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        PRIOR PRINTER'S NO. 1668                      PRINTER'S NO. 1995

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 1203 Session of 2007


        INTRODUCED BY HORNAMAN, GEORGE, DePASQUALE, GERBER, McCALL,
           CALTAGIRONE, CONKLIN, DeWEESE, EACHUS, GIBBONS, HARHAI,
           HARKINS, JAMES, JOSEPHS, KORTZ, MAHONEY, MANDERINO, McGEEHAN,
           MUNDY, M. O'BRIEN, PRESTON, SAINATO, SHIMKUS, STABACK, SURRA,
           TANGRETTI, THOMAS, VITALI, YUDICHAK, CURRY, FREEMAN,
           K. SMITH, GOODMAN, BENNINGTON, M. SMITH, PETRONE, LENTZ,
           GRUCELA, FABRIZIO AND WALKO, MAY 24, 2007

        AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES,
           JUNE 20, 2007

                                     AN ACT

     1  Amending the act of November 30, 2004 (P.L.1672, No.213),
     2     entitled, "An act providing for the sale of electric energy
     3     generated from renewable and environmentally beneficial
     4     sources, for the acquisition of electric energy generated
     5     from renewable and environmentally beneficial sources by
     6     electric distribution and supply companies and for the powers
     7     and duties of the Pennsylvania Public Utility Commission,"
     8     further providing for the definition of "force majeure,"       <--
     9     DEFINITIONS, for alternative energy portfolio standards, for   <--
    10     portfolio requirements in other states and for
    11     interconnection standards for customer-generator facilities.

    12     The General Assembly of the Commonwealth of Pennsylvania
    13  hereby enacts as follows:
    14     Section 1.  The definition of "force majeure" in section 2 of  <--
    15  the act of November 30, 2004 (P.L.1672, No.213), known as the
    16  Alternative Energy Portfolio Standards Act, is amended to read:
    17     SECTION 1.  THE DEFINITIONS OF "ALTERNATIVE ENERGY CREDIT,"    <--
    18  "CUSTOMER-GENERATOR," "FORCE MAJEURE" AND "TIER I ALTERNATIVE
    19  ENERGY SOURCE" IN SECTION 2 OF THE ACT OF NOVEMBER 30, 2004


     1  (P.L.1672, NO.213), KNOWN AS THE ALTERNATIVE ENERGY PORTFOLIO
     2  STANDARDS ACT, ARE AMENDED TO READ:
     3  Section 2.  Definitions.
     4     The following words and phrases when used in this act shall
     5  have the meanings given to them in this section unless the
     6  context clearly indicates otherwise:
     7     "ALTERNATIVE ENERGY CREDIT."  A TRADABLE INSTRUMENT THAT IS    <--
     8  USED TO ESTABLISH, VERIFY AND MONITOR COMPLIANCE WITH THIS ACT.
     9  A UNIT OF CREDIT SHALL EQUAL ONE MEGAWATT HOUR OF ELECTRICITY
    10  FROM AN ALTERNATIVE ENERGY SOURCE. THE ALTERNATIVE ENERGY CREDIT
    11  SHALL REMAIN THE PROPERTY OF THE ALTERNATIVE ENERGY SYSTEM UNTIL
    12  THE ALTERNATIVE ENERGY CREDIT IS VOLUNTARILY TRANSFERRED BY THE
    13  ALTERNATIVE ENERGY SYSTEM.
    14     * * *
    15     "CUSTOMER-GENERATOR."  A NONUTILITY OWNER OR OPERATOR OF A     <--
    16  NET METERED DISTRIBUTED GENERATION SYSTEM WITH A NAMEPLATE
    17  CAPACITY OF NOT GREATER THAN 50 KILOWATTS IF INSTALLED AT A
    18  RESIDENTIAL SERVICE OR NOT LARGER THAN [1,000] 3,000 KILOWATTS
    19  AT OTHER CUSTOMER SERVICE LOCATIONS, EXCEPT FOR CUSTOMERS WHOSE
    20  SYSTEMS ARE ABOVE [ONE MEGAWATT] THREE MEGAWATTS AND UP TO [TWO]
    21  FIVE MEGAWATTS WHO MAKE THEIR SYSTEMS AVAILABLE TO OPERATE IN
    22  PARALLEL WITH THE ELECTRIC UTILITY DURING GRID EMERGENCIES AS
    23  DEFINED BY THE REGIONAL TRANSMISSION ORGANIZATION OR WHERE A
    24  MICROGRID IS IN PLACE FOR THE PRIMARY OR SECONDARY PURPOSE OF
    25  MAINTAINING CRITICAL INFRASTRUCTURE, SUCH AS HOMELAND SECURITY
    26  ASSIGNMENTS, EMERGENCY SERVICES FACILITIES, HOSPITALS, TRAFFIC
    27  SIGNALS, WASTEWATER TREATMENT PLANTS OR TELECOMMUNICATIONS
    28  FACILITIES, PROVIDED THAT TECHNICAL RULES FOR OPERATING
    29  GENERATORS INTERCONNECTED WITH FACILITIES OF AN ELECTRIC
    30  DISTRIBUTION COMPANY, ELECTRIC COOPERATIVE OR MUNICIPAL ELECTRIC
    20070H1203B1995                  - 2 -     

