SB 372 — 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 short title, for definitions and for alternative energy portfolio standards; providing for Zero Emissions Carbon Certificate Program, for solar photovoltaic technology requirements and for decarbonization; and establishing the ZEC Fund.

PRINTER'S NO.   320

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                        SENATE BILL
                        No. 372
                                               Session of
                                                 2025

     INTRODUCED BY STREET, COMITTA, KANE AND SCHWANK, MARCH 6, 2025

     REFERRED TO CONSUMER PROTECTION AND PROFESSIONAL LICENSURE,
        MARCH 6, 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 short title, for definitions and for
 9      alternative energy portfolio standards; providing for Zero
10      Emissions Carbon Certificate Program, for solar photovoltaic
11      technology requirements and for decarbonization; and
12      establishing the ZEC Fund.
13      The General Assembly of the Commonwealth of Pennsylvania
14   hereby enacts as follows:
15      Section 1.    Section 1 of the act of November 30, 2004
16   (P.L.1672, No.213), known as the Alternative Energy Portfolio
17   Standards Act, is amended to read:
18   Section 1.   Short title.
19      This act shall be known and may be cited as the [Alternative
20   Energy Portfolio Standards] Energy Future Act.
21      Section 2.    The definitions of "alternative energy sources,"
22   "reporting period" and "Tier II alternative energy source" in
23   section 2 of the act are amended and the section is amended by
 1   adding definitions to read:
 2   Section 2.   Definitions.
 3      The following words and phrases when used in this act shall
 4   have the meanings given to them in this section unless the
 5   context clearly indicates otherwise:
 6      "Advanced nuclear."       A nuclear fission or fusion reactor,
 7   including a prototype plant as defined in 10 CFR 50.2 (relating
 8   to definitions) and 52.1 (relating to definitions), with
 9   significant improvements compared to commercial nuclear reactors
10   under construction as of the effective date of this definition,
11   including the following improvements:
12          (1)     additional inherent safety features;
13          (2)     significantly lower levelized cost of electricity;
14          (3)     lower waste yields;
15          (4)     greater fuel utilization;
16          (5)     enhanced reliability;
17          (6)     increased proliferation resistance;
18          (7)     increased thermal efficiency; or
19          (8)     ability to integrate into electric and nonelectric
20      applications.
21      * * *
22      "Alternative energy sources."          The term shall include the
23   following existing and new sources for the production of
24   electricity:
25          (1)     Solar photovoltaic or other solar electric energy.
26          (2)     Solar thermal energy.
27          (3)     Wind power.
28          (4)     Large-scale hydropower, which shall mean the
29      production of electric power by harnessing the hydroelectric
30      potential of moving water impoundments, including pumped

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

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

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 1      electricity through the implementation of:
 2                 (i)    energy efficiency technologies, management
 3          practices or other strategies in residential, commercial,
 4          institutional or government customers that reduce
 5          electricity consumption by those customers;
 6                 (ii)    load management or demand response
 7          technologies, management practices or other strategies in
 8          residential, commercial, industrial, institutional and
 9          government customers that shift electric load from
10          periods of higher demand to periods of lower demand; or
11                 (iii)    industrial by-product technologies consisting
12          of the use of a by-product from an industrial process,
13          including the reuse of energy from exhaust gases or other
14          manufacturing by-products that are used in the direct
15          production of electricity at the facility of a customer.
16          (13)    Distributed generation system, which shall mean:
17                 (i)     the small-scale power generation of electricity
18          and useful thermal energy[.]; or
19                 (ii)    a combined heat and power system.
20      * * *
21      "Carbon capture, utilization and storage technology."
22   Technology that has the principal purpose of capturing, reusing,
23   storing, sequestering or using carbon dioxide emissions to
24   prevent carbon dioxide from entering the atmosphere whether
25   constructed integral or adjacent to a coal-fired or natural gas-
26   fired generation facility.
27      "Carbon constrained coal facility."       As follows:
28          (1)    An electric generating facility located in this
29      Commonwealth that uses primarily coal as a feedstock and that
30      emits no more than 650 pounds of carbon dioxide per megawatt

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 1    hour of generated electricity averaged over one calendar year
 2    by 2026, no more than 214 pounds of carbon dioxide per
 3    megawatt hour of generated electricity averaged over one
 4    calendar year by 2031 and zero pounds of carbon dioxide per
 5    megawatt hour of generated electricity averaged over one
 6    calendar year by 2036.
 7        (2)   The power block of the carbon constrained coal
 8    facility does not exceed allowable emission rates for sulfur
 9    dioxide, nitrogen oxides, carbon monoxide, methane, nitrous
10    oxide, volatile organic compounds, particulates and mercury
11    for a natural gas-fired combined-cycle facility the same size
12    as and in the same location as the carbon constrained coal
13    facility at the time the carbon constrained coal facility
14    obtains an approved air permit.
15        (3)   The coal used by a carbon constrained coal facility
16    is located in this Commonwealth.
17    "Carbon constrained energy facility."   As follows:
18        (1)   An electric generating facility located in this
19    Commonwealth that uses primarily natural gas, coal or
20    hydrogen as a feedstock and that emits no more than 650
21    pounds of carbon dioxide per megawatt hour of generated
22    electricity averaged over one calendar year by 2027, no more
23    than 214 pounds of carbon dioxide per megawatt hour of
24    generated electricity averaged over one calendar year by 2031
25    and net zero pounds of carbon dioxide per megawatt hour of
26    generated electricity averaged over one calendar year by
27    2036.
28        (2)   The power block of the carbon constrained natural
29    gas facility, carbon constrained coal facility or carbon
30    constrained hydrogen facility shall not exceed allowable

