Pennsylvania

Summary Pennsylvania Act 129 of 2008 requires each of the seven major electric distribution companies to procure cost-effective energy efficiency and to develop energy efficiency and conservation plans to reduce electricity consumption by a minimum 1% by May 31, 2011, increasing to a total of 3% by May 31, 2013, and to reduce peak demand by 4.5% by May 31, 2013. In July 2009, the electric distribution companies submitted energy efficiency plans to the Public Utility Commission (PUC), which has oversight responsibilities in the implementation of Act 129. The PUC has 120 days to approve, reject, or modify the plans. According to the Energy Information Administration, Pennsylvania utilities spent $4.1 million on energy efficiency in 2007, saving 3,800 MWh. As utilities begin to offer efficiency programs in accordance with Act 129, spending on energy efficiency in the state will begin to increase.

As a result of electric utility restructuring in the state, the Pennsylvania Public Utilities Commission established four Sustainable Energy Funds (SEFs) to promote renewable energy, advanced clean energy technologies, and energy conservation. Although there is a fund for the state’s five major utilities, three of the funds have ceased receiving ratepayer funding. The West Penn Power SEF is the only remainder and the only fund that invests in energy efficiency. The fund launched the Keystone Home Energy Loan Program in 2005 and has since expanded the program into a broader statewide program with base funding from the Pennsylvania Treasury Department. The program helps homeowners improve the energy efficiency of their homes by providing financing for high efficiency heating, air conditioning, insulation, windows, doors, siding, geothermal and solar PV systems, and whole house improvements through Home Performance with ENERGY STAR.

In accordance with Act 129 of 2008, electric distribution company filed energy efficiency and conservation plans with the PUC in July 2009. Plans submitted by each company explain how energy reductions are to be met, including a contract with a conservation service provider, and providing for energy efficiency measures for low-income households. The PUC has 120 days to approve, reject, or modify the plans. Electric distribution companies also filed a smart meter technology procurement and installation plan for approval with the PUC.

According to the Energy Information Administration, Pennsylvania utilities reported efficiency program savings of 3,800 MWh in 2007, less than 0.01% of total retail sales. This number should improve dramatically as the state ramps up its energy efficiency efforts described here.

Back to Top

Four Sustainable Energy Funds were created as a result of individual settlements with the state’s five major distribution utilities to promote both renewable energy and energy efficiency. In 2007, approximately $6.5 million was distributed in the form of loans and $2 million was provided in grants from all SEFs.

Under terms of the settlements, approximately $55 million was collected through these companies’ distribution rates to promote the development of sustainable and renewable energy technologies. Certain utilities’ funds also received lump sum investments resulting from mergers. West Penn Power SEF is the only fund still collecting funds through distribution and transmission rates, currently at $0.001/kWh.

Under the new legislation, the electric distribution companies’ energy efficiency and conservation plans must propose a cost-recovery tariff mechanism to fund the energy efficiency and conservation measures and to ensure recovery of reasonable costs. The utilities can also recover the costs through a reconcilable adjustment mechanism.

According to the Energy Information Administration, Pennsylvania utilities spent $4.1 million on energy efficiency in 2007, 0.03% of total spending.

Back to Top

Act 129, passed in October 2008, established an energy efficiency resource standard in Pennsylvania. Each electric distribution company with at least 100,000 customers must reduce energy consumption by a minimum 1% by May 31, 2011, increasing to 3% by May 31, 2013. Peak demand must be reduced by 4.5% by May 31, 2013.  Ten percent of both consumption and peak demand reductions are to come from "federal, state, local government, including municipalities, school districts, institutions of higher education and nonprofit entities."  The PUC must also set targets for the period beyond 2013.

Failure to achieve the reductions required (load and/or peak demand) subject the EDC to a civil penalty of not less than $1M and not to exceed $20M.

Prior to the 2008 legislation, in 2004, the legislature adopted the Alternative Energy Portfolio Standards (AEPS) Act. Under the law, renewable energy must account for 8% of the power sold in the state after 15 years of implementation. In addition, “tier 2” “advanced energy resources” must account for an additional 10% of power sold in 15 years. “Tier 2” resources include energy efficiency, hydropower, waste coal, and municipal solid waste generation. However, there was already enough waste coal generation in the state to meet the tier 2 targets for many years and no energy efficiency investments were made.

Back to Top

Not in place. 

Back to Top

Not in place. 

Back to Top

Under the October 2008 legislation, the PUC must implement programs that encourage conservation and efficiency by every major rate class. The legislation does not, however, designate energy efficiency as a resource.

Back to Top

• Pennsylvania Public Utility Commission
• Pennsylvania State Incentives for Renewables and Efficiency 
• Pennsylvania House Bill 2200

Last Updated 08/18/2009

Back to Top