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                                 SENATE AMENDED
        PRIOR PRINTER'S NOS. 1668, 1995, 2057         PRINTER'S NO. 2291

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 1203 Session of 2007


        INTRODUCED BY HORNAMAN, GEORGE, DePASQUALE, GERBER, McCALL,
           CALTAGIRONE, CONKLIN, DeWEESE, EACHUS, GIBBONS, HARHAI,
           HARKINS, JAMES, JOSEPHS, KORTZ, MAHONEY, MANDERINO, McGEEHAN,
           MUNDY, M. O'BRIEN, PRESTON, SAINATO, SHIMKUS, STABACK, SURRA,
           TANGRETTI, THOMAS, VITALI, YUDICHAK, CURRY, FREEMAN,
           K. SMITH, GOODMAN, BENNINGTON, M. SMITH, PETRONE, LENTZ,
           GRUCELA, FABRIZIO, WALKO AND GEIST, MAY 24, 2007

        SENATOR M. WHITE, ENVIRONMENTAL RESOURCES AND ENERGY, IN SENATE,
           AS AMENDED, JULY 10, 2007

                                     AN ACT

     1  Amending the act of November 30, 2004 (P.L.1672, No.213),
     2     entitled, "An act providing for the sale of electric energy
     3     generated from renewable and environmentally beneficial
     4     sources, for the acquisition of electric energy generated
     5     from renewable and environmentally beneficial sources by
     6     electric distribution and supply companies and for the powers
     7     and duties of the Pennsylvania Public Utility Commission,"
     8     further providing for definitions, for alternative energy      <--
     9     portfolio standards, for portfolio requirements in other
    10     states and for interconnection standards for customer-
    11     generator facilities. FURTHER PROVIDING FOR THE DEFINITIONS    <--
    12     OF "ALTERNATIVE ENERGY SOURCES," "CUSTOMER-GENERATOR," "FORCE
    13     MAJEURE," AND "NET METERING," FOR ALTERNATIVE ENERGY
    14     PORTFOLIO STANDARDS, FOR PORTFOLIO REQUIREMENTS IN OTHER
    15     STATES AND FOR INTERCONNECTION STANDARDS FOR CUSTOMER-
    16     GENERATOR FACILITIES.

    17     The General Assembly of the Commonwealth of Pennsylvania
    18  hereby enacts as follows:
    19     Section 1.  The definitions of "alternative energy credit,"    <--
    20  "customer-generator," "force majeure" and "Tier I alternative
    21  energy source" in section 2 of the act of November 30, 2004


     1  (P.L.1672, No.213), known as the Alternative Energy Portfolio
     2  Standards Act, are amended to read:
     3  Section 2.  Definitions.
     4     The following words and phrases when used in this act shall
     5  have the meanings given to them in this section unless the
     6  context clearly indicates otherwise:
     7     "Alternative energy credit."  A tradable instrument that is
     8  used to establish, verify and monitor compliance with this act.
     9  A unit of credit shall equal one megawatt hour of electricity
    10  from an alternative energy source. The alternative energy credit
    11  shall remain the property of the alternative energy system until
    12  the alternative energy credit is voluntarily transferred by the
    13  alternative energy system.
    14     * * *
    15     "Customer-generator."  A nonutility owner or operator of a
    16  net metered distributed generation system with a nameplate
    17  capacity of not greater than 50 kilowatts if installed at a
    18  residential service or not larger than [1,000] 3,000 kilowatts
    19  at other customer service locations, except for customers whose
    20  systems are above [one megawatt] three megawatts and up to [two]
    21  five megawatts who make their systems available to operate in
    22  parallel with the electric utility during grid emergencies as
    23  defined by the regional transmission organization or where a
    24  microgrid is in place for the primary or secondary purpose of
    25  maintaining critical infrastructure, such as homeland security
    26  assignments, emergency services facilities, hospitals, traffic
    27  signals, wastewater treatment plants or telecommunications
    28  facilities, provided that technical rules for operating
    29  generators interconnected with facilities of an electric
    30  distribution company, electric cooperative or municipal electric
    20070H1203B2291                  - 2 -     

     1  system have been promulgated by the Institute of Electrical and
     2  Electronic Engineers and the Pennsylvania Public Utility
     3  Commission.
     4     * * *
     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. In making this determination the commission
    13  shall consider whether electric distribution companies or
    14  electric generation suppliers have made a good faith effort to
    15  acquire sufficient alternative energy to comply with their
    16  obligations. Such good faith efforts shall include, but are not
    17  limited to, banking alternative energy credits during their
    18  transition periods, seeking alternative energy credits through
    19  competitive solicitations and seeking to procure alternative
    20  energy credits or alternative energy through long-term
    21  contracts. In further making its determination the commission
    22  shall assess the availability of alternative energy credits in
    23  the Generation Attributes Tracking System (GATS) or its
    24  successor, and the availability of alternative energy credits
    25  generally in Pennsylvania and other jurisdictions in the PJM
    26  Interconnection, L.L.C. regional transmission organization (PJM)
    27  or its successor. The commission may also require solicitations
    28  for alternative energy credits as part of default service before
    29  requests of force majeure can be made. If the commission further
    30  determines that alternative energy resources are not reasonably
    20070H1203B2291                  - 3 -     

     1  available in sufficient quantities in the marketplace for the
     2  electric distribution companies and electric generation
     3  suppliers to meet their obligations under this act, then the
     4  commission shall modify the underlying obligation of the
     5  electric distribution company or electric generation supplier or
     6  recommend to the General Assembly that the underlying obligation
     7  be eliminated. Commission modification of the electric
     8  distribution company or electric generation supplier obligations
     9  under this act shall be for that compliance period only.
    10  Commission modification shall not automatically reduce the
    11  obligation for subsequent compliance years. If the commission
    12  modifies the electric distribution company or electric
    13  generation supplier obligations under this act, the commission
    14  may require the electric distribution company or electric
    15  generation supplier to acquire additional alternative energy
    16  credits in subsequent years equivalent to the obligation reduced
    17  due to a force majeure declaration if the commission determines
    18  that sufficient alternative energy credits exist in the
    19  marketplace.
    20     * * *
    21     "Tier I alternative energy source."  Energy derived from:
    22         (1)  Solar photovoltaic and solar thermal energy.
    23         (2)  Wind power.
    24         (3)  Low-impact hydropower.
    25         (4)  Geothermal energy.
    26         (5)  Biologically derived methane gas.
    27         (6)  Fuel cells.
    28         (7)  Biomass energy.
    29         (8)  Coal mine methane.
    30     * * *
    20070H1203B2291                  - 4 -     

