PRIOR PRINTER'S NOS. 1419, 1912, 1945 PRINTER'S NO. 1973
No. 1030 Session of 2004
INTRODUCED BY ERICKSON, CONTI, WAUGH, ORIE, KUKOVICH, SCHWARTZ, MUSTO, EARLL, PIPPY, BOSCOLA, RAFFERTY, M. WHITE AND STACK, MARCH 15, 2004
AS AMENDED ON THIRD CONSIDERATION, NOVEMBER 17, 2004
AN ACT 1 Providing for the sale of electric energy generated from 2 renewable and environmentally beneficial sources, for the 3 acquisition of electric energy generated from renewable and 4 environmentally beneficial sources by electric distribution 5 and supply companies and for the powers and duties of the 6 Pennsylvania Public Utility Commission. 7 The General Assembly of the Commonwealth of Pennsylvania 8 hereby enacts as follows: 9 Section 1. Short title. 10 This act shall be known and may be cited as the Alternative 11 Energy Portfolio Standards Act. 12 Section 2. Definitions. 13 The following words and phrases when used in this act shall 14 have the meanings given to them in this section unless the 15 context clearly indicates otherwise: 16 "Alternative energy credit." A tradable instrument that is 17 used to establish, verify and monitor compliance with this act. 18 A unit of credit shall equal one megawatt hour of electricity 19 from an alternative energy source.
1 "Alternative energy portfolio standards." Standards
2 establishing that a certain amount of energy sold from
3 alternative energy sources is included as part of the sources of
4 electric generation by electric utilities within this
5 Commonwealth.
6 "Alternative energy sources." The term shall include the
7 following EXISTING AND NEW sources for the production of <--
8 electricity:
9 (1) Solar photovoltaic OR OTHER SOLAR ELECTRIC energy. <--
10 (2) Solar thermal energy.
11 (3) Wind power.
12 (4) Large-scale hydropower, WHICH SHALL MEAN THE <--
13 PRODUCTION OF ELECTRIC POWER BY HARNESSING THE HYDROELECTRIC
14 POTENTIAL OF MOVING WATER IMPOUNDMENTS, INCLUDING PUMPED
15 STORAGE THAT DOES NOT MEET THE REQUIREMENTS OF LOW-IMPACT
16 HYDROPOWER UNDER PARAGRAPH (5).
17 (5) Low-impact hydropower, consisting of any technology
18 that produces less than 50 megawatts of electric power and <--
19 that harnesses the hydroelectric potential of moving water
20 impoundments, provided such incremental hydroelectric
21 development:
22 (i) does not adversely change existing impacts to
23 aquatic systems;
24 (ii) meets the certification standards established
25 by the Low Impact Hydropower Institute and American
26 Rivers, Inc., or their successors;
27 (iii) provides an adequate water flow for protection
28 of aquatic life and for safe and effective fish passage;
29 (iv) protects against erosion; and
30 (v) protects cultural and historic resources.
20040S1030B1973 - 2 -
1 (6) Geothermal energy, which shall mean electricity 2 produced by extracting hot water or steam from geothermal 3 reserves in the earth's crust and supplied to steam turbines 4 that drive generators to produce electricity. 5 (7) Biomass energy, which shall mean the generation of 6 electricity utilizing the following: 7 (i) organic material from a plant that is grown for 8 the purpose of being used to produce electricity or is 9 protected by the Federal Conservation Reserve Program 10 (CRP) and provided further that crop production on CRP 11 lands does not prevent achievement of the water quality 12 protection, soil erosion prevention or wildlife 13 enhancement purposes for which the land was primarily set 14 aside; or 15 (ii) any solid nonhazardous, cellulosic waste 16 material that is segregated from other waste materials, <-- 17 by-products of the pulping process and wood manufacturing 18 process including bark, wood chips, sawdust and lignin in 19 spent pulping liquors, SUCH AS waste pallets, crates and <-- 20 landscape or right-of-way tree trimmings or agricultural 21 sources, including orchard tree crops, vineyards, grain, 22 legumes, sugar and other crop by-products or residues. 23 (8) Biologically derived methane gas, which shall 24 include methane from the anaerobic digestion of organic 25 materials from yard waste, such as grass clippings and 26 leaves, food waste, animal waste and sewage sludge. The term 27 also includes landfill methane gas. 28 (9) Fuel cells, which shall mean any electrochemical 29 device that converts chemical energy in a hydrogen-rich fuel 30 directly into electricity, heat and water without combustion. 20040S1030B1973 - 3 -