     1  SYSTEM HAVE BEEN PROMULGATED BY THE INSTITUTE OF ELECTRICAL AND
     2  ELECTRONIC ENGINEERS AND THE PENNSYLVANIA PUBLIC UTILITY
     3  COMMISSION.
     4     * * *
     5     "Force majeure."  Upon its own initiative or upon a request
     6  of an electric distribution company or an electric generator
     7  supplier, the Pennsylvania Public Utility Commission, within 60
     8  days, shall determine if alternative energy resources are
     9  reasonably available in the marketplace in sufficient quantities
    10  for the electric distribution companies and electric generation
    11  suppliers to meet their obligations for that reporting period
    12  under this act. In making this determination the commission
    13  shall consider whether electric distribution companies or
    14  electric generation suppliers have made a good faith effort to
    15  acquire sufficient alternative energy to comply with their
    16  obligations. Such good faith efforts shall include, but are not
    17  limited to, banking alternative energy credits during their
    18  transition periods, seeking alternative energy credits through
    19  competitive solicitations and seeking to procure alternative
    20  energy credits or alternative energy through long-term
    21  contracts. In further making its determination the commission
    22  shall assess the availability of alternative energy credits in
    23  the Generation Attributes Tracking System (GATS) or its
    24  successor, and the availability of alternative energy credits
    25  generally in Pennsylvania and other jurisdictions in the PJM
    26  Interconnection, L.L.C. regional transmission organization (PJM)
    27  or its successor. The commission may also require solicitations
    28  for alternative energy credits as part of default service before
    29  requests of force majeure can be made. If the commission further
    30  determines that alternative energy resources are not reasonably
    20070H1203B1995                  - 3 -     

     1  available in sufficient quantities in the marketplace for the
     2  electric distribution companies and electric generation
     3  suppliers to meet their obligations under this act, then the
     4  commission shall modify the underlying obligation of the
     5  electric distribution company or electric generation supplier or
     6  recommend to the General Assembly that the underlying obligation
     7  be eliminated. COMMISSION MODIFICATION OF THE ELECTRIC            <--
     8  DISTRIBUTION COMPANY OR ELECTRIC GENERATION SUPPLIER OBLIGATIONS
     9  UNDER THIS ACT SHALL BE FOR THAT COMPLIANCE PERIOD ONLY.
    10  COMMISSION MODIFICATION SHALL NOT AUTOMATICALLY REDUCE THE
    11  OBLIGATION FOR SUBSEQUENT COMPLIANCE YEARS. IF THE COMMISSION
    12  MODIFIES THE ELECTRIC DISTRIBUTION COMPANY OR ELECTRIC
    13  GENERATION SUPPLIER OBLIGATIONS UNDER THIS ACT, THE COMMISSION
    14  MAY REQUIRE THE ELECTRIC DISTRIBUTION COMPANY OR ELECTRIC
    15  GENERATION SUPPLIER TO ACQUIRE ADDITIONAL ALTERNATIVE ENERGY
    16  CREDITS IN SUBSEQUENT YEARS EQUIVALENT TO THE OBLIGATION REDUCED
    17  DUE TO A FORCE MAJEURE DECLARATION IF THE COMMISSION DETERMINES
    18  THAT SUFFICIENT ALTERNATIVE ENERGY CREDITS EXIST IN THE
    19  MARKETPLACE.
    20     * * *
    21     "TIER I ALTERNATIVE ENERGY SOURCE."  ENERGY DERIVED FROM:      <--
    22         (1)  SOLAR PHOTOVOLTAIC AND SOLAR THERMAL ENERGY.
    23         (2)  WIND POWER.
    24         (3)  LOW-IMPACT HYDROPOWER.
    25         (4)  GEOTHERMAL ENERGY.
    26         (5)  BIOLOGICALLY DERIVED METHANE GAS.
    27         (6)  FUEL CELLS.
    28         (7)  BIOMASS ENERGY.
    29         (8)  COAL MINE METHANE.
    30     * * *
    20070H1203B1995                  - 4 -     

