CORRECTIVE REPRINT
                                 SENATE AMENDED
        PRIOR PRINTER'S NOS. 1668, 1995, 2057,        PRINTER'S NO. 2343
        2291, 2297, 2340

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, WALKO AND GEIST, MAY 24, 2007

        SENATOR M. WHITE, ENVIRONMENTAL RESOURCES AND ENERGY, IN SENATE,
           RE-REPORTED AS AMENDED, JULY 14, 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 definitions, for alternative energy      <--
     9     portfolio standards, for portfolio requirements in other
    10     states and for interconnection standards for customer-
    11     generator facilities. FURTHER PROVIDING FOR THE DEFINITIONS    <--
    12     OF "ALTERNATIVE ENERGY SOURCES," CREDIT," "CUSTOMER-           <--
    13     GENERATOR," "FORCE MAJEURE," AND "NET METERING," AND "TIER I   <--
    14     ALTERNATIVE ENERGY SOURCE," FOR ALTERNATIVE ENERGY PORTFOLIO
    15     STANDARDS, FOR PORTFOLIO REQUIREMENTS IN OTHER STATES AND FOR
    16     INTERCONNECTION STANDARDS FOR CUSTOMER-GENERATOR FACILITIES.

    17     The General Assembly of the Commonwealth of Pennsylvania
    18  hereby enacts as follows:
    19     Section 1.  The definitions of "alternative energy credit,"    <--
    20  "customer-generator," "force majeure" and "Tier I alternative


     1  energy source" in section 2 of the act of November 30, 2004
     2  (P.L.1672, No.213), known as the Alternative Energy Portfolio
     3  Standards Act, are amended to read:
     4  Section 2.  Definitions.
     5     The following words and phrases when used in this act shall
     6  have the meanings given to them in this section unless the
     7  context clearly indicates otherwise:
     8     "Alternative energy credit."  A tradable instrument that is
     9  used to establish, verify and monitor compliance with this act.
    10  A unit of credit shall equal one megawatt hour of electricity
    11  from an alternative energy source. The alternative energy credit
    12  shall remain the property of the alternative energy system until
    13  the alternative energy credit is voluntarily transferred by the
    14  alternative energy system.
    15     * * *
    16     "Customer-generator."  A nonutility owner or operator of a
    17  net metered distributed generation system with a nameplate
    18  capacity of not greater than 50 kilowatts if installed at a
    19  residential service or not larger than [1,000] 3,000 kilowatts
    20  at other customer service locations, except for customers whose
    21  systems are above [one megawatt] three megawatts and up to [two]
    22  five megawatts who make their systems available to operate in
    23  parallel with the electric utility during grid emergencies as
    24  defined by the regional transmission organization or where a
    25  microgrid is in place for the primary or secondary purpose of
    26  maintaining critical infrastructure, such as homeland security
    27  assignments, emergency services facilities, hospitals, traffic
    28  signals, wastewater treatment plants or telecommunications
    29  facilities, provided that technical rules for operating
    30  generators interconnected with facilities of an electric
    20070H1203B2343                  - 2 -     

     1  distribution company, electric cooperative or municipal electric
     2  system have been promulgated by the Institute of Electrical and
     3  Electronic Engineers and the Pennsylvania Public Utility
     4  Commission.
     5     * * *
     6     "Force majeure."  Upon its own initiative or upon a request
     7  of an electric distribution company or an electric generator
     8  supplier, the Pennsylvania Public Utility Commission, within 60
     9  days, shall determine if alternative energy resources are
    10  reasonably available in the marketplace in sufficient quantities
    11  for the electric distribution companies and electric generation
    12  suppliers to meet their obligations for that reporting period
    13  under this act. In making this determination the commission
    14  shall consider whether electric distribution companies or
    15  electric generation suppliers have made a good faith effort to
    16  acquire sufficient alternative energy to comply with their
    17  obligations. Such good faith efforts shall include, but are not
    18  limited to, banking alternative energy credits during their
    19  transition periods, seeking alternative energy credits through
    20  competitive solicitations and seeking to procure alternative
    21  energy credits or alternative energy through long-term
    22  contracts. In further making its determination the commission
    23  shall assess the availability of alternative energy credits in
    24  the Generation Attributes Tracking System (GATS) or its
    25  successor, and the availability of alternative energy credits
    26  generally in Pennsylvania and other jurisdictions in the PJM
    27  Interconnection, L.L.C. regional transmission organization (PJM)
    28  or its successor. The commission may also require solicitations
    29  for alternative energy credits as part of default service before
    30  requests of force majeure can be made. If the commission further
    20070H1203B2343                  - 3 -     

     1  determines that alternative energy resources are not reasonably
     2  available in sufficient quantities in the marketplace for the
     3  electric distribution companies and electric generation
     4  suppliers to meet their obligations under this act, then the
     5  commission shall modify the underlying obligation of the
     6  electric distribution company or electric generation supplier or
     7  recommend to the General Assembly that the underlying obligation
     8  be eliminated. Commission modification of the electric
     9  distribution company or electric generation supplier obligations
    10  under this act shall be for that compliance period only.
    11  Commission modification shall not automatically reduce the
    12  obligation for subsequent compliance years. If the commission
    13  modifies the electric distribution company or electric
    14  generation supplier obligations under this act, the commission
    15  may require the electric distribution company or electric
    16  generation supplier to acquire additional alternative energy
    17  credits in subsequent years equivalent to the obligation reduced
    18  due to a force majeure declaration if the commission determines
    19  that sufficient alternative energy credits exist in the
    20  marketplace.
    21     * * *
    22     "Tier I alternative energy source."  Energy derived from:
    23         (1)  Solar photovoltaic and solar thermal energy.
    24         (2)  Wind power.
    25         (3)  Low-impact hydropower.
    26         (4)  Geothermal energy.
    27         (5)  Biologically derived methane gas.
    28         (6)  Fuel cells.
    29         (7)  Biomass energy.
    30         (8)  Coal mine methane.
    20070H1203B2343                  - 4 -     

     1     * * *
     2     Section 2.  Sections 3(b), (e) and (f), 4 and 5 of the act
     3  are amended to read:
     4  Section 3.  Alternative energy portfolio standards.
     5     * * *
     6     (b)  Tier I and solar photovoltaic shares.--
     7         (1)  Two years after the effective date of this act, at
     8     least 1.5% of the electric energy sold by an electric
     9     distribution company or electric generation supplier to
    10     retail electric customers in this Commonwealth shall be
    11     generated from Tier I alternative energy sources. Except as
    12     provided in this section, the minimum percentage of electric
    13     energy required to be sold to retail electric customers from
    14     alternative energy sources shall increase to 2% three years
    15     after the effective date of this act. The minimum percentage
    16     of electric energy required to be sold to retail electric
    17     customers from alternative energy sources shall increase by
    18     at least 0.5% each year so that at least 8% of the electric
    19     energy sold by an electric distribution company or electric
    20     generation supplier to retail electric customers in that
    21     certificated territory in the 15th year after the effective
    22     date of this subsection is sold from Tier I alternative
    23     energy resources.
    24         (2)  [Of the electric energy required to be sold from
    25     Tier I sources, the total percentage that must be sold from
    26     solar photovoltaic technologies is for:] The total percentage
    27     of the electric energy sold by an electric distribution
    28     company or an electric generation supplier to retail electric
    29     customers in this Commonwealth that must be sold from solar
    30     photovoltaic technologies is:
    20070H1203B2343                  - 5 -     

