Regulatory Updates by Region

Mid-Atlantic Regulatory Update: September 2015

Posted September 25, 2015 by Direct Energy Business

Although legislative sessions have concluded for the year in Maryland, Delaware, and Virginia, Pennsylvania is still at it. 

Governor Tom Wolf’s $225 million energy investment plan remains in play, despite protracted budget negotiations that should have concluded by June 30th. The initiative must be must be passed as part of ongoing budget deliberations with the Pennsylvania House of Representatives and Senate. The plan's major components – which are competitively bid or direct grants to residential and business customers – include:

  • Combined Heat and Power (Cogeneration): $30 million in grants to businesses that employ new technologies to produce heat and power on-site from gas, biomass, coal, waste heat, oil, or a combination of fuel sources
  • Last Mile” Natural Gas Distribution Line Fund: $25 million in matching grants to business parks and manufacturers to construct the last few miles of natural gas distribution lines. The program will make low-cost natural gas available to Pennsylvania’s manufacturing sector, establishing a significant competitive advantage in production costs and boosting the Commonwealth’s ability to attract new enterprises
  • Energy Efficiency: $50 million in competitive grants to fund projects that improve energy efficiency at small businesses, local government units, schools, and non-profits with larger grants awarded for collaborative projects
  • Solar Investment: $50 million in distributed rebates on qualifying solar projects to homeowners and small businesses, and expand eligible institutions to include municipalities, universities, schools and hospitals
  • Green Agriculture: $20 million in competitive grants for projects designed to make Pennsylvania farms more self-reliant, including energy efficiency upgrades, biodigesters, and distributed wind generation
  • Wind Power: $20 million program to help facilitate construction of new wind farms and support interconnection to the grid. Proposals will be evaluated based on the level of private financing, cost-effectiveness and commitment to create good-paying jobs with benefits
  • Pennsylvania Energy Development Authority (PEDA): $30 million to help support the Authority’s mission of expanding the market for clean, advanced energy technologies, services, and fuels

On the regulatory front in Pennsylvania, the Public Utility Commission (PUC) has initiated an investigation of the retail natural gas market in the Commonwealth. Similar to the Commission’s investigation into the electric market a few years ago, the PUC seeks to examine the current state of natural gas competition and how it can be improved to encourage shopping by all customer classes. Most recently, a working group – which was directed by the Commission to examine accelerated switching for natural gas customers – circulated a series of proposals and questions asking stakeholders to comment and identify changes that would enable customers to switch more quickly. 

Maryland

In Maryland, the Public Service Commission is in the final phase of an ongoing proceeding to examine their energy competition rules. Various working groups and stakeholder meetings have generated a recommended set of changes to the current rules, which include accelerated switching, end of contract notification requirements, and other consumer protection measures that largely apply to residential customers. To date, the Commission has convened one rule-making session in which each change was evaluated and approved. A final rule-making session is scheduled for October 2015 where the remaining changes will be approved.   

Washington, D.C.

The Washington, D.C. Public Service Commission (PSC) recently rejected the proposed merger of Exelon and PEPCO. The PSC was the last regulatory body to act on the merger and the only one to deny it. Earlier in 2015, regulators in Delaware, Maryland, New Jersey and Virginia approved the merger. Key to the denial was the failure of settlement negotiations between the companies and other stakeholders, a crucial step that aided in the approval from other states. The PSC concluded that the merger would not be in the public’s best interest and not sufficiently address the District of Columbia’s needs. Exelon and PEPCO have 30 days to file a petition for reconsideration and/or to propose an alternative plan to the PSC and other parties. Exelon has not yet filed, but has until late September. 

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