Category Archives: Energy Law

PUC Orders 17 Utilities to Return $320+ Million to Consumers Following Federal Tax Reform

The Pennsylvania Public Utility Commission (PUC) on May 17, 2018 issued an Order, puc_sealrequiring a “negative surcharge” or monthly credit on customer bills for 17 major electric, natural gas, and water and wastewater utilities, totaling more than $320-million per year. The refunds to consumers are the result of the substantial decrease in federal corporate tax rates and other tax changes under the Tax Cuts and Jobs Act (TCJA) of 2017, which impacted the tax liability of many utilities.

Additionally, the PUC will consider the effects of federal tax reform on seven other public utilities as part of the investigations for rate cases which have already been filed or are expected to be filed by Aug. 1, 2018. In those situations, the Commission has directed the parties involved to address the impact of any TCJA tax savings as part of the overall rate design for each utility.

Today’s Order, along with a series of orders specific to each affected utility, were approved by 5-0 votes. The PUC’s action today follows an extensive investigation into the effects of federal tax reform on the rates charged by Commission-regulated utilities – which, among other things, reflect annual taxes owed both to the federal and state governments.

“As economic regulators, it is the Commission’s responsibility to ensure that utility rates are just and reasonable. Further, it is necessary for utility rates to reflect relevant tax expenses,” noted PUC Chairman Gladys M Brown in a statement at today’s public meeting. “I believe this work (by PUC staff) has resulted in an innovative answer by this Commission to effectively flow-through the benefits of the TCJA back to customers.”

Vice Chairman Andrew G. Place also praised staff’s work in this complex proceeding and agreed with the Commission’s overall approach. However, he indicated that the utilities’ overall cost of capital and rate of return should apply on the accumulated balances of tax savings for the period between January 1 and June 30, 2018.

Depending on the revenue and tax impact on each utility addressed in today’s PUC orders, the distribution charges on monthly consumer bills are expected to decrease from .56-percent to 8.55-percent. A list of the utilities impacted by today’s PUC orders, along with the anticipated changes in distribution rates, has been posted to the online docket for this matter: M-2018-2641242.  Tax Effects

Public utilities required to begin returning federal tax savings to consumers include Citizens’ Electric Company of Lewisburg, Metropolitan Edison Company, Pennsylvania Electric Company, Pennsylvania Power Company, Pike County Light & Power Company, PPL Electric Utilities Corporation, Wellsboro Electric Company, West Penn Power Company, PECO Energy Company (Gas Division), National Fuel Gas Distribution Corporation, Peoples Gas Company LLC, Peoples Natural Gas Company LLC—Equitable Division, UGI Central Penn Gas Inc., UGI Penn Natural Gas Inc., UGI Utilities, Inc.–Gas Division, Pennsylvania-American Water Company and Pennsylvania-American Water Company—Wastewater.

Utilities not required to take immediate action because of the continuing analysis of tax reform impacts on their current or pending rate cases include UGI Utilities, Inc. (Electric), Columbia Gas of Pennsylvania, Inc., Duquesne Light Company, PECO Energy Company (Electric), York Water Company, Suez Water Pennsylvania, Inc. and Aqua Pennsylvania, Inc.  In each of those situations, any tax savings will be considered as part of the broader evaluation of their rates.

The Commission also noted that one Pennsylvania public utility saw no financial impact or an increased federal tax liability as the result of TCJA. Per today’s order, Columbia Water Company is directed to file a tariff or tariff supplement within 10 days, replacing their current rates, which were declared to be “temporary” by Commission action in March 2018.

Finally, the Commission investigation determined that two utilities are receiving only a small increased tax liability from TCJA – Peoples Natural Gas Company LLC and Newtown Artesian Water Company. For these two utilities, the Commission’s previous order declaring their rates to be temporary will continue, subject to annual reconciliation.

Desire more specific assistance regarding PUC matters or energy law, contact attorney Jeffrey A. Franklin at Prince Law Offices, P.C.

