SB 504 — An Act providing for community energy facilities; imposing duties on the Pennsylvania Public Utility Commission, electric distribution companies and subscriber organizations; and providing for prevailing wage and labor requirements.

PRINTER'S NO.   772

                   THE GENERAL ASSEMBLY OF PENNSYLVANIA



                       SENATE BILL
                       No. 504
                                                Session of
                                                  2025

     INTRODUCED BY SCHWANK, COSTA, TARTAGLIONE, SANTARSIERO, KANE,
        STREET, COMITTA, COLLETT, FONTANA, SAVAL, CAPPELLETTI,
        HUGHES, HAYWOOD, PISCIOTTANO AND MILLER, MAY 12, 2025

     REFERRED TO CONSUMER PROTECTION AND PROFESSIONAL LICENSURE,
        MAY 12, 2025


                                     AN ACT
 1   Providing for community energy facilities; imposing duties on
 2      the Pennsylvania Public Utility Commission, electric
 3      distribution companies and subscriber organizations; and
 4      providing for prevailing wage and labor requirements.
 5                              TABLE OF CONTENTS
 6   Section 1.   Short title.
 7   Section 2.   Findings and declarations.
 8   Section 3.   Definitions.
 9   Section 4.   Authorization to own or operate community energy
10                facilities.
11   Section 5.   Bill credit for subscribers to community energy
12                facilities.
13   Section 6.   Protection for customers.
14   Section 7.   Duties of electric distribution companies.
15   Section 8.   Compensation and cost recovery for electric
16                distribution companies.
17   Section 9.   Interconnection standards for community energy
18                facilities.
 1   Section 10.    Unsubscribed energy.
 2   Section 11.    Customer participation in community energy
 3                 programs.
 4   Section 12.    Location of multiple community energy facilities.
 5   Section 13.    Prevailing wage and labor requirements.
 6   Section 14.    Ratepayer protections.
 7   Section 15.    Effective date.
 8      The General Assembly of the Commonwealth of Pennsylvania
 9   hereby enacts as follows:
10   Section 1.    Short title.
11      This act shall be known and may be cited as the Community
12   Energy Act.
13   Section 2.    Findings and declarations.
14      The General Assembly finds and declares as follows:
15          (1)    Growth in energy generation provides family-
16      sustaining jobs and investments in this Commonwealth.
17          (2)    Programs for community energy generation provide
18      customers with additional energy choices and access to
19      affordable energy options.
20          (3)    Community energy programs provide customers,
21      including homeowners, renters and businesses, access to the
22      benefits of Pennsylvania community energy generation that is
23      unconstrained by the physical attributes of their home, farm
24      or business, including roof space, shading or ownership
25      status.
26          (4)    In addition to its provision of standard electricity
27      market commodities and services, local energy generation can
28      contribute to a more resilient grid and defer the need for
29      costly new transmission and distribution system investment.
30          (5)    The intent of this act is to:

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 1                (i)    Allow electric distribution customers of this
 2          Commonwealth to subscribe to a portion of a community
 3          energy facility and have the result of the subscription
 4          be guaranteed savings.
 5                (ii)    Reasonably allow for the creation, financing,
 6          accessibility and operation of third-party-owned
 7          community energy generating facilities and enable robust
 8          customer participation.
 9                (iii)    Encourage the development of community energy
10          programs that will facilitate participation by and for
11          accessibility and operation of third-party-owned
12          community energy generating facilities and enable robust
13          customer participation.
14                (iv)    Encourage the development of community energy
15          programs that will facilitate participation by and for
16          the benefit of low-income and moderate-income customers
17          and the communities where they live, reduce barriers to
18          participation by renters and small businesses, promote
19          affordability and improve access to basic public utility
20          services.
21                (v)    Maximize the use of Federal money to provide for
22          the development of community energy programs.
23   Section 3.   Definitions.
24      The following words and phrases when used in this act shall
25   have the meanings given to them in this section unless the
26   context clearly indicates otherwise:
27      "Bill credit."     The commission-approved monetary value of
28   each kilowatt hour of electricity generated by a community
29   energy facility and allocated to a subscriber's monthly bill to
30   offset any part of the subscriber's retail electric bill other

