THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY VITALI, ROSS, GEORGE, DePASQUALE, HARPER, FREEMAN, M. O'BRIEN, GOODMAN, CREIGHTON, MOUL, O'NEILL, MANDERINO, BELFANTI, MELIO, SANTONI, HARHART, READSHAW, GIBBONS, ADOLPH, HORNAMAN, CARROLL, MYERS, JOSEPHS, LENTZ, DeWEESE, CONKLIN, PETRI, GINGRICH, CURRY, DRUCKER, MICOZZIE, GERBER, SABATINA, KULA, MAHONEY, BARBIN, SEIP, WALKO AND CALTAGIRONE, MARCH 12, 2009

AS RE-REPORTED FROM COMMITTEE ON APPROPRIATIONS, HOUSE OF REPRESENTATIVES, AS AMENDED, JUNE 30, 2009   

AN ACT

Amending the act of November 30, 2004 (P.L.1672, No.213),

entitled, "An act providing for the sale of electric energy

generated from renewable and environmentally beneficial

sources, for the acquisition of electric energy generated

from renewable and environmentally beneficial sources by

electric distribution and supply companies and for the powers

and duties of the Pennsylvania Public Utility Commission,"

further providing for definitions and for alternative energy

portfolio standards; and providing for sequestration facility

permitting and for title to carbon dioxide, immunity and

transfer of liability; establishing the Carbon Dioxide

Indemnification Fund; providing for Commonwealth-owned carbon

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dioxide sequestration facility and transportation pipeline on

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Commonwealth State forest lands; establishing the Carbon

Sequestration Fund; and providing for application of the

Public Utility Code to transporters of carbon dioxide.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  The definition of "alternative energy sources"

and "Tier II alternative energy source" in section 2 of the act

of November 30, 2004 (P.L.1672, No.213), known as the

Alternative Energy Portfolio Standards Act, are amended by

adding paragraphs and the section is amended by adding

definitions to read:

Section 2.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

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"Alternative energy sources."  The term shall include the

following existing and new sources for the production of

electricity:

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(14)  Advanced coal combustion with limited carbon

emissions, which means the production of electric power from

a generation facility that is fueled by coal, waste coal or

gas derived from an advanced coal gasification plant or a

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plant that is retrofitted to capture carbon that:

(i)  Begins commercial operation after January 1,

2009, and captures, either in the advanced coal

gasification plant or in the electrical generation

facility, and delivers to a carbon dioxide sequestration

facility in this Commonwealth for permanent sequestration 

at least the following amount of all carbon dioxide

produced:

(A)  40% from June 1, 2015, to May 31, 2019.

(B)  60% from June 1, 2019, to May 31, 2024.

(C)  90% from June 1, 2024, and thereafter.

(D)  The requirement under clause (C) shall be

waived if commercially proven and project-financeable

technology is not available as determined by the

department.

(ii)  Has been designed to accommodate the required

additional processing equipment to produce power with a

maximum of 1,000 pounds of carbon dioxide emissions per

megawatt hour or begins commercial operation before

January 1, 2009, and captures and delivers to a carbon

dioxide sequestration facility in this Commonwealth for

permanent sequestration no less than the following amount

of carbon dioxide produced:

(A)  40% from June 1, 2015, to May 31, 2019.

(B)  60% from June 1, 2019, to May 31, 2024.

(C)  90% from June 1, 2024, and thereafter. The

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requirement under this clause shall be waived if

commercially proven and project-financeable

technology is not available, as determined by the

department.

(15)  Additional energy generated by an existing nuclear

unit as a result of an extended power uprate that has been

completed after the effective date of this paragraph and

increases a plant's nameplate capacity by more than 7% or by

100 megawatts and has a capital cost of more than

$150,000,000 and has been permitted by the United States

Nuclear Regulatory Commission.

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"Carbon dioxide."  Anthropogenically generated carbon dioxide

of sufficient purity and quality as to not compromise the

ability of the carbon dioxide transportation pipeline or

sequestration facility to safely and effectively transport and

sequester the carbon dioxide.

