§ 3015 — Alternative forms of regulation

Pennsylvania § 3015

• Jurisdiction: Pennsylvania
• Title 66: PUBLIC UTILITIES
• Part: PART I
• Ch. 30: ALTERNATIVE FORM OF REGULATION

Text

(a) Inflation offset.--

(1) Except as otherwise provided in paragraphs (2) and (3), a local exchange telecommunications company with an alternative form of regulation containing a price stability mechanism that files an amended network modernization plan under section 3014(b)(1), (2) or (3) (relating to network modernization plans) shall be subject to a modified inflation offset in its price stability mechanism in adjusting its rates for noncompetitive services, effective upon the filing of an amended network modernization plan under section 3014(e), as follows:

(i) If a nonrural telecommunications carrier files an amended network modernization plan under section 3014(b)(3) that commits to deploy 100% broadband availability by December 31, 2013, then the carrier's inflation offset shall be zero.

(ii) If a nonrural telecommunications carrier files an amended network modernization plan under section 3014(b)(3) that commits to deploy 100% broadband availability by December 31, 2015, then the carrier's inflation offset shall be equal to 0.5%.

(iii) If a rural telecommunications carrier files an amended network modernization plan under section 3014(b)(1) that commits to deploy 100% broadband availability by December 31, 2008, or under section 3014(b)(2)(ii)(A) that commits to deploy 100% broadband availability by December 31, 2013, then the carrier's inflation offset shall be zero.

(iv) If a rural telecommunications carrier files an amended network modernization plan under section 3014(b)(2)(ii)(B) that commits to deploy 100% broadband availability by December 31, 2015, then the carrier's inflation offset shall be equal to 0.5%.

(2) Utilizing network modernization plan reports filed with the commission by local exchange telecommunications companies under section 3014(f), the commission shall monitor and enforce companies' compliance with their interim and final 100% commitments for broadband availability in their amended network modernization plans. In the event that a local exchange telecommunications company is found by the commission, after notice and evidentiary hearings held on an expedited basis, to have failed to meet such an interim or final 100% commitment, then the commission shall require the local exchange telecommunications company to refund to customers in its next price stability filing an amount that is just and reasonable under the circumstances. Such amount shall not exceed an amount determined by multiplying the percentage shortfall of the broadband availability commitment on an access-line basis required to be met during the period from the start of the amended plan or from the date of the last prior interim commitment, as applicable, times the increased revenue that was obtained during this period as a result of the modified inflation offset provided in this section that reduced the inflation offset applicable in the local exchange telecommunications company's alternative regulation plan in effect on the effective date of this section, plus interest calculated under section 1308(d) (relating to voluntary changes in rates). Any such refund required under this subsection shall be separate from and in addition to any civil or other penalties that the commission may impose on a local exchange telecommunications company under Chapter 33 (relating to violations and penalties).

(3) Where annual rate adjustments made under a nonrural telecommunications carrier's price stability mechanism are calculated using revenues from protected services, an average rate adjustment for protected residential customer local exchange telecommunications service lines shall be determined by dividing the total protected service revenues associated with such lines, as adjusted by the price stability formula, by the number of such lines, and the rate adjustment for any individual line shall not vary from this average rate adjustment by more than 20%.

(b) Rate changes for rural telecommunications carriers.--

(1) In addition to the rate change provisions in its alternative form of regulation plan, a rural telecommunications carrier operating without a price stability mechanism that files with the commission an amended network modernization plan under section 3014(b)(1) or (2) shall be permitted at any time to file proposed tariff changes with the commission, effective 45 days after filing, setting forth miscellaneous changes, including increases and decreases, in rates for noncompetitive services, excluding basic residential and business rates, provided such rate changes do not increase the rural telecommunications carrier's annual intrastate revenues by more than 3%.

(2) The commission tariff filing requirements and review associated with such proposed rate changes shall be limited to schedules submitted by the rural telecommunications carrier detailing the impact of the rate changes on the carrier's annual intrastate revenues.