     1     Section 2.  Sections 3(b), (E) and (f), 4 and 5 of the act     <--
     2  are amended to read:
     3  Section 3.  Alternative energy portfolio standards.
     4     * * *
     5     (b)  Tier I and solar photovoltaic shares.--
     6         (1)  Two years after the effective date of this act, at
     7     least 1.5% of the electric energy sold by an electric
     8     distribution company or electric generation supplier to
     9     retail electric customers in this Commonwealth shall be
    10     generated from Tier I alternative energy sources. Except as
    11     provided in this section, the minimum percentage of electric
    12     energy required to be sold to retail electric customers from
    13     alternative energy sources shall increase to 2% three years
    14     after the effective date of this act. The minimum percentage
    15     of electric energy required to be sold to retail electric
    16     customers from alternative energy sources shall increase by
    17     at least 0.5% each year so that at least 8% of the electric
    18     energy sold by an electric distribution company or electric
    19     generation supplier to retail electric customers in that
    20     certificated territory in the 15th year after the effective
    21     date of this subsection is sold from Tier I alternative
    22     energy resources.
    23         (2)  [Of the electric energy required to be sold from      <--
    24     Tier I sources, the total percentage that must be sold from
    25     solar photovoltaic technologies is [for]: FOR:] THE TOTAL      <--
    26     PERCENTAGE OF THE ELECTRIC ENERGY SOLD BY AN ELECTRIC
    27     DISTRIBUTION COMPANY OR AN ELECTRIC GENERATION SUPPLIER TO
    28     RETAIL ELECTRIC CUSTOMERS IN THIS COMMONWEALTH THAT MUST BE
    29     SOLD FROM SOLAR PHOTOVOLTAIC TECHNOLOGIES IS:
    30             [(i)  Years 1 through 4 - 0.0013%.
    20070H1203B1995                  - 5 -     

     1             (ii)  Years 5 through 9 - 0.0203%.
     2             (iii)  Years 10 through 14 - 0.2500%.
     3             (iv)  Years 15 and thereafter - 0.5000%.]
     4             (i)  0.0013% for June 1, 2006, through May 31, 2007.
     5             (ii)  0.0030% for June 1, 2007, through May 31, 2008.
     6             (iii)  0.0063% for June 1, 2008, through May 31,
     7         2009.
     8             (iv)  0.0120% for June 1, 2009, through May 31, 2010.
     9             (v)  0.0203% for June 1, 2010, through May 31, 2011.
    10             (vi)  0.0325% for June 1, 2011, through May 31, 2012.
    11             (vii)  0.0510% for June 1, 2012, through May 31,
    12         2013.
    13             (viii)  0.0840% for June 1, 2013, through May 31,
    14         2014.
    15             (ix)  0.1440% for June 1, 2014, through May 31, 2015.
    16             (x)  0.2500% for June 1, 2015, through May 31, 2016.
    17             (xi)  0.2933% for June 1, 2016, through May 31, 2017.
    18             (xii)  0.3400% for June 1, 2017, through May 31,
    19         2018.
    20             (xiii)  0.3900% for June 1, 2018, through May 31,
    21         2019.
    22             (xiv)  0.4433% for June 1, 2019, through May 31,       <--
    23         2020.
    24             (xv)  0.5000% for June 1, 2020, through May 31, 2021.
    25     The percentages in this paragraph shall apply to all retail
    26     electricity sales in this Commonwealth.  AND THEREAFTER.       <--
    27         (3)  Upon commencement of the beginning of the 6th
    28     reporting year, the commission shall undertake a review of
    29     the compliance by electric distribution companies and
    30     electric generation suppliers with the requirements of this
    20070H1203B1995                  - 6 -     