     1             [(i)  Years 1 through 4 - 0.0013%.
     2             (ii)  Years 5 through 9 - 0.0203%.
     3             (iii)  Years 10 through 14 - 0.2500%.
     4             (iv)  Years 15 and thereafter - 0.5000%.]
     5             (i)  0.0013% for June 1, 2006, through May 31, 2007.
     6             (ii)  0.0030% for June 1, 2007, through May 31, 2008.
     7             (iii)  0.0063% for June 1, 2008, through May 31,
     8         2009.
     9             (iv)  0.0120% for June 1, 2009, through May 31, 2010.
    10             (v)  0.0203% for June 1, 2010, through May 31, 2011.
    11             (vi)  0.0325% for June 1, 2011, through May 31, 2012.
    12             (vii)  0.0510% for June 1, 2012, through May 31,
    13         2013.
    14             (viii)  0.0840% for June 1, 2013, through May 31,
    15         2014.
    16             (ix)  0.1440% for June 1, 2014, through May 31, 2015.
    17             (x)  0.2500% for June 1, 2015, through May 31, 2016.
    18             (xi)  0.2933% for June 1, 2016, through May 31, 2017.
    19             (xii)  0.3400% for June 1, 2017, through May 31,
    20         2018.
    21             (xiii)  0.3900% for June 1, 2018, through May 31,
    22         2019.
    23             (xiv)  0.4433% for June 1, 2019, and thereafter.
    24             (xiv)  0.4433% for June 1, 2019, through May 31,
    25         2020.
    26             (xv)  0.5000% for June 1, 2020, and thereafter.
    27         The percentages in this paragraph shall apply to all
    28         retail electricity sales in this Commonwealth.
    29         (3)  Upon commencement of the beginning of the 6th
    30     reporting year, the commission shall undertake a review of
    20070H1203B2343                  - 6 -     

     1     the compliance by electric distribution companies and
     2     electric generation suppliers with the requirements of this
     3     act. The review shall also include the status of alternative
     4     energy technologies within this Commonwealth and the capacity
     5     to add additional alternative energy resources. The
     6     commission shall use the results of this review to recommend
     7     to the General Assembly additional compliance goals beyond
     8     year 15. The commission shall work with the department in
     9     evaluating the future alternative energy resource potential.
    10     * * *
    11     (e)  Alternative energy credits.--
    12         (1)  The commission shall establish an alternative energy
    13     credits program as needed to implement this act. The
    14     provision of services pursuant to this section shall be
    15     exempt from the competitive procurement procedures of 62
    16     Pa.C.S. (relating to procurement).
    17         (2)  The commission shall approve an independent entity
    18     to serve as the alternative energy credits program
    19     administrator. The administrator shall have those powers and
    20     duties assigned by commission regulations. Such powers and
    21     duties shall include, but not be limited to, the following:
    22             (i)  To create and administer an alternative energy
    23         credits certification, tracking and reporting program.
    24         This program should include, at a minimum, a process for
    25         qualifying alternative energy systems and determining the
    26         manner credits can be created, accounted for, transferred
    27         and retired.
    28             (ii)  To submit reports to the commission at such
    29         times and in such manner as the commission shall direct.
    30         (3)  All qualifying alternative energy systems must
    20070H1203B2343                  - 7 -     

     1     include a qualifying meter to record the cumulative electric
     2     production to verify the advanced energy credit value.
     3     Qualifying meters will be approved by the commission as
     4     defined in paragraph (4).
     5         (4)  (i)  An electric distribution company or electric
     6         generation supplier shall comply with the applicable
     7         requirements of this section by purchasing sufficient
     8         alternative energy credits and submitting documentation
     9         of compliance to the program administrator.
    10             (ii)  For purposes of this subsection, one
    11         alternative energy credit shall represent one megawatt
    12         hour of qualified alternative electric generation,
    13         whether self-generated, purchased along with the electric
    14         commodity or separately through a tradable instrument and
    15         otherwise meeting the requirements of commission
    16         regulations and the program administrator.
    17         (5)  The alternative energy credits program shall include
    18     provisions requiring a reporting period as defined in section
    19     2 for all covered entities under this act. The alternative
    20     energy credits program shall also include a true-up period as
    21     defined in section 2. The true-up period shall provide
    22     entities covered under this act the ability to obtain the
    23     required number of alternative energy credits or to make up
    24     any shortfall of the alternative energy credits they may be
    25     required to obtain to comply with this act. A force majeure
    26     provision shall also be provided for under the true-up period
    27     provisions.
    28         (6)  An electric distribution company and electric
    29     generation supplier may bank or place in reserve alternative
    30     energy credits produced in one reporting year for compliance
    20070H1203B2343                  - 8 -     

     1     in either or both of the two subsequent reporting years,
     2     subject to the limitations set forth in this subsection and
     3     provided that the electric distribution company and electric
     4     generation supplier are in compliance for all previous
     5     reporting years. In addition, the electric distribution
     6     company and electric generation supplier shall demonstrate to
     7     the satisfaction of the commission that such credits:
     8             (i)  were in excess of the alternative energy credits
     9         needed for compliance in the year in which they were
    10         generated and that such excess credits have not
    11         previously been used for compliance under this act;
    12             (ii)  were produced by the generation of electrical
    13         energy by alternative energy sources and sold to retail
    14         customers during the year in which they were generated;
    15         and
    16             (iii)  have not otherwise been nor will be sold,
    17         retired, claimed or represented as part of satisfying
    18         compliance with alternative or renewable energy portfolio
    19         standards in other states.
    20         (7)  An electric distribution company or an electric
    21     generation supplier with sales that are exempted under
    22     subsection (d) may bank credits for retail sales of
    23     electricity generated from Tier I and Tier II sources made
    24     prior to the end of the cost-recovery period and after the
    25     effective date of this act. Bankable credits shall be limited
    26     to credits associated with electricity sold from Tier I and
    27     Tier II sources during a reporting year which exceeds the
    28     volume of sales from such sources by an electric distribution
    29     company or electric generation supplier during the 12-month
    30     period immediately preceding the effective date of this act.
    20070H1203B2343                  - 9 -     

     1     All credits banked under this subsection shall be available
     2     for compliance with subsections (b) and (c) for no more than
     3     two reporting years following the conclusion of the cost-
     4     recovery period.
     5         (8)  The commission or its designee shall develop a
     6     registry of pertinent information regarding all available
     7     alternative energy credits, credit transactions among
     8     electric distribution companies and electric generation
     9     suppliers, the number of alternative energy credits sold or
    10     transferred and the price paid for the sale or transfer of
    11     the credits. The registry shall provide current information
    12     to electric distribution companies, electric generation
    13     suppliers and the general public on the status of alternative
    14     energy credits created, sold or transferred within this
    15     Commonwealth.
    16         (9)  The commission may impose an administrative fee on
    17     an alternative energy credit transaction. The amount of this
    18     fee may not exceed the actual direct cost of processing the
    19     transaction by the alternative energy credits administrator.
    20     The commission is authorized to utilize up to 5% of the
    21     alternative compliance fees generated under subsection (f)
    22     for administrative expenses directly associated with this
    23     act.
    24         (10)  The commission shall establish regulations
    25     governing the verification and tracking of energy efficiency
    26     and demand-side management measures pursuant to this act,
    27     which shall include benefits to all utility customer classes.
    28     When developing regulations, the commission must give
    29     reasonable consideration to existing and proposed regulations
    30     and rules in existence in the regional transmission
    20070H1203B2343                 - 10 -     

