Bill Text: PA HB2405 | 2009-2010 | Regular Session | Amended

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Bill Title: Further providing for definitions and for alternative energy portfolio standards; providing for solar photovoltaic and solar thermal energy system requirements; further providing for interagency responsibilities; providing for sequestration facility permitting and for title to carbon dioxide, immunity and transfer of liability; establishing the Carbon Dioxide Indemnification Fund; providing for carbon dioxide sequestration facility and transportation pipeline on Commonwealth State forest lands; and providing for application of the Public Utility Code to transporters of carbon dioxide.

Spectrum: Moderate Partisan Bill (Democrat 23-3)

Status: (Introduced - Dead) 2010-09-21 - Removed from table [HB2405 Detail]

Download: Pennsylvania-2009-HB2405-Amended.html

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PRIOR PRINTER'S NO. 3623 PRINTER'S NO. 3866
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 2405 Session of2010
INTRODUCED BY DePASQUALE, VITALI, ROSS, PAYTON, FREEMAN, BRIGGS, MUNDY, SANTARSIERO, M. O'BRIEN, BELFANTI, BRADFORD, CALTAGIRONE, D. COSTA, EVERETT, GALLOWAY, HORNAMAN, HOUGHTON, JOSEPHS, McILVAINE SMITH, MOUL, SHAPIRO, R. TAYLOR, THOMAS, WAGNER, LENTZ AND GERBER, APRIL 23, 2010
AS REPORTED FROM COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY, HOUSE OF REPRESENTATIVES, AS AMENDED, JUNE 8, 2010
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 definitions and for alternative energy
portfolio standards; providing for solar photovoltaic and
solar thermal energy system requirements; further providing
for interagency responsibilities; providing for sequestration
facility permitting and for title to carbon dioxide, immunity
and transfer of liability; establishing the Carbon Dioxide
Indemnification Fund; providing for carbon dioxide
sequestration facility and transportation pipeline on
Commonwealth State forest lands; and providing for
application of the Public Utility Code to transporters of
carbon dioxide.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The definitions of "alternative energy sources"
and "force majeure" in section 2 of the act of November 30, 2004
(P.L.1672, No.213), known as the Alternative Energy Portfolio
Standards Act, amended July 17, 2007 (P.L.114, No.35), are
amended, the definition of "Tier II alternative energy source"
is amended by adding paragraphs and the section is amended by
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:
* * *
"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
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;
20100HB2405PN3866 - 2 -
(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
material that is segregated from other waste materials,
such as waste pallets, waste utility poles and railroad
ties used by facilities in operation within this
Commonwealth as of the effective date of this act, so
long as the facility employs the best available
technology to reduce or control emissions of air
pollutants under the act of January 8, 1960 (1959
P.L.2119, No.787), known as the Air Pollution Control
Act, 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
20100HB2405PN3866 - 3 -
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
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
20100HB2405PN3866 - 4 -
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 the
small-scale power generation of electricity and useful
thermal energy.
(14) Advanced coal combustion with limited carbon
dioxide emissions, which means the production of electric
power from a generation facility that is fueled by coal,
waste coal or gas derived from an advanced coal gasification
plant or a plant that is retrofitted to capture carbon
dioxide that:
(i) Begins commercial operation after January 1,
2009, and captures, either in the advanced coal
gasification plant or in the electrical generation
facility, and delivers to a carbon dioxide sequestration
facility in this Commonwealth for permanent
sequestration, at least the following amounts of all
carbon dioxide produced:
(A) 40% from June 1, 2020, to May 31, 2024.
(B) 60% from June 1, 2024, to May 31, 2029.
(C) 90% from June 1, 2029, and thereafter.
(D) The requirement under clause (C) shall be
waived if commercially proven and project-financeable
20100HB2405PN3866 - 5 -
technology is not available as determined by the
department.
(ii) Has been designed to accommodate the required
additional processing equipment to produce power with a
maximum of 1,000 pounds of carbon dioxide emissions per
megawatt hour or begins commercial operation before
January 1, 2009, and captures and delivers to a carbon
dioxide sequestration facility in this Commonwealth for
permanent sequestration no less than the following amount
of carbon dioxide produced:
(A) 40% from June 1, 2020, to May 31, 2024.
(B) 60% from June 1, 2024, to May 31, 2029.
(C) 90% from June 1, 2029, and thereafter. The
requirement under this clause shall be waived if
commercially proven and project-financeable
technology is not available, as determined by the
department.
* * *
"Carbon dioxide." Anthropogenically generated carbon dioxide
of sufficient purity and quality as to not compromise the
ability of the carbon dioxide transportation pipeline or
sequestration facility to safely and effectively transport and
sequester the carbon dioxide.
