7406 - Competition by electric cooperatives.
§ 7406. Competition by electric cooperatives. (a) Service rights.--Electric cooperative corporations may provide generation electric service to any person and at any location within this Commonwealth. In the case where an electric cooperative corporation provides generation electric service at retail to a person located outside of its service territory and within the franchised territory of an electric utility subject to 66 Pa.C.S. (relating to public utilities), it must first have been certified by the commission pursuant to subsection (e) and, unless it is otherwise exempt under subsection (d), it shall comply with all relevant terms, conditions and obligations applicable to electric generation suppliers pursuant to 66 Pa.C.S. Electric cooperative corporations shall not be required to be licensed by the commission and shall be exempt as otherwise provided for in this chapter in any and all other respects from the jurisdiction and control of the commission. To the extent such services are not provided for resale to others, such persons must be members of the electric cooperative corporation. It shall not be necessary for an electric cooperative corporation to amend its bylaws to permit it to provide service to any person at any location within this Commonwealth. All other utilities and persons owning, operating or controlling electric transmission or distribution facilities within this Commonwealth shall be obligated to transmit and deliver generation service by electric cooperative corporations at the same prices and at the same terms and conditions as are approved by the commission or the Federal Energy Regulatory Commission for similar service to others. (b) New load termination conditions.--In the case where an electric cooperative corporation provides generation service under subsection (a) to a person not located within its exclusive retail electric service territory and, consistent with any then-existing contract rights of the electric cooperative corporation, such person subsequently desires to receive generation service from another source, the departing member shall have the right to do so, contingent upon the full advance satisfaction of the following conditions, unless waived by the electric cooperative corporation: (1) The departing member must give written notice of intent to receive generation service from another source to the electric cooperative corporation prior to the initiation of the new generation service. (2) The departing member must have made all payments for electric service or other services or products rendered to date by the electric cooperative corporation. (c) Relation to utilities gross receipts tax.-- (1) To the extent that an electric cooperative corporation provides generation electric service at retail to a person in this Commonwealth and located outside of its service territory as set forth in subsection (a), then for that limited purpose and in that limited area it shall be deemed to be the statutory equivalent of an "electric light company," a "waterpower company" and a "hydro-electric company" for purposes of section 1101 of the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971. (2) To the extent that an electric cooperative corporation provides generation electric service at retail to a person in this Commonwealth and located outside of its service territory as set forth in subsection (a) and to the extent that the tax on sales of electric energy under section 1101 of the Tax Reform Code of 1971 has not previously been imposed on such generation electric service or electric energy, then for that limited purpose and in that limited area such retail sales to end-use consumers under this chapter shall be deemed "sales of electric energy" for purposes of section 1101 of the Tax Reform Code of 1971. (d) Small cooperative exceptions.--Because of the relatively small number of consumers which electric cooperative corporations serve, their relatively small electric loads, the nonprofit nature of their operations and their other unique characteristics, the General Assembly finds that it may be unduly burdensome and costly for small electric cooperative corporations to comply with the relevant terms, conditions and obligations applicable to electric generation suppliers pursuant to 52 Pa. Code Ch. 56 (relating to standards and billing practices for residential utility service) and regulations promulgated under 66 Pa.C.S. Ch. 28 (relating to restructuring of electric utility industry) when serving persons located outside of their service territories. Notwithstanding the provisions of subsection (a) requiring an electric cooperative corporation when serving persons outside of its territory to comply with relevant terms, conditions and obligations of electric generation suppliers pursuant to 52 Pa. Code Ch. 56 and regulations promulgated under 66 Pa.C.S. Ch. 28, an electric cooperative corporation may petition the commission to grant exemption from compliance with any or all such relevant terms, conditions or obligations or otherwise may petition the commission to establish and grant streamlined or reduced terms, conditions or standards. The commission shall approve such exemption, streamlining or reduction upon reaching a finding that the proposal is in the public interest. Exemptions shall not be transferable to any entity without prior commission approval. To the extent that an electric cooperative corporation, on its own or in partnership or combination with any other entity which operates on a for-profit basis, by sales outside of its service territory, increases its total net electric load by more than 20% of its total net electric load as of the effective date of this chapter, this subsection shall not apply. Nothing in this chapter shall be construed as allowing any entity, either through formation of a cooperative or through any other method described in this chapter, to avoid responsibility for paying a competitive transition charge that it would otherwise be required to pay pursuant to 66 Pa.C.S. Ch. 28. (e) Commission certification.--Prior to an electric cooperative corporation having the right to provide generation electric service at retail to a person located outside of its service territory as defined by Subchapter C of Chapter 73 (relating to unincorporated area certified territory) and within the franchised territory of an electric utility subject to 66 Pa.C.S., it must first have obtained from the commission a certification of its financial responsibility and technical capability, including the assurance that adequate reserve margins of electric supply are maintained. An application for certification by an electric cooperative corporation must be made to the commission in writing, be verified by oath or affirmation and be in such form and contain such information as the commission may require. A certification shall be issued by the commission to any qualified applicant if it is found that the applicant is fit, willing and able to perform properly the service proposed in conformity with the provisions of this chapter. No certification issued under this subsection may be transferred without prior commission approval. Cross References. Section 7406 is referred to in section 2810 of Title 66 (Public Utilities).