Pay to Play: Pennsylvania to Seek Authority to Impose Annual Tax on Retail Suppliers, Brokers February 18, 2013 Email This Story Copyright 2010-13 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
Pennsylvania will proceed with seeking legislative authority to impose an annual licensing fee on electric generation suppliers, including retail suppliers, brokers, marketers, and aggregators.
The PUC found that legislative changes are necessary in order to impose an annual fee on EGSs. "The Commission proposes to seek to amend Section 317(a) of the Code to permit the Commission to establish, by a rulemaking, reasonable fees to be charged and collected for other services that are not currently enumerated in Section 317(a). The Commission expects to pursue this legislative change in order to lawfully collect fees from EGSs to reimburse the Commission for employee time and resources spent on supplier-related matters," the PUC said in its end-state retail market design.
If you're keeping score, that means the PUC will seek legislative changes to impose a new tax on retail suppliers, but apparently won't be seeking legislative changes to remove the utility from the default supplier role.
"[T]he Commission intends to require all EGSs, including brokers and marketers, to pay an annual flat fee in the amount of $1,000," the PUC said.
"The Commission believes that a flat fee structure is the easiest for the Commission to administer and suppliers to anticipate. Further, upon considering comments from the majority of stakeholders, a $1,000 annual fee does not appear to be so expensive that it would act as a barrier for new EGSs to enter the Pennsylvania market or existing licensed EGSs to remain in Pennsylvania," the PUC said.
Additionally, while retail suppliers and brokers will be paying this new tax, the PUC will not modify, or unbundle, the current electric utility assessment charged through distribution rates paid by all customers.
The PUC said that it currently, "collects all regulatory expenses associated with the electric industry from EDCs."
Although the PUC has tried to characterize the new licensing fee on retail suppliers as related to incremental functions, presumably, the PUC's current oversight of retail suppliers is funded by the current nonbypassable electric industry assessment.
Therefore, absent unbundling, which the PUC will not pursue, retail supply customers will essentially pay double for certain PUC costs; once through the EGS licensing fee, and once through their distribution rates.