INDEPENDENT REGULATORY REVIEW COMMISSION
Notice of Comments Issued
[44 Pa.B. 434]
[Saturday, January 18, 2014]
Section 5(g) of the Regulatory Review Act (71 P. S. § 745.5(g)) provides that the Commission may issue comments within 30 days of the close of the public comment period. The Commission comments are based upon the criteria contained in Section 5.2 of the Act (71 P. S. § 745.5b).
The Commission has issued comments on the following proposed regulations. The agency must consider these comments in preparing the final-form regulation. The final-form regulation must be submitted within two years of the close of the public comment period or it will be deemed withdrawn.
Close of the Public IRRC Comments Reg. No. Agency/Title Comment Period Issued 57-294 Pennsylvania Public Utility Commission
Review of Long Term Infrastructure
43 Pa.B. 6206 (October 19, 2013)
12/3/13 01/02/14 126-6 Philadelphia Parking Authority
Taxicab Medallion Sales by the Authority
43 Pa.B. 6674 (November 9, 2013)
Pennsylvania Public Utility Commission
Regulation #57-294 (IRRC #3032)
Review of Long Term Infrastructure Improvement Plan
January 2, 2014
We submit for your consideration the following comments on the proposed rulemaking published in the October 19, 2013 Pennsylvania Bulletin. Our comments are based on criteria in Section 5.2 of the Regulatory Review Act (71 P. S. § 745.5b). Section 5.1(a) of the Regulatory Review Act (71 P. S. § 745.5a(a)) directs the Pennsylvania Public Utility Commission (PUC) to respond to all comments received from us or any other source.
1. Implementation procedures.
A commentator has suggested that this proposal be amended to specify how the rulemaking will be applied to water and wastewater utilities that already have a Distribution System Improvement Charge (DSIC), as it pertains to the filing of a Long-term Infrastructure Improvement Plan (LTIIP). We ask the PUC to explain what effect, if any, this rulemaking will have on water and wastewater utilities that already have a PUC-approved DSIC in place.
The same commentator also believes that the PUC should establish a schedule that would provide a phased filing of the various submissions required under this rulemaking by the utilities seeking to implement a DSIC. This approach, according to the commentator, would allow interested parties and the statutory advocates the time to provide a more thorough and meaningful analysis of the submissions. The PUC should consider such an approach and in the final-form regulation submittal, explain why it did or did not adopt a phased filing schedule.
2. Section 121.2. Definitions.—Consistency with law; Clarity.
This definition references ''property'' as defined in 66 Pa.C.S.A. § 1351, relating to definitions. The cited section of the statute does not define the term ''property.'' The defined term in the statute is ''eligible property.'' The final-form regulation should be amended accordingly.
Under this definition, a change or deviation to a utility's previously approved LTIIP that meets certain criteria is defined as a ''major modification.'' In order for a modification to be considered a ''major modification,'' does it have to meet all four of the criteria found in this definition? This should be clarified in the final-form rulemaking by inserting either the word ''or'' or ''and'' at the end of Paragraph (iii).
In addition, commentators have raised several concerns with this definition. For example, they note that the elimination of a certain category of eligible property from an LTIIP in Paragraph (i) or the extension of time of scheduled repair beyond two years in Paragraph (ii) should not automatically categorize the modification as a ''major modification.'' They also suggest that the 15% threshold included in Paragraph (iii) is too low because of the timeframes associated with certain projects. In the Preamble to the final-form rulemaking, we ask the PUC to explain why it believes all of the criteria of this definition are reasonable and needed.
3. Section 121.3. LTIIP.—Whether the regulation is consistent with the intent of the General Assembly; Implementation procedures; Need; Clarity.
Subsection (a) requires utilities to file LTIIPs and establishes nine elements that must be included in an LTIIP. We note that the first six paragraphs of this subsection correspond to 66 Pa.C.S.A. §§ 1352(a)(1)—(6). We have two concerns. First, we ask the PUC to explain the need for including three additional elements in a utility's LTIIP that are not included in statute and why it believes these additional elements are consistent with the intent of the General Assembly and Act 11 of 2012 (Act 11). The elements relate to workforce management and training, outreach efforts, and additional information to be provided by natural gas distribution companies.