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 1      emission rates for sulfur dioxide, nitrogen oxides, carbon
 2      monoxide, methane, nitrous oxide, volatile organic compounds,
 3      particulates and mercury for a natural gas-fired combined-
 4      cycle facility the same size as and in the same location as
 5      the carbon constrained natural gas facility, carbon
 6      constrained coal facility or carbon constrained hydrogen
 7      facility at the time the carbon constrained energy facility
 8      obtains an approved air permit.
 9          (3)   The gas, coal and hydrogen used by a carbon
10      constrained energy facility is sourced in this Commonwealth.
11      "Carbon constrained energy system."   A facility or energy
12   system that uses carbon capture, utilization and storage
13   technology that produces carbon emissions at or below the
14   requirement under this act to generate electricity and delivers
15   the electricity it generates to the distribution system of an
16   electric distribution company or to the transmission system
17   operated by a regional transmission organization.
18      "Carbon constrained hydrogen facility."   As follows:
19          (1)   An electric generating facility located in this
20      Commonwealth that uses primarily hydrogen as a feedstock and
21      that emits no more than 650 pounds of carbon dioxide per
22      megawatt hour of generated electricity averaged over one
23      calendar year by 2026, no more than 214 pounds of carbon
24      dioxide per megawatt hour of generated electricity averaged
25      over one calendar year by 2031 and zero pounds of carbon
26      dioxide per megawatt hour of generated electricity averaged
27      over one calendar year by 2036, including the carbon dioxide
28      emissions from the generation of the utilized hydrogen.
29          (2)   The power block of the carbon constrained hydrogen
30      facility and generator of the utilized hydrogen does not

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 1    exceed allowable emission rates for sulfur dioxide, nitrogen
 2    oxides, carbon monoxide, methane, nitrous oxide, volatile
 3    organic compounds, particulates and mercury for a natural
 4    gas-fired combined-cycle facility the same size as and in the
 5    same location as the carbon constrained hydrogen facility at
 6    the time the carbon constrained hydrogen facility obtains an
 7    approved air permit.
 8        (3)   The hydrogen and associated feedstock used by a
 9    carbon constrained hydrogen facility is located in this
10    Commonwealth.
11    "Carbon constrained natural gas facility."   As follows:
12        (1)   An electric generating facility located in this
13    Commonwealth that uses primarily natural gas as a feedstock
14    and that emits no more than 650 pounds of carbon dioxide per
15    megawatt hour of generated electricity averaged over one
16    calendar year by 2026, no more than 214 pounds of carbon
17    dioxide per megawatt hour of generated electricity averaged
18    over one calendar year by 2031 and zero pounds of carbon
19    dioxide per megawatt hour of generated electricity averaged
20    over one calendar year by 2036.
21        (2)   The power block of the carbon constrained natural
22    gas facility does not exceed allowable emission rates for
23    sulfur dioxide, nitrogen oxides, carbon monoxide, methane,
24    nitrous oxide, volatile organic compounds, particulates and
25    mercury for a natural gas-fired combined-cycle facility the
26    same size as and in the same location as the carbon
27    constrained natural gas facility at the time the carbon
28    constrained natural gas facility obtains an approved air
29    permit.
30        (3)   The natural gas used by a carbon constrained natural

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 1      gas facility is located in this Commonwealth.
 2      "Combined heat and power system."     A combined heat and power
 3   system installed on a commercial, institutional or industrial
 4   facility site within this Commonwealth that is a qualified
 5   facility under the Public Utility Regulatory Policies Act of
 6   1978 (Public Law 95-617, 92 Stat. 3117) and has an annual
 7   operating efficiency of at least 60%. A combined heat and power
 8   system shall qualify as a Tier II alternative energy source for
 9   up to 50 megawatts of combined generation on a site.
10      * * *
11      "Eligibility period."    The period of time, measured in energy
12   years, during which a selected nuclear power plant may receive
13   zero emissions carbon certificates under section 3.1.
14      "Eligible nuclear power plant."     A nuclear power plant
15   certified by the commission under section 3.1(e).
16      "Energy year."   The 12-month period from June 1 through May
17   31, numbered according to the calendar year in which it ends.
18      * * *
19      "Nuclear power plant."    An individual electric-generating
20   unit utilizing nuclear fuel to produce electric power.
21      * * *
22      "Renewable energy."    The following:
23          (1)   Energy derived from sunlight, wind, falling water,
24      biomass, sustainable or otherwise, waste, landfill gas,
25      municipal solid waste, wave motion, tides and geothermal
26      power. The term includes the proportion of the thermal or
27      electric energy from a facility that results from the
28      cofiring of biomass.
29          (2)   The term does not include energy derived from coal,
30      oil, natural gas or nuclear power.

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 1          (3)    The term does not include energy waste heat from
 2      fossil-fired facilities or electricity generated from pumped
 3      storage but includes run-of-river generation from a combined
 4      pumped-storage and run-of-river facility.
 5      "Reporting [period."] period" or "reporting year."      The 12-
 6   month period from June 1 through May 31. A reporting year shall
 7   be numbered according to the calendar year in which it begins
 8   and ends.
 9      * * *
10      "Selected nuclear power plant."      An eligible nuclear power
11   plant located in this Commonwealth selected by the commission to
12   participate in the Zero Emissions Carbon Certificate Program
13   under section 3.1.
14      * * *
15      "Tier II alternative energy source."     Energy derived from:
16          (1)    Waste coal from a carbon constrained coal facility.
17          (2)    Distributed generation systems.
18          (3)    Demand-side management.
19          (4)    Large-scale hydropower.
20          (5)    Municipal solid waste.
21          (6)    Generation of electricity utilizing by-products of
22      the pulping process and wood manufacturing process, including
23      bark, wood chips, sawdust and lignin in spent pulping
24      liquors.
25          [(7)    Integrated combined coal gasification technology.]
26          (8)    A Tier I alternative energy source.
27      "Tier III carbon constrained energy source."     Energy derived
28   from a Pennsylvania-sourced carbon constrained energy facility.
29      "Tier IV carbon constrained energy source."      Energy derived
30   from Pennsylvania-existing nuclear generation.

