PA PUC Soon to Revise Regulations to Streamline Procedures for Rate Increase Requests for Small Passenger Carriers

The Pennsylvania Public Utility Commission approved a Final Rulemaking Order at its December 2, 2010 Public Meeting that, upon implementation, will significantly streamline and simplify the record keeping and filing requirements associated with requests for rate increases by small intrastate passenger carriers.

Currently, all passenger carriers seeking rate increases are required to comply with the Commission’s regulations at 52 Pa. Code §§23.63 and 23.64, which direct the submission of detailed financial and operating information in support of the request.  The Commission has determined, however, that these requirements may be overly burdensome to small carriers and may result, due to the difficulty some carriers have in maintaining and providing the required records and information, in the denial of otherwise legitimate increase requests.

The Commission noted in its Order:

Nevertheless, some of the smaller motor passenger carriers have had difficulty keeping the detailed records needed in order to support their efforts to amend their tariffs for the purpose of raising rates and increasing carrier revenue.  The failure to have all of the appropriate operational and financial records in order to support the rate increase case often resulted in the outright denial of the rate increase because the carrier failed to provide the required financial documentation.  Thus, this lack of expertise and unfamiliarity with the Commission’s regulatory ratemaking process in general is one of the main obstacles for small motor passenger carriers when requesting rate increases.

Final Rulemaking Order, Docket No. L-2008-2057661 (Entered December 6, 2010)

The new regulations define “small carriers” as those whose annual operating revenues are below $500,000.  The Commission’s action adds Section 23.68 to its regulations, which provides:

§23.68.  Filing requirements for small passenger carriers.

Small passenger carriers with gross annual intrastate revenue of less than $500,000 need not file the substantial data required under §23.64 (relating to data required in filing increases in operating revenues) when requesting an increase in rates, but shall submit a statement with the tariff or tariff supplement stating the following:

(1) The information required under §23.63 (relating to data required in filing proposed rate changes).

(2) The total gross annual intrastate revenue for the most recent fiscal year.

(3) The dollar amount of increased annual revenue that the rate increase is expected to produce.

(4) The total projected operating revenue after the revenue increase.

(5) The total projected operating expenses.

(6) The projected operating ratio.

52 Pa. Code §23.68.

The new regulations also include a one year stay-out provision for further rate increase requests.  This stay-out provision is waived, however, for carriers with operating ratios (intrastate operating expenses over intrastate operating revenues) of 93% or above.

The proposed regulations are currently before the Independent Regulatory Review Commission for review.  Implementation of the regulations will occur with final publication in the Pennsylvania Bulletin, which is expected in the near future.  A copy of the proposed regulations is attached.

Attached: Chapter 23 Revisions.pdf