Second, Subsection (a) states that utilities ''shall'' file an LTIIP. Similar language can be found in § 121.5 (c), pertaining to modifications to and expiration of an LTIIP. It is our understanding that an LTIIP is required only for utilities seeking to impose a DSIC. We suggest that the rulemaking be clarified to state that the filing of an LTIIP is not mandatory for all utilities and applies only to those utilities seeking to impose a DSIC.
4. Section 121.4. Filing and Commission review procedures.—Statutory authority; Implementation procedures; Clarity.
This section sets forth the filing procedures for LTIIPs, the public comment period associated with those filings and the manner in which the PUC will review a LTIIP. Commentators have expressed concern with various provisions of this section.
First, under Subsection (a), a commentator has suggested that the term ''parties'' be limited to persons who formally participated in the most recent base rate case proceeding. We ask the PUC to clarify what is meant by the term ''parties.''
Second, a commentator has suggested that a utility seeking proprietary treatment of certain information under Subsection (b) should have to obtain that approval from the PUC before the filing of an LTIIP. We ask the PUC to explain when a utility is required to obtain the aforementioned approval and clarify the regulation accordingly.
Third, a commentator believes that the 20-day public comment period included in Subsection (c) does not provide interested parties enough time to review LTIIPs. A similar concern was raised with § 121.5(a), relating to modifications to and expiration of an LTIIP. What factors did the PUC consider when determining that 20-day public comment periods are appropriate for reviewing LTIIPs?
Fourth, commentators are concerned that Subsections (e) and (f) provide the PUC the authority to direct a particular work plan or schedule but Act 11 does not grant such authority. Under these subsections, can the PUC direct a particular work plan or schedule? If so, under what specific statutory authority can this be accomplished?
Finally, Subsection (f) states that the PUC will order a utility to file a new or revised LTIIP if the LTIIP does not meet the criteria of this section. We note that the elements of a LTIIP are found in the preceding section of the rulemaking. Should the regulation reference both §§ 121.3 and 121.4? In addition, several commentators have suggested that Subsection (f) be amended to state that a utility has the right to withdraw an LTIIP. We ask the PUC to consider adding a provision that specifically states a utility has the right to withdraw an LTIIP.
5. Section 121.5. Modifications to and expiration of an LTIIP.—Implementation procedures; Clarity.
This section sets forth the procedures for modifying a PUC-approved LTIIP and filing a new LTIIP prior to the expiration of the filed plan. Subsection (b) states that minor modifications to an LTIIP will be addressed concurrent with the review of a utility's Annual Asset Optimization plan (AAO plan). A commentator has noted that this concurrent review will not be possible if a utility's DSIC has not been approved by the PUC. We ask the PUC to explain how this provision will be implemented.
6. Section 121.6. AAO plan filings.—Implementation procedures; Clarity.
The elements of and the procedures for filing AAO plans are addressed in this section. Commentators have raised several concerns with this section.
First, under Subsection (a), an AAO plan must be filed with the PUC on or before March 1st. Commentators have expressed concerns with the filing date. One commentator has suggested that a more appropriate time for filing an AAO plan would be three months after the end of the 12-month period used by a utility in its LTIIP. As the PUC develops the final-form rulemaking, we ask it to consider this recommendation. We believe it would provide the PUC with more accurate information, address the concern about the March 1st deadline and provide interested parties a more meaningful timeframe for reviewing AAO plans on a staggered basis.
Second, Subsection (b)(3) requires an AAO plan to include a utility's system reliability data for the prior five years. Commentators have raised several concerns with this provision. First they note that this requirement goes beyond the scope of Act 11 and 66 Pa.C.S.A. § 1356. Second, they question the need to include this information in an AAO plan because electric utilities supply similar information under § 57.195, related to reporting requirements, of the PUC's existing regulations. Third, they question the relevance of this type of information for utilities other than electric utilities. We agree with the concerns raised and ask the PUC to explain how this provision is consistent with Act 11 and why this information is needed.