1 (10) Waste coal, which shall include the combustion of 2 waste coal in facilities in which the waste coal was disposed 3 or abandoned prior to July 31, 1982, or disposed of 4 thereafter in a permitted coal refuse disposal site 5 regardless of when disposed of, and used to generate 6 electricity; or such other waste coal combustion meeting 7 alternate eligibility requirements established by regulation. 8 Facilities combusting waste coal shall use at a minimum a 9 combined fluidized bed boiler and be outfitted with a 10 limestone injection system and a fabric filter particulate 11 removal system. Alternative energy credits shall be 12 calculated based upon the proportion of waste coal utilized 13 to produce electricity at the facility. 14 (11) Coal mine methane, which shall mean methane gas 15 emitting from abandoned or working coal mines. 16 (12) Demand side management consisting of the management 17 of customer consumption of electricity or the demand for 18 electricity through the implementation of: 19 (i) energy efficiency technologies, management 20 practices or other strategies in residential, COMMERCIAL, <-- 21 institutional or government customers that reduce 22 electricity consumption by those customers; 23 (ii) load management or demand response 24 technologies, management practices or other strategies in 25 residential, commercial, industrial, institutional and 26 government customers that shift electric load from 27 periods of higher demand to periods of lower demand, <-- 28 including pump storage technologies; or 29 (iii) industrial by-product technologies consisting 30 of the use of a by-product from an industrial process, 20040S1030B1973 - 4 -
1 including the reuse of energy from exhaust gases or other 2 manufacturing by-products that are used in the direct 3 production of electricity at the facility of a customer. 4 (13) Distributed generation system, which shall mean the 5 small-scale power generation of electricity using an <-- 6 alternative energy source at a site that does not use the 7 facilities of an electric distribution company or a regional 8 transmission organization to supply an end user. AND USEFUL <-- 9 THERMAL ENERGY. 10 "Alternative energy system." A facility or energy system 11 that uses a form of alternative energy source to generate 12 electricity and delivers the electricity it generates to the 13 distribution system of an electric distribution company or to 14 the transmission system operated by a regional transmission 15 organization. 16 "Commission." The Pennsylvania Public Utility Commission. 17 "Cost recovery period." The period during which competitive <-- 18 "COST RECOVERY PERIOD." THE LONGER OF: <-- 19 (1) THE PERIOD DURING WHICH COMPETITIVE transition 20 charges under 66 Pa.C.S § 2808 (relating to competitive 21 transition charge) or intangible transition charges under 66 22 Pa.C.S. § 2812 (relating to approval of transition bonds) are <-- 23 recovered or the period during which an electric BONDS) ARE <-- 24 RECOVERED; OR 25 (2) THE PERIOD DURING WHICH AN ELECTRIC distribution 26 company operates under a Pennsylvania Public Utility 27 Commission-approved generation rate plan that has been 28 approved PRIOR TO OR within one year of the effective date of <-- 29 this act, but in no case shall the cost recovery period under 30 this act extend beyond December 31, 2010. 20040S1030B1973 - 5 -