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 1      "Tier V carbon constrained energy source."       Energy derived
 2   from Pennsylvania-advanced nuclear generation.
 3      "Tier VI carbon constrained energy source."       Energy derived
 4   from a Pennsylvania-sourced carbon constrained hydrogen
 5   facility.
 6      * * *
 7      Section 3.        Section 3(a)(1) and (3), (b), (f) and (g)(2) of
 8   the act are amended and the section is amended by adding
 9   subsections to read:
10   Section 3.     Alternative energy portfolio standards.
11      (a)   General compliance and cost recovery.--
12            (1)   From the effective date of this act through and
13      including [the 15th year after enactment of this act and each
14      year thereafter] 2045, the electric energy sold by an
15      electric distribution company or electric generation supplier
16      to retail electric customers in this Commonwealth shall be
17      comprised of electricity generated from alternative energy
18      sources and in the percentage amounts as described under
19      [subsections (b) and (c)] this section.
20            * * *
21            (3)   All costs for:
22                  (i)    the purchase of electricity generated from
23            alternative energy sources, including the costs of the
24            regional transmission organization, in excess of the
25            regional transmission organization real-time locational
26            marginal pricing, or its successor, at the delivery point
27            of the alternative energy source for the electrical
28            production of the alternative energy sources; and
29                  (ii)    payments for alternative energy credits, in
30            both cases that are voluntarily acquired by an electric

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 1            distribution company during the cost recovery period on
 2            behalf of its customers shall be deferred as a regulatory
 3            asset by the electric distribution company and fully
 4            recovered, with a return on the unamortized balance,
 5            pursuant to an automatic energy adjustment clause under
 6            66 Pa.C.S. § 1307 (relating to sliding scale of rates;
 7            adjustments) as a cost of generation supply under 66
 8            Pa.C.S. § 2807 (relating to duties of electric
 9            distribution companies) in the first year after the
10            expiration of its cost-recovery period. After the cost-
11            recovery period, any direct or indirect costs for the
12            purchase by electric distribution companies of resources
13            to comply with this section, including, but not limited
14            to, the purchase of electricity generated from
15            alternative energy sources, payments for alternative
16            energy credits, cost of credits banked, payments to any
17            third party administrators for performance under this act
18            and costs levied by a regional transmission organization
19            to ensure that alternative energy sources are reliable,
20            shall be recovered on a full and current basis pursuant
21            to an automatic energy adjustment clause under 66 Pa.C.S.
22            § 1307 as a cost of generation supply under 66 Pa.C.S. §
23            2807.
24      (b)   Tier I and solar photovoltaic shares through the 20th
25   reporting year.--
26            (1)   Two years after the effective date of this act, at
27      least 1.5% of the electric energy sold by an electric
28      distribution company or electric generation supplier to
29      retail electric customers in this Commonwealth shall be
30      generated from Tier I alternative energy sources. Except as

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 1    provided in this section, the minimum percentage of electric
 2    energy required to be sold to retail electric customers from
 3    alternative energy sources shall increase to 2% three years
 4    after the effective date of this act. The minimum percentage
 5    of electric energy required to be sold to retail electric
 6    customers from alternative energy sources shall increase by
 7    at least 0.5% each year so that at least 8% of the electric
 8    energy sold by an electric distribution company or electric
 9    generation supplier to retail electric customers in that
10    certificated territory in the 15th reporting year after the
11    effective date of this subsection is sold from Tier I
12    alternative energy resources.
13        (2)   [The] Through the 20th reporting year ending May 31,
14    2026, the total percentage of the electric energy sold by an
15    electric distribution company or electric generation supplier
16    to retail electric customers in this Commonwealth that must
17    be sold from solar photovoltaic technologies is:
18              (i)    0.0013% for June 1, 2006, through May 31, 2007.
19              (ii)    0.0030% for June 1, 2007, through May 31, 2008.
20              (iii)    0.0063% for June 1, 2008, through May 31,
21        2009.
22              (iv)    0.0120% for June 1, 2009, through May 31, 2010.
23              (v)    0.0203% for June 1, 2010, through May 31, 2011.
24              (vi)    0.0325% for June 1, 2011, through May 31, 2012.
25              (vii)    0.0510% for June 1, 2012, through May 31,
26        2013.
27              (viii)    0.0840% for June 1, 2013, through May 31,
28        2014.
29              (ix)    0.1440% for June 1, 2014, through May 31, 2015.
30              (x)    0.2500% for June 1, 2015, through May 31, 2016.