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 1   than volumetric or demand-based distribution charges.
 2      "Brownfield."      Real property, the expansion, redevelopment or
 3   reuse of which may be complicated by the presence or potential
 4   presence of a hazardous substance, pollutant or contaminant.
 5      "Brownfield community energy facility."        A community energy
 6   facility that is primarily located on land that is a brownfield.
 7      "Commission."      The Pennsylvania Public Utility Commission.
 8      "Community energy facility."        A facility that meets all of
 9   the following criteria:
10          (1)   Is located within this Commonwealth.
11          (2)   Is connected to and delivers electricity to a
12      distribution system operated by an electric distribution
13      company operating in this Commonwealth and in compliance with
14      requirements under this act.
15          (3)   Generates electricity by means of:
16                (i)    a solar photovoltaic device with a nameplate
17          capacity rating that does not exceed:
18                       (A)   5,000 kilowatts of alternating current for a
19                facility that is not a brownfield community energy
20                facility or rooftop community energy facility; and
21                       (B)   20,000 kilowatts of alternating current for
22                a facility that is a brownfield community energy
23                facility or rooftop community energy facility; or
24                (ii)    a renewable natural gas device with a nameplate
25          capacity rating that does not exceed:
26                       (A)   5,000 kilowatts of alternating current for a
27                facility that is not a brownfield community energy
28                facility; and
29                       (B)   20,000 kilowatts of alternating current for
30                a facility that is a brownfield community energy

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 1              facility.
 2        (4)   Has no single subscriber who subscribes to more than
 3    50% of the facility capacity in kilowatts or output in
 4    kilowatt hours, except if:
 5              (i)    the single subscriber is a master-metered
 6        multifamily residential or commercial building; or
 7              (ii)    the single subscriber is an agricultural
 8        operation as defined in 26 Pa.C.S. § 202 (relating to
 9        definitions) and the facility has no fewer than three
10        subscribers.
11        (5)   Has not less than 50% of the facility capacity
12    subscribed by subscriptions of 25 kilowatts or less or
13    subscribed by agricultural operations as defined in 26
14    Pa.C.S. § 202.
15        (6)   Credits some or all of the facility-generated
16    electricity to the bills of subscribers.
17        (7)   May be located remotely from a subscriber's premises
18    and is not required to provide energy to on-site load.
19        (8)   Is owned or operated by a community energy
20    organization.
21        (9)   Delivers the amount of energy and capacity that is
22    contracted by each customer.
23    "Community energy organization."      As follows:
24        (1)   An entity that owns or operates a community energy
25    facility and is not required to:
26              (i)    be an existing retail electric customer;
27              (ii)    purchase electricity directly from the electric
28        distribution company;
29              (iii)    serve electric load independent of the
30        community energy facility; or

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 1                (iv)   operate under an account held by the same
 2          individual or legal entity of the subscribers to the
 3          community energy facility.
 4          (2)   For the purpose of this definition, a community
 5      energy organization shall not be deemed a public utility
 6      solely as a result of the organization's ownership or
 7      operation of a community energy facility.
 8      "Department."    The Department of Environmental Protection of
 9   the Commonwealth.
10      "Electric distribution company."     As defined in 66 Pa.C.S. §
11   2803 (relating to definitions).
12      "Electric distribution customer."     A customer that takes
13   electric distribution service from an electric distribution
14   company, regardless of whether the company is the customer's
15   supplier of electric generation or not.
16      "Guaranteed savings."    Realized savings by a subscriber from
17   a community energy organization manifested as the difference
18   between the cost of a subscription paid to a community energy
19   facility and the credit received on the subscriber's electric
20   bill for the generation attributed to the subscription.
21      "Initial and replacement subscribers."     Each subscriber to a
22   single community energy facility over the life of the facility.
23      "Low income."    A family income at or below 150% of the
24   poverty line as defined in 42 U.S.C. § 9902(2) (relating to
25   definitions) based on the size of the family.
26      "Pennsylvania Prevailing Wage Act."     The act of August 15,
27   1961 (P.L.987, No.442), known as the Pennsylvania Prevailing
28   Wage Act.
29      "Public utility."    As defined in 66 Pa.C.S. § 102 (relating
30   to definitions).

