Continuing The “Return To Normalcy” At The Pennsylvania Public Utility Commission – Energy and Natural Resources

The Pennsylvania Public Utility Commission (PUC), like many
other public and private organizations, is gradually returning to
pre-pandemic procedures. Commission staff will soon return to the
office and the PUC has issued orders gradually ending the emergency
measures it took in response to the pandemic.1 On July
16, 2021, the PUC issued two more orders2 taking
additional steps toward a “return to
normalcy.”3

Background

Following the issuance of Governor Tom Wolf’s
Proclamation of Disaster Emergency in March 2020,
identifying the COVID-19 pandemic as a disaster emergency affecting
the entire commonwealth, the PUC issued several emergency orders
affecting consumers, the regulated community and public utility
practitioners. Among other things, these orders: (1) prohibited the
termination of public utility service by electric, natural gas,
water, wastewater, telecommunications, and steam utilities; (2)
established a procedure for extending statutory and regulatory
deadlines; and (3) modified the requirements for filing and serving
documents in PUC proceedings.

On June 10, 2021, the General Assembly passed a concurrent
resolution terminating the Proclamation of Disaster
Emergency
. The next day, Governor Wolf signed Act 21, which
provides “temporary regulatory flexibility authority” to
commonwealth agencies that suspended a statute establishing
procedures for the conduct of commonwealth business. In view of
these developments, the PUC adopted the Termination Moratorium
Order
and the Deadline Suspension Order.

Extended Payment Arrangements Entered Into by Utilities

In its March 2021 order terminating the moratorium on public
utility service connections, the PUC ordered utilities to offer
extended repayment terms to residential and small business
customers. For example, utilities were required to offer payment
arrangements with a minimum term of five years to residential
customers with incomes below 250 percent of the federal poverty
level. Utilities were also required to offer payment arrangements
with a minimum term of 18 months to small business
customers. 

The requirement to offer customers payment arrangements with
extended repayment terms was originally scheduled to remain in
effect until December 31, 2021, but the Termination Moratorium
Order
eliminates that requirement after September 30, 2021. On
and after October 1, 2021, payment arrangements must adhere to the
provisions of the Pennsylvania Public Utility Code and PUC
regulations. Payment arrangements with extended terms that were
entered into prior to September 30, 2021, will remain in effect for
the duration of their terms. 

Extended Payment Arrangements Ordered by the Commission

The March 2021 order terminating the moratorium on public
utility service connections also provided that, in response to a
formal or informal complaint filed by December 31, 2021, the PUC
could order payment arrangements with extended repayment terms for
residential and small business customers. Since the key date was
the date the complaint was filed, this provision applied even if
the PUC did not issue an order in the case until after December 31,
2021. 

Under the Termination Moratorium Order, after September
30, 2021, payment arrangements ordered by the PUC must adhere to
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 according to its terms after September
30, 2021.

Regulatory Asset

During 2020, the PUC recognized that its orders responding to
the COVID-19 pandemic imposed costs on utilities. All
jurisdictional utilities were directed to track extraordinary,
nonrecurring, incremental, COVID-19-related expenses, and to
maintain detailed accounting records of such expenses. The PUC also
authorized electric, natural gas, water, wastewater, steam, and
rate base/rate of return telecommunications utilities to create a
regulatory asset for any incremental expenses incurred above those
embedded in rates resulting from the PUC’s COVID-19 related
directives. 

The Termination Moratorium Order confirmed that
utilities are to continue tracking extraordinary, nonrecurring,
incremental, COVID-19-related expenses and maintaining detailed
records of such expenses. The Termination Moratorium Order
also confirmed that electric, natural gas, water, wastewater,
steam, and rate base/rate of return telecommunications utilities
may create a regulatory asset for any incremental expenses incurred
above those embedded in rates resulting from the Termination
Moratorium Order
and prior PUC orders relating to the
pandemic.