Third, under Subsection (e), an AAO plan will be deemed approved absent any major modifications to an LTIIP, adverse comments or PUC action within 60 days of the filing. Commentators believe the inclusion of ''adverse comments'' in this provision is inappropriate because the filing of an AAO plan is for informational purposes and is not intended to be an adversarial proceeding. In the Preamble to the final-form rulemaking, we ask the PUC to explain the rationale for this provision and why it is appropriate that the filing of ''adverse comments'' could delay the approval of an AAO plan.
7. Section 121.7. Periodic review of an LTIIP.—Reasonableness; Implementation procedures.
Commentators provided two suggestions on how this section of the rulemaking could be implemented. One commentator suggested that if the PUC finds a utility's implementation of an LTIIP to be deficient, the utility should have the option to withdraw the LTIIP and suspend the corresponding DSIC. They ask the PUC to add language to the final-form rulemaking to allow this action. Another commentator suggested the section be amended to state the five-year review of an existing LTIIP could be satisfied by the review of new proposed LTIIP. In the context of these suggestions, we ask the PUC to explain why the language of this section is reasonable.
8. Section 121.8. Enforcement of LTIIP implementation.—Statutory authority; Consistency with law; Reasonableness.
Subsection (c) states the following:The remedies for noncompliance with an approved LTIIP may include civil penalties, revocation of the DSIC and other remedies as may be appropriate based on the record developed in the enforcement proceeding.
We note that Act 11 provides the PUC with the authority to promulgate regulations on this matter as follows:The regulations shall ensure that a distribution system improvement charge shall terminate if the commission determines that the utility is not in compliance with the approved plan. 66 Pa.C.S.A. § 1352(b)(2). [Emphasis added.]
Commentators raise three concerns with this subsection. One commentator notes that, under the statute, noncompliance with an LTIIP requires a DSIC to be discontinued and the regulation provides the PUC discretion in this matter. Others believe that Act 11 does not grant the PUC the authority to impose civil penalties. A third commentator questions the reasonableness of imposing penalties and believes the potential for penalties would discourage infrastructure development. We ask the PUC to explain its statutory authority for this provision and how it is consistent with Act 11. We also ask the PUC to explain why the imposition of penalties is reasonable.
9. Determining whether the regulation is in the public interest.
Section 5.2 of the RRA (71 P. S. § 745.5b) directs this Commission to determine whether a regulation is in the public interest. When making this determination, the Commission considers criteria such as economic or fiscal impact and reasonableness. To make that determination, the Commission must analyze the text of the proposed regulation and the reasons for the new or amended language. The Commission also considers the information a promulgating agency is required to provide under § 745.5(a) in the Regulatory Analysis Form (RAF).
We ask the PUC to revise its response to Question #15 of the RAF in order to ensure that the new criteria required by Act 76 of 2012 related to small businesses are met. The PUC should provide a citation to the relevant provisions of the federal definition of small business that were reviewed in the development of the rulemaking and an analysis of their applicability or inapplicability to the regulation.
10. Miscellaneous clarity.
• Under § 121.4(b), the reference to § 5.423 is not accurate. That section of the PUC's existing regulations is currently reserved.
• As noted by a commentator, the phrase ''major changes'' in § 121.5(b) should be amended to the defined term ''major modification.''
Philadelphia Parking Authority
Regulation #126-6 (IRRC #3039)
Taxicab Medallion Sales by the Authority
January 8, 2014
We submit for your consideration the following comments on the proposed rulemaking published in the November 9, 2013 Pennsylvania Bulletin. Our comments are based on criteria in Section 5.2 of the Regulatory Review Act (71 P. S. § 745.5b). Section 5.1(a) of the Regulatory Review Act (71 P. S. § 745.5a(a)) directs the Philadelphia Parking Authority (Authority) to respond to all comments received from us or any other source.
