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Highlights: PA PUC Public Session of July 20, 2006

July 20, 2006

Note:  The public meeting calendar and agendas may be viewed at http://www.puc.state.pa.us/general/public_meeting.aspx.

At the July 20, 2006, Public Meeting of the Pennsylvania Public Utility Commission (“Commission”), the Commissioners adopted Staff’s recommendations for action by a vote of 5-0 on all items listed on the Main Agenda and Carry-In Agenda, except as reflected herein below under the respective Commission agenda headings.  Review of particular items addressed by the Commissioners at this Public Meeting which may be of interest to our clients and our firm are also addressed under the respective Commission agenda headings below.  Any relevant motions and statements are attached to the original of this Session Memo filed in the Public Meeting Agenda and Session Memo binder.  The next regular Public Meeting is scheduled for Thursday, August 17, 2006 at 10:00 a.m.  The minutes of the Public Meeting of June 1, 2006 were unanimously approved without modification.

Bureau of Transportation and Safety

• All matters approved as submitted.

Bureau of Audits

• AUD-0018, D-04GCR033: Gasco Distribution Systems, Inc. - Kane Division: Auditor’s Report on the Gas Cost Rate for the Year Ended December 31, 2004.  Joint Statement of Chairman Holland and Commissioner Pizzingrilli noting that the report raises a number of financial management and accounting issues which indicate serious management, administrative, or accounting control deficiencies and that a significant storage imbalance exists.  Verbal comment of Commissioner Shane that the fact that the storage imbalance has been outstanding for a year is startling.  Vote of 5-0 with no further discussion.

Bureau of Consumer Affairs

• All matters approved as submitted.

Office of Special Assistants

• OSA-0157, A-310651F7003: Joint Petition of Commonwealth Telephone Company and Service Electric Telephone Company, LLC filed on May 16, 2006, for Approval of Amendments to an Interconnection Agreement.  No comments have been received.  Staff recommends that the Commission adopt the proposed Opinion and Order granting the Joint Petition.  Vote of 5-0 with no discussion.

• OSA-0163, A-311394F7007: Joint Petition of Frontier Communications of Pennsylvania, LLC and T-Mobile USA, Inc. filed on May 15, 2006, for Approval of an Interconnection and Traffic Interchange Agreement.  No comments have been received.  Staff recommends that the Commission adopt the proposed Opinion and Order granting the Joint Petition.  Vote of 5-0 with no discussion.

• OSA-0171, A-310752F7005: Joint Petition of North Pittsburgh Telephone Company and MCIMetro Access Transmission Services, LLC filed on May 22, 2006, for Approval of an Interconnection Agreement.  No comments have been received.  Staff recommends that the Commission adopt the proposed Opinion and Order granting the Joint Petition.  Vote of 5-0 with no discussion.

• OSA-0195, P-00042092: Joint Petition of Verizon Pennsylvania Inc. and Verizon North, Inc. for Arbitration of an Amendment to Interconnection Agreements.  On February 25, 2004, Verizon filed a Petition for consolidated Commission arbitration of interconnection agreements between Verizon and CLECs pursuant to various change of law provisions contained in said agreements based on the FCC revisions of unbundling obligations under the Telecom Act of 1996.  A final Commission Order was entered February 21, 2006.  On March 8, 2006, various CLECs filed a consolidated Petition for Reconsideration and Clarification.  On March 20, 2006, the Commission received the Opposition of Verizon PA Inc. and Verizon North Inc.  By Order entered March 16, 2006, the Commission granted Reconsideration pending review of and consideration on the merits.  Staff recommends that the Commission grant clarification, consistent with the proposed Order and deny reconsideration in all other respects.  Vote of 5-0 with Vice Chairman Cawley concurring in the result only.

