PRINTER'S NO. 1839
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
1287
Session of
2024
INTRODUCED BY STREET, FONTANA, KANE AND SCHWANK, JULY 17, 2024
REFERRED TO CONSUMER PROTECTION AND PROFESSIONAL LICENSURE,
JULY 17, 2024
AN ACT
Amending the act of November 30, 2004 (P.L.1672, No.213),
entitled "An act providing for the sale of electric energy
generated from renewable and environmentally beneficial
sources, for the acquisition of electric energy generated
from renewable and environmentally beneficial sources by
electric distribution and supply companies and for the powers
and duties of the Pennsylvania Public Utility Commission,"
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.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 1 of the act of November 30, 2004
(P.L.1672, No.213), known as the Alternative Energy Portfolio
Standards Act, is amended to read:
Section 1. Short title.
This act shall be known and may be cited as the [Alternative
Energy Portfolio Standards] Energy Future Act.
Section 2. The definitions of "alternative energy sources,"
"reporting period" and "Tier II alternative energy source" in
section 2 of the act are amended and the section is amended by
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adding definitions to read:
Section 2. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Advanced nuclear." A nuclear fission or fusion reactor,
including a prototype plant as defined in 10 CFR 50.2 (relating
to definitions) and 52.1 (relating to definitions), with
significant improvements compared to commercial nuclear reactors
under construction as of the effective date of this definition,
including the following improvements:
(1) additional inherent safety features;
(2) significantly lower levelized cost of electricity;
(3) lower waste yields;
(4) greater fuel utilization;
(5) enhanced reliability;
(6) increased proliferation resistance;
(7) increased thermal efficiency; or
(8) ability to integrate into electric and nonelectric
applications.
* * *
"Alternative energy sources." The term shall include the
following existing and new sources for the production of
electricity:
(1) Solar photovoltaic or other solar electric energy.
(2) Solar thermal energy.
(3) Wind power.
(4) Large-scale hydropower, which shall mean the
production of electric power by harnessing the hydroelectric
potential of moving water impoundments, including pumped
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storage that does not meet the requirements of low-impact
hydropower under paragraph (5).
(5) Low-impact hydropower consisting of any technology
that produces electric power and that harnesses the
hydroelectric potential of moving water impoundments,
provided such incremental hydroelectric development:
(i) does not adversely change existing impacts to
aquatic systems;
(ii) meets the certification standards established
by the Low Impact Hydropower Institute and American
Rivers, Inc., or their successors;
(iii) provides an adequate water flow for protection
of aquatic life and for safe and effective fish passage;
(iv) protects against erosion; and
(v) protects cultural and historic resources.
(6) Geothermal energy, which shall mean electricity
produced by extracting hot water or steam from geothermal
reserves in the earth's crust and supplied to steam turbines
that drive generators to produce electricity.
(7) Biomass energy, which shall mean the generation of
electricity utilizing the following:
(i) organic material from a plant that is grown for
the purpose of being used to produce electricity or is
protected by the Federal Conservation Reserve Program
(CRP) and provided further that crop production on CRP
lands does not prevent achievement of the water quality
protection, soil erosion prevention or wildlife
enhancement purposes for which the land was primarily set
aside; or
(ii) any solid nonhazardous, cellulosic waste
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material that is segregated from other waste materials,
such as waste pallets, crates and landscape or right-of-
way tree trimmings or agricultural sources, including
orchard tree crops, vineyards, grain, legumes, sugar and
other crop by-products or residues.
(8) Biologically derived methane gas, which shall
include methane from the anaerobic digestion of organic
materials from yard waste, such as grass clippings and
leaves, food waste, animal waste and sewage sludge. The term
also includes landfill methane gas.
(9) Fuel cells, which shall mean any electrochemical
device that converts chemical energy in a hydrogen-rich fuel
directly into electricity, heat and water without combustion.
(10) Waste coal, which shall include the combustion of
waste coal in facilities in which the waste coal was disposed
or abandoned prior to July 31, 1982, or disposed of
thereafter in a permitted coal refuse disposal site
regardless of when disposed of, and used to generate
electricity, or such other waste coal combustion meeting
alternate eligibility requirements established by regulation.
Facilities combusting waste coal shall use at a minimum a
combined fluidized bed boiler and be outfitted with a
limestone injection system and a fabric filter particulate
removal system. Alternative energy credits shall be
calculated based upon the proportion of waste coal utilized
to produce electricity at the facility.
(11) Coal mine methane, which shall mean methane gas
emitting from abandoned or working coal mines.
(12) Demand-side management consisting of the management
of customer consumption of electricity or the demand for
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electricity through the implementation of:
(i) energy efficiency technologies, management
practices or other strategies in residential, commercial,
institutional or government customers that reduce
electricity consumption by those customers;
(ii) load management or demand response
technologies, management practices or other strategies in
residential, commercial, industrial, institutional and
government customers that shift electric load from
periods of higher demand to periods of lower demand; or
(iii) industrial by-product technologies consisting
of the use of a by-product from an industrial process,
including the reuse of energy from exhaust gases or other
manufacturing by-products that are used in the direct
production of electricity at the facility of a customer.
(13) Distributed generation system, which shall mean:
(i) the small-scale power generation of electricity
and useful thermal energy[.]; or
(ii) a combined heat and power system.
* * *
"Carbon capture, utilization and storage technology."
Technology that has the principal purpose of capturing, reusing,
storing, sequestering or using carbon dioxide emissions to
prevent carbon dioxide from entering the atmosphere whether
constructed integral or adjacent to a coal-fired or natural gas-
fired generation facility.
"Carbon constrained coal facility." As follows:
(1) An electric generating facility located in this
Commonwealth that uses primarily coal as a feedstock and that
emits no more than 650 pounds of carbon dioxide per megawatt
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hour of generated electricity averaged over one calendar year
by 2026, no more than 214 pounds of carbon dioxide per
megawatt hour of generated electricity averaged over one
calendar year by 2031 and zero pounds of carbon dioxide per
megawatt hour of generated electricity averaged over one
calendar year by 2036.