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PUC Promotes Combined Heat and Power Technology in Pennsylvania

Earlier this month, April 5, 2018, the Pennsylvania Public Utility Commission (PUC)CHP Partnership Logo adopted a policy statement geared toward helping advance the development of combined heat and power (CHP) technology. Additionally, the PUC’s Bureau of Technical Utility Services will initiate a CHP Working Group to engage with stakeholders and encourage the deployment of, and reduce barriers to, CHP initiatives in Pennsylvania.

What is CHP? CHP captures the waste heat energy that is typically lost through power generation, using it to provide heating and/or cooling for manufacturing and business. CHP is an efficient means of generating electric power and thermal energy from a single fuel source, providing cost-effective energy services to commercial businesses like hospitals, universities and hotels.

“CHP offers a variety of benefits,” noted Chairman Gladys M. Brown in a supporting statement at recent PUC public meeting,” First and foremost, CHP supports environmental stewardship through increased efficiency. Also, it provides economic benefits to its adopters through reductions in energy consumption. Further, it supports reliability and resiliency as a distributed energy resource.”

The Commission voted 5-0 to adopt the policy statement, which promotes a coordinated approach to CHP to the benefit of the economy, the environment, and the security of Pennsylvania residents and businesses.  First proposed and issued for public comment in the winter of 2016, the newly adopted policy statement is intended to:

  • promote CHP investments;
  • encourage electric distribution companies (EDCs) and natural gas distribution companies (NGDCs) to make CHP an integral part of their energy efficiency and resiliency plans, as well as their marketing and outreach efforts; and
  • encourage these companies to design interconnection processes and rates for owners and operators of CHP facilities.

Under the new policy, EDCs and NGDCs are required to report to the Commission biennially on CHP development in their service territories, including their efforts to promote such development.  Additionally, Commission staff will provide biennial reports to the Commission summarizing and analyzing the utility reports, identifying government agency programs providing financial aid and other support for CHP and making recommendations regarding the development of CHP in the Commonwealth.

Desire more specific assistance regarding CHP, renewable energy projects, energy law, or real estate law, contact attorney Jeffrey A. Franklin at Prince Law Offices, P.C.

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Blockchain Technology Overview

When and if to use blockchain

Aiming to clarify blockchain, the National Institute of Standards and Technology (NIST) recently released an introduction to blockchain, which underpins Bitcoin and other digital currencies.
blockchain_illustration_KIrvineShutterstock

Credit: K. Irvine/NIST/Shutterstock

 

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Answers to Frequent Questions about CHP

Considering Combined Heat and Power (CHP) to save money, enhance reliability, and benefit the environment?  The EPA CHP Partnership and Prince Law Offices can help. 

 CHP Partnership Logo

What is CHP?

Typically, nearly two-thirds of the energy used to generate electricity is wasted in the form of heat discharged to the atmosphere. Additional energy is wasted during the distribution of electricity to end users. CHP is on-site electricity generation that captures the heat that would otherwise be wasted to provide useful thermal energy—such as steam or hot water—that can be used for space heating, cooling, domestic hot water and industrial processes. In this way, and by avoiding distribution losses, CHP can achieve efficiencies of over 80 percent, compared to 50 percent for conventional technologies (i.e., grid-supplied electricity and an on-site boiler).

Learn more in Discover CHP.

What are the benefits of CHP?

CHP offers a number of benefits compared to conventional electricity and thermal energy production, including:

  • Efficiency Benefits. CHP requires less fuel to produce a given energy output and avoids transmission and distribution losses that occur when electricity travels over power lines.
  • Environmental Benefits. Because less fuel is burned to produce each unit of energy output and because transmission and distribution losses are avoided, CHP reduces emissions of greenhouse gases and other air pollutants.
  • Economic Benefits. CHP can save facilities considerable money on their energy bills due to its high efficiency, and it can provide a hedge against electricity cost increases.
  • Reliability Benefits. Unreliable electricity service represents a quantifiable business, safety, and health risk for some companies and organizations. CHP is an on-site generation resource and can be designed to support continued operations in the event of a disaster or grid disruption by continuing to provide reliable electricity.

Learn more in CHP Benefits.

Where does CHP make sense?

CHP is ideally suited for energy users that have both electric and thermal energy demands.

