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

PRINTER'S NO.   1481

                   THE GENERAL ASSEMBLY OF PENNSYLVANIA



                        HOUSE BILL
                        No. 504
                                                Session of
                                                  2025

     INTRODUCED BY SCHWEYER, VENKAT, ABNEY, WAXMAN, GIRAL, FREEMAN,
        SAPPEY, HILL-EVANS, HOWARD, MADDEN, SCHLOSSBERG, ISAACSON,
        KAZEEM, PIELLI, PROBST, MALAGARI, SIEGEL, NEILSON, RIVERA,
        SANCHEZ, VITALI, MATZIE, D. WILLIAMS, O'MARA, CEPEDA-FREYTIZ,
        DAVIDSON, STEELE, K.HARRIS, DONAHUE, CIRESI, KHAN, FRIEL,
        PROKOPIAK, SALISBURY, BOROWSKI, FIEDLER AND KINKEAD,
        APRIL 23, 2025

     REFERRED TO COMMITTEE ON CONSUMER PROTECTION, TECHNOLOGY AND
        UTILITIES, APRIL 23, 2025


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

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

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

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 1                     (B)   20,000 kilowatts of alternating current for
 2              a facility that is a brownfield community energy
 3              facility.
 4        (4)   Has no single subscriber who subscribes to more than
 5    50% of the facility capacity in kilowatts or output in
 6    kilowatt hours, except if:
 7              (i)    the single subscriber is a master-metered
 8        multifamily residential or commercial building; or
 9              (ii)    the single subscriber is an agricultural
10        operation as defined in 26 Pa.C.S. § 202 (relating to
11        definitions) and the facility has no fewer than three
12        subscribers.
13        (5)   Has not less than 50% of the facility capacity
14    subscribed by subscriptions of 25 kilowatts or less or
15    subscribed by agricultural operations as defined in 26
16    Pa.C.S. § 202.
17        (6)   Credits some or all of the facility-generated
18    electricity to the bills of subscribers.
19        (7)   May be located remotely from a subscriber's premises
20    and is not required to provide energy to on-site load.
21        (8)   Is owned or operated by a community energy
22    organization.
23        (9)   Delivers the amount of energy and capacity that is
24    contracted by each customer.
25    "Community energy organization."        As follows:
26        (1)   An entity that owns or operates a community energy
27    facility and is not required to:
28              (i)    be an existing retail electric customer;
29              (ii)    purchase electricity directly from the electric
30        distribution company;

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

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 1      "Public utility."    As defined in 66 Pa.C.S. § 102 (relating
 2   to definitions).
 3      "Renewable natural gas device."      A device that generates
 4   electricity relying upon a fuel source consisting of at least
 5   75% biodiesel or biogas, including biogas derived from municipal
 6   solid waste, industrial and food waste, wastewater treatment
 7   material and animal manure, resulting from the decomposition of
 8   that organic matter under anaerobic conditions, the principal
 9   constituents of which are methane and carbon dioxide, that has
10   been upgraded for use in place of fossil natural gas, gasoline
11   or diesel fuel.
12      "Rooftop community energy facility."      A community energy
13   facility that is primarily located on rooftops.
14      "Subscriber."     An electric distribution customer of an
15   electric distribution company who contracts for a subscription
16   of a community energy facility interconnected with the
17   customer's electric distribution company. The term includes an
18   electric distribution customer who owns a portion of a community
19   energy facility.
20      "Subscriber administrator."     An entity that recruits and
21   enrolls a subscriber, administers subscriber participation in a
22   community energy facility and manages the subscription
23   relationship between subscribers and an electric distribution
24   company. The term includes a community energy organization. For
25   the purpose of this definition, a subscriber administrator shall
26   not be considered a public utility solely as a result of the
27   subscriber administrator's operation or ownership of a community
28   energy facility.
29      "Subscription."     A contract between a subscriber and a
30   subscriber administrator of a community energy facility that