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 1                (xi)    0.2933% for June 1, 2016, through May 31, 2017.
 2                (xii)    0.3400% for June 1, 2017, through May 31,
 3          2018.
 4                (xiii)    0.3900% for June 1, 2018, through May 31,
 5          2019.
 6                (xiv)    0.4433% for June 1, 2019, through May 31,
 7          2020.
 8                (xv)    0.5000% for June 1, 2020, [and thereafter.]
 9          through May 31, 2026.
10          (3)   Upon commencement of the beginning of the 6th
11      reporting year, the commission shall undertake a review of
12      the compliance by electric distribution companies and
13      electric generation suppliers with the requirements of this
14      act. The review shall also include the status of alternative
15      energy technologies within this Commonwealth and the capacity
16      to add additional alternative energy resources. [The
17      commission shall use the results of this review to recommend
18      to the General Assembly additional compliance goals beyond
19      year 15.] The commission shall work with the department in
20      evaluating the future alternative energy resource potential.
21      (b.1)   Tier I and solar photovoltaic shares beginning in the
22   21st reporting year.--
23          (1)   Each electric distribution company and electric
24      generation supplier shall purchase, at a minimum, an amount
25      of Tier I alternative energy credits equal to the percentage
26      of electric energy required to be sold by an electric
27      distribution company or electric generation supplier to
28      retail electric customers from Tier I alternative energy
29      sources for that reporting year and as provided under this
30      subsection. Beginning in the 21st reporting year commencing

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 1    on June 1, 2026, the minimum percentage of electric energy
 2    required to be sold by an electric distribution company or
 3    electric generation supplier to retail electric customers in
 4    this Commonwealth from Tier I alternative energy sources for
 5    each reporting year is:
 6              (i)    10.444% for June 1, 2026, through May 31, 2027.
 7              (ii)    13.703% for June 1, 2027, through May 31, 2028.
 8              (iii)    16.961% for June 1, 2028, through May 31,
 9        2029.
10              (iv)    20.22% for June 1, 2029, through May 31, 2030.
11              (v)    23.497% for June 1, 2030, through May 31, 2031.
12              (vi)    26.737% for June 1, 2031, through May 31, 2032.
13              (vii)    30% for June 1, 2032, through May 31, 2033,
14        and thereafter.
15        (2)   (i)     Beginning in the 21st reporting year commencing
16        on June 1, 2026, the minimum percentage of the electric
17        energy sold by an electric distribution company or
18        electric generation supplier to retail electric customers
19        in this Commonwealth that must be sold from solar
20        photovoltaic technologies that are owned and operated by
21        customer-generators shall be:
22                     (A)   0.65% for June 1, 2026, through May 31,
23              2027.
24                     (B)   0.85% for June 1, 2027, through May 31,
25              2028.
26                     (C)   1.05% for June 1, 2028, through May 31,
27              2029.
28                     (D)   1.25% for June 1, 2029, through May 31,
29              2030.
30                     (E)   1.55% for June 1, 2030, through May 31,

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 1              2031.
 2                     (F)   1.95% for June 1, 2031, through May 31,
 3              2032.
 4                     (G)   2.5% for June 1, 2032, through May 31, 2033,
 5              and thereafter.
 6              (ii)    For purposes of subparagraph (i), solar
 7        photovoltaic technologies that are owned and operated by
 8        customer-generators include any of the following:
 9                     (A)   Solar photovoltaic technologies that were
10              certified on or before May 31, 2024, under subsection
11              (b)(2) and qualify to generate solar alternative
12              energy credits in accordance with section 3.2.
13                     (B)   Solar photovoltaic technologies that qualify
14              as customer-generators under subsection (b)(2).
15        (3)   Beginning in the 21st reporting year commencing on
16    June 1, 2026, and each reporting year thereafter, a solar
17    photovoltaic system that is certified before or on May 31,
18    2024, provided the system meets the requirements under
19    section 3.2, shall be included in the percentage of the
20    required solar photovoltaic energy systems owned and operated
21    by customer-generators under paragraph (2).
22        (4)   A solar photovoltaic energy system owned and
23    operated by a customer-generator in accordance with paragraph
24    (2) shall remain eligible to receive solar alternative energy
25    credits for no more than 15 years beginning on June 1, 2026,
26    or 15 years beginning on the date of the solar photovoltaic
27    energy system's certification if the certification occurs
28    after June 1, 2026. Upon expiration of the 15-year period
29    specified under this paragraph, the solar photovoltaic energy
30    system shall be eligible for alternative energy credits

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 1    provided for Tier I alternative energy sources under
 2    paragraph (1).
 3        (5)   Beginning in the 19th reporting year commencing on
 4    June 1, 2026, the minimum percentage of the electric energy
 5    sold by an electric distribution company or electric
 6    generation supplier to retail electric customers in this
 7    Commonwealth that must be sold from solar photovoltaic
 8    technologies from non-customer-generators is:
 9              (i)     0.94% for June 1, 2026, through May 31, 2027.
10              (ii)    1.54% for June 1, 2027, through May 31, 2028.
11              (iii)    2.34% for June 1, 2028, through May 31, 2029.
12              (iv)    3.34% for June 1, 2029, through May 31, 2030.
13              (v)     4.54% for June 1, 2030, through May 31, 2031.
14              (vi)    5.94% for June 1, 2031, through May 31, 2032.
15              (vii)    7.5% for June 1, 2032, through May 31, 2033,
16        and thereafter.
17        (6)   No later than one year after the effective date of
18    this paragraph, the commission shall establish regulations to
19    ensure diversification across all customer-generators under
20    paragraph (2), including, but not limited to, solar
21    photovoltaic systems that are interconnected at residential
22    or commercial locations or customer-generators whose systems
23    are for virtual meter aggregation.
24        (7)   This subsection shall not apply to the certification
25    of a solar photovoltaic energy system with a contract for the
26    sale and purchase of alternative energy credits derived from
27    solar photovoltaic energy sources entered into before or on
28    May 31, 2026, provided that the system meets the requirements
29    under section 3.2.
30        (8)   This subsection shall apply to a contract for the