CHP is used in many different types and sizes of facilities nationwide, including:

  • Commercial buildings—office buildings, hotels, health clubs, nursing homes
  • Residential—condominiums, co-ops, apartments, planned communities
  • Institutions—colleges and universities, hospitals, prisons, military bases
  • Municipal—district energy systems, wastewater treatment facilities, K-12 schools
  • Manufacturers—chemical, refining, ethanol, pulp and paper, food processing, glass manufacturing

Learn more in Discover CHP.

Desire more specific assistance regarding CHP, renewable energy projects, energy law, or real estate law, contact attorney Jeffrey A. Franklin at Prince Law Offices, P.C.

 

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PaPUC Initiates Further Study of Supplier Consolidated Billing by Electric Generation Suppliers

puc_sealOn January 18, 2018, the Pennsylvania Public Utility Commission (PUC) initiated further study of customer billing practices by competitive electric generations suppliers (EGSs) – directing an en banc hearing be conducted before the Commission to explore, among other things, the legality, merits and potential implementation of supplier consolidated billing (SCB).

The Commission voted 5-0 to deny a petition filed by NRG Energy Inc. (NRG), requesting approval of SCB, but also approved a joint motion by Chairman Gladys M. Brown and Commissioner Norman J. Kennard to further explore the the merits of possible alternatives to SCB.

Under SCB, customers would receive a single, consolidated bill from their chosen EGS that would include both their electric distribution company’s (EDC) distribution charges and their EGS’s generation and transmission charges.  Currently in Pennsylvania, EDCs handle all customer billing, with the EDC joint bill including any generation and transmission charges for customers with competitive EGSs.

The joint motion by Chairman Brown and Commissioner Kennard outlined the ongoing exploration of the issue by the Commission.

“We continue to be of the opinion previously expressed by the Commission as part of our retail electricity market investigation that SCB will facilitate the offering of innovative new products and services and will also help the supplier in establishing a brand identity with the customer,” Commissioner Kennard stated in the joint motion. “In order to continue the consideration of SCB and other programs that can promote a competitive market and benefit customers, we find that it is necessary to seek further information.”

The Commissioners’ joint motion directs the PUC’s Law Bureau and Office of Competitive Market Oversight (OCMO) to organize an en banc hearing, to occur on or before June 14, 2018, to allow invited parties the opportunity to provide additional information on SCB or SCB alternatives.  The Commission plans to issue a Secretarial Letter with more details on the en banc hearing.

To learn how Prince Law Offices, P.C. can assist you or your business with energy law and PUC matters, contact attorney Jeffrey A. Franklin at Prince Law Offices, P.C.

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After Three Years, PennEast Pipeline Approved by Federal Energy Regulatory Commission, Construction to Begin

FERCThe Federal Energy Regulatory Commission (FERC) issued an Order under section 7(c) of the Natural Gas Act approving construction of the PennEast Pipeline.

PennEast Pipeline Logo

Anthony Cox, Chair of the PennEast Pipeline Company LLC Board of Managers said “They will reap the benefits of accessing one of the most affordable and abundant supplies of natural gas in all of North America. PennEast will lower gas and electricity costs, increase reliability, improve air quality, and make the region more competitive for jobs in the coming decades.”

The approximately 120-mile pipeline route begins in the Marcellus Shale production area near Dallas, Pennsylvania, and connects with the existing underground Transcontinental Pipeline near Pennington, New Jersey. The route includes 24 municipalities in Pennsylvania and six in New Jersey.

Access to additional natural gas supplies via PennEast Pipeline should reduce the cost of gas in eastern Pennsylvania and New Jersey, even during non-peak periods. Natural gas prices in the market areas worsen during periods of peak demand, such as the sustained recent cold snap, where natural gas prices spiked 31 times higher in New Jersey than supplies in the Pennsylvania production areas. This is due to pipeline constraints and inadequate supply to meet demand.

Since 2005, natural gas use has more than doubled in New Jersey and increased five-fold in Pennsylvania for electric generation. As a result, carbon emissions are dropping to their lowest level in nearly three decades while air quality has improved across the region. A diverse fuel supply and the reliability of the electric grid are the primary reasons PJM Interconnection, the largest electric grid operator in the world, cited in an October 2016 report to FERC that the PennEast Pipeline is needed for grid reliability.

