1Repealing the act of November 30, 2004 (P.L.1672, No.213),
2entitled, "An act providing for the sale of electric energy
3generated from renewable and environmentally beneficial
4sources, for the acquisition of electric energy generated
5from renewable and environmentally beneficial sources by
6electric distribution and supply companies and for the powers
7and duties of the Pennsylvania Public Utility Commission."

8The General Assembly of the Commonwealth of Pennsylvania
9hereby enacts as follows:

10Section 1. The title and section 1 of the act of November 
1130, 2004 (P.L.1672, No.213), known as the Alternative Energy 
12Portfolio Standards Act, are repealed:

13[AN ACT

14Providing for the sale of electric energy generated from
15renewable and environmentally beneficial sources, for the
16acquisition of electric energy generated from renewable and
17environmentally beneficial sources by electric distribution
18and supply companies and for the powers and duties of the
19Pennsylvania Public Utility Commission.

20Section 1. Short title.

1This act shall be known and may be cited as the Alternative
2Energy Portfolio Standards Act.]

3Section 2. Sections 2, 3, 4 and 5 of the act, amended July
417, 2007 (P.L.114, No.35), are repealed:

5[Section 2. Definitions.

6The following words and phrases when used in this act shall
7have the meanings given to them in this section unless the
8context clearly indicates otherwise:

9"Alternative energy credit." A tradable instrument that is
10used to establish, verify and monitor compliance with this act.
11A unit of credit shall equal one megawatt hour of electricity
12from an alternative energy source. The alternative energy credit
13shall remain the property of the alternative energy system until
14the alternative energy credit is voluntarily transferred by the
15alternative energy system.

16"Alternative energy portfolio standards." Standards
17establishing that a certain amount of energy sold from
18alternative energy sources is included as part of the sources of
19electric generation by electric utilities within this
20Commonwealth.

21"Alternative energy sources." The term shall include the
22following existing and new sources for the production of
23electricity:

24(1) Solar photovoltaic or other solar electric energy.

25(2) Solar thermal energy.

26(3) Wind power.

27(4) Large-scale hydropower, which shall mean the
28production of electric power by harnessing the hydroelectric
29potential of moving water impoundments, including pumped
30storage that does not meet the requirements of low-impact

1hydropower under paragraph (5).

2(5) Low-impact hydropower consisting of any technology
3that produces electric power and that harnesses the
4hydroelectric potential of moving water impoundments,
5provided such incremental hydroelectric development:

6(i) does not adversely change existing impacts to
7aquatic systems;

8(ii) meets the certification standards established
9by the Low Impact Hydropower Institute and American
10Rivers, Inc., or their successors;

11(iii) provides an adequate water flow for protection
12of aquatic life and for safe and effective fish passage;

13(iv) protects against erosion; and

14(v) protects cultural and historic resources.

15(6) Geothermal energy, which shall mean electricity
16produced by extracting hot water or steam from geothermal
17reserves in the earth's crust and supplied to steam turbines
18that drive generators to produce electricity.

19(7) Biomass energy, which shall mean the generation of
20electricity utilizing the following:

21(i) organic material from a plant that is grown for
22the purpose of being used to produce electricity or is
23protected by the Federal Conservation Reserve Program
24(CRP) and provided further that crop production on CRP
25lands does not prevent achievement of the water quality
26protection, soil erosion prevention or wildlife
27enhancement purposes for which the land was primarily set
28aside; or

29(ii) any solid nonhazardous, cellulosic waste
30material that is segregated from other waste materials,

1such as waste pallets, crates and landscape or right-of-
2way tree trimmings or agricultural sources, including
3orchard tree crops, vineyards, grain, legumes, sugar and
4other crop by-products or residues.

5(8) Biologically derived methane gas, which shall
6include methane from the anaerobic digestion of organic
7materials from yard waste, such as grass clippings and
8leaves, food waste, animal waste and sewage sludge. The term
9also includes landfill methane gas.

10(9) Fuel cells, which shall mean any electrochemical
11device that converts chemical energy in a hydrogen-rich fuel
12directly into electricity, heat and water without combustion.