     1     Section 2.  Sections 3(b), (e) and (f), 4 and 5 of the act
     2  are amended to read:
     3  Section 3.  Alternative energy portfolio standards.
     4     * * *
     5     (b)  Tier I and solar photovoltaic shares.--
     6         (1)  Two years after the effective date of this act, at
     7     least 1.5% of the electric energy sold by an electric
     8     distribution company or electric generation supplier to
     9     retail electric customers in this Commonwealth shall be
    10     generated from Tier I alternative energy sources. Except as
    11     provided in this section, the minimum percentage of electric
    12     energy required to be sold to retail electric customers from
    13     alternative energy sources shall increase to 2% three years
    14     after the effective date of this act. The minimum percentage
    15     of electric energy required to be sold to retail electric
    16     customers from alternative energy sources shall increase by
    17     at least 0.5% each year so that at least 8% of the electric
    18     energy sold by an electric distribution company or electric
    19     generation supplier to retail electric customers in that
    20     certificated territory in the 15th year after the effective
    21     date of this subsection is sold from Tier I alternative
    22     energy resources.
    23         (2)  [Of the electric energy required to be sold from
    24     Tier I sources, the total percentage that must be sold from
    25     solar photovoltaic technologies is for:] The total percentage
    26     of the electric energy sold by an electric distribution
    27     company or an electric generation supplier to retail electric
    28     customers in this Commonwealth that must be sold from solar
    29     photovoltaic technologies is:
    30             [(i)  Years 1 through 4 - 0.0013%.
    20070H1203B2291                  - 5 -     

     1             (ii)  Years 5 through 9 - 0.0203%.
     2             (iii)  Years 10 through 14 - 0.2500%.
     3             (iv)  Years 15 and thereafter - 0.5000%.]
     4             (i)  0.0013% for June 1, 2006, through May 31, 2007.
     5             (ii)  0.0030% for June 1, 2007, through May 31, 2008.
     6             (iii)  0.0063% for June 1, 2008, through May 31,
     7         2009.
     8             (iv)  0.0120% for June 1, 2009, through May 31, 2010.
     9             (v)  0.0203% for June 1, 2010, through May 31, 2011.
    10             (vi)  0.0325% for June 1, 2011, through May 31, 2012.
    11             (vii)  0.0510% for June 1, 2012, through May 31,
    12         2013.
    13             (viii)  0.0840% for June 1, 2013, through May 31,
    14         2014.
    15             (ix)  0.1440% for June 1, 2014, through May 31, 2015.
    16             (x)  0.2500% for June 1, 2015, through May 31, 2016.
    17             (xi)  0.2933% for June 1, 2016, through May 31, 2017.
    18             (xii)  0.3400% for June 1, 2017, through May 31,
    19         2018.
    20             (xiii)  0.3900% for June 1, 2018, through May 31,
    21         2019.
    22             (xiv)  0.4433% for June 1, 2019, and thereafter.
    23             (xiv)  0.4433% for June 1, 2019, through May 31,
    24         2020.
    25             (xv)  0.5000% for June 1, 2020, and thereafter.
    26         The percentages in this paragraph shall apply to all
    27         retail electricity sales in this Commonwealth.
    28         (3)  Upon commencement of the beginning of the 6th
    29     reporting year, the commission shall undertake a review of
    30     the compliance by electric distribution companies and
    20070H1203B2291                  - 6 -     

     1     electric generation suppliers with the requirements of this
     2     act. The review shall also include the status of alternative
     3     energy technologies within this Commonwealth and the capacity
     4     to add additional alternative energy resources. The
     5     commission shall use the results of this review to recommend
     6     to the General Assembly additional compliance goals beyond
     7     year 15. The commission shall work with the department in
     8     evaluating the future alternative energy resource potential.
     9     * * *
    10     (e)  Alternative energy credits.--
    11         (1)  The commission shall establish an alternative energy
    12     credits program as needed to implement this act. The
    13     provision of services pursuant to this section shall be
    14     exempt from the competitive procurement procedures of 62
    15     Pa.C.S. (relating to procurement).
    16         (2)  The commission shall approve an independent entity
    17     to serve as the alternative energy credits program
    18     administrator. The administrator shall have those powers and
    19     duties assigned by commission regulations. Such powers and
    20     duties shall include, but not be limited to, the following:
    21             (i)  To create and administer an alternative energy
    22         credits certification, tracking and reporting program.
    23         This program should include, at a minimum, a process for
    24         qualifying alternative energy systems and determining the
    25         manner credits can be created, accounted for, transferred
    26         and retired.
    27             (ii)  To submit reports to the commission at such
    28         times and in such manner as the commission shall direct.
    29         (3)  All qualifying alternative energy systems must
    30     include a qualifying meter to record the cumulative electric
    20070H1203B2291                  - 7 -     

     1     production to verify the advanced energy credit value.
     2     Qualifying meters will be approved by the commission as
     3     defined in paragraph (4).
     4         (4)  (i)  An electric distribution company or electric
     5         generation supplier shall comply with the applicable
     6         requirements of this section by purchasing sufficient
     7         alternative energy credits and submitting documentation
     8         of compliance to the program administrator.
     9             (ii)  For purposes of this subsection, one
    10         alternative energy credit shall represent one megawatt
    11         hour of qualified alternative electric generation,
    12         whether self-generated, purchased along with the electric
    13         commodity or separately through a tradable instrument and
    14         otherwise meeting the requirements of commission
    15         regulations and the program administrator.
    16         (5)  The alternative energy credits program shall include
    17     provisions requiring a reporting period as defined in section
    18     2 for all covered entities under this act. The alternative
    19     energy credits program shall also include a true-up period as
    20     defined in section 2. The true-up period shall provide
    21     entities covered under this act the ability to obtain the
    22     required number of alternative energy credits or to make up
    23     any shortfall of the alternative energy credits they may be
    24     required to obtain to comply with this act. A force majeure
    25     provision shall also be provided for under the true-up period
    26     provisions.
    27         (6)  An electric distribution company and electric
    28     generation supplier may bank or place in reserve alternative
    29     energy credits produced in one reporting year for compliance
    30     in either or both of the two subsequent reporting years,
    20070H1203B2291                  - 8 -     

     1     subject to the limitations set forth in this subsection and
     2     provided that the electric distribution company and electric
     3     generation supplier are in compliance for all previous
     4     reporting years. In addition, the electric distribution
     5     company and electric generation supplier shall demonstrate to
     6     the satisfaction of the commission that such credits:
     7             (i)  were in excess of the alternative energy credits
     8         needed for compliance in the year in which they were
     9         generated and that such excess credits have not
    10         previously been used for compliance under this act;
    11             (ii)  were produced by the generation of electrical
    12         energy by alternative energy sources and sold to retail
    13         customers during the year in which they were generated;
    14         and
    15             (iii)  have not otherwise been nor will be sold,
    16         retired, claimed or represented as part of satisfying
    17         compliance with alternative or renewable energy portfolio
    18         standards in other states.
    19         (7)  An electric distribution company or an electric
    20     generation supplier with sales that are exempted under
    21     subsection (d) may bank credits for retail sales of
    22     electricity generated from Tier I and Tier II sources made
    23     prior to the end of the cost-recovery period and after the
    24     effective date of this act. Bankable credits shall be limited
    25     to credits associated with electricity sold from Tier I and
    26     Tier II sources during a reporting year which exceeds the
    27     volume of sales from such sources by an electric distribution
    28     company or electric generation supplier during the 12-month
    29     period immediately preceding the effective date of this act.
    30     All credits banked under this subsection shall be available
    20070H1203B2291                  - 9 -     