(2) The power block of the carbon constrained coal
facility does not exceed allowable emission rates for sulfur
dioxide, nitrogen oxides, carbon monoxide, methane, nitrous
oxide, volatile organic compounds, particulates and mercury
for a natural gas-fired combined-cycle facility the same size
as and in the same location as the carbon constrained coal
facility at the time the carbon constrained coal facility
obtains an approved air permit.
(3) The coal used by a carbon constrained coal facility
is located in this Commonwealth.
"Carbon constrained energy facility." As follows:
(1) An electric generating facility located in this
Commonwealth that uses primarily natural gas, coal or
hydrogen as a feedstock and that emits no more than 650
pounds of carbon dioxide per megawatt hour of generated
electricity averaged over one calendar year by 2027, no more
than 214 pounds of carbon dioxide per megawatt hour of
generated electricity averaged over one calendar year by 2031
and net zero pounds of carbon dioxide per megawatt hour of
generated electricity averaged over one calendar year by
2036.
(2) The power block of the carbon constrained natural
gas facility, carbon constrained coal facility or carbon
constrained hydrogen facility shall not exceed allowable
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emission rates for sulfur dioxide, nitrogen oxides, carbon
monoxide, methane, nitrous oxide, volatile organic compounds,
particulates and mercury for a natural gas-fired combined-
cycle facility the same size as and in the same location as
the carbon constrained natural gas facility, carbon
constrained coal facility or carbon constrained hydrogen
facility at the time the carbon constrained energy facility
obtains an approved air permit.
(3) The gas, coal and hydrogen used by a carbon
constrained energy facility is sourced in this Commonwealth.
"Carbon constrained energy system." A facility or energy
system that uses carbon capture, utilization and storage
technology that produces carbon emissions at or below the
requirement under this act to generate electricity and delivers
the electricity it generates to the distribution system of an
electric distribution company or to the transmission system
operated by a regional transmission organization.
"Carbon constrained hydrogen facility." As follows:
(1) An electric generating facility located in this
Commonwealth that uses primarily hydrogen as a feedstock and
that emits no more than 650 pounds of carbon dioxide per
megawatt hour of generated electricity averaged over one
calendar year by 2026, no more than 214 pounds of carbon
dioxide per megawatt hour of generated electricity averaged
over one calendar year by 2031 and zero pounds of carbon
dioxide per megawatt hour of generated electricity averaged
over one calendar year by 2036, including the carbon dioxide
emissions from the generation of the utilized hydrogen.
(2) The power block of the carbon constrained hydrogen
facility and generator of the utilized hydrogen does not
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exceed allowable emission rates for sulfur dioxide, nitrogen
oxides, carbon monoxide, methane, nitrous oxide, volatile
organic compounds, particulates and mercury for a natural
gas-fired combined-cycle facility the same size as and in the
same location as the carbon constrained hydrogen facility at
the time the carbon constrained hydrogen facility obtains an
approved air permit.
(3) The hydrogen and associated feedstock used by a
carbon constrained hydrogen facility is located in this
Commonwealth.
"Carbon constrained natural gas facility." As follows:
(1) An electric generating facility located in this
Commonwealth that uses primarily natural gas as a feedstock
and that emits no more than 650 pounds of carbon dioxide per
megawatt hour of generated electricity averaged over one
calendar year by 2026, no more than 214 pounds of carbon
dioxide per megawatt hour of generated electricity averaged
over one calendar year by 2031 and zero pounds of carbon
dioxide per megawatt hour of generated electricity averaged
over one calendar year by 2036.
(2) The power block of the carbon constrained natural
gas facility does not exceed allowable emission rates for
sulfur dioxide, nitrogen oxides, carbon monoxide, methane,
nitrous oxide, volatile organic compounds, particulates and
mercury for a natural gas-fired combined-cycle facility the
same size as and in the same location as the carbon
constrained natural gas facility at the time the carbon
constrained natural gas facility obtains an approved air
permit.
(3) The natural gas used by a carbon constrained natural
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gas facility is located in this Commonwealth.
"Combined heat and power system." A combined heat and power
system installed on a commercial, institutional or industrial
facility site within this Commonwealth that is a qualified
facility under the Public Utility Regulatory Policies Act of
1978 (Public Law 95-617, 92 Stat. 3117) and has an annual
operating efficiency of at least 60%. A combined heat and power
system shall qualify as a Tier II alternative energy source for
up to 50 megawatts of combined generation on a site.
* * *
"Eligibility period." The period of time, measured in energy
years, during which a selected nuclear power plant may receive
zero emissions carbon certificates under section 3.1.
"Eligible nuclear power plant." A nuclear power plant
certified by the commission under section 3.1(e).
"Energy year." The 12-month period from June 1 through May
31, numbered according to the calendar year in which it ends.
* * *
"Nuclear power plant." An individual electric-generating
unit utilizing nuclear fuel to produce electric power.
* * *
"Renewable energy." The following:
(1) Energy derived from sunlight, wind, falling water,
biomass, sustainable or otherwise, waste, landfill gas,
municipal solid waste, wave motion, tides and geothermal
power. The term includes the proportion of the thermal or
electric energy from a facility that results from the
cofiring of biomass.
(2) The term does not include energy derived from coal,
oil, natural gas or nuclear power.
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(3) The term does not include energy waste heat from
fossil-fired facilities or electricity generated from pumped
storage but includes run-of-river generation from a combined
pumped-storage and run-of-river facility.
"Reporting [period."] period" or "reporting year." The 12-
month period from June 1 through May 31. A reporting year shall
be numbered according to the calendar year in which it begins
and ends.
* * *
"Selected nuclear power plant." An eligible nuclear power
plant located in this Commonwealth selected by the commission to
participate in the Zero Emissions Carbon Certificate Program
under section 3.1.
* * *
"Tier II alternative energy source." Energy derived from:
(1) Waste coal from a carbon constrained coal facility.
(2) Distributed generation systems.
(3) Demand-side management.
(4) Large-scale hydropower.