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 1      sale and purchase of alternative energy credits derived from
 2      solar photovoltaic energy sources entered into or renewed for
 3      reporting years commencing after May 31, 2026.
 4      * * *
 5      (c.1)   Tier III share.--Of the electrical energy required to
 6   be sold from a Tier III carbon constrained energy source, the
 7   percentage that must be from these technologies is for:
 8            (1)   Energy years 2028 through 2032 - 5.5%.
 9            (2)   Energy years 2033 through 2037 - 11%.
10            (3)   Energy years 2038 through 2050 - 17.5%.
11      (c.2)   Tier IV share.--Of the electrical energy required to
12   be sold from a Tier IV carbon constrained energy source, the
13   percentage that must be from these technologies is for:
14            (1)   Energy years 2028 through 2032 - 2.5%.
15            (2)   Energy years 2033 through 2037 - 5%.
16            (3)   Energy years 2038 through 2050 - 7.5%.
17      (c.3)   Tier V share.--Of the electrical energy required to be
18   sold from a Tier V carbon constrained energy source, the
19   percentage that must be from these technologies is for:
20            (1)   Energy years 2028 through 2032 - 0.5%.
21            (2)   Energy years 2033 through 2037 - 1%.
22            (3)   Energy years 2038 through 2050 - 2%.
23      (c.4)   Tier VI share.--Of the electrical energy required to
24   be sold from a Tier VI carbon constrained energy source, the
25   percentage that must be from these technologies is for:
26            (1)   Energy years 2028 through 2032 - 0.5%.
27            (2)   Energy years 2033 through 2037 - 1%.
28            (3)   Energy years 2038 through 2050 - 2%.
29      * * *
30      (f)   Alternative compliance payment.--

20250SB0372PN0320                    - 18 -
 1        (1)     At the end of each program reporting year, the
 2    program administrator shall provide a report to the
 3    commission and to each covered electric distribution company
 4    showing their status level of alternative energy acquisition.
 5        (2)     The commission shall conduct a review of each
 6    determination made under subsections (b), (b.1) and (c). If,
 7    after notice and hearing, the commission determines that an
 8    electric distribution company or electric generation supplier
 9    has failed to comply with subsections (b), (b.1) and (c), the
10    commission shall impose an alternative compliance payment on
11    that electric distribution company or electric generation
12    supplier.
13        (3)     [The] Through May 31, 2026, the alternative
14    compliance payment, with the exception of the solar
15    photovoltaic share compliance requirement set forth in
16    subsection (b)(2), shall be $45 times the number of
17    additional alternative energy credits needed in order to
18    comply with subsection (b) or (c).
19        (4)     [The] Through May 31, 2026, the alternative
20    compliance payment for the solar photovoltaic share required
21    under subsection (b)(2) shall be 200% of the average market
22    value of solar renewable energy credits sold during the
23    reporting period within the service region of the regional
24    transmission organization, including, where applicable, the
25    levelized up-front rebates received by sellers of solar
26    [renewable] alternative energy credits in other jurisdictions
27    in the PJM Interconnection, L.L.C. transmission organization
28    (PJM) or its successor.
29        (4.1)     Beginning June 1, 2026, the alternative compliance
30    payment, with the exception of the customer-generator solar

20250SB0372PN0320                  - 19 -
 1    photovoltaic share compliance requirement specified under
 2    subsection (b.1)(2), shall be $45 multiplied by the number of
 3    additional alternative energy credits needed in order to
 4    comply with subsection (b.1) or (c).
 5        (4.2)     Beginning June 1, 2026, the alternative compliance
 6    payment for the customer-generator solar photovoltaic share
 7    compliance requirement specified under subsection (b.1)(2)
 8    shall be as follows:
 9               (i)    An amount equal to the product of $125
10        multiplied by the number of additional alternative energy
11        credits required to comply with subsection (b.1)(2) from
12        June 1, 2026, through May 31, 2031.
13               (ii)    An amount equal to the product of $100
14        multiplied by the number of additional alternative energy
15        credits required to comply with subsection (b.1)(2) from
16        June 1, 2031, through May 31, 2033.
17               (iii)    Beginning with the reporting year commencing
18        on June 1, 2033, and each reporting year thereafter, the
19        alternative compliance payment required for solar
20        photovoltaic energy systems under subsection (b.1)(2)
21        shall decrease by $5 from the previous reporting year
22        until the alternative compliance payment is
23        $45.
24        (5)    The commission shall establish a process to provide
25    for, at least annually, a review of the alternative energy
26    market within this Commonwealth and the service territories
27    of the regional transmission organizations that manage the
28    transmission system in any part of this Commonwealth. The
29    commission will use the results of this study to identify any
30    needed changes to the cost associated with the alternative

20250SB0372PN0320                    - 20 -
 1      compliance payment program. If the commission finds that the
 2      costs associated with the alternative compliance payment
 3      program must be changed, the commission shall present these
 4      findings to the General Assembly for legislative enactment.
 5      (g)   Transfer [to sustainable development funds] of
 6   alternative compliance payments.--
 7            * * *
 8            (2)   The alternative compliance payments shall be
 9      utilized solely for [projects] any of the following:
10                  (i)    Projects that will increase the amount of
11            electric energy generated from alternative energy
12            resources for purposes of compliance with subsections
13            (b), (b.1) and (c).
14                  (ii)    Workforce development programs to train workers
15            in renewable energy industries.
16      * * *
17      Section 4.        The act is amended by adding sections to read:
18   Section 3.1.     Zero Emissions Carbon Certificate Program.
19      (a)   Establishment.--No later than 180 days after the
20   effective date of this subsection, the commission shall allow
21   the commencement of a program providing for the issuance by the
22   commission of a zero emissions carbon certificate. The
23   commission shall adopt, after notice, the opportunity for
24   comment and public hearing, an order establishing the Zero
25   Emissions Carbon Certificate Program for selected nuclear power
26   plants which shall include:
27            (1)   A method and application process for determination
28      of the eligibility and selection of eligible nuclear power
29      plants.
30            (2)   Establishment of a mechanism for each electric