     1     act. The review shall also include the status of alternative
     2     energy technologies within this Commonwealth and the capacity
     3     to add additional alternative energy resources. The
     4     commission shall use the results of this review to recommend
     5     to the General Assembly additional compliance goals beyond
     6     year 15. The commission shall work with the department in
     7     evaluating the future alternative energy resource potential.
     8     * * *
     9     (E)  ALTERNATIVE ENERGY CREDITS.--                             <--
    10         (1)  THE COMMISSION SHALL ESTABLISH AN ALTERNATIVE ENERGY
    11     CREDITS PROGRAM AS NEEDED TO IMPLEMENT THIS ACT. THE
    12     PROVISION OF SERVICES PURSUANT TO THIS SECTION SHALL BE
    13     EXEMPT FROM THE COMPETITIVE PROCUREMENT PROCEDURES OF 62
    14     PA.C.S. (RELATING TO PROCUREMENT).
    15         (2)  THE COMMISSION SHALL APPROVE AN INDEPENDENT ENTITY
    16     TO SERVE AS THE ALTERNATIVE ENERGY CREDITS PROGRAM
    17     ADMINISTRATOR. THE ADMINISTRATOR SHALL HAVE THOSE POWERS AND
    18     DUTIES ASSIGNED BY COMMISSION REGULATIONS. SUCH POWERS AND
    19     DUTIES SHALL INCLUDE, BUT NOT BE LIMITED TO, THE FOLLOWING:
    20             (I)  TO CREATE AND ADMINISTER AN ALTERNATIVE ENERGY
    21         CREDITS CERTIFICATION, TRACKING AND REPORTING PROGRAM.
    22         THIS PROGRAM SHOULD INCLUDE, AT A MINIMUM, A PROCESS FOR
    23         QUALIFYING ALTERNATIVE ENERGY SYSTEMS AND DETERMINING THE
    24         MANNER CREDITS CAN BE CREATED, ACCOUNTED FOR, TRANSFERRED
    25         AND RETIRED.
    26             (II)  TO SUBMIT REPORTS TO THE COMMISSION AT SUCH
    27         TIMES AND IN SUCH MANNER AS THE COMMISSION SHALL DIRECT.
    28         (3)  ALL QUALIFYING ALTERNATIVE ENERGY SYSTEMS MUST
    29     INCLUDE A QUALIFYING METER TO RECORD THE CUMULATIVE ELECTRIC
    30     PRODUCTION TO VERIFY THE ADVANCED ENERGY CREDIT VALUE.
    20070H1203B1995                  - 7 -     