(5) Municipal solid waste.
(6) Generation of electricity utilizing by-products of
the pulping process and wood manufacturing process, including
bark, wood chips, sawdust and lignin in spent pulping
liquors.
[(7) Integrated combined coal gasification technology.]
(8) A Tier I alternative energy source.
"Tier III carbon constrained energy source." Energy derived
from a Pennsylvania-sourced carbon constrained energy facility.
"Tier IV carbon constrained energy source." Energy derived
from Pennsylvania-existing nuclear generation.
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"Tier V carbon constrained energy source." Energy derived
from Pennsylvania-advanced nuclear generation.
"Tier VI carbon constrained energy source." Energy derived
from a Pennsylvania-sourced carbon constrained hydrogen
facility.
* * *
Section 3. Section 3(a)(1) and (3), (b), (f) and (g)(2) of
the act are amended and the section is amended by adding
subsections to read:
Section 3. Alternative energy portfolio standards.
(a) General compliance and cost recovery.--
(1) From the effective date of this act through and
including [the 15th year after enactment of this act and each
year thereafter] 2045, the electric energy sold by an
electric distribution company or electric generation supplier
to retail electric customers in this Commonwealth shall be
comprised of electricity generated from alternative energy
sources and in the percentage amounts as described under
[subsections (b) and (c)] this section.
* * *
(3) All costs for:
(i) the purchase of electricity generated from
alternative energy sources, including the costs of the
regional transmission organization, in excess of the
regional transmission organization real-time locational
marginal pricing, or its successor, at the delivery point
of the alternative energy source for the electrical
production of the alternative energy sources; and
(ii) payments for alternative energy credits, in
both cases that are voluntarily acquired by an electric
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distribution company during the cost recovery period on
behalf of its customers shall be deferred as a regulatory
asset by the electric distribution company and fully
recovered, with a return on the unamortized balance,
pursuant to an automatic energy adjustment clause under
66 Pa.C.S. § 1307 (relating to sliding scale of rates;
adjustments) as a cost of generation supply under 66
Pa.C.S. § 2807 (relating to duties of electric
distribution companies) in the first year after the
expiration of its cost-recovery period. After the cost-
recovery period, any direct or indirect costs for the
purchase by electric distribution companies of resources
to comply with this section, including, but not limited
to, the purchase of electricity generated from
alternative energy sources, payments for alternative
energy credits, cost of credits banked, payments to any
third party administrators for performance under this act
and costs levied by a regional transmission organization
to ensure that alternative energy sources are reliable,
shall be recovered on a full and current basis pursuant
to an automatic energy adjustment clause under 66 Pa.C.S.
§ 1307 as a cost of generation supply under 66 Pa.C.S. §
2807.
(b) Tier I and solar photovoltaic shares through the 18th
reporting year.--
(1) Two years after the effective date of this act, at
least 1.5% of the electric energy sold by an electric
distribution company or electric generation supplier to
retail electric customers in this Commonwealth shall be
generated from Tier I alternative energy sources. Except as
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provided in this section, the minimum percentage of electric
energy required to be sold to retail electric customers from
alternative energy sources shall increase to 2% three years
after the effective date of this act. The minimum percentage
of electric energy required to be sold to retail electric
customers from alternative energy sources shall increase by
at least 0.5% each year so that at least 8% of the electric
energy sold by an electric distribution company or electric
generation supplier to retail electric customers in that
certificated territory in the 15th reporting year after the
effective date of this subsection is sold from Tier I
alternative energy resources.
(2) [The] Through the 18th reporting year ending May 31,
2024, the total percentage of the electric energy sold by an
electric distribution company or electric generation supplier
to retail electric customers in this Commonwealth that must
be sold from solar photovoltaic technologies is:
(i) 0.0013% for June 1, 2006, through May 31, 2007.
(ii) 0.0030% for June 1, 2007, through May 31, 2008.
(iii) 0.0063% for June 1, 2008, through May 31,
2009.
(iv) 0.0120% for June 1, 2009, through May 31, 2010.
(v) 0.0203% for June 1, 2010, through May 31, 2011.
(vi) 0.0325% for June 1, 2011, through May 31, 2012.
(vii) 0.0510% for June 1, 2012, through May 31,
2013.
(viii) 0.0840% for June 1, 2013, through May 31,
2014.
(ix) 0.1440% for June 1, 2014, through May 31, 2015.
(x) 0.2500% for June 1, 2015, through May 31, 2016.
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(xi) 0.2933% for June 1, 2016, through May 31, 2017.
(xii) 0.3400% for June 1, 2017, through May 31,
2018.
(xiii) 0.3900% for June 1, 2018, through May 31,
2019.
(xiv) 0.4433% for June 1, 2019, through May 31,
2020.
(xv) 0.5000% for June 1, 2020, [and thereafter.]
through May 31, 2024.
(3) Upon commencement of the beginning of the 6th
reporting year, the commission shall undertake a review of
the compliance by electric distribution companies and
electric generation suppliers with the requirements of this
act. The review shall also include the status of alternative
energy technologies within this Commonwealth and the capacity
to add additional alternative energy resources. [The
commission shall use the results of this review to recommend
to the General Assembly additional compliance goals beyond
year 15.] The commission shall work with the department in
evaluating the future alternative energy resource potential.
(b.1) Tier I and solar photovoltaic shares beginning in the
19th reporting year.--
(1) Each electric distribution company and electric
generation supplier shall purchase, at a minimum, an amount
of Tier I alternative energy credits equal to the percentage
of electric energy required to be sold by an electric
distribution company or electric generation supplier to
retail electric customers from Tier I alternative energy
sources for that reporting year and as provided under this
subsection. Beginning in the 19th reporting year commencing
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on June 1, 2024, the minimum percentage of electric energy
required to be sold by an electric distribution company or
electric generation supplier to retail electric customers in
this Commonwealth from Tier I alternative energy sources for
each reporting year is:
(i) 10.444% for June 1, 2024, through May 31, 2025.
(ii) 13.703% for June 1, 2025, through May 31, 2026.
