HB 501 — An Act amending the act of November 30, 2004 (P.L.1672, No.213), known as the Alternative Energy Portfolio Standards Act, further providing for definitions; providing for force majeure; further providing for alternative energy portfolio standards, for portfolio requirements in other states, for health and safety standards and for interagency responsibilities; providing for zero emissions credits; and making editorial changes.

PRINTER'S NO.   1478

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 501
                                               Session of
                                                 2025

     INTRODUCED BY OTTEN, WAXMAN, VENKAT, SAPPEY, ABNEY, HILL-EVANS,
        HOWARD, MADDEN, PIELLI, SCHLOSSBERG, MALAGARI, NEILSON,
        VITALI, SANCHEZ, O'MARA, CEPEDA-FREYTIZ, BOROWSKI, K.HARRIS,
        DONAHUE, BOYD, CIRESI, McNEILL, ISAACSON, RIVERA, WARREN,
        HOHENSTEIN, GUENST, PROBST, D. WILLIAMS, POWELL, T. DAVIS,
        KHAN, SHUSTERMAN, WEBSTER, MULLINS, GIRAL, BENHAM, SAMUELSON,
        FRIEL, CERRATO, BRENNAN, BRIGGS, KRUEGER, PROKOPIAK,
        SCHWEYER, BURGOS, HANBIDGE, STEELE, SMITH-WADE-EL, PASHINSKI,
        BIZZARRO, HADDOCK, TAKAC, SALISBURY, SOLOMON, FIEDLER, SCOTT,
        MERSKI, FRANKEL, KINKEAD, DALEY, GREEN, PARKER, MADSEN,
        DOUGHERTY AND MAYES, APRIL 23, 2025

     REFERRED TO COMMITTEE ON ENVIRONMENTAL AND NATURAL RESOURCE
        PROTECTION, APRIL 23, 2025


                                    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; providing for force
 9      majeure; further providing for alternative energy portfolio
10      standards, for portfolio requirements in other states, for
11      health and safety standards and for interagency
12      responsibilities; providing for zero emissions credits; and
13      making editorial changes.
14      The General Assembly of the Commonwealth of Pennsylvania
15   hereby enacts as follows:
16      Section 1.    Sections 1 and 2 of the act of November 30, 2004
17   (P.L.1672, No.213), known as the Alternative Energy Portfolio
18   Standards Act, are amended to read:
 1   Section 1.     Short title.
 2      This act shall be known and may be cited as the [Alternative
 3   Energy Portfolio] Pennsylvania Reliable Energy Sustainability
 4   Standards Act.
 5   Section 2.     Definitions.
 6      The following words and phrases when used in this act shall
 7   have the meanings given to them in this section unless the
 8   context clearly indicates otherwise:
 9      "Advanced reactor."        A nuclear fission reactor consistent
10   with the definition of "advanced nuclear reactor" in 42 U.S.C. §
11   16271 (relating to nuclear energy). The term includes a small
12   modular reactor.
13      ["Alternative energy credit."           A tradable instrument that is
14   used to establish, verify and monitor compliance with this act.
15   A unit of credit shall equal one megawatt hour of electricity
16   from an alternative energy source. The alternative energy credit
17   shall remain the property of the alternative energy system until
18   the alternative energy credit is voluntarily transferred by the
19   alternative energy system. (Def. amended July 17, 2007, P.L.114,
20   No.35)
21      "Alternative energy portfolio standards."           Standards
22   establishing that a certain amount of energy sold from
23   alternative energy sources is included as part of the sources of
24   electric generation by electric utilities within this
25   Commonwealth.
26      "Alternative energy sources."           The term shall include the
27   following existing and new sources for the production of
28   electricity:
29            (1)   Solar photovoltaic or other solar electric energy.
30            (2)   Solar thermal energy.

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 1        (3)   Wind power.
 2        (4)   Large-scale hydropower, which shall mean the
 3    production of electric power by harnessing the hydroelectric
 4    potential of moving water impoundments, including pumped
 5    storage that does not meet the requirements of low-impact
 6    hydropower under paragraph (5).
 7        (5)   Low-impact hydropower consisting of any technology
 8    that produces electric power and that harnesses the
 9    hydroelectric potential of moving water impoundments,
10    provided such incremental hydroelectric development:
11              (i)    does not adversely change existing impacts to
12        aquatic systems;
13              (ii)    meets the certification standards established
14        by the Low Impact Hydropower Institute and American
15        Rivers, Inc., or their successors;
16              (iii)    provides an adequate water flow for protection
17        of aquatic life and for safe and effective fish passage;
18              (iv)    protects against erosion; and
19              (v)    protects cultural and historic resources.
20        (6)   Geothermal energy, which shall mean electricity
21    produced by extracting hot water or steam from geothermal
22    reserves in the earth's crust and supplied to steam turbines
23    that drive generators to produce electricity.
24        (7)   Biomass energy, which shall mean the generation of
25    electricity utilizing the following:
26              (i)    organic material from a plant that is grown for
27        the purpose of being used to produce electricity or is
28        protected by the Federal Conservation Reserve Program
29        (CRP) and provided further that crop production on CRP
30        lands does not prevent achievement of the water quality

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 1        protection, soil erosion prevention or wildlife
 2        enhancement purposes for which the land was primarily set
 3        aside; or
 4               (ii)   any solid nonhazardous, cellulosic waste
 5        material that is segregated from other waste materials,
 6        such as waste pallets, crates and landscape or right-of-
 7        way tree trimmings or agricultural sources, including
 8        orchard tree crops, vineyards, grain, legumes, sugar and
 9        other crop by-products or residues.
10        (8)    Biologically derived methane gas, which shall
11    include methane from the anaerobic digestion of organic
12    materials from yard waste, such as grass clippings and
13    leaves, food waste, animal waste and sewage sludge. The term
14    also includes landfill methane gas.
15        (9)    Fuel cells, which shall mean any electrochemical
16    device that converts chemical energy in a hydrogen-rich fuel
17    directly into electricity, heat and water without combustion.
18        (10)    Waste coal, which shall include the combustion of
19    waste coal in facilities in which the waste coal was disposed
20    or abandoned prior to July 31, 1982, or disposed of
21    thereafter in a permitted coal refuse disposal site
22    regardless of when disposed of, and used to generate
23    electricity, or such other waste coal combustion meeting
24    alternate eligibility requirements established by regulation.
25    Facilities combusting waste coal shall use at a minimum a
26    combined fluidized bed boiler and be outfitted with a
27    limestone injection system and a fabric filter particulate
28    removal system. Alternative energy credits shall be
29    calculated based upon the proportion of waste coal utilized
30    to produce electricity at the facility.