1 "Customer-generator." A nonutility owner or operator of a 2 net metered distributed generation system with a nameplate 3 capacity of not greater than 50 kilowatts if installed at a 4 residential service or not larger than 1,000 kilowatts at other 5 customer service locations, except for customers whose systems 6 are above one megawatt and up to two megawatts who make their 7 systems available to operate in parallel with the electric 8 utility during grid emergencies as defined by the regional 9 transmission organization, or where a microgrid is in place for 10 the purpose of maintaining critical infrastructure, such as 11 homeland security assignments, emergency services facilities, 12 hospitals, traffic signals, wastewater treatment plants or 13 telecommunications facilities, provided that technical rules for 14 operating generators interconnected with facilities of an 15 electric distribution company, electric cooperative or municipal 16 electric system have been promulgated by the Institute of 17 Electrical and Electronic Engineers and the Pennsylvania Public 18 Utility Commission. 19 "Department." The Department of Environmental Protection of 20 the Commonwealth. 21 "Electric distribution company." The term shall have the 22 same meaning given to it in 66 Pa.C.S. Ch. 28 (relating to 23 restructuring of electric utility industry). 24 "Electric generation supplier." The term shall have the same 25 meaning given to it in 66 Pa.C.S. Ch. 28 (relating to 26 restructuring of electric utility industry). 27 "Force majeure." An extended period for compliance which may <-- 28 be granted by the commission, if the commission determines that 29 additional response time is needed because of extreme deviations 30 in expected renewable generation resulting from events that are 20040S1030B1973 - 6 -
1 impossible to control. 2 "Large-scale hydropower." The production of at least 51 3 megawatts of electric power by harnessing the hydroelectric 4 potential of moving water impoundments. 5 "FORCE MAJEURE." UPON ITS OWN INITIATIVE OR UPON A REQUEST <-- 6 OF AN ELECTRIC DISTRIBUTION COMPANY OR AN ELECTRIC GENERATOR 7 SUPPLIER, THE PENNSYLVANIA PUBLIC UTILITY COMMISSION, WITHIN 60 8 DAYS, SHALL DETERMINE IF ALTERNATIVE ENERGY RESOURCES ARE 9 REASONABLY AVAILABLE IN THE MARKETPLACE IN SUFFICIENT QUANTITIES 10 FOR THE ELECTRIC DISTRIBUTION COMPANIES AND ELECTRIC GENERATION 11 SUPPLIERS TO MEET THEIR OBLIGATIONS FOR THAT REPORTING PERIOD 12 UNDER THIS ACT. IF THE COMMISSION DETERMINES THAT ALTERNATIVE 13 ENERGY RESOURCES ARE NOT REASONABLY AVAILABLE IN SUFFICIENT 14 QUANTITIES IN THE MARKETPLACE FOR THE ELECTRIC DISTRIBUTION 15 COMPANIES AND ELECTRIC GENERATION SUPPLIERS TO MEET THEIR 16 OBLIGATIONS UNDER THIS ACT, THEN THE COMMISSION SHALL MODIFY THE 17 UNDERLYING OBLIGATION OF THE ELECTRIC DISTRIBUTION COMPANY OR 18 ELECTRIC GENERATION SUPPLIER OR RECOMMEND TO THE GENERAL 19 ASSEMBLY THAT THE UNDERLYING OBLIGATION BE ELIMINATED. 20 "Municipal solid waste." This will include energy from 21 existing waste to energy facilities which the Department of 22 Environmental Protection has determined are in compliance with 23 current environmental standards, including, but not limited to, 24 all applicable requirements of the Clean Air Act (69 Stat. 322, 25 42 U.S.C. § 7401 et seq.) and associated permit restrictions, 26 and all applicable requirements of the act of July 7, 1980 27 (P.L.380, No.97), known as the Solid Waste Management Act. 28 "Net metering." The means of measuring the difference 29 between the electricity supplied by an electric utility and the 30 electricity generated by a customer-generator, when the 20040S1030B1973 - 7 -
1 renewable energy generating system is intended primarily to 2 offset part or all of the customer-generator's requirements for 3 electricity. 4 "Regional transmission organization." An entity approved by 5 the Federal Energy Regulatory Commission (FERC) that is created 6 to operate and manage the electrical transmission grids of the 7 member electric transmission utilities as required under FERC 8 Order 2000, Docket No. RM99-2-000, FERC Chapter 31.089 (1999) or 9 any successor organization approved by the FERC. 10 "Reporting period." The 12-month period from June 1 through 11 May 31. A reporting year shall be numbered according to the 12 calendar year in which it begins and ends. 13 "Retail electric customer." The term shall have the same 14 meaning given to it in 66 Pa.C.S Ch. 28 (relating to 15 restructuring of electric utility industry). 