"Carbon dioxide sequestration facility."  Geological

subsurface formations within this Commonwealth with suitable cap

rock, sealing faults and anticline for the permanent storage of

carbon dioxide from advanced coal combustion with limited carbon

emissions facilities or other sources within this Commonwealth

along with the facilities necessary to transport the carbon

dioxide from the surface to the subsurface formations and

monitor the permanent storage of the carbon dioxide in

subsurface formations. The term shall not include use of the

carbon dioxide for enhanced resource recovery or the carbon

dioxide transportation pipelines used to transport the carbon

dioxide to the sequestration facility.

"Carbon dioxide sequestration network."  Geological

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subsurface formations within this Commonwealth with suitable cap

rock, sealing faults and anticline used by the Department of

Conservation and Natural Resources for the permanent storage of

carbon dioxide from advanced coal combustion with limited carbon

emissions plants or other sources within this Commonwealth along

with the facilities necessary to transport the carbon dioxide

from the surface to the subsurface formations and monitor the

permanent storage of the carbon dioxide in subsurface

formations. The term shall not include use of the carbon dioxide

for enhanced resource recovery.

"Carbon dioxide transportation pipeline."  A pipeline within

this Commonwealth used to transport carbon dioxide from a

facility within this Commonwealth to a carbon dioxide

sequestration facility.

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"DCNR."  The Department of Conservation and Natural Resources

of the Commonwealth.

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"Enhanced resource recovery."  The use of carbon dioxide

injection or other techniques for increasing the amount of oil,

natural gas or coal bed methane extracted from geologic

formations.

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"Person."  An individual, corporation, partnership,

association or other entity recognized by law as the subject of

rights, duties or obligations. The term includes the United

States, a Federal agency, the Commonwealth, an agency or

instrumentality of the Commonwealth and a political subdivision.

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"Solar thermal energy."  Technology utilizing solar energy

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for water heating or for generating electricity.

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"Tier II alternative energy source."  Energy derived from:

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(8)  Advanced coal combustion with limited carbon

emissions.

"Tier III alternative energy source."  Energy derived from:

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(1)  Solar photovoltaic and solar thermal energy.

(2)  Wind power.

(3)  Low-impact hydropower.

(4)  Geothermal energy.

(5)  Biologically derived methane gas.

(6)  Fuel cells.

(7)  Biomass energy.

(8)  Coal mine methane.

(9)  Advanced coal combustion with limited carbon

emissions.

(10)  Incremental nuclear, as defined in paragraph (15)

of the definition of "alternative energy sources."

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Section 2.  Section 3(a), (b), (c), (e)(6) and (7), (f) and

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(g) of the act, amended July 17, 2007 (P.L.114, No.35), are

amended and the section is amended by adding subsections to

read:

Section 3.  Alternative energy portfolio standards.

(a)  General compliance and cost recovery.--

(1)  From the effective date of this act through and

including the 15th year after enactment of this act and each

year thereafter, the electric energy sold by an electric

distribution company or electric generation supplier to

retail electric customers in this Commonwealth shall be

comprised of electricity generated from alternative energy

sources and in the percentage amounts as described under

subsections [(b) and (c)] (b), (c) and (c.1), (c.1) and (i).

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(2)  Electric distribution companies and electric

generation suppliers shall satisfy both requirements set

forth in subsections [(b) and (c)] (b), (c) and (c.1), (c.1)

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and (i), provided, however, that an electric distribution

company or an electric generation supplier shall be excused

from its obligations under this section to the extent that

the commission determines that force majeure exists.

(3)  All costs for:

(i)  the purchase of electricity generated from

alternative energy sources, including the costs of the

regional transmission organization, in excess of the

regional transmission organization real-time locational

marginal pricing, or its successor, at the delivery point

of the alternative energy source for the electrical

production of the alternative energy sources; and

(ii)  payments for alternative energy credits,in both

cases that are voluntarily acquired by an electric

distribution company during the cost recovery period on

behalf of its customers shall be deferred as a regulatory

asset by the electric distribution company and fully

recovered, with a return on the unamortized balance,

pursuant to an automatic energy adjustment clause under

66 Pa.C.S. § 1307 (relating to sliding scale of rates;

adjustments) as a cost of generation supply under 66

Pa.C.S. § 2807 (relating to duties of electric

distribution companies) in the first year after the

expiration of its cost-recovery period. After the cost-

recovery period, any direct or indirect costs for the

purchase by electric distribution of resources to comply

with this section, including, but not limited to, the

purchase of electricity generated from alternative energy

sources, payments for alternative energy credits, cost of

credits banked, payments to any third party

administrators for performance under this act and costs

levied by a regional transmission organization to ensure

that alternative energy sources are reliable, shall be

recovered on a full and current basis pursuant to an

automatic energy adjustment clause under 66 Pa.C.S. §

1307 as a cost of generation supply under 66 Pa.C.S. §

2807.