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 1          (11)    Coal mine methane, which shall mean methane gas
 2      emitting from abandoned or working coal mines.
 3          (12)    Demand-side management consisting of the management
 4      of customer consumption of electricity or the demand for
 5      electricity through the implementation of:
 6                 (i)    energy efficiency technologies, management
 7          practices or other strategies in residential, commercial,
 8          institutional or government customers that reduce
 9          electricity consumption by those customers;
10                 (ii)    load management or demand response
11          technologies, management practices or other strategies in
12          residential, commercial, industrial, institutional and
13          government customers that shift electric load from
14          periods of higher demand to periods of lower demand; or
15                 (iii)    industrial by-product technologies consisting
16          of the use of a by-product from an industrial process,
17          including the reuse of energy from exhaust gases or other
18          manufacturing by-products that are used in the direct
19          production of electricity at the facility of a customer.
20          (13)    Distributed generation system, which shall mean the
21      small-scale power generation of electricity and useful
22      thermal energy.
23      "Alternative energy system."       A facility or energy system
24   that uses a form of alternative energy source to generate
25   electricity and delivers the electricity it generates to the
26   distribution system of an electric distribution company or to
27   the transmission system operated by a regional transmission
28   organization.]
29      "Biogas energy."      The generation of electricity that uses:
30          (1)    biogas resultant of anaerobic digestion of organic

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 1      material, including yard waste such as grass clippings and
 2      leaves, food waste, animal waste and sewage sludge; or
 3          (2)   landfill gas.
 4      "Biomass energy."   The generation of electricity that uses:
 5          (1)   organic material from a plant that is grown for the
 6      purpose of being used to produce electricity or is protected
 7      by the Federal Conservation Reserve Program, and provided
 8      that crop production on Federal Conservation Reserve Program
 9      lands does not prevent achievement of the water quality
10      protection, soil erosion prevention or wildlife enhancement
11      purposes for which the land is primarily set aside; or
12          (2)   any solid nonhazardous, cellulosic waste material
13      that is segregated from other waste material, including waste
14      pallets, crates and landscape or right-of-way tree trimmings
15      or agricultural sources, including orchard tree crops,
16      vineyards, grain, legumes, sugar and other crop by-products
17      or residues.
18      "Clean hydrogen."   Hydrogen produced through a process that
19   results in a lifecycle greenhouse gas emissions rate of less
20   than 0.45 kilograms of CO2e per kilogram of hydrogen.
21      "Coal mine fugitive emissions."    Methane gas emitted from an
22   abandoned or working coal mine.
23      "Combined heat and power system."   A combined heat and power
24   system installed on a commercial, institutional or industrial
25   facility site within this Commonwealth that is a qualified
26   facility under the Public Utility Regulatory Policies Act of
27   1978 (Public Law 95-617, 92 Stat. 3117) and has an annual
28   operating efficiency of at least 60% with at least 25% of the
29   total annual energy output being useful thermal energy. A
30   combined heat and power system shall qualify as a Tier II PRESS

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 1   energy source for up to 25 megawatts of aggregate electric
 2   nameplate capacity on a site.
 3      "Commission."   The Pennsylvania Public Utility Commission.
 4      ["Cost-recovery period."     The longer of:
 5          (1)   the period during which competitive transition
 6      charges under 66 Pa.C.S § 2808 (relating to competitive
 7      transition charge) or intangible transition charges under 66
 8      Pa.C.S. § 2812 (relating to approval of transition bonds) are
 9      recovered; or
10          (2)   the period during which an electric distribution
11      company operates under a Pennsylvania Public Utility
12      Commission-approved generation rate plan that has been
13      approved prior to or within one year of the effective date of
14      this act, but in no case shall the cost-recovery period under
15      this act extend beyond December 31, 2010.]
16      "Customer-generator."   A nonutility owner or operator of a
17   net metered distributed generation system with a nameplate
18   capacity of not greater than 50 kilowatts if installed at a
19   residential service or not larger than 3,000 kilowatts at other
20   customer service locations, except for customers whose systems
21   are above three megawatts and up to five megawatts who make
22   their systems available to operate in parallel with the electric
23   utility during grid emergencies as defined by the regional
24   transmission organization or where a microgrid is in place for
25   the primary or secondary purpose of maintaining critical
26   infrastructure, such as homeland security assignments, emergency
27   services facilities, hospitals, traffic signals, wastewater
28   treatment plants or telecommunications facilities, provided that
29   technical rules for operating generators interconnected with
30   facilities of an electric distribution company, electric

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 1   cooperative or municipal electric system have been promulgated
 2   by the Institute of Electrical and Electronic Engineers and the
 3   Pennsylvania Public Utility Commission.
 4      "Demand-side management."    The management of customer
 5   consumption of electricity or the demand for electricity through
 6   the implementation of:
 7            (1)   energy efficiency technologies, management practices
 8      or other strategies in residential, commercial, institutional
 9      or government customers that reduce electricity consumption
10      by those customers;
11            (2)   load management or demand response technologies,
12      management practices or other strategies in residential,
13      commercial, industrial, institutional and government
14      customers that shift electric load from periods of higher
15      demand to periods of lower demand, such as virtual power
16      plants; or
17            (3)   industrial by-product technologies consisting of the
18      use of a by-product from an industrial process, including the
19      reuse of energy from exhaust gases or other manufacturing by-
20      products, including combined heat and power systems and
21      waste-heat-to-power systems, that are used in the direct
22      production of electricity at the facility of a customer.
23      "Department."    The Department of Environmental Protection of
24   the Commonwealth.
25      "Distributed generation system."     Small-scale power
26   generation of electricity, not including combined heat and
27   power.
28      "Electric distribution company."     The term shall have the
29   same meaning given to it in 66 Pa.C.S. Ch. 28 (relating to
30   restructuring of electric utility industry).

