HB 2380 — An Act amending Title 66 (Public Utilities) of the Pennsylvania Consolidated Statutes, in restructuring of electric utility industry, providing for energy storage procurement.

PRINTER'S NO.    3424

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 2380
                                               Session of
                                                 2026

     INTRODUCED BY RIVERA, FIEDLER, WEBSTER, OTTEN, WAXMAN, SANCHEZ,
        HILL-EVANS, CEPEDA-FREYTIZ, HOHENSTEIN, PROBST, PIELLI,
        VENKAT, McNEILL, VITALI, NEILSON, INGLIS, BOROWSKI, BOYD,
        MAYES, CURRY, CIRESI AND STEELE, MAY 21, 2026

     REFERRED TO COMMITTEE ON ENERGY, MAY 21, 2026


                                    AN ACT
 1   Amending Title 66 (Public Utilities) of the Pennsylvania
 2      Consolidated Statutes, in restructuring of electric utility
 3      industry, providing for energy storage procurement.
 4      The General Assembly of the Commonwealth of Pennsylvania
 5   hereby enacts as follows:
 6      Section 1.    Title 66 of the Pennsylvania Consolidated
 7   Statutes is amended by adding a section to read:
 8   § 2807.1.   Energy storage procurement.
 9      (a)   Energy storage program.--The commission shall require
10   each electric distribution company to establish an energy
11   storage program that is designed to achieve at least 3,000 total
12   megawatts of capacity in the aggregate from front-of-the-meter
13   energy storage systems by July 1, 2033. The total megawatts of
14   capacity shall consist of at least 2,000 megawatts of short-
15   duration storage and 1,000 megawatts of long-duration storage.
16      (b)   Allocation of capacity targets.--Within 60 days of the
17   effective date of this subsection, the commission shall
 1   calculate and assign each electric distribution company's
 2   apportioned share of the 3,000 total megawatts of capacity for
 3   short-duration storage and long-duration storage in a manner
 4   consistent with subsection (a). The commission's calculations
 5   shall be based on the service load and annual system peak demand
 6   of each applicable electric distribution company's service
 7   territory, in addition to any other criteria that the commission
 8   determines to be appropriate.
 9      (c)   Target modifications.--
10            (1)   The commission may adjust or modify the apportioned
11      share of energy storage system capacity under subsection (b)
12      for each electric distribution company if there is a
13      demonstrated lack of commercially available energy storage
14      systems or procurement proposals received, as determined by
15      the commission.
16            (2)   If found by the commission to be in the public
17      interest, the commission may establish a cap on the total
18      megawatts of energy storage system capacity that may be
19      procured or owned by an electric distribution company under
20      this section.
21            (3)   The commission may, after an adequate period of
22      implementation, increase the total megawatts of capacity
23      required under subsection (a) and calculate new apportioned
24      shares for each electric distribution company if the
25      commission finds doing so to be in the public interest for
26      efficient, reliable and affordable service.
27      (d)   Competitive procurement.--Subject to approval by the
28   commission, each electric distribution company shall use an
29   open, fair and nondiscriminatory competitive procurement
30   process, including the use of auctions or requests for

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 1   proposals, to reach the company's apportioned share of the total
 2   megawatts of capacity as described under subsection (b).
 3      (e)    Use of independent monitor.--The commission shall
 4   appoint an independent evaluator to monitor and report on each
 5   competitive procurement process under subsection (d). An
 6   independent evaluator shall have access to all information and
 7   data relating to the competitive procurement process, provided
 8   that all proprietary information shall remain confidential. For
 9   the purposes of ensuring an open, fair and transparent
10   solicitation and bid selection process, the independent
11   evaluator appointed by the commission shall have the following
12   duties:
13             (1)   Monitor the competitive procurement process to
14      identify any noncompliance with the requirements under this
15      section.
16             (2)   Issue a report to the commission that analyzes the
17      procedures, methods of solicitation and timeline of each
18      competitive procurement process, including any
19      recommendations to improve the process.
20             (3)   For each proposed contract of a winning bid
21      proposal, issue a report to the commission that analyzes the
22      solicitation and bid selection process, including an
23      assessment of whether all bids were evaluated in a fair and
24      nondiscriminatory manner.
25      (f)    Schedule.--Each electric distribution company shall
26   enter into cost-effective long-term purchase contracts for the
27   company's apportioned share of the 3,000 total megawatts of
28   capacity under subsection (a) in accordance with the following
29   schedule:
30             (1)   By July 31, 2028, at least 500 megawatts of

