SB 1323 — An Act providing for the regulation of commercial data centers; imposing duties on the Pennsylvania Public Utility Commission, the Department of Human Services and the Pennsylvania Energy Development Authority; establishing the Data Center Low-Income Home Energy Assistance Program Enhancement Account and the Pennsylvania Energy Independence Account; providing for clean firm energy requirements, contract filing, commission review, disclosure requirements, backup generation standards, curtailment standards and certification and expedited interconnection for commercial data centers bringing incremental clean firm energy resources; and imposing penalties.

PRINTER'S NO.   1717

                   THE GENERAL ASSEMBLY OF PENNSYLVANIA



                       SENATE BILL
                       No. 1323
                                              Session of
                                                2026

     INTRODUCED BY FLYNN, SAVAL, SANTARSIERO, FONTANA, BOSCOLA,
        MALONE, KANE AND SCHWANK, MAY 20, 2026

     REFERRED TO CONSUMER PROTECTION AND PROFESSIONAL LICENSURE,
        MAY 20, 2026


                                   AN ACT
 1   Providing for the regulation of commercial data centers;
 2      imposing duties on the Pennsylvania Public Utility
 3      Commission, the Department of Human Services and the
 4      Pennsylvania Energy Development Authority; establishing the
 5      Data Center Low-Income Home Energy Assistance Program
 6      Enhancement Account and the Pennsylvania Energy Independence
 7      Account; providing for clean firm energy requirements,
 8      contract filing, commission review, disclosure requirements,
 9      backup generation standards, curtailment standards and
10      certification and expedited interconnection for commercial
11      data centers bringing incremental clean firm energy
12      resources; and imposing penalties.
13                           TABLE OF CONTENTS
14   Section 1.   Short title.
15   Section 2.   Definitions.
16   Section 3.   Duties of commission.
17   Section 4.   Prohibition on cost shifting and recovery of costs.
18   Section 5.   Contributions to Low-Income Home Energy Assistance
19                Program.
20   Section 6.   Pennsylvania Energy Independence Account.
21   Section 7.   Clean firm energy requirements.
22   Section 8.   Contract filing and commission review.
 1   Section 9.    Annual report.
 2   Section 10.    Disclosure requirements.
 3   Section 11.    Backup generation standards.
 4   Section 12.    Curtailment standards.
 5   Section 13.    Certification and expedited interconnection for
 6                 commercial data centers bringing incremental clean
 7                 firm energy resources.
 8   Section 14.    Enforcement.
 9   Section 15.    Construction.
10   Section 16.    Effective date.
11      The General Assembly of the Commonwealth of Pennsylvania
12   hereby enacts as follows:
13   Section 1.    Short title.
14      This act shall be known and may be cited as the Data Center
15   Act.
16   Section 2.    Definitions.
17      The following words and phrases when used in this act shall
18   have the meanings given to them in this section unless the
19   context clearly indicates otherwise:
20      "Alternative compliance payment."       A per-megawatt-hour
21   payment made by a commercial data center under section 7(e) if
22   the commercial data center elects to satisfy its clean firm
23   energy procurement requirement through payment in lieu of
24   procurement.
25      "Backstop procurement of capacity."       An emergency or backstop
26   procurement of capacity by the applicable regional transmission
27   organization or its successor organization.
28      "Clean firm energy."       Energy derived from nuclear energy,
29   hydroelectric power, including pumped storage, geothermal
30   energy, fuel cells, solar energy, including solar energy paired

20260SB1323PN1717                      - 2 -
 1   with storage resources, wind energy, including wind energy
 2   paired with storage resources, clean hydrogen-fueled energy
 3   generation, battery energy storage systems and long-duration
 4   storage resources that meet all of the following:
 5          (1)   The resource is dispatchable or capable of providing
 6      firm service so that the resource can deliver electricity on
 7      demand with an availability factor consistent with standards
 8      established by the commission.
 9          (2)   The resource constitutes incremental capacity,
10      including any of the following:
11                (i)    Placement in service of a new clean firm energy
12          generation facility on or after January 1, 2025.
13                (ii)    An uprate or efficiency improvement at an
14          existing clean firm energy generation facility completed
15          on or after January 1, 2025, that increases accredited
16          capacity or net output.
17                (iii)    Placement in service of a battery energy
18          storage system on or after January 1, 2025, that provides
19          at least two hours of continuous discharge or another
20          duration determined by the commission to provide reliable
21          capacity value.
22                (iv)    Placement in service of a long-duration storage
23          resource on or after January 1, 2025, that provides not
24          less than four hours of continuous discharge capability
25          and firm service as determined by the commission.
26      "Clean firm energy certificate."      A tradable instrument
27   representing one megawatt-hour of eligible incremental clean
28   firm energy, issued and retired through a registry established
29   by the commission to demonstrate additionality and
30   deliverability consistent with section 7 and regulations

20260SB1323PN1717                     - 3 -
 1   promulgated under this act.
 2      "Clean firm energy generation."     Electricity generated from
 3   clean firm energy. The term does not include a battery energy
 4   storage system or long-duration storage resource. The term
 5   includes solar energy paired with storage resources and wind
 6   energy paired with storage resources.
 7      "Clean hydrogen."    Hydrogen produced through a process that
 8   results in a lifecycle greenhouse gas emissions rate of less
 9   than four kilograms of carbon dioxide equivalent per kilogram of
10   hydrogen.
11      "Clean oil furnace." An oil-fired furnace that meets all of
12   the following:
13          (1)   Is Energy Star-certified.
14          (2)   Is designed to operate on a blended liquid fuel
15      containing not less than 20% biodiesel, renewable diesel
16      or second generation biofuel.
17          (3)   Demonstrates improved efficiency or reduced
18      emissions relative to the system being replaced, as
19      determined by the Department of Environmental Protection.
20      "Commercial data center."    A facility, campus of facilities
21   or array of interconnected facilities in this Commonwealth that
22   meets all of the following:
23          (1)   Is used by a business entity or other enterprise to
24      operate, manage or maintain a computer, group of computers or
25      other organized assembly of hardware and software for the
26      primary purpose of processing, storing, retrieving or
27      transmitting data.
28          (2)   Has a peak demand of 25 megawatts or greater.
29          (3)   Is interconnected to a public utility at a single
30      point of interconnection or multiple points of