13(10) Waste coal, which shall include the combustion of
14waste coal in facilities in which the waste coal was disposed
15or abandoned prior to July 31, 1982, or disposed of
16thereafter in a permitted coal refuse disposal site
17regardless of when disposed of, and used to generate
18electricity, or such other waste coal combustion meeting
19alternate eligibility requirements established by regulation.
20Facilities combusting waste coal shall use at a minimum a
21combined fluidized bed boiler and be outfitted with a
22limestone injection system and a fabric filter particulate
23removal system. Alternative energy credits shall be
24calculated based upon the proportion of waste coal utilized
25to produce electricity at the facility.

26(11) Coal mine methane, which shall mean methane gas
27emitting from abandoned or working coal mines.

28(12) Demand-side management consisting of the management
29of customer consumption of electricity or the demand for
30electricity through the implementation of:

1(i) energy efficiency technologies, management
2practices or other strategies in residential, commercial,
3institutional or government customers that reduce
4electricity consumption by those customers;

5(ii) load management or demand response
6technologies, management practices or other strategies in
7residential, commercial, industrial, institutional and
8government customers that shift electric load from
9periods of higher demand to periods of lower demand; or

10(iii) industrial by-product technologies consisting
11of the use of a by-product from an industrial process,
12including the reuse of energy from exhaust gases or other
13manufacturing by-products that are used in the direct
14production of electricity at the facility of a customer.

15(13) Distributed generation system, which shall mean the
16small-scale power generation of electricity and useful
17thermal energy.

18"Alternative energy system." A facility or energy system
19that uses a form of alternative energy source to generate
20electricity and delivers the electricity it generates to the
21distribution system of an electric distribution company or to
22the transmission system operated by a regional transmission
23organization.

24"Commission." The Pennsylvania Public Utility Commission.

25"Cost-recovery period." The longer of:

26(1) the period during which competitive transition
27charges under 66 Pa.C.S § 2808 (relating to competitive
28transition charge) or intangible transition charges under 66 
29Pa.C.S. § 2812 (relating to approval of transition bonds) are
30recovered; or

1(2) the period during which an electric distribution
2company operates under a Pennsylvania Public Utility
3Commission-approved generation rate plan that has been
4approved prior to or within one year of the effective date of
5this act, but in no case shall the cost-recovery period under
6this act extend beyond December 31, 2010.

7"Customer-generator." A nonutility owner or operator of a
8net metered distributed generation system with a nameplate
9capacity of not greater than 50 kilowatts if installed at a
10residential service or not larger than 3,000 kilowatts at other
11customer service locations, except for customers whose systems
12are above three megawatts and up to five megawatts who make
13their systems available to operate in parallel with the electric
14utility during grid emergencies as defined by the regional
15transmission organization or where a microgrid is in place for
16the primary or secondary purpose of maintaining critical
17infrastructure, such as homeland security assignments, emergency
18services facilities, hospitals, traffic signals, wastewater
19treatment plants or telecommunications facilities, provided that
20technical rules for operating generators interconnected with
21facilities of an electric distribution company, electric
22cooperative or municipal electric system have been promulgated
23by the Institute of Electrical and Electronic Engineers and the
24Pennsylvania Public Utility Commission.

25"Department." The Department of Environmental Protection of
26the Commonwealth.

27"Electric distribution company." The term shall have the
28same meaning given to it in 66 Pa.C.S. Ch. 28 (relating to
29restructuring of electric utility industry).

30"Electric generation supplier." The term shall have the same

1meaning given to it in 66 Pa.C.S. Ch. 28 (relating to
2restructuring of electric utility industry).

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

1suppliers to meet their obligations under this act, then the
2commission shall modify the underlying obligation of the
3electric distribution company or electric generation supplier or
4recommend to the General Assembly that the underlying obligation
5be eliminated. Commission modification of the electric
6distribution company or electric generation supplier obligations
7under this act shall be for that compliance period only.
8Commission modification shall not automatically reduce the
9obligation for subsequent compliance years. If the commission
10modifies the electric distribution company or electric
11generation supplier obligations under this act, the commission
12may require the electric distribution company or electric
13generation supplier to acquire additional alternative energy
14credits in subsequent years equivalent to the obligation reduced
15due to a force majeure declaration if the commission determines
16that sufficient alternative energy credits exist in the
17marketplace.

