2009 Report - Pennsylvania Public Utility Commission

power from the wholesale market to fulfill their provider of last resort (POLR)
obligations. 15
It is the responsibility of each load-serving entity to make provisions for
adequate generating resources to serve its customers. Furthermore, section
2807(e)(3) of the Public Utility Code requires that, at the end of the transition
period (the period in which the EDC recovers its stranded costs), the local EDC or
Commission-approved alternate supplier must acquire electric energy, pursuant to
a Commission-approved competitive procurement process, for customers who
contract for power which is not delivered, or for customers who do not choose an
alternate supplier. The acquired electric power must include a prudent mix of spot
market purchases, short-term contracts and long-term purchase contracts,
designed to ensure adequate and reliable service at the least cost to customers
over time. EDCs must also assume the role of provider of last resort for customers
choosing to return to the EDC. 16
On May 10, 2007, the Commission finalized the statewide default service
rulemaking and policy statement which provides guidelines to default service
providers regarding the acquisition of electric generation supply, the recovery of
associated costs and the integration of default service with competitive retail
electric markets. The regulations establish the criteria on how electric generation
service is provided to customers who choose to obtain generation service from an
alternate supplier. In reviewing the comments and considering revisions to the
proposed default service rules, the Commission recognized that some elements of
the default service rules should be addressed in a policy statement that provides
guidance to the industry rather than strict rules. 17
Alternative Energy Portfolio Standards
18
Act 213 requires that an annually increasing percentage of electricity sold
to retail customers be derived from alternative energy resources. This applies to
both electric distribution companies and electric generation suppliers.
These alternative energy resources are categorized as Tier 1 and Tier 2
resources. Tier 1 resources include solar, wind, low-impact hydropower,
geothermal, biologically derived methane gas, fuel cells, biomass and coal mine
methane. Tier 2 resources include waste coal, demand side management,
distributed generation, large-scale hydropower, by-products of wood pulping and
15 Also referred to as “obligation to serve” and “default service.”
16 66 Pa.C.S. § 2807(e)(3).
17 Docket Nos. L-00040169 and M-00072009; 52 Pa. Code §§ 54.4-54.6, 54.31-54.41, 54.123, 54.181-54.189, 57.178
and 69.1801-68.1817.
18 73 P.S. §§ 1647.1–1647.8.
Electric Power Outlook for Pennsylvania 2008-2013 13