(iii) 16.961% for June 1, 2026, through May 31,
2027.
(iv) 20.22% for June 1, 2027, through May 31, 2028.
(v) 23.497% for June 1, 2028, through May 31, 2029.
(vi) 26.737% for June 1, 2029, through May 31, 2030.
(vii) 30% for June 1, 2030, through May 31, 2031,
and thereafter.
(2) (i) Beginning in the 19th reporting year commencing
on June 1, 2024, the minimum percentage of the electric
energy sold by an electric distribution company or
electric generation supplier to retail electric customers
in this Commonwealth that must be sold from solar
photovoltaic technologies that are owned and operated by
customer-generators shall be:
(A) 0.65% for June 1, 2024, through May 31,
2025.
(B) 0.85% for June 1, 2025, through May 31,
2026.
(C) 1.05% for June 1, 2026, through May 31,
2027.
(D) 1.25% for June 1, 2027, through May 31,
2028.
(E) 1.55% for June 1, 2028, through May 31,
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2029.
(F) 1.95% for June 1, 2029, through May 31,
2030.
(G) 2.5% for June 1, 2030, through May 31, 2031,
and thereafter.
(ii) For purposes of subparagraph (i), solar
photovoltaic technologies that are owned and operated by
customer-generators include any of the following:
(A) Solar photovoltaic technologies that were
certified on or before May 31, 2024, under subsection
(b)(2) and qualify to generate solar alternative
energy credits in accordance with section 3.2.
(B) Solar photovoltaic technologies that qualify
as customer-generators under subsection (b)(2).
(3) Beginning in the 19th reporting year commencing on
June 1, 2024, and each reporting year thereafter, a solar
photovoltaic system that is certified before or on May 31,
2024, provided the system meets the requirements under
section 3.2, shall be included in the percentage of the
required solar photovoltaic energy systems owned and operated
by customer-generators under paragraph (2).
(4) A solar photovoltaic energy system owned and
operated by a customer-generator in accordance with paragraph
(2) shall remain eligible to receive solar alternative energy
credits for no more than 15 years beginning on June 1, 2024,
or 15 years beginning on the date of the solar photovoltaic
energy system's certification if the certification occurs
after June 1, 2024. Upon expiration of the 15-year period
specified under this paragraph, the solar photovoltaic energy
system shall be eligible for alternative energy credits
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provided for Tier I alternative energy sources under
paragraph (1).
(5) Beginning in the 19th reporting year commencing on
June 1, 2024, the minimum percentage of the electric energy
sold by an electric distribution company or electric
generation supplier to retail electric customers in this
Commonwealth that must be sold from solar photovoltaic
technologies from non-customer-generators is:
(i) 0.94% for June 1, 2024, through May 31, 2025.
(ii) 1.54% for June 1, 2025, through May 31, 2026.
(iii) 2.34% for June 1, 2026, through May 31, 2027.
(iv) 3.34% for June 1, 2027, through May 31, 2028.
(v) 4.54% for June 1, 2028, through May 31, 2029.
(vi) 5.94% for June 1, 2029, through May 31, 2030.
(vii) 7.5% for June 1, 2030, through May 31, 2031,
and thereafter.
(6) No later than one year after the effective date of
this paragraph, the commission shall establish regulations to
ensure diversification across all customer-generators under
paragraph (2), including, but not limited to, solar
photovoltaic systems that are interconnected at residential
or commercial locations or customer-generators whose systems
are for virtual meter aggregation.
(7) This subsection shall not apply to the certification
of a solar photovoltaic energy system with a contract for the
sale and purchase of alternative energy credits derived from
solar photovoltaic energy sources entered into before or on
May 31, 2024, provided that the system meets the requirements
under section 3.2.
(8) This subsection shall apply to a contract for the
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sale and purchase of alternative energy credits derived from
solar photovoltaic energy sources entered into or renewed for
reporting years commencing after May 31, 2024.
* * *
(c.1) Tier III share.--Of the electrical energy required to
be sold from a Tier III carbon constrained energy source, the
percentage that must be from these technologies is for:
(1) Energy years 2026 through 2030 - 5.5%.
(2) Energy years 2031 through 2035 - 11%.
(3) Energy years 2036 through 2048 - 17.5%.
(c.2) Tier IV share.--Of the electrical energy required to
be sold from a Tier IV carbon constrained energy source, the
percentage that must be from these technologies is for:
(1) Energy years 2026 through 2030 - 2.5%.
(2) Energy years 2031 through 2035 - 5%.
(3) Energy years 2036 through 2048 - 7.5%.
(c.3) Tier V share.--Of the electrical energy required to be
sold from a Tier V carbon constrained energy source, the
percentage that must be from these technologies is for:
(1) Energy years 2026 through 2030 - 0.5%.
(2) Energy years 2031 through 2035 - 1%.
(3) Energy years 2036 through 2048 - 2%.
(c.4) Tier VI share.--Of the electrical energy required to
be sold from a Tier VI carbon constrained energy source, the
percentage that must be from these technologies is for:
(1) Energy years 2026 through 2030 - 0.5%.
(2) Energy years 2031 through 2035 - 1%.
(3) Energy years 2036 through 2048 - 2%.
* * *
(f) Alternative compliance payment.--
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(1) At the end of each program reporting year, the
program administrator shall provide a report to the
commission and to each covered electric distribution company
showing their status level of alternative energy acquisition.
(2) The commission shall conduct a review of each
determination made under subsections (b), (b.1) and (c). If,
after notice and hearing, the commission determines that an
electric distribution company or electric generation supplier
has failed to comply with subsections (b), (b.1) and (c), the
commission shall impose an alternative compliance payment on
that electric distribution company or electric generation
supplier.
(3) [The] Through May 31, 2024, the alternative
compliance payment, with the exception of the solar
photovoltaic share compliance requirement set forth in
subsection (b)(2), shall be $45 times the number of
additional alternative energy credits needed in order to
comply with subsection (b) or (c).
