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Pennsylvania State Senate
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=S&SPick=20170&cosponId=24803
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Senate of Pennsylvania
Session of 2017 - 2018 Regular Session

MEMORANDUM

Posted: November 6, 2017 11:11 AM
From: Senator Mike Regan
To: All Senate members
Subject: Modernization of Act 129 Energy Efficiency Mandates
 
In 2008, when wholesale electricity prices were at record highs, it was projected that consumers would see their electric bills as much as double due to the scheduled expiration of decade-long rate caps. The Rendell Administration and General Assembly sought to restrain these anticipated price increases by passing Act 129 of 2008. Among other things, Act 129 mandated that electric distribution companies (EDCs) work to reduce consumption by offering subsidized energy efficiency programs to their customers.

Due in part to the influx of natural gas supplies, the projected rate increases never occurred and today wholesale electricity prices are less than half of what they were a decade ago. Nevertheless, the Act 129 energy efficiency mandates remain in law.

In the near future, I will be introducing legislation to modernize and improve the Act 129 energy efficiency mandates. Specifically, my legislation will:
  • Update the energy efficiency program cost structure to reflect present-day market conditions (as opposed to the outdated 2006 baseline) and base costs on EDC distribution revenue
  • Provide flexibility with respect to peak demand reduction mandates beginning in 2021
  • Align our law with other states by providing positive financial incentives for EDCs that meet or exceed efficiency benchmarks
  • Ensure that civil penalties imposed upon EDCs are consistent with penalties for other violations of Title 66
  • Allow EDCs to contract with affiliated conservation service providers to meet their efficiency goals, subject to PUC approval

Pennsylvania’s energy landscape has evolved since the passage Act 129 nearly a decade ago. Moreover, the cost of achieving efficiency gains has increased significantly, making these programs less effective over time. For these reasons, policy changes should be made to modernize and improve the law.

Doing so will make our energy efficiency statute more competitive and consistent with other states, reduce bureaucratic red tape, and return money (and ultimately initiative) for energy efficiency to consumers.

Please join me in co-sponsoring and supporting this important piece of legislation.