20260SB1323PN1717                   - 4 -
 1      interconnection or is interconnected to multiple public
 2      utilities within this Commonwealth through multiple points of
 3      interconnection.
 4      "Commission."    The Pennsylvania Public Utility Commission.
 5      "Community energy facility."    A facility that complies with
 6   the requirements necessary to achieve designation as a community
 7   energy facility under a State law enacted on or after the
 8   effective date of this definition establishing a community
 9   energy program in this Commonwealth.
10      "Electric distribution company."       As defined in 66 Pa.C.S. §
11   2803 (relating to definitions).
12      "Electric generation supplier."       As defined in 66 Pa.C.S. §
13   2803.
14      "Electric service."   All interconnection services and other
15   required elements provided by an electric distribution company
16   for the jurisdictional transmission and distribution of
17   electricity. The term shall be construed in a manner consistent
18   with the meaning of service under 66 Pa.C.S. § 102 (relating to
19   definitions) as applied to public utilities.
20      "Energy-efficient heat pump."       An electric heat pump that
21   meets or exceeds the highest efficiency tier, excluding an
22   advanced tier, established by the Consortium for Energy
23   Efficiency as of the effective date of this definition or a
24   functionally equivalent program designated by the Department of
25   Environmental Protection.
26      "Energy Star."   The voluntary energy efficiency
27   certification program established by the United States
28   Environmental Protection Agency and the United States
29   Department of Energy, or any successor program, that
30   establishes minimum performance and efficiency standards for

20260SB1323PN1717                   - 5 -
 1   qualifying equipment.
 2      "Fuel cell."   An electrochemical device that converts
 3   chemical energy in a hydrogen-rich fuel directly into
 4   electricity, heat and water without combustion.
 5      "Incremental capacity."    Additional accredited capacity or
 6   additional net energy output from a clean firm energy generation
 7   resource or long-duration storage resource that meets all of the
 8   following:
 9          (1)   Results from the placement in service of a new
10      resource on or after January 1, 2025.
11          (2)   Results from an uprate or efficiency improvement
12      completed on or after January 1, 2025, at an existing clean
13      firm energy generation resource or long-duration storage
14      resource, to the extent that the improvement increases
15      accredited capacity or net output available to the grid.
16          (3)   In the case of a battery energy storage system or
17      long-duration storage resource, results from the installation
18      of new storage equipment or the expansion or repowering of an
19      existing storage facility completed on or after January 1,
20      2025, that increases discharge duration, rated capacity or
21      firm service capability.
22          (4)   Is verified and certified by the commission as
23      representing additional accredited capacity or additional net
24      energy output that would not have been available to the bulk
25      electric system in this Commonwealth absent the investment
26      identified under paragraph (1), (2) or (3).
27      "Interruptible rate."   A rate published in an electric
28   distribution company's tariff and approved by the commission as
29   just and reasonable that authorizes the electric distribution
30   company to curtail service to customers taking service under the

20260SB1323PN1717                   - 6 -
 1   rate during a regional supply shortage, in response to a
 2   projected regional supply shortage, in response to actual or
 3   projected conditions on the bulk power system or under other
 4   conditions specified in the rate when, in the electric
 5   distribution company's discretion, curtailment is necessary to
 6   protect the electric distribution company's ability to provide
 7   firm electric service to customers served under other tariff
 8   rate schedules. The term includes a rate that contains
 9   provisions for coordination with a regional transmission
10   organization voluntary or mandatory curtailment program under
11   which load is curtailed in a preemergency condition.
12      "Lifecycle greenhouse gas emissions."   The term shall have
13   the meaning given to it under 26 U.S.C. § 45V(c)(1)(A) and (B)
14   (relating to credit for production of clean hydrogen), as in
15   effect on the effective date of this definition.
16      "Load-serving entity."   An electric distribution company or
17   electric generation supplier that serves retail load within the
18   regional transmission organization in which the electric
19   distribution company or electric generation supplier
20   participates.
21      "Long-duration storage resource."   A storage resource located
22   within this Commonwealth that meets all of the following:
23          (1)   Is capable of delivering not less than four hours of
24      continuous discharge at rated capacity.
25          (2)   Is dispatchable or capable of providing firm service
26      consistent with standards established by the commission.
27          (3)   Qualifies as incremental capacity placed in service
28      on or after January 1, 2025.
29      "Low-Income Home Energy Assistance Program."    A federally
30   funded program that provides financial assistance in the form of

20260SB1323PN1717                  - 7 -
 1   cash and crisis grants to low-income households for home energy
 2   bills and is administered by the Department of Human Services.
 3      "Material adverse impact."    A demonstrable and significant
 4   effect on electric bill affordability for residential customers,
 5   as determined by the commission by regulation or order,
 6   considering rate levels, cumulative riders and surcharges and
 7   income-based affordability metrics.
 8      "Pennsylvania Energy Development Authority."     The authority
 9   established under section 2803-C of the act of April 9, 1929
10   (P.L.177, No.175), known as The Administrative Code of 1929.
11      "Pennsylvania Energy Independence Account."      The restricted
12   account established under section 6(a).
13      "Public utility."   As defined in 66 Pa.C.S. § 102.
14      "Ratepayer."   A retail customer of an electric distribution
15   company that purchases electric delivery service.
16      "Regional supply shortage."     A condition in which supply
17   reserves are less than target supply reserves as determined by
18   the regional transmission organization.
19      "Regional transmission organization."      An entity approved by
20   the Federal Energy Regulatory Commission to control and operate
21   electric transmission facilities in interstate commerce and
22   ensure nondiscriminatory access to those facilities.
23      "Renewable natural gas device."      A device that generates
24   electricity using a fuel source consisting of at least 75%
25   biodiesel or biogas, including biogas derived from municipal
26   solid waste, industrial waste, food waste, wastewater treatment
27   material and animal manure resulting from the decomposition of
28   organic matter under anaerobic conditions, or any methane
29   resource classified as a Tier I alternative energy source as
30   defined in section 2 of the act of November 30, 2004 (P.L.1672,