     1     for compliance with subsections (b) and (c) for no more than
     2     two reporting years following the conclusion of the cost-
     3     recovery period.
     4         (8)  The commission or its designee shall develop a
     5     registry of pertinent information regarding all available
     6     alternative energy credits, credit transactions among
     7     electric distribution companies and electric generation
     8     suppliers, the number of alternative energy credits sold or
     9     transferred and the price paid for the sale or transfer of
    10     the credits. The registry shall provide current information
    11     to electric distribution companies, electric generation
    12     suppliers and the general public on the status of alternative
    13     energy credits created, sold or transferred within this
    14     Commonwealth.
    15         (9)  The commission may impose an administrative fee on
    16     an alternative energy credit transaction. The amount of this
    17     fee may not exceed the actual direct cost of processing the
    18     transaction by the alternative energy credits administrator.
    19     The commission is authorized to utilize up to 5% of the
    20     alternative compliance fees generated under subsection (f)
    21     for administrative expenses directly associated with this
    22     act.
    23         (10)  The commission shall establish regulations
    24     governing the verification and tracking of energy efficiency
    25     and demand-side management measures pursuant to this act,
    26     which shall include benefits to all utility customer classes.
    27     When developing regulations, the commission must give
    28     reasonable consideration to existing and proposed regulations
    29     and rules in existence in the regional transmission
    30     organizations that manage the transmission system in any part
    20070H1203B2291                 - 10 -     

     1     of this Commonwealth. All verified reductions shall accrue
     2     credits starting with the passage of this act.
     3         (11)  The commission shall within 120 days of the
     4     effective date of this act develop a depreciation schedule
     5     for alternative energy credits created through demand-side
     6     management, energy efficiency and load management
     7     technologies and shall develop standards for tracking and
     8     verifying savings from energy efficiency, load management and
     9     demand-side management measures. The commission shall allow
    10     for a 60-day public comment period and shall issue final
    11     standards within 30 days of the close of the public comment
    12     period.
    13         (12)  (i)  Unless a contractual provision explicitly
    14         assigns alternative energy credits in a different manner,
    15         the owner of the alternative energy system or a customer-
    16         generator owns any and all alternative energy credits
    17         associated with or created by the production of electric
    18         energy by such facility or customer, and the owner or
    19         customer shall be entitled to sell, transfer or take any
    20         other action to which a legal owner of property is
    21         entitled to take with respect to the credits.
    22             (ii)  This paragraph shall apply to all alternative
    23         energy credits which were created pursuant to this act
    24         prior to the effective date of this paragraph and which
    25         will be created after the effective date of this
    26         paragraph, regardless of when any underlying contract for
    27         the purchase of electric energy or other products from
    28         the generator that qualifies as an alternative energy
    29         system was executed.
    30     (f)  Alternative compliance payment.--
    20070H1203B2291                 - 11 -     

     1         (1)  At the end of each program year, the program
     2     administrator shall provide a report to the commission and to
     3     each covered electric distribution company showing their
     4     status level of alternative energy acquisition.
     5         (2)  The commission shall conduct a review of each
     6     determination made under subsections (b) and (c). If, after
     7     notice and hearing, the commission determines that an
     8     electric distribution company or electric generation supplier
     9     has failed to comply with subsections (b) and (c), the
    10     commission shall impose an alternative compliance payment on
    11     that company or supplier.
    12         (3)  The alternative compliance payment, with the
    13     exception of the solar photovoltaic share compliance
    14     requirement set forth in subsection (b)(2), shall be $45
    15     times the number of additional alternative energy credits
    16     needed in order to comply with subsection (b) or (c).
    17         (4)  The alternative compliance payment for the solar
    18     photovoltaic share shall be 200% of the average market value
    19     of solar renewable energy credits sold during the reporting
    20     period within the service region of the regional transmission
    21     organization, including, where applicable, the levelized up-
    22     front rebates received by sellers of solar renewable energy
    23     credits in other jurisdictions in the PJM Interconnection,
    24     L.L.C. transmission organization (PJM) or its successor.
    25         (5)  The commission shall establish a process to provide
    26     for, at least annually, a review of the alternative energy
    27     market within this Commonwealth and the service territories
    28     of the regional transmission organizations that manage the
    29     transmission system in any part of this Commonwealth. The
    30     commission will use the results of this study to identify any
    20070H1203B2291                 - 12 -     

     1     needed changes to the cost associated with the alternative
     2     compliance payment program. If the commission finds that the
     3     costs associated with the alternative compliance payment
     4     program must be changed, the commission shall present these
     5     findings to the General Assembly for legislative enactment.
     6     * * *
     7  Section 4.  Portfolio requirements in other states.
     8     If an electric distribution supplier or electric generation
     9  company provider sells electricity in any other state and is
    10  subject to renewable energy portfolio requirements in that
    11  state, they shall list any such requirement and shall indicate
    12  how it satisfied those renewable energy portfolio requirements.
    13  To prevent double-counting, the electric distribution supplier
    14  or electric generation company shall not satisfy Pennsylvania's
    15  alternative energy portfolio requirements using alternative
    16  energy used to satisfy another state's portfolio requirements[.
    17  Energy derived only from alternative energy sources inside the
    18  geographical boundaries of this Commonwealth or within the
    19  service territory of any regional transmission organization that
    20  manages the transmission system in any part of this Commonwealth
    21  shall be eligible to meet the compliance requirements under this
    22  act.] or alternative energy credits already purchased by
    23  individuals, businesses, or government bodies that do not have a
    24  compliance obligation under this act unless the individual,
    25  business or government body sells those credits to the electric
    26  distribution company or electric generation supplier. Energy
    27  derived from alternative energy sources inside the geographical
    28  boundaries of this Commonwealth shall be eligible to meet the
    29  compliance requirements under this act. Energy derived from
    30  alternative energy sources located outside the geographical
    20070H1203B2291                 - 13 -     

     1  boundaries of this Commonwealth but within the service territory
     2  of a regional transmission organization that manages the
     3  transmission system in any part of this Commonwealth shall only
     4  be eligible to meet the compliance requirements of electric
     5  distribution companies or electric generation suppliers located
     6  within the service territory of the same regional transmission
     7  organization. For purposes of compliance with this act,
     8  alternative energy sources located in the PJM Interconnection,
     9  L.L.C. regional transmission organization (PJM) or its successor
    10  service territory shall be eligible to fulfill compliance
    11  obligations of all Pennsylvania electric distribution companies
    12  and electric generation suppliers. Energy derived from
    13  alternative energy sources located outside the service territory
    14  of a regional transmission organization that manages the
    15  transmission system in any part of this Commonwealth shall not
    16  be eligible to meet the compliance requirements of this act.
    17  Electric distribution companies and electric generation
    18  suppliers shall document that this energy was not used to
    19  satisfy another state's renewable energy portfolio standards.
    20  Section 5.  Interconnection standards for customer-generator
    21                 facilities.
    22     Excess generation from net-metered customer-generators shall
    23  receive full retail value for all energy produced on an annual
    24  basis. The commission shall develop technical and net metering
    25  interconnection rules for customer-generators intending to
    26  operate renewable onsite generators in parallel with the
    27  electric utility grid, consistent with rules defined in other
    28  states within the service region of the regional transmission
    29  organization that manages the transmission system in any part of
    30  this Commonwealth. The commission shall convene a stakeholder
    20070H1203B2291                 - 14 -     