     1     organizations that manage the transmission system in any part
     2     of this Commonwealth. All verified reductions shall accrue
     3     credits starting with the passage of this act.
     4         (11)  The commission shall within 120 days of the
     5     effective date of this act develop a depreciation schedule
     6     for alternative energy credits created through demand-side
     7     management, energy efficiency and load management
     8     technologies and shall develop standards for tracking and
     9     verifying savings from energy efficiency, load management and
    10     demand-side management measures. The commission shall allow
    11     for a 60-day public comment period and shall issue final
    12     standards within 30 days of the close of the public comment
    13     period.
    14         (12)  (i)  Unless a contractual provision explicitly
    15         assigns alternative energy credits in a different manner,
    16         the owner of the alternative energy system or a customer-
    17         generator owns any and all alternative energy credits
    18         associated with or created by the production of electric
    19         energy by such facility or customer, and the owner or
    20         customer shall be entitled to sell, transfer or take any
    21         other action to which a legal owner of property is
    22         entitled to take with respect to the credits.
    23             (ii)  This paragraph shall apply to all alternative
    24         energy credits which were created pursuant to this act
    25         prior to the effective date of this paragraph and which
    26         will be created after the effective date of this
    27         paragraph, regardless of when any underlying contract for
    28         the purchase of electric energy or other products from
    29         the generator that qualifies as an alternative energy
    30         system was executed.
    20070H1203B2343                 - 11 -     

     1     (f)  Alternative compliance payment.--
     2         (1)  At the end of each program year, the program
     3     administrator shall provide a report to the commission and to
     4     each covered electric distribution company showing their
     5     status level of alternative energy acquisition.
     6         (2)  The commission shall conduct a review of each
     7     determination made under subsections (b) and (c). If, after
     8     notice and hearing, the commission determines that an
     9     electric distribution company or electric generation supplier
    10     has failed to comply with subsections (b) and (c), the
    11     commission shall impose an alternative compliance payment on
    12     that company or supplier.
    13         (3)  The alternative compliance payment, with the
    14     exception of the solar photovoltaic share compliance
    15     requirement set forth in subsection (b)(2), shall be $45
    16     times the number of additional alternative energy credits
    17     needed in order to comply with subsection (b) or (c).
    18         (4)  The alternative compliance payment for the solar
    19     photovoltaic share shall be 200% of the average market value
    20     of solar renewable energy credits sold during the reporting
    21     period within the service region of the regional transmission
    22     organization, including, where applicable, the levelized up-
    23     front rebates received by sellers of solar renewable energy
    24     credits in other jurisdictions in the PJM Interconnection,
    25     L.L.C. transmission organization (PJM) or its successor.
    26         (5)  The commission shall establish a process to provide
    27     for, at least annually, a review of the alternative energy
    28     market within this Commonwealth and the service territories
    29     of the regional transmission organizations that manage the
    30     transmission system in any part of this Commonwealth. The
    20070H1203B2343                 - 12 -     

     1     commission will use the results of this study to identify any
     2     needed changes to the cost associated with the alternative
     3     compliance payment program. If the commission finds that the
     4     costs associated with the alternative compliance payment
     5     program must be changed, the commission shall present these
     6     findings to the General Assembly for legislative enactment.
     7     * * *
     8  Section 4.  Portfolio requirements in other states.
     9     If an electric distribution supplier or electric generation
    10  company provider sells electricity in any other state and is
    11  subject to renewable energy portfolio requirements in that
    12  state, they shall list any such requirement and shall indicate
    13  how it satisfied those renewable energy portfolio requirements.
    14  To prevent double-counting, the electric distribution supplier
    15  or electric generation company shall not satisfy Pennsylvania's
    16  alternative energy portfolio requirements using alternative
    17  energy used to satisfy another state's portfolio requirements[.
    18  Energy derived only from alternative energy sources inside the
    19  geographical boundaries of this Commonwealth or within the
    20  service territory of any regional transmission organization that
    21  manages the transmission system in any part of this Commonwealth
    22  shall be eligible to meet the compliance requirements under this
    23  act.] or alternative energy credits already purchased by
    24  individuals, businesses, or government bodies that do not have a
    25  compliance obligation under this act unless the individual,
    26  business or government body sells those credits to the electric
    27  distribution company or electric generation supplier. Energy
    28  derived from alternative energy sources inside the geographical
    29  boundaries of this Commonwealth shall be eligible to meet the
    30  compliance requirements under this act. Energy derived from
    20070H1203B2343                 - 13 -     

     1  alternative energy sources located outside the geographical
     2  boundaries of this Commonwealth but within the service territory
     3  of a regional transmission organization that manages the
     4  transmission system in any part of this Commonwealth shall only
     5  be eligible to meet the compliance requirements of electric
     6  distribution companies or electric generation suppliers located
     7  within the service territory of the same regional transmission
     8  organization. For purposes of compliance with this act,
     9  alternative energy sources located in the PJM Interconnection,
    10  L.L.C. regional transmission organization (PJM) or its successor
    11  service territory shall be eligible to fulfill compliance
    12  obligations of all Pennsylvania electric distribution companies
    13  and electric generation suppliers. Energy derived from
    14  alternative energy sources located outside the service territory
    15  of a regional transmission organization that manages the
    16  transmission system in any part of this Commonwealth shall not
    17  be eligible to meet the compliance requirements of this act.
    18  Electric distribution companies and electric generation
    19  suppliers shall document that this energy was not used to
    20  satisfy another state's renewable energy portfolio standards.
    21  Section 5.  Interconnection standards for customer-generator
    22                 facilities.
    23     Excess generation from net-metered customer-generators shall
    24  receive full retail value for all energy produced on an annual
    25  basis. The commission shall develop technical and net metering
    26  interconnection rules for customer-generators intending to
    27  operate renewable onsite generators in parallel with the
    28  electric utility grid, consistent with rules defined in other
    29  states within the service region of the regional transmission
    30  organization that manages the transmission system in any part of
    20070H1203B2343                 - 14 -     

     1  this Commonwealth. The commission shall convene a stakeholder
     2  process to develop Statewide technical and net metering rules
     3  for customer-generators. The commission shall develop these
     4  rules within nine months of the effective date of this act.
     5     Section 3.  The addition of section 3(e)(12) of the act shall
     6  apply to all alternative energy credits created under the act
     7  before, on or after the effective date of this section,
     8  regardless of when any underlying contract for the purchase of
     9  electric energy or other products from the generator that
    10  qualifies as an alternative energy system was executed.
    11     Section 4.  This act shall take effect immediately.
    12     SECTION 1.  THE DEFINITIONS OF "ALTERNATIVE ENERGY SOURCES,"   <--
    13  "CUSTOMER-GENERATOR," "FORCE MAJEURE" AND "NET METERING" IN
    14  SECTION 2 OF THE ACT OF NOVEMBER 30, 2004 (P.L.1672, NO.213),
    15  KNOWN AS THE ALTERNATIVE ENERGY PORTFOLIO STANDARDS ACT, ARE
    16  AMENDED TO READ:
    17     SECTION 1.  THE DEFINITIONS OF "ALTERNATIVE ENERGY CREDIT,"    <--
    18  "CUSTOMER-GENERATOR," "FORCE MAJEURE," "NET METERING" AND "TIER
    19  I ALTERNATIVE ENERGY SOURCE" IN SECTION 2 OF THE ACT OF NOVEMBER
    20  30, 2004 (P.L.1672, NO.213), KNOWN AS THE ALTERNATIVE ENERGY
    21  PORTFOLIO STANDARDS ACT, ARE AMENDED TO READ:
    22  SECTION 2.  DEFINITIONS.
    23     THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS ACT SHALL
    24  HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE
    25  CONTEXT CLEARLY INDICATES OTHERWISE:
    26     "ALTERNATIVE ENERGY CREDIT."  A TRADABLE INSTRUMENT THAT IS    <--
    27  USED TO ESTABLISH, VERIFY AND MONITOR COMPLIANCE WITH THIS ACT.
    28  A UNIT OF CREDIT SHALL EQUAL ONE MEGAWATT HOUR OF ELECTRICITY
    29  FROM AN ALTERNATIVE ENERGY SOURCE. THE ALTERNATIVE ENERGY CREDIT
    30  SHALL REMAIN THE PROPERTY OF THE ALTERNATIVE ENERGY SYSTEM UNTIL
    20070H1203B2343                 - 15 -     