20260SB1323PN1717                    - 8 -
 1   No.213), known as the Alternative Energy Portfolio Standards
 2   Act, the principal constituents of which are methane and carbon
 3   dioxide, that has been upgraded for use in place of fossil
 4   natural gas, gasoline or diesel fuel.
 5      "Small-scale energy system."        A system with a nameplate
 6   capacity rating that does not exceed two megawatts and that
 7   generates or stores electricity by means of solar panels,
 8   batteries or renewable natural gas devices, or a combination of
 9   those resources. The term includes an energy-efficient heat pump
10   or clean oil furnace installed at a home or residential
11   building, a small business as defined in 62 Pa.C.S. § 2102
12   (relating to definitions), a charitable organization as defined
13   in section 3 of the act of December 19, 1990 (P.L.1200, No.202),
14   known as the Solicitation of Funds for Charitable Purposes Act,
15   an educational institution, a religious institution, a municipal
16   building or a State government building.
17      "Universal service and energy conservation."        As defined in
18   66 Pa.C.S. § 2803 for electric service and 66 Pa.C.S. § 2202
19   (relating to definitions) for natural gas service.
20      "Useful life."     For purposes of cost allocation and recovery
21   under this act, the depreciable life used in commission-approved
22   cost recovery or a period determined by the commission.
23   Section 3.     Duties of commission.
24      (a)   Temporary regulations.--
25            (1)   To facilitate the prompt implementation of this act,
26      the commission shall promulgate temporary regulations no
27      later than 90 days after the effective date of this
28      subsection. The commission shall transmit notice of the
29      promulgation of the temporary regulations to the Legislative
30      Reference Bureau for publication in the next available issue

20260SB1323PN1717                    - 9 -
 1      of the Pennsylvania Bulletin.
 2             (2)   Temporary regulations promulgated under this
 3      subsection shall expire no later than two years after
 4      publication in the Pennsylvania Bulletin.
 5             (3)   The commission may promulgate temporary regulations
 6      under this subsection that are not subject to any of the
 7      following:
 8                   (i)    Section 612 of the act of April 9, 1929
 9             (P.L.177, No.175), known as The Administrative Code of
10             1929.
11                   (ii)    Sections 201, 202, 203, 204 and 205 of the act
12             of July 31, 1968 (P.L.769, No.240), referred to as the
13             Commonwealth Documents Law.
14                   (iii)    Sections 204(b) and 301(10) of the act of
15             October 15, 1980 (P.L.950, No.164), known as the
16             Commonwealth Attorneys Act.
17                   (iv)    The act of June 25, 1982 (P.L.633, No.181),
18             known as the Regulatory Review Act.
19             (4)   The commission's authority to promulgate temporary
20      regulations under this subsection shall expire two years
21      after the effective date of this subsection. Before the
22      expiration of this authority, the commission shall promulgate
23      final regulations in accordance with State law and subsection
24      (b).
25      (b)    Required regulatory topics.--Regulations promulgated
26   under subsection (a) shall include provisions governing all of
27   the following:
28             (1)   Retail tariff terms and conditions between a
29      commercial data center and an electric distribution company
30      for electric service to safeguard existing customers from

20260SB1323PN1717                        - 10 -
 1    stranded investment and cost shifting, including all of the
 2    following:
 3             (i)    Deposits or other financial security required
 4        from a commercial data center.
 5             (ii)    Contributions in aid of construction for
 6        network upgrades or distribution infrastructure and
 7        direct assignment through rates of costs for transmission
 8        service, to the extent permitted by law.
 9             (iii)    Minimum contract terms and minimum load
10        obligations that require a commercial data center, if the
11        commercial data center ceases operations before
12        satisfying the minimum contract term or engages in
13        economic peak-shaving behavior, to take a minimum level
14        of service for a minimum number of years sufficient to
15        generate expected revenues that protect other customers.
16        An electric distribution company shall require the
17        commercial data center to secure the obligation under
18        this subparagraph by a letter of credit or other
19        comparable financial instrument that ensures payment if
20        the commercial data center ceases operations or otherwise
21        fails to satisfy the obligation.
22             (iv)    Load-ramping schedules to ensure infrastructure
23        adequacy.
24             (v)    Exit fees or early termination fees.
25             (vi)    Measures to prevent circumvention of the
26        commercial data center threshold through multiple
27        facilities, interconnection points or metering points.
28             (vii)    Tracking of all costs, including transmission
29        and distribution costs, incurred to serve a commercial
30        data center and verification that the revenues collected

20260SB1323PN1717                  - 11 -
 1        exceed the costs incurred.
 2              (viii)    An end-of-contract process that provides
 3        sufficient notice of a commercial data center's renewal
 4        or closure.
 5              (ix)    To the extent permitted by Federal and State
 6        law, a process for the direct assignment to a commercial
 7        data center of costs assigned by a regional transmission
 8        organization, as determined by the commission.
 9        (2)   Curtailment of a commercial data center's load under
10    an interruptible rate.
11        (3)   Standards governing coordination of an electric
12    distribution company's interruptible rate with a regional
13    transmission organization voluntary or mandatory curtailment
14    program to ensure statewide consistency.
15        (4)   Conditions for interconnection of new commercial
16    data center load while ensuring the continued provision of
17    electric service to existing customers that is adequate,
18    reasonable, reasonably continuous and without unreasonable
19    interruption or delay. If a regional supply shortage exists
20    or is likely to exist, as forecasted or determined by the
21    regional transmission organization in which the electric
22    distribution system participates, the commission shall impose
23    any of the following conditions on a new interconnection or
24    an incremental addition of load associated with an
25    interconnected commercial data center:
26              (i)    Requiring the commercial data center to take
27        electric distribution service under the electric
28        distribution company's interruptible rate.
29              (ii)    Permitting firm electric distribution service
30        on the condition that the commercial data center has been

