Thomas, Long, Niesen & Kennard Law

Highlights: PA PUC Public Session of October 19, 2006

October 19, 2006

Note: Audio from each public meeting is available on the Pennsylvania Public Utility Commission’s website for approximately six months. To access the audio stream for this public meeting, please visit http://www.puc.state.pa.us/general/PMAudio.aspx. The public meeting calendar and agendas may be viewed at http://www.puc.state.pa.us/general/public_meeting.aspx.

At the October 19, 2006 Public Meeting of the Pennsylvania Public Utility Commission (“Commission”), the Commissioners adopted Staff’s recommendations for action by a vote of 4-0 on all items listed on the Main Agenda and Carry-In Agenda, except as reflected herein below under the respective Commission agenda headings. Review of particular items addressed by the Commissioners at this Public Meeting which may be of interest to our clients and our firm are also addressed under the respective Commission agenda headings below. Any relevant motions and statements are attached to the original of this Session Memo filed in the Public Meeting Agenda and Session Memo binder. The next regular Public Meeting is scheduled for Thursday, November 9, 2006 at 10:00 a.m. The minutes of the Public Meeting of September 15, 2006 were unanimously approved without modification.

Bureau of Transportation and Safety

All matters approved as submitted.

Bureau of Audits

Equitable Gas Company AUD-0024, D-06SPA019. Auditor’s report on the Disposition of a Pipeline Supplier Refund for Low-Income Energy Assistance as of June 30, 2006. Staff recommends that the Commission approve the Audit Report for public release. Vote of 4-0 with no discussion.

Bureau of Consumer Services

Final Investigatory Order/Proposed Rulemaking: BCS-0010R*, M-0005193: On December 15, 2006 the Commission entered an Order requesting public Comments on the funding, cost recovery and other issues related to Universal Service and Energy Conservation Programs. Numerous Comments were filed. Staff recommends that the Commission adopt the proposed Order, to be published in the Pennsylvania Bulletin. Joint Motion of Commissioners Fitzpatrick and Pizzingrilli to amend the recommendation in several respects. Regarding funding levels for CAPS, uniform funding levels for all utilities is not appropriate. Levels should be considered on a case by case basis. Regarding cost recovery mechanisms, utilities have a right to collect in base rates or to assess a surcharge. CAP rules should be placed in tariff. Biennial review should be conducted as a tariff filing. Regarding CAP design element, retain current approach with certain changes. Chairman Holland verbally concurs. Vote of 4-0 with no further discussion.

Office of Special Assistants

Pilot Travel Center, LLC v. Jai-Mai, Inc., OSA-0250R*, C-20031054. Comments filed by Pilot Travel Centers, Jai Mai, Inc. And DEP, in response to the Commission’s April 4, 2006 Opinion and Order, which stated its intent to reconsider pending further review of the merits of the Opinion and Order entered January 17, 2006. Staff recommends that the Commission modify the Opinion and Order entered January 17, 2006, consistent with the proposed Opinion and Order. Motion of Vice Chairman Cawley that Jai-Mai is not operating as a public utility since it serves only a defined, limited group and as long as it does not seek to serve any additional customers. Commissioner Pizzingrilli orally supports the Motion. Vote of 4-0 with no further discussion.

Firetree, Ltd. V. AT&T Communications of Pennsylvania, LLC. (Alleged service error), OSA-0290*, C-20055714. On December 22, 2005, Firetree filed a Formal Complaint against AT&T alleging that Verizon Pennsylvania, Inc. assigned an incorrect presubscribed interexchange carrier code designating AT&T as its long distance carrier. On January 19, 2006, AT&T filed an Answer and Motion to Dismiss. On February 3, 2006, Firetree filed a second Formal Complaint against AT&T which included Verizon as a respondent. On March 28, 2006, the Initial Decision of CALJ Smith was issued recommending that the Motion of AT&T be granted and the Formal Complaint be dismissed. On April 17, 2006, Firetree filed Exceptions. Reply Exceptions were filed by AT&T on April 27, 2006. Staff recommends that the Commission adopt the proposed Opinion and Order dismissing the Complainant’s Exceptions and adopting the CALJ’s Initial Decision. Motion of Vice Chairman Cawley to clarify that although the PUC no longer regulates IXC rates (now deemed competitive under Section 3018), the PUC does nevertheless retain subject matter jurisdiction over the ordering, installation, restoration and disconnection of IXC service. Nevertheless, dismissal of the complaint is appropriate here on other grounds. Vote of 4-0 with no further discussion.