     1     QUALIFYING METERS WILL BE APPROVED BY THE COMMISSION AS
     2     DEFINED IN PARAGRAPH (4).
     3         (4)  (I)  AN ELECTRIC DISTRIBUTION COMPANY OR ELECTRIC
     4         GENERATION SUPPLIER SHALL COMPLY WITH THE APPLICABLE
     5         REQUIREMENTS OF THIS SECTION BY PURCHASING SUFFICIENT
     6         ALTERNATIVE ENERGY CREDITS AND SUBMITTING DOCUMENTATION
     7         OF COMPLIANCE TO THE PROGRAM ADMINISTRATOR.
     8             (II)  FOR PURPOSES OF THIS SUBSECTION, ONE
     9         ALTERNATIVE ENERGY CREDIT SHALL REPRESENT ONE MEGAWATT
    10         HOUR OF QUALIFIED ALTERNATIVE ELECTRIC GENERATION,
    11         WHETHER SELF-GENERATED, PURCHASED ALONG WITH THE ELECTRIC
    12         COMMODITY OR SEPARATELY THROUGH A TRADABLE INSTRUMENT AND
    13         OTHERWISE MEETING THE REQUIREMENTS OF COMMISSION
    14         REGULATIONS AND THE PROGRAM ADMINISTRATOR.
    15         (5)  THE ALTERNATIVE ENERGY CREDITS PROGRAM SHALL INCLUDE
    16     PROVISIONS REQUIRING A REPORTING PERIOD AS DEFINED IN SECTION
    17     2 FOR ALL COVERED ENTITIES UNDER THIS ACT. THE ALTERNATIVE
    18     ENERGY CREDITS PROGRAM SHALL ALSO INCLUDE A TRUE-UP PERIOD AS
    19     DEFINED IN SECTION 2. THE TRUE-UP PERIOD SHALL PROVIDE
    20     ENTITIES COVERED UNDER THIS ACT THE ABILITY TO OBTAIN THE
    21     REQUIRED NUMBER OF ALTERNATIVE ENERGY CREDITS OR TO MAKE UP
    22     ANY SHORTFALL OF THE ALTERNATIVE ENERGY CREDITS THEY MAY BE
    23     REQUIRED TO OBTAIN TO COMPLY WITH THIS ACT. A FORCE MAJEURE
    24     PROVISION SHALL ALSO BE PROVIDED FOR UNDER THE TRUE-UP PERIOD
    25     PROVISIONS.
    26         (6)  AN ELECTRIC DISTRIBUTION COMPANY AND ELECTRIC
    27     GENERATION SUPPLIER MAY BANK OR PLACE IN RESERVE ALTERNATIVE
    28     ENERGY CREDITS PRODUCED IN ONE REPORTING YEAR FOR COMPLIANCE
    29     IN EITHER OR BOTH OF THE TWO SUBSEQUENT REPORTING YEARS,
    30     SUBJECT TO THE LIMITATIONS SET FORTH IN THIS SUBSECTION AND
    20070H1203B1995                  - 8 -     

     1     PROVIDED THAT THE ELECTRIC DISTRIBUTION COMPANY AND ELECTRIC
     2     GENERATION SUPPLIER ARE IN COMPLIANCE FOR ALL PREVIOUS
     3     REPORTING YEARS. IN ADDITION, THE ELECTRIC DISTRIBUTION
     4     COMPANY AND ELECTRIC GENERATION SUPPLIER SHALL DEMONSTRATE TO
     5     THE SATISFACTION OF THE COMMISSION THAT SUCH CREDITS:
     6             (I)  WERE IN EXCESS OF THE ALTERNATIVE ENERGY CREDITS
     7         NEEDED FOR COMPLIANCE IN THE YEAR IN WHICH THEY WERE
     8         GENERATED AND THAT SUCH EXCESS CREDITS HAVE NOT
     9         PREVIOUSLY BEEN USED FOR COMPLIANCE UNDER THIS ACT;
    10             (II)  WERE PRODUCED BY THE GENERATION OF ELECTRICAL
    11         ENERGY BY ALTERNATIVE ENERGY SOURCES AND SOLD TO RETAIL
    12         CUSTOMERS DURING THE YEAR IN WHICH THEY WERE GENERATED;
    13         AND
    14             (III)  HAVE NOT OTHERWISE BEEN NOR WILL BE SOLD,
    15         RETIRED, CLAIMED OR REPRESENTED AS PART OF SATISFYING
    16         COMPLIANCE WITH ALTERNATIVE OR RENEWABLE ENERGY PORTFOLIO
    17         STANDARDS IN OTHER STATES.
    18         (7)  AN ELECTRIC DISTRIBUTION COMPANY OR AN ELECTRIC
    19     GENERATION SUPPLIER WITH SALES THAT ARE EXEMPTED UNDER
    20     SUBSECTION (D) MAY BANK CREDITS FOR RETAIL SALES OF
    21     ELECTRICITY GENERATED FROM TIER I AND TIER II SOURCES MADE
    22     PRIOR TO THE END OF THE COST-RECOVERY PERIOD AND AFTER THE
    23     EFFECTIVE DATE OF THIS ACT. BANKABLE CREDITS SHALL BE LIMITED
    24     TO CREDITS ASSOCIATED WITH ELECTRICITY SOLD FROM TIER I AND
    25     TIER II SOURCES DURING A REPORTING YEAR WHICH EXCEEDS THE
    26     VOLUME OF SALES FROM SUCH SOURCES BY AN ELECTRIC DISTRIBUTION
    27     COMPANY OR ELECTRIC GENERATION SUPPLIER DURING THE 12-MONTH
    28     PERIOD IMMEDIATELY PRECEDING THE EFFECTIVE DATE OF THIS ACT.
    29     ALL CREDITS BANKED UNDER THIS SUBSECTION SHALL BE AVAILABLE
    30     FOR COMPLIANCE WITH SUBSECTIONS (B) AND (C) FOR NO MORE THAN
    20070H1203B1995                  - 9 -     

