2390 Insuring consistent application of 52 Pa. Code § 56.12(7) equal monthly billing; doc. no. M-00051925
Insuring Consistent Application of 52 Pa. Code § 56.12(7) Equal Monthly Billing; Doc. No. M- 00051925 [36 Pa.B. 7388]
[Saturday, December 2, 2006]Public Meeting held
November 9, 2006Commissioners Present: Wendell F. Holland, Chairperson; James H. Cawley, Vice Chairperson; Kim Pizzingrilli; Terrance J. Fitzpatrick
Order Before the Commission for consideration and disposition are Petitions for Reconsideration of the Commission's Final Interpretive Order (Petition) filed by PPL Electric Utilities Corporation (PPL) on June 19, 2006, National Fuel Gas Distribution Corporation (NFG) on July 3, 2006, and Columbia Gas of Pennsylvania, Inc. (Columbia) on July 28, 2006, relative to the above-captioned proceeding. In that proceeding, the Commission entered an order setting forth a proposed interpretive rule regarding 52 Pa. Code § 56.12(7) pertaining to the establishment and availability of equal monthly billing or budget billing for utility customers.
History of Proceeding By order entered December 8, 2005, the Commission entered an order regarding a proposed interpretive rule to insure consistent application of equal monthly billing contained in the Consumer Standards and Billing Practices for Residential Service, which is generically referred to as Chapter 56, 52 Pa. Code Chapter 56. The Commission solicited comments, pursuant to Section 703(g) of the Public Utility Code, 66 Pa.C.S. § 703(g), from all interested parties in response to the proposed interpretative rule regarding 52 Pa. Code § 56.12(7) set forth in this order. The Commission requested feedback on whether the interpretative rule in that order was clear or whether this action would be better undertaken by a policy statement.
In the December 8 order, the Commission set forth several elements which it stated needed to be included in an acceptable budget billing program. The order was published in the Pa. Bulletin on December 24, 2005 at 39 Pa. B. 6970. The comment period ended January 3, 2006. Comments were filed by PPL Electric Utilities Corporation, PPL Gas Utilities Corporation, Columbia Gas of Pennsylvania, Inc., the Office of Consumer Advocate, the Office of Trial Staff and the Energy Association of Pennsylvania.
Based upon the comments, the Commission entered a Final Interpretive Order on June 2, 2006. That order stated that the following elements are essential to an acceptable budget billing program:
* Budget billing must be available, on a rolling enrollment basis, to all utility customers with residential end use irrespective of the rate the account is billed.1
* Based on well-established case history, budget billing must be the method by which customers in arrears pay current bills while liquidating the past due amounts owed the utility.2
* Budget accounts are to be routinely monitored and adjusted at least three times per year, consistent with the Commission's regulations to prevent over or under collections to the extent possible.
* Natural gas utilities should adjust budget bills at least four times per year, in conjunction with their Purchased Gas Cost (PGC) rate adjustments.
* The budget billing payment period must be a minimum of 12 months, with no annual true-ups occurring during the winter heating season.
* If the true-up amount is less than 100% of the budget amount, customers should be given 3-6 months to pay off that amount.
* If the true-up amount is 100% or more of the budget amount, customers should be given 12 months to pay off that amount.
* Any tariff provision that is inconsistent with the Commission's interpretation of its regulation is deemed null and void.3
In the June 2 order, the Commission allowed affected natural gas, electric and steam heating companies six months from the entry date of that order to make the necessary programming modifications, test their system, and finally, implement a design which complies with this order. The Commission also stated in that order that it would incorporate this Final Interpretive Order in the next Chapter 56 rulemaking.
The above-mentioned Petitions for Reconsideration were filed in response to the June 2, 2006 order. Since all of the petitions request reconsideration of the same order, we will dispose of them jointly in this order.
Discussion The Public Utility Code (Code) establishes a party's right to seek relief following the issuance of our final decisions pursuant to subsections 703(f) and (g) of the Code, 66 Pa.C.S. § 703(f) and (g), relating to rehearings, rescission and amendment of orders. Such requests for relief must be consistent with Section 5.572(b) of our regulations, 52 Pa. Code § 5.572(b), relating to petitions for relief following the issuance of a final decision. The standards for a petition for relief following the issuance of a final decision were addressed in Duick v. PG&W, 56 Pa. PUC 553 (1982) (Duick).
