D. Inclusion of ACR and CER Revenue in the 5% DSIC Cap 1. PPLICA Position In its Main Brief, PPLICA took issue with inclusion of ACR and CER PPL’s revenues within the 5% cap that cannot be exceeded in an DSIC. This 5% cap is set forth at EDC’s 66 Pa.C.S. § 1358(a)(1) of the Code as follows: Except as provided under paragraph (2) [relating to water utilities], the distribution system improvement charge may not exceed 5% of the amount billed to customers under the . . . distribution rates of the electric distribution . company… The Commission in its Model Tariff, defined distribution rates to Final Implementation Order, include and “applicable clauses riders.” witness Richard Baudino further observed: PPLICA’s are paid by customers for "distribution service," “Distribution rates" which is transmitting electricity to customers at distribution voltages. In my opinion, some of riders are unrelated to PPL’s PPL’s distribution services and should not be considered applicable riders for purposes of establishing DSIC revenues. PPL’s PPLICA St. No. 1, p. 5. Regarding the riders which are not related to distribution service, PPLICA specifically identified the ACR and CER riders. According to PPLICA, the underlying purpose of both the ACR and CER is directed towards non-distribution services. The ACR recovers the Company's costs of administering Energy Efficiency and Conservation (EE&C) programs to meet statutory consumption benchmarks. However, as observed by witness Mr. Baudino, PPLICA’s "[t]hese charges recover expenses to fund rebates directed towards improvements, retrofits, and other program measures installed at end-user locations, not distribution plant." Similarly, the CER recovers retail enhancement programs designed to develop competitive generation supply markets.
D. Inclusion of ACR and CER Revenue in the 5% DSIC Cap 1. PPLICA Position In its Main Brief, PPLICA took issue with PPL’s inclusion of ACR and CER revenues within the 5% cap that cannot be exceeded in an EDC’s DSIC. This 5% cap is set forth at 66 Pa.C.S. § 1358(a)(1) of the Code as follows: Except as provided under paragraph (2) [relating to water utilities], the distribution system improvement charge may not exceed 5% of the amount billed to customers under the . . . distribution rates of the electric distribution company… . The Commission in its Final Implementation Order, Model Tariff, defined distribution rates to include “applicable clauses and riders.” PPLICA’s witness Richard Baudino further observed: “Distribution rates" are paid by customers for "distribution service," which is transmitting electricity to customers at distribution voltages. In my opinion, some of PPL’s riders are unrelated to PPL’s distribution services and should not be considered applicable riders for purposes of establishing PPL’s DSIC revenues. PPLICA St. No. 1, p. 5. Regarding the riders which are not related to distribution service, PPLICA specifically identified the ACR and CER riders. According to PPLICA, the underlying purpose of both the ACR and CER is directed towards non-distribution services. The ACR recovers the Company's costs of administering Energy Efficiency and Conservation (EE&C) programs to meet statutory consumption benchmarks. However, as observed by PPLICA’s witness Mr. Baudino, "[t]hese charges recover expenses to fund rebates directed towards improvements, retrofits, and other program measures installed at end-user locations, not distribution plant." Similarly, the CER recovers retail enhancement programs designed to develop competitive generation supply markets.