     1  process to develop Statewide technical and net metering rules
     2  for customer-generators. The commission shall develop these
     3  rules within nine months of the effective date of this act.
     4     Section 3.  The addition of section 3(e)(12) of the act shall
     5  apply to all alternative energy credits created under the act
     6  before, on or after the effective date of this section,
     7  regardless of when any underlying contract for the purchase of
     8  electric energy or other products from the generator that
     9  qualifies as an alternative energy system was executed.
    10     Section 4.  This act shall take effect immediately.
    11     SECTION 1.  THE DEFINITIONS OF "ALTERNATIVE ENERGY SOURCES,"   <--
    12  "CUSTOMER-GENERATOR," "FORCE MAJEURE" AND "NET METERING" IN
    13  SECTION 2 OF THE ACT OF NOVEMBER 30, 2004 (P.L.1672, NO.213),
    14  KNOWN AS THE ALTERNATIVE ENERGY PORTFOLIO STANDARDS ACT, ARE
    15  AMENDED TO READ:
    16  SECTION 2.  DEFINITIONS.
    17     THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS ACT SHALL
    18  HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE
    19  CONTEXT CLEARLY INDICATES OTHERWISE:
    20     * * *
    21     "ALTERNATIVE ENERGY SOURCES."  THE TERM SHALL INCLUDE THE
    22  FOLLOWING EXISTING AND NEW SOURCES FOR THE PRODUCTION OF
    23  ELECTRICITY:
    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
    28     PRODUCTION OF ELECTRIC POWER BY HARNESSING THE HYDROELECTRIC
    29     POTENTIAL OF MOVING WATER IMPOUNDMENTS, INCLUDING PUMPED
    30     STORAGE THAT DOES NOT MEET THE REQUIREMENTS OF LOW-IMPACT
    20070H1203B2291                 - 15 -     

     1     HYDROPOWER UNDER PARAGRAPH (5).
     2         (5)  LOW-IMPACT HYDROPOWER CONSISTING OF ANY TECHNOLOGY
     3     THAT PRODUCES ELECTRIC POWER AND THAT HARNESSES THE
     4     HYDROELECTRIC POTENTIAL OF MOVING WATER IMPOUNDMENTS,
     5     PROVIDED THE HYDROPOWER SOURCE HAS A NAMEPLATE CAPACITY OF 21
     6     MEGAWATTS OR LESS AND A LICENSE ISSUED BY THE FEDERAL ENERGY
     7     REGULATORY COMMISSION FOR THE HYDROPOWER SOURCE WAS HELD IN
     8     WHOLE OR IN PART BY A MUNICIPALITY OR ELECTRIC COOPERATIVE ON
     9     JULY 1, 2007, OR SUCH INCREMENTAL HYDROELECTRIC DEVELOPMENT:
    10             (I)  DOES NOT ADVERSELY CHANGE EXISTING IMPACTS TO
    11         AQUATIC SYSTEMS;
    12             (II)  MEETS THE CERTIFICATION STANDARDS ESTABLISHED
    13         BY THE LOW IMPACT HYDROPOWER INSTITUTE AND AMERICAN
    14         RIVERS, INC., OR THEIR SUCCESSORS;
    15             (III)  PROVIDES AN ADEQUATE WATER FLOW FOR PROTECTION
    16         OF AQUATIC LIFE AND FOR SAFE AND EFFECTIVE FISH PASSAGE;
    17             (IV)  PROTECTS AGAINST EROSION; AND
    18             (V)  PROTECTS CULTURAL AND HISTORIC RESOURCES.
    19         (6)  GEOTHERMAL ENERGY, WHICH SHALL MEAN ELECTRICITY
    20     PRODUCED BY EXTRACTING HOT WATER OR STEAM FROM GEOTHERMAL
    21     RESERVES IN THE EARTH'S CRUST AND SUPPLIED TO STEAM TURBINES
    22     THAT DRIVE GENERATORS TO PRODUCE ELECTRICITY.
    23         (7)  BIOMASS ENERGY, WHICH SHALL MEAN THE GENERATION OF
    24     ELECTRICITY UTILIZING THE FOLLOWING:
    25             (I)  ORGANIC MATERIAL FROM A PLANT THAT IS GROWN FOR
    26         THE PURPOSE OF BEING USED TO PRODUCE ELECTRICITY OR IS
    27         PROTECTED BY THE FEDERAL CONSERVATION RESERVE PROGRAM
    28         (CRP) AND PROVIDED FURTHER THAT CROP PRODUCTION ON CRP
    29         LANDS DOES NOT PREVENT ACHIEVEMENT OF THE WATER QUALITY
    30         PROTECTION, SOIL EROSION PREVENTION OR WILDLIFE
    20070H1203B2291                 - 16 -     

     1         ENHANCEMENT PURPOSES FOR WHICH THE LAND WAS PRIMARILY SET
     2         ASIDE; OR
     3             (II)  ANY SOLID NONHAZARDOUS, CELLULOSIC WASTE
     4         MATERIAL THAT IS SEGREGATED FROM OTHER WASTE MATERIALS,
     5         SUCH AS WASTE PALLETS, CRATES AND LANDSCAPE OR RIGHT-OF-
     6         WAY TREE TRIMMINGS OR AGRICULTURAL SOURCES, INCLUDING
     7         ORCHARD TREE CROPS, VINEYARDS, GRAIN, LEGUMES, SUGAR AND
     8         OTHER CROP BY-PRODUCTS OR RESIDUES.
     9         (8)  BIOLOGICALLY DERIVED METHANE GAS, WHICH SHALL
    10     INCLUDE METHANE FROM THE ANAEROBIC DIGESTION OF ORGANIC
    11     MATERIALS FROM YARD WASTE, SUCH AS GRASS CLIPPINGS AND
    12     LEAVES, FOOD WASTE, ANIMAL WASTE AND SEWAGE SLUDGE. THE TERM
    13     ALSO INCLUDES LANDFILL METHANE GAS.
    14         (9)  FUEL CELLS, WHICH SHALL MEAN ANY ELECTROCHEMICAL
    15     DEVICE THAT CONVERTS CHEMICAL ENERGY IN A HYDROGEN-RICH FUEL
    16     DIRECTLY INTO ELECTRICITY, HEAT AND WATER WITHOUT COMBUSTION.
    17         (10)  WASTE COAL, WHICH SHALL INCLUDE THE COMBUSTION OF
    18     WASTE COAL IN FACILITIES IN WHICH THE WASTE COAL WAS DISPOSED
    19     OR ABANDONED PRIOR TO JULY 31, 1982, OR DISPOSED OF
    20     THEREAFTER IN A PERMITTED COAL REFUSE DISPOSAL SITE
    21     REGARDLESS OF WHEN DISPOSED OF, AND USED TO GENERATE
    22     ELECTRICITY, OR SUCH OTHER WASTE COAL COMBUSTION MEETING
    23     ALTERNATE ELIGIBILITY REQUIREMENTS ESTABLISHED BY REGULATION.
    24     FACILITIES COMBUSTING WASTE COAL SHALL USE AT A MINIMUM A
    25     COMBINED FLUIDIZED BED BOILER AND BE OUTFITTED WITH A
    26     LIMESTONE INJECTION SYSTEM AND A FABRIC FILTER PARTICULATE
    27     REMOVAL SYSTEM. ALTERNATIVE ENERGY CREDITS SHALL BE
    28     CALCULATED BASED UPON THE PROPORTION OF WASTE COAL UTILIZED
    29     TO PRODUCE ELECTRICITY AT THE FACILITY.
    30         (11)  COAL MINE METHANE, WHICH SHALL MEAN METHANE GAS
    20070H1203B2291                 - 17 -     

