PENNSYLVANIA PUBLIC UTILITY COMMISSION Investigation Order [34 Pa.B. 660] Public Meeting held
January 16, 2004Commissioners Present: Terrance J. Fitzpatrick, Chairperson; Robert K. Bloom, Vice Chairperson; Glen R. Thomas; Kim Pizzingrilli; Wendell F. Holland
Investigation regarding the Metropolitan Edison Company, Pennsylvania Electric Company and Pennsylvania Power Company's Reliability Performance; Doc. No. I-00040102 Investigation Order By the Commission:
Under 66 Pa.C.S. § 1501, the Commission has a fundamental duty to ensure that public utilities which operate as electric distribution companies (EDCs) in this Commonwealth are providing safe, adequate and reasonably continuous service to their customers without unreasonable interruptions or delay and in accordance with our regulations and orders. Today we initiate a formal investigation of the Metropolitan Edison Company (Met-Ed), Pennsylvania Electric Company (Penelec) and Pennsylvania Power Company (Penn Power) (collectively referred to as FirstEnergy companies) levels of compliance with the Public Utility Code and the Commission's regulations and orders with regard to reliable electric service.
The Electricity Generation Customer Choice and Competition Act (act), 1996, Dec. 3, P. L. 802, No. 138 § 4, became effective January 1, 1997. The act authorized the Commission to ensure that levels of reliability that were present prior to the restructuring of the electric utility industry would continue in the new competitive markets. 66 Pa.C.S. §§ 2802(12), 2804(1) and 2807(a)(d).
Thus, the Commission promulgated regulations in 52 Pa. Code §§ 57.191--57.197 to ensure reliability would be maintained in the new competitive markets. On December 16, 1999, the Commission entered a Final Order at Docket No. M-00991220, which established reliability benchmarks and standards for the EDCs in accordance with 52 Pa. Code § 57.194(h). These benchmarks and standards have been in effect since 1999.
The Commission established the Staff Internal Working Group on Electric Service Reliability (Working Group) to examine, in detail, the level of reliability provided by Pennsylvania's EDCs post-restructuring. In the course of this work, the Staff examined the reliability data filed in compliance with Commission regulations. In addition, the Working Group obtained additional monthly reports and data from certain companies, including two of the FirstEnergy companies, Met-Ed and Penelec.
Based on the Commission's review of the reliability data filed in compliance with our regulations, the additional monthly reports and other reliability data, we are concerned the FirstEnergy companies may not be meeting the reliability standards regarding the frequency and duration of service outages established in our Order of December 16, 1999, at Docket No. M-00991220. Our main concern is whether the service reliability performance of one or more of the FirstEnergy companies has deteriorated to a point below the level of service reliability that existed prior to restructuring.
We are not concluding that performance has deteriorated in violation of the act or that the deterioration is due to factors within the control of the FirstEnergy companies. However, there is enough information before us to warrant further investigation. Therefore, this Commission is persuaded to order a formal investigation to further examine the level of service reliability provided by the FirstEnergy Companies, and refer this matter to the Office of Administrative Law Judge (OALJ) for an on the record proceeding, following a sufficient discovery period. We direct Law Bureau Prosecutory Staff to participate in the investigation, and to utilize technical assistance from the Bureaus of Fixed Utility Services, Audits and Conservation, Economics and Energy Planning as necessary.
To fully address the Commission's concerns regarding service reliability at the FirstEnergy companies, the scope of this formal investigation should include, but not be limited to, the following areas:
* Underlying causes for outages.
* Adequacy of inspection and maintenance cycles.
* Tree-trimming activities and contracts.
* Changes to budgeted/actual capital and operating expenditures in select areas in prior years.
* Emergency call-out procedures and calculation of the acceptance rate.
* Hiring/contracting practices for line workers.
* Other factors, practices and policies that may affect service reliability.
At the outset, this investigation should focus on the issue of whether the service reliability of any of the FirstEnergy companies has deteriorated below the level required by the act. However, the presiding ALJ shall also take evidence from the parties on recommendations for corrective actions to be taken by the FirstEnergy companies if it is found that service reliability has deteriorated. Civil fines and penalties, however, are not within the scope of this proceeding.
The investigation will be assigned to the OALJ to conduct hearings as may be necessary to address the concerns outlined in this Investigation Order and to place in evidence the relevant findings and any recommendations for corrective actions. We expect testimony to be presented by the FirstEnergy companies, Staff and intervenors to address these matters. After briefing, the presiding ALJ will issue a Recommended Decision, subject to exceptions, for the Commission's consideration. We expect the presiding ALJ to render a Recommended Decision on this matter by September 30, 2004, to allow the Commission ample time to review and issue a Final Order before December 16, 2004. Therefore,
It Is Ordered That:
1. A formal investigation is hereby instituted to examine the level of service reliability provided by the FirstEnergy companies including: Metropolitan Edison Company, Pennsylvania Power Company and Pennsylvania Electric Company.
2. The investigation is assigned to the OALJ to conduct hearings as may be necessary to address the concerns outlined in this Investigation Order and to issue a Recommended Decision by September 30, 2004.
3. Under 52 Pa. Code § 1.2(c), the presiding ALJ is authorized to waive appropriate sections of the Commission's rules of practice and procedure, as necessary, to resolve disputed issues and file a Recommended Decision on or before September 30, 2004.
4. A copy of this Investigation Order be served on Metropolitan Edison Company, Pennsylvania Power Company, Pennsylvania Electric Company, the Attorney General's Office of Consumer Advocate and the Office of Small Business Advocate. In addition, the Secretary shall cause a copy of this order to be published in the Pennsylvania Bulletin.
JAMES J. MCNULTY,
Secretary[Pa.B. Doc. No. 04-204. Filed for public inspection January 30, 2004, 9:00 a.m.]