(b)  Tier I and solar [photovoltaic] shares.--

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(1)  [Two years after the effective date of this act, at

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least 1.5% of the electric energy sold by an electric

distribution company or electric generation supplier to

retail electric customers in this Commonwealth shall be

generated from Tier I alternative energy sources. Except as

provided in this section, the minimum percentage of electric

energy required to be sold to retail electric customers from

alternative energy sources shall increase to 2% three years

after the effective date of this act. The minimum percentage

of electric energy required to be sold to retail electric

customers from alternative energy sources shall increase by

at least 0.5% each year so that at least 8% of the electric

energy sold by an electric distribution company or electric

generation supplier to retail electric customers in that

certificated territory in the 15th year after the effective

date of this subsection is sold from Tier I alternative

energy resources.]

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(1.1)  After the 15th year of the effective date of this

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subsection, the The minimum percentage of electric energy

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required to be sold to retail electric customers from Tier I

alternative energy sources is:

(i)  10% for June 1, 2021, through May 31, 2022.

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(ii)  12% for June 1, 2022, through May 31, 2023.

(iii)  14% for June 1, 2023, through May 31, 2024.

(iv)  16% for June 1, 2024, through May 31, 2025.

(v)  18% for June 1, 2025, through May 31, 2026.

(vi)  20% for June 1, 2026, and thereafter.

(i)  1.5013% for June 1, 2006, through May 31, 2007.

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(ii)  1.503% for June 1, 2007, through May 31, 2008.

(iii)  2.0063% for June 1, 2008, through May 31,

2009.

(iv)  2.512% for June 1, 2009, through May 31, 2010. 

(v)  3.0203% for June 1, 2010, through May 31, 2011.

(vi)  3.5504% for June 1, 2011, through May 31, 2012.

(vii)  4.0752% for June 1, 2012, through May 31,

2013.

(viii)  4.6218% for June 1, 2013, through May 31,

2014.

(ix)  5.7016% for June 1, 2014, through May 31, 2015.

(x)  6.80% for June 1, 2015, through May 31, 2016.

(xi)  7.91% for June 1, 2016, through May 31, 2017.

(xii)  9.00% for June 1, 2017, through May 31, 2018.

(xiii)  10.12% for June 1, 2018, through May 31,

2019. 

(xiv)  11.25% for June 1, 2019, through May 31, 2020.

(xv)  12.47% for June 1, 2020, through May 31, 2021.

(xvi)  13.85% for June 1, 2021, through May 31, 2022.

(xvii)  15.40% for June 1, 2022, through May 31,

2023.

(xviii)  16.95% for June 1, 2023, through May 31,

2024.

(xix)  18.00% for June 1, 2024, and thereafter.

(1.1)  The commission shall comply with the requirements

of 66 Pa.C.S. § 2814 (relating to additional alternative

energy sources) by annually increasing the percentage share

of Tier I alternative energy sources required to be sold by

an electric distribution company or electric generation

supplier under paragraph (1) to reflect any new alternative

energy source provided for by 66 Pa.C.S. § 2814. Any annual

increase will be applied to the next compliance year

requirement.

(2)  The total percentage of the electric energy sold by

an electric distribution company or electric generation

supplier to retail electric customers in this Commonwealth

that must be sold from solar photovoltaic and solar thermal

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energy technologies is:

(i)  0.0013% for June 1, 2006, through May 31, 2007.

(ii)  0.0030% for June 1, 2007, through May 31, 2008.

(iii)  0.0063% for June 1, 2008, through May 31,

2009.

(iv)  0.0120% for June 1, 2009, through May 31, 2010.

(v)  0.0203% for June 1, 2010, through May 31, 2011.

[(vi)  0.0325% for June 1, 2011, through May 31,

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2012.

(vii)  0.0510% for June 1, 2012, through May 31,

2013.

(viii)  0.0840% for June 1, 2013, through May 31,

2014.