     1     EMITTING FROM ABANDONED OR WORKING COAL MINES.
     2         (12)  DEMAND-SIDE MANAGEMENT CONSISTING OF THE MANAGEMENT
     3     OF CUSTOMER CONSUMPTION OF ELECTRICITY OR THE DEMAND FOR
     4     ELECTRICITY THROUGH THE IMPLEMENTATION OF:
     5             (I)  ENERGY EFFICIENCY TECHNOLOGIES, MANAGEMENT
     6         PRACTICES OR OTHER STRATEGIES IN RESIDENTIAL, COMMERCIAL,
     7         INSTITUTIONAL OR GOVERNMENT CUSTOMERS THAT REDUCE
     8         ELECTRICITY CONSUMPTION BY THOSE CUSTOMERS;
     9             (II)  LOAD MANAGEMENT OR DEMAND RESPONSE
    10         TECHNOLOGIES, MANAGEMENT PRACTICES OR OTHER STRATEGIES IN
    11         RESIDENTIAL, COMMERCIAL, INDUSTRIAL, INSTITUTIONAL AND
    12         GOVERNMENT CUSTOMERS THAT SHIFT ELECTRIC LOAD FROM
    13         PERIODS OF HIGHER DEMAND TO PERIODS OF LOWER DEMAND; OR
    14             (III)  INDUSTRIAL BY-PRODUCT TECHNOLOGIES CONSISTING
    15         OF THE USE OF A BY-PRODUCT FROM AN INDUSTRIAL PROCESS,
    16         INCLUDING THE REUSE OF ENERGY FROM EXHAUST GASES OR OTHER
    17         MANUFACTURING BY-PRODUCTS THAT ARE USED IN THE DIRECT
    18         PRODUCTION OF ELECTRICITY AT THE FACILITY OF A CUSTOMER.
    19         (13)  DISTRIBUTED GENERATION SYSTEM, WHICH SHALL MEAN THE
    20     SMALL-SCALE POWER GENERATION OF ELECTRICITY AND USEFUL
    21     THERMAL ENERGY.
    22     * * *
    23     "CUSTOMER-GENERATOR."  A NONUTILITY OWNER OR OPERATOR OF A
    24  NET METERED DISTRIBUTED GENERATION SYSTEM WITH A NAMEPLATE
    25  CAPACITY OF NOT GREATER THAN 50 KILOWATTS IF INSTALLED AT A
    26  RESIDENTIAL SERVICE OR NOT LARGER THAN [1,000] 3,000 KILOWATTS
    27  AT OTHER CUSTOMER SERVICE LOCATIONS, EXCEPT FOR CUSTOMERS WHOSE
    28  SYSTEMS ARE ABOVE [ONE MEGAWATT] THREE MEGAWATTS AND UP TO [TWO]
    29  FIVE MEGAWATTS WHO MAKE THEIR SYSTEMS AVAILABLE TO OPERATE IN
    30  PARALLEL WITH THE ELECTRIC UTILITY DURING GRID EMERGENCIES AS
    20070H1203B2291                 - 18 -     

     1  DEFINED BY THE REGIONAL TRANSMISSION ORGANIZATION OR [WHERE A
     2  MICROGRID IS IN PLACE] WHO MAKE THEIR SYSTEMS AVAILABLE FOR THE
     3  PRIMARY OR SECONDARY PURPOSE OF MAINTAINING CRITICAL
     4  INFRASTRUCTURE, SUCH AS HOMELAND SECURITY ASSIGNMENTS, EMERGENCY
     5  SERVICES FACILITIES, HOSPITALS, TRAFFIC SIGNALS, WASTEWATER
     6  TREATMENT PLANTS OR TELECOMMUNICATIONS FACILITIES, PROVIDED THAT
     7  TECHNICAL RULES FOR OPERATING GENERATORS INTERCONNECTED WITH
     8  FACILITIES OF AN ELECTRIC DISTRIBUTION COMPANY, ELECTRIC
     9  COOPERATIVE OR MUNICIPAL ELECTRIC SYSTEM HAVE BEEN PROMULGATED
    10  BY THE INSTITUTE OF ELECTRICAL AND ELECTRONIC ENGINEERS AND THE
    11  PENNSYLVANIA PUBLIC UTILITY COMMISSION. A NET METERED
    12  DISTRIBUTED GENERATION SYSTEM CAPABLE OF PROVIDING MORE THAN ONE
    13  MEGAWATT THROUGH ITS INTERCONNECTION SHALL COMPLY WITH ALL
    14  TECHNICAL RULES NECESSARY TO ENSURE THAT SIGNIFICANT
    15  FLUCTUATIONS IN THE ELECTRICAL SUPPLY TO THE ELECTRIC
    16  DISTRIBUTION COMPANY, ELECTRIC COOPERATIVE OR MUNICIPAL ELECTRIC
    17  SYSTEM WILL NOT INTERFERE WITH ITS OPERATIONS.
    18     * * *
    19     "FORCE MAJEURE."  UPON ITS OWN INITIATIVE OR UPON A REQUEST
    20  OF AN ELECTRIC DISTRIBUTION COMPANY OR AN ELECTRIC GENERATOR
    21  SUPPLIER, THE PENNSYLVANIA PUBLIC UTILITY COMMISSION, WITHIN 60
    22  DAYS, SHALL DETERMINE IF ALTERNATIVE ENERGY RESOURCES ARE
    23  REASONABLY AVAILABLE IN THE MARKETPLACE IN SUFFICIENT QUANTITIES
    24  FOR THE ELECTRIC DISTRIBUTION COMPANIES AND ELECTRIC GENERATION
    25  SUPPLIERS TO MEET THEIR OBLIGATIONS FOR THAT REPORTING PERIOD
    26  UNDER THIS ACT. IN MAKING THIS DETERMINATION THE COMMISSION
    27  SHALL CONSIDER WHETHER ELECTRIC DISTRIBUTION COMPANIES OR
    28  ELECTRIC GENERATION SUPPLIERS HAVE MADE A GOOD FAITH EFFORT TO
    29  ACQUIRE SUFFICIENT ALTERNATIVE ENERGY TO COMPLY WITH THEIR
    30  OBLIGATIONS. SUCH GOOD FAITH EFFORTS SHALL INCLUDE, BUT ARE NOT
    20070H1203B2291                 - 19 -     