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 1      transmission-connected short-duration storage and 100
 2      megawatts of distribution-connected short-duration storage
 3      shall be procured, including existing energy storage systems.
 4            (2)   By July 31, 2029, at least 500 megawatts of
 5      transmission-connected short-duration storage shall be
 6      procured.
 7            (3)   By July 1, 2030, at least 500 megawatts of
 8      transmission-connected short-duration storage shall be
 9      procured.
10            (4)   By July 31, 2033, all remaining energy storage
11      systems capacity shall be procured, including 400 total
12      megawatts short-duration storage and 1,000 megawatts of long-
13      duration storage.
14      (g)   Procurement standards.--For the purposes of subsection
15   (d), each electric distribution company shall comply with the
16   following competitive procurement requirements:
17            (1)   For each competitive procurement process, each
18      electric distribution company shall provide an initial
19      description of the following information to prospective
20      bidders:
21                  (i)    The reliability needs of the distribution or
22            transmission system that may be addressed in a cost-
23            effective manner by energy storage system capacity,
24            including the reduction of system constraints, the
25            deferral or replacement of transmission or distribution
26            upgrades and reduction in system congestion during peak
27            demand periods in specific areas of the distribution
28            system.
29                  (ii)    The size, resource type and minimum thresholds
30            required.

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 1              (iii)    The qualifications and experience required for
 2        submitting bids under the competitive procurement
 3        process.
 4              (iv)    The preferred location of the energy storage
 5        system.
 6              (v)    Detailed instructions for preparing bids and the
 7        estimated timeline for bid evaluation.
 8              (vi)    The criteria for selecting and awarding
 9        contracts to qualified bidders.
10              (vii)    Any other information deemed necessary by the
11        commission.
12        (2)   Each electric distribution company shall select and
13    award the lowest responsible bidder under a competitive
14    procurement process based on evaluating, but not limited to,
15    the following criteria:
16              (i)    The cost-effectiveness to ratepayers over the
17        course of the term of the contract after taking into
18        consideration the benefits to the distribution and
19        transmission system.
20              (ii)    The ability to meet the reliability needs of
21        the distribution or transmission system identified by the
22        electric distribution company under paragraph (1).
23              (iii)    The ability to guarantee firm capacity
24        performance for the entire duration of the contract
25        terms.
26              (iv)    The adequate demonstration of project viability
27        within a commercially reasonable time frame, if
28        applicable.
29              (v)    The project developer's qualifications and
30        experience.

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 1                  (vi)    The proximity to the distribution or
 2            transmission system experiencing constraints or
 3            congestion.
 4                  (vii)    Benefits to the businesses and workforce of
 5            the Commonwealth.
 6            (3)   Each electric distribution company shall prioritize
 7      the evaluation of a qualified bidder that demonstrates any of
 8      the following:
 9                  (i)    For construction, expansion, rehabilitation,
10            renovation or site work performed on energy storage
11            system, all contractors and subcontractors comply with
12            fair wage standards, including compliance with the
13            provisions of the act of August 15, 1961 (P.L.987,
14            No.442), known as the Pennsylvania Prevailing Wage Act.
15                  (ii)    The supply chain of equipment, components and
16            materials relating to the energy storage system is
17            sourced within the United States.
18                  (iii)    A third-party developer has made investments
19            in the manufacturing or assembly workforce of the energy
20            storage system that is located within this Commonwealth.
21      (h)   Decommissioning.--Each contract agreement entered into
22   under this section shall include provisions requiring the owner
23   or operator to provide a decommissioning plan for the procured
24   energy storage systems, including the recycling or reuse of all
25   qualifying components of each system.
26      (i)   Ownership.--The energy storage systems procured under
27   the program shall be owned by a combination of the electric
28   distribution company and third-party developers. The following
29   apply:
30            (1)   An electric distribution company may enter into

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 1      bilateral agreements under a competitive procurement process
 2      to construct, own and operate distribution-connected energy
 3      storage systems to reach part of the company's apportioned
 4      share of the 3,000 total megawatts of capacity under
 5      subsection (b).
 6            (2)   An electric distribution company may not acquire
 7      ownership of more than 50% of the distribution-connected
 8      energy storage systems that are procured under this section.
 9            (3)   An electric distribution company may not acquire
10      ownership of any transmission-connected energy storage
11      systems that are required to be procured under this section.
12            (4)   Nothing in this subsection shall be construed to
13      prohibit a third-party developer from originating, securing
14      site control, developing, constructing, owning, operating or
15      transferring ownership of a distribution-connected energy
16      storage system to an electric distribution company.
17      (j)   Commission approval.--The commission, in consultation
18   with the independent evaluator under subsection (e), shall
19   establish procedures to review all proposed contracts prior to
20   the execution of the contract with the lowest responsible
21   bidder. The following apply:
22            (1)   An electric distribution company shall file a
23      proposed contract with the commission and provide sufficient
24      documentation to permit the commission to conduct the review
25      required under paragraph (3), including the cost-benefit
26      analysis used to determine the cost-effectiveness of the
27      procurement and methods used to select a qualified bidder.
28            (2)   The commission shall review each proposed contract
29      to determine the following:
30                  (i)   The cost-effectiveness of the contract terms and

