In light of ongoing concerns that incumbent utilities could share customer information, link regulated services with non-competitive services, and either directly or indirectly favor affiliated generators and thereby compromise efforts to achieve a truly competitive market, the Public Utility Commission at its August 25, 2011, public meeting issued a proposed rulemaking to revise existing competitive safeguard regulations at 52 Pa. Code §§ 54.121-123, which have been in effect since July 2000.  Comments on the proposed amendments are due in mid to late October, 45 days from the date of their publication in the Pennsylvania Bulletin.

The proposed revisions divide the competitive safeguard regulations into six subject matter categories: (1) non-discrimination requirements; (2) customer requests for information; (3) prohibited transactions and activities; (4) accounting and training requirements; (5) dispute resolution procedures; and (6) penalties.

Some of the proposed revisions would govern the business arrangements between affiliated distribution companies and generation companies.  For example, distribution company representatives would be required to refer customers to the Commission’s retail choice website and offer to provide customers with a list of current electricity suppliers without ranking or recommending a certain supplier over another.  Also, the prohibition against a distribution company recovering costs associated with a generation affiliate would be made explicit.  The Commission also proposes an express prohibition against the transfer of regulated assets from a distributor to an affiliated generator at less than market value.  To assist the Commission in conducting effective verification and audit of the companies’ compliance with the code of conduct, distribution companies would be required to file cost allocation manuals as part of the audit and management efficiency investigations under section 516 of the Public Utility Code.

The proposed revisions also contain consumer protections.  A disclaimer would require that customers be notified that the distribution and generation companies are separate entities and that a distribution company customer need not necessarily buy any specific generator’s services to continue receiving distribution service.  In addition, distributors and generators would be required to have dissimilar names and would be prohibited from sharing office space and employees.

New penalties are proposed as well, which provide that violations could result in civil penalties of up to $1,000 per day of non-compliance.

A press release announcing these proposed regulations may be found here and a copy of the Commission’s Proposed Rulemaking Order may be found here.