(4) [The] Through May 31, 2024, the alternative
compliance payment for the solar photovoltaic share required
under subsection (b)(2) shall be 200% of the average market
value of solar renewable energy credits sold during the
reporting period within the service region of the regional
transmission organization, including, where applicable, the
levelized up-front rebates received by sellers of solar
[renewable] alternative energy credits in other jurisdictions
in the PJM Interconnection, L.L.C. transmission organization
(PJM) or its successor.
(4.1) Beginning June 1, 2024, the alternative compliance
payment, with the exception of the customer-generator solar
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photovoltaic share compliance requirement specified under
subsection (b.1)(2), shall be $45 multiplied by the number of
additional alternative energy credits needed in order to
comply with subsection (b.1) or (c).
(4.2) Beginning June 1, 2024, the alternative compliance
payment for the customer-generator solar photovoltaic share
compliance requirement specified under subsection (b.1)(2)
shall be as follows:
(i) An amount equal to the product of $125
multiplied by the number of additional alternative energy
credits required to comply with subsection (b.1)(2) from
June 1, 2024, through May 31, 2029.
(ii) An amount equal to the product of $100
multiplied by the number of additional alternative energy
credits required to comply with subsection (b.1)(2) from
June 1, 2029, through May 31, 2031.
(iii) Beginning with the reporting year commencing
on June 1, 2031, and each reporting year thereafter, the
alternative compliance payment required for solar
photovoltaic energy systems under subsection (b.1)(2)
shall decrease by $5 from the previous reporting year
until the alternative compliance payment is
$45.
(5) The commission shall establish a process to provide
for, at least annually, a review of the alternative energy
market within this Commonwealth and the service territories
of the regional transmission organizations that manage the
transmission system in any part of this Commonwealth. The
commission will use the results of this study to identify any
needed changes to the cost associated with the alternative
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compliance payment program. If the commission finds that the
costs associated with the alternative compliance payment
program must be changed, the commission shall present these
findings to the General Assembly for legislative enactment.
(g) Transfer [to sustainable development funds] of
alternative compliance payments.--
* * *
(2) The alternative compliance payments shall be
utilized solely for [projects] any of the following:
(i) Projects that will increase the amount of
electric energy generated from alternative energy
resources for purposes of compliance with subsections
(b), (b.1) and (c).
(ii) Workforce development programs to train workers
in renewable energy industries.
* * *
Section 4. The act is amended by adding sections to read:
Section 3.1. Zero Emissions Carbon Certificate Program.
(a) Establishment.--Notwithstanding any other law to the
contrary, no later than 180 days after the effective date of
this subsection, the commission shall allow the commencement of
a program providing for the issuance by the commission of a zero
emissions carbon certificate. The commission shall adopt, after
notice, the opportunity for comment and public hearing, an order
establishing the Zero Emissions Carbon Certificate Program for
selected nuclear power plants which shall include:
(1) A method and application process for determination
of the eligibility and selection of eligible nuclear power
plants.
(2) Establishment of a mechanism for each electric
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distribution company to purchase ZECs from selected nuclear
power plants and a mechanism for the commission to effectuate
the provisions of subsection (i).
(b) ZEC program application.--
(1) As part of an application submitted to the
commission under subsection (c), a nuclear power plant
seeking to participate in the ZEC program shall provide to
the commission any financial information requested by the
commission pertaining to the nuclear power plant, including
certified cost projections over the next three energy years,
including operation and maintenance expenses, fuel expenses,
including spent fuel expenses, nonfuel capital expenses,
fully allocated overhead costs, the cost of operational risks
and market risks that would be avoided by ceasing operations
and any other information, financial or otherwise, to
demonstrate that the nuclear power plant's fuel diversity,
air quality and other environmental attributes are at risk of
loss because the nuclear power plant is projected to not
fully cover its costs and risks, or alternatively is
projected to not fully cover its costs and risks, including
its risk-adjusted cost of capital.
(2) An application submitted to the commission under
subsection (c) shall include a certification that the nuclear
power plant will cease operations within three years unless
the nuclear power plant experiences a material financial
change. The certification shall specify the necessary steps
required to be completed to cease the nuclear power plant's
operations.
(3) The financial and other information required under
this subsection may be submitted on a confidential basis and
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shall be treated and maintained as confidential by the
commission and, notwithstanding any other law to the
contrary, shall not be subject to public disclosure. The
commission and the Attorney General shall jointly approve the
disclosure of confidential information to a party that the
commission and the Attorney General deem essential to aid the
commission in making the determinations required under this
subsection, provided that the party is not in a position that
disclosure could harm competition and the party agrees in
writing to maintain the confidentiality of the confidential
information.
(4) As used in this subsection, the following words and
phrases shall have the meanings given to them in this
paragraph unless the context clearly indicates otherwise:
"Market risks." The term shall include, but not be
limited to, the risk of a forced outage and the associated
costs arising from contractual obligations and the risk that
output from the nuclear power plant may not be able to be
sold at projected levels.
"Operational risks." The term shall include, but not be
limited to, the risk that operating costs will be higher than
anticipated because of new regulatory mandates or equipment
failures and the risk that per megawatt hour costs will be
higher than anticipated because of a lower than expected
capacity factor.
(c) Submission of application.--No later than 210 days after
the effective date of this subsection, a nuclear power plant
seeking to participate in the ZEC program shall submit its
application to the commission.
(d) List.--Notwithstanding any other law to the contrary,
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the commission shall complete a proceeding no later than 330
days after the effective date of this subsection and shall
adopt, after notice, the opportunity for comment and public
hearing, an order establishing a rank-ordered list of the
nuclear power plants certified as eligible to receive ZECs, and
establishing which eligible nuclear power plants have been
selected to receive ZECs under this section. If the commission
determines that no nuclear plant that applied satisfies the
objectives of this section, the commission shall be under no
obligation to certify any nuclear power plant as an eligible
nuclear power plant.
(e) Requirements.--To be certified by the commission as an
eligible nuclear power plant, a nuclear power plant shall:
(1) Be licensed to operate by the United States Nuclear
Regulatory Commission by the effective date of this paragraph
and through calendar year 2030 or later.