18"Municipal solid waste." This will include energy from
19existing waste to energy facilities which the Department of
20Environmental Protection has determined are in compliance with
21current environmental standards, including, but not limited to,
22all applicable requirements of the Clean Air Act (69 Stat. 322, 
2342 U.S.C. § 7401 et seq.) and associated permit restrictions and
24all applicable requirements of the act of July 7, 1980 (P.L.380, 
25No.97), known as the Solid Waste Management Act.

26"Net metering." The means of measuring the difference
27between the electricity supplied by an electric utility and the
28electricity generated by a customer-generator when any portion
29of the electricity generated by the alternative energy
30generating system is used to offset part or all of the customer-

1generator's requirements for electricity. Virtual meter
2aggregation on properties owned or leased and operated by a
3customer-generator and located within two miles of the
4boundaries of the customer-generator's property and within a
5single electric distribution company's service territory shall
6be eligible for net metering.

7"Regional transmission organization." An entity approved by
8the Federal Energy Regulatory Commission (FERC) that is created
9to operate and manage the electrical transmission grids of the
10member electric transmission utilities as required under FERC
11Order 2000, Docket No. RM99-2-000, FERC Chapter 31.089 (1999) or
12any successor organization approved by the FERC.

13"Reporting period." The 12-month period from June 1 through
14May 31. A reporting year shall be numbered according to the
15calendar year in which it begins and ends.

16"Retail electric customer." The term shall have the same
17meaning given to it in 66 Pa.C.S. Ch. 28 (relating to
18restructuring of electric utility industry).

19"Tier I alternative energy source." Energy derived from:

20(1) Solar photovoltaic and solar thermal energy.

21(2) Wind power.

22(3) Low-impact hydropower.

23(4) Geothermal energy.

24(5) Biologically derived methane gas.

25(6) Fuel cells.

26(7) Biomass energy.

27(8) Coal mine methane.

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

29(1) Waste coal.

30(2) Distributed generation systems.

1(3) Demand-side management.

2(4) Large-scale hydropower.

3(5) Municipal solid waste.

4(6) Generation of electricity utilizing by-products of
5the pulping process and wood manufacturing process, including
6bark, wood chips, sawdust and lignin in spent pulping
7liquors.

8(7) Integrated combined coal gasification technology.

9"True-up period." The period each year from the end of the
10reporting year until September 1.

11Section 3. Alternative energy portfolio standards.

12(a) General compliance and cost recovery.--

13(1) From the effective date of this act through and
14including the 15th year after enactment of this act and each
15year thereafter, the electric energy sold by an electric
16distribution company or electric generation supplier to
17retail electric customers in this Commonwealth shall be
18comprised of electricity generated from alternative energy
19sources and in the percentage amounts as described under
20subsections (b) and (c).

21(2) Electric distribution companies and electric
22generation suppliers shall satisfy both requirements set
23forth in subsections (b) and (c), provided, however, that an
24electric distribution company or an electric generation
25supplier shall be excused from its obligations under this
26section to the extent that the commission determines that
27force majeure exists.

28(3) All costs for:

29(i) the purchase of electricity generated from
30alternative energy sources, including the costs of the

1regional transmission organization, in excess of the
2regional transmission organization real-time locational
3marginal pricing, or its successor, at the delivery point
4of the alternative energy source for the electrical
5production of the alternative energy sources; and

6(ii) payments for alternative energy credits, in
7both cases that are voluntarily acquired by an electric
8distribution company during the cost recovery period on
9behalf of its customers shall be deferred as a regulatory
10asset by the electric distribution company and fully
11recovered, with a return on the unamortized balance,
12pursuant to an automatic energy adjustment clause under
1366 Pa.C.S. § 1307 (relating to sliding scale of rates;
14adjustments) as a cost of generation supply under 66 
15Pa.C.S. § 2807 (relating to duties of electric
16distribution companies) in the first year after the
17expiration of its cost-recovery period. After the cost-
18recovery period, any direct or indirect costs for the
19purchase by electric distribution of resources to comply
20with this section, including, but not limited to, the
21purchase of electricity generated from alternative energy
22sources, payments for alternative energy credits, cost of
23credits banked, payments to any third party
24administrators for performance under this act and costs
25levied by a regional transmission organization to ensure
26that alternative energy sources are reliable, shall be
27recovered on a full and current basis pursuant to an
28automatic energy adjustment clause under 66 Pa.C.S. § 
291307 as a cost of generation supply under 66 Pa.C.S. § 
302807.

