HMS Legal Blog

Why the Skeptics are Wrong about Supplier Consolidated Billing

            The Pennsylvania Public Utility Commission opened a docket[1] this year to examine whether it should encourage or require supplier consolidated billing (“SCB”)[2].  SCB is when competitive energy suppliers, rather than the utility, bill the customer for all the services associated with their energy supply, including the utility’s distribution charges – sort of the opposite of how it happens today.  The reason I suggest that SCB is “sort of” the opposite of how things are done at present, is that when utilities bill and collect for suppliers now, they normally do so under a program called “purchase of receivables” or (“POR”) where the utility bills and collects from the customer and pays the supplier – regardless of whether the customer pays the utility.  The supplier pays a fee for this benefit equal to the utility’s bad debt percentage, which is known as the “POR discount”. For example, if a utility can’t collect 4% of what it charges to customers as a group, suppliers only get 96 cents on the dollar for the product they sell, even if the utility collects a larger percentage of charges to the supplier’s customers, which is often the case.  However, under the proposed SCB, the supplier would be required to remit 100% of charges back to the utility and manage the entire risk of uncollectible debts on its own.

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“Good Deed” or Producer Licensing Violation?

 

Even experienced agents can make mistakes that jeopardize their license

Ben Adams knows what he’s doing as an independent insurance agent.[1] He should. He’s been licensed for nearly 40 years, selling P & C and Life & Annuity products from the “Main St.” family-owned insurance agency his dad founded in a small town in eastern Pennsylvania. Ben and his brother have successfully operated the agency since dad retired years ago. They are well-respected in their community and in the industry. They have a nice, profitable book with good retention and respectable loss ratios. Naturally, Ben never had any licensing violations or trouble with regulators. And in his way of thinking, if a customer is unhappy, he will make it right. That’s the way their dad did business, so going above and beyond in customer service comes naturally to the Adams brothers. This time, though, that’s the thinking that ended up getting Ben in trouble.

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Is the PUC Preparing to Address Utility Rates in Light of the Recent Tax Cut?

Most US taxpayers are by now conscious of the passage of President Trump’s signature tax legislation which dramatically reduces the corporate tax rate from 35% to 21%.  What many folks may not know is that the rates they pay to their local utility include recovery for the income tax expense of those utilities.  This raises the question that some states, notably Kentucky and Oklahoma, have already begun to address: “How do regulators make sure that utility rates promptly reflect the substantial reduction in tax liability?”  In Oklahoma, the Attorney General has called upon the Oklahoma Corporation Commission to address the tax savings issue which he estimates to total $100 million statewide.  The Kentucky Public Service Commission already has ordered utilities to track their savings due to the tax change and to timely pass these savings on to customers.  Montana and Michigan are taking similar actions. 

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Kevin McKeon Discusses Medical Marijuana Appeals at PBI Program

On October 18, 2017, Kevin McKeon, partner at Hawke McKeon & Sniscak, LLP and co-founder of Pennsylvania Appellate Advocate, joined the Pennsylvania Bar Institute for its CLE program, “Next Steps for Medical Marijuana in PA: Evolving Issues in a Growing Industry”. Mr. McKeon discussed the status of Pennsylvania’s medical marijuana program and related appeals pending before the Pennsylvania Department of Health, Office of Open Records, and Commonwealth Court.

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Legislation “Pipeline”

There are three bills before the Pennsylvania General Assembly that could impact basic services that many Pennsylvanians take for granted. All three involve jurisdiction over pipes that run underground in the Commonwealth.  The first two bills before the Pennsylvania General Assembly concern whether the Pennsylvania Public Utility Commission (“PUC”) or the municipalities/authorities will ultimately get to set rates and reasonable service standards for water and sewer service provided by municipalities.  The third bill before the General Assembly came into the spotlight on October 10, 2017 when Rep. Barrar filed a resolution, strongly urging the PUC to deny Laurel Pipeline’s Application to reverse the flow of its Philadelphia-to-Pittsburgh pipeline from the current westerly flow to easterly. 

