HARRISBURG – Jan. 26, 2012 – State Sen. Tim Solobay voted yesterday to pass legislation that will help replace aging utility infrastructure in Pennsylvania while protecting consumers from costly rate hikes.
Under current law, utilities have the authority to recover costs for necessary construction work through expensive and time-consuming general rate cases. House Bill 1294 will allow utilities to instead gradually recover infrastructure investment costs through a capped Distribution System Improvement Charge (DSIC).
“Ultimately, it’s the consumer that pays for the expensive bureaucracy involved in a rate case, in addition to the costs of infrastructure repair and replacement,” Solobay said. “This bill will cut those costs, thereby easing the impact on consumers.”
House Bill 1294 requires utility companies to submit to the Public Utility Commission (PUC) their long term plans for infrastructure replacement when petitioning for a DSIC. The idea is that the ability to recover costs more quickly through a DSIC will encourage utilities to accelerate infrastructure upgrades.
“Improving our utility infrastructure in Pennsylvania is a win-win situation,” Solobay said. “It will put people to work and, at the same time, newer pipes and wires are safer pipes and wires. As a fire Chief, I feel this bill effectively responds to great safety needs within our aging infrastructure.”
Along with the DSIC the bill enacts numerous safeguards over rate increases and assures that utilities stand by their work.
The bill will:
- cap the DSIC at 5 percent;
- preserve the Public Utility Commission’s (PUC) rate case system;
- require utilities to detail and adhere to their long range infrastructure plans;
- empower the PUC to reject faulty plans and penalize utilities for not following through on work;
- require the PUC to annually review a utility company’s progress and adherence to their stated work plans; and
- mandate that utility companies repay customers -- with interest – when overcharges occur.
The bill goes back to the House for consideration of Senate amendments.
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