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 1      "Electric generation supplier."        The term shall have the same
 2   meaning given to it in 66 Pa.C.S. Ch. 28 (relating to
 3   restructuring of electric utility industry).
 4      "Energy price index."   The average of the day-ahead
 5   locational marginal prices at the highest PJM Interconnection,
 6   L.L.C., pricing node in Pennsylvania for each hour of the three
 7   prior years.
 8      "Energy storage resource."    A technology, including any
 9   electromechanical, thermal and electromechanical technology, or
10   any technology defined as "energy storage technology" in 26
11   U.S.C. § 48E (relating to clean electricity investment credit)
12   or 26 CFR 1.48E-2(g)(6) (relating to qualified investments in
13   qualified facilities and EST for purposes of section 48E) as of
14   the effective date of this definition that is capable of
15   absorbing and storing electrical energy for use at a later time.
16      "Environmental justice area."        A geographic area
17   characterized by increased pollution burden and sensitive or
18   vulnerable populations based on demographic and environmental
19   data as identified by the department.
20      "Force majeure."   [Upon its own initiative or upon a request
21   of an electric distribution company or an electric generator
22   supplier, the Pennsylvania Public Utility Commission, within 60
23   days, shall determine if alternative PRESS energy resources are
24   reasonably available in the marketplace in sufficient quantities
25   or are likely to be developed in sufficient quantities due to
26   alternative compliance payments or economics for the electric
27   distribution companies and electric generation suppliers to meet
28   their obligations for that reporting period under this act. In
29   making this determination, the commission shall consider whether
30   electric distribution companies or electric generation suppliers

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 1   have made a good faith effort to acquire sufficient PRESS
 2   alternative energy to comply with their obligations. Such good
 3   faith efforts shall include, but are not limited to, banking
 4   reliable alternative energy credits during their transition
 5   periods, seeking reliable alternative energy credits through
 6   competitive solicitations and seeking to procure reliable
 7   alternative energy credits or PRESS alternative energy through
 8   long-term contracts. In further making its determination, the
 9   commission shall assess the availability of alternative reliable
10   energy credits in the Generation Attributes Tracking System
11   (GATS) or its successor and the availability of reliable
12   alternative energy credits generally in Pennsylvania and other
13   jurisdictions in the PJM Interconnection, L.L.C. regional
14   transmission organization (PJM) or its successor. The commission
15   may also require solicitations for reliable alternative energy
16   credits as part of default service before requests of force
17   majeure can be made. If the commission further determines that
18   PRESS alternative energy resources are not reasonably available
19   in sufficient quantities in the marketplace for the electric
20   distribution companies and electric generation suppliers to meet
21   their obligations under this act, then the commission shall
22   modify the underlying obligation of the electric distribution
23   company or electric generation supplier or recommend to the
24   General Assembly that the underlying obligation be eliminated.
25   Commission modification of the electric distribution company or
26   electric generation supplier obligations under this act shall be
27   for that compliance period only. Commission modification shall
28   not automatically reduce the obligation for subsequent
29   compliance years. If the commission modifies the electric
30   distribution company or electric generation supplier obligations

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 1   under this act, the commission may require the electric
 2   distribution company or electric generation supplier to acquire
 3   additional reliable alternative energy credits in subsequent
 4   years equivalent to the obligation reduced due to a force
 5   majeure declaration if the commission determines that sufficient
 6   reliable alternative energy credits exist in the marketplace.]
 7   The determination made by the commission under section 2.1.
 8      "Fuel cells."     A device that converts chemical energy in a
 9   hydrogen-rich fuel directly into electricity, heat and water
10   without combustion including an integrated system comprised of a
11   fuel cell stack assembly or linear generator assembly and
12   associated balance of plant components which converts a fuel
13   into electricity using electromechanical means. The term does
14   not include an assembly which contains rotating parts.
15      "Fusion energy."     The product of fusion reactions inside a
16   fusion device and used to generate electricity.
17      "Geothermal energy."     The utilization of natural heat of the
18   earth found below the surface of the earth, which is then used
19   to generate electricity.
20          (1)   The term includes:
21                (i)    Devices that generate electricity using a
22          product of geothermal process including heat, indigenous
23          steam, pressure, hot water and hot brines, gases and
24          byproducts.
25                (ii)    Devices that generate or distribute energy from
26          a geothermal heating and cooling system.
27          (2)   The term does not include helium, oil, hydrocarbon
28      gas or any other hydrocarbon substances.
29      "Geothermal heating and cooling system."     A system that:
30          (1)   Exchanges thermal energy from groundwater or a

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 1      shallow ground source to generate thermal energy through an
 2      electric geothermal heat pump or a system of electric
 3      geothermal heat pumps interconnected with a geothermal
 4      extraction facility that:
 5                (i)    Is a closed loop or a series of closed loop
 6          systems in which fluid is permanently confined within a
 7          pipe or tubing.
 8                (ii)    Does not come in contact with the outside
 9          environment or an open loop system in which ground or
10          surface water is:
11                       (A)   circulated in an environmentally safe manner
12                directly into the facility; and
13                       (B)   returned to the same aquifer or surface
14                water source.
15          (2)   Meets or exceeds the current Federal Energy Star
16      product specification standards.
17          (3)   Replaces or displaces less efficient space or water
18      heating systems, regardless of fuel type.
19          (4)   Replaces or displaces less efficient space cooling
20      systems that do not meet Federal Energy Star product
21      specification standards.
22          (5)   Does not feed electricity back to the grid.
23      "Hydropower."      The production of electric power by harnessing
24   the hydroelectric potential of moving water impoundments,
25   including pumped storage that does not meet the requirements of
26   low-impact hydropower.
27      "Lifecycle greenhouse gas emissions."       As defined under 26
28   CFR §§ 1.45V-1 (relating to credit for production of clean
29   hydrogen), 1.45V-2 (relating to special rules), 1.45V-3
30   (relating to rules relating to the increased credit amount for

