high usage, CAP customers with calculated Annual Credit exceeding the allowable maximum, and any other low-income customer who may benefit from heating de facto mitigation. As stated in Exhibit A to the Joint Settlement (at pages 11 and 12): The mitigation measure is repair or replacement of a broken gas or oil heater or furnace; The residence does not have other structural issues that would make it inappropriate under LIURP to perform a heater or furnace repair; and The mitigation measure, on average, has a payback period of 15 years or less, or is less than the expected life of the new measure, as determined by data available to PECO at that time.16 ____________ 16 The regulations, 52 Pa. Code §58.11, provide that Commission’s “space heating system measures should meet a 12-year payback period. replacement” In a 1996 audit of LIURP program, the of PECO’s auditors noted that: “As December 4, 1995, the auditors have been instructed to use the 15 year payback criteria for recommending all allowable treatments that fall within this payback period.” At least one aspect of the proposed heating pilot program appears to be in de facto conflict with LIURP regulations at 52 Pa. Code §58.11(a). The Joint Settlement excerpt above is footnoted with a reference to 1996, indicating that PECO may have been operating LIURP for years utilizing a 15-year measure payback period rather than the specified seven- or 12-year requirement outlined in Section 58.11(a). PECO is now clearly proposing to operate the heating program under a 15-year payback de facto period. Proposed Resolution: Since the proposed program is essentially a three-year LIURP pilot, we propose to allow a temporary partial waiver of Section 58.11(a), applying to those measures deemed necessary for the mitigation of heating. de facto In the proposed 2016-2108 Plan, PECO states that the heating program de facto will be part of LIURP and that it will recover additional funding of $700,000 each year,
high usage, CAP customers with calculated Annual Credit exceeding the allowable maximum, and any other low-income customer who may benefit from de facto heating mitigation. As stated in Exhibit A to the Joint Settlement (at pages 11 and 12): The mitigation measure is repair or replacement of a broken gas or oil heater or furnace; The residence does not have other structural issues that would make it inappropriate under LIURP to perform a heater or furnace repair; and The mitigation measure, on average, has a payback period of 15 years or less, or is less than the expected life of the new measure, as determined by data available to PECO at that time.16 ____________ 16 The Commission’s regulations, 52 Pa. Code §58.11, provide that “space heating system replacement” measures should meet a 12-year payback period. In a 1996 audit of PECO’s LIURP program, the auditors noted that: “As of December 4, 1995, the auditors have been instructed to use the 15 year payback criteria for recommending all allowable treatments that fall within this payback period.” At least one aspect of the proposed de facto heating pilot program appears to be in conflict with LIURP regulations at 52 Pa. Code §58.11(a). The Joint Settlement excerpt above is footnoted with a reference to 1996, indicating that PECO may have been operating LIURP for years utilizing a 15-year measure payback period rather than the specified seven- or 12-year requirement outlined in Section 58.11(a). PECO is now clearly proposing to operate the de facto heating program under a 15-year payback period. Proposed Resolution: Since the proposed program is essentially a three-year LIURP pilot, we propose to allow a temporary partial waiver of Section 58.11(a), applying to those measures deemed necessary for the mitigation of de facto heating. In the proposed 2016-2108 Plan, PECO states that the de facto heating program will be part of LIURP and that it will recover additional funding of $700,000 each year,