     1  THE ALTERNATIVE ENERGY CREDIT IS VOLUNTARILY TRANSFERRED BY THE
     2  ALTERNATIVE ENERGY SYSTEM.
     3     * * *
     4     "ALTERNATIVE ENERGY SOURCES."  THE TERM SHALL INCLUDE THE      <--
     5  FOLLOWING EXISTING AND NEW SOURCES FOR THE PRODUCTION OF
     6  ELECTRICITY:
     7         (1)  SOLAR PHOTOVOLTAIC OR OTHER SOLAR ELECTRIC ENERGY.
     8         (2)  SOLAR THERMAL ENERGY.
     9         (3)  WIND POWER.
    10         (4)  LARGE-SCALE HYDROPOWER, WHICH SHALL MEAN THE
    11     PRODUCTION OF ELECTRIC POWER BY HARNESSING THE HYDROELECTRIC
    12     POTENTIAL OF MOVING WATER IMPOUNDMENTS, INCLUDING PUMPED
    13     STORAGE THAT DOES NOT MEET THE REQUIREMENTS OF LOW-IMPACT
    14     HYDROPOWER UNDER PARAGRAPH (5).
    15         (5)  LOW-IMPACT HYDROPOWER CONSISTING OF ANY TECHNOLOGY
    16     THAT PRODUCES ELECTRIC POWER AND THAT HARNESSES THE
    17     HYDROELECTRIC POTENTIAL OF MOVING WATER IMPOUNDMENTS,
    18     PROVIDED THE HYDROPOWER SOURCE HAS A NAMEPLATE CAPACITY OF 21
    19     MEGAWATTS OR LESS AND A LICENSE ISSUED BY THE FEDERAL ENERGY
    20     REGULATORY COMMISSION FOR THE HYDROPOWER SOURCE WAS HELD IN
    21     WHOLE OR IN PART BY A MUNICIPALITY OR ELECTRIC COOPERATIVE ON
    22     JULY 1, 2007, OR SUCH INCREMENTAL HYDROELECTRIC DEVELOPMENT:
    23             (I)  DOES NOT ADVERSELY CHANGE EXISTING IMPACTS TO
    24         AQUATIC SYSTEMS;
    25             (II)  MEETS THE CERTIFICATION STANDARDS ESTABLISHED
    26         BY THE LOW IMPACT HYDROPOWER INSTITUTE AND AMERICAN
    27         RIVERS, INC., OR THEIR SUCCESSORS;
    28             (III)  PROVIDES AN ADEQUATE WATER FLOW FOR PROTECTION
    29         OF AQUATIC LIFE AND FOR SAFE AND EFFECTIVE FISH PASSAGE;
    30             (IV)  PROTECTS AGAINST EROSION; AND
    20070H1203B2343                 - 16 -     

     1             (V)  PROTECTS CULTURAL AND HISTORIC RESOURCES.
     2         (6)  GEOTHERMAL ENERGY, WHICH SHALL MEAN ELECTRICITY
     3     PRODUCED BY EXTRACTING HOT WATER OR STEAM FROM GEOTHERMAL
     4     RESERVES IN THE EARTH'S CRUST AND SUPPLIED TO STEAM TURBINES
     5     THAT DRIVE GENERATORS TO PRODUCE ELECTRICITY.
     6         (7)  BIOMASS ENERGY, WHICH SHALL MEAN THE GENERATION OF
     7     ELECTRICITY UTILIZING THE FOLLOWING:
     8             (I)  ORGANIC MATERIAL FROM A PLANT THAT IS GROWN FOR
     9         THE PURPOSE OF BEING USED TO PRODUCE ELECTRICITY OR IS
    10         PROTECTED BY THE FEDERAL CONSERVATION RESERVE PROGRAM
    11         (CRP) AND PROVIDED FURTHER THAT CROP PRODUCTION ON CRP
    12         LANDS DOES NOT PREVENT ACHIEVEMENT OF THE WATER QUALITY
    13         PROTECTION, SOIL EROSION PREVENTION OR WILDLIFE
    14         ENHANCEMENT PURPOSES FOR WHICH THE LAND WAS PRIMARILY SET
    15         ASIDE; OR
    16             (II)  ANY SOLID NONHAZARDOUS, CELLULOSIC WASTE
    17         MATERIAL THAT IS SEGREGATED FROM OTHER WASTE MATERIALS,
    18         SUCH AS WASTE PALLETS, CRATES AND LANDSCAPE OR RIGHT-OF-
    19         WAY TREE TRIMMINGS OR AGRICULTURAL SOURCES, INCLUDING
    20         ORCHARD TREE CROPS, VINEYARDS, GRAIN, LEGUMES, SUGAR AND
    21         OTHER CROP BY-PRODUCTS OR RESIDUES.
    22         (8)  BIOLOGICALLY DERIVED METHANE GAS, WHICH SHALL
    23     INCLUDE METHANE FROM THE ANAEROBIC DIGESTION OF ORGANIC
    24     MATERIALS FROM YARD WASTE, SUCH AS GRASS CLIPPINGS AND
    25     LEAVES, FOOD WASTE, ANIMAL WASTE AND SEWAGE SLUDGE. THE TERM
    26     ALSO INCLUDES LANDFILL METHANE GAS.
    27         (9)  FUEL CELLS, WHICH SHALL MEAN ANY ELECTROCHEMICAL
    28     DEVICE THAT CONVERTS CHEMICAL ENERGY IN A HYDROGEN-RICH FUEL
    29     DIRECTLY INTO ELECTRICITY, HEAT AND WATER WITHOUT COMBUSTION.
    30         (10)  WASTE COAL, WHICH SHALL INCLUDE THE COMBUSTION OF
    20070H1203B2343                 - 17 -     

     1     WASTE COAL IN FACILITIES IN WHICH THE WASTE COAL WAS DISPOSED
     2     OR ABANDONED PRIOR TO JULY 31, 1982, OR DISPOSED OF
     3     THEREAFTER IN A PERMITTED COAL REFUSE DISPOSAL SITE
     4     REGARDLESS OF WHEN DISPOSED OF, AND USED TO GENERATE
     5     ELECTRICITY, OR SUCH OTHER WASTE COAL COMBUSTION MEETING
     6     ALTERNATE ELIGIBILITY REQUIREMENTS ESTABLISHED BY REGULATION.
     7     FACILITIES COMBUSTING WASTE COAL SHALL USE AT A MINIMUM A
     8     COMBINED FLUIDIZED BED BOILER AND BE OUTFITTED WITH A
     9     LIMESTONE INJECTION SYSTEM AND A FABRIC FILTER PARTICULATE
    10     REMOVAL SYSTEM. ALTERNATIVE ENERGY CREDITS SHALL BE
    11     CALCULATED BASED UPON THE PROPORTION OF WASTE COAL UTILIZED
    12     TO PRODUCE ELECTRICITY AT THE FACILITY.
    13         (11)  COAL MINE METHANE, WHICH SHALL MEAN METHANE GAS
    14     EMITTING FROM ABANDONED OR WORKING COAL MINES.
    15         (12)  DEMAND-SIDE MANAGEMENT CONSISTING OF THE MANAGEMENT
    16     OF CUSTOMER CONSUMPTION OF ELECTRICITY OR THE DEMAND FOR
    17     ELECTRICITY THROUGH THE IMPLEMENTATION OF:
    18             (I)  ENERGY EFFICIENCY TECHNOLOGIES, MANAGEMENT
    19         PRACTICES OR OTHER STRATEGIES IN RESIDENTIAL, COMMERCIAL,
    20         INSTITUTIONAL OR GOVERNMENT CUSTOMERS THAT REDUCE
    21         ELECTRICITY CONSUMPTION BY THOSE CUSTOMERS;
    22             (II)  LOAD MANAGEMENT OR DEMAND RESPONSE
    23         TECHNOLOGIES, MANAGEMENT PRACTICES OR OTHER STRATEGIES IN
    24         RESIDENTIAL, COMMERCIAL, INDUSTRIAL, INSTITUTIONAL AND
    25         GOVERNMENT CUSTOMERS THAT SHIFT ELECTRIC LOAD FROM
    26         PERIODS OF HIGHER DEMAND TO PERIODS OF LOWER DEMAND; OR
    27             (III)  INDUSTRIAL BY-PRODUCT TECHNOLOGIES CONSISTING
    28         OF THE USE OF A BY-PRODUCT FROM AN INDUSTRIAL PROCESS,
    29         INCLUDING THE REUSE OF ENERGY FROM EXHAUST GASES OR OTHER
    30         MANUFACTURING BY-PRODUCTS THAT ARE USED IN THE DIRECT
    20070H1203B2343                 - 18 -     