20250SB0372PN0320                       - 21 -
 1    distribution company to purchase ZECs from selected nuclear
 2    power plants and a mechanism for the commission to effectuate
 3    the provisions of subsection (i).
 4    (b)   ZEC program application.--
 5          (1)   As part of an application submitted to the
 6    commission under subsection (c), a nuclear power plant
 7    seeking to participate in the ZEC program shall provide to
 8    the commission any financial information requested by the
 9    commission pertaining to the nuclear power plant, including
10    certified cost projections over the next three energy years,
11    including operation and maintenance expenses, fuel expenses,
12    including spent fuel expenses, nonfuel capital expenses,
13    fully allocated overhead costs, the cost of operational risks
14    and market risks that would be avoided by ceasing operations
15    and any other information, financial or otherwise, to
16    demonstrate that the nuclear power plant's fuel diversity,
17    air quality and other environmental attributes are at risk of
18    loss because the nuclear power plant is projected to not
19    fully cover its costs and risks, or alternatively is
20    projected to not fully cover its costs and risks, including
21    its risk-adjusted cost of capital.
22          (2)   An application submitted to the commission under
23    subsection (c) shall include a certification that the nuclear
24    power plant will cease operations within three years unless
25    the nuclear power plant experiences a material financial
26    change. The certification shall specify the necessary steps
27    required to be completed to cease the nuclear power plant's
28    operations.
29          (3)   The financial and other information required under
30    this subsection may be submitted on a confidential basis and

20250SB0372PN0320                  - 22 -
 1      shall be treated and maintained as confidential by the
 2      commission and, notwithstanding any other law to the
 3      contrary, shall not be subject to public disclosure. The
 4      commission and the Attorney General shall jointly approve the
 5      disclosure of confidential information to a party that the
 6      commission and the Attorney General deem essential to aid the
 7      commission in making the determinations required under this
 8      subsection, provided that the party is not in a position that
 9      disclosure could harm competition and the party agrees in
10      writing to maintain the confidentiality of the confidential
11      information.
12            (4)   As used in this subsection, the following words and
13      phrases shall have the meanings given to them in this
14      paragraph unless the context clearly indicates otherwise:
15            "Market risks."   The term shall include, but not be
16      limited to, the risk of a forced outage and the associated
17      costs arising from contractual obligations and the risk that
18      output from the nuclear power plant may not be able to be
19      sold at projected levels.
20            "Operational risks."   The term shall include, but not be
21      limited to, the risk that operating costs will be higher than
22      anticipated because of new regulatory mandates or equipment
23      failures and the risk that per megawatt hour costs will be
24      higher than anticipated because of a lower than expected
25      capacity factor.
26      (c)   Submission of application.--No later than 210 days after
27   the effective date of this subsection, a nuclear power plant
28   seeking to participate in the ZEC program shall submit its
29   application to the commission.
30      (d)   List.--The commission shall complete a proceeding no

20250SB0372PN0320                    - 23 -
 1   later than 330 days after the effective date of this subsection
 2   and shall adopt, after notice, the opportunity for comment and
 3   public hearing, an order establishing a rank-ordered list of the
 4   nuclear power plants certified as eligible to receive ZECs, and
 5   establishing which eligible nuclear power plants have been
 6   selected to receive ZECs under this section. If the commission
 7   determines that no nuclear plant that applied satisfies the
 8   objectives of this section, the commission shall be under no
 9   obligation to certify any nuclear power plant as an eligible
10   nuclear power plant.
11      (e)   Requirements.--To be certified by the commission as an
12   eligible nuclear power plant, a nuclear power plant shall:
13            (1)   Be licensed to operate by the United States Nuclear
14      Regulatory Commission by the effective date of this paragraph
15      and through calendar year 2030 or later.
16            (2)   Demonstrate to the satisfaction of the commission
17      that the nuclear power plant makes a significant and material
18      contribution to the air quality in this Commonwealth by
19      minimizing emissions that result from electricity consumed in
20      this Commonwealth, minimizing harmful emissions that
21      adversely affect the residents of this Commonwealth and if
22      the nuclear power plant were to be retired, that retirement
23      would significantly and negatively impact this Commonwealth's
24      ability to comply with State air emissions reduction
25      requirements.
26            (3)   Demonstrate to the satisfaction of the commission,
27      through the financial and other confidential information
28      submitted to the commission under subsection (b), and any
29      other information required by the commission, which
30      information may be submitted on a confidential basis and

20250SB0372PN0320                    - 24 -
 1      shall be treated and maintained as confidential by the
 2      commission and, notwithstanding any law to the contrary,
 3      shall not be subject to public disclosure that the nuclear
 4      power plant's fuel diversity, air quality and other
 5      environmental attributes are at risk of loss because the
 6      nuclear power plant is projected to not fully cover its costs
 7      and risks, or alternatively is projected to not cover its
 8      costs, including its risk-adjusted cost of capital, and that
 9      the nuclear power plant will cease operations within three
10      years unless the nuclear power plant experiences a material
11      financial change.
12            (4)   Certify annually that the nuclear power plant does
13      not receive any direct or indirect payment or credit under a
14      Federal law, rule, regulation, order, tariff or other action,
15      or a law, rule, regulation, order, tariff or other action of
16      this Commonwealth or any other state, or a regional compact,
17      despite its reasonable best efforts to obtain any such
18      payment or credit, for its fuel diversity, resilience, air
19      quality or other environmental attributes that will eliminate
20      the need for the nuclear power plant to retire, except for
21      any payment or credit received under this section.
22            (5)   Submit an application fee to the commission in an
23      amount to be determined by the commission, but which shall
24      not exceed $250,000, to be used to defray the costs incurred
25      by the commission to administer the ZEC program.
26      (f)   Ranking.--The commission shall rank eligible nuclear
27   power plants from first to last by considering how well the
28   nuclear power plants satisfy the criteria provided under this
29   section and other relevant factors, including sustainability or
30   long-term commitment to nuclear energy production in a manner