1. Comments by Senator Lawrence M. Farnese, Jr.—Legislative intent; Protection of the public welfare.
Senator Farnese submitted comments to highlight several concerns he has with this regulation in a letter dated January 7, 2014. His concerns relate to specifying a minimum number of Wheelchair Accessible Vehicles to be licensed; using a public, open bidding process; and allowing more non-medallion owner taxicab drivers and potential new and reputable companies to buy medallions. Senator Farnese concludes that, ultimately, the intent of Act 119 of 2012 (Act 119) was to provide for more wheelchair accessible taxicabs in Philadelphia and the regulations, as written, do not adequately represent this intent. We will review the Authority's responses to Senator Farnese as part of our consideration of whether the final regulation is in the public interest.
2. Sale of 150 additional medallions—Consistency with statute; Legislative intent; Implementation procedure; Clarity.
The amendments made by Act 119 provide the procedure for the sale of additional medallions by the Authority in 53 Pa.C.S. § 5711(c)(2):
The Authority is authorized to issue the following:(i) Subject to the provisions of subparagraph (ii), a maximum of 1,600 certificates of public convenience and corresponding medallions for citywide call or demand service and an additional 15 certificates of public convenience and corresponding medallions restricted to wheelchair-accessible taxicab service as provided in this chapter.(ii) Beginning June 1, 2013, and each June 1 thereafter until there is a total of 1,750 certificates of public convenience and corresponding medallions, the maximum number of certificates of public convenience and corresponding medallions for citywide call or demand service shall be increased by 15. The authority, in its discretion, may issue the certificates and medallions authorized by this subparagraph with special rights, privileges and limitations applicable to issuance and use as it determines necessary to advance the purposes of this chapter and may issue the certificates and medallions authorized by this subparagraph in stages.
In the Preamble to the proposed regulation, the Authority explains, in part: ''The Authority has been authorized by the Legislature through the act of July 5, 2012, (P. L. 1022, No. 119) (''Act 119'') to issue up to 150 new taxicab medallions over the next 10 years, including medallions designated only for use on wheelchair accessible vehicles.'' We note that the regulation does not specify what type the new medallions will be, but rather states the notice of the sale will specify ''special restrictions that have been attached to a medallion.'' See proposed Sections 1013.33 and 1013.34(4).
In relation to the comments submitted on this proposed regulation, commentators raise two points:
Will the 150 new medallions exclusively be issued as wheelchair accessible medallions?
Commentators express concern that the Authority's interpretation of Act 119 is that not all medallions will be issued as wheelchair accessible medallions. One commentator asserts that the Authority has exceeded its legal authority through the proposed regulation.
In regard to what type of medallions (e.g., ''special restrictions . . . attached to a medallion'') the Authority will issue, we ask the Authority to:
• Provide its interpretation of the statute and how the regulation is consistent with legislative intent;
• Explain how the regulation's language properly implements the statute;
• Explain why the regulation is not specific regarding what type of medallions will be issued; and
• Explain the Authority's intentions regarding what type(s) of medallions will be issued.
How many new medallions does the Authority anticipate selling each year?
The statute set forth a process that began June 1, 2013, with a maximum annual increase of 15 medallions each June 1 thereafter until there is a total of 1,750 certificates of public convenience and corresponding medallions. 53 Pa.C.S. § 5711(c)(2)(ii). It is our understanding that the Authority has not yet sold any additional medallions over the cap of 1,600 established prior to Act 119. Given that the starting date of June 1, 2013 has passed, it is not clear what specific plan the Authority will pursue in selling the new medallions.
Commentators believe that the Authority should sell all 150 medallions at once to address the shortage of wheelchair accessible vehicles in Philadelphia. Public comments also question the 10-year distribution schedule of medallions.
We agree to the extent that it is not clear how the statute is being implemented at this point. For example, if the regulation was effective by April 15, 2014, as the Authority expects, how many new medallions would the Authority offer for sale as of June 1, 2014, June 1, 2015, etc.? We ask the Authority to provide a schedule of its intended sale of new medallions for the period ''beginning June 1, 2013, and each June 1 thereafter until there is a total of 1,750 certificates of public convenience and corresponding medallions.''
