HMS Legal Blog

PUC Proposes to Amend Competitive Safeguard Regulations

In light of ongoing concerns that incumbent utilities could share customer information, link regulated services with non-competitive services, and either directly or indirectly favor affiliated generators and thereby compromise efforts to achieve a truly competitive market, the Public Utility Commission at its August 25, 2011, public meeting issued a proposed rulemaking to revise existing competitive safeguard regulations at 52 Pa. Code §§ 54.121-123, which have been in effect since July 2000.  Comments on the proposed amendments are due in mid to late October, 45 days from the date of their publication in the Pennsylvania Bulletin.

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The Ethanol Credit - Slip Sliding Away

The Ethanol Blenders’ tax credit, which has existed for decades, is in serious jeopardy of being repealed or at a minimum non-renewed.

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PA PUC to Revise Policy Statement on Scope of Exemption from PUC Regulation for the Transportation of Injured or Ill Persons

The Pennsylvania Public Utility Commission recently proposed revisions to the policy statement, at 52 Pa. Code §41.11, that defines the scope of the exemption, from Commission regulation, for the provision of transportation service to injured or ill persons for medical treatment.

The proposed revisions, which were published in the Pennsylvania Bulletin and issued for public comment on June 11, 2011, are intended to eliminate confusion about the application of the policy to non-emergency transportation of injured or ill persons.

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Medical professional liability insurance limits will remain unchanged in Pennsylvania

Pennsylvania Insurance Commissioner Mike Consedine today made public his determination that the coverage limits required by law for medical professional liability will remain unchanged for 2012.  In an announcement much-anticipated by insurers and health care providers, Commissioner Consedine indicated that “it cannot be definitively found that additional basic insurance capacity is presently available and as such…limits of coverage for the primary market and Mcare shall remain unchanged.”

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PUC Initiates Phase II of Competitive Retail Electricity Market Investigation

On July 28th, 2011, the Pennsylvania Public Utility Commission entered an Order intended to provide guidance to the PUC Staff and interested stakeholders regarding issues to be addressed in Phase II of the PUC’s Investigation into the competitiveness of Pennsylvania’s retail electric market.  The Phase II process will involve a series of technical conferences to be chaired by the PUC’s Office of Competitive Market Oversight (OCMO) as well as additional en banc hearings.

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The PUC recently issued a Tentative Order seeking comment on a number of issues involved in the implementation of the deployment of smart meter technology throughout the Commonwealth and the data transactions required to support that implementation. Smart Meter Procurement and Installation, Docket No. M-2009-2092655 (Tentative Order entered June 30, 2011).

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Commonwealth Court Upholds PUC's Approval of PPL's Poconos Transmission Line

In January 2009, PPL Electric Utilities Corp. (“PPL”) sought Pennsylvania Public Utility Commission (“PUC”) approval to construct a 500kV Pennsylvania-New Jersey transmission line, part of which, subject to the issuance of appropriate permits, will run through the National Park system in Pennsylvania's Pocono Mountains.  The project involves modernization of an existing 230kV transmission line and the exercise of eminent domain over five parcels of land.  A PUC Administrative Law Judge issued a recommended decision granting PPL’s application on the condition that PPL not begin construction on the 230kV line prior to obtaining all approvals necessary for construction.  The PUC's final opinion and order adopted the ALJ’s recommended decision but also required that PPL inform the PUC whether it intended to defer its construction schedule and refrain from constructing a certain portion of the 230kV line until obtaining a National Park Service permit.  On reconsideration, the PUC clarified that PPL could begin construction on any other part of either line that was not subject to the National Park Service permit because to hold otherwise “would result in a significant, unacceptable delay in light of the demonstrated need for the line.”

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No “Unintentional” Violation of Ethics Act Possible

Interpreting the “conflict of interest” provisions of Pennsylvania’s Ethics Act, the Supreme Court has ruled that “to violate the conflict of interest provision … a public official must be consciously aware of a private pecuniary benefit for himself, his family, or his business, and then must take action in the form of one or more specific steps to attain that benefit.”  Kistler v. State Ethics Comm’n,  __Pa. __, ___A. 2d ___ (2011) (59 MAP 2009, decided June 22, 2011).

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New Federal Insurance Office gets a Director, but will it get regulatory authority?