(2) Demonstrate to the satisfaction of the commission
that the nuclear power plant makes a significant and material
contribution to the air quality in this Commonwealth by
minimizing emissions that result from electricity consumed in
this Commonwealth, minimizing harmful emissions that
adversely affect the residents of this Commonwealth and if
the nuclear power plant were to be retired, that retirement
would significantly and negatively impact this Commonwealth's
ability to comply with State air emissions reduction
requirements.
(3) Demonstrate to the satisfaction of the commission,
through the financial and other confidential information
submitted to the commission under subsection (b), and any
other information required by the commission, which
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information may be submitted on a confidential basis and
shall be treated and maintained as confidential by the
commission and, notwithstanding any law to the contrary,
shall not be subject to public disclosure that the nuclear
power plant's fuel diversity, air quality and other
environmental attributes are at risk of loss because the
nuclear power plant is projected to not fully cover its costs
and risks, or alternatively is projected to not cover its
costs, including its risk-adjusted cost of capital, and that
the nuclear power plant will cease operations within three
years unless the nuclear power plant experiences a material
financial change.
(4) Certify annually that the nuclear power plant does
not receive any direct or indirect payment or credit under a
Federal law, rule, regulation, order, tariff or other action,
or a law, rule, regulation, order, tariff or other action of
this Commonwealth or any other state, or a regional compact,
despite its reasonable best efforts to obtain any such
payment or credit, for its fuel diversity, resilience, air
quality or other environmental attributes that will eliminate
the need for the nuclear power plant to retire, except for
any payment or credit received under this section.
(5) Submit an application fee to the commission in an
amount to be determined by the commission, but which shall
not exceed $250,000, to be used to defray the costs incurred
by the commission to administer the ZEC program.
(f) Ranking.--The commission shall rank eligible nuclear
power plants from first to last by considering how well the
nuclear power plants satisfy the criteria provided under this
section and other relevant factors, including sustainability or
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long-term commitment to nuclear energy production in a manner
that supports this Commonwealth's cost-effective transition to a
zero carbon energy supply. Two or more eligible nuclear power
plants may not have the same ranking.
(g) Selection.--
(1) The commission shall select eligible nuclear power
plants to receive ZECs according to their ranking. Beginning
with the top-ranked eligible nuclear power plant and
continuing in rank order, the commission shall continue to
select nuclear power plants until the point at which the
combined number of megawatt hours of electricity produced in
the energy year immediately prior to the effective date of
this section by all selected nuclear power plants equals 40%
of the total number of megawatt hours of electricity
distributed by electric public utilities in this Commonwealth
in the energy year immediately prior to the effective date of
this section.
(2) The commission may not select an eligible nuclear
power plant to receive ZECs if the addition of the
electricity produced by that nuclear power plant in the
energy year immediately prior to the effective date of this
section by the selected nuclear power plants ranked ahead of
that plant on the rank-ordered list exceeds 40% of the total
number of megawatt hours of electricity distributed by
electric public utilities in this Commonwealth in the energy
year immediately prior to the effective date of this section.
(3) A selected nuclear power plant shall be eligible to
receive ZECs 330 days after the effective date of this
paragraph. In the first energy year in which an eligible
nuclear power plant is selected, the selected nuclear power
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plant shall receive a number of ZECs equal to the number of
megawatt hours of electricity it produced in that energy year
starting on the date of the eligible nuclear power plant's
selection. In each energy year thereafter, each selected
nuclear power plant shall receive a number of ZECs equal to
the number of megawatt hours of electricity that it produced
in that energy year.
(h) Eligibility periods.--
(1) Selected nuclear power plants shall initially
receive ZECs for an eligibility period that shall run through
the end of the first energy year in which the nuclear power
plant is selected, plus an additional three energy years.
(2) No later than 13 months prior to the conclusion of
the initial eligibility period established under paragraph
(1), and no later than 13 months prior to the conclusion of
each three energy year eligibility period thereafter, a
nuclear power plant may demonstrate its eligibility to the
commission and the commission may certify the nuclear power
plant's eligibility to receive ZECs for additional
eligibility periods of three energy years, consistent with
the provisions of this section.
(3) A selected nuclear power plant shall annually
certify to the commission that the nuclear power plant will
continue operations at full or near full capacity for the
duration of the period of its eligibility to receive ZECs,
except with respect to nuclear power plant shutdowns for
necessary maintenance and refueling.
(i) Price and purchase of ZECs by electric distribution
companies.--
(1) The commission shall determine the price of a ZEC
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each energy year by dividing the total number of dollars held
by electric public utilities in the accounts established
under subsection (j)(1) at the end of the prior energy year
by the greater of:
(i) 40% of the total number of megawatt hours of
electricity distributed by the electric public utilities
in this Commonwealth in the prior energy year; or
(ii) the number of megawatt hours of electricity
generated in the prior energy year by the selected
nuclear power plants.
(2) Each electric distribution company in this
Commonwealth shall be required to begin to purchase ZECs on a
monthly basis from each selected nuclear power plant with
payment to follow within 90 days after the conclusion of the
first energy year in which selected nuclear power plants
receive ZECs and within 90 days after the conclusion of each
subsequent energy year. The number of ZECs an electric
distribution company shall be required to purchase shall
equal the total number of ZECs received by the selected
nuclear power plants for the prior energy year under
subsection (g) multiplied by the percentage of electricity
distributed in this Commonwealth by the electric distribution
company as compared to other electric public utilities in
this Commonwealth.
(3) To ensure that a selected nuclear power plant does
not receive double-payment for its fuel diversity,
resilience, air quality or other environmental attributes,
the commission shall annually determine the dollar amount
received by the selected nuclear power plant in an energy
year under a Federal law, rule, regulation, order, tariff or
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other action, or a law, rule, regulation, order, tariff or
other action of this Commonwealth or any other state, or a
regional compact referenced in subsection (e)(4).