     1     TWO REPORTING YEARS FOLLOWING THE CONCLUSION OF THE COST-
     2     RECOVERY PERIOD.
     3         (8)  THE COMMISSION OR ITS DESIGNEE SHALL DEVELOP A
     4     REGISTRY OF PERTINENT INFORMATION REGARDING ALL AVAILABLE
     5     ALTERNATIVE ENERGY CREDITS, CREDIT TRANSACTIONS AMONG
     6     ELECTRIC DISTRIBUTION COMPANIES AND ELECTRIC GENERATION
     7     SUPPLIERS, THE NUMBER OF ALTERNATIVE ENERGY CREDITS SOLD OR
     8     TRANSFERRED AND THE PRICE PAID FOR THE SALE OR TRANSFER OF
     9     THE CREDITS. THE REGISTRY SHALL PROVIDE CURRENT INFORMATION
    10     TO ELECTRIC DISTRIBUTION COMPANIES, ELECTRIC GENERATION
    11     SUPPLIERS AND THE GENERAL PUBLIC ON THE STATUS OF ALTERNATIVE
    12     ENERGY CREDITS CREATED, SOLD OR TRANSFERRED WITHIN THIS
    13     COMMONWEALTH.
    14         (9)  THE COMMISSION MAY IMPOSE AN ADMINISTRATIVE FEE ON
    15     AN ALTERNATIVE ENERGY CREDIT TRANSACTION. THE AMOUNT OF THIS
    16     FEE MAY NOT EXCEED THE ACTUAL DIRECT COST OF PROCESSING THE
    17     TRANSACTION BY THE ALTERNATIVE ENERGY CREDITS ADMINISTRATOR.
    18     THE COMMISSION IS AUTHORIZED TO UTILIZE UP TO 5% OF THE
    19     ALTERNATIVE COMPLIANCE FEES GENERATED UNDER SUBSECTION (F)
    20     FOR ADMINISTRATIVE EXPENSES DIRECTLY ASSOCIATED WITH THIS
    21     ACT.
    22         (10)  THE COMMISSION SHALL ESTABLISH REGULATIONS
    23     GOVERNING THE VERIFICATION AND TRACKING OF ENERGY EFFICIENCY
    24     AND DEMAND-SIDE MANAGEMENT MEASURES PURSUANT TO THIS ACT,
    25     WHICH SHALL INCLUDE BENEFITS TO ALL UTILITY CUSTOMER CLASSES.
    26     WHEN DEVELOPING REGULATIONS, THE COMMISSION MUST GIVE
    27     REASONABLE CONSIDERATION TO EXISTING AND PROPOSED REGULATIONS
    28     AND RULES IN EXISTENCE IN THE REGIONAL TRANSMISSION
    29     ORGANIZATIONS THAT MANAGE THE TRANSMISSION SYSTEM IN ANY PART
    30     OF THIS COMMONWEALTH. ALL VERIFIED REDUCTIONS SHALL ACCRUE
    20070H1203B1995                 - 10 -     