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

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 1      Pa. Code Ch. 75 (relating to alternative energy portfolio
 2      standards).
 3            (2)   Proof of site control.
 4            (3)   The required nonministerial permits.
 5            (4)   Proof that the community energy facility will be at
 6      least 50% subscribed on the date the community energy
 7      facility receives permission to operate.
 8            (5)   A signed agreement for a commission-approved
 9      workforce development requirement.
10            (6)   Proof that the community energy facility is
11      constructed or, if not yet constructed, an attestation that
12      the community energy facility will be in compliance with
13      section 13.
14            (7)   A community energy organization or subscriber
15      administrator will not bill a subscriber for services
16      provided by an electric distribution company. An electric
17      distribution company may not bill a subscriber for
18      subscription costs to a community energy organization.
19      (b)   Establishment of credit.--Within 180 days of the
20   effective date of this subsection, the commission shall
21   establish a bill credit for a public utility that appropriately
22   values the energy, capacity and transmission values produced by
23   a community energy facility and is not less than the bill credit
24   established under 52 Pa. Code § 75.13(e) (relating to general
25   provisions). The terms and conditions of receiving the bill
26   credit may not limit or inhibit participation of subscribers
27   from any rate class.
28   Section 6.     Protection for customers.
29      (a)   Customer protection provisons.--The commission shall
30   promulgate regulations providing for the protection of a

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 1   residential customer who has a subscription with a community
 2   energy organization or subscriber administrator.
 3      (b)   Standardized customer disclosure form.--The commission
 4   shall develop a standardized customer disclosure form in English
 5   and Spanish for a residential customer that identifies key
 6   information that is required to be provided by a subscriber
 7   administrator to a potential residential subscriber, including
 8   future costs and benefits of a subscription and the subscriber's
 9   rights and obligations pertaining to a subscription.
10      (c)   Subscription costs.--The subscription costs for a
11   subscriber must be lesser than the value of the bill credit and
12   may not include any up-front or sign-on fees or credit checks.
13   The subscription costs shall be nonbasic public utility charges.
14   Failure to pay a subscription may result in the loss of a
15   subscription but shall not impact public utility services.
16      (d)   Benefits and costs.--The commission shall maximize
17   benefits and minimize costs to each rate class, notwithstanding
18   participation in a community energy program.
19      (e)   Fees prohibited.--A community energy organization may
20   not impose a termination or cancellation fee on a subscriber.
21      (f)   Net crediting.--An electric distribution company shall
22   enter into a net crediting agreement with a community energy
23   organization to include a subscriber's subscription fee on a
24   monthly bill and provide a customer with a new credit equivalent
25   to the total bill credit value for the generation period minus
26   the subscription fee. The net crediting agreement shall specify
27   payment terms from the electric distribution company to the
28   community energy organization. The electric distribution company
29   may charge a net crediting fee to the community energy
30   organization that may not exceed 1% of the bill credit value. A

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 1   nonresidential customer may subscribe to multiple community
 2   energy facilities, except that no more than one of the
 3   subscriptions may be under a net credit agreement with an
 4   electric distribution company. The electric distribution company
 5   shall continue to have the duty for billing all basic electric
 6   services, including transmission, distribution and generation
 7   charges, consistent in accordance with this act and regulations
 8   promulgated by the commission. The electric distribution company
 9   shall also continue to maintain customer services, at a minimum,
10   consistent with existing standards prior to the implementation
11   of a net crediting agreement with a community energy
12   organization in accordance with this act and regulations
13   promulgated by the commission.
14   Section 7.   Duties of electric distribution companies.
15      (a)   Report on bill credit.--On a monthly basis, an electric
16   distribution company shall provide to a community energy
17   organization or subscriber administrator a report in a
18   standardized electronic format indicating the total value of the
19   bill credit generated by the community energy facility in the
20   prior month, the calculation used to arrive at the total value
21   of the bill credit and the amount of the bill credit applied to
22   each subscriber.
23      (b)   Application of bill credit.--An electric distribution
24   company shall apply a bill credit to a subscriber's next monthly
25   electric bill for the proportional output of a community energy
26   facility attributable to the subscriber. Excess credits on a
27   subscriber's bill shall roll over from month to month. An
28   electric distribution company shall automatically apply excess
29   credits to the final electric bill when a subscription is
30   terminated for any cause.

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

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

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

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

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

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




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