20260SB1323PN1717                   - 12 -
 1            certified to have brought its own incremental clean firm
 2            energy resources into service under a certification
 3            program established by the commission, the Federal Energy
 4            Regulatory Commission or the regional transmission
 5            organization or independent system operator in which the
 6            applicable public utility participates.
 7                   (iii)   Imposing a combination of the requirements
 8            under subparagraphs (i) and (ii).
 9            (5)    Cost responsibility standards under section 4.
10            (6)    Establishment of the alternative compliance payment
11      rate and calculation methods under section 7(e).
12            (7)    Disclosure requirements under section 10.
13            (8)    Backup generation standards under section 11.
14            (9)    Curtailment standards under section 12.
15            (10)    Certification and expedited interconnection
16      standards under section 13.
17   Section 4.      Prohibition on cost shifting and recovery of costs.
18      (a)   Prohibition on cross-subsidization.--An electric
19   distribution company may not recover from ratepayers other than
20   commercial data centers, whether through base rates, riders,
21   surcharges or another ratemaking mechanism, a cost caused in
22   whole or in part by the interconnection, service or load of a
23   commercial data center, including a cost associated with
24   capacity, energy, ancillary services, transmission,
25   distribution, network upgrades or dedicated facilities, if
26   either of the following applies:
27            (1)    The cost is directly attributable to the provision
28      of electric service to a commercial data center.
29            (2)    The cost would not have been incurred but for the
30      electricity demand of a commercial data center.

20260SB1323PN1717                       - 13 -
 1      (b)   Rate review and allocation.--The commission shall review
 2   rates to ensure that the cost of providing service to a
 3   commercial data center is not subsidized by another customer
 4   class. For purposes of a rate determination, each electric
 5   distribution company serving a commercial data center shall have
 6   the following duties:
 7            (1)   To allocate or assign costs in one of the following
 8      ways:
 9                  (i)    Allocate the cost of serving commercial data
10            centers to a customer class consisting solely of
11            commercial data centers in an amount equal to the cost of
12            serving commercial data centers, including direct and
13            indirect costs associated with providing service to
14            commercial data centers through new or existing
15            facilities.
16                  (ii)    Directly assign the cost of serving a
17            commercial data center to the commercial data center.
18            (2)   To mitigate the risk of any of the following:
19                  (i)    Another electric service customer paying a cost
20            associated with providing service to a commercial data
21            center if the cost does not benefit another customer
22            class.
23                  (ii)    Shifting to another electric service customer
24            the cost of serving a commercial data center, including a
25            cost incurred by an electric distribution company to meet
26            load requirements resulting from the provision of
27            electric service to a commercial data center.
28      (c)   Cost-of-service study.--A public utility that serves or
29   is reasonably expected to serve commercial data center load
30   shall submit a full cost-of-service study when seeking a rate

20260SB1323PN1717                       - 14 -
 1   increase under 66 Pa.C.S. § 1308 (relating to voluntary changes
 2   in rates) to support the public utility's proposed allocation of
 3   shared or indirect costs that benefit multiple customer classes,
 4   including commercial data centers.
 5      (d)   Universal service and energy conservation programs.--A
 6   public utility shall recover from commercial data centers the
 7   costs incurred by the public utility in connection with the
 8   development, implementation and support of universal service and
 9   energy conservation programs, consistent with 66 Pa.C.S. §§
10   2203(6), (7), (8), (9) and (10) (relating to standards for
11   restructuring of natural gas utility industry) and 2804(8) and
12   (9) (relating to standards for restructuring of electric
13   industry), through a tariff rate approved by the commission.
14      (e)   Duration of allocation and recovery standards.--The
15   commission shall establish standards to ensure that a commercial
16   data center responsible for costs specified under subsection
17   (a), including construction, transmission and distribution
18   costs, remains responsible for those costs for the useful life
19   of the associated infrastructure or for the duration of the
20   service obligation, whichever is longer, in a manner that
21   supports business development in this Commonwealth while
22   minimizing the risk of stranded infrastructure costs,
23   maintaining customer affordability and maintaining overall
24   system reliability.
25      (f)   Transmission and regional cost impacts.--To the maximum
26   extent permitted under Federal law, the commission shall ensure
27   that a cost allocated to an electric distribution company or
28   electric generation supplier under a tariff approved by the
29   Federal Energy Regulatory Commission and associated with
30   transmission facilities, network upgrades, capacity obligations

20260SB1323PN1717                  - 15 -
 1   or another regional system cost, if caused in whole or in part
 2   by a commercial data center, is appropriately allocated at
 3   retail and recovered from the commercial data center and does
 4   not result in unreasonable cost impacts to residential customers
 5   or small commercial customers.
 6      (g)   Curtailment obligations.--
 7            (1)   If a regional transmission organization issues a
 8      curtailment obligation or directive and assigns the
 9      obligation or directive to an electric distribution company
10      or electric generation supplier in its capacity as a load-
11      serving entity, in whole or in part due to the provision of
12      electric service to a commercial data center, the electric
13      distribution company or electric generation supplier shall
14      require the commercial data center to satisfy the curtailment
15      obligation or directive under contractual terms or tariff
16      provisions approved by the commission.
17            (2)   Another customer of the electric distribution
18      company or electric generation supplier may not be assigned
19      responsibility for a curtailment obligation resulting from
20      the commercial data center's service.
21            (3)   Nothing in this subsection shall be construed to:
22                  (i)    prevent or hinder an electric distribution
23            company or electric generation supplier from taking
24            action necessary to maintain system reliability; or
25                  (ii)    prohibit an electric distribution company or
26            electric generation supplier from implementing a
27            voluntary load curtailment program approved by the
28            commission.
29      (h)   Backstop procurement obligations.--
30            (1)   If a regional transmission organization undertakes