Duick held that a petition for rehearing under Subsection 703(f) of the Code must allege newly-discovered evidence not discoverable through the exercise of due diligence prior to the close of the record. Duick at 558. A petition for reconsideration under Subsection 703(g), however, may properly raise any matter designed to convince us that we should exercise our discretion to amend or rescind a prior order, in whole or in part. Furthermore, such petitions are likely to succeed only when they raise ''new and novel arguments'' not previously heard or considerations which appear to have been overlooked or not addressed by us. Duick at 559.
We note that, pursuant to 66 Pa.C.S. § 703(g) and 52 Pa. Code § 5.572, our power to modify or rescind final orders is limited to certain circumstances. A petition to modify or rescind a final Commission order may only be granted judiciously and under appropriate circumstances, because such an order will result in the disturbance of final orders. City of Pittsburgh v. Pennsylvania Department of Transportation, 490 Pa. 264, 416 A.2d 461 (1980); City of Philadelphia v. Pa. PUC, 720 A.2d 845 (Pa. Cmwlth. 1998); and West Penn Power Company v. Pa. PUC, 659 A.2d 1055 (Pa. Cmwlth. 1995).
Moreover, we note that any issue, which we do not specifically address herein, has been duly considered and will be denied without further discussion. It is well settled that we are not required to consider expressly or at length each contention or argument raised by the parties. Consolidated Rail Corp. v. Pa. PUC, 625 A.2d 741 (Pa. Cmwlth. 1993); University of Pennsylvania v. Pa. PUC, 485 A.2d 1217 (Pa. Cmwlth. 1984).
PPL Electric Utilities Corporation
In its Petition, PPL states that it generally has no objections to the Commission's June 2 order. PPL's one area of concern is the prohibition against budget billing true-ups during the winter heating season. First, PPL states that the prohibition in overly broad. PPL notes that the Commission's concern in this area is the potential effect of a winter true-up on the bills of heating customers. However, the prohibition is not limited to heating customers, but instead applies to all customers.
Second, PPL states that even if the prohibition is limited to heating customers, ''the prohibition is inappropriate because it is based upon a mistaken premise of how winter heating bills are affected by budget billing, particularly bills for customers with electric heat.'' PPL states that during the winter heating season, budget billing customers who have electric heat already pay substantially less than their actual bill. According to PPL, whether customers pay their budget billing balances starting in the winter, spring or summer is not particularly relevant, because PPL Electric reviews and adjusts budget amounts, as necessary, on a quarterly basis. As a result, budget amounts remain fairly constant year-round for most customers. PPL states that its budget billing program does not increase winter electric bills; rather, it levelizes bills over 12 months. In addition, PPL states that the requirement in the June 2 order to have budget billing balances greater than 100 percent of the monthly budget paid over a 12 month period further mitigates any adverse impact of true-ups on most customers.
In addition, PPL argues that a prohibition against true-ups in winter could have a detrimental effect on customers, since the number of customers who currently have winter true-ups is sizable; the company would most likely not want to start collecting budget billing balances in April from all of them because of the increased call volume. PPL states that changes in budget billing generally and in budget amounts specifically, result in increased telephone calls to PPL's customer call center. PPL argues that shifting winter true-ups to spring and summer will increase customer confusion with their bills, and ultimately, its call volume.4
Fourth, PPL argues that there does not appear to be customer demand for the winter true-up prohibition. Historically, PPL receives few Commission complaints regarding budget billing. PPL is concerned that the prohibition coupled with the complexity of the lengthened repayment periods, will result in additional informal complaints with the Commission.
Fifth, PPL states that it believes the Commission may not have fully recognized the impact on utilities of not allowing winter true-ups of budget billing accounts and giving some budget billing customers up to 16 months to pay off their balances. PPL alleges that extending the repayment period for budget billing increases deferred balances and write-offs, decreases cash flow and raises carrying chares for PPL.
Lastly, PPL asserts that the prohibition may be inconsistent with the desire of some customers to pay off budget billing balances quickly. Some of PPL's customers, who have the ability to pay, prefer to pay off their budget billing balance in a shorter period of time, even if the balance owed exceeds their monthly budget amount. PPL's past practice has been to accommodate these requests from budget billing customers. PPL would like to be flexible to continue this practice under the Commission's budget billing order.
PPL requests that the Commission reconsider its June 2 Final Interpretive Order and either delete or rescind the winter true-up portion of that order.