20250SB0372PN0320                    - 25 -
 1   that supports this Commonwealth's cost-effective transition to a
 2   zero carbon energy supply. Two or more eligible nuclear power
 3   plants may not have the same ranking.
 4      (g)   Selection.--
 5            (1)   The commission shall select eligible nuclear power
 6      plants to receive ZECs according to their ranking. Beginning
 7      with the top-ranked eligible nuclear power plant and
 8      continuing in rank order, the commission shall continue to
 9      select nuclear power plants until the point at which the
10      combined number of megawatt hours of electricity produced in
11      the energy year immediately prior to the effective date of
12      this section by all selected nuclear power plants equals 40%
13      of the total number of megawatt hours of electricity
14      distributed by electric public utilities in this Commonwealth
15      in the energy year immediately prior to the effective date of
16      this section.
17            (2)   The commission may not select an eligible nuclear
18      power plant to receive ZECs if the addition of the
19      electricity produced by that nuclear power plant in the
20      energy year immediately prior to the effective date of this
21      section by the selected nuclear power plants ranked ahead of
22      that plant on the rank-ordered list exceeds 40% of the total
23      number of megawatt hours of electricity distributed by
24      electric public utilities in this Commonwealth in the energy
25      year immediately prior to the effective date of this section.
26            (3)   A selected nuclear power plant shall be eligible to
27      receive ZECs 330 days after the effective date of this
28      paragraph. In the first energy year in which an eligible
29      nuclear power plant is selected, the selected nuclear power
30      plant shall receive a number of ZECs equal to the number of

20250SB0372PN0320                    - 26 -
 1      megawatt hours of electricity it produced in that energy year
 2      starting on the date of the eligible nuclear power plant's
 3      selection. In each energy year thereafter, each selected
 4      nuclear power plant shall receive a number of ZECs equal to
 5      the number of megawatt hours of electricity that it produced
 6      in that energy year.
 7      (h)   Eligibility periods.--
 8            (1)   Selected nuclear power plants shall initially
 9      receive ZECs for an eligibility period that shall run through
10      the end of the first energy year in which the nuclear power
11      plant is selected, plus an additional three energy years.
12            (2)   No later than 13 months prior to the conclusion of
13      the initial eligibility period established under paragraph
14      (1), and no later than 13 months prior to the conclusion of
15      each three energy year eligibility period thereafter, a
16      nuclear power plant may demonstrate its eligibility to the
17      commission and the commission may certify the nuclear power
18      plant's eligibility to receive ZECs for additional
19      eligibility periods of three energy years, consistent with
20      the provisions of this section.
21            (3)   A selected nuclear power plant shall annually
22      certify to the commission that the nuclear power plant will
23      continue operations at full or near full capacity for the
24      duration of the period of its eligibility to receive ZECs,
25      except with respect to nuclear power plant shutdowns for
26      necessary maintenance and refueling.
27      (i)   Price and purchase of ZECs by electric distribution
28   companies.--
29            (1)   The commission shall determine the price of a ZEC
30      each energy year by dividing the total number of dollars held

20250SB0372PN0320                    - 27 -
 1    by electric public utilities in the accounts established
 2    under subsection (j)(1) at the end of the prior energy year
 3    by the greater of:
 4              (i)    40% of the total number of megawatt hours of
 5        electricity distributed by the electric public utilities
 6        in this Commonwealth in the prior energy year; or
 7              (ii)    the number of megawatt hours of electricity
 8        generated in the prior energy year by the selected
 9        nuclear power plants.
10        (2)   Each electric distribution company in this
11    Commonwealth shall be required to begin to purchase ZECs on a
12    monthly basis from each selected nuclear power plant with
13    payment to follow within 90 days after the conclusion of the
14    first energy year in which selected nuclear power plants
15    receive ZECs and within 90 days after the conclusion of each
16    subsequent energy year. The number of ZECs an electric
17    distribution company shall be required to purchase shall
18    equal the total number of ZECs received by the selected
19    nuclear power plants for the prior energy year under
20    subsection (g) multiplied by the percentage of electricity
21    distributed in this Commonwealth by the electric distribution
22    company as compared to other electric public utilities in
23    this Commonwealth.
24        (3)   To ensure that a selected nuclear power plant does
25    not receive double-payment for its fuel diversity,
26    resilience, air quality or other environmental attributes,
27    the commission shall annually determine the dollar amount
28    received by the selected nuclear power plant in an energy
29    year under a Federal law, rule, regulation, order, tariff or
30    other action, or a law, rule, regulation, order, tariff or