     1         PRODUCTION OF ELECTRICITY AT THE FACILITY OF A CUSTOMER.
     2         (13)  DISTRIBUTED GENERATION SYSTEM, WHICH SHALL MEAN THE
     3     SMALL-SCALE POWER GENERATION OF ELECTRICITY AND USEFUL
     4     THERMAL ENERGY.
     5     * * *
     6     "CUSTOMER-GENERATOR."  A NONUTILITY OWNER OR OPERATOR OF A
     7  NET METERED DISTRIBUTED GENERATION SYSTEM WITH A NAMEPLATE
     8  CAPACITY OF NOT GREATER THAN 50 KILOWATTS IF INSTALLED AT A
     9  RESIDENTIAL SERVICE OR NOT LARGER THAN [1,000] 3,000 KILOWATTS
    10  AT OTHER CUSTOMER SERVICE LOCATIONS, EXCEPT FOR CUSTOMERS WHOSE
    11  SYSTEMS ARE ABOVE [ONE MEGAWATT] THREE MEGAWATTS AND UP TO [TWO]
    12  FIVE MEGAWATTS WHO MAKE THEIR SYSTEMS AVAILABLE TO OPERATE IN
    13  PARALLEL WITH THE ELECTRIC UTILITY DURING GRID EMERGENCIES AS
    14  DEFINED BY THE REGIONAL TRANSMISSION ORGANIZATION OR [WHERE A     <--
    15  MICROGRID IS IN PLACE] WHO MAKE THEIR SYSTEMS AVAILABLE FOR THE   <--
    16  PRIMARY OR SECONDARY PURPOSE OF MAINTAINING CRITICAL
    17  INFRASTRUCTURE, SUCH AS HOMELAND SECURITY ASSIGNMENTS, EMERGENCY
    18  SERVICES FACILITIES, HOSPITALS, TRAFFIC SIGNALS, WASTEWATER
    19  TREATMENT PLANTS OR TELECOMMUNICATIONS FACILITIES, PROVIDED THAT
    20  TECHNICAL RULES FOR OPERATING GENERATORS INTERCONNECTED WITH
    21  FACILITIES OF AN ELECTRIC DISTRIBUTION COMPANY, ELECTRIC
    22  COOPERATIVE OR MUNICIPAL ELECTRIC SYSTEM HAVE BEEN PROMULGATED
    23  BY THE INSTITUTE OF ELECTRICAL AND ELECTRONIC ENGINEERS AND THE
    24  PENNSYLVANIA PUBLIC UTILITY COMMISSION. A NET METERED             <--
    25  DISTRIBUTED GENERATION SYSTEM CAPABLE OF PROVIDING MORE THAN ONE
    26  MEGAWATT THROUGH ITS INTERCONNECTION SHALL COMPLY WITH ALL
    27  TECHNICAL RULES NECESSARY TO ENSURE THAT SIGNIFICANT
    28  FLUCTUATIONS IN THE ELECTRICAL SUPPLY TO THE ELECTRIC
    29  DISTRIBUTION COMPANY, ELECTRIC COOPERATIVE OR MUNICIPAL ELECTRIC
    30  SYSTEM WILL NOT INTERFERE WITH ITS OPERATIONS.
    20070H1203B2343                 - 19 -     

     1     * * *
     2     "FORCE MAJEURE."  UPON ITS OWN INITIATIVE OR UPON A REQUEST
     3  OF AN ELECTRIC DISTRIBUTION COMPANY OR AN ELECTRIC GENERATOR
     4  SUPPLIER, THE PENNSYLVANIA PUBLIC UTILITY COMMISSION, WITHIN 60
     5  DAYS, SHALL DETERMINE IF ALTERNATIVE ENERGY RESOURCES ARE
     6  REASONABLY AVAILABLE IN THE MARKETPLACE IN SUFFICIENT QUANTITIES
     7  FOR THE ELECTRIC DISTRIBUTION COMPANIES AND ELECTRIC GENERATION
     8  SUPPLIERS TO MEET THEIR OBLIGATIONS FOR THAT REPORTING PERIOD
     9  UNDER THIS ACT. IN MAKING THIS DETERMINATION THE COMMISSION
    10  SHALL CONSIDER WHETHER ELECTRIC DISTRIBUTION COMPANIES OR
    11  ELECTRIC GENERATION SUPPLIERS HAVE MADE A GOOD FAITH EFFORT TO
    12  ACQUIRE SUFFICIENT ALTERNATIVE ENERGY TO COMPLY WITH THEIR
    13  OBLIGATIONS. SUCH GOOD FAITH EFFORTS SHALL INCLUDE, BUT ARE NOT
    14  LIMITED TO, BANKING ALTERNATIVE ENERGY CREDITS DURING THEIR
    15  TRANSITION PERIODS, SEEKING ALTERNATIVE ENERGY CREDITS THROUGH
    16  COMPETITIVE SOLICITATIONS AND SEEKING TO PROCURE ALTERNATIVE
    17  ENERGY CREDITS OR ALTERNATIVE ENERGY THROUGH LONG-TERM
    18  CONTRACTS. IN FURTHER MAKING ITS DETERMINATION THE COMMISSION
    19  SHALL ASSESS THE AVAILABILITY OF ALTERNATIVE ENERGY CREDITS IN
    20  THE GENERATION ATTRIBUTES TRACKING SYSTEM (GATS) OR ITS
    21  SUCCESSOR, AND THE AVAILABILITY OF ALTERNATIVE ENERGY CREDITS
    22  GENERALLY IN PENNSYLVANIA AND OTHER JURISDICTIONS IN THE PJM
    23  INTERCONNECTION, L.L.C. REGIONAL TRANSMISSION ORGANIZATION (PJM)
    24  OR ITS SUCCESSOR. THE COMMISSION MAY ALSO REQUIRE SOLICITATIONS
    25  FOR ALTERNATIVE ENERGY CREDITS AS PART OF DEFAULT SERVICE BEFORE
    26  REQUESTS OF FORCE MAJEURE CAN BE MADE. IF THE COMMISSION FURTHER
    27  DETERMINES THAT ALTERNATIVE ENERGY RESOURCES ARE NOT REASONABLY
    28  AVAILABLE IN SUFFICIENT QUANTITIES IN THE MARKETPLACE FOR THE
    29  ELECTRIC DISTRIBUTION COMPANIES AND ELECTRIC GENERATION
    30  SUPPLIERS TO MEET THEIR OBLIGATIONS UNDER THIS ACT, THEN THE
    20070H1203B2343                 - 20 -     

