Albert Einstein Healthcare Foundation/University v. Pennsylvania Public Utility Commission

Summary

The Pennsylvania Commonwealth Court affirmed a Pennsylvania Public Utility Commission order setting rates for firm backup power supplied by Philadelphia Electric Company to qualifying cogeneration facilities. The court held that the rate structure, including a minimum monthly charge credited against usage charges, was cost-based, supported by substantial evidence, and consistent with federal and state requirements governing utility service to qualifying facilities.

Holdings

1. Substantial evidence supported the Commission's determination that the minimum monthly charge, credited against the usage charge, reflected costs associated with providing firm backup power.
2. Rates for firm backup power to qualifying facilities must be based on traditional cost-of-service ratemaking principles, and the Commission's rate satisfied that requirement.
3. The rate mechanism did not violate federal or state law by discouraging cogeneration because it required firm backup customers to bear the costs attributable to the service rather than shifting those costs to other customers.

Questions Presented

1. Whether substantial evidence supported the Commission's firm backup power rate mechanism.
2. Whether the Commission's rate mechanism violated federal or state law by failing to use a cost-of-service basis.
3. Whether the rate mechanism unlawfully discouraged cogeneration by imposing costs beyond those attributable to firm backup service.

Disposition

affirmed