PA PUC, BTS v. Fantasy Limousine Service, Inc. OSA-0316*, A-00108359, A-00108359C0601 (code violation): On March 15, 2006, BTS instituted a Complaint against the Petitioner for failure to have evidence of insurance on file with the Commission. By Secretarial Letter entered July 26, 2006, BTS’ Complaint was sustained, and the Petitioner’s Certificate was revoked. On September 18, 2006, the Petitioner filed a Petition for Reinstatement. BTS did not file an Answer. Staff recommends that the Petition for Reinstatement be granted. Postponed by Commissioner Fitzpatrick until the Public Meeting of November 9, 2006.

Bureau of Fixed Utility Services

Application filed August 26, 2006, by CityNet, Pennsylvania, LLC, FUS-0500 R* A-311281F0002: for an expansion of its CLEC authority beyond Verizon Pennsylvania Inc. to include Verizon North Inc. and United Telephone Company of Pennsylvania d/b/a Embarq Pennsylvania. Staff recommends that the Commission adopt the proposed Order. Motion by Vice Chairman Cawley that the uncontested CLEC applications be approved without possibility of reconsideration, depending on outcome of other contested applications for other service areas. Statement by Commissioner Fitzpatrick concurring in result only to grant the unprotested applications. However, he believes that the unprotested applications should still be subject to possible reconsideration following an order in the protested dockets. Vote 4-0 with no further comment.

Application filed May 30, 2006, by Salsgiver Telecom, Inc., FUS-0504* A-311373F0002 FUS-0504* A-311373F0003 A-311373F0004: to offer, render, furnish, or supply telecommunications services as a Competitive Local Exchange Carrier in the service territories of Verizon North Inc. and Verizon Pennsylvania Inc.; as a Reseller of Interexchange Motion by Vice Chairman Cawley. Statement by Commissioner Fitzpatrick, concurring in result only. See discussion in CityNet, above (Same Motion and Statement) Vote 4-0 with no further discussion.

Joint Application filed September 16, 2005, by Aqua Pennsylvania, Inc. and Country Club Gardens Water Company, Inc., FUS-0875* A-210104F0066, A-210620F2000: for approval of 1) the acquisition by Aqua PA of the water system assets of Country Club Gardens, 2) the rights of Aqua PA to begin to offer, render, furnish, or supply water service to the public in portions of Lower Macungie, Salisbury, and South Whitehall Townships, Lehigh County, and 3) the abandonment by Country Club Gardens of public water service within portions of Lower Macungie, Salisbury, and South Whitehall Townships, Lehigh County. Staff recommends that the Commission adopt the proposed Order. Vote of 4-0 with no discussion.

Pennsylvania Power Company Home Office - New Castle, PA: FUS-1056* P-00052188 Supplement No. 37 to Tariff Electric – Pa. P.U.C. No. 35 filed September 21, 2006, to replace certain tariff sheets in compliance with the Commission’s Orders dated April 28, 2006, May 4, 2006, and Secretarial Letters dated June 2, 2006, July 20, 2006, July 25, 2006, July 28, 2006, and August 17, 2006, at Docket No. P-00052188. Staff recommends that the Commission adopt the proposed Order. Vote of 4-0 with no discussion.

Supplement No. 200 to Tariff Telephone-Pa. P.U.C. No. 11 filed August 22, 2006, by North Pittsburgh Telephone Company, FUS-1365 R*, R-00061782 proposing to adjust the State Tax Adjustment Surcharge to zero and offset the State Tax Adjustment Surcharge change by making an equivalent reduction to its banked Price Stability Index revenues. Staff recommends that the Commission adopt the proposed Order permitting the filing to go into effect. Vote of 4-0 with no discussion.

Combined Bureau Agenda

Utilities, Inc. – Westgate, FUS-0851*, OTS-0016, R-00061592: Tariff Water-Pa. P.U.C. No. 6, filed June 16, 2006, voluntarily postponed to become effective October 20, 2006, proposing an annual increase in rates of $161,255. FUS recommends that the Respondent be given the alternative of filing a revised Tariff containing proposed changes in rates calculated to produce additional annual revenues of approximately $95,917, or if Respondent does not elect to file such a Supplement, the Commission will institute an Investigation; suspend the Tariff until May 20, 2007; and assign the filing to the OALJ, consistent with the proposed Order. OTS recommends that the Commission institute an Investigation and allow the filing to be suspended by operation of law. Motion of Chairman Holland to adopt the FUS recommendation and reject the OTS recommendation. Vote of 4-0 with no further discussion.