     1  COMMISSION SHALL MODIFY THE UNDERLYING OBLIGATION OF THE
     2  ELECTRIC DISTRIBUTION COMPANY OR ELECTRIC GENERATION SUPPLIER OR
     3  RECOMMEND TO THE GENERAL ASSEMBLY THAT THE UNDERLYING OBLIGATION
     4  BE ELIMINATED. COMMISSION MODIFICATION OF THE ELECTRIC            <--
     5  DISTRIBUTION COMPANY OR ELECTRIC GENERATION SUPPLIER OBLIGATIONS
     6  UNDER THIS ACT SHALL BE FOR THAT COMPLIANCE PERIOD ONLY.
     7  COMMISSION MODIFICATION SHALL NOT AUTOMATICALLY REDUCE THE
     8  OBLIGATION FOR SUBSEQUENT COMPLIANCE YEARS. IF THE COMMISSION
     9  MODIFIES THE ELECTRIC DISTRIBUTION COMPANY OR ELECTRIC
    10  GENERATION SUPPLIER OBLIGATIONS UNDER THIS ACT, THE COMMISSION
    11  MAY REQUIRE THE ELECTRIC DISTRIBUTION COMPANY OR ELECTRIC
    12  GENERATION SUPPLIER TO ACQUIRE ADDITIONAL ALTERNATIVE ENERGY
    13  CREDITS IN SUBSEQUENT YEARS EQUIVALENT TO THE OBLIGATION REDUCED
    14  DUE TO A FORCE MAJEURE DECLARATION IF THE COMMISSION DETERMINES
    15  THAT SUFFICIENT ALTERNATIVE ENERGY CREDITS EXIST IN THE
    16  MARKETPLACE.
    17     * * *
    18     "NET METERING."  THE MEANS OF MEASURING THE DIFFERENCE
    19  BETWEEN THE ELECTRICITY SUPPLIED BY AN ELECTRIC UTILITY AND THE
    20  ELECTRICITY GENERATED BY A CUSTOMER-GENERATOR [WHEN THE
    21  RENEWABLE ENERGY GENERATING SYSTEM IS INTENDED PRIMARILY], WHEN
    22  ANY PORTION OF THE ELECTRICITY GENERATED BY THE ALTERNATIVE
    23  ENERGY GENERATING SYSTEM IS USED TO OFFSET PART OR ALL OF THE
    24  CUSTOMER-GENERATOR'S REQUIREMENTS FOR ELECTRICITY. VIRTUAL METER
    25  AGGREGATION ON PROPERTIES OWNED OR LEASED AND OPERATED BY A
    26  CUSTOMER-GENERATOR AND LOCATED WITHIN TWO MILES OF THE
    27  BOUNDARIES OF THE CUSTOMER-GENERATOR'S PROPERTY AND WITHIN A
    28  SINGLE ELECTRIC DISTRIBUTION COMPANY'S SERVICE TERRITORY SHALL
    29  BE ELIGIBLE FOR NET METERING. AT THE END OF EACH MONTHLY BILLING  <--
    30  PERIOD, THE ELECTRIC DISTRIBUTION COMPANY SHALL COMPENSATE THE
    20070H1203B2343                 - 21 -     

     1  CUSTOMER-GENERATOR FOR KILOWATT-HOURS GENERATED BY THE CUSTOMER-
     2  GENERATOR OVER THE AMOUNT OF KILOWATT HOURS DELIVERED BY THE
     3  ELECTRIC DISTRIBUTION COMPANY DURING THE BILLING PERIOD AT THE
     4  ELECTRIC DISTRIBUTION COMPANY'S AVOIDED COST OF WHOLESALE POWER.
     5  NO CONTRACT SHALL ABROGATE THE CUSTOMER-GENERATOR'S RIGHT TO
     6  RECEIVE THESE PAYMENTS. NO CUSTOMER GENERATOR SHALL OPERATE MORE
     7  THAN ONE ALTERNATIVE ENERGY PROJECT THAT IS ENGAGED IN VIRTUAL
     8  METER AGGREGATION WITHIN EACH OF THE ELECTRIC DISTRIBUTION
     9  COMPANY'S SERVICE TERRITORIES.
    10     * * *
    11     "TIER I ALTERNATIVE ENERGY SOURCE."  ENERGY DERIVED FROM:      <--
    12         (1)  SOLAR PHOTOVOLTAIC AND SOLAR THERMAL ENERGY.
    13         (2)  WIND POWER.
    14         (3)  LOW-IMPACT HYDROPOWER.
    15         (4)  GEOTHERMAL ENERGY.
    16         (5)  BIOLOGICALLY DERIVED METHANE GAS.
    17         (6)  FUEL CELLS.
    18         (7)  BIOMASS ENERGY.
    19         (8)  COAL MINE METHANE.
    20     * * *
    21     SECTION 2.  SECTION 3(B) AND (F) OF THE ACT ARE AMENDED AND
    22  SUBSECTION (E) IS AMENDED BY ADDING A PARAGRAPH TO READ:
    23  SECTION 3.  ALTERNATIVE ENERGY PORTFOLIO STANDARDS.
    24     * * *
    25     (B)  TIER I AND SOLAR PHOTOVOLTAIC SHARES.--
    26         (1)  TWO YEARS AFTER THE EFFECTIVE DATE OF THIS ACT, AT
    27     LEAST 1.5% OF THE ELECTRIC ENERGY SOLD BY AN ELECTRIC
    28     DISTRIBUTION COMPANY OR ELECTRIC GENERATION SUPPLIER TO
    29     RETAIL ELECTRIC CUSTOMERS IN THIS COMMONWEALTH SHALL BE
    30     GENERATED FROM TIER I ALTERNATIVE ENERGY SOURCES. EXCEPT AS
    20070H1203B2343                 - 22 -     

     1     PROVIDED IN THIS SECTION, THE MINIMUM PERCENTAGE OF ELECTRIC
     2     ENERGY REQUIRED TO BE SOLD TO RETAIL ELECTRIC CUSTOMERS FROM
     3     ALTERNATIVE ENERGY SOURCES SHALL INCREASE TO 2% THREE YEARS
     4     AFTER THE EFFECTIVE DATE OF THIS ACT. THE MINIMUM PERCENTAGE
     5     OF ELECTRIC ENERGY REQUIRED TO BE SOLD TO RETAIL ELECTRIC
     6     CUSTOMERS FROM ALTERNATIVE ENERGY SOURCES SHALL INCREASE BY
     7     AT LEAST 0.5% EACH YEAR SO THAT AT LEAST 8% OF THE ELECTRIC
     8     ENERGY SOLD BY AN ELECTRIC DISTRIBUTION COMPANY OR ELECTRIC
     9     GENERATION SUPPLIER TO RETAIL ELECTRIC CUSTOMERS IN THAT
    10     CERTIFICATED TERRITORY IN THE 15TH YEAR AFTER THE EFFECTIVE
    11     DATE OF THIS SUBSECTION IS SOLD FROM TIER I ALTERNATIVE
    12     ENERGY RESOURCES.
    13         (2)  [OF THE ELECTRIC ENERGY REQUIRED TO BE SOLD FROM
    14     TIER I SOURCES, THE TOTAL PERCENTAGE THAT MUST BE SOLD FROM
    15     SOLAR PHOTOVOLTAIC TECHNOLOGIES IS FOR:] THE TOTAL PERCENTAGE
    16     OF THE ELECTRIC ENERGY SOLD BY AN ELECTRIC DISTRIBUTION
    17     COMPANY OR ELECTRIC GENERATION SUPPLIER TO RETAIL ELECTRIC
    18     CUSTOMERS IN THIS COMMONWEALTH THAT MUST BE SOLD FROM SOLAR
    19     PHOTOVOLTAIC TECHNOLOGIES IS:
    20             [(I)  YEARS 1 THROUGH 4 - 0.0013%.
    21             (II)  YEARS 5 THROUGH 9 - 0.0203%.
    22             (III)  YEARS 10 THROUGH 14 - 0.2500%.
    23             (IV)  YEARS 15 AND THEREAFTER - 0.5000%.]
    24             (I)  0.0013% FOR JUNE 1, 2006, THROUGH MAY 31, 2007.
    25             (II)  0.0030% FOR JUNE 1, 2007, THROUGH MAY 31, 2008.
    26             (III)  0.0063% FOR JUNE 1, 2008, THROUGH MAY 31,
    27         2009.
    28             (IV)  0.0120% FOR JUNE 1, 2009, THROUGH MAY 31, 2010.
    29             (V)  0.0203% FOR JUNE 1, 2010, THROUGH MAY 31, 2011.
    30             (VI)  0.0325% FOR JUNE 1, 2011, THROUGH MAY 31, 2012.
    20070H1203B2343                 - 23 -     