(3) A rural telecommunications carrier that implements noncompetitive rate changes consistent with the procedure set forth in its alternative form of regulation plan shall be required only to file such financial and cost data with the commission to justify such changes as is required under its commission-approved alternative form of regulation plan.

(4) Notwithstanding the provisions of paragraph (1), (2) or (3), for any rural telecommunications carrier serving less than 50,000 access lines in this Commonwealth and operating under an alternative form of regulation plan, a formal complaint to deny rate changes for noncompetitive services unless signed by at least 20 customers of the rural telecommunications carrier shall not prevent implementation of the rate changes pending the adjudication of the formal complaint by the commission.

(c) Broadband Outreach and Aggregation Fund.--

(1) There is hereby established within the State Treasury a special fund to be known as the Broadband Outreach and Aggregation Fund for the purposes enumerated in section 3014(i).

(2) A local exchange telecommunications company that files an amended network modernization plan under section 3014(b)(2) or (3) shall be assessed by the commission for contribution to the fund and to the E-fund established under subsection (d) an amount of 20% of the first year's annual revenue effect:

(i) of any rate increase permitted by the elimination or reduction of the offset under subsection (a) and placed into effect; or

(ii) of any rate increase placed into effect under subsection (b)(1) if the local exchange telecommunications company is operating without a price stability mechanism.

For purposes of this paragraph, the term "first year's annual revenue effect" means the projected or actual increased revenues received by the local exchange telecommunications company during the one-year period from the effective date of its rate increase. The commission shall begin the assessments provided for in this paragraph on June 30, 2005, and thereafter shall make such assessments annually on June 30 until June 30, 2010, for assessments that include amounts for the fund and the e-fund and until June 30, 2015, for assessments that include amounts for only the fund. Each assessment shall be based on the first year's annual revenue effect of any covered rate increase effective after the date of the last annual assessment.

(3) An amount not to exceed 50% of such assessment shall be allocated to the fund. The remainder of the assessment shall be allocated to the E-fund provided for under subsection (d) until its termination on June 30, 2011. After the E-fund termination, the maximum assessment percentage shall be reduced from 20% to 10%, and contributions shall be made only to the fund until the local exchange telecommunications company achieves 100% broadband availability. Contributions of allocated amounts shall be paid to the fund and the E-fund by the local exchange telecommunications company in equal quarterly installments.

(4) In no event shall the total amount of the fund exceed $5,000,000 annually, and in the event of such overfunding the department shall credit the overcollection to the next year's contribution amount.

(5) A local exchange telecommunications company that elects to amend its network modernization plan pursuant to section 3014 (b)(1) shall not be required to contribute to the fund.

(6) The moneys in the Broadband Outreach and Aggregation Fund are hereby appropriated upon approval of the Governor to the department for the purposes enumerated in paragraph (1). The department may use up to 3% of the money in the fund for administration.

(7) The fund shall continue until July 1, 2016, at which time the fund shall terminate, and the department shall return any funds remaining in the fund on a pro rata basis to the local exchange telecommunications companies that contributed to the fund.

(d) Education Technology Fund (E-Fund).--

(1) There is hereby established within the State Treasury a special fund to be known as the Education Technology Fund (E-Fund) for the purposes enumerated in paragraph (4).

(2) All E-fund assessments imposed by the commission under subsection (c)(2) and paragraph (3), moneys specifically appropriated by the General Assembly for the purposes of this subsection and any funds, contributions or payments which may be made available to the fund by the Federal Government, another State agency or any public or private source for the purpose of implementing this subsection shall be deposited in the E-Fund.