"Carbon dioxide sequestration facility." The term shall
include the following:
(1) geological subsurface formations within this
Commonwealth with suitable cap rock, sealing faults and
anticline for the permanent storage of carbon dioxide from
advanced coal combustion with limited carbon dioxide
emissions plants or other sources within this Commonwealth
20100HB2405PN3866 - 6 -
along with the facilities necessary to transport the carbon
dioxide from the surface to the subsurface formations and
monitor the permanent storage of the carbon dioxide in
subsurface formations; or
(2) facilities that convert captured carbon dioxide to a
stable form that will safely and permanently sequester the
carbon dioxide; or
(3) other capture and sequestration processes that
permanently sequester carbon dioxide.
The term shall not include use of the carbon dioxide for
enhanced resource recovery or the carbon dioxide transportation
pipelines used to transport the carbon dioxide to the
sequestration facility.
"Carbon dioxide transportation pipeline." A pipeline within
this Commonwealth used to transport carbon dioxide from a
facility within this Commonwealth to a carbon dioxide
sequestration facility.
* * *
"DCNR." The Department of Conservation and Natural Resources
of the Commonwealth.
* * *
"Enhanced resource recovery." The use of carbon dioxide
injection or other techniques for increasing the amount of oil,
natural gas or coal bed methane extracted from geologic
formations.
"Force majeure." Upon its own initiative or upon a request
of an electric distribution company or an electric generator
supplier, the Pennsylvania Public Utility Commission, within 60
days, shall determine if alternative energy resources are
reasonably available in the marketplace in sufficient quantities
20100HB2405PN3866 - 7 -
for the electric distribution companies and electric generation
suppliers to meet their obligations for that reporting period
under this act. The commission shall declare a force majeure for
any reporting period if it determines the price of available
alternative energy credits exceeds the cost of applicable
alternative energy compliance payments established under this
act. The commission shall not declare a force majeure for any
reporting period based solely on the price of alternative energy
credits if the alternative energy credit prices are less than
the cost of applicable alternative compliance payments
established under this act. In making this determination, the
commission shall consider whether electric distribution
companies or electric generation suppliers have made a good
faith effort to acquire sufficient alternative energy to comply
with their obligations. Such good faith efforts shall include,
but are not limited to, banking alternative energy credits
during their transition periods, seeking alternative energy
credits through competitive solicitations and seeking to procure
alternative energy credits or alternative energy through long-
term contracts. In further making its determination, the
commission shall assess the availability of alternative energy
credits in the Generation Attributes Tracking System (GATS) or
its successor and the availability of alternative energy credits
generally in Pennsylvania and other jurisdictions in the PJM
Interconnection, L.L.C. regional transmission organization (PJM)
or its successor. The commission may also require solicitations
for alternative energy credits as part of default service before
requests of force majeure can be made. If the commission further
determines that alternative energy resources are not reasonably
available in sufficient quantities in the marketplace for the
20100HB2405PN3866 - 8 -
electric distribution companies and electric generation
suppliers to meet their obligations under this act, then the
commission shall modify the underlying obligation of the
electric distribution company or electric generation supplier or
recommend to the General Assembly that the underlying obligation
be eliminated. Commission modification of the electric
distribution company or electric generation supplier obligations
under this act shall be for that compliance period only.
Commission modification shall not automatically reduce the
obligation for subsequent compliance years. If the commission
modifies the electric distribution company or electric
generation supplier obligations under this act, the commission
may require the electric distribution company or electric
generation supplier to acquire additional alternative energy
credits in subsequent years equivalent to the obligation reduced
due to a force majeure declaration if the commission determines
that sufficient alternative energy credits exist in the
marketplace.
* * *
"Person." An individual, corporation, partnership,
association or other entity recognized by law as the subject of
rights, duties or obligations. The term includes the United
States, a Federal agency, the Commonwealth, an agency or
instrumentality of the Commonwealth and a political subdivision.
* * *
"Solar thermal energy." Technology utilizing solar energy
for water heating or for generating energy.
* * *
"Tier II alternative energy source." Energy derived from:
* * *
20100HB2405PN3866 - 9 -
(8) Advanced coal combustion with limited carbon dioxide
emissions.
* * *
Section 2. Section 3(a), (b), (c), (e)(6), (7) and (12),
(f), (g) and (h) of the act, amended July 17, 2007 (P.L.114,
No.35), 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, 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)] (b), (c) and (c.1).
(2) Electric distribution companies and electric
generation suppliers shall satisfy both requirements set
forth in subsections [(b) and (c)] (b), (c) and (c.1),
provided, however, that an electric distribution company or
an electric generation supplier shall be excused from its
obligations under this section to the extent that the
commission determines that force majeure exists.
(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
20100HB2405PN3866 - 10 -
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
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 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 and solar thermal energy
shares.--
(1) [Two years after the effective date of this act, at
20100HB2405PN3866 - 11 -
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
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 year after the effective
date of this subsection is sold from Tier I alternative
energy resources.] The minimum percentage of electric energy
required to be sold to retail electric customers from Tier I
alternative energy sources is:
(i) 1.5013% for June 1, 2006, through May 31, 2007.