     1     CREDITS STARTING WITH THE PASSAGE OF THIS ACT.
     2         (11)  THE COMMISSION SHALL WITHIN 120 DAYS OF THE
     3     EFFECTIVE DATE OF THIS ACT DEVELOP A DEPRECIATION SCHEDULE
     4     FOR ALTERNATIVE ENERGY CREDITS CREATED THROUGH DEMAND-SIDE
     5     MANAGEMENT, ENERGY EFFICIENCY AND LOAD MANAGEMENT
     6     TECHNOLOGIES AND SHALL DEVELOP STANDARDS FOR TRACKING AND
     7     VERIFYING SAVINGS FROM ENERGY EFFICIENCY, LOAD MANAGEMENT AND
     8     DEMAND-SIDE MANAGEMENT MEASURES. THE COMMISSION SHALL ALLOW
     9     FOR A 60-DAY PUBLIC COMMENT PERIOD AND SHALL ISSUE FINAL
    10     STANDARDS WITHIN 30 DAYS OF THE CLOSE OF THE PUBLIC COMMENT
    11     PERIOD.
    12         (12)  (I)  UNLESS A CONTRACTUAL PROVISION EXPLICITLY
    13         ASSIGNS ALTERNATIVE ENERGY CREDITS IN A DIFFERENT MANNER,
    14         THE OWNER OF THE ALTERNATIVE ENERGY SYSTEM OR A CUSTOMER-
    15         GENERATOR OWNS ANY AND ALL ALTERNATIVE ENERGY CREDITS
    16         ASSOCIATED WITH OR CREATED BY THE PRODUCTION OF ELECTRIC
    17         ENERGY BY SUCH FACILITY OR CUSTOMER, AND THE OWNER OR
    18         CUSTOMER SHALL BE ENTITLED TO SELL, TRANSFER OR TAKE ANY
    19         OTHER ACTION TO WHICH A LEGAL OWNER OF PROPERTY IS
    20         ENTITLED TO TAKE WITH RESPECT TO THE CREDITS.
    21             (II)  THIS PARAGRAPH SHALL APPLY TO ALL ALTERNATIVE
    22         ENERGY CREDITS WHICH WERE CREATED PURSUANT TO THIS ACT
    23         PRIOR TO THE EFFECTIVE DATE OF THIS PARAGRAPH AND WHICH
    24         WILL BE CREATED AFTER THE EFFECTIVE DATE OF THIS
    25         PARAGRAPH, REGARDLESS OF WHEN ANY UNDERLYING CONTRACT FOR
    26         THE PURCHASE OF ELECTRIC ENERGY OR OTHER PRODUCTS FROM
    27         THE GENERATOR THAT QUALIFIES AS AN ALTERNATIVE ENERGY
    28         SYSTEM WAS EXECUTED.
    29     (f)  Alternative compliance payment.--
    30         (1)  At the end of each program year, the program
    20070H1203B1995                 - 11 -     

     1     administrator shall provide a report to the commission and to
     2     each covered electric distribution company showing their
     3     status level of alternative energy acquisition.
     4         (2)  The commission shall conduct a review of each
     5     determination made under subsections (b) and (c). If, after
     6     notice and hearing, the commission determines that an
     7     electric distribution company or electric generation supplier
     8     has failed to comply with subsections (b) and (c), the
     9     commission shall impose an alternative compliance payment on
    10     that company or supplier.
    11         (3)  The alternative compliance payment, with the
    12     exception of the solar photovoltaic share compliance
    13     requirement set forth in subsection (b)(2), shall be $45
    14     times the number of additional alternative energy credits
    15     needed in order to comply with subsection (b) or (c).
    16         (4)  The alternative compliance payment for the solar
    17     photovoltaic share shall be 200% of the average market value
    18     of solar renewable energy credits sold during the reporting
    19     period within the service region of the regional transmission
    20     organization, including, where applicable, the levelized up-
    21     front rebates received by sellers of solar renewable energy
    22     credits in other jurisdictions in the PJM Interconnection,
    23     L.L.C. transmission organization (PJM) or its successor.
    24         (5)  The commission shall establish a process to provide
    25     for, at least annually, a review of the alternative energy
    26     market within this Commonwealth and the service territories
    27     of the regional transmission organizations that manage the
    28     transmission system in any part of this Commonwealth. The
    29     commission will use the results of this study to identify any
    30     needed changes to the cost associated with the alternative
    20070H1203B1995                 - 12 -     