(ix)  0.1440% for June 1, 2014, through May 31, 2015.

(x)  0.2500% for June 1, 2015, through May 31, 2016.

(xi)  0.2933% for June 1, 2016, through May 31, 2017.

(xii)  0.3400% for June 1, 2017, through May 31,

2018.

(xiii)  0.3900% for June 1, 2018, through May 31,

2019.

(xiv)  0.4433% for June 1, 2019, through May 31,

2020.

(xv)  0.5000% for June 1, 2020, [and thereafter.] 

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through May 31, 2021.

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(xvi)  0.9000% for June 1, 2021, through May 31,

2022.

(xvii)  1.3000% for June 1, 2022, through May 31,

2023.

(xviii)  1.7000% for June 1, 2023, through May 31,

2024.

(xix)  2.1000% for June 1, 2024, through May 31,

2025.

(xx)  2.5000% for June 1, 2025, through May 31, 2026.

(xxi)  3.000% for June 1, 2026, and thereafter.

(vi)  0.0504% for June 1, 2011, through May 31, 2012.

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(vii)  0.0752% for June 1, 2012, through May 31,

2013.

(viii)  0.1218% for June 1, 2013, through May 31,

2014.

(ix)  0.2016% for June 1, 2014, through May 31, 2015.

(x)  0.3% for June 1, 2015, through May 31, 2016.

(xi)  0.41% for June 1, 2016, through May 31, 2017.

(xii)  0.5% for June 1, 2017, through May 31, 2018.

(xiii)  0.62% for June 1, 2018, through May 31, 2019.

(xiv)  0.75% for June 1, 2019, through May 31, 2020.

(xv)  0.97% for June 1, 2020, through May 31, 2021.

(xvi)  1.35% for June 1, 2021, through May 31, 2022.

(xvii)  1.9% for June 1, 2022, through May 31, 2023.

(xviii)  2.45% for June 1, 2023, through May 31,

2024.

(xix)  3% for June 1, 2024, and thereafter.

(3)  Upon commencement of the beginning of the 6th

reporting year, and every five years thereafter, the

commission shall undertake a review of the compliance by

electric distribution companies and electric generation

suppliers with the requirements of this act. The review shall

also include the status of alternative energy technologies

within this Commonwealth and the capacity to add additional

alternative energy resources. The commission shall use the

results of this review to recommend to the General Assembly

additional compliance goals beyond year [15] 21. The

commission shall work with the department in evaluating the

future alternative energy resource potential.

(4)  Electric energy from solar photovoltaic and solar

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thermal energy technologies supplied to retail customers

shall be generated from solar photovoltaic and solar thermal

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energy systems located within this Commonwealth in meeting

the requirements of paragraph (2).

(5)  Notwithstanding the other provisions of this act,

credits generated from solar photovoltaic and solar thermal

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energy technologies outside this Commonwealth may be used to

demonstrate compliance under this act provided the credit was

acquired prior to the effective date of this subsection.

(c)  Tier II share.--Of the electrical energy required to be

sold from alternative energy sources identified in Tier II, the

percentage that must be from these technologies is for:

(1)  Years 1 through 4 - 4.2%.

(2)  Years 5 through 9 - 6.2%.

(3)  Years 10 through 14 - [8.2%] 11.2%.

(4)  Years 15 and thereafter - [10.0%] 13.0%.

(c.1)  Retail sales from advanced coal combustion.--The total

electric energy sold by an electric distribution company or

electric generation supplier to retail electric customers in

this Commonwealth that shall be sold from advanced coal

combustion with limited carbon emissions is all of the electric

energy available from advanced coal combustion with limited

carbon emissions up to a maximum of 3.0% of the total electric

energy sold by an electric distribution company or electric

generation supplier to retail electric customers in this

Commonwealth for the reporting period which begins June 1, 2015,

and for each reporting period thereafter pursuant to subsection

(c). If at any time on or after June 1, 2015, the a carbon

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dioxide sequestration facility provided for under section 12, or

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other sequestration facility permitted to permanently sequester

carbon dioxide in this Commonwealth, is not operating and

capable of receiving carbon dioxide for sequestration through no

fault of an advanced coal combustion with limited carbon

emissions facility, a facility need not sequester carbon dioxide

in order to generate alternative energy credits provided:

(1)  The facility is capable of capturing to the

department's satisfaction the amount of carbon dioxide

required by paragraph (14)(ii) (14) of the definition of

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"alternative energy sources" in section 2.

