HB 505 — An Act amending Title 66 (Public Utilities) of the Pennsylvania Consolidated Statutes, in restructuring of electric utility industry, further providing for energy efficiency and conservation program.

PRINTER'S NO.     1482

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 505
                                               Session of
                                                 2025

     INTRODUCED BY DONAHUE, GIRAL, MADDEN, SAPPEY, HOWARD,
        SCHLOSSBERG, KAZEEM, MALAGARI, NEILSON, SANCHEZ, KHAN,
        O'MARA, CEPEDA-FREYTIZ, K.HARRIS, McNEILL, INGLIS, PROKOPIAK,
        STEELE, SALISBURY, KRUEGER, BOROWSKI, BOYD, HOHENSTEIN,
        PIELLI, FIEDLER AND KINKEAD, APRIL 23, 2025

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


                                    AN ACT
 1   Amending Title 66 (Public Utilities) of the Pennsylvania
 2      Consolidated Statutes, in restructuring of electric utility
 3      industry, further providing for energy efficiency and
 4      conservation program.
 5      The General Assembly of the Commonwealth of Pennsylvania
 6   hereby enacts as follows:
 7      Section 1.    Section 2806.1 of Title 66 of the Pennsylvania
 8   Consolidated Statutes is amended to read:
 9   § 2806.1.   Energy efficiency, resilience and conservation
10               program.
11      (a)   Program.--The commission shall[, by January 15, 2009,]
12   adopt an energy efficiency, resilience and conservation program
13   to require electric distribution companies to adopt and
14   implement cost-effective energy efficiency, resilience and
15   conservation plans to reduce energy demand and consumption
16   within the service territory of each electric distribution
17   company in this Commonwealth. The program shall include:
 1        (1)   Procedures for the approval of plans submitted under
 2    subsection (b).
 3        (2)   An evaluation process, including a process to
 4    monitor and verify data collection, quality assurance and
 5    results of each plan and the program.
 6        (3)   An analysis of the cost and benefit of each plan
 7    submitted under subsection (b) in accordance with a total
 8    resource cost test approved by the commission.
 9        (4)   An analysis of how the program and individual plans
10    will enable each electric distribution company to achieve or
11    exceed the requirements for reduction in consumption under
12    subsections (c) and (d).
13        (5)   Standards to ensure that each plan includes a
14    variety of energy efficiency, resilience and conservation
15    measures, including measures that increase consumer
16    resilience to extreme weather events, and will provide the
17    measures equitably to all classes of customers.
18        (6)   Procedures to make recommendations as to additional
19    measures that will enable an electric distribution company to
20    improve its plan and exceed the required reductions in
21    consumption under subsections (c) and (d) while increasing
22    consumer resilience to extreme weather events.
23        (7)   Procedures to require that electric distribution
24    companies competitively bid all contracts with conservation
25    service providers, unless alternative procedures are
26    otherwise authorized by the commission.
27        (8)   Procedures to review all proposed contracts prior to
28    the execution of the contract with conservation service
29    providers to implement the plan. The commission may order the
30    modification of a proposed contract to ensure that the plan

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 1    meets the requirements for reduction in demand and
 2    consumption under subsections (c) and (d).
 3          (9)    Procedures to ensure compliance with requirements
 4    for reduction in consumption under subsections (c) and (d).
 5          (10)    A requirement for the participation of conservation
 6    service providers in the implementation of all or part of a
 7    plan.
 8          (11)    Cost recovery to ensure that measures approved are
 9    financed by the same customer class or classes that will
10    receive the direct energy and conservation benefits.
11    (b)   Duties of electric distribution companies.--
12          (1)    (i)    [By July 1, 2009, each] Each electric
13          distribution company shall develop and file an energy
14          efficiency, resilience and conservation plan with the
15          commission for approval to meet the requirements of
16          subsection (a) and the requirements for reduction in
17          consumption under subsections (c) and (d). The plan shall
18          be implemented upon approval by the commission. The
19          following are the plan requirements:
20                       (A)   The plan shall include specific proposals to
21                 implement energy efficiency, resilience and
22                 conservation measures, including measures that
23                 increase consumer resilience to extreme weather
24                 events, to achieve or exceed the required reductions
25                 in consumption under subsections (c) and (d).
26                       (B)   [A minimum of 10%] The commission shall
27                 approve a targeted required reduction requiring a
28                 minimum of no greater than 10% of the required
29                 reductions in consumption under subsections (c) and
30                 (d) [shall] to be obtained from units of Federal,