     1     compliance payment program. If the commission finds that the
     2     costs associated with the alternative compliance payment
     3     program must be changed, the commission shall present these
     4     findings to the General Assembly for legislative enactment.
     5     * * *
     6  Section 4.  Portfolio requirements in other states.
     7     If an electric distribution supplier or electric generation
     8  company provider sells electricity in any other state and is
     9  subject to renewable energy portfolio requirements in that
    10  state, they shall list any such requirement and shall indicate
    11  how it satisfied those renewable energy portfolio requirements.
    12  To prevent double-counting, the electric distribution supplier
    13  or electric generation company shall not satisfy Pennsylvania's
    14  alternative energy portfolio requirements using alternative
    15  energy used to satisfy another state's portfolio requirements[.
    16  Energy derived only from alternative energy sources inside the
    17  geographical boundaries of this Commonwealth or within the
    18  service territory of any regional transmission organization that
    19  manages the transmission system in any part of this Commonwealth
    20  shall be eligible to meet the compliance requirements under this
    21  act.] or alternative energy credits already purchased by
    22  individuals, businesses, or government bodies that do not have a
    23  compliance obligation under this act unless the individual,
    24  business or government body sells those credits to the electric
    25  distribution company or electric generation supplier. Energy
    26  derived from alternative energy sources inside the geographical
    27  boundaries of this Commonwealth shall be eligible to meet the
    28  compliance requirements under this act. Energy derived from
    29  alternative energy sources located outside the geographical
    30  boundaries of this Commonwealth but within the service territory
    20070H1203B1995                 - 13 -     

     1  of a regional transmission organization that manages the
     2  transmission system in any part of this Commonwealth shall only
     3  be eligible to meet the compliance requirements of electric
     4  distribution companies or electric generation suppliers located
     5  within the service territory of the same regional transmission
     6  organization. For purposes of compliance with this act,
     7  alternative energy sources located in the PJM Interconnection,
     8  L.L.C. regional transmission organization (PJM) or its successor
     9  service territory shall be eligible to fulfill compliance
    10  obligations of Pike County Light and Power Company and            <--
    11  Pennsylvania Power Company. ALL PENNSYLVANIA ELECTRIC             <--
    12  DISTRIBUTION COMPANIES AND ELECTRIC GENERATION SUPPLIERS. Energy
    13  derived from alternative energy sources located outside the
    14  service territory of a regional transmission organization that
    15  manages the transmission system in any part of this Commonwealth
    16  shall not be eligible to meet the compliance requirements of
    17  this act. Electric distribution companies and electric
    18  generation suppliers shall document that this energy was not
    19  used to satisfy another state's renewable energy portfolio
    20  standards.
    21  Section 5.  Interconnection standards for customer-generator
    22                 facilities.
    23     Excess generation from net-metered customer-generators shall
    24  be "trued-up" RECEIVE FULL RETAIL VALUE FOR ALL ENERGY PRODUCED   <--
    25  on an annual basis. The commission shall develop technical and
    26  net metering interconnection rules for customer-generators
    27  intending to operate renewable onsite generators in parallel
    28  with the electric utility grid, consistent with rules defined in
    29  other states within the service region of the regional
    30  transmission organization that manages the transmission system
    20070H1203B1995                 - 14 -     

     1  in any part of this Commonwealth. The commission shall convene a
     2  stakeholder process to develop Statewide technical and net
     3  metering rules for customer-generators. The commission shall
     4  develop these rules within nine months of the effective date of
     5  this act.
     6     SECTION 3.  THE ADDITION OF SECTION 3(E)(12) OF THE ACT SHALL  <--
     7  APPLY TO ALL ALTERNATIVE ENERGY CREDITS CREATED UNDER THE ACT
     8  BEFORE, ON OR AFTER THE EFFECTIVE DATE OF THIS SECTION,
     9  REGARDLESS OF WHEN ANY UNDERLYING CONTRACT FOR THE PURCHASE OF
    10  ELECTRIC ENERGY OR OTHER PRODUCTS FROM THE GENERATOR THAT
    11  QUALIFIES AS AN ALTERNATIVE ENERGY SYSTEM WAS EXECUTED.
    12     Section 3 4.  This act shall take effect immediately.          <--












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