(2)  The total value of the alternative energy credits

sold by the advanced coal combustion with limited carbon

emissions facility during times when the carbon dioxide

emissions from the facility are not sequestered shall not

exceed the costs that the facility incurred in installing

carbon capture equipment and in installing additional, 

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equipment necessary to process coal for carbon capture

purposes, equipment necessary to transport the carbon dioxide

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to the carbon dioxide sequestration facility and costs

incurred in connection with the operation of the facility

that are due to the capture and transportation of carbon

dioxide, as determined by the department. Costs incurred in

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installing carbon capture equipment by an advanced coal

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combustion with limited carbon emissions facility shall not

include Federal or State financial assistance received by the

facility.

(c.2)  Force majeure.--On or after December 31, 2015, if the

commission determines that construction of an advanced coal

combustion with limited carbon emissions facility has not been

commenced during a reporting period, this determination shall

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constitute force majeure, and electric distribution companies

and electric generation suppliers shall be excused from all or

part of their obligation under subsection (c.1) during that

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reporting period, provided the requirements in the definition of

"force majeure" in section 2 have been met, as determined by the

commission.

(c.3)  Long-term contracts.--Upon review and approval of the

commission, an electric distribution company may enter into a

long-term contract of up to 25 years to purchase the energy,

capacity or alternative energy credits of an advanced coal

combustion with limited carbon emissions facility. The contract

shall provide for the recovery of costs associated with carbon

capture, including, but not limited to, any fees charged by the

owner or operator of the carbon dioxide sequestration facility

or a carbon dioxide transportation pipeline. The commission

shall determine whether the contract is reasonable, taking into

consideration the following:

(1)  The price of the energy purchased under the long-

term contract. The contract shall provide that if the carbon

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dioxide sequestration facility is not operating and capable

of receiving carbon dioxide for sequestration for a period of

no less than 90 days, the price of energy under the contract

shall be reduced to account for the advanced coal combustion

with limited carbon emissions facility's reduced operating

costs.

(2)  The price of capacity purchased under the long-term

contract.

(3)  The price of alternative energy credits, provided

that the cost of an alternative energy credit purchased from

advanced coal combustion with limited carbon emissions shall

not exceed $45 per megawatt hour (MWh).

(4)  Prior to the effective date of the contract, the

value of any carbon emission credits or other credits that

the seller obtains from the advanced coal combustion with

limited carbon emissions facility.

(5)  After the effective date of the contract, the value

of any additional Federal or State carbon credits, allowances

or other financial benefits shall be reflected in the price

of the resource in a manner which recognizes savings to

customers and does not reduce the economic return to the

seller, provided that the seller demonstrates that it has

made a commercially reasonable effort to distribute any

economic incentives it has realized to electric distribution

companies. A contract approved by the commission under this

subsection shall be deemed to meet the requirements of 66

Pa.C.S. § 2807(e) (relating to duties of electric

distribution companies).

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(e)  Alternative energy credits.--

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* * *

(6)  An electric distribution company and electric

generation supplier may bank or place in reserve alternative

energy credits produced in one reporting year for compliance

in [either or both] any of the [two] four subsequent

reporting years, subject to the limitations set forth in this

subsection and provided that the electric distribution

company and electric generation supplier are in compliance

for all previous reporting years. In addition, the electric

distribution company and electric generation supplier shall

demonstrate to the satisfaction of the commission that such

credits:

(i)  were in excess of the alternative energy credits

needed for compliance in the year in which they were

generated and that such excess credits have not

previously been used for compliance under this act;

(ii)  were produced by the generation of electrical

energy by alternative energy sources and sold to retail

customers during the year in which they were generated;

and

(iii)  have not otherwise been nor will be sold,

retired, claimed or represented as part of satisfying

compliance with alternative or renewable energy portfolio

standards in other states.

(7)  An electric distribution company or an electric

generation supplier with sales that are exempted under

subsection (d) may bank credits for retail sales of

electricity generated from Tier I and Tier II sources made

prior to the end of the cost-recovery period and after the

effective date of this act. Bankable credits shall be limited

to credits associated with electricity sold from Tier I and

Tier II sources during a reporting year which exceeds the

volume of sales from such sources by an electric distribution

company or electric generation supplier during the 12-month

period immediately preceding the effective date of this act.