(ii) 1.503% for June 1, 2007, through May 31, 2008.
(iii) 2.0063% for June 1, 2008, through May 31,
2009.
(iv) 2.512% for June 1, 2009, through May 31, 2010.
(v) 3.0203% for June 1, 2010, through May 31, 2011.
(vi) 3.5504% for June 1, 2011, through May 31, 2012.
(vii) 4.0752% for June 1, 2012, through May 31,
2013.
(viii) 4.6218% for June 1, 2013, through May 31,
2014.
(ix) 5.4516% for June 1, 2014, through May 31, 2015.
20100HB2405PN3866 - 12 -
(x) 6.05% for June 1, 2015, through May 31, 2016.
(xi) 6.66% for June 1, 2016, through May 31, 2017.
(xii) 7.25% for June 1, 2017, through May 31, 2018.
(xiii) 7.87% for June 1, 2018, through May 31, 2019.
(xiv) 8.75% for June 1, 2019, through May 31, 2020.
(xv) 9.72% for June 1, 2020, through May 31, 2021.
(xvi) 10.85% for June 1, 2021, through May 31, 2022.
(xvii) 12.15% for June 1, 2022, through May 31,
2023.
(xviii) 13.45% for June 1, 2023, through May 31,
2024.
(xix) 15.00% for June 1, 2024, and thereafter.
(1.1) The commission shall comply with the requirements
of 66 Pa.C.S. § 2814 (relating to additional alternative
energy sources) by annually increasing the percentage share
of Tier I alternative energy sources required to be sold by
an electric distribution company or electric generation
supplier under paragraph (1) to reflect any new alternative
energy source provided for by 66 Pa.C.S. § 2814. Any annual
increase will be applied to the next compliance year
requirement.
(2) 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 and solar thermal
energy 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.
20100HB2405PN3866 - 13 -
(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.
(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.]
(vi) 0.0504% for June 1, 2011, through May 31, 2012.
(vii) 0.0752% for June 1, 2012, through May 31,
2013.
(viii) 0.1218% for June 1, 2013, through May 31,
2014.
(ix) 0.2016% for June 1, 2014, through May 31, 2015.
(x) 0.3% for June 1, 2015, through May 31, 2016.
(xi) 0.41% for June 1, 2016, through May 31, 2017.
(xii) 0.5% for June 1, 2017, through May 31, 2018.
(xiii) 0.62% for June 1, 2018, through May 31, 2019.
(xiv) 0.75% for June 1, 2019, through May 31, 2020.
(xv) 0.97% for June 1, 2020, through May 31, 2021.
20100HB2405PN3866 - 14 -
(xvi) 1.35% for June 1, 2021, through May 31, 2022.
(xvii) 1.9% for June 1, 2022, through May 31, 2023.
(xviii) 2.45% for June 1, 2023, through May 31,
2024.
(xix) 3% for June 1, 2024, and thereafter.
(3) Upon commencement of the beginning of the 6th
reporting year, and every five years thereafter, 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] 21. The
commission shall work with the department in evaluating the
future alternative energy resource potential.
(4) Electric energy and alternative energy credits from
solar photovoltaic and solar thermal energy technologies
supplied to retail customers shall be generated from solar
photovoltaic and solar thermal energy systems located within
this Commonwealth in meeting the requirements of paragraph
(2). This paragraph shall apply to all contracts or short-
term purchases made after December 31, 2010.
(5) Notwithstanding the other provisions of this act,
credits purchased or contracted for prior to the effective
date of this subsection may be used to demonstrate compliance
under this subsection.
(c) Tier II share.--Of the electrical energy required to be
sold from alternative energy sources identified in Tier II, the
20100HB2405PN3866 - 15 -
percentage that must be from these technologies is for:
(1) Years 1 through 4 - 4.2%.
(2) Years 5 through 9 - 6.2%.
(3) Years 10 through 14 - [8.2%] 11.2%.
(4) Years 15 and thereafter - [10.0%] 13.0%.
(c.1) Retail sales from advanced coal combustion.--The total
electric energy sold by an electric distribution company or
electric generation supplier to retail electric customers in
this Commonwealth that shall be sold from advanced coal
combustion with limited carbon dioxide emissions is all of the
electric energy available from advanced coal combustion with
limited carbon dioxide emissions up to a maximum of 3.0% of the
total electric energy sold by an electric distribution company
or electric generation supplier to retail electric customers in
this Commonwealth for the reporting period which begins June 1,
2020, and for each reporting period thereafter pursuant to
subsection (c). If at any time on or after June 1, 2020, a
carbon dioxide sequestration facility permitted to permanently
sequester carbon dioxide in this Commonwealth is not operating
and capable of receiving carbon dioxide for sequestration
through no fault of an advanced coal combustion with limited
carbon dioxide emissions plant, then an advanced coal combustion
with limited carbon dioxide emissions plant shall not be
eligible to generate alternative energy credits. A coal
combustion plant existing as of the effective date of this
subsection, however, that has been retrofitted by installing
carbon capture technology need not sequester carbon dioxide
until the sequestration facility is capable of receiving carbon
dioxide in order to generate alternative energy credits,
provided that:
20100HB2405PN3866 - 16 -
(1) The plant is capable of capturing the amount of
carbon dioxide required by paragraph (14) of the definition
of "alternative energy sources" in section 2.