Fairview Sanitation Co. – Fairview, PA Supplement No. 11 to Sewer – Pa. P.U.C. No. 1, FUS-0870*, OTS-0029, R-00061624: filed August 3, 2006, voluntarily postponed to become effective October 20, 2006, proposing an annual increase in rates of $8,400. FUS recommends that the Respondent be given the alternative of filing a revised Tariff Supplement containing proposed changes in rates calculated to produce additional annual revenues of approximately $7,086; or if Respondent does not elect to file such a Supplement, the Commission will institute an Investigation; suspend the Tariff until May 20, 2007; and assign the filing to the OALJ, consistent with the proposed Order. OTS recommends that the Commission institute an Investigation and allow the filing to be suspended by operation of law. Motion of Chairman Holland to adopt the FUS recommendation and reject the OTS recommendation. Vote of 4-0 with no further discussion.

Imperial Point Water Service Co. Fairview, PA FUS-0871*, OTS-0028, R-00061618: Supplement No. 12 to Tariff Water-Pa. P.U.C. No. 2, filed August 31, 2006, proposing an annual increase in rates of $80,679, to become effective October 30, 2006. FUS recommends that the Commission institute an Investigation; suspend the Tariff to May 30, 2007; and assign the filing to the OALJ, consistent with the proposed Order. OTS recommends that the Commission institute an Investigation and allow the filing to be suspended until May 30, 2007. Motion of Chairman Holland to adopt the FUS and the OTS recommendation to the extent it is consistent. Vote of 4-0 with no further discussion.

Timberlee Valley Sanitation Co., FUS-0874*, OTS-0030, R-00061691 Supplement No. 2 to Tariff Wastewater-Pa. P.U.C. No. 1, filed August 30, 2006, to become effective November 1, 2006, proposing an annual increase in rates of $14,400. FUS recommends that the Commission institute an Investigation; suspend the Tariff until June 1, 2007; and assign the filing to the OALJ, consistent with the proposed Order. OTS recommends that the Commission permit the Tariff to become effective November 1, 2006. OTS recommends that the Commission institute an Investigation and allow the filing to be suspended by operation of law. Motion of Chairman Holland to adopt the FUS recommendation and reject the OTS recommendation. Vote of 4-0 with no further discussion.

NRG Energy Center – Pittsburgh, PA, FUS-1048 R* R-0006143: Tariff Heating and Cooling – Pa. P.U.C. No. 4, proposing an annual increase in rates of $1,143,759, voluntarily postponed to become effective October 20, 2006. FUS recommends that the Respondent be given the alternative of filing a revised Tariff Supplement containing proposed changes in rates calculated to produce additional annual revenues of approximately $782,540; or if Respondent does not elect to file such a Supplement, the Commission will institute an Investigation; suspend the Tariff until May 20, 2007; and assign the filing to the OALJ, consistent with the proposed Order. OTS recommends that the Commission institute an Investigation and allow the filing to be suspended by operation of law. Motion of Chairman Holland to adopt the FUS recommendation and reject the OTS recommendation. Vote of 4-0 with no further discussion.

Law Bureau

In Re: Insuring Consistent Application of 52 PA Code §56.12(7) Equal Monthly Billing, L-0062*, M-00051925: Petitions for Reconsideration of the Commission’s June 2, 2006 Final Interpretive Order. Staff recommends that the Petitions are granted in part, consistent with the proposed Order, to be published in the Pennsylvania Bulletin. Postponed by Commissioner Pizzingrilli until Public Meeting of November 9, 2006.

Petition of Equitable Gas Company L-0069R*, P-00062238 for Authorization to Utilize for Low Income Energy Assistance During the 2006-2007 Winter Heating Season the Portion of an Equitrans, L.P. Refund Advanced for that purpose, but not utilized during the 2005-2006 Winter Heating Season. Staff recommends that the commission grant the Petition, consistent with the proposed Order. Vote of 4-0 with no further discussion.

Petition of UGI Penn Natural Gas, Inc. for a Declaratory Order that an Asset Management Agreement with UGI Energy Services, Inc. Is in the Public Interest and for Approval of the Asset Management Agreement Under Chapter 21 of the public Utility Code. Staff recommends that the Commission refer the matter to the OALJ, consistent with the proposed Order. Joint Statement of Chairman Holland and Commissioner Pizzingrilli encouraging the parties to expedite the hearing process so as to resolve the matter before the next winter heating season.

THE NEXT REGULAR MEETING IS SCHEDULED FOR THURSDAY, NOVEMBER 9, 2006 AT 10:00 AM.

NOTES: This was the first Public Meeting to be recorded with audio stream available at PUC website.

*Denotes Order