All credits banked under this subsection shall be available

for compliance with subsections (b) and (c) for no more than

[two] four reporting years following the conclusion of the

cost-recovery period.

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(f)  Alternative compliance payment.--

(1)  At the end of each program year, the program

administrator shall provide a report to the commission and to

each covered electric distribution company showing their

status level of alternative energy acquisition.

(2)  The commission shall conduct a review of each

determination made under subsections [(b) and (c)] (b), (c)

and (c.1), (c.1) and (i). If, after notice and hearing, the

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commission determines that an electric distribution company

or electric generation supplier has failed to comply with

subsections [(b) and (c)] (b), (c) and (c.1), (c.1) and (i),

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the commission shall impose an alternative compliance payment

on that company or supplier.

(3)  The alternative compliance payment, with the

exception of the solar [photovoltaic] share compliance

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requirement set forth in subsection (b)(2), shall be $45

times the number of additional alternative energy credits

needed in order to comply with subsection (b) or (c).

(4)  [The alternative compliance payment for the solar

photovoltaic share shall be 200% of the average market value

of solar renewable energy credits sold during the reporting

period within the service region of the regional transmission

organization, including, where applicable, the levelized up-

front rebates received by sellers of solar renewable energy

credits in other jurisdictions in the PJM Interconnection,

L.L.C. transmission organization (PJM) or its successor.] The

alternative compliance payment for the solar photovoltaic 

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alternative share shall be established by the commission in

an amount and for a period of years necessary to promote the

market for solar photovoltaic alternative energy credits. The

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alternative compliance payment for the solar photovoltaic 

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share may vary over the time period established by the

commission but shall be at least 200% of the average market

value for solar photovoltaic alternative energy credits sold

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within the service region of the PJM Interconnection, L.L.C.

transmission organization in the year prior to the

establishment of the alternative compliance payment schedule.

The commission shall review the solar photovoltaic 

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alternative compliance payment schedule at least once per

year and shall establish an alternative compliance payment

schedule for additional years as needed to promote the market

for solar photovoltaic alternative energy credits.

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(5)  The commission shall establish a process to provide

for, at least annually, a review of the alternative energy

market within this Commonwealth and the service territories

of the regional transmission organizations that manage the

transmission system in any part of this Commonwealth. The

commission will use the results of this study to identify any

needed changes to the cost associated with the alternative

compliance payment program. If the commission finds that the

costs associated with the alternative compliance payment

program must be changed, the commission shall present these

findings to the General Assembly for legislative enactment.

(g)  Transfer to sustainable development funds.--

(1)  Notwithstanding the provisions of 66 Pa.C.S. §§ 511

(relating to disposition, appropriation and disbursement of

assessments and fees) and 3315 (relating to disposition of

fines and penalties), alternative compliance payments imposed

pursuant to this act shall be paid into Pennsylvania's

Sustainable Energy Funds created under the commission's

restructuring orders under 66 Pa.C.S. Ch. 28 (relating to

restructuring of electric utility industry). Alternative

compliance payments shall be paid into a special fund of the

Pennsylvania Sustainable Energy Board, established by the

commission under Docket M-00031715, and made available to the

Regional Sustainable Energy Funds under procedures and

guidelines approved by the Pennsylvania Energy Board.

(2)  The alternative compliance payments shall be

utilized solely for projects that will increase the amount of

electric energy generated from alternative energy resources

for purposes of compliance with subsections [(b) and (c)] 

(b), (c) and (c.1), (c.1) and (i).

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* * *

(i)  Tier III share.--The requirements of this subsection are

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separate and additional to the requirements of subsections (b),

(c) and (c.1).

(1)  The percentage of the electric energy required to be

sold by an electric distribution company or electric

generation supplier to retail electric customers in this

Commonwealth that shall be sold from alternative energy

sources identified in Tier III is:

(i)  3% for June 1, 2015, through May 31, 2016.

(ii)  3.5% for June 1, 2016, through May 31, 2017.

(iii)  4% for June 1, 2017, through May 31, 2018.

(iv)  4.5% for June 1, 2018, through May 31, 2019.

(v)  5% for June 1, 2019, through May 31, 2020.