(2) The total value of the alternative energy credits
sold by the advanced coal combustion with limited carbon
dioxide emissions plant during times when the carbon dioxide
emissions from the plant are not sequestered shall not exceed
the costs that the plant incurred in installing carbon
capture equipment, equipment necessary to process coal for
carbon capture purposes, equipment necessary to transport the
carbon dioxide to the carbon dioxide sequestration facility
and costs incurred in connection with the operation of the
plant that are due to the capture and transportation of
carbon dioxide, as determined by the department. Costs
incurred by an advanced coal combustion with limited carbon
dioxide emissions plant shall not include Federal or State
financial assistance received by the plant.
(c.2) Force majeure.--On or after December 31, 2020, if the
commission determines that an advanced coal combustion with
limited carbon dioxide emissions plant is not operating and
capable of capturing the amount of carbon dioxide required by
paragraph (14) of the definition of "alternative energy sources"
in section 2 during a reporting period, this determination shall
constitute force majeure, and electric distribution companies
and electric generation suppliers shall be excused from all or
part of their obligation under subsection (c.1) during that
reporting period, provided the requirements in the definition of
"force majeure" in section 2 have been met, as determined by the
commission. Should force majeure be declared pursuant to this
subsection, then subsection (c.1)(2) shall remain in full force
20100HB2405PN3866 - 17 -
and effect to the extent that any such credits remain available
under this act.
(c.3) Long-term contracts.--Upon review and approval of the
commission, an electric distribution company may enter into a
long-term contract of up to 25 years to purchase the energy,
capacity or alternative energy credits of an advanced coal
combustion with limited carbon dioxide emissions plant. The
contract shall provide for the recovery of costs associated with
carbon capture, including, but not limited to, any fees charged
by the owner or operator of the carbon dioxide sequestration
facility or a carbon dioxide transportation pipeline. The
commission shall determine whether the contract is reasonable,
taking into consideration the following:
(1) The price of the energy purchased under the long-
term contract. The contract shall provide that if the carbon
dioxide sequestration facility is not operating and capable
of receiving carbon dioxide for sequestration for a period of
no less than 90 days, the price of energy under the contract
shall be reduced to account for the advanced coal combustion
with limited carbon dioxide emissions plant's reduced
operating costs.
(2) The price of capacity purchased under the long-term
contract.
(3) The price of alternative energy credits, provided
that the cost of an alternative energy credit purchased from
advanced coal combustion with limited carbon dioxide
emissions shall not exceed $45 per megawatt hour (MWh).
(4) Prior to the effective date of the contract, the
value of any carbon dioxide emission credits or other credits
that the seller obtains from the advanced coal combustion
20100HB2405PN3866 - 18 -
with limited carbon dioxide emissions plant.
(5) After the effective date of the contract, the value
of any additional Federal or State carbon credits, allowances
or other financial benefits shall be reflected in the price
of the resource in a manner which recognizes savings to
customers and does not reduce the economic return to the
seller, provided that the seller demonstrates that it has
made a commercially reasonable effort to distribute any
economic incentives it has realized to electric distribution
companies. A contract approved by the commission under this
subsection shall be deemed to meet the requirements of 66
Pa.C.S. § 2807(e) (relating to duties of electric
distribution companies).
* * *
(e) Alternative energy credits.--
* * *
(6) An electric distribution company and electric
generation supplier may bank or place in reserve alternative
energy credits produced in one reporting year for compliance
in [either or both] any or all of the [two] four subsequent
reporting years, subject to the limitations set forth in this
subsection and provided that the electric distribution
company and electric generation supplier are in compliance
for all previous reporting years. In addition, the electric
distribution company and electric generation supplier shall
demonstrate to the satisfaction of the commission that such
credits:
(i) were in excess of the alternative energy credits
needed for compliance in the year in which they were
generated and that such excess credits have not
20100HB2405PN3866 - 19 -
previously been used for compliance under this act;
(ii) were produced by the generation of electrical
energy by alternative energy sources and sold to retail
customers during the year in which they were generated;
and
(iii) have not otherwise been nor will be sold,
retired, claimed or represented as part of satisfying
compliance with alternative or renewable energy portfolio
standards in other states.
(7) An electric distribution company or an electric
generation supplier with sales that are exempted under
subsection (d) may bank credits for retail sales of
electricity generated from Tier I and Tier II sources made
prior to the end of the cost-recovery period and after the
effective date of this act. Bankable credits shall be limited
to credits associated with electricity sold from Tier I and
Tier II sources during a reporting year which exceeds the
volume of sales from such sources by an electric distribution
company or electric generation supplier during the 12-month
period immediately preceding the effective date of this act.