1(b) Tier I and solar photovoltaic shares.--

2(1) Two years after the effective date of this act, at
3least 1.5% of the electric energy sold by an electric
4distribution company or electric generation supplier to
5retail electric customers in this Commonwealth shall be
6generated from Tier I alternative energy sources. Except as
7provided in this section, the minimum percentage of electric
8energy required to be sold to retail electric customers from
9alternative energy sources shall increase to 2% three years
10after the effective date of this act. The minimum percentage
11of electric energy required to be sold to retail electric
12customers from alternative energy sources shall increase by
13at least 0.5% each year so that at least 8% of the electric
14energy sold by an electric distribution company or electric
15generation supplier to retail electric customers in that
16certificated territory in the 15th year after the effective
17date of this subsection is sold from Tier I alternative
18energy resources.

19(2) The total percentage of the electric energy sold by
20an electric distribution company or electric generation
21supplier to retail electric customers in this Commonwealth
22that must be sold from solar photovoltaic technologies is:

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

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

25(iii) 0.0063% for June 1, 2008, through May 31,
262009.

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

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

29(vi) 0.0325% for June 1, 2011, through May 31, 2012.

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

12013.

2(viii) 0.0840% for June 1, 2013, through May 31,
32014.

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

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

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

7(xii) 0.3400% for June 1, 2017, through May 31,
82018.

9(xiii) 0.3900% for June 1, 2018, through May 31,
102019.

11(xiv) 0.4433% for June 1, 2019, through May 31,
122020.

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

14(3) Upon commencement of the beginning of the 6th
15reporting year, the commission shall undertake a review of
16the compliance by electric distribution companies and
17electric generation suppliers with the requirements of this
18act. The review shall also include the status of alternative
19energy technologies within this Commonwealth and the capacity
20to add additional alternative energy resources. The
21commission shall use the results of this review to recommend
22to the General Assembly additional compliance goals beyond
23year 15. The commission shall work with the department in
24evaluating the future alternative energy resource potential.

25((b) amended July 17, 2007, P.L.114, No.35)

26(c) Tier II share.--Of the electrical energy required to be
27sold from alternative energy sources identified in Tier II, the
28percentage that must be from these technologies is for:

29(1) Years 1 through 4 - 4.2%.

30(2) Years 5 through 9 - 6.2%.

1(3) Years 10 through 14 - 8.2%.

2(4) Years 15 and thereafter - 10.0%.

3(d) Exemption during cost-recovery period.--Compliance with
4subsections (a), (b) and (c) shall not be required for any
5electric distribution company that has not reached the end of
6its cost-recovery period or for electric generation supplier
7sales in the service territory of an electric distribution
8company that has not reached the end of its cost-recovery
9period. At the conclusion of an electric distribution company's
10cost-recovery period, this exception shall no longer apply, and
11compliance shall be required at the percentages in effect at
12that time. Electric distribution companies and electric
13generation suppliers whose sales are exempted under this
14subsection and who voluntarily sell electricity generated from
15Tier I and Tier II sources during the cost-recovery period may
16bank credits consistent with subsection (e)(7).

17(e) Alternative energy credits.--

18(1) The commission shall establish an alternative energy
19credits program as needed to implement this act. The
20provision of services pursuant to this section shall be
21exempt from the competitive procurement procedures of 62 
22Pa.C.S. (relating to procurement).

23(2) The commission shall approve an independent entity
24to serve as the alternative energy credits program
25administrator. The administrator shall have those powers and
26duties assigned by commission regulations. Such powers and
27duties shall include, but not be limited to, the following:

28(i) To create and administer an alternative energy
29credits certification, tracking and reporting program.
30This program should include, at a minimum, a process for

1qualifying alternative energy systems and determining the
2manner credits can be created, accounted for, transferred
3and retired.

