52 Pa. Code § 69.1808 : PUBLIC UTILITIES — PUBLIC UTILITY COMMISSION — FIXED SERVICE UTILITIES — GENERAL ORDERS, POLICY STATEMENTS AND GUIDELINES ON FIXED UTILITIES —STATEMENT OF POLICY — Default service cost elements

(a) The PTC should be designed to recover all generation, transmission and other related costs of default service. These cost elements include:
(1) Wholesale energy, capacity, ancillary, applicable RTO or ISO administrative and transmission costs.
(2) Congestion costs will ultimately be recovered from ratepayers. Congestion costs should be reflected in the fixed price bids submitted by wholesale energy suppliers.
(3) Supply management costs, including supply bidding, contracting, hedging, risk management costs, any scheduling and forecasting services provided exclusively for default service by the EDC, and applicable administrative and general expenses related to these activities.
(4) Administrative costs, including billing, collection, education, regulatory, litigation, tariff filings, working capital, information system and associated administrative and general expenses related to default service.
(5) Applicable taxes, excluding Sales Tax.
(6) Costs for alternative energy portfolio standard compliance.
(b) EDC rates should be scrutinized for any generation related costs that remain embedded in distribution rates. This review should occur no later than the next distribution rate case for each EDC filed after September 15, 2007. The Commission may initiate a cost allocation case for an EDC on its own motion if such a case is not initiated by December 31, 2007. Changes to rates resulting from the examination would take effect after the expiration of Commission-approved rate caps.

52 Pa. Code § 69.1808