HARRISBURG - Building on a policy of supporting alternative energy resources, the Pennsylvania Public Utility Commission proposed a policy outlining the circumstances under which it will consider an alternative energy project to be exempt from the definition of “public utility” under the state’s Public Utility Code.

“Some alternative energy projects may wish to serve only one or a few customers under proposed private contractual arrangements,” said Vice Chairman James H. Cawley. “This policy statement is intended to define the circumstances that must exist to exclude a project from the protections of the Public Utility Code. Encouragement of alternative energy development will not only provide environmental and economic development benefits, but also potentially lessen the need to increase the rates of electric and natural gas service from conventional sources.”

The Commission passed the policy statement by a vote of 4-1. Commissioner Terrance J. Fitzpatrick issues a statement with his dissenting vote.

A project will not be considered a public utility if it satisfies one or more of the following:
* The service being provided by the alternative energy source is merely incidental to non-utility business with the customer which creates a nexus between the provider and the customer.
* The facility is designed and constructed only to serve specific individuals or entities, and other cannot feasibly be served without a significant revision to the project.
* The service is provided to a single customer or to a defined, privileged and limited group of customers where the provider reserves its right to select its customers by contractual arrangement such that no one among the public outside of the selected group is privileged to demand service and resale of the service is prohibited.
* Any other factors indicate an intention, express or implied, to serve private entities as opposed to the general public.
* “I have supported and continue to support the development of new technologies, particularly in light of the passage of the Alternative Energy Portfolio Standards Act,” said Commission Kim Pizzingrilli in a statement that included questions for the interested parties to consider in offering their comments on the proposed policy. “The Commission is cognizant that new technologies present new issues for the Commission to consider and responded by striking a balance between the needs of the alternative technology provider and the public interest.”

The Commission encourages parties to comment on the proposed amendments. Interested parties will have 30 days to submit comments after the proposed policy statement has been published in the Pennsylvania Bulletin.

The policy builds on the Alternative Energy Portfolio Standards Act of 2004. The Act requires that a certain percentage of all electric energy sold to retail customers be derived from alternative energy sources such as solar, wind, hydropower, geothermal, biomass, and demand side management resources. The law applies to both electric distribution companies and electric generation suppliers who must demonstrate their compliance on an annual basis. The level of alternative energy required gradually increases according to a 15-year schedule.

The Pennsylvania Public Utility Commission ensures safe, reliable and reasonably priced electric, natural gas, water, telephone and transportation service for Pennsylvania consumers, by regulating public utilities and by serving as stewards of competition.

POSTED 051111_1616 EST