16 "Tier I alternative energy source." Energy derived from: 17 (1) Solar photovoltaic energy. 18 (2) Wind power. 19 (3) Low-impact hydropower. 20 (4) Geothermal energy. 21 (5) Biologically derived methane gas. 22 (6) Fuel cells. 23 (7) Biomass energy. 24 (8) COAL MINE METHANE. <-- 25 "Tier II alternative energy source." Energy derived from: 26 (1) Waste coal. 27 (2) Distributed generation systems. 28 (3) Demand-side management. 29 (4) Coal mine methane. <-- 30 (5) Large-scale hydropower. 20040S1030B1973 - 8 -
1 (6) Municipal solid waste. 2 (4) LARGE-SCALE HYDROPOWER. <-- 3 (5) MUNICIPAL SOLID WASTE. 4 (6) GENERATION OF ELECTRICITY UTILIZING BY-PRODUCTS OF 5 THE PULPING PROCESS AND WOOD MANUFACTURING PROCESS INCLUDING 6 BARK, WOOD CHIPS, SAWDUST AND LIGNIN IN SPENT PULPING 7 LIQUORS. 8 (7) INTEGRATED COMBINED COAL GASIFICATION TECHNOLOGY. 9 "True-up period." The period each year from the end of the 10 reporting year until September 1. 11 Section 3. Alternative energy portfolio standards. 12 (a) General rule.--From the effective date of this act <-- 13 (A) GENERAL COMPLIANCE AND COST RECOVER.-- <-- 14 (1) FROM THE EFFECTIVE DATE OF THIS ACT through and 15 including the 15th year after enactment of this act, and each 16 year thereafter, the electric energy sold by an electric 17 distribution company or electric generation supplier to 18 retail electric customers in this Commonwealth shall be 19 comprised of electricity generated from alternative energy 20 sources, and in the percentage amounts as described under 21 subsections (b) and (c). Electric distribution companies and <-- 22 SUBSECTIONS (B) AND (C). <-- 23 (2) ELECTRIC DISTRIBUTION COMPANIES AND electric 24 generation suppliers shall satisfy both requirements set 25 forth in subsections (b) and (c). Any cost for the purchase <-- 26 of resources or credits to comply with this section shall be 27 considered cost of generation supply by the commission, 28 including the cost of generation supply to meet the 29 obligation under 66 Pa.C.S § 2807 (relating to duties of 30 electric distribution companies), by the commission.; <-- 20040S1030B1973 - 9 -
1 PROVIDED, HOWEVER, THAT AN ELECTRIC DISTRIBUTION COMPANY OR 2 AN ELECTRIC GENERATION SUPPLIER SHALL BE EXCUSED FROM ITS 3 OBLIGATIONS UNDER THIS SECTION TO THE EXTENT THAT THE 4 COMMISSION DETERMINES THAT FORCE MAJEURE EXISTS. 5 (3) ALL COSTS FOR: 6 (I) THE PURCHASE OF ELECTRICITY GENERATED FROM 7 ALTERNATIVE ENERGY SOURCES, INCLUDING THE COSTS OF THE 8 REGIONAL TRANSMISSION ORGANIZATION, IN EXCESS OF THE 9 REGIONAL TRANSMISSION ORGANIZATION REAL-TIME LOCATIONAL 10 MARGINAL PRICING, OR ITS SUCCESSOR, AT THE DELIVERY POINT 11 OF THE ALTERNATIVE ENERGY SOURCE FOR THE ELECTRICAL 12 PRODUCTION OF THE ALTERNATIVE ENERGY SOURCES; AND 13 (II) PAYMENTS FOR ALTERNATIVE ENERGY CREDITS, IN 14 BOTH CASES THAT ARE VOLUNTARILY ACQUIRED BY AN ELECTRIC 15 DISTRIBUTION COMPANY DURING THE COST RECOVERY PERIOD ON 16 BEHALF OF ITS CUSTOMERS 17 SHALL BE DEFERRED AS A REGULATORY ASSET BY THE ELECTRIC 18 DISTRIBUTION COMPANY AND FULLY RECOVERED, WITH A RETURN ON 19 THE UNAMORTIZED BALANCE, PURSUANT TO AN AUTOMATIC ENERGY 20 ADJUSTMENT CLAUSE UNDER 66 PA.C.S. § 1307 (RELATING TO 21 SLIDING SCALE OF RATES; ADJUSTMENTS) AS A COST OF GENERATION 22 SUPPLY UNDER 66 PA.C.S. § 2807 (RELATING TO DUTIES OF 23 ELECTRIC DISTRIBUTION COMPANIES), IN THE FIRST YEAR AFTER THE 24 EXPIRATION OF ITS COST RECOVERY PERIOD. AFTER THE COST 25 RECOVERY PERIOD, ANY DIRECT OR INDIRECT COSTS FOR THE 26 PURCHASE BY ELECTRIC DISTRIBUTION OF RESOURCES TO COMPLY WITH 27 THIS SECTION, INCLUDING, BUT NOT LIMITED TO, THE PURCHASE OF 28 ELECTRICITY GENERATED FROM ALTERNATIVE ENERGY SOURCES, 29 PAYMENTS FOR ALTERNATIVE ENERGY CREDITS, COST OF CREDITS 30 BANKED, PAYMENTS TO ANY THIRD PARTY ADMINISTRATORS FOR 20040S1030B1973 - 10 -