20260SB1323PN1717                       - 16 -
 1    backstop procurement of capacity or a comparable reliability
 2    service and assigns a financial or other obligation to an
 3    electric distribution company or electric generation supplier
 4    in its capacity as a load-serving entity, in whole or in part
 5    due to a commercial data center's service, the electric
 6    distribution company or electric generation supplier shall
 7    allocate the obligation at retail to and recover the
 8    obligation from the commercial data center or commercial data
 9    centers that gave rise to the obligation under terms
10    comparable to those under which the obligation is assigned to
11    the electric distribution company or electric generation
12    supplier.
13          (2)   If an electric distribution company does not provide
14    retail default service to a commercial data center and, in
15    its capacity as a load-serving entity, receives an assignment
16    of cost obligations related to backstop procurement from a
17    regional transmission organization, the electric distribution
18    company may establish a nonbypassable surcharge to pass
19    through the obligation on a pro rata basis to each commercial
20    data center taking electric service under the electric
21    distribution company's tariff if the rebuttable presumption
22    under subsection (i)(2) applies.
23    (i)   Regional generation, capacity and reliability costs.--
24          (1)   To the maximum extent permitted under Federal law,
25    if a regional transmission organization assigns, under a
26    tariff approved by the Federal Energy Regulatory Commission,
27    to an electric distribution company or electric generation
28    supplier in its capacity as a load-serving entity a cost
29    associated in whole or in part with the procurement of new
30    generation supply, capacity or a comparable reliability

20260SB1323PN1717                  - 17 -
 1    service undertaken to meet the electricity demand of one or
 2    more commercial data centers, the electric distribution
 3    company or electric generation supplier shall directly
 4    assign, allocate and recover the cost from the applicable
 5    commercial data center or commercial data centers.
 6        (2)   There shall be a rebuttable presumption that a cost
 7    described under paragraph (1) is attributable to a commercial
 8    data center if any of the following apply:
 9              (i)    The regional transmission organization or its
10        independent market monitor identifies the load addition
11        as a material driver of the procurement.
12              (ii)    The timing of the procurement is reasonably
13        correlated with the commercial data center's load
14        addition.
15              (iii)    The procurement would not have occurred in
16        substantially the same form or time frame absent the
17        commercial data center's load addition.
18        (3)   The presumption under paragraph (2) shall apply
19    solely to retail allocation and recovery by the commission
20    and may not be construed to alter an assignment or
21    determination made under a tariff approved by the Federal
22    Energy Regulatory Commission.
23        (4)   If a regional transmission organization does not
24    directly allocate the costs described under paragraph (1) to
25    the commercial data center or commercial data centers that
26    gave rise to the costs, the commission shall establish and
27    implement, consistent with Federal law, a just and reasonable
28    mechanism to allocate and recover the costs from the
29    applicable commercial data center or commercial data centers
30    without altering the wholesale assignment established under a

20260SB1323PN1717                   - 18 -
 1    tariff approved by the Federal Energy Regulatory Commission.
 2          (5)   If an electric distribution company does not provide
 3    retail default service to a commercial data center and, in
 4    its capacity as a load-serving entity, receives an assignment
 5    of generation supply, capacity or comparable reliability
 6    service cost obligations from a regional transmission
 7    organization, the electric distribution company may establish
 8    a nonbypassable surcharge to pass through the obligation on a
 9    pro rata basis to each commercial data center taking service
10    under the electric distribution company's tariff if the
11    rebuttable presumption under paragraph (2) applies.
12    (j)   Financial security.--
13          (1)   As a condition of taking electric service, a
14    commercial data center whose load is reasonably likely to
15    trigger or contribute to an obligation under subsection (h)
16    shall provide financial security, in a form and amount
17    approved by the commission, sufficient to ensure that
18    existing and future customers of the public utility are held
19    harmless for the full term and value of the obligation.
20          (2)   The financial security required under paragraph (1)
21    shall remain in effect for the duration of the applicable
22    capacity obligation and any associated cost recovery period.
23          (3)   As a condition of taking electric service, a
24    commercial data center reasonably expected to trigger or
25    contribute to a cost described under subsection (i) shall
26    provide and maintain financial security, in a form and amount
27    approved by the commission, sufficient to ensure full
28    recovery of the cost for the duration of the obligation and
29    to hold harmless existing and future customers of the
30    electric distribution company.

20260SB1323PN1717                   - 19 -
 1      (k)   Duration of responsibility.--Cost responsibility under
 2   subsections (h) and (i) shall apply for the useful life of the
 3   associated facilities or the duration of the regional
 4   obligation, whichever is longer.
 5      (l)   Federal law.--Nothing in subsections (g), (h), (i), (j)
 6   and (k) shall be construed to conflict with or preempt the
 7   jurisdiction of the Federal Energy Regulatory Commission or to
 8   require an electric distribution company or electric generation
 9   supplier to take action inconsistent with a tariff approved by
10   the Federal Energy Regulatory Commission.
11      (m)   Implementation.--The commission shall promulgate
12   regulations or issue orders necessary to implement subsections
13   (g), (h), (i), (j), (k) and (l) in a manner consistent with
14   Federal law governing regional transmission organizations and
15   applicable tariffs and agreements.
16      (n)   Alternative compliance payments not recoverable.--An
17   electric distribution company may not recover, through base
18   rates, riders, surcharges or another ratemaking mechanism, an
19   alternative compliance payment under section 7(e) from a
20   ratepayer other than the commercial data center responsible for
21   the payment.
22   Section 5.   Contributions to Low-Income Home Energy Assistance
23                Program.
24      (a)   Establishment of account.--The Data Center Low-Income
25   Home Energy Assistance Program Enhancement Account is
26   established as a restricted account in the General Fund. The
27   Department of Human Services shall use money appropriated from
28   the Data Center Low-Income Home Energy Assistance Program
29   Enhancement Account under subsection (d) for a supplemental
30   program to enhance the Low-Income Home Energy Assistance