     1  LIMITED TO, BANKING ALTERNATIVE ENERGY CREDITS DURING THEIR
     2  TRANSITION PERIODS, SEEKING ALTERNATIVE ENERGY CREDITS THROUGH
     3  COMPETITIVE SOLICITATIONS AND SEEKING TO PROCURE ALTERNATIVE
     4  ENERGY CREDITS OR ALTERNATIVE ENERGY THROUGH LONG-TERM
     5  CONTRACTS. IN FURTHER MAKING ITS DETERMINATION THE COMMISSION
     6  SHALL ASSESS THE AVAILABILITY OF ALTERNATIVE ENERGY CREDITS IN
     7  THE GENERATION ATTRIBUTES TRACKING SYSTEM (GATS) OR ITS
     8  SUCCESSOR, AND THE AVAILABILITY OF ALTERNATIVE ENERGY CREDITS
     9  GENERALLY IN PENNSYLVANIA AND OTHER JURISDICTIONS IN THE PJM
    10  INTERCONNECTION, L.L.C. REGIONAL TRANSMISSION ORGANIZATION (PJM)
    11  OR ITS SUCCESSOR. THE COMMISSION MAY ALSO REQUIRE SOLICITATIONS
    12  FOR ALTERNATIVE ENERGY CREDITS AS PART OF DEFAULT SERVICE BEFORE
    13  REQUESTS OF FORCE MAJEURE CAN BE MADE. IF THE COMMISSION FURTHER
    14  DETERMINES THAT ALTERNATIVE ENERGY RESOURCES ARE NOT REASONABLY
    15  AVAILABLE IN SUFFICIENT QUANTITIES IN THE MARKETPLACE FOR THE
    16  ELECTRIC DISTRIBUTION COMPANIES AND ELECTRIC GENERATION
    17  SUPPLIERS TO MEET THEIR OBLIGATIONS UNDER THIS ACT, THEN THE
    18  COMMISSION SHALL MODIFY THE UNDERLYING OBLIGATION OF THE
    19  ELECTRIC DISTRIBUTION COMPANY OR ELECTRIC GENERATION SUPPLIER OR
    20  RECOMMEND TO THE GENERAL ASSEMBLY THAT THE UNDERLYING OBLIGATION
    21  BE ELIMINATED.
    22     * * *
    23     "NET METERING."  THE MEANS OF MEASURING THE DIFFERENCE
    24  BETWEEN THE ELECTRICITY SUPPLIED BY AN ELECTRIC UTILITY AND THE
    25  ELECTRICITY GENERATED BY A CUSTOMER-GENERATOR [WHEN THE
    26  RENEWABLE ENERGY GENERATING SYSTEM IS INTENDED PRIMARILY], WHEN
    27  ANY PORTION OF THE ELECTRICITY GENERATED BY THE ALTERNATIVE
    28  ENERGY GENERATING SYSTEM IS USED TO OFFSET PART OR ALL OF THE
    29  CUSTOMER-GENERATOR'S REQUIREMENTS FOR ELECTRICITY. VIRTUAL METER
    30  AGGREGATION ON PROPERTIES OWNED OR LEASED AND OPERATED BY A
    20070H1203B2291                 - 20 -     

     1  CUSTOMER-GENERATOR AND LOCATED WITHIN TWO MILES OF THE
     2  BOUNDARIES OF THE CUSTOMER-GENERATOR'S PROPERTY AND WITHIN A
     3  SINGLE ELECTRIC DISTRIBUTION COMPANY'S SERVICE TERRITORY SHALL
     4  BE ELIGIBLE FOR NET METERING. AT THE END OF EACH MONTHLY BILLING
     5  PERIOD, THE ELECTRIC DISTRIBUTION COMPANY SHALL COMPENSATE THE
     6  CUSTOMER-GENERATOR FOR KILOWATT-HOURS GENERATED BY THE CUSTOMER-
     7  GENERATOR OVER THE AMOUNT OF KILOWATT HOURS DELIVERED BY THE
     8  ELECTRIC DISTRIBUTION COMPANY DURING THE BILLING PERIOD AT THE
     9  ELECTRIC DISTRIBUTION COMPANY'S AVOIDED COST OF WHOLESALE POWER.
    10  NO CONTRACT SHALL ABROGATE THE CUSTOMER-GENERATOR'S RIGHT TO
    11  RECEIVE THESE PAYMENTS. NO CUSTOMER GENERATOR SHALL OPERATE MORE
    12  THAN ONE ALTERNATIVE ENERGY PROJECT THAT IS ENGAGED IN VIRTUAL
    13  METER AGGREGATION WITHIN EACH OF THE ELECTRIC DISTRIBUTION
    14  COMPANY'S SERVICE TERRITORIES.
    15     * * *
    16     SECTION 2.  SECTION 3(B) AND (F) OF THE ACT ARE AMENDED AND
    17  SUBSECTION (E) IS AMENDED BY ADDING A PARAGRAPH TO READ:
    18  SECTION 3.  ALTERNATIVE ENERGY PORTFOLIO STANDARDS.
    19     * * *
    20     (B)  TIER I AND SOLAR PHOTOVOLTAIC SHARES.--
    21         (1)  TWO YEARS AFTER THE EFFECTIVE DATE OF THIS ACT, AT
    22     LEAST 1.5% OF THE ELECTRIC ENERGY SOLD BY AN ELECTRIC
    23     DISTRIBUTION COMPANY OR ELECTRIC GENERATION SUPPLIER TO
    24     RETAIL ELECTRIC CUSTOMERS IN THIS COMMONWEALTH SHALL BE
    25     GENERATED FROM TIER I ALTERNATIVE ENERGY SOURCES. EXCEPT AS
    26     PROVIDED IN THIS SECTION, THE MINIMUM PERCENTAGE OF ELECTRIC
    27     ENERGY REQUIRED TO BE SOLD TO RETAIL ELECTRIC CUSTOMERS FROM
    28     ALTERNATIVE ENERGY SOURCES SHALL INCREASE TO 2% THREE YEARS
    29     AFTER THE EFFECTIVE DATE OF THIS ACT. THE MINIMUM PERCENTAGE
    30     OF ELECTRIC ENERGY REQUIRED TO BE SOLD TO RETAIL ELECTRIC
    20070H1203B2291                 - 21 -     

     1     CUSTOMERS FROM ALTERNATIVE ENERGY SOURCES SHALL INCREASE BY
     2     AT LEAST 0.5% EACH YEAR SO THAT AT LEAST 8% OF THE ELECTRIC
     3     ENERGY SOLD BY AN ELECTRIC DISTRIBUTION COMPANY OR ELECTRIC
     4     GENERATION SUPPLIER TO RETAIL ELECTRIC CUSTOMERS IN THAT
     5     CERTIFICATED TERRITORY IN THE 15TH YEAR AFTER THE EFFECTIVE
     6     DATE OF THIS SUBSECTION IS SOLD FROM TIER I ALTERNATIVE
     7     ENERGY RESOURCES.
     8         (2)  [OF THE ELECTRIC ENERGY REQUIRED TO BE SOLD FROM
     9     TIER I SOURCES, THE TOTAL PERCENTAGE THAT MUST BE SOLD FROM
    10     SOLAR PHOTOVOLTAIC TECHNOLOGIES IS FOR:] THE TOTAL PERCENTAGE
    11     OF THE ELECTRIC ENERGY SOLD BY AN ELECTRIC DISTRIBUTION
    12     COMPANY OR ELECTRIC GENERATION SUPPLIER TO RETAIL ELECTRIC
    13     CUSTOMERS IN THIS COMMONWEALTH THAT MUST BE SOLD FROM SOLAR
    14     PHOTOVOLTAIC TECHNOLOGIES IS:
    15             [(I)  YEARS 1 THROUGH 4 - 0.0013%.
    16             (II)  YEARS 5 THROUGH 9 - 0.0203%.
    17             (III)  YEARS 10 THROUGH 14 - 0.2500%.
    18             (IV)  YEARS 15 AND THEREAFTER - 0.5000%.]
    19             (I)  0.0013% FOR JUNE 1, 2006, THROUGH MAY 31, 2007.
    20             (II)  0.0030% FOR JUNE 1, 2007, THROUGH MAY 31, 2008.
    21             (III)  0.0063% FOR JUNE 1, 2008, THROUGH MAY 31,
    22         2009.
    23             (IV)  0.0120% FOR JUNE 1, 2009, THROUGH MAY 31, 2010.
    24             (V)  0.0203% FOR JUNE 1, 2010, THROUGH MAY 31, 2011.
    25             (VI)  0.0325% FOR JUNE 1, 2011, THROUGH MAY 31, 2012.
    26             (VII)  0.0510% FOR JUNE 1, 2012, THROUGH MAY 31,
    27         2013.
    28             (VIII)  0.0840% FOR JUNE 1, 2013, THROUGH MAY 31,
    29         2014.
    30             (IX)  0.1440% FOR JUNE 1, 2014, THROUGH MAY 31, 2015.
    20070H1203B2291                 - 22 -     