National Fuel Gas Distribution Corporation
In its petition, NFG states that it seeks reconsideration of the Commission's June 2, order because the Final Interpretive Order: (a) represents a change to the regulations as opposed to being a mere interpretation of the regulations, (b) conflicts with the rules regarding payment agreements established by Chapter 14, (c) creates a benefit for budget billing customers that is not available to customers choosing to pay their current bill, (d) will have an adverse impact on NFG's cash flow and receivables, and (e) will result in customer confusion regarding budget billing.
In particular, NFG argues that the Commission's Final Interpretive Order will have the effect of modifying 52 Pa. Code § 56.12(7) by establishing a minimum budget billing payment period of 12 months although the regulation expressly allows budget billing periods of 10 or 11 months. Furthermore, NFG asserts that the Commission's interpretation that ''it is acceptable for an initial budget period to exceed 10, 11 or 12 months'' is inappropriate since the language of the regulation does not allow for a budget billing period greater than 12 months. NFG states that to the extent utilities are required to defer collecting budget true-up amounts until a later date, customers are in effect being granted a budget billing period greater than 12 months, which it adds is not permitted under the existing regulation.
NFG also asserts that the Final Interpretive Order conflicts with the rules regarding payment agreements established by Chapter 14. Specifically, NFG states that 66 Pa.C.S. § 1405 grants the Commission permission to create payment agreements between customers and utilities based on the schedule set forth in subparagraph (b). However, the General Assembly limited the number of payment agreements that the Commission can establish in subparagraph (d) as follows:
(d) Number of payment agreements.-Absent a change in income, the commission shall not establish or order a public utility to establish a second or subsequent payment agreement if a customer has defaulted on a previous payment agreement. A public utility may, at its discretion, enter into a second or subsequent payment agreement with a customer.
NFG argues that the Commission's interpretation, if implemented will have the effect of granting second or subsequent payment agreements to many customers who defaulted on payments, in violation of § 1405(d). Furthermore, NFG states that ordering utilities to defer payment of budget billing true-up payments for a 3-6 month or 12 month period, the commission is creating payment agreements under chapter 14. NFG also argues that the Commission's directive that customers be given 12 months to pay true-up amounts where true-up amounts exceed 100% or more of the budget amount would also conflict with 66 Pa.C.S. § 1405(b)(4) which provides that the maximum period of time that the commission can allow a customer with gross monthly household income exceeding 300% of the Federal poverty level is 6 months.
Columbia Gas of Pennsylvania, Inc.
Columbia filed its comments in support of comments filed by NFG. Columbia believes that the Commission's Final Interpretive Order conflicts with Section 1405(d) of Chapter 14, by granting customers with prior defaulted payment agreements a second or subsequent payment agreement contrary to Section 1405(d). Columbia states that reconsideration of the Final Interpretive Order is necessary to: (1) observe the limit on the number of payment agreements permitted by Section 1405(d), (2) protect the utility's paying customers from uncollectibles, and (3) protect cash flow which will be negatively impacted by additional payment agreements.
Disposition As stated in the Commission's Final Interpretive Order entered June 2, 2006, that order is an interpretive rule which does not establish a binding standard of conduct, and need not be promulgated in accordance with the Commonwealth Documents Law. Lowing v. Public School Employes' Retirement Board, 776 A.2d 306, 309(2001). ''For an interpretive rule to be viable, however, it must genuinely track the meaning of the underlying statute, rather than establish an extrinsic substantive standard.'' Id. Based on our review of the practices and issues raised with respect to the budget billing comments, we issued the Final Interpretive Rule in order to provide beneficial and necessary guidance to utilities and ratepayers alike.
PPL argues that the prohibition against winter true-ups is overly broad since it includes all customers, not just heating customers. We agree. In the discussion section of the Final Interpretive Order, we stated that two commentators found winter true-ups for heating customers undesirable during the winter. However, when we enumerated the list of essential elements for an acceptable budget billing program, we did not limit that element to heating customers. Moreover, as explained by PPL, if the budget billing amount is reviewed and adjusted periodically, the true-up amount should not be substantial. Under these circumstances, we shall delete the prohibition on winter true-ups from the interpretive rule. Nevertheless, we reiterate what was stated in our Final Interpretive Order. We expect utilities to exercise good judgment in dealing with these situations, and to manage their budget billing programs in a manner designed to avoid large winter true-ups for heating customers.
We also agree with the commentators that there appears to be a conflict between Section 56.12(7) and the enumerated element that the budget billing period ''must be a minimum period of 12 months . . . .'' In addition, NFG stated that some of its customers are satisfied with a 10 month budget billing program that allows customers to experience 2 months of lower current bills during the summer months. As stated in our Final Interpretive Order, the purpose of that order was to provide guidance. Since our intent was not to change or modify the current regulation, we will modify the fifth bullet on page 19 of our Final Interpretive Order to more closely track the existing regulation. Accordingly, we do not intend to prohibit 10 or 11 month budget billing programs that suit the needs of some customers and utilities.
