HB 2740

                                                PRINTER'S NO.    3826
                THE GENERAL ASSEMBLY OF PENNSYLVANIA
                    HOUSE BILL
                    No. 2740
                                          Session of
                                            2026
INTRODUCED BY BURGOS, McNEILL, KAZEEM, GUZMAN, WEBSTER,
   PROKOPIAK, HILL-EVANS, DEASY, SANCHEZ, BOROWSKI, PARKER,
   RIVERA AND CEPEDA-FREYTIZ, AUGUST 17, 2026
REFERRED TO COMMITTEE ON CONSUMER PROTECTION, TECHNOLOGY AND
   UTILITIES, AUGUST 18, 2026
                               AN ACT
1 Amending Title 66 (Public Utilities) of the Pennsylvania
2    Consolidated Statutes, in rates and distribution systems,
3    further providing for voluntary changes in rates.
4    The General Assembly of the Commonwealth of Pennsylvania
5 hereby enacts as follows:
6    Section 1.    Sections 1308 of Title 66 of the Pennsylvania
7 Consolidated Statutes is amended by adding subsections to read:
8 § 1308.    Voluntary changes in rates.
9    * * *
10    (g)    Mandatory hypothetical capital structure for ratemaking
11 purposes.--The commission shall utilize a mandatory hypothetical
12 capital structure consisting of 50% equity and 50% debt for the
13 purpose of establishing just and reasonable rates, determining a
14 reasonable rate of return and for revenue requirement
15 calculations.
16    (h)    Exclusivity.--The commission shall be strictly
17 prohibited from utilizing, considering or granting weight to a
1 public utility's actual capital structure, the capital structure
2 of any parent or affiliate companies or any other alternative
3 capital structure, regardless of whether the actual equity ratio
4 is higher or lower than the hypothetical capital structure.
5    (i)   Cost of debt.--The commission shall utilize the public
6 utility's actual cost of long-term debt for ratemaking purposes,
7 provided that debt was prudently incurred.
8    (j)   Exclusivity.--The hypothetical capital structure
9 required under subsection (g) shall be used exclusively for
10 ratemaking purposes and shall not require a public utility to
11 maintain any specific actual capital structure.
12    (k)   Applicability.--This subsection and subsections (g),
13 (h), (i) and (j) shall apply to all base rate proceedings filed
14 in accordance with subsection (d) after the effective date of
15 this subsection.
16    Section 2.   This act shall take effect in 60 days.
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