     1             (X)  0.2500% FOR JUNE 1, 2015, THROUGH MAY 31, 2016.
     2             (XI)  0.2933% FOR JUNE 1, 2016, THROUGH MAY 31, 2017.
     3             (XII)  0.3400% FOR JUNE 1, 2017, THROUGH MAY 31,
     4         2018.
     5             (XIII)  0.3900% FOR JUNE 1, 2018, THROUGH MAY 31,
     6         2019.
     7             (XIV)  0.4433% FOR JUNE 1, 2019, THROUGH MAY 31,
     8         2020.
     9             (XV)  0.5000% FOR JUNE 1, 2020, AND THEREAFTER.
    10         (3)  UPON COMMENCEMENT OF THE BEGINNING OF THE 6TH
    11     REPORTING YEAR, THE COMMISSION SHALL UNDERTAKE A REVIEW OF
    12     THE COMPLIANCE BY ELECTRIC DISTRIBUTION COMPANIES AND
    13     ELECTRIC GENERATION SUPPLIERS WITH THE REQUIREMENTS OF THIS
    14     ACT. THE REVIEW SHALL ALSO INCLUDE THE STATUS OF ALTERNATIVE
    15     ENERGY TECHNOLOGIES WITHIN THIS COMMONWEALTH AND THE CAPACITY
    16     TO ADD ADDITIONAL ALTERNATIVE ENERGY RESOURCES. THE
    17     COMMISSION SHALL USE THE RESULTS OF THIS REVIEW TO RECOMMEND
    18     TO THE GENERAL ASSEMBLY ADDITIONAL COMPLIANCE GOALS BEYOND
    19     YEAR 15. THE COMMISSION SHALL WORK WITH THE DEPARTMENT IN
    20     EVALUATING THE FUTURE ALTERNATIVE ENERGY RESOURCE POTENTIAL.
    21     * * *
    22     (E)  ALTERNATIVE ENERGY CREDITS.--
    23         * * *
    24         (12)  (I)  UNLESS A CONTRACTUAL PROVISION EXPLICITLY
    25         ASSIGNS ALTERNATIVE ENERGY CREDITS IN A DIFFERENT MANNER,
    26         THE OWNER OF THE ALTERNATIVE ENERGY SYSTEM OR A CUSTOMER-
    27         GENERATOR OWNS ANY AND ALL ALTERNATIVE ENERGY CREDITS
    28         ASSOCIATED WITH OR CREATED BY THE PRODUCTION OF ELECTRIC
    29         ENERGY BY SUCH FACILITY OR CUSTOMER, AND THE OWNER OR
    30         CUSTOMER SHALL BE ENTITLED TO SELL, TRANSFER OR TAKE ANY
    20070H1203B2291                 - 23 -     

     1         OTHER ACTION TO WHICH A LEGAL OWNER OF PROPERTY IS
     2         ENTITLED TO TAKE WITH RESPECT TO THE CREDITS.
     3             (II)  THIS PARAGRAPH SHALL APPLY TO ALL ALTERNATIVE
     4         ENERGY CREDITS CREATED PURSUANT TO THIS ACT EXCEPT THOSE
     5         CREATED UNDER CONTRACTS WHICH WERE EXECUTED PRIOR TO THE
     6         EFFECTIVE DATE OF THIS PARAGRAPH BETWEEN AN ELECTRIC
     7         DISTRIBUTION COMPANY AND A COGENERATION FACILITY OR A
     8         SMALL POWER PRODUCTION FACILITY AS THOSE TERMS ARE
     9         DEFINED UNDER THE FEDERAL PUBLIC UTILITY REGULATORY
    10         POLICIES ACT OF 1978 (16 U.S.C. § 824A-3).
    11     (F)  ALTERNATIVE COMPLIANCE PAYMENT.--
    12         (1)  AT THE END OF EACH PROGRAM YEAR, THE PROGRAM
    13     ADMINISTRATOR SHALL PROVIDE A REPORT TO THE COMMISSION AND TO
    14     EACH COVERED ELECTRIC DISTRIBUTION COMPANY SHOWING THEIR
    15     STATUS LEVEL OF ALTERNATIVE ENERGY ACQUISITION.
    16         (2)  THE COMMISSION SHALL CONDUCT A REVIEW OF EACH
    17     DETERMINATION MADE UNDER SUBSECTIONS (B) AND (C). IF, AFTER
    18     NOTICE AND HEARING, THE COMMISSION DETERMINES THAT AN
    19     ELECTRIC DISTRIBUTION COMPANY OR ELECTRIC GENERATION SUPPLIER
    20     HAS FAILED TO COMPLY WITH SUBSECTIONS (B) AND (C), THE
    21     COMMISSION SHALL IMPOSE AN ALTERNATIVE COMPLIANCE PAYMENT ON
    22     THAT COMPANY OR SUPPLIER.
    23         (3)  THE ALTERNATIVE COMPLIANCE PAYMENT, WITH THE
    24     EXCEPTION OF THE SOLAR PHOTOVOLTAIC SHARE COMPLIANCE
    25     REQUIREMENT SET FORTH IN SUBSECTION (B)(2), SHALL BE $45
    26     TIMES THE NUMBER OF ADDITIONAL ALTERNATIVE ENERGY CREDITS
    27     NEEDED IN ORDER TO COMPLY WITH SUBSECTION (B) OR (C).
    28         (4)  THE ALTERNATIVE COMPLIANCE PAYMENT FOR THE SOLAR
    29     PHOTOVOLTAIC SHARE SHALL BE 200% OF THE AVERAGE MARKET VALUE
    30     OF SOLAR RENEWABLE ENERGY CREDITS SOLD DURING THE REPORTING
    20070H1203B2291                 - 24 -     

