An Act amending Title 66 (Public Utilities) of the Pennsylvania Consolidated Statutes, in rates and distribution systems, further providing for voluntary changes in rates.

Pennsylvania House Bill 2740 amends state public utility laws to mandate that the Public Utility Commission use a fixed hypothetical capital structure of 50 percent equity and 50 percent debt when calculating rates for electric and gas distribution companies. The bill strictly prohibits regulators from considering a utility's actual financial leverage or the capital structures of its parent companies during rate-setting proceedings. While utilities must still use their actual cost of long-term debt if it was incurred prudently, they are not required to maintain the hypothetical 50-50 balance in their real-world finances. These new rules will apply to all base rate cases filed after the act takes effect, which is set for 60 days after its enactment.