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 1   prevailing wage and apprenticeship), 1.45V-4 (relating to
 2   procedures for determining lifecycle greenhouse gas emissions
 3   rates for qualified clean hydrogen), 1.45V-5 (relating to
 4   procedures for verification of qualified clean hydrogen
 5   production and sale or use) and 1.45V-6 (relating to rules for
 6   determining the placed in service date for an existing facility
 7   that is modified or retrofitted to produce qualified clean
 8   hydrogen) as of the effective date of this definition.
 9      "Low-impact hydropower."    Technology that produces electric
10   power and harnesses the hydroelectric potential of moving water
11   impoundments, if the incremental hydroelectric development:
12          (1)   Does not adversely change existing impacts to
13      aquatic systems.
14          (2)   Meets the certification standards established by the
15      Low Impact Hydropower Institute and American Rivers, Inc., or
16      its successors.
17          (3)   Provides an adequate water flow for protection of
18      aquatic life and for safe and effective fish passage.
19          (4)   Protects against erosion.
20          (5)   Protects cultural and historic resources.
21      "Municipal solid waste."    This will include energy from
22   existing waste to energy facilities which the Department of
23   Environmental Protection has determined are in compliance with
24   current environmental standards, including, but not limited to,
25   all applicable requirements of the Clean Air Act (69 Stat. 322,
26   42 U.S.C. § 7401 et seq.) and associated permit restrictions and
27   all applicable requirements of the act of July 7, 1980 (P.L.380,
28   No.97), known as the Solid Waste Management Act.
29      "Net metering."    The means of measuring the difference
30   between the electricity supplied by an electric utility and the

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 1   electricity generated by a customer-generator when any portion
 2   of the electricity generated by the [alternative] PRESS energy
 3   [generating] system is used to offset part or all of the
 4   customer-generator's requirements for electricity. [Virtual] The
 5   term includes virtual meter aggregation on properties owned or
 6   leased and operated by a customer-generator and located within
 7   two miles of the boundaries of the customer-generator's property
 8   and within a single electric distribution company's service
 9   territory [shall be eligible for net metering].
10      "PRESS energy sources."   The term shall include existing and
11   new sources for the production of electricity including Tier I,
12   Tier II and Tier III PRESS energy sources.
13      "PRESS energy system."    A facility or energy system that uses
14   a form of PRESS energy sources to generate electricity and
15   delivers the electricity generated to the distribution system of
16   an electric distribution company or to the transmission system
17   operated by a regional transmission organization.
18      "Regional transmission organization."     An entity approved by
19   the Federal Energy Regulatory Commission [(FERC)] that is
20   created to operate and manage the electrical transmission grids
21   of the member electric transmission utilities as required under
22   [FERC] Federal Energy Regulatory Commission Order 2000, Docket
23   No. RM99-2-000, [FERC] Federal Energy Regulatory Commission
24   Chapter 31.089 (1999) or any successor organization approved by
25   the [FERC] Federal Energy Regulatory Commission.
26      "Reliable energy credit."    A tradable instrument that is used
27   to establish, verify and monitor compliance with this act. A
28   unit of credit shall equal one megawatt hour of electricity from
29   a PRESS energy source. The reliable energy credit shall remain
30   the property of the reliable energy system until the reliable

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 1   energy credit is voluntarily transferred by the reliable energy
 2   system.
 3      "Reliable energy sustainability standards."        Standards
 4   establishing that a certain amount of energy sold from PRESS
 5   energy sources is included as part of the sources of electric
 6   generation by electric utilities within this Commonwealth.
 7      "Reporting period."        The 12-month period from June 1 through
 8   May 31. A reporting year shall be numbered according to the
 9   calendar year in which it begins and ends.
10      "Retail electric customer."        The term shall have the same
11   meaning given to it in 66 Pa.C.S. Ch. 28 (relating to
12   restructuring of electric utility industry).
13      "Small modular reactors."        An advanced nuclear reactor with a
14   rated capacity of less than 300 electrical megawatts that can be
15   constructed and operated in combination with similar reactors at
16   a single site.
17      ["Tier I alternative energy source."        Energy derived from:
18             (1)   Solar photovoltaic and solar thermal energy.
19             (2)   Wind power.
20             (3)   Low-impact hydropower.
21             (4)   Geothermal energy.
22             (5)   Biologically derived methane gas.
23             (6)   Fuel cells.
24             (7)   Biomass energy.
25             (8)   Coal mine methane.
26      "Tier II alternative energy source."        Energy derived from:
27             (1)   Waste coal.
28             (2)   Distributed generation systems.
29             (3)   Demand-side management.
30             (4)   Large-scale hydropower.

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 1        (5)    Municipal solid waste.
 2        (6)    Generation of electricity utilizing by-products of
 3    the pulping process and wood manufacturing process, including
 4    bark, wood chips, sawdust and lignin in spent pulping
 5    liquors.
 6        (7)    Integrated combined coal gasification technology.]
 7    "Tier I PRESS energy source."    Electric energy derived from:
 8        (1)    Solar photovoltaic and solar thermal energy.
 9        (2)    Wind power.
10        (3)    Low-impact hydropower.
11        (4)    Geothermal energy.
12        (5)    Advanced reactors.
13        (6)    Fusion energy.
14        (7)    Coal mine fugitive emissions.
15        (8)    Biogas energy.
16    "Tier II PRESS energy source."       Electric energy derived from:
17        (1)    Natural gas or coal using at least 80% clean
18    hydrogen co-fired blend or equivalent carbon intensity
19    reduction technologies.
20        (2)    Non-Tier I distributed generation systems.
21        (3)    Demand-side management.
22        (4)    Hydropower.
23        (5)    Fuel cells.
24        (6) Biomass energy.
25        (7)    Storage resources co-located with a Tier I PRESS
26    energy source certified to possess the technical capacity to
27    deliver 10% nameplate capacity of the Tier I PRESS energy
28    source every hour for a 24-hour period.
29        (8)    Combined heat and power system.
30        (9)    Tier I PRESS energy source that meets the

