On October 6, 2016, the Pennsylvania Public Utility Commission entered a Final Order in the Proceeding to Evaluate the Transition to Corrected Non‑Solar Tier I Calculation Methodology, Docket A-2009-2093383.  The October 6 Final Order evaluated the public comments regarding the Commission’s proposals to address an unanticipated seven percent increase in the non-solar Tier I Alternative Energy Credit (“AEC”) for the 2016 compliance year.  The Commission is charged with using its general powers to carry out, execute, and enforce AEC obligations under the Alternative Energy Portfolio Standards Act of 2004 (“AEPS Act”).  As we explained in a previous blog entry, the Commission had become aware of a recurring error over the past six years regarding the calculation of the non-solar Tier I AEC obligation quarterly adjustment.

In the Final Order, the PUC rejected the solution that would have required electric distribution companies (“EDCs”) to procure the additional needed AECs, transfer those procured credits to all load serving entities, and recover the costs of the procurement through a preexisting non-bypassable surcharge.  The Commission explained that this solution (1) inappropriately shifts the responsibility to acquire and retire AECs from electric generation suppliers to EDCs under the AEPS Act and Commission regulations; (2) is administratively burdensome; (3) incurs unnecessary time and resources; and (4) does not ameliorate the costs for compliance, which would ultimately be borne by all ratepayers.

Based on the high level of support in the comments, the Commission determined that the second solution – delaying the true-up period for the non-solar Tier I adjustment credits — is the most reasonable solution.  Accordingly, the Commission further extended the true-up period for non‑solar Tier I adjustment obligations for the 2016 AEPS compliance year from November 30, 2016 to May 1, 2017.

If you have any questions or concerns regarding the PUC’s Final Order and how it may potentially impact your business, please do not hesitate to contact us.