Finally, we agree with NFG and Columbia that bullet numbers 6 and 7, pertaining to how long customers should be given to pay off true-up amounts, raise interpretational issues with Chapter 14 payment arrangement limitations. The purpose of our Final Interpretive Order was to provide guidance as to how budget billing programs are managed, not to resolve interpretational issues that will be the subject of the rulemaking required at Section 6 of Act 201 to amend Chapter 56. Accordingly, we will delete bullet numbers 6 and 7 from these guidelines. However, we emphasize that we expect utilities to exercise good judgment in dealing with true-up amounts in their budget billing programs. The remaining elements enumerated are guidelines on how to set up budget billing programs and what common elements we expect to see in budget billing programs. These guidelines should have no effect on customer assistance programs and existing payment agreements. Moreover, the use of ''should'' for bullet numbers 4-7 is intended to communicate what the Commission would like to see practiced by utilities. Nevertheless, the elements listed as acceptable budget billing components are guidelines, not a mandate. As stated in our Final Interpretive Order the goal of budget billing is to allow new customers, and existing customers not previously enrolled in a budget billing program, to obtain the maximum benefits from the program, while benefiting utilities by reducing their exposure to uncollectible expenses. A properly designed and managed budget billing program will achieve these goals and benefit both the customer and the utility.
Based on our review of the arguments put forth in the Petitions for Reconsideration, the Petitioners have alleged considerations which appear to have been overlooked by the Commission, as required by Duick, supra. Accordingly, the Petitions for Reconsideration are hereby granted in part consistent with this order; Therefore,
It Is Ordered That :
1. The Petitions for Reconsideration filed by PPL Electric Utilities Corporation, National Fuel Gas Distribution Corporation and Columbia Gas of Pennsylvania, Inc. to the Commission's June 2, 2006 Final Interpretive Order are granted in part consistent with this order.
2. The June 2, 2006 Final Interpretive Order regarding § 56.12(7) which sets forth elements that are essential to an acceptable budget billing program is hereby modified as follows:
* Budget billing must be available, on a rolling enrollment basis, to all utility customers with residential end use irrespective of the rate the account is billed.5
* Based on well-established case history, budget billing should be the method by which customers in arrears pay current bills while liquidating the past due amounts owed the utility.6
* Budget accounts are to be routinely monitored and adjusted at least three times per year, consistent with the Commission's regulations to prevent over or under collections to the extent possible.
* Natural gas utilities should adjust budget bills as often as necessary, but not less than three times per year. Rate changes such as increases in the Purchased Gas Cost (PGC) are examples of indicators that budgets may need adjustment.
* The budget billing payment period should average service costs over a 10, 11 or 12 month period.
* Any tariff provision that is inconsistent with the Commission's interpretation of its regulation is deemed null and void.7
3. In all other respects the Final Interpretive Order remains unchanged.
4. A copy of this Final Interpretive Order be published in the Pennsylvania Bulletin.
5. A copy of this Final Interpretive Order be served on all jurisdictional electric, gas, water, and steam heating companies, the Office of Consumer Advocate, the Office of Small Business Advocate, the Office of Trial Staff, the Energy Association of Pennsylvania and the Public Utility Law Project.
6. Companies with computer systems unable to comply with this order are given six months from the entry date of this Final Interpretive Order to comply.
By the Commission
JAMES J. MCNULTY,
Secretary[Pa.B. Doc. No. 06-2390. Filed for public inspection December 1, 2006, 9:00 a.m.] _______
1 See 52 Pa. Code § 56.1 (relating to definition of residential service).
2 Mary Frayne v. PECO Energy Company, C-20029005 (Order entered September 10, 2003).
3 See 52 Pa. Code § 56.223 (relating to inconsistent tariff provisions).
4 Companies are reminded that they have a duty to investigate a consumer complaint. If a company recognizes an error, the company should notify the customer of the reason for the make-up bill and inform the customer of his or her rights.
5 See 52 Pa. Code § 56.1 (relating to definition of residential service).
6 Mary Frayne v. PECO Energy Company, C-20029005 (Order entered September 10, 2003).
7 See 52 Pa. Code § 56.223 (relating to inconsistent tariff provisions).