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Christopher Knight of HMS Discusses Insurance Regulatory Issues at PAMIC’s Market Regulation Seminar


FOR IMMEDIATE RELEASE

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Thomas Sniscak of Hawke, McKeon & Sniscak LLP Speaks before a Packed Audience about Marcellus Shale at the Keystone Energy Forum

FOR IMMEDIATE RELEASE:

January 12, 2017

Thomas J. Sniscak participated as a speaker at the Keystone Energy Forum on January 12, 2017.  He spoke on the many critical issues facing the Marcellus shale industry from both the federal and state levels.  In his presentation Attorney Sniscak addressed the eminent domain and public right-of-way issues related to the siting of pipelines within the Marcellus Shale areas of Pennsylvania.

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Department of the Interior Finalizes Stream Protection Rule for Coal Mining Industry


Today the Department of the Interior (Department), announced that it has finalized regulations that it has been working on since 2009,[1] which aim to “protect streams, fish, wildlife, and related environmental values from the adverse impacts of surface coal mining operations and provide mine operators with a regulatory framework to avoid water pollution and the long-term costs associated with water treatment”[2] by overhauling 30-year-old regulations.  Highlights include:

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Commonwealth Court Denies PA PUC Authority to Rule on the Meaning of “Customer-Generator” under AEPS

 

            In Sunrise Energy v. FirstEnergy Corp. and West Penn Power Company,[1] the Pennsylvania Commonwealth Court affirmed the lower court’s ruling, in a 5-2 decision, that the Pennsylvania Public Utility Commission does not have primary, let alone exclusive, authority to adjudicate claims arising under the Alternative Energy Portfolio Standards Act[2] (“AEPS”) because the General Assembly failed to delegate such authority to the Commission.

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PA Supreme Court Further Demolishes Act 13 in Robinson Township Remand Appeal


On September 28, 2016, the Pennsylvania Supreme Court (Court) ruled[1] on a Commonwealth Court remand decision[2] of the Robinson Township 2013 Court decision,[3] where the Court held key provisions of Act 13[4] (the statute implementing major changes in Pennsylvania’s oil and gas laws and the ability of local government to regulate this industry) were unconstitutional (HMS Blog).  In the 2016 Robinson Township decision, the Court:  (1) upheld the Commonwealth Court’s holding that provisions related to Public Utility Commission (PUC) review of local ordinances are unseverable from unconstitutional provisions and thus unenforceable, and (2) held four additional provisions of Act 13, including the grant of eminent domain, unconstitutional. 

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PUC Requests Comments on Taxi Regulations


            On August 11, 2016, The PUC acting pursuant to Act 85 of 2016, which requires the PUC to promulgate new regulations in response to changes in the industry, requested public comment on ride sharing companies such as Uber and Lyft.  Uber and Lyft have spurred and created controversy  in both the Public Utility Commission (PUC)  and Commonwealth Courts.  The PUC requested comments include “specific suggestions for any proposal, including suggested regulatory language, with appropriate citations to current regulations that address the particular comment.  Additionally, comments must provide the underlying rationale to support any suggested temporary regulations.”  Comments are due 30 days from publication in the Pennsylvania Bulletin, which is published each Saturday.  The rulemaking is docketed at L-2016-2556432.

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Despite Drilling Downturn, PA Natural Gas Production Grows


       On August 1, 2016, The Pennsylvania Department of Environmental Protection (DEP) released its 2015 Oil and Gas Annual Report (Report).[1]  In additional to natural gas production details, the Report provides information on natural gas data trends in Pennsylvania and details on DEP inspections.  2015 was a difficult year for the natural gas industry as it faced record inventory levels, declining prices, and decreases in newly drilled wells.[2]  DEP confirms Pennsylvania was not immune to the national downturn in natural gas drilling with only 1,070 newly drilled wells in 2015 – more than a 50% decrease from the 2,163 new wells drilled in 2014.[3]

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Commission Sets Precedent to Extend Uber’s and Lyft’s Authority to Operate in Pennsylvania


            On June 30, 2016, at its most recent public meeting, the Pennsylvania Public Utility Commission (“Commission”) set a precedent important to Pennsylvania Uber (operating in Pennsylvania under its subsidiary Raiser-PA) and Lyft users alike by granting Yellow Cab Company of Pittsburgh, Inc. (“Yellow Cab”), a temporary extension of one year of operating authority to provide Transportation Network Service (“TNC”) in Pennsylvania.[1] Although Yellow Cab may no longer be a household name like Uber and Lyft, the service that it provides is identical. In fact, Yellow Cab was the first Transportation Network Service (“TNC”) or app-based transportation provider that was granted temporary authority to operate in Pennsylvania.[2] But under the Commission’s regulations, TNC authority is considered “experimental” and therefore is temporary and only valid for two years.[3] Yellow Cab was granted authority to operate beginning in July 2014 and without the Commission’s June 30th Order, it would have been required to cease operating on July 1, 2016.