All credits banked under this subsection shall be available
for compliance with subsections (b) and (c) for no more than
[two] four reporting years following the conclusion of the
cost-recovery period.
* * *
(12) (i) Unless a contractual provision explicitly
assigns alternative energy credits in a different manner,
the owner of the alternative energy system or a customer-
generator owns any and all alternative energy credits
associated with or created by the production of electric
20100HB2405PN3866 - 20 -
energy by such facility or customer, and the owner or
customer shall be entitled to sell, transfer or take any
other action to which a legal owner of property is
entitled to take with respect to the credits.
(ii) This paragraph shall apply to all alternative
energy credits created pursuant to this act.
(f) Market Development and Long-Term Contracting.--
(1) The commission shall promote the development of
alternative energy through the adoption of alternative energy
credit procurement rules policies that ensure market <--
diversity, competition and a reliable supply of alternative
energy credits to all electric distribution companies and
electric generation suppliers. These rules policies shall <--
include, but are not limited to, long-term contracts for
alternative energy credits and electric distribution company
procurement of alternative energy credits at the request of
competitive retail suppliers.
(2) These rules policies shall require that each winning <--
bid be selected solely on the least cost alternative energy
credit offered and shall award contracts on a pay-as-bid
basis. For purposes of this subsection, the term "pay-as-bid"
shall mean winning bidders are paid according to their bid
price and not a single clearing price.
(3) The commission shall determine that each procurement
under this subsection is competitive based on its standard
protocols for determining competitiveness. If it is
determined that a procurement event was not competitive, the
commission shall set a date for another procurement event
which, in the case of the first procurement event, shall take
place no later than 180 days after the initial procurement
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event and, in the case of the second procurement event, shall
take place no later than one year after the initial
procurement event.
(4) The commission shall require procurement of
qualifying Tier I alternative energy credits, other than
solar energy credits, subject to the following terms:
(i) The first procurement for 25% of the following
compliance year obligations under subsection (b), for a
contract period of at least ten years, shall be conducted
no later than 120 days after the effective date of this
subsection.
(ii) The second procurement for an additional 25% of
the following compliance year obligations under
subsection (b), for a contract period of at least ten
years, shall be conducted no later than December 31,
2011.
(iii) Alternative energy credits from resources
eligible to participate under these procurement rules <--
policies shall have an in-service date as of the <--
effective date of this section or later and shall be
located in this Commonwealth.
(5) The commission shall require procurement of
qualifying solar energy alternative energy credits subject to
the following terms:
(i) The process shall recognize that different
procurement approaches are necessary based on the size of
the solar energy systems used to serve residential,
commercial and government customers.
(ii) Aggregation of solar energy resources shall be
used for solar energy systems with a nameplate capacity
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of no greater than 200 kilowatts and may be used for
other resources.
(iii) Financial security requirements imposed on
solar developers and other sellers not render solar
energy projects financially infeasible.
(iv) Contract periods for procurement mandated under
this subsection shall be at least ten years and shall be
subject to the following:
(A) The first procurement for at least 55% of
the following compliance year obligation under
subsection (b) shall be conducted no later than 120
days after the effective date of this subsection.
(B) The second procurement for at least 45% of
the compliance obligation under subsection (b) for
the following compliance year shall be conducted no
later than December 31, 2011.
(C) The third procurement for at least 30% of
the compliance obligation under subsection (b) for
the following compliance year shall be conducted no
later than December 31, 2012.
(D) The fourth procurement for at least 25% of
the compliance obligation under subsection (b) for
the following compliance year shall be conducted no
later than December 31, 2013.
(E) The fifth procurement for at least 20% of
the compliance obligation under subsection (b) for
the following compliance year shall be conducted no
later than December 31, 2014.
(F) For each compliance year commencing with
June 1, 2015, the procurement of at least 15% of the
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compliance obligation under subsection (b) shall be
conducted no later than December 31 of the year
preceding that compliance year.
(v) Upon commencement of the compliance year ending
May 31, 2015, and thereafter in conjunction with the
reviews required under subsection (b)(3), the commission
shall undertake a review of the procurement processes
under this subsection, the compliance by electric
distribution companies and electric generation suppliers
with the requirements of this act and the overall market
conditions. The commission shall use the results of this
review to determine whether to modify the procurement
processes established in accordance with this subsection.
(6) The procurement of alternative energy credits under <--
this act shall not be used to satisfy the requirements of a
long-term purchase contract under 66 Pa.C.S. § 2807(e)(3.2)
(iii) (relating to duties of electric distribution
companies).
[(f)] (g) Alternative compliance payment.--
(1) At the end of each program 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) and (c)] (b), (c)
and (c.1). If, after notice and hearing, the commission
determines that an electric distribution company or electric
generation supplier has failed to comply with subsections
[(b) and (c)] (b), (c) and (c.1) in the absence of force
majeure, the commission shall impose an alternative
20100HB2405PN3866 - 24 -
compliance payment on that company or supplier.
