Penn. Fights for Gas Incentive Regulation

Fortnightly Magazine - July 15 1995
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The Pennsylvania Public Utility Commission (PUC) has reaffirmed earlier rulings establishing performance-based rate mechanisms for Columbia Gas of Pennsylvania, Inc., citing its authority to implement modified versions of a capacity-release sharing mechanism and an incentive mechanism for purchased gas costs. The PUC also upheld the gas local distribution company's (LDC's) option to reject the modified mechanisms, stating that the experimental nature of the rate reforms was better served by a voluntary program.

Predicting that the programs would be overturned by the courts, PUC chairman David Rolka dissented, arguing that state law required adherence to "actual gas costs" in setting adjustment clause rates for LDCs. He also pointed out that the state's Public Utility Code explicitly permits alternative regulation only for telecommunications carriers. Pennsylvania PUC et al. v. Columbia Gas of Pennsylvania, Inc., R-00943029 et al., Mar. 16, 1995 (Pa.P.U.C.).

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