Pennsylvania Extends Life and Applicability of Chapter 14 of the Public Utility Code 

Energy, Environmental & Utilities Alert

November 18, 2014

On October 22, 2014, Governor Corbett signed Act 155 into law. The Act will go into effect 60 days from the date the governor signed it or approximately December 21, 2014. Among other things, this Act revises Section 510 and Chapter 14 of the Pennsylvania Public Utility Code to implement funding changes for the Public Utility Commission (the Commission), expands the types of entities subject to the “responsible utility customer protection[s]” contained within Chapter 14 and extends Chapter 14’s expiration through 2024. These changes will be discussed in more detail below.

Commission Funding Changes

The preamble of Act 155 reports the General Assembly’s finding that “responsible utility customer protection is a fundamental goal” of the Pennsylvania Public Utility Code “for public utilities and licensed entities.” The preamble further states that changes to the Commission’s funding are necessary in order to carry out that goal, including changes to the assessment methodology for regulatory expenses that currently exists under 11 Pa. C.S. § 510(a), and the imposition of fees associated with the Commission’s oversight of Electric Generation Suppliers (EGSs) and Natural Gas Suppliers (NGSs).

Currently, the Commission’s estimated expenditures are capped at three-tenths of 1 percent of the total gross intrastate operating revenues of the public utilities under its jurisdiction. Act 155 amends Section 510(a) to include the total gross intrastate operating revenues of public utilities and licensed entities under its jurisdiction. By adding this new group of licensed entities – which includes EGSs and NGSs – into the base for the limitation on Commission expenditures, it is clear that the Commission’s estimated expenditure cap will increase.

Assuming that the Commission’s estimated expenditures will increase to the new higher level, the next question is: How will the Commission collect funds to cover these expenditures? While Act 155 amends Section 510(a) to include the new licensed entities in the base for the Commission’s expenditures calculation cap, it does not amend Section 501(b), which governs how the Commission’s expenditure assessment is allocated and paid. However, Act 155 does amend 66 Pa. C.S. §§ 2208, 2809 (regarding the requirements for EGSs and NGSs respectively). More specifically, as to each section, Act 155 adds new subsections to provide that the Commission may establish, on a reasonable cost basis, fees to be charged for annual activities related to oversight of EGSs and NGSs. Accordingly, the legislature has not technically provided a mechanism for the Commission to assess EGSs and NGSs. It has, however, provided a mechanism for the Commission to impose fees on EGSs and NGSs for its oversight activities. Accordingly, EGSs and NGSs should anticipate a budget impact in 2015 for these new fees.

Additional Utilities Covered by Chapter 14

Act 155 extends Chapter 14’s “responsible utility customer protection[s]” to three new types of utilities. Specifically, Act 155 extends Chapter 14 to cover small natural gas distribution utilities, steam heat utilities and wastewater utilities. The Act specifically defines each of the above-referenced utilities. The take-away for the operators of these newly covered utilities is that they should immediately prepare to comply with the billing and termination requirements for residential customers as set forth in Chapter 14.

Revisions to Residential Billing and Termination Requirements

Act 155 also makes several changes to the Residential Billing and Termination regulations contained in Chapter 14. Some of the changes are summarized below by topic.

Medical Certification: Chapter 14 previously provided that a public utility shall not terminate service to a premise when a licensed physician or nurse practitioner has certified that the customer or a member of the customer’s household is seriously ill or afflicted with a condition that would be aggravated by termination of the service in question. (66 Pa. C.S. § 1406(f)). Act 155 provides a definition for the term “medical certificate,” and adds physicians’ assistants to the list of medical professionals authorized to issue medical certificates. Act 155 also provides that a medical certificate must state that a customer or a member of the customer’s household is seriously ill or has been diagnosed with a medical condition that requires the continuance of the service to treat the medical condition.

Cash Deposits: Act 155 prohibits a utility from requiring a cash deposit from customers or applicants that are confirmed to be eligible for a customer assistance program. Additionally, as to those customers for which cash deposits are allowed, Act 155 now makes such deposits payable during a 90-day period. Cash deposits are still limited to one-sixth of the applicant’s estimated annual bill. Finally, Act 155 amends 66 Pa. C.S. § 1404(c)(6) to better define the rate of interest that will accrue on customers’ cash deposits.

Notice of Termination: Act 155 alters and expands the methods that can be used to contact the customer or occupant prior to termination of service. Specifically, Act 155 shortens the hours when the utility can attempt telephonic contact by changing the starting time for such calls from 7:00 a.m. to 8:00 a.m. Further, Act 155 allows contact for notice of termination purposes by email, text or other electronic messaging format if the customer has affirmatively consented to being contacted using a specific electronic messaging format for termination purposes and that such contact is consistent with the Commission’s privacy guidelines.

Grounds for Immediate Termination: Act 155 adds a new ground for the immediate termination of service based upon a customer tendering payment for reconnection of services that is subsequently dishonored, revoked, canceled or otherwise not authorized and which has not been cured or otherwise made full payment within three business days of the utility providing notice of the dishonored payment.

Friday Service Terminations: Act 155 changes the dates upon which service can be terminated from Monday through Friday to Monday through Thursday. Accordingly, utilities may no longer be able to terminate services immediately before a weekend.

Public Utility Duties (Customer Assistance): Act 155 creates a new section under Chapter 14, Section 1410.1, which outlines several duties utilities have to direct customers to their Universal Service Programs including customer assistance programs.

Public Utility Duties (Collections and Reporting): The new section 1410.1 also provides that utilities have an affirmative responsibility to attempt to collect payment on overdue accounts. Further, utilities now need to report to the Commission, on an annual basis, residential customer accounts with an arrearage balance of at least $10,000. In reporting to the Commission, the utility must also demonstrate what efforts are being taken to collect the arrearage. Act 155 authorizes civil fines or other appropriate sanctions by the Commission for a utility’s failure to take reasonable steps to collect payments on the overdue accounts. It appears that a well-documented collection file and consistent reasonable collection actions are needed by the utility to comport with this collection and reporting duty.

New Sunset Date

Finally, the Act provides that Chapter 14 will expire on December 31, 2024. Accordingly, the new fees and other requirements of Act 155 will apply for the next decade unless the Legislature takes subsequent action. 


David P. Zambito

Chair, Utility & Energy

(717) 703-5892

Related Practices

If you would like to learn more about the impact that Act 155 will have on your business, please contact the Energy, Environmental and Utility Practice Group at Cozen O’Connor.