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 1      "Renewable natural gas device."      A device that generates
 2   electricity relying upon a fuel source consisting of at least
 3   75% biodiesel or biogas, including biogas derived from municipal
 4   solid waste, industrial and food waste, wastewater treatment
 5   material and animal manure, resulting from the decomposition of
 6   that organic matter under anaerobic conditions, the principal
 7   constituents of which are methane and carbon dioxide, that has
 8   been upgraded for use in place of fossil natural gas, gasoline
 9   or diesel fuel.
10      "Rooftop community energy facility."      A community energy
11   facility that is primarily located on rooftops.
12      "Subscriber."     An electric distribution customer of an
13   electric distribution company who contracts for a subscription
14   of a community energy facility interconnected with the
15   customer's electric distribution company. The term includes an
16   electric distribution customer who owns a portion of a community
17   energy facility.
18      "Subscriber administrator."     An entity that recruits and
19   enrolls a subscriber, administers subscriber participation in a
20   community energy facility and manages the subscription
21   relationship between subscribers and an electric distribution
22   company. The term includes a community energy organization. For
23   the purpose of this definition, a subscriber administrator shall
24   not be considered a public utility solely as a result of the
25   subscriber administrator's operation or ownership of a community
26   energy facility.
27      "Subscription."     A contract between a subscriber and a
28   subscriber administrator of a community energy facility that
29   entitles the subscriber to a bill credit, measured in kilowatt
30   hours, and applied against the subscriber's retail electric

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 1   bill.
 2      "Unsubscribed energy."     The output of a community energy
 3   facility, measured in kilowatt hours, that is not allocated to
 4   subscribers.
 5   Section 4.     Authorization to own or operate community energy
 6                  facilities.
 7      A community energy organization or subscriber administrator
 8   may develop, build, own or operate a community energy facility.
 9   A community energy organization may serve as a subscriber
10   administrator or may contract with a third party to serve as a
11   subscriber administrator on behalf of the community energy
12   organization. Renewable energy credits that are associated with
13   the generation of electricity by a community energy facility
14   shall be the property of the community energy organization and
15   may be retired or transferred by the community energy
16   organization or retired on behalf of the subscribers.
17   Section 5.     Bill credit for subscribers to community energy
18                  facilities.
19      (a)   Credit.--A subscriber to a community energy facility
20   shall receive a monetary bill credit for every kilowatt hour
21   produced by the subscriber's subscription. A community energy
22   facility that demonstrates all of the following to the
23   commission shall have the initial and replacement subscribers of
24   the community energy facility receive a bill credit from the
25   date the community energy facility is authorized by the
26   commission to operate:
27            (1)   An executed interconnection agreement with an
28      electric distribution company obtained in accordance with 52
29      Pa. Code Ch. 75 (relating to alternative energy portfolio
30      standards).

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 1            (2)   Proof of site control.
 2            (3)   The required nonministerial permits.
 3            (4)   Proof that the community energy facility will be at
 4      least 50% subscribed on the date the community energy
 5      facility receives permission to operate.
 6            (5)   A signed agreement for a commission-approved
 7      workforce development requirement.
 8            (6)   Proof that the community energy facility is
 9      constructed or, if not yet constructed, an attestation that
10      the community energy facility will be in compliance with
11      section 13.
12            (7)   A community energy organization or subscriber
13      administrator will not bill a subscriber for services
14      provided by an electric distribution company. An electric
15      distribution company may not bill a subscriber for
16      subscription costs to a community energy organization.
17      (b)   Establishment of credit.--Within 180 days of the
18   effective date of this subsection, the commission shall
19   establish a bill credit for a public utility that appropriately
20   values the energy, capacity and transmission values produced by
21   a community energy facility and is not less than the bill credit
22   established under 52 Pa. Code § 75.13(e) (relating to general
23   provisions). The terms and conditions of receiving the bill
24   credit may not limit or inhibit participation of subscribers
25   from any rate class.
26   Section 6.     Protection for customers.
27      (a)   Customer protection provisons.--The commission shall
28   promulgate regulations providing for the protection of a
29   residential customer who has a subscription with a community
30   energy organization or subscriber administrator.