(vi)  5.5% for June 1, 2020, through May 31, 2021.

(vii)  6% for June 1, 2021, through May 31, 2022.

(viii)  6.5% for June 1, 2022, through May 31, 2023.

(ix)  7% for June 1, 2023, through May 31, 2024.

(x)  7% for June 1, 2024, and thereafter.

(2)  Incremental nuclear energy shall supply not more

than 50% of the electric energy required by tier III in any

compliance year.

(3)  Electric distribution companies and electric

generation suppliers shall be excused from their obligations

under this subsection to the extent that the commission

determines that force majeure exists, provided the

requirements in the definition of "force majeure" in section

2 have been met.

Section 3.  The act is amended by adding sections to read:

Section 8.1.  Sequestration facility permitting.

(a)  Prohibition.--No person may operate a carbon dioxide

sequestration facility without a permit from the department.

(b)  Facility sites.--The Environmental Quality Board shall,

by regulation, establish the conditions under which a carbon

dioxide sequestration facility may be located, developed and

operated. The regulations promulgated by the board shall provide

for the protection of public health, safety and environment and

shall include, but not be limited to, the following:

(1)  Geologic site characterization.

(2)  Sequestration facility performance standards.

(3)  Well location restrictions and well construction

standards, including operation and mechanical integrity

testing.

(4)  Risk assessment, corrective action and emergency

response requirements.

(5)  Monitoring, recordkeeping and reporting

requirements.

(6)  Facility closure, postclosure and final closure

certification requirements.

(7)  Financial assurance requirements, including bonding

or insurance, in amounts sufficient to ensure the carbon

sequestration facility will be constructed, operated, closed

and monitored during the postclosure period in accordance

with regulations promulgated under this section.

(8)  Fees in an amount sufficient to recover the

department's cost of administering this section.

(9)  Fees for every ton of carbon dioxide accepted by a

carbon dioxide sequestration facility in an amount sufficient

to monitor and maintain the facility after final closure of

the facility and take remedial actions if necessary after

final closure of the facility. The fees shall be paid by the

operator of a carbon dioxide sequestration facility to the

department on a quarterly basis.

(10)  Public notice requirements, including notification

of a release.

(11)  Criteria used to determine that carbon dioxide has

been permanently sequestered.

(12)  Other requirements necessary to evaluate the

proposed carbon dioxide sequestration facility and to ensure

safe and environmentally protective operation of the

facility.

(c)  Powers, duties and enforcement authority of

department.--The department shall have the same powers, duties

and enforcement authority provided by the act of July 7, 1980

(P.L.380, No.97), known as the Solid Waste Management Act, to

carry out the purposes of this section. Operators of a carbon

dioxide sequestration facility shall have the same rights and be

subject to the same penalties as provided by the Solid Waste

Management Act; however, an administrative penalty assessed by

the department for a violation of this section shall not exceed

$50,000 per day per violation.

Section 8.2.  Title to carbon dioxide, immunity and transfer of

liability.

(a)  Title to carbon dioxide.--The right, title and interest

in and to carbon dioxide delivered to a carbon dioxide

sequestration facility by the advanced coal combustion with

limited carbon emission facilities that, individually or

collectively, first meet the maximum requirements of section

3(c.1), as determined by the department, shall be transferred to

the carbon dioxide sequestration facility and the facility shall

accept and receive the right, title and interest in and to such

carbon dioxide, including, but not limited to, liabilities

associated with the carbon dioxide, current or future

environmental benefits, marketing claims, associated voluntary

or compliance-based emissions allocations or offsets, but not

alternative energy credits provided by section 3(e).

(b)  Immunity.--Upon and after transfer and conveyance of

carbon dioxide as provided under subsection (a), the owner of an

advanced coal combustion plant with limited carbon emissions

shall be immune from liabilities regarding the storage of carbon

dioxide within and the release, escape or migration of carbon

dioxide from the carbon dioxide sequestration facility.

(c)  Transfer of liability.--Upon final closure of a carbon

dioxide sequestration facility, as determined by the department,

the right, title or interest in the carbon dioxide and liability

for any release from the facility shall be transferred to and

accepted by the Commonwealth provided the operator of the carbon

dioxide sequestration facility has paid the appropriate fees

under section 8.1.