     1             (VII)  0.0510% FOR JUNE 1, 2012, THROUGH MAY 31,
     2         2013.
     3             (VIII)  0.0840% FOR JUNE 1, 2013, THROUGH MAY 31,
     4         2014.
     5             (IX)  0.1440% FOR JUNE 1, 2014, THROUGH MAY 31, 2015.
     6             (X)  0.2500% FOR JUNE 1, 2015, THROUGH MAY 31, 2016.
     7             (XI)  0.2933% FOR JUNE 1, 2016, THROUGH MAY 31, 2017.
     8             (XII)  0.3400% FOR JUNE 1, 2017, THROUGH MAY 31,
     9         2018.
    10             (XIII)  0.3900% FOR JUNE 1, 2018, THROUGH MAY 31,
    11         2019.
    12             (XIV)  0.4433% FOR JUNE 1, 2019, THROUGH MAY 31,
    13         2020.
    14             (XV)  0.5000% FOR JUNE 1, 2020, AND THEREAFTER.
    15         (3)  UPON COMMENCEMENT OF THE BEGINNING OF THE 6TH
    16     REPORTING YEAR, THE COMMISSION SHALL UNDERTAKE A REVIEW OF
    17     THE COMPLIANCE BY ELECTRIC DISTRIBUTION COMPANIES AND
    18     ELECTRIC GENERATION SUPPLIERS WITH THE REQUIREMENTS OF THIS
    19     ACT. THE REVIEW SHALL ALSO INCLUDE THE STATUS OF ALTERNATIVE
    20     ENERGY TECHNOLOGIES WITHIN THIS COMMONWEALTH AND THE CAPACITY
    21     TO ADD ADDITIONAL ALTERNATIVE ENERGY RESOURCES. THE
    22     COMMISSION SHALL USE THE RESULTS OF THIS REVIEW TO RECOMMEND
    23     TO THE GENERAL ASSEMBLY ADDITIONAL COMPLIANCE GOALS BEYOND
    24     YEAR 15. THE COMMISSION SHALL WORK WITH THE DEPARTMENT IN
    25     EVALUATING THE FUTURE ALTERNATIVE ENERGY RESOURCE POTENTIAL.
    26     * * *
    27     (E)  ALTERNATIVE ENERGY CREDITS.--
    28         * * *
    29         (12)  (I)  UNLESS A CONTRACTUAL PROVISION EXPLICITLY       <--
    30     ASSIGNS ALTERNATIVE ENERGY CREDITS IN A DIFFERENT MANNER, THE
    20070H1203B2343                 - 24 -     

     1     OWNER OF THE ALTERNATIVE ENERGY SYSTEM OR A CUSTOMER-
     2     GENERATOR OWNS ANY AND ALL ALTERNATIVE ENERGY CREDITS
     3     ASSOCIATED WITH OR CREATED BY THE PRODUCTION OF ELECTRIC
     4     ENERGY BY SUCH FACILITY OR CUSTOMER, AND THE OWNER OR
     5     CUSTOMER SHALL BE ENTITLED TO SELL, TRANSFER OR TAKE ANY
     6     OTHER ACTION TO WHICH A LEGAL OWNER OF PROPERTY IS ENTITLED
     7     TO TAKE WITH RESPECT TO THE CREDITS.
     8             (II)  THIS PARAGRAPH SHALL APPLY TO ALL ALTERNATIVE    <--
     9         ENERGY CREDITS CREATED PURSUANT TO THIS ACT EXCEPT THOSE
    10         CREATED UNDER CONTRACTS WHICH WERE EXECUTED PRIOR TO THE
    11         EFFECTIVE DATE OF THIS PARAGRAPH BETWEEN AN ELECTRIC
    12         DISTRIBUTION COMPANY AND A COGENERATION FACILITY OR A
    13         SMALL POWER PRODUCTION FACILITY AS THOSE TERMS ARE
    14         DEFINED UNDER THE FEDERAL PUBLIC UTILITY REGULATORY
    15         POLICIES ACT OF 1978 (16 U.S.C. § 824A-3).
    16     (F)  ALTERNATIVE COMPLIANCE PAYMENT.--
    17         (1)  AT THE END OF EACH PROGRAM YEAR, THE PROGRAM
    18     ADMINISTRATOR SHALL PROVIDE A REPORT TO THE COMMISSION AND TO
    19     EACH COVERED ELECTRIC DISTRIBUTION COMPANY SHOWING THEIR
    20     STATUS LEVEL OF ALTERNATIVE ENERGY ACQUISITION.
    21         (2)  THE COMMISSION SHALL CONDUCT A REVIEW OF EACH
    22     DETERMINATION MADE UNDER SUBSECTIONS (B) AND (C). IF, AFTER
    23     NOTICE AND HEARING, THE COMMISSION DETERMINES THAT AN
    24     ELECTRIC DISTRIBUTION COMPANY OR ELECTRIC GENERATION SUPPLIER
    25     HAS FAILED TO COMPLY WITH SUBSECTIONS (B) AND (C), THE
    26     COMMISSION SHALL IMPOSE AN ALTERNATIVE COMPLIANCE PAYMENT ON
    27     THAT COMPANY OR SUPPLIER.
    28         (3)  THE ALTERNATIVE COMPLIANCE PAYMENT, WITH THE
    29     EXCEPTION OF THE SOLAR PHOTOVOLTAIC SHARE COMPLIANCE
    30     REQUIREMENT SET FORTH IN SUBSECTION (B)(2), SHALL BE $45
    20070H1203B2343                 - 25 -     

     1     TIMES THE NUMBER OF ADDITIONAL ALTERNATIVE ENERGY CREDITS
     2     NEEDED IN ORDER TO COMPLY WITH SUBSECTION (B) OR (C).
     3         (4)  THE ALTERNATIVE COMPLIANCE PAYMENT FOR THE SOLAR
     4     PHOTOVOLTAIC SHARE SHALL BE 200% OF THE AVERAGE MARKET VALUE
     5     OF SOLAR RENEWABLE ENERGY CREDITS SOLD DURING THE REPORTING
     6     PERIOD WITHIN THE SERVICE REGION OF THE REGIONAL TRANSMISSION
     7     ORGANIZATION, INCLUDING, WHERE APPLICABLE, THE LEVELIZED UP-
     8     FRONT REBATES RECEIVED BY SELLERS OF SOLAR RENEWABLE ENERGY
     9     CREDITS IN OTHER JURISDICTIONS IN THE PJM INTERCONNECTION,
    10     L.L.C. TRANSMISSION ORGANIZATION (PJM) OR ITS SUCCESSOR.
    11         (5)  THE COMMISSION SHALL ESTABLISH A PROCESS TO PROVIDE
    12     FOR, AT LEAST ANNUALLY, A REVIEW OF THE ALTERNATIVE ENERGY
    13     MARKET WITHIN THIS COMMONWEALTH AND THE SERVICE TERRITORIES
    14     OF THE REGIONAL TRANSMISSION ORGANIZATIONS THAT MANAGE THE
    15     TRANSMISSION SYSTEM IN ANY PART OF THIS COMMONWEALTH. THE
    16     COMMISSION WILL USE THE RESULTS OF THIS STUDY TO IDENTIFY ANY
    17     NEEDED CHANGES TO THE COST ASSOCIATED WITH THE ALTERNATIVE
    18     COMPLIANCE PAYMENT PROGRAM. IF THE COMMISSION FINDS THAT THE
    19     COSTS ASSOCIATED WITH THE ALTERNATIVE COMPLIANCE PAYMENT
    20     PROGRAM MUST BE CHANGED, THE COMMISSION SHALL PRESENT THESE
    21     FINDINGS TO THE GENERAL ASSEMBLY FOR LEGISLATIVE ENACTMENT.
    22     * * *
    23     SECTION 3.  SECTIONS 4 AND 5 OF THE ACT ARE AMENDED TO READ:
    24  SECTION 4.  PORTFOLIO REQUIREMENTS IN OTHER STATES.
    25     IF AN ELECTRIC DISTRIBUTION SUPPLIER OR ELECTRIC GENERATION
    26  COMPANY PROVIDER SELLS ELECTRICITY IN ANY OTHER STATE AND IS
    27  SUBJECT TO RENEWABLE ENERGY PORTFOLIO REQUIREMENTS IN THAT
    28  STATE, THEY SHALL LIST ANY SUCH REQUIREMENT AND SHALL INDICATE
    29  HOW IT SATISFIED THOSE RENEWABLE ENERGY PORTFOLIO REQUIREMENTS.
    30  TO PREVENT DOUBLE-COUNTING, THE ELECTRIC DISTRIBUTION SUPPLIER
    20070H1203B2343                 - 26 -     