1 PERFORMANCE UNDER THIS ACT AND COSTS LEVIED BY A REGIONAL
2 TRANSMISSION ORGANIZATION TO ENSURE THAT ALTERNATIVE ENERGY
3 SOURCES ARE RELIABLE, SHALL BE RECOVERED ON A FULL AND
4 CURRENT BASIS PURSUANT TO AN AUTOMATIC ENERGY ADJUSTMENT
5 CLAUSE UNDER 66 PA.C.S. § 1307 AS A COST OF GENERATION SUPPLY
6 UNDER 66 PA.C.S. § 2807.
7 (b) Tier I and solar photovoltaic shares.--
8 (1) Two years after the effective date of this act, at
9 least 1.5% of the electric energy sold by an electric
10 distribution company or electric generation supplier to
11 retail electric customers in this Commonwealth shall be
12 generated from Tier I alternative energy sources. Except as
13 provided in this section, the minimum percentage of electric
14 energy required to be sold to retail electric customers from
15 alternative energy sources shall increase to 2% three years
16 after the effective date of this act. The minimum percentage
17 of electric energy required to be sold to retail electric
18 customers from alternative energy sources shall increase by
19 at least 0.5% each year so that at least 10% 8% of the <--
20 electric energy sold by an electric distribution company or
21 electric generation supplier to retail electric customers in
22 that certificated territory in the 15th year after the
23 effective date of this subsection is sold from Tier I
24 alternative energy resources.
25 (2) Of the electric energy required to be sold from Tier
26 I sources, the TOTAL percentage that must be sold from solar <--
27 photovoltaic technologies is for:
28 (i) Years 1 through 4 - 0.0013%.
29 (ii) Years 5 through 9 - 0.0203%.
30 (iii) Years 10 through 14 - 0.2500%.
20040S1030B1973 - 11 -
1 (iv) Years 15 and thereafter - 0.5000%. 2 (3) Upon commencement of the beginning of the 6th 3 reporting year, the commission shall undertake a review of 4 the compliance by electric distribution companies and 5 electric generation suppliers with the requirements of this 6 act. The review shall also include the status of alternative 7 energy technologies within this Commonwealth and the capacity 8 to add additional alternative energy resources. The 9 commission shall use the results of this review to recommend 10 to the General Assembly additional compliance goals beyond 11 year 15. The commission shall work with the department in 12 evaluating the future alternative energy resource potential. 13 (c) Tier II share.--Of the electrical energy required to be 14 sold from alternative energy sources identified in Tier II, the 15 percentage that must be from these technologies is for: 16 (1) Years 1 through 4 - 2.2%. <-- 17 (2) Years 5 through 9 - 3.2%. 18 (3) Years 10 through 14 - 4.2%. 19 (4) Years 15 and thereafter - 5.0%. 20 (1) YEARS 1 THROUGH 4 - 4.2%. <-- 21 (2) YEARS 5 THROUGH 9 - 6.2%. 22 (3) YEARS 10 THROUGH 14 - 8.2%. 23 (4) YEARS 15 AND THEREAFTER - 10.0%. 24 (d) Exemption during cost-recovery period.--Compliance with 25 subsections (a), (b) and (c) shall not be required for any 26 electric distribution company that has not reached the end of 27 its cost-recovery period or for electric generation supplier 28 sales in the service territory of an electric distribution 29 company that has not reached the end of its cost-recovery 30 period. At the conclusion of an electric distribution company's 20040S1030B1973 - 12 -
1 cost-recovery period, this exception shall no longer apply, and 2 compliance shall be required at the percentages in effect at 3 that time. Electric distribution companies and electric 4 generation suppliers whose sales are exempted under this 5 subsection and who voluntarily sell electricity generated from 6 Tier I and Tier II sources during the cost-recovery period may 7 bank credits consistent with subsection (e)(7). 8 (e) Alternative energy credits.-- 9 (1) The commission shall establish an alternative energy 10 credits program as needed to implement this act. The 11 provision of services pursuant to this section shall be 12 exempt from the competitive procurement procedures of 62 13 Pa.C.S. (relating to procurement). 14 (2) The commission shall approve an independent entity 15 to serve as the alternative energy credits program 16 administrator. The administrator shall have those powers and 17 duties assigned by commission regulations. Such powers and 18 duties shall include, but not be limited to, the following: 19 (i) To create and administer an alternative energy 20 credits certification, tracking and reporting program. 21 This program should include, at a minimum, a process for 22 qualifying alternative energy systems and determining the 23 manner credits can be created, accounted for, transferred 24 and retired. 25 (ii) To submit reports to the commission at such 26 times and in such manner as the commission shall direct. 27 (3) All qualifying alternative energy systems must 28 include a qualifying meter to record the cumulative electric 29 production to verify the advanced energy credit value. 30 Qualifying meters will be approved by the commission as 20040S1030B1973 - 13 -