20260SB1323PN1717                  - 20 -
 1   Program. The supplemental program shall include a summer cooling
 2   component.
 3      (b)   Sources of money.--The following shall be deposited into
 4   the Data Center Low-Income Home Energy Assistance Program
 5   Enhancement Account:
 6            (1)   Payments made under subsection (c).
 7            (2)   Interest accrued on money in the Data Center Low-
 8      Income Home Energy Assistance Program Enhancement Account.
 9            (3)   Money from another source authorized by Federal or
10      State law.
11      (c)   Annual payments.--
12            (1)   No later than June 1 of each year, each commercial
13      data center with an annual peak load of at least 25 megawatts
14      shall pay into the Data Center Low-Income Home Energy
15      Assistance Program Enhancement Account as follows:
16                  (i)    $40,000 per megawatt of annual peak load up to
17            and including 25 megawatts.
18                  (ii)   For each additional megawatt of annual peak
19            load above 25 megawatts, an additional $40,000 per
20            megawatt.
21            (2)   A payment under this subsection shall be required
22      for the duration of the load.
23            (3)   The commission may adjust the payment amounts under
24      this subsection periodically to account for inflation. The
25      commission shall make an adjustment under this paragraph by
26      promulgating regulations.
27      (d)   Appropriation.--Money in the Data Center Low-Income Home
28   Energy Assistance Program Enhancement Account is appropriated to
29   the Department of Human Services on a continuing basis for the
30   purposes of this section.

20260SB1323PN1717                       - 21 -
 1      (e)   Regulations and guidelines.--The Department of Human
 2   Services may promulgate regulations or issue guidelines
 3   necessary to implement this section.
 4   Section 6.     Pennsylvania Energy Independence Account.
 5      (a)   Establishment of account.--The Pennsylvania Energy
 6   Independence Account is established as a restricted account in
 7   the General Fund. The Pennsylvania Energy Development Authority
 8   shall expend money from the Pennsylvania Energy Independence
 9   Account for the purposes of this act and may establish
10   subaccounts within the Pennsylvania Energy Independence Account.
11      (b)   Sources of money.--The following shall be deposited into
12   the Pennsylvania Energy Independence Account:
13            (1)   Money appropriated or transferred by the General
14      Assembly for deposit into the Pennsylvania Energy
15      Independence Account.
16            (2)   Supplemental Federal funding available for the
17      purposes of this act and appropriated by the General Assembly
18      for deposit into the Pennsylvania Energy Independence
19      Account.
20            (3)   Interest and other amounts resulting from the
21      investment of money in the Pennsylvania Energy Independence
22      Account.
23            (4)   Gifts, grants and donations made to the Pennsylvania
24      Energy Independence Account.
25      (c)   Use of money.--Money in the Pennsylvania Energy
26   Independence Account is appropriated to the Pennsylvania Energy
27   Development Authority on a continuing basis to provide grants,
28   loans and loan guarantees to finance new clean firm energy
29   systems, small-scale energy systems, energy efficiency projects
30   and community energy facilities.

20260SB1323PN1717                    - 22 -
 1      (d)   Construction loans.--The Pennsylvania Energy Development
 2   Authority may provide a construction loan under this section
 3   only if the loan constitutes the senior debt secured by the
 4   facility and does not exceed 60% of the facility's estimated
 5   construction cost.
 6      (e)   Administrative costs.--The Pennsylvania Energy
 7   Development Authority may use not more than 5% annually of the
 8   money in the Pennsylvania Energy Independence Account for
 9   administrative costs relating to the authority's
10   responsibilities under this act.
11      (f)   Application criteria.--In evaluating an application for
12   a loan under this section, the Pennsylvania Energy Development
13   Authority shall consider all of the following:
14            (1)   The applicant's:
15                  (i)    quality of services and management;
16                  (ii)    efficiency of operations;
17                  (iii)    history of operations in this Commonwealth and
18            the United States;
19                  (iv)    resource operation attributes;
20                  (v)    ability to address regional, local and
21            reliability needs;
22                  (vi)    access to resources essential for operating the
23            project for which the loan is requested, including land,
24            water and reliable infrastructure, as applicable; and
25                  (vii)    evidence of creditworthiness and ability to
26            repay the loan on the terms established in the loan
27            agreement, including total assets, total liabilities, net
28            worth and credit ratings issued by major credit rating
29            agencies.
30            (2)   The generation capacity and estimated cost of the

20260SB1323PN1717                       - 23 -
 1      project for which a grant, loan or loan guarantee is
 2      requested.
 3            (3)   Any other factor the Pennsylvania Energy Development
 4      Authority considers appropriate.
 5      (g)   Annual payments.--
 6            (1)   No later than June 1 of each year, each commercial
 7      data center with an annual peak load of at least 25 megawatts
 8      shall pay into the Pennsylvania Energy Independence Account
 9      as follows:
10                  (i)    $2,000 per megawatt of annual peak load up to
11            and including 25 megawatts.
12                  (ii)    For each additional megawatt of annual peak
13            load above 25 megawatts, an additional $2,000 per
14            megawatt.
15            (2)   A payment under this subsection shall be required
16      for the duration of the load.
17            (3)   The commission may adjust the payment amounts under
18      this subsection periodically to account for inflation. The
19      commission shall make an adjustment under this paragraph by
20      promulgating regulations.
21      (h)   Exemption.--A commercial data center certified by the
22   commission under section 13 to have brought its own incremental
23   clean firm energy resources shall be exempt from subsection (g).
24   Section 7.     Clean firm energy requirements.
25      (a)   Procurement requirement.--Energy supplied to a
26   commercial data center shall include electricity procured from
27   incremental clean firm energy resources located within this
28   Commonwealth in an amount not less than the following
29   percentages of the commercial data center's annual electricity
30   consumption:

20260SB1323PN1717                       - 24 -
 1            (1)   Beginning January 1, 2027, 10%.
 2            (2)   Beginning January 1, 2030, 14.5%.
 3            (3)   Beginning January 1, 2035, 32%.
 4      (b)   Incremental requirement.--As certified by the
 5   commission, only incremental capacity or incremental net
 6   additional megawatt-hours delivered to the grid relative to a
 7   baseline year may qualify to satisfy subsection (a).
 8      (c)   Compliance methods.--A commercial data center may
 9   demonstrate compliance with this section through any of the
10   following:
11            (1)   A power purchase agreement or other bilateral
12      contract for clean firm energy.
13            (2)   Retirement of a clean firm energy certificate issued
14      through a registry established by the commission.
15            (3)   Another method or instrument approved by the
16      commission.
17      (d)   Cost containment and flexibility.--To protect system
18   reliability and ratepayer affordability, the commission shall
19   have the following duties:
20            (1)   Establish an alternative compliance payment
21      available to a commercial data center.
22            (2)   Permit the banking of clean firm energy certificates
23      for up to three compliance years.
24            (3)   Authorize limited borrowing of future-year
25      certificates under conditions determined by the commission.
26            (4)   Temporarily adjust the percentages under subsection
27      (a) if the commission determines that insufficient eligible
28      in-State supply of clean firm energy exists for a compliance
29      year, if the commission issues written findings and a
30      schedule for restoring full compliance with this section.

20260SB1323PN1717                    - 25 -
 1    (e)   Alternative compliance payment.--
 2          (1)   A commercial data center that does not procure or
 3    demonstrate retirement of sufficient clean firm energy
 4    certificates to satisfy subsection (a) for a compliance year
 5    shall make an alternative compliance payment to the
 6    Pennsylvania Energy Independence Account established under
 7    section 6.
 8          (2)   The commission shall establish the rate of the
 9    alternative compliance payment by regulation. The rate shall
10    be expressed in dollars per megawatt-hour and shall be
11    calculated in a manner that does all of the following:
12                (i)    Ensures that the alternative compliance payment
13          is a viable cost containment mechanism for commercial
14          data centers.
15                (ii)    Reflects the commission's assessment of the
16          market cost of incremental clean firm energy resources.
17                (iii)    Supports the Commonwealth's interest in
18          facilitating timely investment in clean firm energy and
19          long-duration storage resources located within this
20          Commonwealth.
21          (3)   An alternative compliance payment under this
22    subsection shall be deposited into the Pennsylvania Energy
23    Independence Account and used for the purposes specified in
24    section 6(c), including grants, loans and loan guarantees to
25    finance new clean firm energy systems, energy efficiency
26    projects, small-scale energy systems, community energy
27    facilities and other projects that support energy reliability
28    and independence in this Commonwealth.
29          (4)   Payment of an alternative compliance payment under
30    this subsection shall constitute full compliance with

20260SB1323PN1717                     - 26 -
 1      subsection (a) for the corresponding megawatt-hours.
 2   Section 8.     Contract filing and commission review.
 3      (a)   Filing requirement.--An electric distribution company
 4   shall file with the commission a copy of each contract executed
 5   with a commercial data center on or after the effective date of
 6   this subsection, including any of the following:
 7            (1)   A contract for electric service between a public
 8      utility and a commercial data center entered into under a
 9      commission-approved rate schedule for distribution service.
10            (2)   A construction services agreement, engineering
11      services agreement or similar agreement between a public
12      utility and a commercial data center relating to the public
13      utility's high-voltage transmission infrastructure or
14      distribution infrastructure.
15            (3)   A construction services agreement, engineering
16      services agreement or similar agreement between a public
17      utility and a commercial data center relating to transmission
18      infrastructure that is the subject of the public utility's
19      application for commission approval and authorization to
20      locate and construct a transmission line or a portion of a
21      transmission line with a design voltage greater than 100,000
22      volts.
23      (b)   Distribution of filed contracts.--A public utility shall
24   provide a copy of a contract filed under subsection (a) to the
25   Office of Consumer Advocate, the Office of Small Business
26   Advocate and the Bureau of Investigation and Enforcement within
27   the commission, subject to an appropriate confidentiality
28   agreement, protective agreement or protective order.
29      (c)   Supporting documentation.--An electric distribution
30   company shall include with a filing under subsection (a)

20260SB1323PN1717                    - 27 -
 1   sufficient documentation to permit the commission to conduct the
 2   review required under subsection (d).
 3      (d)   Commission review.--The commission shall review each
 4   contract filed under this section to determine all of the
 5   following:
 6            (1)   The impact of the contract on the continued
 7      provision of electric service that is adequate, safe and
 8      reliable to residents and businesses of this Commonwealth.
 9            (2)   The impact of the contract on ratepayers and
10      electric bill affordability for residential customers and
11      commercial customers. The impact on low-income customers
12      shall be determined as a subset of residential customers.
13            (3)   Whether the contract is reasonably likely to result
14      in a material adverse impact on electric bill affordability
15      or reliability for residential customers.
16            (4)   Whether the contract complies with sections 3, 4 and
17      7.
18      (e)   Approval standard.--The commission may not approve a
19   contract under this act if the commission finds that the
20   contract is reasonably likely to result in a material adverse
21   impact on electric bill affordability or reliability for
22   residential customers. As a condition of approval, the
23   commission may require the imposition of any reasonable
24   mitigation measure necessary to ensure that the contract will
25   not result in a material adverse impact on electric bill
26   affordability or reliability for residential customers.
27   Section 9.     Annual report.
28      (a)   Report.--For at least 10 years, the commission shall
29   submit a written report to the General Assembly each year and
30   shall make a public version of the report available on the