• OSA-0209, R-00028028: Verizon Consolidated Loop Cost Study Proceeding (Joint Petition for Rescission or Amendment).  On December 24, 2002, the Commission entered an Order which initiated a consolidated loop cost study proceeding for the purpose of establishing statewide unbundled network element loop rates for Verizon Pennsylvania, Inc. and Verizon North, Inc.  By Petition filed April 19, 2006, Verizon PA, Verizon North, the OCA, the OTS and interested CLECs filed a Joint Petition to amend and/or rescind the December 24, 2002 Order so that the necessity to litigate the proceeding will be deferred until on or after January 7, 2008.  The PAAG filed a Motion to Join in the Joint Petition.  Staff recommends that the Commission adopt the proposed Tentative Form Opinion and Order granting the Joint Petition, consistent with the proposed draft.  Vote of 5-0 with no discussion.

• OSA-0210, M-00991220F0003: Petition of Allegheny Power to Amend Benchmarks for Electric Distribution Reliability.  Settlement Petition signed by all Parties was filed April 20, 2005.  ALJ Colwell’s Recommended Decision adopting the Settlement was issued May 12, 2005.  By Order entered October 18, 2005, the Commission remanded the proceeding to the OALJ.  Exceptions to ALJ Colwell’s March 22, 2006 Recommended Decision on Remand were filed by Allegheny Power on March 28, 2006.  Staff recommends that the Commission grant the Exceptions, deny Allegheny’s request for Extension of Time to Comply and adopt the ALJ’s Recommended Decision on Remand, as modified.  Vote of 5-0 with no discussion.

• OSA-0211, R-00061375, P-00981428F1000: Buffalo Valley Telephone Company: Supplement No. 7 and Supplement No. 8 to Tariff Pa PUC No. 8; 2006 Annual Price Stability Index/Service Price Index Filing.  Petition for Reconsideration of the Commission’s Opinion and Order entered June 23, 2006.  Staff recommends that the Commission grant the Petition, pending further review of and consideration on the merits.  Vote of 5-0 with no discussion.

• OSA-0212, R-00061376, P-00981429F1000: Conestoga Telephone & Telegraph Company: Supplement No. 206 to Tariff Pa PUC No. 10 and Supplement No. 7 to Tariff Pa PUC No. 11; 2006 Annual Price Stability Index/Service Price Index Filing.  Petition for Reconsideration of the Commission’s Opinion and Order entered June 23, 2006.  Staff recommends that the Commission grant the Petition, pending further review of and consideration on the merits.  Vote of 5-0 with no discussion.

• OSA-0213, R-00061377, P-00981430F1000: Denver & Ephrata Telephone & Telegraph Co.: Supplement No.251 to Tariff Pa PUC No. 15 and Supplement No. 10 to Tariff PA PUC No. 16; 2006 Annual Price Stability Index/Service Price Index Filing.  Petition for Reconsideration of the Commission’s Opinion and Order entered June 23, 2006.  Staff recommends that the Commission grant the Petition, pending further review of and consideration on the merits.  Vote of 5-0 with no discussion.

Bureau of Fixed Utility Services

• FUS-1339, A-310633F0007, S-00061120: Joint Application filed May 12, 2006, by Level 3 Communications, Inc. and TelCove, Inc., for approval of a change in ownership of authorized telecommunications providers in connection with a transfer of control and merger transaction with TelCove of Pennsylvania, Inc.; TelCove of Eastern Pennsylvania; TelCove of York; TelCove Investment, LLC; and TelCove Operations, Inc.; and for the registration of the Securities Certificates regarding existing financing arrangements of Level 3 Financing, Inc.  Staff recommends that the Commission adopt the proposed Order.  Dissenting oral statement of Chairman Holland that Application should not be approved until Joint Petitioners submit a commitment letter to preserve Pennsylvania jobs.  He has concerns with the loss of jobs and declining employment levels in Pennsylvania, citing the elimination of 200 jobs by AT&T.  Vote of 4-1 (Chairman Holland dissenting) with no further discussion.

