasks of the Working Group and developed a class (two solicitations of 19 tranches each). Each process and timeline for completion of those tasks. The tranch will include a fixed percentage of the DSR Working Group is to complete the investigation and customer class POLR load and is estimated to be provide specific policy recommendations consistent with a 50 MW. The supply must also be load-following and schedule that would allow for Commission action by May include generation from renewable sources. The 15, 2007. process will resemble the auction process currently in place in New Jersey. PPL is planning to upgrade its DSR plan by extending the completion date from 2007 to 2010, Penn Power’s Provider of doubling the number of eligible participations and removing the limit of the number of participants in Last Resort Supply Plan 2010. It also plans the implementation of a year- On Oct. 19, 2006, the Commission certified that the process round program to replace the current summer-time used to determine the default service prices for Pennsylvania program. Power Co. (Penn Power) customers was transparent and non- An enhanced consumer education program will discriminatory and reflected market-based prices. The market- begin in 2007 and will concentrate on the following based rates, to be effective from Jan. 1, 2007, to May 21, 2008, four areas: customer choice, demand response replaced the capped rates that Penn Power customers had education, wise use of energy education and been paying pursuant to the company’s restructuring education on POLR rates. settlement in 1999. Additional assistance will be required for low- The electricity that will be supplied during this period was income customers as a result of the cost difference procured by Penn Power through three auctions held in May, between the upcoming POLR rates and the currently July and August 2006. effective rates. Funding will be increased by These auctions were administered by NERA Economic approximately $5.5 million to provide the additional Consulting, a contractor retained by Penn Power to manage assistance to affected customers. this procurement, and monitored by Commission staff. Supply contracts were awarded to the lowest bidders for each of the three auctions. The average residential customers will see a 20 to 30 percent increase in their monthly electric bill. 2 Keystone Connection www.puc.state.pa.us Keystone Connection - Electric Merger Update for Electric the Macquarie Consortium, which is headquartered in Australia. It is recognized as a global leader in Companies infrastructure assets and investments. Macquarie’s infrastructure and property funds own a string of toll PSEG & Exelon Terminate Proposed Merger roads, airports and utilities across the United Kingdom, United States and Asia, and manage over $66 billion of On Sept. 14, 2006, Public Service Enterprise Group investments worldwide. Incorporated (PSEG) and Exelon Corporation, the parent On Sept. 6, 2006, DLH and Macquarie filed an company of PECO Energy Company, formally terminated application docketed at A-110150F0035 and the merger agreement announced on Dec. 20, 2004. A-311233F0002 requesting the necessary Commission Additionally, the companies withdrew their merger approvals authorizing the transfer of control. application pending before the New Jersey Board of Public Utilities (NJBPU). Exelon explained that its decision to terminate the merger was based on significant differences of opinion between the companies and the NJBPU staff during settlement negotations. The issues separating them Commission Reaches included rate concessions and market power mitigation. At a public meeting held Jan. 27, 2006, the PUC had Settlements