20250SB0372PN0320                   - 28 -
 1      other action of this Commonwealth or any other state, or a
 2      regional compact referenced in subsection (e)(4).
 3      Notwithstanding paragraph (2), the number of ZECs purchased
 4      by each electric distribution company from a selected nuclear
 5      power plant for an energy year shall be reduced by the number
 6      of ZECs equal in value to the dollar amount determined by the
 7      commission in this paragraph, multiplied by the percentage of
 8      electricity distributed in this Commonwealth by the electric
 9      distribution company as compared to other electric public
10      utilities in this Commonwealth. To the extent that the
11      commission determines that a selected nuclear plant receives
12      revenues for its fuel diversity, resilience, air quality or
13      other environmental attributes, the commission shall
14      immediately reduce the number of ZECs on a prospective basis
15      consistent with the level of the revenues.
16      (i.1)    ZEC Fund.--The ZEC Fund is established as a separate
17   fund in the State Treasury. Money in the ZEC Fund is
18   appropriated to the commission on a continuing basis for the
19   purpose of implementing the ZEC program. All money received by
20   the commission under this section shall be deposited into the
21   ZEC Fund.
22      (j)   Recovery of costs.--
23            (1)   The commission shall order the full recovery of all
24      costs associated with the electric distribution company's
25      required procurement of ZECs, and with the commission's
26      implementation of the ZEC program, through a nonbypassable,
27      irrevocable charge imposed on the electric distribution
28      company's retail distribution customers. Within 150 days
29      after the effective date of this paragraph, each electric
30      distribution company shall file with the commission a tariff

20250SB0372PN0320                    - 29 -
 1    to recover from the electric distribution company's retail
 2    distribution customers as follows:
 3              (i)    For an electric distribution company whose rates
 4        are regulated by the commission, the commission shall
 5        determine the appropriate charges for the electric
 6        distribution company's tariff that permit recovery of the
 7        incremental cost of compliance subject to the retail rate
 8        impact limits provided under subparagraph (2).
 9              (ii)    An electric distribution company shall recover
10        the incremental cost of compliance with the renewable
11        energy standards. An electric distribution company may
12        not comply with the renewable energy standards to the
13        extent that, as determined by the commission, recovery of
14        the incremental cost of compliance will have a retail
15        rate impact that exceeds any of the following:
16                     (A)   $3.00 per month per residential customer
17              meter.
18                     (B)   $16.58 per month per commercial secondary
19              customer meter.
20                     (C)   $187.50 per month per commercial primary or
21              industrial customer meter.
22        (2)   Within 60 days after the tariff filing under
23    paragraph (1), after notice, the opportunity for comment and
24    public hearing, the commission shall approve the tariff,
25    provided that the tariff is consistent with the provisions of
26    this subsection. No later than the date of the commission's
27    order establishing the initial selected nuclear power plants
28    to receive ZECs, each electric distribution company shall
29    implement the tariff and begin collecting from its retail
30    distribution customers the approved charge. Revenues

20250SB0372PN0320                    - 30 -
 1    collected by the electric distribution company from the
 2    nonbypassable, irrevocable charge shall be placed in a
 3    separate, interest-bearing account and shall be used solely
 4    to purchase ZECs, and to reimburse the commission for
 5    reasonable, verifiable costs the commission incurs to
 6    implement the ZEC program to the extent the commission's
 7    costs exceed the application fees collected by the commission
 8    under subsection (e)(5).
 9        (3)   Notwithstanding any provision of this section, an
10    electric distribution company shall not be required to
11    purchase any additional number of ZECs if the cost of the
12    additional number of ZECs exceeds the revenues deposited in
13    the electric distribution company's separate, interest-
14    bearing account, created under paragraph (2), for that energy
15    year, after subtracting the reasonable, verifiable costs
16    incurred by the commission during that energy year to
17    implement the ZEC program, which costs shall be remitted to
18    the commission and deposited into the ZEC Fund each energy
19    year in a manner to be determined by the commission. Excess
20    money in an electric distribution company's separate,
21    interest-bearing account shall be refunded to its retail
22    distribution customers at the end of each energy year.
23        (4)   Notwithstanding the provisions of paragraph (1), and
24    to ensure that the ZEC program remains affordable to retail
25    distribution customers in this Commonwealth, the commission
26    may reduce the charge imposed by paragraph (1) starting in
27    the second three-year eligibility period and for each
28    subsequent three-year eligibility period thereafter, provided
29    that the commission determines that a reduced charge will
30    nonetheless be sufficient to achieve the Commonwealth's air

20250SB0372PN0320                - 31 -
 1    quality and other environmental objectives by preventing the
 2    retirement of the nuclear power plants that meet the
 3    eligibility criteria established under subsections (d) and
 4    (e).
 5           (5)   If the commission reduces the charge imposed by
 6    paragraph (1), the reduction shall be applicable to the next
 7    eligibility period only and the commission shall make its
 8    determination no later than 13 months prior to the start of
 9    that eligibility period. Within 30 days thereafter, each
10    electric distribution company shall file, in lieu of the
11    tariff described in paragraph (1), a tariff consistent with
12    the commission's determination. Within 60 days after filing
13    of the tariff, after notice, the opportunity for comment and
14    public hearing, the commission shall approve the revised
15    tariff, provided that it is consistent with the commission's
16    determination. The revised tariff shall take effect starting
17    in the next eligibility period.
18           (6)   If the commission does not certify any nuclear power
19    plants for a subsequent eligibility period under this
20    section, the commission may reduce the charge imposed under
21    paragraph (1) to ensure that the ZEC program remains
22    affordable to retail distribution customers in this
23    Commonwealth in the final year of the first eligibility
24    period if the commission determines that a reduced charge
25    will be sufficient to achieve the Commonwealth's air quality
26    and other environmental objectives by preventing the
27    retirement of the nuclear power plants that meet the
28    eligibility criteria established under subsections (d) and
29    (e).
30           (7)   For the second three-year eligibility period, and

20250SB0372PN0320                   - 32 -
 1    every subsequent eligibility period thereafter, a selected
 2    nuclear power plant shall pay a renewal fee to the commission
 3    in an amount to be determined by the commission, but which
 4    shall not exceed $250,000, to be used to defray the costs
 5    incurred by the commission to administer the ZEC program.
 6    (k)   Performance.

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