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 1      (b)   Standardized customer disclosure form.--The commission
 2   shall develop a standardized customer disclosure form in English
 3   and Spanish for a residential customer that identifies key
 4   information that is required to be provided by a subscriber
 5   administrator to a potential residential subscriber, including
 6   future costs and benefits of a subscription and the subscriber's
 7   rights and obligations pertaining to a subscription.
 8      (c)   Subscription costs.--The subscription costs for a
 9   subscriber must be lesser than the value of the bill credit and
10   may not include any up-front or sign-on fees or credit checks.
11   The subscription costs shall be nonbasic public utility charges.
12   Failure to pay a subscription may result in the loss of a
13   subscription but shall not impact public utility services.
14      (d)   Benefits and costs.--The commission shall maximize
15   benefits and minimize costs to each rate class, notwithstanding
16   participation in a community energy program.
17      (e)   Fees prohibited.--A community energy organization may
18   not impose a termination or cancellation fee on a subscriber.
19      (f)   Net crediting.--An electric distribution company shall
20   enter into a net crediting agreement with a community energy
21   organization to include a subscriber's subscription fee on a
22   monthly bill and provide a customer with a new credit equivalent
23   to the total bill credit value for the generation period minus
24   the subscription fee. The net crediting agreement shall specify
25   payment terms from the electric distribution company to the
26   community energy organization. The electric distribution company
27   may charge a net crediting fee to the community energy
28   organization that may not exceed 1% of the bill credit value. A
29   nonresidential customer may subscribe to multiple community
30   energy facilities, except that no more than one of the

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 1   subscriptions may be under a net credit agreement with an
 2   electric distribution company. The electric distribution company
 3   shall continue to have the duty for billing all basic electric
 4   services, including transmission, distribution and generation
 5   charges, consistent in accordance with this act and regulations
 6   promulgated by the commission. The electric distribution company
 7   shall also continue to maintain customer services, at a minimum,
 8   consistent with existing standards prior to the implementation
 9   of a net crediting agreement with a community energy
10   organization in accordance with this act and regulations
11   promulgated by the commission.
12   Section 7.   Duties of electric distribution companies.
13      (a)   Report on bill credit.--On a monthly basis, an electric
14   distribution company shall provide to a community energy
15   organization or subscriber administrator a report in a
16   standardized electronic format indicating the total value of the
17   bill credit generated by the community energy facility in the
18   prior month, the calculation used to arrive at the total value
19   of the bill credit and the amount of the bill credit applied to
20   each subscriber.
21      (b)   Application of bill credit.--An electric distribution
22   company shall apply a bill credit to a subscriber's next monthly
23   electric bill for the proportional output of a community energy
24   facility attributable to the subscriber. Excess credits on a
25   subscriber's bill shall roll over from month to month. An
26   electric distribution company shall automatically apply excess
27   credits to the final electric bill when a subscription is
28   terminated for any cause.
29      (c)   Transferability.--An electric distribution company shall
30   permit the transferability and portability of subscriptions if a

