Current through Register Vol. 54, No. 38, September 21, 2024
(a)
Approval of compliance
plans.
(1) The Commission will, upon
request, review a jurisdictional utility's proposed CAAA compliance plan under
66 Pa.C.S. §
530
(relating to Clean Air Act implementation plans), including planned sales or
purchases of emission allowances. Absent special circumstances, the Commission
will not approve specific transactions. A proposed plan shall detail the
analysis used by the utility to derive its plan and the alternatives considered
with enough specificity to permit reasonable evaluation. In addition, the
Commission may require that companies supply specific information to support
these plans.
(2) If a utility
chooses not to have its compliance plan approved, the plan will only be
reviewed in the context of a subsequent base rate or other proceeding in which
that utility seeks recovery of its compliance costs.
(3) Public utilities are not required to
obtain certificates of public convenience under
66 Pa.C.S. §
1102
(relating to enumeration of acts requiring certificate) to engage in emissions
allowances transactions.
(4)
Emissions allowances transactions, including the purchase and sale of emissions
allowances, allowance options and future contracts, do not constitute the
issuance or assumption of securities within the meaning of
66 Pa.C.S. §
1901(b) and
(c) (relating to registration of securities
to be issued or assumed) and therefore no registration of a securities
certificate is required.
(b)
Banking.
(1) A utility may bank some level of emission
allowances to prepare for unforeseen future contingencies. The Commission will
not set generic or benchmark reserve levels or benchmark prices. The
determination of an appropriate number of banked allowances will depend upon a
utility's specific circumstances. The utility has the burden of proof
concerning the appropriate number of banked allowances. The Commission will
view a utility's decision to bank allowances as a part of its overall
compliance plan. Approval of a utility's decision to bank allowances does not
assure a prudency finding for purposes of ratemaking.
(2) The Commission finds it inappropriate to
adopt a categorical approach to reserve allowances because individual utility
circumstances will differ. Operating contingency allowance reserves, determined
to be prudent, will be granted appropriate ratemaking treatment in base rate
proceedings under §
69.294(b)
(relating to ratemaking treatment of emission allowances).
(c)
Pooling arrangements.
The Commission recognizes that pooling arrangements which are consistent with
section 405 of the Clean Air Act Amendments of 1990 (42 U.S.C.A. § 651d)
may be appropriate. Pooling options will be reviewed by the Commission as part
of the compliance plan review process.
(d)
Sales of allowances to nonutility
generators. The Commission will not require allowance preferences for
the sale of emissions allowances to nonutility generating facilities, such as
qualifying facilities, independent power producers and exempt wholesale
generators.
This section cited in 52 Pa. Code §
69.291 (relating to general); and
52 Pa. Code §
69.292 (relating to
definitions).