FERC issued its Draft Environmental Impact Statement (EIS) first under the Obama Administration in July 2016, and finalized its recommendations after nearly nine months of additional public input. The Final EIS in April 2017 affirmed that construction and operation of the PennEast Pipeline would have minimal environmental impact, which would be reduced to “less than significant levels” with PennEast’s and FERC’s mitigation measures.  The Pennsylvania Department of Environmental Protection under Democrat Governor Tom Wolf issued its 401 Water Quality Certification in February, and in May, the United States Environmental Protection Agency Region 3 added that the Final EIS included “improved safeguards for the protection of human health and the environment.”

Additionally, the PennEast Pipeline Company updated its estimated in-service date to 2019, with construction still beginning in 2018. The original project timeline allowed for many variables, though did not anticipate the many months without a voting quorum at FERC.

“In the coming days, we will work to finalize fair and positive compensation agreements with landowners,” added Cox. “In the weeks ahead, survey crews will collect remaining field data in support of our permit applications to ensure minimal environmental and community impact. We look forward to continuing our work with state, bi-state and regional permitting agencies and expect those permit reviews to be conducted on the merits of the application, without outside interference.”

If you or your business have questions regarding energy law or real estate law, including right of way and easement negotiations, condemnations or eminent domain, contact attorney Jeffrey A. Franklin at Prince Law Offices, P.C.

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When the Lights Go Out – Black Sky Power Outage Mass Event – Preparedness

What would you do if you didn’t have power for an extended period of time? For one week? For one month? For six months? “EARTH EX” is designed to help you think through this scenario and increase your preparedness.

Leadership and staff from the Pennsylvania Public Utility Commission (PUC), Pennsylvania Emergency Management Agency (PEMA) and Pennsylvania Governor’s Office of Homeland Security today, August 23, 2017, joined with government agencies, utilities, emergency responders and other stakeholders around the world in a first-ever transnational exercise to test responses to a large-scale power outage event.

Today’s Pennsylvania involvement in EARTH EX 2017 is part of a continuing collaboration of public and private sector leaders to strengthen the state’s effort to prepare for “Black Sky” events – defined as extraordinary, wide-reaching events capable of producing power outages that last significantly longer than typical weather or operational outages.

Because of the large-scale nature of Black Sky events, they have the potential to impact not only electricity, but also other critical systems, such as natural gas, water, wastewater treatment, telecommunications and transportation services. These events could be caused by a cyber-attack on the electric grid, severe weather or physical attacks.

“Black Sky events have the potential to disrupt essential services across large areas, impacting the lives of millions of people,” said PUC Chairman Gladys M. Brown. “It is essential that we work collectively to address these threats, because it will require the work of government, private sector and not-for-profit organizations to better safeguard our critical systems, strengthen our response and enhance our ability to recover from Black Sky events.”

“This exercise gives us the opportunity to work with our partners in preparedness, response and recovery to identify ways we can work together more efficiently and effectively in the event of a Black Sky incident,” said PEMA Director Richard D. Flinn, Jr.

“Planning exercises like EARTH EX are a critical part of developing an effective, coordinated response to a Black Sky event,” said Marcus L. Brown, director of Pennsylvania’s Office of Homeland Security. “The lessons learned will help all of the participants prepare for, and recover from, a catastrophic disruption of electricity and other essential services.”

Pennsylvania’s first Black Sky exercise – one of the first in the country – was held in June 2016, hosted by the PUC and Gov. Tom Wolf. Since that time, the PUC, PEMA and the Governor’s Office of Homeland Security have continued to integrate Black Sky planning and practice into broader discussions about emergency response planning.

Today’s EARTH EX exercise, developed by the Electric Infrastructure Security Council (EIS Council), is the first phase of a nearly year-long series of international exercises intended to develop, test and enhance planning and preparation for Black Sky events. EIS Council hosts national and international collaborations on resilience and whole community restoration and response planning, addressing severe, national and global scale hazards to lifeline infrastructures.

If you or your business have legal questions or concerns regarding disaster preparedness, computer law, privacy, or cybersecurity law matters, contact attorney Jeffrey A. Franklin at Prince Law Offices. Learn more about preparedness at EARTH EX 2017.  Tell us how you are preparing in the comments.

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