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 1        impact on ratepayer affordability.
 2              (ii)    Whether the projected benefits to the
 3        distribution and transmission system exceed the costs of
 4        the proposed contract terms.
 5              (iii)    Whether the electric distribution company has
 6        made all reasonable efforts to design the procurement
 7        contract to protect ratepayers from stranded assets,
 8        energy storage system degradation risks, supply chain
 9        volatility and other unforeseen circumstances that may
10        increase costs over time or delay project development.
11              (iv)    Whether the electric distribution company has
12        complied with the requirements under this section.
13        (3)   The commission may not approve the proposed contract
14    under this section unless the commission finds that:
15              (i)    the procurement of the energy storage system is
16        in the public interest;
17              (ii)    the proposed contract is a cost-effective
18        mechanism to reliably procure energy storage system
19        capacity to benefit the distribution system or
20        transmission system, or both; and
21              (iii)    the bid selection and solicitation process are
22        found to be fair, objective and nondiscriminatory by the
23        independent evaluator.
24        (4)   Within 45 days of submission, the commission shall
25    approve or reject a proposed contract. If the commission
26    rejects a proposed contract, the commission may, as a
27    condition of approval, require an electric distribution
28    company to modify the proposed contract terms to address any
29    deficiencies identified by the commission or independent
30    evaluator. An electric distribution company shall have 60

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 1      days to file a modified proposed contract with the
 2      commission. The modified proposal shall be approved or
 3      rejected by the commission within 30 days.
 4      (k)   Annual report.--
 5            (1)   Each electric distribution company shall submit an
 6      annual report to the commission relating to the progress and
 7      results of the energy storage program within each electric
 8      distribution service territory. The report shall include the
 9      following:
10                  (i)    Documentation of the expenditures for all
11            procurement contracts entered into with a third-party
12            developer.
13                  (ii)    Measurement and verification of each energy
14            storage system's performance to improve the reliability
15            of distribution system and provide peak demand
16            management, if applicable at the time of submission.
17                  (iii)    The location and ownership status each energy
18            storage system procured.
19                  (iv)    Evaluation of the cost-effectiveness of program
20            expenditures.
21                  (v)    Any other information required by the
22            commission.
23            (2)   Beginning five years after the effective date of
24      this paragraph and annually thereafter, the commission shall
25      submit a report to the Environmental Resources and Energy
26      Committee of the Senate and the Energy Committee of the House
27      of Representatives.
28      (l)   Cost recovery.--An electric distribution company may
29   recover on a full and current basis from customers, through a
30   reconcilable adjustment clause under section 1307 (relating to

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 1   sliding scale of rates; adjustments), all reasonable and prudent
 2   costs in the procurement of a transmission-connected energy
 3   storage system under a competitive procurement process under
 4   this section, as determined by the commission. Any decreased
 5   revenues of an electric distribution company due to changes in
 6   energy demand or avoided infrastructure costs shall not be a
 7   recoverable cost under a reconcilable automatic adjustment
 8   clause. Subject to commission approval, an electric distribution
 9   company's ownership of a distribution-connected energy storage
10   system under an executed bilateral agreement may be included in
11   the rate base of the public utility and recovered in accordance
12   with section 1308(d) (relating to voluntary changes in rates).
13      (m)   Applicability.--This section shall not apply to an
14   electric distribution company with fewer than 600,000 customers.
15      (n)   Definitions.--As used in this section, the following
16   words and phrases shall have the meanings given to them in this
17   subsection unless the context clearly indicates otherwise:
18      "Energy storage system."       An integrated set of technologies
19   connected to the distribution system or transmission system that
20   can absorb electrical energy, store the energy for a period of
21   time and deliver the energy for use at a later time. The term
22   includes all types of electric storage technologies, regardless
23   of their size, storage medium or operational purpose, including:
24            (1)   thermal storage;
25            (2)   electrochemical storage;
26            (3)   thermo-mechanical storage; and
27            (4)   hydrogen-based storage.
28      "Long-duration storage."       An energy storage system that is
29   capable of dispatching energy at the system's full rated
30   nameplate capacity for a period of 10 hours or more.

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1      "Short-duration storage."    An energy storage system that is
2   capable of dispatching energy at the system's full rated
3   nameplate capacity for a period greater than two hours but less
4   than 10 hours.
5      Section 2.    This act shall take effect immediately.




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