20260SB1323PN1717                    - 28 -
 1   commission's publicly accessible Internet website.
 2      (b)   Contents.--The report shall include all of the
 3   following:
 4            (1)   The commission's efforts during the prior year to
 5      implement this act.
 6            (2)   The commission's determinations under section 8(d)
 7      regarding the impact of commercial data centers on the
 8      continued provision of electric service that is adequate,
 9      safe and reliable to residents and businesses of this
10      Commonwealth, the impact on ratepayers and electric bill
11      affordability and compliance with sections 3, 4 and 7.
12            (3)   Recommendations for legislative or regulatory
13      changes to improve the commission's oversight
14      responsibilities under this act.
15   Section 10.    Disclosure requirements.
16      (a)   Interconnection requests.--The commission shall require
17   each planned commercial data center to disclose to the
18   commission, the applicable electric distribution company and the
19   applicable regional transmission organization or independent
20   system operator whether the planned commercial data center is
21   pursuing a substantially similar request for electric service
22   within this Commonwealth or within the applicable regional
23   transmission organization or independent system operator if
24   approval of the substantially similar request would result in a
25   change, delay or withdrawal of the interconnection request. The
26   disclosure may withhold or anonymize competitively sensitive
27   details. The commission shall prohibit or impose reasonable
28   restrictions on the sale or disclosure of information provided
29   to an electric distribution company under this subsection.
30      (b)   Backup generation.--The commission shall require each

20260SB1323PN1717                    - 29 -
 1   planned commercial data center to disclose to the commission,
 2   the applicable electric distribution company and the applicable
 3   regional transmission organization or independent system
 4   operator information regarding the planned commercial data
 5   center's backup generation resources and storage resources and
 6   the planned commercial data center's capability to rely on
 7   backup generation resources or storage resources during a period
 8   of required load shedding or curtailment, including the amount
 9   of notice required to deploy backup generation resources or
10   storage resources.
11   Section 11.    Backup generation standards.
12      A commercial data center's onsite fossil-fueled backup
13   generation shall comply with all of the following:
14            (1)   Meet or exceed the Tier 4 emissions standards of the
15      United States Environmental Protection Agency or both meet
16      the Tier 2 emissions standards and be equipped with a
17      selective catalytic reduction system or another emissions
18      control system that more stringently reduces nitrogen oxides,
19      where applicable.
20            (2)   Be limited to emergency use and limited testing and
21      maintenance consistent with Federal and State air quality
22      laws and regulations.
23            (3)   Be permitted, monitored and reported in the
24      aggregate as a single emissions source or as part of a single
25      emissions source, where practicable, in coordination with the
26      Department of Environmental Protection.
27   Section 12.    Curtailment standards.
28      (a)   Direction to commercial data centers.--During a period
29   of emergency curtailment or manual load dump, the commission
30   shall require an electric distribution company to direct a

20260SB1323PN1717                    - 30 -
 1   commercial data center to deploy backup generation resources or
 2   storage resources or curtail load before the electric
 3   distribution company curtails service to a residential customer
 4   or small commercial customer.
 5      (b)   Priority.--The commission may require an electric
 6   distribution company to give priority under subsection (a) to a
 7   commercial data center that has not been certified to have
 8   brought its own incremental clean firm energy resources into
 9   service under a program established by the commission, the
10   Federal Energy Regulatory Commission or the regional
11   transmission organization or independent system operator in
12   which the applicable public utility participates.
13      (c)   Environmental compliance.--Nothing in this section shall
14   be construed to authorize or require a violation of a Federal or
15   State emissions limitation or another Federal or State
16   environmental law or regulation.
17   Section 13.     Certification and expedited interconnection for
18                  commercial data centers bringing incremental clean
19                  firm energy resources.
20      (a)   Certification program.--The commission shall establish a
21   program to certify a commercial data center that has brought or
22   plans to bring incremental clean firm energy resources.
23   Certification shall be based on a binding financial commitment
24   by the commercial data center, including a power purchase
25   agreement, to enable incremental clean firm energy resources on
26   a one-for-one accredited unforced capacity basis, including a
27   reasonable reserve margin, tied to the commercial data center's
28   ramp-up and utilization schedule, through any combination of the
29   following:
30            (1)   Placement in service by the commercial data center

20260SB1323PN1717                     - 31 -
 1      or a third party of an incremental clean firm energy resource
 2      or combined generation and storage resource within the
 3      regional transmission organization that serves the commercial
 4      data center.
 5             (2)   An uprate or expansion of an existing clean firm
 6      energy resource or combined generation and storage resource
 7      within the regional transmission organization that serves the
 8      commercial data center, to the extent of the additional
 9      accredited unforced capacity.
10             (3)   Participation in a demand response product, if the
11      participation continues for the duration of the certification
12      period or until the commercial data center has brought
13      additional accredited unforced capacity equivalent to the
14      capacity value of the demand response product.
15             (4)   Another incremental addition of accredited unforced
16      capacity from incremental clean firm energy resources, as
17      measured by the applicable regional transmission organization
18      or independent system operator.
19      (b)    Interconnection priority.--The commission shall require
20   an electric distribution company to give priority to the
21   interconnection of a commercial data center certified under
22   subsection (a). For an interconnection subject to State
23   jurisdiction, the commission shall also require an electric
24   distribution company to give priority to the interconnection of
25   an incremental clean firm energy resource or combined generation
26   and storage resource associated with a certified commercial data
27   center.
28   Section 14.     Enforcement.
29      A violation of this act shall be subject to enforcement by
30   the commission under 66 Pa.C.S. Ch. 33 (relating to violations

20260SB1323PN1717                     - 32 -
1   and penalties).
2   Section 15.   Construction.
3      Nothing in this act shall be construed to authorize an
4   electric distribution company to own electric generation supply
5   in this Commonwealth.
6   Section 16.   Effective date.
7      This act shall take effect in 60 days.




20260SB1323PN1717                   - 33 -