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 1             State and local government, including municipalities,
 2             school districts, institutions of higher education
 3             [and], nonprofit entities and housing authorities,
 4             and from subsidized housing.
 5                  (C)   The plan shall explain how quality assurance
 6             and performance will be measured, verified and
 7             evaluated.
 8                  (D)   The plan shall state the manner in which the
 9             plan will achieve the requirements of the program
10             under subsection (a) and will achieve or exceed the
11             required reductions in consumption under subsections
12             (c) and (d) while increasing consumer resilience to
13             extreme weather events.
14                  (E)   The plan shall include a contract with one
15             or more conservation service providers selected by
16             competitive bid or other selection mechanism to
17             implement the plan or a portion of the plan as
18             approved by the commission.
19                  (F)   The plan shall include estimates of the cost
20             of implementation of the energy efficiency,
21             resilience and conservation measures in the plan.
22                  (G)   The plan shall include specific energy
23             efficiency measures and programs that result in
24             reductions in consumption for households at or below
25             150% of the Federal poverty income guidelines[. The
26             number of measures] or an alternative income level
27             established by the commission not less than 150% of
28             the Federal poverty income guidelines. The reductions
29             in consumption shall be proportionate to those
30             households' share of the total energy usage in the

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 1             service territory. The electric distribution company
 2             shall coordinate measures under this clause with
 3             other programs administered by the commission or
 4             another Federal or State agency. Upon request by an
 5             electric distribution company, the commission may
 6             establish an alternative compliance mechanism for
 7             direct installation of energy-efficient equipment
 8             that produces quantifiable and verified reductions in
 9             energy consumption for households at or below the
10             income level established in this clause. The amount
11             of funding proposed for an alternative compliance
12             mechanism may not be less than the amount expended by
13             the electric distribution company for specific energy
14             efficiency measures or programs for households at or
15             below 150% of the Federal poverty income guidelines,
16             or the alternative income level established by the
17             commission under this clause, in the prior five-year
18             evaluation period. The expenditures of an electric
19             distribution company under this clause shall be in
20             addition to expenditures made under 52 Pa. Code Ch.
21             58 (relating to residential low income usage
22             reduction programs).
23                  (H)   The plan shall include a proposed cost-
24             recovery tariff mechanism, in accordance with
25             [section 1307 (relating to sliding scale of rates;
26             adjustments)] subsection (k), to fund the energy
27             efficiency, resilience and conservation measures and
28             to ensure full and current recovery of the prudent
29             and reasonable costs of the plan, including
30             administrative costs, as approved by the commission.

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 1                    (I)    The electric distribution company shall
 2             demonstrate that the plan is cost effective using a
 3             total resource cost test approved by the commission
 4             and provides a diverse cross section of alternatives
 5             for customers of all rate classes.
 6                    (J)    The plan shall require an annual independent
 7             evaluation of its cost-effectiveness and a full
 8             review of the results of each five-year plan required
 9             under subsection (c)(3) and, to the extent practical,
10             how the plan will be adjusted on a going-forward
11             basis as a result of the evaluation.
12                    (K)    The plan shall include an analysis of the
13             electric distribution company's administrative costs.
14             (ii)    A new plan shall be filed with the commission
15        every five years or as otherwise required by the
16        commission. The plan shall set forth the manner in which
17        the company will meet the required reductions in
18        consumption under subsections (c) and (d).
19             [(iii)       No more than 2% of funds available to
20        implement a plan under this subsection shall be allocated
21        for experimental equipment or devices.]
22             (iv)    No more than 5% of funds available to implement
23        a plan under this subsection shall be allocated for
24        behind-the-meter pilot programs, experimental equipment
25        or devices or other investments in innovative
26        technologies and management practices that reduce energy
27        consumption.
28             (v)    Up to 15% of funds available to implement a plan
29        under this subsection may be allocated for measures to
30        reduce distribution system loss.