4(ii) To submit reports to the commission at such
5times and in such manner as the commission shall direct.

6(3) All qualifying alternative energy systems must
7include a qualifying meter to record the cumulative electric
8production to verify the advanced energy credit value.
9Qualifying meters will be approved by the commission as
10defined in paragraph (4).

11(4) (i) An electric distribution company or electric
12generation supplier shall comply with the applicable
13requirements of this section by purchasing sufficient
14alternative energy credits and submitting documentation
15of compliance to the program administrator.

16(ii) For purposes of this subsection, one
17alternative energy credit shall represent one megawatt
18hour of qualified alternative electric generation,
19whether self-generated, purchased along with the electric
20commodity or separately through a tradable instrument and
21otherwise meeting the requirements of commission
22regulations and the program administrator.

23(5) The alternative energy credits program shall include
24provisions requiring a reporting period as defined in section
252 for all covered entities under this act. The alternative
26energy credits program shall also include a true-up period as
27defined in section 2. The true-up period shall provide
28entities covered under this act the ability to obtain the
29required number of alternative energy credits or to make up
30any shortfall of the alternative energy credits they may be

1required to obtain to comply with this act. A force majeure
2provision shall also be provided for under the true-up period
3provisions.

4(6) An electric distribution company and electric
5generation supplier may bank or place in reserve alternative
6energy credits produced in one reporting year for compliance
7in either or both of the two subsequent reporting years,
8subject to the limitations set forth in this subsection and
9provided that the electric distribution company and electric
10generation supplier are in compliance for all previous
11reporting years. In addition, the electric distribution
12company and electric generation supplier shall demonstrate to
13the satisfaction of the commission that such credits:

14(i) were in excess of the alternative energy credits
15needed for compliance in the year in which they were
16generated and that such excess credits have not
17previously been used for compliance under this act;

18(ii) were produced by the generation of electrical
19energy by alternative energy sources and sold to retail
20customers during the year in which they were generated;
21and

22(iii) have not otherwise been nor will be sold,
23retired, claimed or represented as part of satisfying
24compliance with alternative or renewable energy portfolio
25standards in other states.

26(7) An electric distribution company or an electric
27generation supplier with sales that are exempted under
28subsection (d) may bank credits for retail sales of
29electricity generated from Tier I and Tier II sources made
30prior to the end of the cost-recovery period and after the

1effective date of this act. Bankable credits shall be limited
2to credits associated with electricity sold from Tier I and
3Tier II sources during a reporting year which exceeds the
4volume of sales from such sources by an electric distribution
5company or electric generation supplier during the 12-month
6period immediately preceding the effective date of this act.
7All credits banked under this subsection shall be available
8for compliance with subsections (b) and (c) for no more than
9two reporting years following the conclusion of the cost-
10recovery period.

11(8) The commission or its designee shall develop a
12registry of pertinent information regarding all available
13alternative energy credits, credit transactions among
14electric distribution companies and electric generation
15suppliers, the number of alternative energy credits sold or
16transferred and the price paid for the sale or transfer of
17the credits. The registry shall provide current information
18to electric distribution companies, electric generation
19suppliers and the general public on the status of alternative
20energy credits created, sold or transferred within this
21Commonwealth.

22(9) The commission may impose an administrative fee on
23an alternative energy credit transaction. The amount of this
24fee may not exceed the actual direct cost of processing the
25transaction by the alternative energy credits administrator.
26The commission is authorized to utilize up to 5% of the
27alternative compliance fees generated under subsection (f)
28for administrative expenses directly associated with this
29act.

30(10) The commission shall establish regulations

1governing the verification and tracking of energy efficiency
2and demand-side management measures pursuant to this act,
3which shall include benefits to all utility customer classes.
4When developing regulations, the commission must give
5reasonable consideration to existing and proposed regulations
6and rules in existence in the regional transmission
7organizations that manage the transmission system in any part
8of this Commonwealth. All verified reductions shall accrue
9credits starting with the passage of this act.