1 defined in paragraph (4). 2 (4) (i) An electric distribution company or electric 3 generation supplier shall comply with the applicable 4 requirements of this section by purchasing sufficient 5 alternative energy credits and submitting documentation 6 of compliance to the program administrator. 7 (ii) For purposes of this subsection, one 8 alternative energy credit shall represent one megawatt 9 hour of qualified alternative electric generation, 10 whether self-generated, purchased along with the electric 11 commodity or separately through a tradable instrument and 12 otherwise meeting the requirements of commission 13 regulations and the program administrator. 14 (5) The alternative energy credits program shall include 15 provisions requiring a reporting period as defined in section 16 2 for all covered entities under this act. The alternative 17 energy credits program shall also include a true-up period as 18 defined in section 2. The true-up period shall provide 19 entities covered under this act the ability to obtain the 20 required number of alternative energy credits or to make up 21 any shortfall of the alternative energy credits they may be 22 required to obtain to comply with this act. A force majeure 23 provision shall also be provided for under the true-up period 24 provisions. 25 (6) An electric distribution company and electric 26 generation supplier may bank or place in reserve alternative 27 energy credits produced in one reporting year for compliance 28 in either or both of the two subsequent reporting years, 29 subject to the limitations set forth in this subsection and 30 provided that the electric distribution company and electric 20040S1030B1973 - 14 -
1 generation supplier are in compliance for all previous 2 reporting years. In addition, the electric distribution 3 company and electric generation supplier shall demonstrate to 4 the satisfaction of the commission that such credits: 5 (i) were in excess of the alternative energy credits 6 needed for compliance in the year in which they were 7 generated and that such excess credits have not 8 previously been used for compliance under this act; 9 (ii) do not exceed 30% of the credits needed by the <-- 10 electric distribution company and electric generation 11 supplier for compliance in the year they were generated; 12 (iii) (II) were produced by the generation of <-- 13 electrical energy by alternative energy sources and sold 14 to retail customers during the year in which they were 15 generated; and 16 (iv) (III) have not otherwise been nor will be sold, <-- 17 retired, claimed or represented as part of satisfying 18 compliance with alternative or renewable energy portfolio 19 standards in other states. 20 (7) An electric distribution company or an electric 21 generation supplier with sales that are exempted under 22 subsection (d) may bank credits for retail sales of 23 electricity generated from Tier I and Tier II sources made 24 prior to the end of the cost-recovery period and after the 25 effective date of this act. Bankable credits shall be limited 26 to credits associated with electricity sold from Tier I and 27 Tier II sources during a reporting year which exceeds the 28 volume of sales from such sources by an electric distribution 29 company or electric generation supplier during the 12-month 30 period immediately preceding the effective date of this act. 20040S1030B1973 - 15 -
1 All credits banked under this subsection shall be available 2 for compliance with subsections (b) and (c) for no more than 3 two reporting years following the conclusion of the cost- 4 recovery period. 5 (8) The commission or its designee shall develop a 6 registry of pertinent information regarding all available 7 alternative energy credits, credit transactions among 8 electric distribution companies and electric generation 9 suppliers, the number of alternative energy credits sold or 10 transferred and the price paid for the sale or transfer of 11 the credits. The registry shall provide current information 12 to electric distribution companies, electric generation 13 suppliers and the general public on the status of alternative 14 energy credits created, sold or transferred within this 15 Commonwealth. 16 (9) The commission may impose an administrative fee on 17 an alternative energy credit transaction. The amount of this 18 fee may not exceed the actual direct cost of processing the 19 transaction by the alternative energy credits administrator. 20 The commission is authorized to utilize up to 5% of the 21 alternative compliance fees generated under subsection (f) 22 for administrative expenses directly associated with this 23 act. 24 (10) The commission shall establish regulations 25 governing the verification and tracking of energy efficiency 26 and demand-side management measures pursuant to this act, 27 which shall include benefits to all utility customer classes. 28 When developing regulations, the commission must give 29 reasonable consideration to existing and proposed regulations 30 and rules in existence in the regional transmission 20040S1030B1973 - 16 -