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 1                  (vi)   Up to 10% of funds available to implement a
 2            plan under this subsection may be allocated for
 3            preweatherization health and safety upgrades necessary
 4            for enabling energy efficiency, resilience and
 5            conservation measures, including mold and moisture
 6            remediation, electrical panel upgrades and structural
 7            repairs, for households at or below 150% of the Federal
 8            poverty income guidelines or the alternative income level
 9            established by the commission under subparagraph (i)(G).
10            (2)   The commission shall direct an electric distribution
11      company to modify or terminate any part of a plan approved
12      under this section if, after an adequate period for
13      implementation, the commission determines that an energy
14      efficiency, resilience or conservation measure included in
15      the plan will not achieve the required reductions in
16      consumption in a cost-effective manner under subsections (c)
17      and (d).
18            (3)   If part of a plan is modified or terminated under
19      paragraph (2), the electric distribution company shall submit
20      a revised plan describing actions to be taken to offer
21      substitute measures or to increase the availability of
22      existing measures in the plan to achieve the required
23      reductions in consumption under subsections (c) and (d).
24      (c)     Reductions in consumption.--The plans adopted under
25   subsection (b) shall reduce [electric] energy consumption as
26   follows:
27            (1)   By May 31, 2011, total annual weather-normalized
28      consumption of the retail customers of each electric
29      distribution company shall be reduced by a minimum of 1%. The
30      1% load reduction in consumption shall be measured against

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 1    the electric distribution company's expected load as
 2    forecasted by the commission for June 1, 2009, through May
 3    31, 2010, with provisions made for weather adjustments and
 4    extraordinary loads that the electric distribution company
 5    must serve.
 6        (2)   By May 31, 2013, the total annual weather-normalized
 7    consumption of the retail customers of each electric
 8    distribution company shall be reduced by a minimum of 3%. The
 9    3% load reduction in consumption shall be measured against
10    the electric distribution company's expected load as
11    forecasted by the commission for June 1, 2009, through May
12    31, 2010, with provisions made for weather adjustments and
13    extraordinary loads that the electric distribution company
14    must serve.
15        (3)   By November 30, 2013, and every five years
16    thereafter, the commission shall evaluate the costs and
17    benefits of the program established under subsection (a) and
18    of approved energy efficiency, resilience and conservation
19    plans submitted to the program[.], subject to the following:
20              (i)     The evaluation shall be consistent with a total
21        resource cost test or a cost-benefit analysis determined
22        by the commission. If the commission determines that the
23        benefits of the program exceed the costs, the commission
24        shall adopt additional required incremental reductions in
25        consumption.
26              (ii)    The assessment of costs and benefits shall
27        incorporate an assessment of the benefits of the program
28        with respect to increased grid and consumer resilience to
29        extreme weather events.
30              (iii)    As of the effective date of this subparagraph,

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 1            the effective life of a plan adopted under subsection (b)
 2            shall be the greater of 15 years or an alternative term
 3            approved by the commission. The effective life of any
 4            individual measure included in such a plan may exceed 15
 5            years.
 6                  (iv)   Measures and programs that result in reductions
 7            in energy consumption for households at or below 150% of
 8            the Federal poverty income guidelines, or the alternative
 9            income level established by the commission under
10            subsection (b)(1)(i)(G), shall, with respect to those
11            reductions and for the exclusive purpose of the cost-
12            benefit evaluation of that specific measure or program
13            under this subsection, multiply the calculation of
14            benefits by two. The multiplication shall not be
15            undertaken for the purposes of calculating reductions in
16            consumption under subsection (b)(1)(i)(G) or the
17            financial incentive in subsection (k.1)(1)(ii).
18      (d)   Peak demand.--The plans adopted under subsection (b)
19   shall reduce [electric] energy demand as follows:
20            (1)   By May 31, 2013, the weather-normalized demand of
21      the retail customers of each electric distribution company
22      shall be reduced by a minimum of 4.5% of annual system peak
23      demand in the 100 hours of highest demand. The reduction
24      shall be measured against the electric distribution company's
25      peak demand for June 1, 2007, through May 31, 2008.
26            (2)   By November 30, 2013, the commission shall compare
27      the total costs of energy efficiency, resilience and
28      conservation plans implemented under this section to the
29      total savings in energy and capacity costs to retail
30      customers in this Commonwealth or other costs determined by