(3) The alternative compliance payment, with the
exception of the solar photovoltaic and solar thermal energy
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 alternative compliance payment for the solar
photovoltaic share 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 energy
credits in other jurisdictions in the PJM Interconnection,
L.L.C. transmission organization (PJM) or its successor] The
alternative compliance payment for the solar alternative
share shall be set at $450 per megawatt hour (MWh) per year
beginning January 1, 2011, and the amount shall be reduced by
3% each year thereafter.
(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
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.
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[(g)] (h) Transfer to sustainable development funds.--
(1) Notwithstanding the provisions of 66 Pa.C.S. §§ 511
(relating to disposition, appropriation and disbursement of
assessments and fees) and 3315 (relating to disposition of
fines and penalties), alternative compliance payments imposed
pursuant to this act shall be paid into Pennsylvania's
Sustainable Energy Funds created under the commission's
restructuring orders under 66 Pa.C.S. Ch. 28 (relating to
restructuring of electric utility industry). Alternative
compliance payments shall be paid into a special fund of the
Pennsylvania Sustainable Energy Board, established by the
commission under Docket M-00031715, and made available to the
Regional Sustainable Energy Funds under procedures and
guidelines approved by the Pennsylvania Energy Board.
(2) The alternative compliance payments shall be
utilized solely for projects within this Commonwealth that
will increase the amount of electric energy generated from
alternative energy resources within this Commonwealth for
purposes of compliance with subsections [(b) and (c)] (b),
(c) and (c.1).
[(h)] (i) Nonseverability.--The provisions of subsection (a)
are declared to be nonseverable. If any provision of subsection
(a) is held invalid, the remaining provisions of this act shall
be void.
Section 3. The act is amended by adding a section to read:
Section 3.1. Solar photovoltaic and solar thermal energy system
requirements.
In order for new or upgrades to existing solar photovoltaic
and solar thermal energy systems to qualify for solar
alternative energy credits the following requirements shall
20100HB2405PN3866 - 26 -
apply:
(1) A solar Solar photovoltaic or solar thermal energy <--
system work shall be installed completed by an approved <--
participating contractor or a contractor who subcontracts
with an approved participating contractor under the
department's grant program administered under section 306 of
the act of July 9, 2008 (1st Sp.Sess., P.L.1873, No.1), known
as the Alternative Energy Investment Act.
(2) If the solar photovoltaic or solar thermal energy
system will be installed in a municipality that licenses
electrical contractors or a municipality that requires an
electrical contractor be licensed, the final electrical <--
connection of a solar photovoltaic system shall be made by an
electrical contractor licensed in that municipality or a
person employed by the licensed electrical contractor then <--
the electrical work on the installation shall be completed by
an electrical contractor licensed in that municipality.
(3) The solar photovoltaic or solar thermal energy
installation shall be completed in accordance with the
applicable codes, including, but not limited to, those
relating to structural integrity, electrical installation and
electrical safety. Inspections, including electrical <--
inspections, shall be performed in accordance with the act of
November 10, 1999 (P.L.491, No.45), known as the Pennsylvania
Construction Code Act. An electrical inspection shall be
performed by an electrical inspector licensed in
certification categories 10, 19 and 25. Copies of the
required permits and inspection certificates shall be
provided to the department.
(4) Credits generated from non-electricity-generating
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solar thermal energy systems shall at a minimum be calculated
based upon a formula established by the commission in
consultation with the department and shall consider such
things as a standard BTU to kWh equivalency.
Section 4. Section 7(c) of the act is amended and the
section is amended by adding a subsection to read:
Section 7. Interagency responsibilities.
* * *
(c) Cooperation between commission and department.--The
commission and the department shall work cooperatively to
monitor the performance of all aspects of this act [and will].
The commission, in cooperation with the department, shall
provide an annual report to the chairman and minority chairman
of the Environmental Resources and Energy Committee of the
Senate and the chairman and minority chairman of the
Environmental Resources and Energy Committee of the House of
Representatives. The report shall include at a minimum:
(1) The status of the compliance with the provisions of
this act by electric distribution companies and electric
generation suppliers.
(2) Current costs of alternative energy on a per
kilowatt hour basis for all alternative energy technology
types.
(3) Costs associated with the alternative energy credits
program under this act, including the number of alternative
compliance payments.
(4) The status of the alternative energy marketplace
within this Commonwealth.
(5) Recommendations for program improvements.
(6) The total megawatts installed and megawatt hours
20100HB2405PN3866 - 28 -
generated by alternative energy systems a year prior to and
since the effective date of this paragraph.
(7) The infrastructure needs associated with the
transmission and distribution of energy generated by
alternative energy systems within this Commonwealth.
