THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY ARGALL, ERICKSON, BLAKE, RAFFERTY, FONTANA, SCHWANK, LEACH, ALLOWAY, GREENLEAF, BREWSTER, DINNIMAN, FERLO, COSTA, TARTAGLIONE, STACK, FARNESE, McILHINNEY, HUGHES AND BROWNE, AUGUST 14, 2012

REFERRED TO CONSUMER PROTECTION AND PROFESSIONAL LICENSURE, AUGUST 14, 2012  

AN ACT

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

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

generated from renewable and environmentally beneficial

sources, for the acquisition of electric energy generated

from renewable and environmentally beneficial sources by

electric distribution and supply companies and for the powers

and duties of the Pennsylvania Public Utility Commission," 

further providing for definitions and for alternative energy

portfolio standards; and providing for sale and installation

of customer-generator alternative energy systems.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  The definitions of "alternative energy credit,"

"alternative energy sources," "alternative energy system,"

"force majeure" and "Tier 1 alternative energy source" in

section 2 of the act of November 30, 2004 (P.L.1672, No.213),

known as the Alternative Energy Portfolio Standards Act, amended

July 17, 2007 (P.L.114, No.35), are amended and the section is

amended by adding a definition to read:

Section 2.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Alternative energy credit."  A tradable instrument that is

used to establish, verify and monitor compliance with this act.

A unit of credit shall equal one megawatt hour of electricity or

3,413,000 British thermal units (3,413 MMBtu) of solar thermal

energy from an alternative energy source. The alternative energy

credit shall remain the property of the alternative energy

system until the alternative energy credit is voluntarily

transferred by the alternative energy system.

* * *

"Alternative energy sources."  The term shall include the

following existing and new sources for the production of

electricity:

(1)  Solar photovoltaic or other solar electric energy.

(2)  Solar thermal energy[.] which shall mean solar

equipment that generates energy that is equivalent to the

generation of electricity and is eligible for solar renewable

energy credits by using solar radiation for the purpose of

heating, and shall exclude systems used for a hot tub or

swimming pool.

(3)  Wind power.

(4)  Large-scale hydropower, which shall mean the

production of electric power by harnessing the hydroelectric

potential of moving water impoundments, including pumped

storage that does not meet the requirements of low-impact

hydropower under paragraph (5).

(5)  Low-impact hydropower consisting of any technology

that produces electric power and that harnesses the

hydroelectric potential of moving water impoundments,

provided such incremental hydroelectric development:

(i)  does not adversely change existing impacts to

aquatic systems;

(ii)  meets the certification standards established

by the Low Impact Hydropower Institute and American

Rivers, Inc., or their successors;

(iii)  provides an adequate water flow for protection

of aquatic life and for safe and effective fish passage;

(iv)  protects against erosion; and

(v)  protects cultural and historic resources.

(6)  Geothermal energy, which shall mean electricity

produced by extracting hot water or steam from geothermal

reserves in the earth's crust and supplied to steam turbines

that drive generators to produce electricity.

(7)  Biomass energy, which shall mean the generation of

electricity utilizing the following:

(i)  organic material from a plant that is grown for

the purpose of being used to produce electricity or is

protected by the Federal Conservation Reserve Program

(CRP) and provided further that crop production on CRP

lands does not prevent achievement of the water quality

protection, soil erosion prevention or wildlife

enhancement purposes for which the land was primarily set

aside; or

(ii)  any solid nonhazardous, cellulosic waste

material that is segregated from other waste materials,

such as waste pallets, crates and landscape or right-of-

way tree trimmings or agricultural sources, including

orchard tree crops, vineyards, grain, legumes, sugar and

other crop by-products or residues.

(8)  Biologically derived methane gas, which shall

include methane from the anaerobic digestion of organic

materials from yard waste, such as grass clippings and

leaves, food waste, animal waste and sewage sludge. The term

also includes landfill methane gas.

(9)  Fuel cells, which shall mean any electrochemical

device that converts chemical energy in a hydrogen-rich fuel

directly into electricity, heat and water without combustion.

(10)  Waste coal, which shall include the combustion of

waste coal in facilities in which the waste coal was disposed

or abandoned prior to July 31, 1982, or disposed of

thereafter in a permitted coal refuse disposal site

regardless of when disposed of, and used to generate

electricity, or such other waste coal combustion meeting

alternate eligibility requirements established by regulation.

Facilities combusting waste coal shall use at a minimum a

combined fluidized bed boiler and be outfitted with a

limestone injection system and a fabric filter particulate

removal system. Alternative energy credits shall be

calculated based upon the proportion of waste coal utilized

to produce electricity at the facility.

