Pennsylvania § 521 - Retirement of electric generating units.

§ 521. Retirement of electric generating units.

(a) Removal from normal operation.--No public utility shall discontinue an electric generating unit from normal operation unless it has petitioned for and obtained the approval of the commission. The commission may, upon its own motion or upon complaint, prohibit a public utility from discontinuing an electric generating unit from normal operation if the commission determines that it would be more cost effective for the utility's ratepayers if the unit were to remain in normal operation, either with or without capital additions or operating improvements, than if the utility were to implement its plan for replacing the power which the unit is, or could be made, capable of producing.

(b) Return to normal operation.--The commission may, upon its own motion or upon complaint, order a public utility to return an electric generating unit to normal operation if the commission determines that it would be more cost effective for the utility's ratepayers if the unit were to be returned to normal operation, with or without capital additions or operating improvements, than if the utility were to implement its plan for providing the power which the unit is, or could be made, capable of producing.

(c) Procedure.--The commission may hold such hearings as it deems necessary in making the determinations required by subsection (a) or (b). The affected public utility shall have the burden of proof in any proceeding pursuant to this section.

(d) Regulations.--The commission may adopt such regulations as it deems necessary to carry out its powers and duties under this section.

(e) Exclusion.--This section shall not apply to a nuclear generating unit or to variations in operation of electric generating units to satisfy economic dispatch requirements or to maintain intrasystem or intersystem stability.

(f) Construction costs.--Notwithstanding section 1315 (relating to limitation on consideration of certain costs for electric utilities) and subject to regulations promulgated by the commission, the commission may allow a portion of the prudently incurred costs of capital additions, determined on a per megawatt basis and not to exceed 50% of the unit's undepreciated original cost per megawatt, to an electric generating unit to be made a part of the rate base or otherwise included in the rates charged by the utility before such capital additions are completed if the commission, acting pursuant to subsection (a) or (b), prohibits the utility from retiring the unit or orders the utility to return the unit to normal operation, provided that:

(1) the capital additions would allow the continued or increased use of coal mined in Pennsylvania; and

(2) the capital additions would be more cost effective for the utility's ratepayers than other alternatives for meeting the utility's load and capacity requirements.

Notwithstanding section 1309 (relating to rates fixed on complaint; investigation of costs of production), the commission, by regulation, shall provide for a utility to remove the costs of capital additions from its rate base and to refund any revenues collected as the result of this subsection, plus interest, which shall be the average rate of interest specified for residential mortgage lending by the Secretary of Banking in accordance with the act of January 30, 1974 (P.L.13, No.6), referred to as the Loan Interest and Protection Law, during the period or periods for which the commission orders refunds, if the commission, after notice and hearing, determines that the capital addition has not been completed within a reasonable time.

(g) Definition.--As used in this section the term "normal operation" means the continuing availability of an electric generating unit to meet consumer demand except during:

(1) Scheduled outages for repairs, tests or other procedures essential to the unit's further use.

(2) Unscheduled outages caused by the unit's physical malfunctioning or breakdown.

(3) Reduced levels of generation pending execution of repairs.

(4) Reduced levels or complete cessation of generation, on a temporary basis, because of disruptions in fuel supplies, waste disposal or cooling water; or because of compliance with environmental protection limitations or conservation of fuel during periods of, or in anticipation of, scarcity.

(July 3, 1986, P.L.348, No.80, eff. 60 days)

1986 Amendment. Act 80 added section 521.

References in Text. The Secretary of Banking, referred to in subsec. (f), was renamed the Secretary of Banking and Securities by the act of July 2, 2012 (P.L.814, No.86).