3. Section 1013.32. Bidder qualifications.—Reasonableness; Clarity; Implementation procedure.
Person in good standing
Paragraph (a)(3) states a person in good standing with the Authority is a person who ''has not sold a medallion in the most recent 365 days.'' This provision implies that anyone who sells a medallion for any reason is no longer in good standing with the Authority. On one hand, this might deter bidders whose only intention is to resell medallions. It would also eliminate a person who had to sell a medallion due to Authority violations. On the other hand, this provision would also eliminate a bidder who has held a medallion for many years in good standing, but wants to sell a medallion to raise funds to bid on a wheelchair-accessible medallion. We also question whether this provision would affect an otherwise qualified bidder who owns and sells a medallion outside of the Authority's jurisdiction. In the final regulation submittal, the Authority should explain why this provision is needed and what goals it accomplishes in establishing a person's credentials as a qualified bidder.
Pending medallion taxicab certificate holder
We question the reasonableness of the timeline for a person to qualify as a pending medallion taxicab certificate holder. Section 1013.34, consistent with 53 Pa.C.S. § 5717(b), requires notice of a proposed sale to be published in the Pennsylvania Bulletin 60 days or more before bids are due. Subsection (b) addresses bidders who are not medallion taxicab certificate holders: ''To qualify to bid as a pending medallion taxicab certificate holder, the SA-1 shall be filed 45 days or more before the date bids are due.'' [Emphasis added.] This potentially would leave only 15 days from publication of the notice for a person to submit the information to qualify as a pending medallion taxicab certificate holder. As outlined in the following comment, this form requires a lot of information, such as a credit report obtained within the last 30 days. The Authority should explain how 15 days is sufficient time for a bidder to submit the information to qualify as a pending medallion taxicab certificate holder.
The SA-1 application we found on the Authority's website (http://philapark.org/taxis-limousines/forms/) is titled ''APPLICATION FOR THE ISSUANCE OF A CERTIFICATE OF PUBLIC CONVENIENCE AND OR THE TRANSFER OF TAXICAB, LIMOUSINE OR DISPATCH RIGHTS ISSUED BY PHILADELPHIA PARKING AUTHORITY.'' This appears to be a multi-purpose document, consisting of 18 pages, which includes issuance of a certificate of public convenience along with transfer of rights for a taxicab, limousine or dispatch.
We note that successful completion of the SA-1 application is critical to a successful bid and furthermore to a pool of bidders who may bring the highest bid. We did not find clear direction either in the regulation, or in the directions to fill out SA-1, as to how to correctly fill out this document for the purposes of qualifying to bid as a pending medallion taxicab certificate holder. In the final regulation submittal, we recommend that the Authority establish a clear process for a person to qualify as a pending medallion taxicab certificate holder and provide an explanation of how the process is in the public interest.
4. Section 1013.33. General provisions.—Economic impact; Reasonableness; Implementation procedure.
Advertisement for bids or for public auction
Under 53 Pa.C.S. § 5717(b), the Authority is given the following authority to solicit bids:Medallions shall be sold to the highest bidder after due notice by advertisement for bids or for public auction in the Pennsylvania Bulletin . . . . [Emphasis added.]
Subsection (a) of the proposed regulation directly states that the Authority ''will sell taxicab medallions by sealed bid.''
Parties opposing sealed bids provided the following comments:
• The regulation does not have enough procedures in place to prevent corruptive bidding practices.
• How can the industry and the public ensure that the Authority is conducting sales with objectivity without an open and honest live auction?
• The auction should be a transparent process conducted in an open manner.
• There have been several examples of sealed bids that ended in investigations in other jurisdictions, including allegations of collusion and corruption.
We note that neither the preamble nor the regulatory analysis form (RAF) provide a detailed explanation of why the Authority proposed a sealed bid process for the sale of medallions. Furthermore, in response to RAF Question #26, the Authority responds that no other alternative regulatory provisions were considered. In the final regulation submittal, we request that the Authority explain how the process proposed to sell medallions is in the public interest. The Authority should explain how the regulation preserves the integrity of the bidding process and how it eliminates or reduces the opportunity for collusion and corruption.