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 1      requirements of section 3(e)(16).
 2      "Tier III PRESS energy source."        Electric energy derived
 3   from:
 4           (1)   Natural gas or coal using 20% clean hydrogen co-
 5      fired blend or equivalent carbon reduction technologies.
 6           (2)   Waste coal.
 7           (3)   Municipal solid waste.
 8           (4)   Integrated combined coal gasification technology.
 9           (5)   Generation of electricity utilizing by-products of
10      the pulping process, including bark, wood chips, sawdust and
11      lignin in spent pulping liquors.
12           (6)   Tier I PRESS energy source that meets the
13      requirements of section 3(e)(16).
14      "True-up period."   The period each year from the end of the
15   reporting year until September 1.
16      "Virtual currency."      A type of digital unit that is used as a
17   medium of exchange or a form of digitally stored value. The term
18   shall be broadly construed to include a digital unit of exchange
19   that:
20           (1)   has a centralized repository or administrator;
21           (2)   is decentralized and has no centralized repository
22      or administrator; or
23           (3)   may be created or obtained by computing or
24      manufacturing effort.
25      "Waste coal."   The combustion of waste coal in a facility:
26           (1)   In which the waste coal was disposed or abandoned
27      prior to July 31, 1982, or disposed of thereafter in a
28      permitted coal refuse disposal site regardless of when
29      disposed of, and used to generate electricity, or other waste
30      coal combustion meeting alternate eligibility requirements

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 1      established by regulation.
 2            (2)    That uses at a minimum a combined fluidized bed
 3      boiler and is outfitted with a limestone injection system and
 4      a fabric filter particulate removal system.
 5   Reliable energy credits shall be calculated based upon the
 6   proportion of waste coal utilized to produce electricity at the
 7   facility.
 8      "ZEC."      A zero emission credit authorized under section 8.1.
 9      Section 2.     The act is amended by adding a section to read:
10   Section 2.1.     Force majeure.
11      (a)   Determination of commission.--
12            (1)    Upon the commission's own initiative or upon a
13      request of an electric distribution company or an electric
14      generator supplier, the commission shall determine if PRESS
15      energy resources are reasonably available in the marketplace
16      in sufficient quantities or are likely to be developed in
17      sufficient quantities due to alternative compliance payments
18      or economics for the electric distribution companies and
19      electric generation suppliers to meet their obligations for
20      that reporting period under this act.
21            (2)    In making the determination under paragraph (1), the
22      commission shall consider whether electric distribution
23      companies or electric generation suppliers have made a good
24      faith effort to acquire sufficient PRESS energy to comply
25      with their obligations. The good faith efforts shall include,
26      but are not limited to, banking reliable energy credits
27      during their transition periods, seeking reliable energy
28      credits through competitive solicitations and seeking to
29      procure reliable energy credits or PRESS energy through long-
30      term contracts.

20250HB0501PN1478                      - 18 -
 1          (3)   In further making a determination, the commission
 2    shall assess the availability of reliable energy credits in
 3    the Generation Attributes Tracking System or its successor
 4    and the availability of reliable energy credits generally in
 5    this Commonwealth and other jurisdictions in the PJM
 6    Interconnection, L.L.C., regional transmission organization
 7    or its successor. The commission may also require
 8    solicitations for reliable energy credits as part of default
 9    service before requests of force majeure can be made.
10    (b)   Modifications of obligations.--
11          (1)   If the commission further determines that PRESS
12    energy resources are not reasonably available in sufficient
13    quantities in the marketplace for the electric distribution
14    companies and electric generation suppliers to meet the
15    obligations under this act, then the commission shall modify
16    the underlying obligation of the electric distribution
17    company or electric generation supplier or recommend to the
18    General Assembly that the underlying obligation be
19    eliminated.
20          (2)   Commission modification of the electric distribution
21    company or electric generation supplier obligations under
22    this act shall be for that compliance period only. Commission
23    modification shall not automatically reduce the obligation
24    for subsequent compliance years.
25          (3)   If the commission modifies the electric distribution
26    company or electric generation supplier obligations under
27    this act, the commission may require the electric
28    distribution company or electric generation supplier to
29    acquire additional reliable energy credits in subsequent
30    years equivalent to the obligation reduced due to a force

20250HB0501PN1478                  - 19 -
 1      majeure declaration if the commission determines that
 2      sufficient reliable energy credits exist in the marketplace.
 3      Section 3.        Sections 3, 4, 6 and 7 of the act are amended to
 4   read:
 5   Section 3.     [Alternative energy portfolio] Pennsylvania reliable
 6                  energy sustainability standards.
 7      (a)   General compliance and cost recovery.--
 8            (1)   [From the effective date of this act through and
 9      including the 15th year after enactment of this act and each
10      year thereafter,] Beginning February 28, 2005, the electric
11      energy sold by an electric distribution company or electric
12      generation supplier to retail electric customers in this
13      Commonwealth shall be comprised of electricity generated from
14      [alternative] PRESS energy sources and in the percentage
15      amounts as described under subsections (b), [and] (c) and
16      (c.1).
17            (2)   Electric distribution companies and electric
18      generation suppliers shall satisfy [both] requirements [set
19      forth] specified in subsections (b), [and] (c) and (c.1),
20      provided, however, that an electric distribution company or
21      an electric generation supplier shall be excused from its
22      obligations under this section to the extent that the
23      commission determines that force majeure exists.
24            (3)   All costs for:
25                  (i)    the purchase of electricity generated from
26            [alternative] PRESS energy sources, including the costs
27            of the regional transmission organization, in excess of
28            the regional transmission organization real-time
29            locational marginal pricing, or its successor, at the
30            delivery point of the [alternative] PRESS energy source