     1  OR ELECTRIC GENERATION COMPANY SHALL NOT SATISFY PENNSYLVANIA'S
     2  ALTERNATIVE ENERGY PORTFOLIO REQUIREMENTS USING ALTERNATIVE
     3  ENERGY USED TO SATISFY ANOTHER STATE'S PORTFOLIO REQUIREMENTS[.
     4  ENERGY DERIVED ONLY FROM ALTERNATIVE ENERGY SOURCES INSIDE THE
     5  GEOGRAPHICAL BOUNDARIES OF THIS COMMONWEALTH OR WITHIN THE
     6  SERVICE TERRITORY OF ANY REGIONAL TRANSMISSION ORGANIZATION THAT
     7  MANAGES THE TRANSMISSION SYSTEM IN ANY PART OF THIS COMMONWEALTH
     8  SHALL BE ELIGIBLE TO MEET THE COMPLIANCE REQUIREMENTS UNDER THIS
     9  ACT.] OR ALTERNATIVE ENERGY CREDITS ALREADY PURCHASED BY
    10  INDIVIDUALS, BUSINESSES, OR GOVERNMENT BODIES THAT DO NOT HAVE A
    11  COMPLIANCE OBLIGATION UNDER THIS ACT UNLESS THE INDIVIDUAL,
    12  BUSINESS OR GOVERNMENT BODY SELLS THOSE CREDITS TO THE ELECTRIC
    13  DISTRIBUTION COMPANY OR ELECTRIC GENERATION SUPPLIER. ENERGY
    14  DERIVED FROM ALTERNATIVE ENERGY SOURCES INSIDE THE GEOGRAPHICAL
    15  BOUNDARIES OF THIS COMMONWEALTH SHALL BE ELIGIBLE TO MEET THE
    16  COMPLIANCE REQUIREMENTS UNDER THIS ACT. ENERGY DERIVED FROM
    17  ALTERNATIVE ENERGY SOURCES LOCATED OUTSIDE THE GEOGRAPHICAL
    18  BOUNDARIES OF THIS COMMONWEALTH BUT WITHIN THE SERVICE TERRITORY
    19  OF A REGIONAL TRANSMISSION ORGANIZATION THAT MANAGES THE
    20  TRANSMISSION SYSTEM IN ANY PART OF THIS COMMONWEALTH SHALL ONLY
    21  BE ELIGIBLE TO MEET THE COMPLIANCE REQUIREMENTS OF ELECTRIC
    22  DISTRIBUTION COMPANIES OR ELECTRIC GENERATION SUPPLIERS LOCATED
    23  WITHIN THE SERVICE TERRITORY OF THE SAME REGIONAL TRANSMISSION
    24  ORGANIZATION. FOR PURPOSES OF COMPLIANCE WITH THIS ACT,
    25  ALTERNATIVE ENERGY SOURCES LOCATED IN THE PJM INTERCONNECTION,
    26  L.L.C. REGIONAL TRANSMISSION ORGANIZATION (PJM) OR ITS SUCCESSOR
    27  SERVICE TERRITORY SHALL BE ELIGIBLE TO FULFILL COMPLIANCE
    28  OBLIGATIONS OF PIKE COUNTY LIGHT AND POWER COMPANY AND            <--
    29  PENNSYLVANIA POWER COMPANY ALL PENNSYLVANIA ELECTRIC              <--
    30  DISTRIBUTION COMPANIES AND ELECTRIC GENERATION SUPPLIERS. ENERGY
    20070H1203B2343                 - 27 -     

     1  DERIVED FROM ALTERNATIVE ENERGY SOURCES LOCATED OUTSIDE THE
     2  SERVICE TERRITORY OF A REGIONAL TRANSMISSION ORGANIZATION THAT
     3  MANAGES THE TRANSMISSION SYSTEM IN ANY PART OF THIS COMMONWEALTH
     4  SHALL NOT BE ELIGIBLE TO MEET THE COMPLIANCE REQUIREMENTS OF
     5  THIS ACT. ELECTRIC DISTRIBUTION COMPANIES AND ELECTRIC
     6  GENERATION SUPPLIERS SHALL DOCUMENT THAT THIS ENERGY WAS NOT
     7  USED TO SATISFY ANOTHER STATE'S RENEWABLE ENERGY PORTFOLIO
     8  STANDARDS.
     9  SECTION 5.  INTERCONNECTION STANDARDS FOR CUSTOMER-GENERATOR
    10                 FACILITIES.
    11     EXCESS GENERATION FROM NET-METERED CUSTOMER-GENERATORS SHALL
    12  BE "TRUED-UP" RECEIVE FULL RETAIL VALUE FOR ALL ENERGY PRODUCED   <--
    13  ON AN ANNUAL BASIS. THE COMMISSION SHALL DEVELOP TECHNICAL AND
    14  NET METERING INTERCONNECTION RULES FOR CUSTOMER-GENERATORS
    15  INTENDING TO OPERATE RENEWABLE ONSITE GENERATORS IN PARALLEL
    16  WITH THE ELECTRIC UTILITY GRID, CONSISTENT WITH RULES DEFINED IN
    17  OTHER STATES WITHIN THE SERVICE REGION OF THE REGIONAL
    18  TRANSMISSION ORGANIZATION THAT MANAGES THE TRANSMISSION SYSTEM
    19  IN ANY PART OF THIS COMMONWEALTH. THE COMMISSION SHALL CONVENE A
    20  STAKEHOLDER PROCESS TO DEVELOP STATEWIDE TECHNICAL AND NET
    21  METERING RULES FOR CUSTOMER-GENERATORS. THE COMMISSION SHALL
    22  DEVELOP THESE RULES WITHIN NINE MONTHS OF THE EFFECTIVE DATE OF
    23  THIS ACT.
    24     SECTION 3.1.  NOTWITHSTANDING THE ADDITION OF SECTION          <--
    25  3(E)(12) OF THE ACT, NOTHING IN THIS ACT IS INTENDED TO REVERSE
    26  OR MODIFY THE PENNSYLVANIA PUBLIC UTILITY COMMISSION'S ORDER
    27  DOCKET NUMBER P-00052149.
    28     SECTION 4.  THIS ACT SHALL TAKE EFFECT IMMEDIATELY.


    B22L66RLE/20070H1203B2343       - 28 -
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