Reporting Requirements

The March 2021 order terminating the moratorium on public
utility service connections also directed electric, natural gas,
water, wastewater, steam, and telecommunications companies to
submit reports concerning accounts at risk of termination,
aggregate dollars of arrears, and accounts disconnected for
non-payment. The 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 Termination Moratorium Order
re-stated these reporting requirements, but made clear that they
were based on the PUC’s statutory authority to require public
utilities to file periodic reports4 – not on the
Proclamation of Disaster Emergency or any other order
relating to the COVID-19 pandemic.

Suspension/Extension of Deadlines

In March 2020, the PUC established procedures for suspending or
extending deadlines established in PUC regulations or in statutes
administered by the PUC. For example, in rate cases, the chief
administrative law judge was authorized to establish reasonable
deadlines under the circumstances, after considering the positions
of the parties and the presiding administrative law judge.
Deadlines generally could not be extended or suspended for more
than 90 days. In addition, following termination of the
Proclamation of Disaster Emergency, the March 2020 order
stated that a suspended deadline could be extended by an additional
30 days.

The Deadline Suspension Order states that the authority
to suspend or extend a deadline expires on September 30, 2021. Any
order issued prior to that date, suspending or extending a
deadline, will remain in full force and effect after September 30,
2021, in accordance with its terms.

Filing and Service Requirements

In March 2020, the PUC ordered that all filings be made through
its electronic filing system, rather than by mailing paper copies
to the PUC. Confidential or proprietary information, which cannot
be filed using the PUC’s electronic filing system, was to be
filed by emails addressed to the PUC’s secretary. Finally, the
PUC directed that service in PUC proceedings was to 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 is to be made in accordance with PUC regulations.

Conclusion

The pandemic has had a considerable impact on ratepayers and
utilities alike. Consequently, the return to normalcy is a process
that will take time. That process may be similar to the process of
recovering from the polar vortex of 2013-2014. Many consumers have
amassed large arrearages and will ask their utilities or the PUC
for payment arrangements. Some consumers may also file complaints
challenging fees 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 during the next several months
certainly bear watching.

Footnotes

1 For previous articles discussing the PUC’s response
to the COVID-19 pandemic, please see our previous Alerts:
(1) In Party Line Vote the Pennsylvania PUC Continues
the Moratorium on Utility Terminations; (2) Pennsylvania PUC Remains Deadlocked over
Terminating the Moratorium on Utility Shut-Offs; (3) The Saga Continues Pennsylvania PUC Delays Action
on Terminating the Moratorium on Utility Shut-Offs; (4) Pennsylvania Public Utility Commission Enters
Phase 2 of the Moratorium on Utility Shut-Offs; (5) Phase 2 of the Moratorium on Utility Shut-Offs in
Pennsylvania Extended Until March 31, 2021; and (6) Pennsylvania Public Utility Commission Enters a
New Phase in Responding to the COVID-19
Pandemic. 

2 Public Utility Service Termination Moratorium;
COVID-19 Cost Tracking and Creation of Regulatory Asset
,
Docket Nos. M-2020-3019244 and M-2020-3019775 (Order entered July
15, 2021) (the Termination Moratorium Order) and
Suspension of Regulatory and Statutory Deadlines;
Modifications to Filing and Service Requirements, Docket
No. M-2020-3019262 (Order entered July 15, 2021) (the Deadline
Suspension Order
).

3 While not a direct subject of this alert, the PUC also
entered an order on July 15, 2021, lifting its ban on door-to-door,
public event, and in-person sales and marketing activities by
electric generation suppliers and natural gas suppliers.
Supplier Door-to-Door and In-Person Marketing Moratorium,
Proclamation of Disaster Emergency – COVID-19, Docket No.
M-2020-3019254 (Order entered Jul. 15, 2021).

4 66 Pa. C.S. § 504 (Reports by public
utilities).

5 For several years, the PUC’s Law Bureau has been
leading a working group on revisions to the PUC’s Rules of
Practice and Procedure. Proposed revisions to the Rules of Practice
and Procedure could incorporate lessons learned and efficiencies
realized during the pandemic – including greater use of electronic
filing/service of documents and use of videoconference
hearings.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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