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IRRC Shoots Down AEPS Regulations a Second Time


When Pennsylvania’s Independent Regulatory Review Commission (“IRRC”) voted unanimously at its June 30, 2016 meeting to disapprove for a second time the Pennsylvania Public Utility Commission’s (“PUC”) recent efforts to modify its regulations implementing the Alternative Energy Portfolio Standards(“AEPS”) Act,[1] it was aware that its action would at most place a speed bump in the PUC’s path, but it disapproved the regulations anyway. 

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North American Leaders Announce Climate, Clean Energy, and Environment Partnership


On June 29, 2016, President Obama, Prime Minister Trudeau, and President Nieto announced the North American Climate, Clean Energy, and Environment Partnership at the North American Leaders Summit.  According to President Obama, the “ambitious and enduring” Partnership will see the United States, Canada, and Mexico “work toward the common goal of a North America that is competitive, that encourages clean growth, and that protects our shared environment.”[1]

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PIPES Act Update


Yesterday, President Obama signed into law the “Protecting our Infrastructure of Pipelines and Enhancing Safety” (PIPES) Act.  This bi-partisan bill was the culmination of efforts by both the Energy and Commerce Committee and the Transportation and Infrastructure Committee.  This Act is intended to increase the efficiency and transparency of the Pipeline and Hazardous Materials Safety Administration (PHMSA) while enlarging safety inspections and audits of the natural gas pipeline industry.

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The Uncertain Future of Net Metering in Pennsylvania


     On June 2, 2016 the Independent Regulatory Review Commission (“IRRC”) appropriately voted 5-0 to disapprove the Pennsylvania Public Utility Commission’s (“PUC”) attempt to modify its regulations implementing the Alternative Energy Portfolio Standards (“AEPS”) Act, 73 P.S. §§1648.1, et seq.  The IRRC’s rejection was based primarily on its view that the PUC’s proposed regulations would exceed its statutory authority by limiting net-metering of electricity to entities with alternative energy systems sized to generate no more than 200% of their annual consumption.  The IRRC went on to state that if the PUC decides to proceed with the rulemaking by deleting this limit, it “should ensure that other provisions of the regulation do not limit a customer-generator’s ability to net-meter excess generation it produces.”  The IRRC also found that the PUC had failed to show any need for the modifications and suggested that because the PUC’s proposal appeared to be a change in policy of such a substantial nature consultation with the General Assembly was warranted.

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President to Sign New Natural Gas Safety Act


Tuesday night, the U.S. Senate passed the Protecting our Infrastructure of Pipelines and Enhancing Safety Act (PIPES Act).  This bill is now headed to President Obama to be signed into law.  In addition to reauthorizing the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) through FY2019, this soon-to-be law enacts substantive changes in the pipeline industry’s regulatory landscape.

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Uber Week for Uber in PA - Commonwealth Court Affirms PUC’s Authorization of Raiser’s Service (an Uber Subsidiary) and PUC Decreases Recommended $49 Mil Civil Penalty to $11 Mil


            In an April 19, 2016 Opinion, the Pennsylvania Commonwealth Court[1] affirmed the Public Utility Commission’s (PUC) grant of a certificate of public convenience (CPC) for experimental authority to operate as a common carrier to Raiser-PA, LLC (Raiser) in Pennsylvania, excluding Philadelphia.[2]  Raiser is a subsidiary of Uber Technologies, Inc. (Uber), which licenses the technology to Raiser that allows users to request a ride via smartphone app. 

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PHMSA Proposes Significant New Regulations Regarding Transmission and Gathering Pipelines


            On March 17, 2016 Pipeline and Hazardous Materials Safety Administration (PHMSA) released a 549 page Notice of Proposed Rulemaking (NPRM) that significantly changes regulations for transmission lines and imposes regulations on previously unregulated gathering lines carrying, inter alia, natural gas and petroleum products. 

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