Notwithstanding paragraph (2), the number of ZECs purchased
by each electric distribution company from a selected nuclear
power plant for an energy year shall be reduced by the number
of ZECs equal in value to the dollar amount determined by the
commission in this paragraph, multiplied by the percentage of
electricity distributed in this Commonwealth by the electric
distribution company as compared to other electric public
utilities in this Commonwealth. To the extent that the
commission determines that a selected nuclear plant receives
revenues for its fuel diversity, resilience, air quality or
other environmental attributes, the commission shall
immediately reduce the number of ZECs on a prospective basis
consistent with the level of the revenues.
(i.1) ZEC Fund.--The ZEC Fund is established as a separate
fund in the State Treasury. Money in the ZEC Fund is
appropriated to the commission on a continuing basis for the
purpose of implementing the ZEC program. All money received by
the commission under this section shall be deposited into the
ZEC Fund.
(j) Recovery of costs.--
(1) The commission shall order the full recovery of all
costs associated with the electric distribution company's
required procurement of ZECs, and with the commission's
implementation of the ZEC program, through a nonbypassable,
irrevocable charge imposed on the electric distribution
company's retail distribution customers. Within 150 days
after the effective date of this paragraph, each electric
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distribution company shall file with the commission a tariff
to recover from the electric distribution company's retail
distribution customers as follows:
(i) For an electric distribution company whose rates
are regulated by the commission, the commission shall
determine the appropriate charges for the electric
distribution company's tariff that permit recovery of the
incremental cost of compliance subject to the retail rate
impact limits provided under subparagraph (2).
(ii) An electric distribution company shall recover
the incremental cost of compliance with the renewable
energy standards. An electric distribution company may
not comply with the renewable energy standards to the
extent that, as d etermined by the commission, recovery of
the incremental cost of compliance will have a retail
rate impact that exceeds any of the following:
(A) $3.00 per month per residential customer
meter.
(B) $16.58 per month per commercial secondary
customer meter.
(C) $187.50 per month per commercial primary or
industrial customer meter.
(2) Within 60 days after the tariff filing under
paragraph (1), after notice, the opportunity for comment and
public hearing, the commission shall approve the tariff,
provided that the tariff is consistent with the provisions of
this subsection. No later than the date of the commission's
order establishing the initial selected nuclear power plants
to receive ZECs, each electric distribution company shall
implement the tariff and begin collecting from its retail
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distribution customers the approved charge. Revenues
collected by the electric distribution company from the
nonbypassable, irrevocable charge shall be placed in a
separate, interest-bearing account and shall be used solely
to purchase ZECs, and to reimburse the commission for
reasonable, verifiable costs the commission incurs to
implement the ZEC program to the extent the commission's
costs exceed the application fees collected by the commission
under subsection (e)(5).
(3) Notwithstanding any provision of this section, an
electric distribution company shall not be required to
purchase any additional number of ZECs if the cost of the
additional number of ZECs exceeds the revenues deposited in
the electric distribution company's separate, interest-
bearing account, created under paragraph (2), for that energy
year, after subtracting the reasonable, verifiable costs
incurred by the commission during that energy year to
implement the ZEC program, which costs shall be remitted to
the commission and deposited into the ZEC Fund each energy
year in a manner to be determined by the commission. Excess
money in an electric distribution company's separate,
interest-bearing account shall be refunded to its retail
distribution customers at the end of each energy year.
(4) The following shall apply:
(i) Notwithstanding the provisions of paragraph (1),
and to ensure that the ZEC program remains affordable to
retail distribution customers in this Commonwealth, the
commission may reduce the charge imposed by paragraph (1)
starting in the second three-year eligibility period and
for each subsequent three-year eligibility period
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thereafter, provided that the commission determines that
a reduced charge will nonetheless be sufficient to
achieve the Commonwealth's air quality and other
environmental objectives by preventing the retirement of
the nuclear power plants that meet the eligibility
criteria established under subsections (d) and (e).
(ii) If the commission reduces the charge imposed by
paragraph (1), the reduction shall be applicable to the
next eligibility period only and the commission shall
make its determination no later than 13 months prior to
the start of that eligibility period. Within 30 days
thereafter, each electric distribution company shall
file, in lieu of the tariff described in paragraph (1), a
tariff consistent with the commission's determination.
Within 60 days after filing of the tariff, after notice,
the opportunity for comment and public hearing, the
commission shall approve the revised tariff, provided
that it is consistent with the commission's
determination. The revised tariff shall take effect
starting in the next eligibility period.
(iii) If the commission does not certify any nuclear
power plants for a subsequent eligibility period under
this section, the commission may reduce the charge
imposed under paragraph (1) to ensure that the ZEC
program remains affordable to retail distribution
customers in this Commonwealth in the final year of the
first eligibility period if the commission determines
that a reduced charge will be sufficient to achieve the
Commonwealth's air quality and other environmental
objectives by preventing the retirement of the nuclear
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power plants that meet the eligibility criteria
established under subsections (d) and (e).
(iv) For the second three-year eligibility period,
and every subsequent eligibility period thereafter, a
selected nuclear power plant shall pay a renewal fee to
the commission in an amount to be determined by the
commission, but which shall not exceed $250,000, to be
used to defray the costs incurred by the commission to
administer the ZEC program.
(k) Performance.--
(1) A selected nuclear power plant shall be excused from
performance, including, but not limited to, the sale of ZECs,
and a payment from an electric distribution company shall not
be due to the selected nuclear power plant, if:
(i) the selected nuclear power suspends or ceases
operations, despite the selected nuclear power plant's
reasonable efforts to continue operations, due to an
event beyond its control, including, but not limited to,
acts of God, flood, drought, earthquake, storm, fire,
lightning, epidemic, war, riot, labor dispute, labor or
material shortage, sabotage or explosion. The selected
nuclear power plant shall no longer be excused from
performance, and a payment from an electric distribution
company shall be due, after conclusion of the event;
(ii) the General Assembly enacts a law imposing a
significant new tax, special assessment or fee on the
generation of electricity, the ownership or leasehold of
a generating unit or the privilege or occupation of the
generation, ownership or leasehold of generation units by
a selected nuclear power plant;
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(iii) a Federal or State law is enacted that
materially reduces the value of a ZEC or the commission
exercises its discretion to reduce the amount of the per-
kilowatt-hour charge under subsection (j)(3);
(iv) the selected nuclear power plant requires
capital expenditures in excess of $40,000,000 that were
neither known nor reasonably foreseeable at the time it
was selected to receive ZECs, and the capital
expenditures are expenditures that a prudent owner or
operator of a selected nuclear power plant would not
undertake; or
(v) the United States Nuclear Regulatory Commission
terminates the selected nuclear power plant's license.
