PRIOR PRINTER'S NO. 3022
PRINTER'S NO. 3776
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2075
Session of
2018
INTRODUCED BY CHARLTON, DRISCOLL, HEFFLEY, FLYNN, CORBIN,
BIZZARRO, QUIGLEY, BARRAR, SANTORA AND SCHWEYER,
FEBRUARY 16, 2018
AS REPORTED FROM COMMITTEE ON CONSUMER AFFAIRS, HOUSE OF
REPRESENTATIVES, AS AMENDED, JUNE 20, 2018
AN ACT
Amending Title 66 (Public Utilities) of the Pennsylvania
Consolidated Statutes, in rates and distribution systems,
further providing for valuation of and return on the property
of a public utility.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 1311(b) of Title 66 of the Pennsylvania
Consolidated Statutes is amended to read:
ยง 1311. Valuation of and return on the property of a public
utility.
* * *
(b) Method of valuation.--
(1) The value of the property of the public utility
included in the rate base shall be the original cost of the
property when first devoted to the public service less the
applicable accrued depreciation as such depreciation is
determined by the commission.
(2) (i) The value of the property of a public utility
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providing water or wastewater service shall include the
original cost incurred by the public utility for the
replacement of customer-owned lead water service lines
and the replacement or rehabilitation of damaged
customer-owned sewer laterals, notwithstanding that the
customer will hold legal title to the replacement water
service line or replacement or rehabilitated sewer
lateral.
(ii) The original cost of the replacement water
service line or replacement or rehabilitated sewer
lateral shall be deemed other related capitalized costs
that are part of the public utility's distribution
system.
(iii) The public utility incurring the cost under
subparagraph (i) may recover a return on, and a return
of, the cost that the commission determines to have been
prudently incurred and will help prevent adverse effects
on public health or public safety or help the public
utility comply with laws and regulations pertaining to
drinking water or environmental standards.
(iv) The commission may allocate the cost associated
with the replacement of a customer-owned lead water
service line and the replacement or rehabilitation of a
damaged customer-owned sewer lateral among each customer,
classes of customers and types of service.
(v) Notwithstanding any other provision of this
title to the contrary, a public utility providing water
or wastewater service must obtain prior approval of the
commission or replacement or rehabilitation of damaged
customer-owned sewer laterals.
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* * *
ยง 1311. VALUATION OF AND RETURN ON THE PROPERTY OF A PUBLIC
UTILITY.
* * *
(B) METHOD OF VALUATION.--
(1) THE VALUE OF THE PROPERTY OF THE PUBLIC UTILITY
INCLUDED IN THE RATE BASE SHALL BE THE ORIGINAL COST OF THE
PROPERTY WHEN FIRST DEVOTED TO THE PUBLIC SERVICE LESS THE
APPLICABLE ACCRUED DEPRECIATION AS SUCH DEPRECIATION IS
DETERMINED BY THE COMMISSION.
(2) (I) THE VALUE OF THE PROPERTY OF A PUBLIC UTILITY
P ROVIDING WATER SERVICE SHALL INCLUDE THE ORIGINAL COST
INCURRED BY THE PUBLIC UTILITY FOR THE REPLACEMENT OF A
CUSTOMER-OWNED LEAD WATER SERVICE LINE, PERFORMED
CONCURRENT WITH A SCHEDULED UTILITY MAIN REPLACEMENT
PROJECT, NOTWITHSTANDING THAT THE CUSTOMER WILL HOLD
LEGAL TITLE TO THE REPLACEMENT WATER SERVICE LINE .
(II) THE ORIGINAL COST OF THE REPLACEMENT WATER
SERVICE LINE SHALL BE DEEMED OTHER RELATED CAPITALIZED
COSTS THAT ARE PART OF THE PUBLIC UTILITY'S DISTRIBUTION
SYSTEM.
(III) THE PUBLIC UTILITY INCURRING THE COST UNDER
SUBPARAGRAPH (I) MAY RECOVER A RETURN ON, AND A RETURN
OF, THE COST THAT THE COMMISSION DETERMINES TO HAVE BEEN
PRUDENTLY INCURRED AND WILL HELP PREVENT ADVERSE EFFECTS
ON PUBLIC HEALTH OR PUBLIC SAFETY OR HELP THE PUBLIC
UTILITY COMPLY WITH LAWS AND REGULATIONS PERTAINING TO
DRINKING WATER OR ENVIRONMENTAL STANDARDS. THE RETURN ON
COSTS PERMITTED UNDER THIS SUBPARAGRAPH MAY BE RECOVERED
FOR A PERIOD NOT TO EXCEED 10 YEARS FROM THE DATE THE
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COST IS INCURRED.
(IV) THE COMMISSION MAY ALLOCATE THE COST ASSOCIATED
WITH THE REPLACEMENT OF A CUSTOMER-OWNED LEAD WATER
SERVICE LINE AMONG EACH CUSTOMER, CLASSES OF CUSTOMERS
AND TYPES OF SERVICE.
(V) NOTWITHSTANDING ANY OTHER PROVISION OF LAW TO
THE CONTRARY, A PUBLIC UTILITY PROVIDING WATER SERVICE
MUST OBTAIN PRIOR APPROVAL FROM THE COMMISSION FOR THE
REPLACEMENT OF A CUSTOMER-OWNED LEAD WATER SERVICE LINE
BY FILING A NEW TARIFF OR SUPPLEMENT TO EXISTING TARIFFS
UNDER SECTION 1308 (RELATING TO VOLUNTARY CHANGES IN
RATES).
(VI) A NEW TARIFF OR SUPPLEMENT TO AN EXISTING
TARIFF APPROVED BY THE COMMISSION UNDER SUBPARAGRAPH (V)
SHALL INCLUDE A CAP ON THE MAXIMUM NUMBER OF CUSTOMER-
OWNED LEAD WATER SERVICE LINES THAT CAN BE REPLACED
ANNUALLY.
( VII) THE COMMISSION SHALL, BY REGULATION OR ORDER,
ESTABLISH STANDARDS, PROCESSES AND PROCEDURES TO:
(A) ENSURE THAT WORK PERFORMED BY A PUBLIC
UTILITY OR THE PUBLIC UTILITY'S CONTRACTOR TO REPLACE
A CUSTOMER-OWNED LEAD WATER SERVICE LINE IS
ACCOMPANIED BY A WARRANTY OF NO LESS THAN 12 MONTHS
FROM THE DATE THE WORK IS COMPLETED AND THE PUBLIC
UTILITY AND THE PUBLIC UTILITY'S CONTRACTOR HAS
ACCESS TO THE AFFECTED CUSTOMER'S PROPERTY DURING THE
TERM OF THE WARRANTY.
(B) PROVIDE FOR A REIMBURSEMENT TO A CUSTOMER
WHO HAS REPLACED THE CUSTOMER'S LEAD WATER SERVICE
LINE WITHIN FOUR YEARS OF COMMENCEMENT OF A PROJECT
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IN ACCORDANCE WITH A COMMISSION-APPROVED TARIFF.
(3) NOTHING IN THIS SECTION SHALL BE CONSTRUED TO LIMIT
THE EXISTING RATEMAKING AUTHORITY OF THE COMMISSION NOR
INVALIDATE OR VOID ANY RATES APPROVED BY THE COMMISSION
BEFORE THE EFFECTIVE DATE OF THIS PARAGRAPH.
* * *
Section 2. This act shall take effect in 60 days.
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