10(11) The commission shall within 120 days of the
11effective date of this act develop a depreciation schedule
12for alternative energy credits created through demand-side
13management, energy efficiency and load management
14technologies and shall develop standards for tracking and
15verifying savings from energy efficiency, load management and
16demand-side management measures. The commission shall allow
17for a 60-day public comment period and shall issue final
18standards within 30 days of the close of the public comment
19period.

20(12) Unless a contractual provision explicitly assigns
21alternative energy credits in a different manner, the owner
22of the alternative energy system or a customer-generator owns
23any and all alternative energy credits associated with or
24created by the production of electric energy by such facility
25or customer, and the owner or customer shall be entitled to
26sell, transfer or take any other action to which a legal
27owner of property is entitled to take with respect to the
28credits.

29(f) Alternative compliance payment.--

30(1) At the end of each program year, the program

1administrator shall provide a report to the commission and to
2each covered electric distribution company showing their
3status level of alternative energy acquisition.

4(2) The commission shall conduct a review of each
5determination made under subsections (b) and (c). If, after
6notice and hearing, the commission determines that an
7electric distribution company or electric generation supplier
8has failed to comply with subsections (b) and (c), the
9commission shall impose an alternative compliance payment on
10that company or supplier.

11(3) The alternative compliance payment, with the
12exception of the solar photovoltaic share compliance
13requirement set forth in subsection (b)(2), shall be $45
14times the number of additional alternative energy credits
15needed in order to comply with subsection (b) or (c).

16(4) The alternative compliance payment for the solar
17photovoltaic share shall be 200% of the average market value
18of solar renewable energy credits sold during the reporting
19period within the service region of the regional transmission
20organization, including, where applicable, the levelized up-
21front rebates received by sellers of solar renewable energy
22credits in other jurisdictions in the PJM Interconnection,
23L.L.C. transmission organization (PJM) or its successor.

24(5) The commission shall establish a process to provide
25for, at least annually, a review of the alternative energy
26market within this Commonwealth and the service territories
27of the regional transmission organizations that manage the
28transmission system in any part of this Commonwealth. The
29commission will use the results of this study to identify any
30needed changes to the cost associated with the alternative

1compliance payment program. If the commission finds that the
2costs associated with the alternative compliance payment
3program must be changed, the commission shall present these
4findings to the General Assembly for legislative enactment.

5(g) Transfer to sustainable development funds.--

6(1) Notwithstanding the provisions of 66 Pa.C.S. §§ 511
7(relating to disposition, appropriation and disbursement of
8assessments and fees) and 3315 (relating to disposition of
9fines and penalties), alternative compliance payments imposed
10pursuant to this act shall be paid into Pennsylvania's
11Sustainable Energy Funds created under the commission's
12restructuring orders under 66 Pa.C.S. Ch. 28 (relating to
13restructuring of electric utility industry). Alternative
14compliance payments shall be paid into a special fund of the
15Pennsylvania Sustainable Energy Board, established by the
16commission under Docket M-00031715, and made available to the
17Regional Sustainable Energy Funds under procedures and
18guidelines approved by the Pennsylvania Energy Board.

19(2) The alternative compliance payments shall be
20utilized solely for projects that will increase the amount of
21electric energy generated from alternative energy resources
22for purposes of compliance with subsections (b) and (c).

23(h) Nonseverability.--The provisions of subsection (a) are
24declared to be nonseverable. If any provision of subsection (a)
25is held invalid, the remaining provisions of this act shall be
26void.

27Section 4. Portfolio requirements in other states.

