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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| HOUSE RESOLUTION |
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| INTRODUCED BY GEORGE, BELFANTI, CALTAGIRONE, COHEN, CONKLIN, DONATUCCI, GOODMAN, GRUCELA, HARKINS, HENNESSEY, JOSEPHS, LEVDANSKY, MANDERINO, McILVAINE SMITH, MELIO, MUNDY, READSHAW, SIPTROTH AND K. SMITH, MARCH 9, 2010 |
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| REFERRED TO COMMITTEE ON CONSUMER AFFAIRS, MARCH 9, 2010 |
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| A RESOLUTION |
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1 | Directing the Environmental Resources and Energy Committee of |
2 | the House of Representatives to formally investigate whether |
3 | some utility companies were unjustly enriched by |
4 | overcollecting and charging billions of dollars in |
5 | unjustified stranded cost payments under the Electricity |
6 | Generation Customer Choice and Competition Act of 1996 to |
7 | Pennsylvania ratepayers, and whether those electric |
8 | utilities' generation affiliates, which received formerly |
9 | regulated generation assets of the utility companies at |
10 | little to no cost, were unjustly enriched in those |
11 | transactions. |
12 | WHEREAS, The General Assembly, by enacting the Electricity |
13 | Generation Customer Choice and Competition Act, 66 Pa.C.S. Ch. |
14 | 28, on December 3, 1996, to facilitate moving toward greater |
15 | competition in the electricity generation market, sought to |
16 | resolve certain transitional issues in a manner that is fair to |
17 | customers, electric utilities, investors, the employees of |
18 | electric utilities, local communities, nonutility generators of |
19 | electricity and other affected parties; and |
20 | WHEREAS, The Electricity Generation Customer Choice and |
21 | Competition Act defines "competitive transition charge" as "[a] |
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1 | nonbypassable charge applied to the bill of every customer |
2 | accessing the transmission or distribution network which |
3 | (charge) is designed to recover an electric utility's transition |
4 | or stranded costs as determined by the public utility |
5 | commission"; and |
6 | WHEREAS, The act defines "transition or stranded costs" as, |
7 | in part, "[an] electric utility's known and measurable net |
8 | electric generation-related costs, determined on a net present |
9 | value basis over the life of the asset or liability as part of |
10 | its restructuring plan, which traditionally would be recoverable |
11 | under a regulated environment but which may not be recoverable |
12 | in a competitive electric generation market and which the |
13 | commission determines will remain following mitigation by the |
14 | electric utility"; and |
15 | WHEREAS, Since the implementation of the Electricity |
16 | Generation Customer Choice and Competition Act, there has not |
17 | been a close scrutiny by the Pennsylvania Public Utility |
18 | Commission, or any other governmental entity, of stranded costs |
19 | by electric utilities, nor has there been any analysis of the |
20 | commission-approved stranded costs that have been made publicly |
21 | available to ratepayers; and |
22 | WHEREAS, Electric utilities have been collecting stranded |
23 | cost payments from all classes of ratepayers during the period |
24 | in which electric rates have been capped; and |
25 | WHEREAS, With the expirations of electric rate caps, an |
26 | analysis is necessary to determine whether electric utilities |
27 | either overcollected or undercollected in stranded cost payments |
28 | from their ratepayers by comparing the projected cost of |
29 | electricity as outlined in the stranded cost agreements with the |
30 | actual cost of electricity charged to ratepayers; and |
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1 | WHEREAS, The Environmental Resources and Energy Committee |
2 | desires to investigate whether electric utilities overcollected |
3 | millions or billions of dollars in stranded cost payments from |
4 | Pennsylvania ratepayers and were unjustly enriched in doing so, |
5 | and whether their unregulated generation affiliates (UGAs), |
6 | which received formerly regulated generation assets at little to |
7 | no cost from electric utilities that grossly undervalued those |
8 | assets, were unjustly enriched in those transactions; and |
9 | WHEREAS, In order to effectively investigate and to find the |
10 | answers to the questions listed above, it is imperative that the |
11 | Environmental Resources and Energy Committee has the power to |
12 | issue subpoenas to obtain testimony and documents; therefore be |
13 | it |
14 | RESOLVED, That the House of Representatives direct the |
15 | Environmental Resources and Energy Committee to conduct an |
16 | investigation on whether more than $18 billion of stranded costs |
17 | paid by Pennsylvania ratepayers were justified and whether some |
18 | electric utilities and their UGAs, which received formerly |
19 | regulated generation assets of the electric utilities at little |
20 | to no cost, were unjustly enriched in those transactions and |
21 | whether there should be any refunds to ratepayers in cases of |
22 | overcollection or unjust enrichment; and be it further |
23 | RESOLVED, That the committee may hold hearings, take |
24 | testimony and conduct investigations at such places as necessary |
25 | in this Commonwealth; and be it further |
26 | RESOLVED, That it may issue subpoenas under the hand and seal |
27 | of its chairman commanding any person to appear before the |
28 | committee and to testify on matters relevant to the committee's |
29 | inquiries and to produce such books, papers, records and |
30 | documents as the committee deems necessary; and be it further |
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1 | RESOLVED, That the subpoenas may be served upon any person |
2 | and shall have the same effect as subpoenas issued out of the |
3 | courts of this Commonwealth; and be it further |
4 | RESOLVED, That any person who neglects or refuses to testify |
5 | or to produce any books, papers, records or documents shall be |
6 | subject to the penalties provided by the laws of this |
7 | Commonwealth in such case, and each member of the committee |
8 | shall have power to administer oaths and affirmations to |
9 | witnesses appearing before the committee; and be it further |
10 | RESOLVED, That the committee make a report of its |
11 | investigation and recommendations to the House of |
12 | Representatives by September 1, 2010. |
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