PRINTER'S NO. 2457
No. 1427 Session of 2007
INTRODUCED BY BENNINGTON, SIPTROTH, HARPER, WAGNER, VITALI, READSHAW, FRANKEL, CONKLIN, GEORGE, LEACH, MUNDY, M. O'BRIEN, CALTAGIRONE, GRUCELA, HORNAMAN, LEVDANSKY, McCALL, McGEEHAN, RUBLEY AND KULA, SEPTEMBER 19, 2007
REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY, SEPTEMBER 19, 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 defining "Tier III alternative energy resource"; and further
9 providing for alternative energy portfolio standards.
10 The General Assembly of the Commonwealth of Pennsylvania
11 hereby enacts as follows:
12 Section 1. Section 2 of the act of November 30, 2004
13 (P.L.1672, No.213), known as the Alternative Energy Portfolio
14 Standards Act, is amended by adding a definition to read:
15 Section 2. Definitions.
16 The following words and phrases when used in this act shall
17 have the meanings given to them in this section unless the
18 context clearly indicates otherwise:
19 * * *
20 "Tier III alternative energy resource." Energy use avoided
1 through energy efficiency, conservation or any like reduction in 2 the rate of energy used that is obtained by substituting 3 technologically more advanced equipment to produce the same 4 level of output using less electricity; adoption of technologies 5 and processes that reduce heat or other energy losses; or 6 reorganization of processes to make use of waste heat. 7 * * * 8 Section 2. Section 3(a) and (b) of the act, amended July 17, 9 2007 (P.L.114, No.35), are amended and the section is amended by 10 adding a subsection to read: 11 Section 3. Alternative energy portfolio standards. 12 (a) General compliance and cost recovery.-- 13 (1) From the effective date of this act through and 14 including the [15th] 21st year after enactment of this act 15 and each year thereafter, the electric energy sold by an 16 electric distribution company or electric generation supplier 17 to retail electric customers in this Commonwealth shall be 18 comprised of electricity generated from alternative energy 19 sources and in the percentage amounts as described under 20 subsections (b) and (c). 21 (2) Electric distribution companies and electric 22 generation suppliers shall satisfy both requirements set 23 forth in subsections (b) and (c), provided, however, that an 24 electric distribution company or an electric generation 25 supplier shall be excused from its obligations under this 26 section to the extent that the commission determines that 27 force majeure exists. 28 (3) All costs for: 29 (i) the purchase of electricity generated from 30 alternative energy sources, including the costs of the 20070H1427B2457 - 2 -
1 regional transmission organization, in excess of the 2 regional transmission organization real-time locational 3 marginal pricing, or its successor, at the delivery point 4 of the alternative energy source for the electrical 5 production of the alternative energy sources; and 6 (ii) payments for alternative energy credits, 7 in both cases that are voluntarily acquired by an electric 8 distribution company during the cost recovery period on 9 behalf of its customers shall be deferred as a regulatory 10 asset by the electric distribution company and fully 11 recovered, with a return on the unamortized balance, pursuant 12 to an automatic energy adjustment clause under 66 Pa.C.S. § 13 1307 (relating to sliding scale of rates; adjustments) as a 14 cost of generation supply under 66 Pa.C.S. § 2807 (relating 15 to duties of electric distribution companies) in the first 16 year after the expiration of its cost-recovery period. After 17 the cost-recovery period, any direct or indirect costs for 18 the purchase by electric distribution of resources to comply 19 with this section, including, but not limited to, the 20 purchase of electricity generated from alternative energy 21 sources, payments for alternative energy credits, cost of 22 credits banked, payments to any third party administrators 23 for performance under this act and costs levied by a regional 24 transmission organization to ensure that alternative energy 25 sources are reliable, shall be recovered on a full and 26 current basis pursuant to an automatic energy adjustment 27 clause under 66 Pa.C.S. § 1307 as a cost of generation supply 28 under 66 Pa.C.S. § 2807. 29 (b) Tier I and solar photovoltaic shares.-- 30 (1) Two years after the effective date of this act, at 20070H1427B2457 - 3 -
1 least 1.5% of the electric energy sold by an electric 2 distribution company or electric generation supplier to 3 retail electric customers in this Commonwealth shall be 4 generated from Tier I alternative energy sources. Except as 5 provided in this section, the minimum percentage of electric 6 energy required to be sold to retail electric customers from 7 alternative energy sources shall increase to 2% three years 8 after the effective date of this act. The minimum percentage 9 of electric energy required to be sold to retail electric 10 customers from alternative energy sources shall increase by 11 at least 0.5% each year so that at least [8%] 6% of the 12 electric energy sold by an electric distribution company or 13 electric generation supplier to retail electric customers in 