Michael McRaith officially began his new job earlier this month as the first Director of the Federal Insurance Office (FIO or Office) after serving for the past six years as Director of the Department of Insurance in President Obama’s home state of Illinois.  The FIO was established by the Dodd-Frank financial reform legislation of 2010 as an office within the U.S. Department of the Treasury, and represents a part of the Congressional response to concerns about the financial stability of certain large domestic insurers and their subsequent taxpayer bailouts in 2008 and 2009.  Director McRaith will report to Treasury Secretary Timothy Geithner.

At this time the FIO has only an advisory role and monitoring authority over the business of insurance, while regulatory authority remains vested at the state level.  However, the establishment of the Office has caused a great deal of speculation, both within the industry and among state regulators, regarding whether it represents a significant first step towards shifting insurance regulation to the federal level in the future.

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Commonwealth Court Upholds Commission Determination That Line Loss Costs Are Not Transmission-Related, Remands Carrying Charge Issue For Reconsideration

Last week, the en banc Commonwealth Court  upheld in Metropolitan Edison Co. v. Pa. Pub. Util. Comm’n, No. 532 C.D. 2010 (Jun. 14, 2011), the Pennsylvania Public Utility Commission’s (“Commission”) decision in two consolidated cases in which the Commission held that “marginal transmission losses” or “line losses” are generation-related costs and are not recoverable from ratepayers under the Companies’ Transmission Service Charge Riders.  In a surprising upset for the Commission, however, the court remanded the case in-part for further consideration on whether Companies should be permitted to collect carrying charges.

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PUC en banc Hearing: A Resounding Success

The PA PUC’s recent public hearing to explore the future of the competitive electricity markets in Pennsylvania was no less than a resounding success according to Chairman Robert Powelson of the Commission.

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On June 4, 2011, the PUC reduced its majority motion to a written order and has remanded the case to an Administrative Law Judge for a ruling on whether the service and terms of the partial settlement are in the public interest.  The Order essentially follows Commissioner Wayne E. Gardner’s Motion, which was joined by Chairman Robert F. Powelson and Vice-Chairman John F. Coleman, Jr. at the May 19, 2011 public meeting.  It accepted the position of Laser and other parties, such as the PUC’s Office of Trial Staff, that the service proposed by Laser will be public utility service because it will be open to any member of the public requiring service to the extent of capacity.

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FCC Clarifies Rural Telco Obligations under Sec. 251(a) and (b)

On May 26, 2011, the Federal Communications Commission (“FCC”) released an Order clarifying that telecommunications carriers with rural exemptions under the Telecommunications Act of 1996 (“Telecom Act”)  still have the obligation to  negotiate interconnection under Sec. 251(a) and (b) of the Telecom Act and that state commissions have jurisdiction to arbitrate disputes arising from those negotiations.   Specifically, the FCC reaffirmed that:

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PUC finds that Laser Northeast’s gas gathering service in the Marcellus Shale play is public utility service

On May 19, 2011, the Pennsylvania Public Utility Commission (“PUC”) voted 3-2 to approve a motion by Commissioner Wayne E. Gardner finding that Laser Northeast Gathering Company’s (“Laser”) proposed natural gas pipeline gathering service in Pennsylvania is a public utility service.

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Pennsylvania Environmental Hearing Board Determines that TMDLs are Not Subject to State Appeal

TMDLs Established by EPA, Not DEP

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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.

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PUC Poised to Determine Expedited Procedure for Certain Changes to Energy Efficiency and Conservation Plans

The Pennsylvania Public Utility Commission has received comments and reply comments from various parties on its April 1, 2011 Tentative Order regarding changes to electric distribution companies’ (“EDCs”) energy efficiency and conservation plans (“EE&C Plan”) under Act 129.  See 66 Pa.C.S. § 2806.1.

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Former Insurance Department Counsel joins firm

Christopher KnightHawke McKeon and Sniscak LLP, is pleased to announce the expansion of its insurance regulatory practice, with Christopher J. Knight joining the firm as Of Counsel.

Chris spent nearly nine years as Counsel for the Pennsylvania Insurance Department as a member of the Governor’s Office of General Counsel, and will now use that experience and knowledge in his representation of insurance companies, producer licensees and other insurance-entity clients in regulatory, licensing and government compliance matters and related litigation.

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PUC Launches Investigation of Pennsylvania’s Retail Electricity Market

In a 4 to 1 vote, the Pennsylvania Public Utility Commission “officially launch[ed] the investigation of the competitiveness of the retail electric market with the goal of making recommendations for improvements to ensure a properly functioning and workably competitive retail electric market.”

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