(3) Beginning in 2005 and continuing through 2010, the commission shall, no later than June 30, annually assess each nonrural telecommunications carrier that files an amended network modernization plan under section 3014(b)(3) an amount to be deposited in the E-Fund. Each carrier's annual assessment shall be payable in two equal installments due on October 31 of each year and January 31 of the following year and shall be based on the relative proportion of the retail access lines served by the nonrural telecommunications carrier in relation to the number of retail access lines served by all nonrural telecommunications carriers that have filed an amended network modernization plan under section 3014(b)(3). For fiscal years 2005-2006 and 2006-2007, the total annual assessment amount shall be $7,000,000. For fiscal years 2007-2008, 2008-2009, 2009-2010 and 2010-2011, the total annual assessment amount shall be the difference between $7,000,000 and any amount remaining in the E-Fund from prior fiscal years which remains unencumbered or unexpended. A nonrural telecommunications carrier's assessments required under this paragraph may not be recovered via a surcharge on customers' bills or in rates for noncompetitive services as exogenous change adjustment under the provisions of the carrier's price stability mechanism and subsection (a)(3) where applicable.

(4) Additional local exchange telecommunications company contributions to the E-fund shall be made pursuant to the provisions of subsections (c)(2) and (3).

(5) The Department of Education shall expend the moneys of the E-Fund for the purpose of providing grants to school entities as prescribed by section 3014(j).

(6) The moneys of the Education Technology Fund are hereby appropriated upon approval of the Governor to the Department of Education for the purposes enumerated in paragraph (5). The Department of Education may use up to 3% of the money for administration. Appropriations by the General Assembly to the fund shall be continuing appropriations and shall not lapse at the close of any fiscal year.

(7) The E-Fund shall continue until June 30, 2011, at which time the fund shall terminate and the Department of Education shall return any funds remaining therein on a pro rata basis to the local exchange telecommunications companies that contributed to the fund.

(e) General filing requirements.--The commission's filing and audit requirements for a local exchange telecommunications company that is operating under an amended network modernization plan shall be limited to the following:

(1) Network modernization plan reports filed pursuant to section 3014(f).

(2) An annual financial report consisting of a balance sheet and income statement.

(3) An annual deaf, speech-impaired and hearing-impaired relay information report.

(4) An annual service report.

(5) Universal service reports.

(6) An annual access line report.

(7) An annual statement of gross intrastate operating revenues for purposes of calculating assessments for regulatory expenses.

(8) An annual State tax adjustment computation for years in which a tax change has occurred, if applicable.

(9) For those companies with a bona fide retail request program, a bona fide retail request report under section 3014(c)(9). These reports shall be submitted in the form determined by the commission.

(f) Other reports.--

(1) Notwithstanding any other provision of this title to the contrary, no report, statement, filing or other document or information, except as specified in subsection (e), shall be required of any local exchange telecommunications company unless the commission, upon notice to the affected local exchange telecommunications company and an opportunity to be heard, has first made specific written findings supporting conclusions in an entered order that:

(i) The report is necessary to ensure that the local exchange telecommunications company is charging rates that are in compliance with this chapter and its effective alternative form of regulation.

(ii) The benefits of the report substantially outweigh the attendant expense and administrative time and effort required of the local exchange telecommunications company to prepare it.

(2) Nothing in this subsection shall be construed to impede the ability of the commission to require the submission of further information to support the accuracy of or to seek an explanation of the reports specified in subsection (e).

(g) Rate change limitations.--Nothing in this chapter shall be construed to limit the requirement of section 1301 (relating to rates to be just and reasonable) that rates shall be just and reasonable. The annual rate change limitations set forth in a local exchange telecommunications company's effective commission-approved alternative form of regulation plan or any other commission-approved annual rate change limitation shall remain applicable and shall be deemed just and reasonable under section 1301.

(h) Conformance of plan.--Upon approval of a local exchange telecommunications company of network modernization plan amendments pursuant to section 3014(e), the local exchange telecommunications company's alternative form of regulation plan shall be deemed amended consistent with this section.

Legislative History

(Nov. 30, 2004, P.L.1398, No.183, eff. imd.) 2004 Amendment.Act 183 added section 3015. Cross References.Section 3015 is referred to in sections 3012, 3014, 3019 of this title.