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 1   subscriber relocates within the same electric distribution
 2   company territory.
 3   Section 8.     Compensation and cost recovery for electric
 4                  distribution companies.
 5      (a)   Compensation.--A community energy organization shall
 6   compensate an electric distribution company for the electric
 7   distribution company's reasonable administrative costs of
 8   interconnection of a community energy facility.
 9      (b)   Cost recovery.--An electric distribution company may
10   recover reasonable costs from each subscriber organization,
11   subject to approval by the commission, to administer a community
12   energy program within the electric distribution company's
13   service territory of a community energy facility. The
14   Commonwealth shall maximize Federal and State funds for energy
15   assistance, clean energy deployment or any other applicable
16   funding to minimize the cost recovery impact on each subscriber.
17   Section 9.     Interconnection standards for community energy
18                  facilities.
19      (a)   Applications.--Beginning on the effective date of this
20   subsection, an electric distribution company shall have the
21   following duties:
22            (1)   Accept interconnection applications for community
23      energy facilities on a nondiscriminatory basis and study the
24      impact of interconnecting the facilities to the grid using
25      the current commission-approved interconnection rules and
26      tariffs and in accordance with best practices.
27            (2)   Include, in an interconnection application for a
28      community energy facility, proof of site control by the
29      community energy facility for the purposes of the study under
30      paragraph (1).

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 1      (b)   Administrative fees.--The commission may impose an
 2   administrative fee on an initial interconnection application for
 3   community energy facilities under subsection (a). The commission
 4   may impose a fee equivalent to up to 5% of the electric
 5   distribution company's initial interconnection application fee.
 6   The commission may use fees collected under this subsection for
 7   the administrative costs directly associated with this act.
 8   Section 10.    Unsubscribed energy.
 9      An electric distribution company shall purchase unsubscribed
10   energy from a community energy facility at the electric
11   distribution company's wholesale energy cost as determined by
12   the commission. To offset real or perceived costs, an electric
13   distribution company shall sell unsubscribed energy to
14   PJM Interconnection, L.L.C., regional transmission organization
15   (PJM) or its successor service territory markets or otherwise
16   decrease energy purchases.
17   Section 11.    Customer participation in community energy
18                 programs.
19      (a)   Participation in programs.--The commission shall
20   promulgate permanent regulations to enable participation in
21   community energy programs by each customer class and economic
22   group in accordance with the laws of this Commonwealth within
23   365 days of the effective date of this subsection.
24      (b)   Temporary regulations.--In order to facilitate the
25   prompt implementation of this section, the commission and
26   department may promulgate temporary regulations. The temporary
27   regulations shall be implemented within 180 days of the
28   effective date of this subsection and expire following the date
29   of publication of the permanent regulations under subsection (a)
30   in the Pennsylvania Bulletin. The temporary regulations shall

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 1   not be subject to any of the following:
 2            (1)   Section 612 of the act of April 9, 1929 (P.L.177,
 3      No.175), known as The Administrative Code of 1929.
 4            (2)   Sections 201, 202, 203, 204 and 205 of the act of
 5      July 31, 1968 (P.L.769, No.240), referred to as the
 6      Commonwealth Documents Law.
 7            (3)   Sections 204(b) and 301(10) of the act of October
 8      15, 1980 (P.L.950, No.164), known as the Commonwealth
 9      Attorneys Act.
10            (4)   The act of June 25, 1982 (P.L.633, No.181), known as
11      the Regulatory Review Act.
12      (c)   Expiration.--The authority of the commission and
13   department to promulgate temporary regulations under subsection
14   (b) shall not expire until the commission promulgates the
15   permanent regulations under subsection (a).
16      (d)   Contents.--The temporary regulations under subsection
17   (b) shall meet all of the following criteria:
18            (1)   Be based on consideration of formal and informal
19      input from all stakeholders.
20            (2)   Establish requirements that ensure access to
21      programs and equitable opportunities for participation for
22      residential and small commercial customer classes.
23            (3)   Establish a registration process for community
24      energy organizations.
25            (4)   Address the reasonable enforcement of minimum
26      subscription requirements for a community energy facility.
27      (e)   Low-income customers.--The commission, in collaboration
28   with the Office of Consumer Advocate, electric distribution
29   companies, community energy organizations and low-income
30   stakeholders, may promulgate regulations adopting mechanisms to