14 that certificated territory in the [15th] 7th year after the 15 effective date of this subsection is sold from Tier I 16 alternative energy resources. The minimum percentage of 17 electric energy required to be sold to retail electric 18 customers from alternative energy sources shall increase by 19 at least 1.357% each year beginning in the 8th year after the 20 effective date of this act so that at least 25% of the 21 electric energy sold by an electric distribution company or 22 electric generation supplier to retail electric customers in 23 that certified territory in the 21st year after the effective 24 date of this act is sold from Tier I alternative energy 25 sources. As enumerated in subsection (c.1), a specified 26 portion of Tier III alternative energy resources may be 27 substituted for Tier I energy resources beginning in years 12 28 through 21. 29 (2) The total percentage of the electric energy sold by 30 an electric distribution company or electric generation 20070H1427B2457 - 4 -
1 supplier to retail electric customers in this Commonwealth 2 that must be sold from solar photovoltaic technologies is: 3 (i) 0.0013% for June 1, 2006, through May 31, 2007. 4 (ii) 0.0030% for June 1, 2007, through May 31, 2008. 5 (iii) 0.0063% for June 1, 2008, through May 31, 6 2009. 7 (iv) 0.0120% for June 1, 2009, through May 31, 2010. 8 (v) 0.0203% for June 1, 2010, through May 31, 2011. 9 (vi) 0.0325% for June 1, 2011, through May 31, 2012. 10 (vii) 0.0510% for June 1, 2012, through May 31, 11 2013. 12 (viii) 0.0840% for June 1, 2013, through May 31, 13 2014. 14 (ix) 0.1440% for June 1, 2014, through May 31, 2015. 15 (x) 0.2500% for June 1, 2015, through May 31, 2016. 16 (xi) 0.2933% for June 1, 2016, through May 31, 2017. 17 (xii) 0.3400% for June 1, 2017, through May 31, 18 2018. 19 (xiii) 0.3900% for June 1, 2018, through May 31, 20 2019. 21 (xiv) 0.4433% for June 1, 2019, through May 31, 22 2020. 23 (xv) 0.5000% for June 1, 2020, [and thereafter] 24 through May 31, 2021. 25 (xvi) 0.6500% for June 1, 2021, through May 31, 26 2022. 27 (xvii) 0.8000% for June 1, 2022, through May 31, 28 2023. 29 (xviii) 0.9500% for June 1, 2023, through May 31, 30 2024. 20070H1427B2457 - 5 -
1 (xix) 1.100% for June 1, 2024, through May 31, 2025. 2 (xx) 1.2500% for June 1, 2025, through May 31, 2026. 3 (xxi) 1.5000% for June 1, 2026, and thereafter. 4 (3) Upon commencement of the beginning of the 6th 5 reporting year, the commission shall undertake a review of 6 the compliance by electric distribution companies and 7 electric generation suppliers with the requirements of this 8 act. The review shall also include the status of alternative 9 energy technologies within this Commonwealth and the capacity 10 to add additional alternative energy resources. The 11 commission shall use the results of this review to recommend 12 to the General Assembly additional compliance goals beyond 13 year [15] 21. The commission shall work with the department 14 in evaluating the future alternative energy resource 15 potential. 16 * * * 17 (c.1) Tier III share.-- 18 (1) Beginning in year 12, each electric distribution 19 company or electrical generation supplier must acquire cost- 20 effective energy efficiency savings equivalent to at least 21 the following percentage of electrical energy sold. The 22 following are the maximum percentages that may be substituted 23 for the Tier I share: 24 (i) Year 12 - 0.5000%. 25 (ii) Year 13 - 1.000%. 26 (iii) Year 14 - 1.500%. 27 (iv) Year 15 - 2.000%. 28 (v) Year 16 - 2.500%. 29 (vi) Year 17 - 3.000%. 30 (vii) Year 18 - 3.500%. 20070H1427B2457 - 6 -
1 (viii) Year 19 - 4.000%. 2 (ix) Year 20 - 4.500%. 3 (x) Year 21 - 5.000%. 4 (2) The electric distribution company or electrical 5 generation supplier shall achieve these shares through the 6 implementation of direct market-based energy efficiency 7 programs, market transformation programs offered directly to 8 customers in their service territory or by entering into 9 contracts with energy efficiency service providers to acquire 10 cost-effective energy savings. 11 (3) All savings must be verified in accordance with this 12 paragraph. Each project or program shall include an industry 13 accepted measurement and verification protocol approved by 14 the commission as part of the detailed energy efficiency plan 15 that will be used to measure and verify energy and peak 16 demand savings to ensure that the goals of this section are 17 achieved. The following apply: 18 (i) The energy efficiency service provider is 19 responsible for the measurement of energy and peak demand 20 savings using the approved measurement and verification 21 protocol and may utilize the services of an independent 22 third party for such purposes. 23 (ii) Commission-approved deemed energy and peak 24 demand savings may substitute for the energy efficiency 25 service provider's measurement and verification where 26 applicable. 27 (iii) Each customer shall sign a certification 28 indicating that the measures contracted for were 29 installed before final payment is made to the energy 30 efficiency service provider. 20070H1427B2457 - 7 -
1 * * * 2 Section 3. This act shall take effect in 90 days. I14L66JAM/20070H1427B2457 - 8 -