The Public Utility Commission formally published its Implementation Order for Act 58 of 2018, putting in place procedures through which utilities may seek Commission approval of applications establishing alternative rates and rate mechanisms in future base rate proceedings in the May 11 PA Bulletin.

Act 58 gives the Commission express statutory authority to approve alternative rate mechanisms for electric, natural gas, and water and wastewater utilities, as well as what notices of such ratemaking requests are to be given to customers.

One goal of alternative ratemaking for energy utilities is to encourage energy conservation, distributed power and renewable energy.

The Commission voted 5-0 to adopt the order, which the PUC finalized after providing for an extended comment and review period on the Commission’s proposed interpretation and implementation of the new law.

On June 28, 2018, Gov. Tom Wolf signed Act 58, which added Section 1330 to Chapter 13 of the Pennsylvania Public Utility Code and enabled utilities to seek PUC approval of alternative rates and rate mechanisms including, but not limited to: decoupling mechanisms, performance-based rates, formula rates, multiyear rate plans, or a combination of these alternatives.

In its Tentative Implementation Order of Aug. 23, 2018, the Commission proposed that the alternative ratemaking mechanisms authorized under Act 58 be proposed within the confines of a utility base rate case under Chapter 13.

The PUC has a well-established process for reviewing base rate cases, which provides for hearings concerning the lawfulness and appropriateness of proposed rates, including proposed alternative rate mechanisms.

Click Here for a copy of the order.

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