• FUS-1340, M-0006______: Bureau of Fixed Utility Services.  Report to the Commission regarding Quarterly Earnings of Pennsylvania Utilities for the Quarter ended March 31, 2006.  Staff recommends that the Commission make the Earnings Report public.  Vote of 5-0 with no discussion.

Combined Bureau Agenda

• OTS-0014, R-00061493: National Fuel Gas Distribution Corp., Supplement No. 61 to Tariff Gas-Pa. P.U.C. No. 9, proposing an annual increase in rates of $25,892,000, to become effective July 30, 2006.  Staff recommends that the Commission institute an Investigation of the Tariff and allow the filing to be suspended by operation of law for a period of seven months, or through March 2, 2007.  Statement of Vice Chairman Cawley concerning conservation efforts.  Vote of 5-0 with no further discussion.

Law Bureau

• L-0042, L-0006______: Implementation of the Alternative Energy Portfolio Standards Act of 2004.  Staff recommends that the Commission adopt the Proposed Rulemaking Order, to be published in the Pennsylvania Bulletin for Comments.  Dissenting Statements by Commissioners Fitzpatrick and Pizzingrilli regarding, among other things, the geographic eligibility restrictions.  Vote of 3-2 (Commissioners Fitzpatrick and Pizzingrilli dissenting) with no further discussion.

Office of Administrative Law Judge

• ALJ-0562, A-00122100 (Postponed from 06/22/06): Application of American Invalid Transport Coach, LLC, a Limited Liability Company of the Commonwealth of PA.  On June 16, 2005, an application was filed requesting the right to begin to transport, as a common carrier, in motor vehicles, persons in paratransit service: (1) from South Union Township, Fayette county to points in PA and return; and (2) who are residents of nursing homes and personal care facilities, from such facilities located in townships of South Union and North Union and the city of Uniontown, all located in Fayette County, to points in PA and return.  Notice of the application was published in the Pennsylvania Bulletin on October 1, 2005.  A timely protest to the application was filed.  A hearing was held on March 6, 2006.  Commission Review of ALJ Nemec’s Initial Decision approving the application.  Statement of Chairman Holland (?).  Vote of 5-0 with Chairman Holland and Vice Chairman Cawley concurring in the result only.

• ALJ-0572, F-01831657:   Maureen Monczewski v. PPL Electric Utilities Corp.  On April 12, 2005, a complaint was filed alleging a billing dispute.  On July 14, 2005, PPL filed its answer.  A hearing was held on November 15, 2005.  Commission Review of ALJ Jandebeur’s Initial Decision dismissing the complaint.  Motion by Vice Chairman Cawley to modify Initial Decision.  Vote of 5-0 with no further discussion.

• ALJ-0574, R-00061246, R-00061246C0001 thru C009: PA PUC, et al. v. National Fuel Gas Distribution Corporation 1307(f) Filing.  On February 1, 2006, NFGD filed its Computation of Annual Purchased Gas Costs Statement.  No hearings were held.  On May 19., 2006, a Stipulation in Partial Settlement of the Issues Reserved for Litigation were filed.  Review of ALJ Nemec’s Recommended Decision approving the Settlements.  Dissenting Statement of Vice Chairman Cawley stating that substantive changes made to the transportation and balancing services of NFGD are matters beyond the normal scope of a 1307(f) proceeding.  Vote of 4-1 (Vice Chairman Cawley dissenting) with no further discussion.

CARRY-IN AGENDA

Bureau of Transportation and Safety

• OSA-0207; A-122250F5000: Joint Application of Equitable Resources, Inc. and The Peoples Natural Gas Co., d/b/a Dominion Peoples.  Petition for Interlocutory Review and Answer to Material Question filed June 19, 2006.  Staff recommends that the Commission grant the Petition for Interlocutory Review and answer the Material Question in the negative, and that the matter be returned to the OALJ.  Vote of 5-0 with no discussion.

THE NEXT REGULAR MEETING IS SET FOR THURSDAY, AUGUST 17, 2006 AT 10:00 AM.