Dominion Retail Seeks Order from Pennsylvania PUC Declaring Home Rule Opt-Out Aggregations Illegal

Email This Story
November 4, 2010

Dominion Retail has filed a petition for a declaratory order from the Pennsylvania PUC finding that implementation of opt-out municipal aggregation programs, for home rule municipalities or otherwise, is illegal in the absence of an act of the General Assembly authorizing such activity (P-2010-2207953).

Dominion Retail's petition was filed on October 29, a day after a similar petition from the Retail Energy Supply Association was filed (11/1), and was posted by the Secretary on November 3.

Dominion Retail's petition makes similar arguments to those raised in the RESA petition against the ability of home rule municipalities to conduct opt-out aggregation, but cites some additional case law and also deals with specific issues related to Third Class Cities.

The City of Meadville, which has authorized an opt-out aggregation program to be supplied by FirstEnergy Solutions, is an Optional Charter Third Class City.

"[T]here is no authority in any relevant part of any municipal code that allows a municipality to regulate the conduct of public utilities or services subject to regulation by the Commission," Dominion Retail said, citing PECO Energy Co. v. Upper Dublin, 922 A.2d 996 (Pa. Cmwlth. 2006).  In that decision, as described by Dominion Retail, the Township was preempted by the Public Utility Code and the Commission's regulations from applying the Township's shade tree ordinance to PECO's vegetation management practices.  

Additionally, in South Coventry v. Philadelphia Electric Co., 504 A.2d 368 (Pa. Cmwlth. 1986), Dominion Retail said that the court found that it is the intent of the legislature to commit the regulation of public utilities to a commission of statewide jurisdiction in rejection of parochial local interests.

While Third Class Cities are granted the right to "supply" the city with electricity using their own systems, 53 P.S. § 38575, Dominion Retail argued that such activity, "is not the same thing as acting in concert with another proprietary business entity to provide service through the jurisdictional facilities of a regulated public utility."

Moreover, opt-out aggregation activities undertaken by Third Class Cities, "are contrary to the Optional Third Class City Charter Law, 53. P.S. § 41305, which prohibits Third Class Cities from engaging in such business activity, to wit: 1) a home rule municipality may not engage in any 'proprietary or private business' unless authorized by the General Assembly; and 2) a home rule [municipality ] may not exercise power contrary to laws applicable in every part of the Commonwealth," Dominion Retail argued.

Participation as an aggregator of customers for EGSs, possibly even for compensation, is a business subject to regulation under the Electricity Generation Customer Choice and Competition Act, 66 Pa. C.S. § 2803 and § 2809, Dominion Retail said.

"Moreover, even to the extent that any specific grant of authority in the Optional Third Class City Charter Law or Third Class City Code conflicted with the Public Utility Code, the [Public Utility] Code would prevail," Dominion Retail said, again citing PECO Energy Company v. Township of Upper Dublin.

"Regardless of whether one agrees that provision of electricity through an opt-out program is authorized by the Optional Third Class City Charter Law or Third Class City Code, or whether such a program is a private or proprietary business, one simply cannot ignore the fact that Third Class Cities do not have the authority to enact laws that address subjects regulated by the Public Utility Code.  In this case, the issue is switching customers without consent.  Neither Meadville nor any other municipality can change the specific requirement grounded in the Public Utility Code that customers must affirmatively consent," Dominion Retail argued.

“Pennsylvania law is clear that the customer must affirmatively request to be switched to a new supplier. 66 Pa. C.S. § 2807(d)(1); 52 Pa. Code § 57.173,” Dominion Retail said, specifically requiring direct oral confirmation from the customer of record or written evidence of a customer's consent to change of supplier.  While the PUC has authorized aggregation programs and waived the affirmative consent requirement, for two programs that were opt-out in nature, such programs were the result of litigated proceedings of limited scope, Dominion Retail noted

   
Email This Story
 

HOME

Copyright 2010 Energy Choice Matters.  If you wish to share this story, please email or post the website link; unauthorized copying, retransmission, or republication prohibited.

 

Be Seen By Energy Professionals in Retail and Wholesale Marketing

Run Ads with Energy Choice Matters

Call Paul Ring

954-205-1738

 

 

 

 

 

Energy Choice
                            

Matters