(8) An analysis of ratepayer impacts developed in
cooperation with the commission, the department and the
Office of the Consumer Advocate. The analysis shall provide a
balanced assessment of the costs and benefits from this act
to ratepayers in this Commonwealth and shall include at a
minimum:
(i) The total cost of compliance incurred through
purchase of alternative energy credits and alternative
compliance payments by each electric distribution company
and electric generation supplier in this Commonwealth.
(ii) Quantification of the price suppression effects
on the competitive wholesale electricity market from
alternative energy generated for compliance with this
act.
(iii) The amount of air and water pollution reduced
and quantifications of any associated avoided cost of
compliance.
(iv) The amount of private investment in generation
leveraged by the compliance costs.
(d) Ratepayer notification.--The commission shall annually
provide a one-page ratepayer notification summary of the cost of
compliance with this act compared to the related benefits of
compliance with this act as determined in the analysis required
by subsection (c)(8). Electric distribution companies and
electric generation suppliers shall distribute the ratepayer
20100HB2405PN3866 - 29 -
notification summary each year.
Section 5. The act is amended by adding sections to read:
Section 8.1. Sequestration facility permitting.
(a) Prohibition.--No person may operate a carbon dioxide
sequestration facility without a permit from the department.
(b) Facility sites.--The Environmental Quality Board shall,
by regulation, establish the conditions under which a carbon
dioxide sequestration facility may be located, developed and
operated. The regulations promulgated by the board shall provide
for the protection of public health, safety and environment.
(c) All carbon dioxide sequestration facilities.--For all
carbon dioxide sequestration facilities, the regulations
required by subsection (b) shall include, but not be limited to,
the following:
(1) Criteria used to determine that carbon dioxide has
been permanently sequestered.
(2) Sequestration facility performance standards.
(3) Monitoring, recordkeeping and reporting
requirements.
(4) Fees in an amount sufficient to recover the
department's cost of administering this section.
(5) Public participation in the permitting process.
(6) Other requirements necessary to evaluate the
proposed carbon dioxide sequestration facility and to ensure
safe and environmentally protective operation of the
facility.
(d) Geologic carbon dioxide sequestration facilities.--For
geologic carbon dioxide sequestration facilities the regulations
required by subsection (b) shall include, but not be limited to,
the following:
20100HB2405PN3866 - 30 -
(1) Geologic site characterization.
(2) Well location restrictions and well construction
standards, including operation and mechanical integrity
testing.
(3) Risk assessment, corrective action and emergency
response requirements.
(4) Facility closure, postclosure and final closure
certification requirements.
(5) Financial assurance requirements, including bonding
or insurance, in amounts sufficient to ensure the carbon
dioxide sequestration facility will be constructed, operated,
closed and monitored during the postclosure period in
accordance with regulations promulgated under this section,
including those regulations designed to ensure the safe and
environmentally protective operation of the facility. The
operator of the sequestration facility shall provide
financial assurance for mitigation of and compensation for
any damage caused by the injection and storage of carbon
dioxide or the escape, release or migration of carbon dioxide
from the carbon dioxide sequestration facility.
(6) Fees for every ton of carbon dioxide accepted by a
carbon dioxide sequestration facility in an amount sufficient
to monitor and maintain the facility after final closure of
the facility and to take remedial actions if necessary after
final closure of the facility. The fees shall be paid by the
operator of a carbon dioxide sequestration facility to the
department on a quarterly basis.
(7) Public notice requirements, including notification
of a release.
(8) Public participation in the closure certification
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process.
(e) Powers, duties and enforcement authority of
department.--The department shall have the same powers, duties
and enforcement authority provided by the act of July 7, 1980
(P.L.380, No.97), known as the Solid Waste Management Act, to
carry out the purposes of this section. Operators of a carbon
dioxide sequestration facility shall have the same rights and be
subject to the same penalties as provided by the Solid Waste
Management Act; however, an administrative penalty assessed by
the department for a violation of this section shall not exceed
$50,000 per day per violation.
Section 8.2. Title to carbon dioxide, immunity and transfer of
liability.
(a) Title to carbon dioxide.--The right, title and interest
in and to carbon dioxide delivered to a carbon dioxide
sequestration facility by the advanced coal combustion with
limited carbon dioxide emission plants that, individually or
collectively, first meet the maximum requirements of section
3(c.1), as determined by the department, shall be transferred to
the carbon dioxide sequestration facility and the facility shall
accept and receive the right, title and interest in and to such
carbon dioxide, including, but not limited to, liabilities
associated with the carbon dioxide, current or future
environmental benefits, marketing claims, associated voluntary
or compliance-based emissions allocations or offsets, but not
alternative energy credits provided by section 3(e).
(b) Immunity.--Upon and after transfer and conveyance of
carbon dioxide as provided under subsection (a), the owner of an
advanced coal combustion plant with limited carbon dioxide
emissions shall be immune from liabilities regarding the storage
20100HB2405PN3866 - 32 -
of carbon dioxide within and the release, escape or migration of
carbon dioxide from the carbon dioxide sequestration facility.