28If an electric distribution supplier or electric generation
29company provider sells electricity in any other state and is
30subject to renewable energy portfolio requirements in that

1state, they shall list any such requirement and shall indicate
2how it satisfied those renewable energy portfolio requirements.
3To prevent double-counting, the electric distribution supplier
4or electric generation company shall not satisfy Pennsylvania's
5alternative energy portfolio requirements using alternative
6energy used to satisfy another state's portfolio requirements or
7alternative energy credits already purchased by individuals,
8businesses or government bodies that do not have a compliance
9obligation under this act unless the individual, business or
10government body sells those credits to the electric distribution
11company or electric generation supplier. Energy derived from
12alternative energy sources inside the geographical boundaries of
13this Commonwealth shall be eligible to meet the compliance
14requirements under this act. Energy derived from alternative
15energy sources located outside the geographical boundaries of
16this Commonwealth but within the service territory of a regional
17transmission organization that manages the transmission system
18in any part of this Commonwealth shall only be eligible to meet
19the compliance requirements of electric distribution companies
20or electric generation suppliers located within the service
21territory of the same regional transmission organization. For
22purposes of compliance with this act, alternative energy sources
23located in the PJM Interconnection, L.L.C. regional transmission
24organization (PJM) or its successor service territory shall be
25eligible to fulfill compliance obligations of all Pennsylvania
26electric distribution companies and electric generation
27suppliers. Energy derived from alternative energy sources
28located outside the service territory of a regional transmission
29organization that manages the transmission system in any part of
30this Commonwealth shall not be eligible to meet the compliance

1requirements of this act. Electric distribution companies and
2electric generation suppliers shall document that this energy
3was not used to satisfy another state's renewable energy
4portfolio standards.

5Section 5. Interconnection standards for customer-generator
6facilities.

7Excess generation from net-metered customer-generators shall
8receive full retail value for all energy produced on an annual
9basis. The commission shall develop technical and net metering
10interconnection rules for customer-generators intending to
11operate renewable onsite generators in parallel with the
12electric utility grid, consistent with rules defined in other
13states within the service region of the regional transmission
14organization that manages the transmission system in any part of
15this Commonwealth. The commission shall convene a stakeholder
16process to develop Statewide technical and net metering rules
17for customer-generators. The commission shall develop these
18rules within nine months of the effective date of this act.]

19Section 3. Sections 6, 7, 8 and 9 of the act are repealed:

20[Section 6. Health and safety standards.

21The department shall cooperate with the Department of Labor
22and Industry as necessary in developing health and safety
23standards, as needed, regarding facilities generating energy
24from alternative energy sources. The department shall establish
25appropriate and reasonable health and safety standards to ensure
26uniform and proper compliance with this act by owners and
27operators of facilities generating energy from alternative
28energy sources as defined in this act.

29Section 7. Interagency responsibilities.

30(a) Commission responsibilities.--The commission will carry

1out the responsibilities delineated within this act. The
2commission also shall, in cooperation with the department,
3conduct an ongoing alternative energy resources planning
4assessment for this Commonwealth. This assessment will, at a
5minimum, identify current and operating alternative energy
6facilities, the potential to add future alternative energy
7generating capacity and the conditions of the alternative energy
8marketplace. The assessment will identify needed methods to
9maintain or increase the relative competitiveness of the
10alternative energy market within this Commonwealth.

11(b) Department responsibilities.--The department shall
12ensure that all qualified alternative energy sources meet all
13applicable environmental standards and shall verify that an
14alternative energy source meets the standards set forth in
15section 2.

16(c) Cooperation between commission and department.--The
17commission and the department shall work cooperatively to
18monitor the performance of all aspects of this act and will
19provide an annual report to the chairman and minority chairman
20of the Environmental Resources and Energy Committee of the
21Senate and the chairman and minority chairman of the
22Environmental Resources and Energy Committee of the House of
23Representatives. The report shall include at a minimum:

24(1) The status of the compliance with the provisions of
25this act by electric distribution companies and electric
26generation suppliers.

27(2) Current costs of alternative energy on a per
28kilowatt hour basis for all alternative energy technology
29types.

30(3) Costs associated with the alternative energy credits

1program under this act, including the number of alternative
2compliance payments.

3(4) The status of the alternative energy marketplace
4within this Commonwealth.

5(5) Recommendations for program improvements.

6Section 8. Rural electric cooperatives.

7Each rural electric cooperative operating within this
8Commonwealth shall offer to its retail customers a voluntary
9program of energy efficiency and demand-side management programs
10as a means to satisfy compliance with the requirements of this
11act.

12Section 9. Effective date.

13This act shall take effect in 90 days.]

14Section 4. This act shall take effect in 60 days.