(11)  Coal mine methane, which shall mean methane gas

emitting from abandoned or working coal mines.

(12)  Demand-side management consisting of the management

of customer consumption of electricity or the demand for

electricity through the implementation of:

(i)  energy efficiency technologies, management

practices or other strategies in residential, commercial,

institutional or government customers that reduce

electricity consumption by those customers;

(ii)  load management or demand response

technologies, management practices or other strategies in

residential, commercial, industrial, institutional and

government customers that shift electric load from

periods of higher demand to periods of lower demand; or

(iii)  industrial by-product technologies consisting

of the use of a by-product from an industrial process,

including the reuse of energy from exhaust gases or other

manufacturing by-products that are used in the direct

production of electricity at the facility of a customer.

(13)  Distributed generation system, which shall mean the

small-scale power generation of electricity and useful

thermal energy.

"Alternative energy system."  A facility or energy system

that:

(1)  uses a form of alternative energy source to generate

electricity and delivers the electricity it generates to the

distribution system of an electric distribution company or to

the transmission system operated by a regional transmission

organization[.]; or

(2)  qualifies as a solar thermal energy system.

* * *

"Force majeure."  Upon its own initiative or upon a request

of an electric distribution company or an electric generator

supplier, the Pennsylvania Public Utility Commission, within 60

days, shall determine if alternative energy resources are

reasonably available in the marketplace in sufficient quantities

for the electric distribution companies and electric generation

suppliers to meet their obligations for that reporting period

under this act. The commission shall declare a force majeure for

any reporting period if the commission determines that the price

of available alternative energy credits exceeds the cost of the

alternative energy compliance payments established under this

act. In making this determination, the commission shall consider

whether electric distribution companies or electric generation

suppliers have made a good faith effort to acquire sufficient

alternative energy to comply with their obligations. Such good

faith efforts shall include, but are not limited to, banking

alternative energy credits during their transition periods,

seeking alternative energy credits through competitive

solicitations and seeking to procure alternative energy credits

or alternative energy through long-term contracts. In further

making its determination, the commission shall assess the

availability of alternative energy credits in the Generation

Attributes Tracking System (GATS) or its successor and the

availability of alternative energy credits generally in

Pennsylvania and other jurisdictions in the PJM Interconnection,

L.L.C. regional transmission organization (PJM) or its

successor. The commission may also require solicitations for

alternative energy credits as part of default service before

requests of force majeure can be made. If the commission further

determines that alternative energy resources are not reasonably

available in sufficient quantities in the marketplace for the

electric distribution companies and electric generation

suppliers to meet their obligations under this act, then the

commission shall modify the underlying obligation of the

electric distribution company or electric generation supplier or

recommend to the General Assembly that the underlying obligation

be eliminated. Commission modification of the electric

distribution company or electric generation supplier obligations

under this act shall be for that compliance period only.

Commission modification shall not automatically reduce the

obligation for subsequent compliance years. If the commission

modifies the electric distribution company or electric

generation supplier obligations under this act, the commission

may require the electric distribution company or electric

generation supplier to acquire additional alternative energy

credits in subsequent years equivalent to the obligation reduced

due to a force majeure declaration if the commission determines

that sufficient alternative energy credits exist in the

marketplace.

* * *

"Solar technology."  The term includes solar photovoltaic and

solar thermal energy technology.

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

(1)  Solar photovoltaic [and solar thermal] energy.

(2)  Wind power.

(3)  Low-impact hydropower.

(4)  Geothermal energy.

(5)  Biologically derived methane gas.

(6)  Fuel cells.

(7)  Biomass energy.

(8)  Coal mine methane.

(9)  Solar thermal energy.

* * *

Section 2.  Section 3(b)(2), (e)(3), (4), (7) and (12), (f)

(4) and (g)(2) of the act, amended or added July 17, 2007

(P.L.114, No.35), are amended and subsection (f) is amended by

adding a paragraph to read:

Section 3.  Alternative energy portfolio standards.

* * *

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

* * *

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

an electric distribution company or electric generation

supplier to retail electric customers in this Commonwealth

that must be sold from solar photovoltaic technologies is:

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

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

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

2009.

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

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

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

(vii)  [0.0510%] 0.1500% for June 1, 2012, through

May 31, 2013.

(viii)  [0.0840%] 0.1700% for June 1, 2013, through

May 31, 2014.

(ix)  [0.1440%] 0.2041% for June 1, 2014, through May

31, 2015.