1 organizations that manage the transmission system in any part 2 of this Commonwealth. All verified reductions shall accrue 3 credits starting with the passage of this act. 4 (11) The commission shall within 120 days of the 5 effective date of this act develop a depreciation schedule 6 for alternative energy credits created through demand side 7 management, energy efficiency and load management 8 technologies and shall develop standards for tracking and 9 verifying savings from energy efficiency, load management and 10 demand-side management measures. The commission shall allow 11 for a 60-day public comment period and shall issue final 12 standards within 30 days of the close of the public comment 13 period. 14 (f) Alternative compliance payment.-- 15 (1) At the end of each program year, the program 16 administrator shall provide a report to the commission and to 17 each covered electric distribution company showing their 18 status level of alternative energy acquisition. 19 (2) The commission shall conduct a review of each 20 determination made under subsections (b) and (c). If, after 21 notice and hearing, the commission determines that an 22 electric distribution company or electric generation supplier 23 has failed to comply with subsections (b) and (c), the 24 commission shall impose an alternative compliance payment on 25 that company or supplier. 26 (3) The alternative compliance payment, with the 27 exception of the solar photovoltaic share compliance 28 requirement set forth in subsection (b)(2), shall be $45 29 times the number of additional alternative energy credits 30 needed in order to comply with subsection (b) or (c). 20040S1030B1973 - 17 -
1 (4) The alternative compliance payment for the solar 2 photovoltaic share shall be 200% of the average market share <-- 3 of the solar photovoltaic credits sold during the reporting 4 period. VALUE OF SOLAR RENEWABLE ENERGY CREDITS SOLD DURING <-- 5 THE REPORTING PERIOD WITHIN THE SERVICE REGION OF THE 6 REGIONAL TRANSMISSION ORGANIZATION. 7 (5) The commission shall establish a process to provide 8 for, at least annually, a review of the alternative energy 9 market within this Commonwealth and the service territories 10 of the regional transmission organizations that manage the 11 transmission system in any part of this Commonwealth. The 12 commission will use the results of this study to identify any 13 needed changes to the cost associated with the alternative 14 compliance payment program. The commission may raise the cost <-- 15 of the alternative compliance payments to maintain the 16 integrity of the payments program and to ensure that it is 17 not used to meet compliance with this act in lieu of 18 acquiring energy from actual alternative energy sources as 19 defined in this act. If the commission finds that the costs 20 associated with alternative compliance payment program must 21 be lowered CHANGED, the commission shall present these <-- 22 findings to the General assembly for legislative enactment. 23 (g) Transfer to sustainable development funds.-- 24 (1) Notwithstanding the provisions of 66 Pa.C.S. §§ 511 25 (relating to disposition, appropriation and disbursement of 26 assessments and fees) and 3315 (relating to disposition of 27 fines and penalties), alternative compliance payments imposed 28 pursuant to this act shall be paid into the sustainable <-- 29 development funds, created under the commissions 30 restructuring orders under 66 Pa.C.S. Ch. 28 (relating to 20040S1030B1973 - 18 -
1 restructuring of electric utility industry). Alternative 2 compliance payments will be paid into the appropriate fund 3 based upon which electric distribution company or electric 4 generation supplier incurred the alternative compliance 5 payment. PENNSYLVANIA'S SUSTAINABLE ENERGY FUNDS, CREATED <-- 6 UNDER THE COMMISSION'S RESTRUCTURING ORDERS UNDER 66 PA.C.S. 7 CH. 28 (RELATING TO RESTRUCTURING OF ELECTRIC UTILITY 8 INDUSTRY). ALTERNATIVE COMPLIANCE PAYMENTS SHALL BE PAID INTO 9 A SPECIAL FUND OF THE PENNSYLVANIA SUSTAINABLE ENERGY BOARD, 10 ESTABLISHED BY THE COMMISSION UNDER DOCKET M-00031715, AND 11 MADE AVAILABLE TO THE REGIONAL SUSTAINABLE ENERGY FUNDS UNDER 12 PROCEDURES AND GUIDELINES APPROVED BY THE PENNSYLVANIA ENERGY 13 BOARD. 14 (2) The alternative compliance payments shall be 15 utilized solely for projects that will increase the amount of 16 electric energy generated from alternative energy resources 17 for purposes of compliance with subsections (b) and (c). 18 (H) NONSEVERABILITY.--THE PROVISIONS OF SUBSECTION (A) ARE <-- 19 DECLARED TO BE NONSEVERABLE. IF ANY PROVISION OF SUBSECTION (A) 20 IS HELD INVALID, THE REMAINING PROVISIONS OF THIS ACT SHALL BE 21 VOID. 22 Section 4. Portfolio requirements in other states. 23 If an electric distribution supplier or electric generation 24 company provider sells electricity in any other state and is 25 subject to renewable energy portfolio requirements in that 26 state, they shall list any such requirement and shall indicate 27 how it satisfied those renewable energy portfolio requirements. 28 To prevent double-counting, the electric distribution supplier 29 or electric generation company shall not satisfy Pennsylvania's 30 alternative energy portfolio requirements using alternative 20040S1030B1973 - 19 -