20250HB0501PN1478                       - 20 -
 1          for the electrical production of the [alternative] PRESS
 2          energy sources; and
 3                (ii)   [payments for alternative energy credits, in
 4          both cases that are voluntarily acquired by an electric
 5          distribution company during the cost recovery period on
 6          behalf of its customers shall be deferred as a regulatory
 7          asset by the electric distribution company and fully
 8          recovered, with a return on the unamortized balance,
 9          pursuant to an automatic energy adjustment clause under
10          66 Pa.C.S. § 1307 (relating to sliding scale of rates;
11          adjustments) as a cost of generation supply under 66
12          Pa.C.S. § 2807 (relating to duties of electric
13          distribution companies) in the first year after the
14          expiration of its cost-recovery period. After the cost-
15          recovery period,] any reasonable or prudent direct or
16          indirect costs for the purchase by electric distribution
17          of resources to comply with this section, including, but
18          not limited to, the purchase of electricity generated
19          from [alternative] PRESS energy sources, payments for
20          [alternative] reliable energy credits, cost of credits
21          banked, payments to any third party administrators for
22          performance under this act and costs levied by a regional
23          transmission organization to ensure that [alternative]
24          PRESS energy sources are reliable, shall be recovered on
25          a full and current basis pursuant to an automatic energy
26          adjustment clause under 66 Pa.C.S. § 1307 as a cost of
27          generation supply under 66 Pa.C.S. § 2807.
28    (b)   Tier I and solar photovoltaic shares.--
29          (1)   [Two years after the effective date of this act and
30    through May 31, 2025,] Beginning February 28, 2007, through

20250HB0501PN1478                    - 21 -
 1    May 31, 2026, at least 1.5% of the electric energy sold by an
 2    electric distribution company or electric generation supplier
 3    to retail electric customers in this Commonwealth shall be
 4    generated from Tier I [alternative] PRESS energy sources.
 5    Except as provided in this section, the minimum percentage of
 6    electric energy required to be sold to retail electric
 7    customers from [alternative] Tier I PRESS energy sources
 8    shall increase to 2% three years after the effective date of
 9    this act. The minimum percentage of electric energy required
10    to be sold to retail electric customers from [alternative]
11    PRESS energy sources shall increase by at least 0.5% each
12    year so that at least 8% of the electric energy sold by an
13    electric distribution company or electric generation supplier
14    to retail electric customers in that certificated territory
15    in the 15th year after the effective date of this subsection
16    is sold from [alternative] Tier I PRESS energy resources.
17        (1.1)     Beginning on June 1, 2026, at least 10.7% of
18    electric energy sold by an electric distribution company or
19    electric generation supplier to retail electric customers in
20    this Commonwealth shall be generated from Tier I PRESS energy
21    sources. Beginning on June 1, 2027, through May 31, 2035, the
22    minimum percentage of electric energy required to be sold to
23    retail electric customers from Tier I PRESS energy sources
24    shall increase by at least 3% each year so that at least 35%
25    of the electric energy sold by an electric distribution
26    company or electric generation supplier to retail electric
27    customers in that certificated territory is sold from Tier I
28    PRESS energy resources by May 31, 2035.
29        (2)   The total percentage of the electric energy sold by
30    an electric distribution company or electric generation

20250HB0501PN1478                  - 22 -
 1    supplier to retail electric customers in this Commonwealth
 2    that must be sold from solar photovoltaic technologies is:
 3              (i)    0.0013% for June 1, 2006, through May 31, 2007.
 4              (ii)    0.0030% for June 1, 2007, through May 31, 2008.
 5              (iii)    0.0063% for June 1, 2008, through May 31,
 6        2009.
 7              (iv)    0.0120% for June 1, 2009, through May 31, 2010.
 8              (v)    0.0203% for June 1, 2010, through May 31, 2011.
 9              (vi)    0.0325% for June 1, 2011, through May 31, 2012.
10              (vii)    0.0510% for June 1, 2012, through May 31,
11        2013.
12              (viii)    0.0840% for June 1, 2013, through May 31,
13        2014.
14              (ix)    0.1440% for June 1, 2014, through May 31, 2015.
15              (x)    0.2500% for June 1, 2015, through May 31, 2016.
16              (xi)    0.2933% for June 1, 2016, through May 31, 2017.
17              (xii)    0.3400% for June 1, 2017, through May 31,
18        2018.
19              (xiii)    0.3900% for June 1, 2018, through May 31,
20        2019.
21              (xiv)    0.4433% for June 1, 2019, through May 31,
22        2020.
23              (xv)    0.5000% for June 1, 2020, [and thereafter]
24        through May 31, 2031.
25        (3)   Upon commencement of the beginning of the 6th
26    reporting year, the commission shall undertake a review of
27    the compliance by electric distribution companies and
28    electric generation suppliers with the requirements of this
29    act. The review shall also include the status of
30    [alternative] PRESS energy technologies within this

20250HB0501PN1478                   - 23 -
 1      Commonwealth and the capacity to add additional [alternative]
 2      PRESS energy resources. The commission shall use the results
 3      of this review to recommend to the General Assembly
 4      additional compliance goals beyond year 15. The commission
 5      shall work with the department in evaluating the future
 6      [alternative] PRESS energy resource potential.
 7      (c)   Tier II share.--Of the electrical energy required to be
 8   sold from [alternative] PRESS energy sources identified in Tier
 9   II, the percentage that must be from these technologies is for:
10            (1)   Years 1 through 4 - 4.2%.
11            (2)   Years 5 through 9 - 6.2%.
12            (3)   Years 10 through 14 - 8.2%.
13            (4)   Years 15 [and thereafter] through 19 - 10.0%.
14            (5)   Beginning on June 1, 2026, through May 31, 2027, the
15      electrical energy required to be sold from PRESS energy
16      sources identified in Tier II, the percentage that shall be
17      from these technologies is 6%.
18            (6)   Beginning June 1, 2027, through May 31, 2035, the
19      percentage that must be from these technologies shall
20      increase by 0.5% each year so that at least 10% of the
21      electric energy is sold from PRESS energy sources identified
22      in Tier II by May 31, 2035, and each year thereafter.
23      (c.1)   Tier III share.--Of the electrical energy required to
24   be sold from PRESS energy sources identified in Tier III, the
25   percentage that must be from these technologies is:
26            (1)   June 1, 2026, through May 31, 2029 - 3.8%.
27            (2)   June 1, 2029, through May 31, 2032 - 4.4%.
28            (3)   June 1, 2032, and thereafter - 5%.
29      (d)   [Exemption during cost-recovery period.--Compliance with
30   subsections (a), (b) and (c) shall not be required for any