(2) If a selected nuclear power plant ceases operations
during an eligibility period for any reason other than those
specified under this subsection, the selected nuclear power
plant shall pay a charge to the electric distribution
companies that purchased ZECs from the selected nuclear power
plant in an amount equal to the compensation received for the
sale of ZECs since the commission's last determination of the
selected nuclear power plant's eligibility to receive ZECs.
An electric distribution company shall provide a refund to
its retail distribution customers in an amount equal to the
charge paid by a selected nuclear power plant to the electric
distribution company under this paragraph.
(3) The owner of a selected nuclear power plant shall,
within two years after receiving ZECs, submit a plan to the
commission to retain, retrain or compensate personnel whose
employment would be eliminated as a direct result of the
cessation of the selected nuclear power plant's operations,
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including an alternative economic development plan for
communities that rely on the selected nuclear power plant for
a substantial portion of the community's tax revenues.
(l) Employee layoffs.--A selected nuclear power plant may
not lay off any personnel unless the lay-off is due to employee
misconduct or underperformance issues or due to the suspension
or cessation of the selected nuclear power plant's operations as
provided under subsection (k).
(m) Study and report by selected nuclear power plant.--The
owner of a selected nuclear power plant shall, within two years
after receiving ZECs, conduct a study and prepare a written
report in cooperation with selected experts, to determine the
optimal use of dry cask storage of spent nuclear fuel at its
site, considering environmental impacts, worker safety and cost
impacts.
(n) Study and report by commission.--No later than 10 years
after the effective date of this section, the commission shall
conduct a study to evaluate the efficacy of the ZEC program and
submit a written report to the Governor and the General
Assembly. In conducting the study, the commission shall evaluate
the ZEC program's effect on the premature retirement of nuclear
power plants, its effect on the air quality and environment in
this Commonwealth and its contribution to a more reliable energy
supply by assuring fuel diversity. The study shall also evaluate
the ZEC program's benefits and costs to ratepayers. The written
report shall:
(1) Summarize the study and analysis conducted under
subsection (a).
(2) Discuss and quantify the potential benefits and
costs associated with the ZEC program.
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(3) Recommend any changes to the ZEC program or whether
the ZEC program should continue.
(4) Recommend whether the ZEC program should be expanded
to include other technologies.
(o) Definitions.--As used in this section, the following
words and phrases shall have the meanings given to them in this
subsection unless the context clearly indicates otherwise:
"ZEC." A zero emissions carbon certificate established by
the commission under subsection (a).
"ZEC program." The Zero Emissions Carbon Certificate Program
established by the commission under subsection (a).
Section 3.2. Solar photovoltaic technology requirements.
(a) System requirements.--Notwithstanding section 4, in
order to qualify as an alternative energy source eligible to
meet the solar photovoltaic share of the compliance requirements
under section 3, a solar photovoltaic system must do one of the
following:
(1) Directly deliver the electricity that the solar
photovoltaic system generates to a retail customer of an
electric distribution company or to the distribution system
operated by an electric distribution company operating in
this Commonwealth and currently obligated to meet the
compliance requirements specified under section 3.
(2) Directly connect to the electric system of an
electric cooperative or municipal electric system operating
in this Commonwealth.
(3) Directly connect to the electric transmission system
at a location within the service territory of an electric
distribution company operating in this Commonwealth.
(b) Construction.--
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(1) Nothing under this section or section 4 shall be
construed to affect any of the following:
(i) A certification originating in this Commonwealth
and granted before the effective date of this
subparagraph of a solar photovoltaic energy generator as
a qualifying alternative energy source eligible to meet
the solar photovoltaic share of this Commonwealth's
alternative energy portfolio compliance requirements
under section 3.
(ii) A certification of a solar photovoltaic system
with a binding written contract for the sale and purchase
of alternative energy credits derived from solar
photovoltaic energy sources entered into before October
30, 2017.
(2) This section shall apply to contracts entered into
or renewed on or after October 30, 2017.
Section 8.1. Decarbonization.
(a) General rule.--The minimum reduction of carbon dioxide
emissions as a percentage of 2020 emissions from the generation
of all of the electric energy sold by an electric distribution
company or electric generation supplier to retail electric
customers in this Commonwealth shall be as follows:
(1) 2.5% for energy year 2022.
(2) 13.1% for energy year 2026.
(3) 14.7% for energy year 2030.
(4) 23% for energy year 2034.
(5) 37.9% for energy year 2038.
(6) 47.9% for energy year 2042.
(7) 66% for energy year 2046.
(8) 100% for energy year 2050 and thereafter.
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(b) Relief.--An electric distribution company may petition
the commission for relief from the requirements under subsection
(a) on the basis that the requirement would threaten the
reliability or security of electric service to customers. The
commission shall consider in-State and regional transmission
entity resources and shall evaluate the reliability in ruling
upon a petition for relief.
(c) Carbon constrained energy credit.--The commission shall
complete a proceeding to allow for the issuance of carbon
constrained energy credits to carbon constrained energy systems.
A carbon constrained energy credit shall be a tradable
instrument that is used to establish, verify and monitor
compliance with this section. A unit of credit shall equal one
megawatt hour of electricity from a carbon constrained source.
The carbon constrained energy credit shall remain the property
of the carbon constrained energy system until the carbon
constrained energy credit is voluntarily transferred by the
carbon constrained energy system.
Section 5. This act shall take effect in 90 days.
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