(c) Transfer of liability.--Upon final closure of a carbon
dioxide sequestration facility, as determined by the department,
the right, title or interest in the carbon dioxide and liability
for any release from the facility shall be transferred to and
accepted by the Commonwealth provided the operator of the carbon
dioxide sequestration facility has paid the appropriate fees
under section 8.1.
Section 8.3. Carbon Dioxide Indemnification Fund Account. <--
(a) Establishment.--There is hereby established in the State <--
Treasury a nonlapsing fund to be known as the Carbon Dioxide
Indemnification Fund. Money collected by the department under
section 8.1(d)(6) shall be deposited in the fund and shall only
be expended by the department to monitor and maintain carbon
dioxide sequestration facilities after final closure and to take
remedial actions, if necessary, after final closure.
(b) Money collected under section 8.1.--Fines, civil
penalties and permit fees collected by the department under
section 8.1 are hereby appropriated to the department to carry
out the purposes of section 8.1.
(a) Establishment.--There is hereby established in the <--
General Fund an account to be known as the Carbon Dioxide
Indemnification Account.
(b) Deposits.--Deposits to the account shall include all
revenues collected by the department pursuant to the regulations
required under section 8.1.
(c) Use of funds.--The per ton fees collected under section
8.1(d)(6) shall be used by the department only to monitor and
maintain carbon dioxide sequestration facilities after final
20100HB2405PN3866 - 33 -
closure and to take remedial actions, if necessary, after final
closure. All other moneys in the account shall be used by the
department to carry out the administrative functions contained
in section 8.1.
(d) Appropriation.--All moneys in the account are hereby
appropriated to the department.
Section 8.4. Carbon dioxide sequestration facility and
transportation pipeline on Commonwealth lands.
The Commonwealth may lease Commonwealth-owned lands and DCNR
may lease State forest land owned by the Commonwealth to any
person, on terms and conditions as DCNR may consider
appropriate, if the facility is consistent with and does not
interfere with the uses and purposes of the Commonwealth-owned
lands, as determined by the Department of General Services or as
determined by DCNR if the facility is proposed to be located on
State forest land, for the development and operation of a carbon
dioxide sequestration facility and carbon dioxide transportation
pipeline necessary to deliver carbon dioxide to the facility. In
considering the potential lease of State forest land, DCNR shall
review sites of interest to persons seeking to operate a carbon
dioxide sequestration facility and shall complete an
environmental review prior to offering a site for lease. A
carbon dioxide sequestration facility or carbon dioxide
transportation pipeline developed and operated on Commonwealth
State forest lands shall only be utilized to store carbon
dioxide generated within this Commonwealth. All rents and other
payments from any lease of Commonwealth State forest land under
this section shall be deposited into the Environmental
Stewardship Fund established in 27 Pa.C.S. § 6104 (relating to
fund).
20100HB2405PN3866 - 34 -
Section 8.5. Application of the Public Utility Code to
transporters of carbon dioxide.
Entities transporting or conveying carbon dioxide by pipeline
or conduit for compensation under this act shall be considered a
public utility under 66 Pa.C.S. § 102 (relating to definitions)
and subject to the provisions of 66 Pa.C.S. (relating to public
utilities).
Section 6. The provisions of this act are severable. If any
provision of this act or its application to any person or
circumstance is held invalid, the invalidity shall not affect
other provisions or applications of this act which can be given
effect without the invalid provision or application.
Section 7. Repeals are as follows:
(1) The General Assembly declares that the repeal under
paragraph (2) is necessary to effectuate the amendment of
section 3(e)(12) of the act.
(2) Section 3.1 of the act of July 17, 2007 (P.L.114,
No.35), entitled "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 the
definitions of 'alternative energy credit,' 'customer-
generator,' 'force majeure,' 'net metering,' and 'Tier I
alternative energy source,' for alternative energy portfolio
standards, for portfolio requirements in other states and for
interconnection standards for customer-generator facilities,"
20100HB2405PN3866 - 35 -
is repealed.
Section 8. The following shall apply:
(1) The amendment of section 3(e)(12) of the act shall
apply to all alternative energy credits created under the act
on or after the effective date of this section, regardless of
when any underlying contract for the purchase of electric
energy or other products from the generator that qualifies as
an alternative energy system was executed.
(2) Notwithstanding 66 Pa.C.S. §§ 508 (relating to
powers of the commission to vary, reform and revise
contracts) and 2102 (relating to approval of contracts with
affiliated interests), the commission may modify contracts or
disallow costs of alternative energy credit contracts under
this act only when the party seeking recovery of the costs of
these contracts is, after hearing, found to be at fault for
the following:
(i) not complying with the commission-approved
alternative energy credit procurement rules policies; or <--
(ii) fraud, collusion or market manipulation with
regard to these contracts.
(3) Notwithstanding the other provisions of this act,
alternative energy credits acquired or contracted for prior
to the effective date of this section may be used to
demonstrate compliance under this act.
Section 9. This act shall take effect immediately.
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