20250HB0501PN1478                    - 24 -
 1   electric distribution company that has not reached the end of
 2   its cost-recovery period or for electric generation supplier
 3   sales in the service territory of an electric distribution
 4   company that has not reached the end of its cost-recovery
 5   period. At the conclusion of an electric distribution company's
 6   cost-recovery period, this exception shall no longer apply, and
 7   compliance shall be required at the percentages in effect at
 8   that time. Electric distribution companies and electric
 9   generation suppliers whose sales are exempted under this
10   subsection and who voluntarily sell electricity generated from
11   Tier I and Tier II sources during the cost-recovery period may
12   bank credits consistent with subsection (e)(7).] (Reserved).
13      (e)   [Alternative] Reliable energy credits.--
14            (1)   The commission shall establish [an alternative] a
15      reliable energy credits program as needed to implement this
16      act. The provision of services pursuant to this section shall
17      be exempt from the competitive procurement procedures of 62
18      Pa.C.S. (relating to procurement).
19            (2)   The commission shall approve an independent entity
20      to serve as the [alternative] reliable energy credits program
21      administrator. The administrator shall have those powers and
22      duties assigned by commission regulations. [Such] The powers
23      and duties shall include, but not be limited to, the
24      following:
25                  (i)   To create and administer [an alternative] a
26            reliable energy credits certification, tracking and
27            reporting program. [This program should] The program
28            shall include, at a minimum, a process for qualifying
29            [alternative] PRESS energy systems and determining the
30            manner credits can be created, accounted for, transferred

20250HB0501PN1478                      - 25 -
 1        and retired.
 2              (ii)   To submit reports to the commission at such
 3        times and in such manner as the commission shall direct.
 4        (3)   All qualifying [alternative] PRESS energy systems
 5    [must] shall include a qualifying meter to record the
 6    cumulative electric production to verify the advanced energy
 7    credit value. Qualifying meters will be approved by the
 8    commission as defined in paragraph (4).
 9        (4)   (i)    An electric distribution company or electric
10    generation supplier shall comply with the applicable
11    requirements of this section by purchasing sufficient
12    [alternative] reliable energy credits and submitting
13    documentation of compliance to the program administrator.
14              (ii)   For purposes of this subsection, one
15        [alternative] reliable energy credit shall represent one
16        megawatt hour of qualified [alternative] electric
17        generation, whether self-generated, purchased along with
18        the electric commodity or separately through a tradable
19        instrument and otherwise meeting the requirements of
20        commission regulations and the program administrator.
21        (5)   The [alternative] reliable energy credits program
22    shall include provisions requiring a reporting period [as
23    defined in section 2] for all covered entities under this
24    act. The [alternative] reliable energy credits program shall
25    also include a true-up period [as defined in section 2]. The
26    true-up period shall provide entities covered under this act
27    the ability to obtain the required number of [alternative]
28    reliable energy credits or to make up any shortfall of the
29    [alternative] reliable energy credits they may be required to
30    obtain to comply with this act. A force majeure provision

20250HB0501PN1478                  - 26 -
 1    shall also be provided for under the true-up period
 2    provisions.
 3        (6)    An electric distribution company and electric
 4    generation supplier may bank or place in reserve
 5    [alternative] reliable energy credits produced in one
 6    reporting year for compliance in either or both of the two
 7    subsequent reporting years, subject to the limitations [set
 8    forth] specified in this subsection and provided that the
 9    electric distribution company and electric generation
10    supplier are in compliance for all previous reporting years.
11    [In addition, the] The electric distribution company and
12    electric generation supplier shall demonstrate to the
13    satisfaction of the commission that [such] the credits:
14               (i)    were in excess of the [alternative] reliable
15        energy credits needed for compliance in the year in which
16        they were generated and that [such] the excess credits
17        have not previously been used for compliance under this
18        act;
19               (ii)    were produced by the generation of electrical
20        energy by [alternative] PRESS energy sources and sold to
21        retail customers during the year in which they were
22        generated; and
23               (iii)   have not otherwise been nor will be sold,
24        retired, claimed or represented as part of satisfying
25        compliance with alternative or renewable energy portfolio
26        standards in other states.
27        [(7)    An electric distribution company or an electric
28    generation supplier with sales that are exempted under
29    subsection (d) may bank credits for retail sales of
30    electricity generated from Tier I and Tier II sources made

20250HB0501PN1478                    - 27 -
 1    prior to the end of the cost-recovery period and after the
 2    effective date of this act. Bankable credits shall be limited
 3    to credits associated with electricity sold from Tier I and
 4    Tier II sources during a reporting year which exceeds the
 5    volume of sales from such sources by an electric distribution
 6    company or electric generation supplier during the 12-month
 7    period immediately preceding the effective date of this act.
 8    All credits banked under this subsection shall be available
 9    for compliance with subsections (b) and (c) for no more than
10    two reporting years following the conclusion of the cost-
11    recovery period.]
12        (8)   The commission or its designee shall develop a
13    registry of pertinent information regarding all available
14    [alternative] reliable energy credits, credit transactions
15    among electric distribution companies and electric generation
16    suppliers, the number of [alternative] reliable energy
17    credits sold or transferred and the price paid for the sale
18    or transfer of the credits. The registry shall provide
19    current information to electric distribution companies,
20    electric generation suppliers and the general public on the
21    status of [alternative] reliable energy credits created, sold
22    or transferred within this Commonwealth.
23        (9)   The commission may impose an administrative fee on
24    [an alternative] a reliable energy credit transaction. The
25    amount of this fee may not exceed the actual direct cost of
26    processing the transaction by the [alternative] reliable
27    energy credits administrator. The commission [is authorized
28    to] may utilize up to 5% of the alternative compliance fees
29    generated under subsection (f) for administrative expenses
30    directly associated with this act.