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 1   increase participation by low-income customers in community
 2   energy programs. The commission shall increase participation by
 3   low-income customers in community energy programs in a manner
 4   that allows the commission to use available Federal funds to do
 5   all of the following:
 6            (1)   Deliver larger guaranteed savings to income-
 7      qualified households than those households that would receive
 8      guaranteed savings without the Federal funds.
 9            (2)   Maximize State energy assistance programs.
10   Section 12.    Location of multiple community energy facilities.
11      The commission shall promulgate regulations establishing
12   limitations on the location of multiple community energy
13   facilities in close proximity. The regulations shall meet all of
14   the following criteria:
15            (1)   Prohibit an entity or affiliated entity under common
16      control from developing, owning or operating more than one
17      community energy facility on the same parcel or contiguous
18      parcels of land.
19            (2)   Authorize a brownfield community energy facility or
20      rooftop community energy facility to be sited on contiguous
21      parcels if the total brownfield community energy facility or
22      rooftop community energy facility capacity on all contiguous
23      parcels does not exceed the limits established by the
24      commission.
25   Section 13.    Prevailing wage and labor requirements.
26      (a)   Prevailing wage.--A community energy facility for which
27   a bill credit is sought and awarded to a subscriber under this
28   act shall be deemed to meet each of the minimum requirements
29   necessary to apply the wage and benefit rates and related
30   certification of payroll records required under the

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 1   Pennsylvania Prevailing Wage Act. A community energy
 2   organization and each of the organization's agents, contractors
 3   and subcontractors shall comply with the Pennsylvania Prevailing
 4   Wage Act as attested under section 5 for work undertaken at the
 5   community energy facility in which a bill credit for a
 6   subscriber is sought and awarded.
 7      (b)   Community energy projects.--A contractor, subcontractor
 8   or worker performing construction, reconstruction, demolition,
 9   repair or maintenance work on a community energy project funded
10   under this act shall meet all of the following requirements:
11            (1)   Maintains all valid licenses, registrations or
12      certificates required by the Federal Government, the
13      Commonwealth or a local government entity that is necessary
14      to do business or perform applicable work.
15            (2)   Maintains compliance with the act of June 2, 1915
16      (P.L.736, No.338), known as the Workers' Compensation Act,
17      the act of December 5, 1936 (2nd Sp.Sess., 1937 P.L.2897,
18      No.1), known as the Unemployment Compensation Law, and
19      bonding and liability insurance requirements as specified in
20      the contract for the energy project.
21            (3)   Has not defaulted on a project, declared bankruptcy,
22      been debarred or suspended on a project by the Federal
23      Government, the Commonwealth or a local government entity
24      within the previous three years.
25            (4)   Has not been convicted of a misdemeanor or felony
26      relating to the performance or operation of the business of
27      the contractor or subcontractor within the previous 10 years.
28            (5)   Has completed a minimum of the United States
29      Occupational Safety and Health Administration's 10-hour
30      safety training course or similar training sufficient to

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 1      prepare workers for any hazards that may be encountered
 2      during their work.
 3      (c)   Violations.--The Department of Labor and Industry shall
 4   enforce this section in accordance with the laws of this
 5   Commonwealth. The Department of Labor and Industry shall apply
 6   the same administration and enforcement applicable under the
 7   requirements of the Pennsylvania Prevailing Wage Act to ensure
 8   compliance with subsection (a). In addition to enforcement
 9   authorized under the Pennsylvania Prevailing Wage Act, if the
10   Department of Labor and Industry determines that the community
11   energy organization intentionally failed to pay prevailing wage
12   rates or benefit rates in violation of section 11(h) of the
13   Pennsylvania Prevailing Wage Act for work specified under
14   subsection (a), the community energy organization or the
15   organization's agents, contractors and subcontractors shall pay
16   a fine equivalent to 10% of the value of the bill credit
17   multiplied by the estimated 25-year production of the community
18   energy facility.
19   Section 14.   Ratepayer protections.
20      This act shall be construed to minimize direct or indirect
21   costs related to community energy facilities to ratepayers of an
22   electric distribution company that are not subscribers. The
23   commission shall maximize benefits to all rate classes,
24   regardless of participation in a community energy program.
25   Section 15.   Effective date.
26      This act shall take effect in 60 days.




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