     1     PERIOD WITHIN THE SERVICE REGION OF THE REGIONAL TRANSMISSION
     2     ORGANIZATION, INCLUDING, WHERE APPLICABLE, THE LEVELIZED UP-
     3     FRONT REBATES RECEIVED BY SELLERS OF SOLAR RENEWABLE ENERGY
     4     CREDITS IN OTHER JURISDICTIONS IN THE PJM INTERCONNECTION,
     5     L.L.C. TRANSMISSION ORGANIZATION (PJM) OR ITS SUCCESSOR.
     6         (5)  THE COMMISSION SHALL ESTABLISH A PROCESS TO PROVIDE
     7     FOR, AT LEAST ANNUALLY, A REVIEW OF THE ALTERNATIVE ENERGY
     8     MARKET WITHIN THIS COMMONWEALTH AND THE SERVICE TERRITORIES
     9     OF THE REGIONAL TRANSMISSION ORGANIZATIONS THAT MANAGE THE
    10     TRANSMISSION SYSTEM IN ANY PART OF THIS COMMONWEALTH. THE
    11     COMMISSION WILL USE THE RESULTS OF THIS STUDY TO IDENTIFY ANY
    12     NEEDED CHANGES TO THE COST ASSOCIATED WITH THE ALTERNATIVE
    13     COMPLIANCE PAYMENT PROGRAM. IF THE COMMISSION FINDS THAT THE
    14     COSTS ASSOCIATED WITH THE ALTERNATIVE COMPLIANCE PAYMENT
    15     PROGRAM MUST BE CHANGED, THE COMMISSION SHALL PRESENT THESE
    16     FINDINGS TO THE GENERAL ASSEMBLY FOR LEGISLATIVE ENACTMENT.
    17     * * *
    18     SECTION 3.  SECTIONS 4 AND 5 OF THE ACT ARE AMENDED TO READ:
    19  SECTION 4.  PORTFOLIO REQUIREMENTS IN OTHER STATES.
    20     IF AN ELECTRIC DISTRIBUTION SUPPLIER OR ELECTRIC GENERATION
    21  COMPANY PROVIDER SELLS ELECTRICITY IN ANY OTHER STATE AND IS
    22  SUBJECT TO RENEWABLE ENERGY PORTFOLIO REQUIREMENTS IN THAT
    23  STATE, THEY SHALL LIST ANY SUCH REQUIREMENT AND SHALL INDICATE
    24  HOW IT SATISFIED THOSE RENEWABLE ENERGY PORTFOLIO REQUIREMENTS.
    25  TO PREVENT DOUBLE-COUNTING, THE ELECTRIC DISTRIBUTION SUPPLIER
    26  OR ELECTRIC GENERATION COMPANY SHALL NOT SATISFY PENNSYLVANIA'S
    27  ALTERNATIVE ENERGY PORTFOLIO REQUIREMENTS USING ALTERNATIVE
    28  ENERGY USED TO SATISFY ANOTHER STATE'S PORTFOLIO REQUIREMENTS[.
    29  ENERGY DERIVED ONLY FROM ALTERNATIVE ENERGY SOURCES INSIDE THE
    30  GEOGRAPHICAL BOUNDARIES OF THIS COMMONWEALTH OR WITHIN THE
    20070H1203B2291                 - 25 -     

     1  SERVICE TERRITORY OF ANY REGIONAL TRANSMISSION ORGANIZATION THAT
     2  MANAGES THE TRANSMISSION SYSTEM IN ANY PART OF THIS COMMONWEALTH
     3  SHALL BE ELIGIBLE TO MEET THE COMPLIANCE REQUIREMENTS UNDER THIS
     4  ACT.] OR ALTERNATIVE ENERGY CREDITS ALREADY PURCHASED BY
     5  INDIVIDUALS, BUSINESSES, OR GOVERNMENT BODIES THAT DO NOT HAVE A
     6  COMPLIANCE OBLIGATION UNDER THIS ACT UNLESS THE INDIVIDUAL,
     7  BUSINESS OR GOVERNMENT BODY SELLS THOSE CREDITS TO THE ELECTRIC
     8  DISTRIBUTION COMPANY OR ELECTRIC GENERATION SUPPLIER. ENERGY
     9  DERIVED FROM ALTERNATIVE ENERGY SOURCES INSIDE THE GEOGRAPHICAL
    10  BOUNDARIES OF THIS COMMONWEALTH SHALL BE ELIGIBLE TO MEET THE
    11  COMPLIANCE REQUIREMENTS UNDER THIS ACT. ENERGY DERIVED FROM
    12  ALTERNATIVE ENERGY SOURCES LOCATED OUTSIDE THE GEOGRAPHICAL
    13  BOUNDARIES OF THIS COMMONWEALTH BUT WITHIN THE SERVICE TERRITORY
    14  OF A REGIONAL TRANSMISSION ORGANIZATION THAT MANAGES THE
    15  TRANSMISSION SYSTEM IN ANY PART OF THIS COMMONWEALTH SHALL ONLY
    16  BE ELIGIBLE TO MEET THE COMPLIANCE REQUIREMENTS OF ELECTRIC
    17  DISTRIBUTION COMPANIES OR ELECTRIC GENERATION SUPPLIERS LOCATED
    18  WITHIN THE SERVICE TERRITORY OF THE SAME REGIONAL TRANSMISSION
    19  ORGANIZATION. FOR PURPOSES OF COMPLIANCE WITH THIS ACT,
    20  ALTERNATIVE ENERGY SOURCES LOCATED IN THE PJM INTERCONNECTION,
    21  L.L.C. REGIONAL TRANSMISSION ORGANIZATION (PJM) OR ITS SUCCESSOR
    22  SERVICE TERRITORY SHALL BE ELIGIBLE TO FULFILL COMPLIANCE
    23  OBLIGATIONS OF PIKE COUNTY LIGHT AND POWER COMPANY AND
    24  PENNSYLVANIA POWER COMPANY. ENERGY DERIVED FROM ALTERNATIVE
    25  ENERGY SOURCES LOCATED OUTSIDE THE SERVICE TERRITORY OF A
    26  REGIONAL TRANSMISSION ORGANIZATION THAT MANAGES THE TRANSMISSION
    27  SYSTEM IN ANY PART OF THIS COMMONWEALTH SHALL NOT BE ELIGIBLE TO
    28  MEET THE COMPLIANCE REQUIREMENTS OF THIS ACT. ELECTRIC
    29  DISTRIBUTION COMPANIES AND ELECTRIC GENERATION SUPPLIERS SHALL
    30  DOCUMENT THAT THIS ENERGY WAS NOT USED TO SATISFY ANOTHER
    20070H1203B2291                 - 26 -     

     1  STATE'S RENEWABLE ENERGY PORTFOLIO STANDARDS.
     2  SECTION 5.  INTERCONNECTION STANDARDS FOR CUSTOMER-GENERATOR
     3                 FACILITIES.
     4     EXCESS GENERATION FROM NET-METERED CUSTOMER-GENERATORS SHALL
     5  BE "TRUED-UP" ON AN ANNUAL BASIS. THE COMMISSION SHALL DEVELOP
     6  TECHNICAL AND NET METERING INTERCONNECTION RULES FOR CUSTOMER-
     7  GENERATORS INTENDING TO OPERATE RENEWABLE ONSITE GENERATORS IN
     8  PARALLEL WITH THE ELECTRIC UTILITY GRID, CONSISTENT WITH RULES
     9  DEFINED IN OTHER STATES WITHIN THE SERVICE REGION OF THE
    10  REGIONAL TRANSMISSION ORGANIZATION THAT MANAGES THE TRANSMISSION
    11  SYSTEM IN ANY PART OF THIS COMMONWEALTH. THE COMMISSION SHALL
    12  CONVENE A STAKEHOLDER PROCESS TO DEVELOP STATEWIDE TECHNICAL AND
    13  NET METERING RULES FOR CUSTOMER-GENERATORS. THE COMMISSION SHALL
    14  DEVELOP THESE RULES WITHIN NINE MONTHS OF THE EFFECTIVE DATE OF
    15  THIS ACT.
    16     SECTION 4.  THIS ACT SHALL TAKE EFFECT IMMEDIATELY.










    B22L66RLE/20070H1203B2291       - 27 -