20250HB0501PN1478                - 28 -
 1        (10)   The commission shall establish regulations
 2    governing the verification and tracking of energy efficiency
 3    and demand-side management measures [pursuant to] under this
 4    act, which shall include benefits to all utility customer
 5    classes. When developing regulations, the commission [must]
 6    shall give reasonable consideration to existing and proposed
 7    regulations and rules in existence in the regional
 8    transmission organizations that manage the transmission
 9    system in any part of this Commonwealth. All verified
10    reductions shall accrue credits starting with the [passage]
11    enactment of this act.
12        (11)   The commission shall [within 120 days of the
13    effective date of this act] not later than March 30, 2005,
14    develop a depreciation schedule for [alternative] reliable
15    energy credits created through demand-side management, energy
16    efficiency and load management technologies and shall develop
17    standards for tracking and verifying savings from energy
18    efficiency, load management and demand-side management
19    measures. The commission shall allow for a 60-day public
20    comment period and shall issue final standards within 30 days
21    of the close of the public comment period.
22        (12)   Unless a contractual provision explicitly assigns
23    [alternative] reliable energy credits in a different manner,
24    the owner of the [alternative] reliable energy system or a
25    customer-generator owns any and all [alternative] reliable
26    energy credits associated with or created by the production
27    of electric energy by such facility or customer, and the
28    owner or customer shall be entitled to sell, transfer or take
29    any other action to which a legal owner of property is
30    entitled to take with respect to the credits.

20250HB0501PN1478                - 29 -
 1        (13)    No PRESS energy system shall be eligible to sell
 2    reliable energy credits associated with or created by the
 3    production of electric energy subsequently utilized to
 4    generate or produce virtual currency at a facility co-located
 5    with the PRESS energy system, or where a power purchase
 6    agreement commits the offtake of electric energy to a virtual
 7    currency generator or producer. Reliable energy credits may
 8    be sold based upon the proportion of electric energy at the
 9    facility that is not utilized to generate or produce virtual
10    currency.
11        (14)    An individual generating unit with a nameplate
12    capacity over 250 megawatts must be located inside or within
13    15 miles of this Commonwealth to be eligible for reliable
14    energy credits. The commission may promulgate a regulation to
15    change the nameplate capacity for purposes of this paragraph
16    if the commission determines that a change to the nameplate
17    capacity is necessary to prevent a force majeure event or the
18    ongoing imposition of alternative compliance payments due to
19    lack of availability of reliable energy credits.
20        (15)    No PRESS energy source may be offered to meet the
21    compliance requirements of more than one tier unless:
22               (i)   the source is owned or leased by and located on
23        the grounds of a school district as defined in section
24        102 of the act of March 10, 1949 (P.L.30, No.14), known
25        as the Public School Code of 1949. If a PRESS energy
26        source is owned or leased by and located on the grounds
27        of a school district, a school district may offer credits
28        from a Tier I PRESS energy source to meet the compliance
29        requirements of Tier I and either Tier II or Tier III. A
30        school district may not offer credits to meet the

20250HB0501PN1478                   - 30 -
 1        compliance obligations of more than one tier in any year
 2        in excess of the school district's requirement for
 3        electricity in the same year.
 4               (ii)    The source is a Tier I PRESS energy source co-
 5        located with an energy storage resource, certified to
 6        possess the technical capacity to deliver 10% nameplate
 7        capacity of the Tier I PRESS energy source every hour for
 8        a 24-hour period. The Tier I PRESS energy source co-
 9        located with a certified energy storage resource may
10        receive credits to reach the compliance requirements of
11        Tier 1 equal to the energy output of the Tier I energy
12        source and may additionally receive credits to meet the
13        compliance requirements of Tier II equal to the energy
14        output of the co-located storage resource.
15        (16)    (i)     PRESS energy sources eligible for compliance
16        requirements in Tier II, Tier III and solar photovoltaic
17        technologies eligible for compliance requirements under
18        subsection (b)(2) must meet one of the following
19        requirements:
20                      (A)   directly deliver the electricity generated
21               to a retail customer of an electric distribution
22               company or to the distribution system operated by an
23               electric distribution company operating within this
24               Commonwealth and obligated to meet the compliance
25               requirements contained under this act;
26                      (B)   be directly connected to the electric system
27               of an electric cooperative or municipal electric
28               system operating within this Commonwealth;
29                      (C)   connect directly to the electric
30               transmission system at a location that is within the

20250HB0501PN1478                     - 31 -
 1               service territory of an electric distribution company
 2               operating within this Commonwealth; or
 3                      (D)   generate electricity at generation units
 4               whose construction and operation is subject to and
 5               complies with permits issued by the department under
 6               the act of January 8, 1960 (1959 P.L.2119, No.787),
 7               known as the Air Pollution Control Act, or the act of
 8               July 7, 1980 (P.L.380, No.97), known as the Solid
 9               Waste Management Act.
10               (ii)    This paragraph shall not be construed to affect
11        a binding written contract, entered into prior to the
12        effective date of this paragraph, for the sale and
13        purchase of alternative energy credits derived from
14        alternative energy sources until June 1, 2029.
15               (iii)    Beginning June 1, 2031, 6% of the electric
16        energy sold by an electric distribution company or
17        electric generation supplier to retail electric customers
18        in this Commonwealth and that is used to satisfy Tier I
19        obligations shall be generated from Tier I PRESS energy
20        sources that meet one of the requirements of subparagraph
21        (i). The percentage shall increase by 1.333% in each
22        subsequent compliance year through June 1, 2036, and
23        increase by 0.6% in each subsequent compliance year
24        through 

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