Section 8.3.  Carbon Dioxide Indemnification Fund.

(a)  Establishment.--There is hereby established in the State

Treasury a nonlapsing fund to be known as the Carbon Dioxide

Indemnification Fund. Money collected by the department under

section 8.1(b)(9) shall be deposited in the fund and shall only

be expended by the department to monitor and maintain carbon

dioxide sequestration facilities after final closure and to take

remedial actions, if necessary, after final closure.

(b)  Money collected under section 8.1.--Fines, civil

penalties and permit fees collected by the department under

section 9 are hereby appropriated to the department to carry out

the purposes of section 8.1.

Section 8.4.  Commonwealth-owned carbon Carbon dioxide

<--

sequestration facility and transportation pipeline on

<--

Commonwealth State forest lands.

(a)  Development and operation.--DCNR may develop and operate 

<--

lease State forest land owned by the Commonwealth to any person,

<--

on terms and conditions as DCNR may consider appropriate, for

the development and operation of a carbon dioxide sequestration

facility and carbon dioxide transportation pipeline necessary to

deliver carbon dioxide to the facility, which may be located on

<--

State forest land or on other land acquired by DCNR, on behalf

of the Commonwealth, for such purpose by purchase, gift, lease

or condemnation. A carbon dioxide sequestration facility or

carbon dioxide transportation pipeline developed and operated by

<--

DCNR on Commonwealth State forest lands shall only be utilized

<--

to store carbon dioxide generated within this Commonwealth. All

<--

rents and other payments from any lease of Commonwealth State

forest land under this section shall be deposited into the

Environmental Stewardship Fund established in 27 Pa.C.S. § 6104

(relating to fund).

(b)  Fees.--DCNR shall collect reasonable fees from entities

<--

that deposit in or otherwise utilize a carbon dioxide

sequestration facility or a carbon dioxide transportation

pipeline owned by the Commonwealth. DCNR shall enter into an

agreement with entities seeking to use the Commonwealth facility

or pipeline establishing the terms and conditions for such use

and the payment of appropriate fees prior to the deposit of any

carbon dioxide into the carbon dioxide transportation pipeline

or sequestration facility. Fees shall be established to recover

the total cost, less nonreimbursable Federal funding, of

developing and operating the carbon dioxide sequestration

facility or transportation pipeline. Recoverable costs shall

include, but are not limited to, the cost to acquire or obtain

the right to use geologic formations or facilities required for

the carbon dioxide sequestration facility or rights-of-way for

the carbon dioxide transportation pipeline, construction costs,

insurance costs and other costs to operate and maintain the

sequestration facility or transportation pipeline.

(c)  Establishment of fund.--Prior to the receipt of fees by

DCNR for the delivery of carbon dioxide through a carbon dioxide

transportation pipeline or deposit of carbon dioxide into a

carbon dioxide sequestration facility, the State Treasury shall

establish a nonlapsing fund to be known as the Carbon

Sequestration Fund. Money deposited into this fund is

specifically appropriated to DCNR to carry out activities

related to any Commonwealth-owned carbon dioxide transportation

pipeline or carbon dioxide sequestration facility performed by

DCNR at the discretion of the Secretary of Conservation and

Natural Resources.

(d)  Contracting and insuring.--DCNR may enter into contracts

for the development and operation of the carbon dioxide

sequestration facility or transportation pipeline. DCNR and the

Department of General Services shall determine the appropriate

method to insure the operation of the carbon dioxide

sequestration facility or transportation pipeline and shall

insure the operation as deemed appropriate. In no event,

however, shall the Commonwealth indemnify the developer or

operator of the carbon dioxide sequestration facility or

transportation pipeline from liability where the actions of the

developer or operator constitute gross negligence or intentional

misconduct.

Section 8.5.  Application of the Public Utility Code to

transporters of carbon dioxide.

Entities transporting or conveying carbon dioxide by pipeline

or conduit for compensation under this act shall be considered a

public utility under 66 Pa.C.S. § 102 (relating to definitions)

and subject to the provisions of 66 Pa.C.S. (relating to public

utilities).

Section 4.  The provisions of this act are severable. If any

provision of this act or its application to any person or

circumstance is held invalid, the invalidity shall not affect

other provisions or applications of this act which can be given

effect without the invalid provision or application.

Section 5.  This act shall take effect immediately.