5. Section 1013.34. Notice of medallion sale by the Authority.—Reasonableness; Clarity; Implementation procedure.
60 days or more
The opening paragraph states that ''Notice of a proposed sale of a medallion by the Authority will be published in the Pennsylvania Bulletin 60 days or more before the sealed bids are due from bidders.'' This tracks the statutory provision at 53 Pa.C.S. § 5717(b)(1). We outlined concerns that bidders might not have enough time to qualify to bid as a pending medallion taxicab certificate holder under Subsection 1013.32(b). Given the discretion in statute to publish ''not less than 60 days before auction,'' the Authority should consider establishing in regulation a longer timeframe than 60 days, or explain how all bidders can reasonably meet a timeline with as little as a 60 day notice before sealed bids are due.
Other terms of sale
Paragraph (8) allows the notice of medallion sale to include ''other terms of sale.'' This provision is vague because it could encompass an unlimited realm of terms of sale. It should either be deleted or amended to limit the scope of these terms of sale.
6. Section 1013.35. Procedures for bidding.—Reasonableness; Fiscal impact; Clarity.
Form No. MA-2
Paragraph (a)(3) requires completed form MA-2 and states the form is available on the Authority's website at www.philapark.org/tld. We were not able to locate this document on the website. Without this form, we are not able to evaluate whether Paragraph (a)(3) is in the public interest because we do not know what information it entails. The same concerns apply to Subsection (c).
Deposits for bids
Subparagraph (a)(4)(i) requires a deposit of $5,000. A commentator questions whether this amount is sufficient compared to the expected market value for the medallions which the commentator believes is now more than $500,000. The Authority should explain how the amount of the required deposit specified in the final regulation is sufficient.
Subparagraph (a)(4)(i) specifies that the $5,000 deposit will be nonrefundable as to the highest bidder and credited toward the sale price if the sale is approved. We recommend that the regulation also specify what happens to the deposits from the unsuccessful bidders and, in relation to Subsection 1013.36(b), what happens to the deposit from a bidder who originally won the bid but subsequently was not approved as the winning bidder.
7. Section 1013.36. Bid opening.—Reasonableness, Economic impact; Clarity.
Timeline in Subsection (b) Nonsuccessful bid review
If the high bidder is subsequently not approved, Subsection (b) sets forth the procedures to determine and notify the highest nonsuccessful bidder, or readvertise the bid. Paragraph (4) allows the Director to amend the mandatory closing date. However, Paragraph (5) also allows the Director to request to readvertise the bid process if ''. . . the original successful bidder fails to close by the date designated in Section 1013.34.'' Between Paragraphs (4) and (5), it would appear there is a time period when the Director could simultaneously offer the bid to another bidder with an amended closing date and readvertise the bid after the original closing date published under Section 1013.34. We recommend that the Authority amend Subsection (b) so that a medallion is clearly either in the process of being sold or being readvertised for a new bid.
As provided in this subchapter
Paragraph (b)(2) ends with the phrase ''as provided in this subchapter.'' Is the intention to reference the entirety of Subchapter C, or was the intent to reference this ''section''? The final-form regulation should clarify the reference.
8. Section 1013.37. Medallion bid approval process and closing on sale.—Consistency with statute; Reasonableness; Clarity.
Transfer or sale of medallions
Subsection (g) establishes measures which the Authority describes in the Preamble as ''intended to discourage'' rapid turnaround sales ''through graduated fee transfer disincentives during the first three years after purchase. . . .'' The Authority should explain how these multipliers of transfer fees are consistent with the statute, needed and reasonable.
Reference to the act
Paragraphs (g)(1), (2) and (3) reference the fee schedule in ''section 5710(a) of the act.'' Should these references be to section 5710(b)(8) of the act?
SILVAN B. LUTKEWITTE, III,
[Pa.B. Doc. No. 14-151. Filed for public inspection January 17, 2014, 9:00 a.m.]
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