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

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

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

2018.

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

2019.

(xiv)  [0.4433%] 0.4200% for June 1, 2019, through

May 31, 2020.

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

(xv)  0.4323% for June 1, 2020, through May 31, 2021.

(xvi)  0.4458% for June 1, 2021, through May 31,

2022.

(xvii)  0.4594% for June 1, 2022, through May 31,

2023.

(xviii)  0.4729% for June 1, 2023, through May 31,

2024.

(xix)  0.4865% for June 1, 2024, through May 31,

2025.

(xx)  0.5000% for June 1, 2025, and thereafter.

* * *

(e)  Alternative energy credits.--

* * *

(3)  All qualifying alternative energy systems must

include a qualifying meter to record the cumulative electric

or solar thermal energy production to verify the advanced

energy credit value. Qualifying meters will be approved by

the commission as defined in paragraph (4).

(4)  (i)  An electric distribution company or electric

generation supplier shall comply with the applicable

requirements of this section by purchasing sufficient

alternative energy credits and submitting documentation of

compliance to the program administrator.

(ii)  For purposes of this subsection, one

alternative energy credit shall represent one megawatt

hour of qualified alternative electric or 3,413,000

British thermal units (3,413 MMBtu) of solar thermal

energy generation, whether self-generated, purchased

along with the electric commodity or separately through a

tradable instrument and otherwise meeting the

requirements of commission regulations and the program

administrator.

* * *

(7)  An electric distribution company or an electric

generation supplier with sales that are exempted under

subsection (d) may bank credits for retail sales of

electricity generated from Tier I and Tier II sources made

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

effective date of this act. Bankable credits shall be limited

to credits associated with electricity or solar thermal

energy sold from Tier I and Tier II sources during a

reporting year which exceeds the volume of sales from such

sources by an electric distribution company or electric

generation supplier during the 12-month period immediately

preceding the effective date of this act. All credits banked

under this subsection shall be available for compliance with

subsections (b) and (c) for no more than two reporting years

following the conclusion of the cost-recovery period.

* * *

(12)  Unless a contractual provision explicitly assigns

alternative energy credits in a different manner, the owner

of the alternative energy system or a customer-generator owns

any and all alternative energy credits associated with or

created by the production of electric or solar thermal energy

by such facility or customer, and the owner or customer shall

be entitled to sell, transfer or take any other action to

which a legal owner of property is entitled to take with

respect to the credits.

(f)  Alternative compliance payment.--

* * *

(4)  [The] Except as otherwise provided in paragraph

(4.1), the alternative compliance payment for the solar

photovoltaic share shall be 200% of the average market value

of solar renewable energy credits sold during the reporting

period within the service region of the regional transmission

organization, including, where applicable, the levelized up-

front rebates received by sellers of solar renewable energy

credits in other jurisdictions in the PJM Interconnection,

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

(4.1)  (i)  The alternative compliance payment for the

solar technology share for the 2012-2013 through 2018-2019

reporting periods shall be $285. Thereafter, the amount of

the alternative compliance payment for the solar technology

share shall be reduced by two percent during each subsequent

reporting period and the commission shall publish the reduced

amount as a notice in the Pennsylvania Bulletin.

(ii)  The alternative compliance payment under

subparagraph (i) shall not apply in any reporting period

that the commission declares a force majeure.

* * *

(g)  Transfer to sustainable development funds.--

* * *

(2)  The alternative compliance payments shall be

utilized solely for projects that will increase the amount of

electric energy or solar thermal energy generated from

alternative energy resources for purposes of compliance with

subsections (b) and (c).

* * *

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

Section 5.1.  Sale and installation of customer-generator

alternative energy systems.

(a)  Prohibited conduct.--A person may not:

(1)  engage in unfair or deceptive acts, practices or

advertising in connection with the sale or installation of a

customer-generator alternative energy system; or

(2)  engage in any conduct in connection with the sale or

installation of a customer-generator alternative energy

system which creates the likelihood of confusion or

misunderstanding by the purchaser of the financial risks or

benefits associated with alternative energy systems,

including the creation, price or sale of alternative energy

credits.

(b)  Penalty.--A violation of this section shall be deemed a

violation of act of December 17, 1968 (P.L.1224, No.387), known

as the Unfair Trade Practices and Consumer Protection Law.

Section 4.  This act shall apply only prospectively and may

not be applied or interpreted to have any effect on, or

application to, any contract or registration of solar technology

existing before the effective date of this section.

Section 5.  This act shall take effect in 60 days.