1 energy used to satisfy another state's portfolio requirements. 2 Energy derived only from alternative energy sources inside the 3 geographical boundaries of this Commonwealth or within the 4 service territory of any regional transmission organization that 5 manages the transmission system in any part of this Commonwealth 6 shall be eligible to meet the compliance requirements under this 7 act. Electric distribution companies and electric generation 8 suppliers shall document that this energy was not used to 9 satisfy another state's renewable energy portfolio standards. 10 Section 5. Interconnection standards for customer-generator 11 facilities. 12 The commission shall develop technical and net metering 13 interconnection rules for customer-generators intending to 14 operate renewable onsite generators in parallel with the 15 electric utility grid, consistent with rules defined in other 16 states within the service region of the regional transmission 17 organization that manages the transmission system in any part of 18 this Commonwealth. The commission shall convene a stakeholder 19 process to develop Statewide technical and net metering rules 20 for customer-generators. The commission shall develop these 21 rules within nine months of the effective date of this act. 22 Section 6. Health and safety standards. 23 The department shall cooperate with the Department of Labor 24 and Industry as necessary in developing health and safety 25 standards, as needed, regarding facilities generating energy 26 from alternative energy sources. The department shall establish 27 appropriate and reasonable health and safety standards to ensure 28 uniform and proper compliance with this act by owners and 29 operators of facilities generating energy from alternative 30 energy sources as defined in this act. 20040S1030B1973 - 20 -
1 Section 7. Interagency responsibilities. 2 (a) Commission responsibilities.--The commission will carry 3 out the responsibilities delineated within this act. The 4 commission also shall, in cooperation with the department, 5 conduct an ongoing alternative energy resources planning 6 assessment for this Commonwealth. This assessment will, at a 7 minimum, identify current and operating alternative energy 8 facilities, the potential to add future alternative energy 9 generating capacity, and the conditions of the alternative 10 energy marketplace. The assessment will identify needed methods 11 to maintain or increase the relative competitiveness of the 12 alternative energy market within this Commonwealth. 13 (b) Department responsibilities.--The department shall 14 ensure that all qualified alternative energy sources meet all 15 applicable environmental standards and shall verify that an 16 alternative energy source meets the standards set forth in 17 section 2. 18 (c) Cooperation between commission and department.--The 19 commission and the department shall work cooperatively to 20 monitor the performance of all aspects of this act and will 21 provide an annual report to the chairman and minority chairman 22 of the Environmental Resources and Energy Committee of the 23 Senate and the chairman and minority chairman of the 24 Environmental Resources and Energy Committee of the House of 25 Representatives. The report shall include at a minimum: 26 (1) The status of the compliance with the provisions of 27 this act by electric distribution companies and electric 28 generations suppliers. 29 (2) Current costs of alternative energy on a per 30 kilowatt hour basis for all alternative energy technology 20040S1030B1973 - 21 -
1 types. 2 (3) Costs associated with the alternative energy credits 3 program under this act, including the number of alternative 4 compliance payments. 5 (4) The status of the alternative energy marketplace 6 within this Commonwealth. 7 (5) Recommendations for program improvements. 8 Section 8. Rural electric cooperatives. 9 Each rural electric cooperative operating within this 10 Commonwealth shall offer to its retail customers a voluntary 11 program of energy efficiency and demand-side management 12 programs, as a means to satisfy compliance with the requirements 13 of this act. 14 Section 9. Effective date. 15 This act shall take effect in 90 days. B13L66MEP/20040S1030B1973 - 22 -