Pursuing the “Return to Normal” at the Pennsylvania Public Utility Commission | Cozen O’Connor
The Pennsylvania Public Utility Commission (PUC), like many other public and private organizations, is gradually returning to pre-pandemic procedures. Commission staff will soon be returning to office, and the PUC has issued orders phasing out emergency measures it has taken in response to the pandemic.1 On July 16, 2021, the PUC issued two more orders2 take further steps towards a ‘return to normal’.3
Following Governor Tom Wolf’s broadcast Emergency Disaster Proclamation in March 2020, identifying the COVID-19 pandemic as a catastrophic emergency affecting the entire Commonwealth, the PUC issued several emergency orders affecting consumers, the regulated community and utility practitioners. Among other things, these ordinances: (1) prohibited the termination of public service by utilities of electricity, natural gas, water, wastewater, telecommunications and steam; (2) put in place a procedure for extending statutory and regulatory deadlines; and (3) amended the requirements for filing and serving documents in PUC proceedings.
On June 10, 2021, the General Assembly adopted a concurrent resolution ending the Emergency Disaster Proclamation. The next day, Governor Wolf signed Act 21, which grants “temporary regulatory flexibility” to Commonwealth agencies that suspended an act establishing procedures for the conduct of Commonwealth business. In view of these developments, the PUC adopted the Moratorium order on termination and the Order to suspend deadline.
EXTENDED PAYMENT TERMS CONCLUDED BY THE PUBLIC SERVICES
In its March 2021 order ending the moratorium on utility connections, the PUC ordered utilities to offer extended repayment terms to residential and small business customers. For example, utilities were required to offer payment terms of a minimum five-year term to residential customers with incomes below 250% of the federal poverty line. Utilities were also required to offer payment terms of a minimum of 18 months to small business customers.
The obligation to offer customers payment terms with extended repayment terms was initially to remain in effect until December 31, 2021, but the Moratorium order on termination eliminates this requirement after September 30, 2021. Effective October 1, 2021, payment terms must comply with the provisions of the Pennsylvania Public Utility Code and PUC regulations. Payment agreements with extended terms that were entered into before September 30, 2021 will remain in effect for the duration of their terms.
EXTENDED PAYMENT TERMS ORDERED BY THE COMMISSION
The order of March 2021 ending the moratorium on connections to public services also provided that in response to a formal or informal complaint filed before December 31, 2021, the PUC could order payment terms with extended repayment terms for residential and small business customers. Since the key date was the filing date of the complaint, this provision applied even if the PUC did not issue an order in the case until after December 31, 2021.
Under the Moratorium order on termination, after September 30, 2021, payment terms ordered by the PUC must comply with the provisions of the Pennsylvania Public Utility Code and PUC regulations. A PUC order entered on or before September 30, 2021, establishing a payment arrangement with an extended repayment plan, will continue to be valid under its terms after September 30, 2021.
In 2020, the PUC acknowledged that its orders in response to the COVID-19 pandemic were imposing costs on utilities. All jurisdictional utilities have been asked to track extraordinary, one-time, additional, and COVID-19-related expenses, and to keep detailed accounting records of these expenses. The PUC has also authorized the telecommunications utilities of Electricity, Natural Gas, Water, Wastewater, Steam and Rate Base / Rate of Return to create a regulatory asset for any additional expenses incurred over- beyond those incorporated in the tariffs resulting from the COVID-19 directives of the PUC.
the Moratorium order on termination confirmed that utilities should continue to track extraordinary, one-time, additional, and COVID-19 expenses and keep detailed records of those expenses. the Moratorium order on termination also confirmed that electric utilities, natural gas, water, wastewater, steam, and telecom rate base / rate of return can create a regulatory asset for any additional expenses incurred beyond those included in the rates resulting from the Moratorium order on termination and previous PUC orders relating to the pandemic.
The March 2021 order ending the moratorium on utility connections also ordered electricity, natural gas, water, wastewater, steam and telecommunications companies to submit reports regarding the accounts. at risk of termination, accumulated dollars in arrears and accounts disconnected for non-payment. . Reports were due quarterly, on the 15th day of the month following the end of the quarter, with the last report due on January 15, 2022. The Moratorium order on termination reaffirmed these reporting requirements, but clarified that they were based on the PUC’s statutory authority to require utilities to file periodic reports4 – not on the Emergency Disaster Proclamation or any other order relating to the COVID-19 pandemic.
SUSPENSION / EXTENSION OF TIMES
In March 2020, the PUC established procedures for suspension or extension of time limits set out in the PUC bylaws or in the statutes administered by the PUC. For example, in tariff cases, the chief administrative law judge was authorized to set time limits reasonable in the circumstances, after taking into consideration the positions of the parties and of the presiding administrative law judge. Deadlines generally could not be extended or suspended for more than 90 days. In addition, following the termination of the Emergency Disaster Proclamation, the March 2020 order stated that a suspended period could be extended by an additional 30 days.
the Order to suspend deadline states that the power to suspend or extend a time limit expires on September 30, 2021. Any order issued before that date, suspending or extending a time limit, will remain in full force after September 30, 2021, in accordance with its terms.
DEPT AND SERVICE REQUIREMENTS
In March 2020, the PUC ordered that all filings be made through its electronic filing system, rather than sending hard copies to the PUC. Confidential or proprietary information, which cannot be classified using the PUC electronic filing system, had to be filed by e-mail addressed to the PUC Secretary. Finally, the PUC ordered that service in PUC proceedings be exclusively electronic during the pandemic.
The special rules for filing and service during the pandemic will expire on September 30, 2021. After that date, filing and service must be made in accordance with PUC regulations.
The pandemic has had a huge impact on taxpayers and public services. Therefore, getting back to normal is a process that will take time. This process may be similar to the 2013-2014 polar vortex recovery process. Many consumers have accumulated large arrears and will ask their utilities or the PUC for payment terms. Some consumers may also file complaints challenging the charges imposed by their utilities during the pandemic. Utilities that received small rate increases due to economic conditions during the pandemic may file another rate case sooner than would have been the case in the absence of the pandemic. The PUC may review its procedural and substantive regulations to determine what changes, if any, may be desirable based on “lessons learned” during the pandemic.5 As a result, developments at the PUC over the next few months are certainly worth watching.