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 1    the commission. If the commission determines that the
 2    benefits of the plans exceed the costs, the commission shall
 3    set additional incremental requirements for reduction in peak
 4    demand for the 100 hours of greatest demand or an alternative
 5    reduction approved by the commission. Reductions in demand
 6    shall be measured from the electric distribution company's
 7    peak demand for the period from June 1, 2011, through May 31,
 8    2012. The reductions in consumption required by the
 9    commission shall be accomplished no later than May 31, 2017.
10          (3)   By November 30, 2030, the commission shall compare
11    the total costs of energy efficiency, resilience and
12    conservation plans implemented under this section to the
13    total savings in energy, resilience and capacity costs to
14    retail customers in this Commonwealth or other costs
15    determined by the commission. If the commission determines
16    that the benefits of the plans exceed the costs, the
17    commission shall set requirements for electric distribution
18    companies to establish a program addressing daily peak demand
19    or an alternative reduction program approved by the
20    commission. The reductions in consumption required by the
21    commission shall be accomplished no later than May 31, 2032.
22    (e)   Commission approval.--
23          (1)   The commission shall conduct a public hearing on
24    each plan and allow for the submission of recommendations by
25    the Office of Consumer Advocate and the Office of Small
26    Business Advocate and by members of the public as to how the
27    electric distribution company could improve its plan or
28    exceed the required reductions in consumption under
29    subsections (c) and (d).
30          (2)   The commission shall approve or disapprove a plan

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 1    filed under subsection (b) within 120 days of submission. The
 2    following shall apply to an order disapproving a plan:
 3                (i)    The commission shall describe in detail the
 4          reasons for the disapproval.
 5                (ii)    The electric distribution company shall have 60
 6          days to file a revised plan to address the deficiencies
 7          identified by the commission. The revised plan shall be
 8          approved or disapproved by the commission within 60 days.
 9                (iii)    The commission may not disapprove a plan
10          solely due to the inclusion of mechanical insulation,
11          including insulation materials, facings and accessory
12          products used for thermal requirements for mechanical
13          piping and equipment, hot and cold applications and
14          heating, venting and air conditioning applications.
15    (f)   Penalties.--
16          (1)   The following shall apply for failure to submit a
17    plan:
18                (i)    An electric distribution company that fails to
19          file a plan under subsection (b) shall [be subject to a
20          civil penalty of $100,000 per] forfeit and pay to the
21          Commonwealth a sum determined by the commission pursuant
22          to its authority under section 3301 (relating to civil
23          penalties for violations) for each day until the plan is
24          filed.
25                (ii)    An electric distribution company that fails to
26          file a revised plan under subsection (e)(2)(ii) shall [be
27          subject to a civil penalty of $100,000 per] forfeit and
28          pay to the Commonwealth a sum determined by the
29          commission pursuant to its authority under section 3301
30          for each day until the plan is filed.

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 1              (iii)    Penalties collected under this paragraph shall
 2        be deposited in the low-income electric customer
 3        assistance program of the energy distribution company for
 4        the respective service territory.
 5        (2)   The following shall apply to an electric
 6    distribution company that fails to achieve the reductions in
 7    consumption required under subsection (c) or (d):
 8              (i)    The electric distribution company shall [be
 9        subject to a civil penalty not less than $1,000,000 and
10        not to exceed $20,000,000] forfeit and pay to the
11        Commonwealth a sum determined by the commission pursuant
12        to its authority under section 3301 for failure to
13        achieve the required reductions in consumption under
14        subsection (c) or (d). In determining the sum, the
15        commission shall consider the extent to which an electric
16        distribution company undertook good faith efforts to
17        achieve the required reductions in consumption proposed
18        in its plan. Any penalty paid by an electric distribution
19        company under this subparagraph shall not be recoverable
20        from ratepayers.
21              (ii)    If an electric distribution company fails to
22        achieve the required reductions in consumption under
23        subsection (c) or (d), responsibility to achieve the
24        reductions in consumption shall be transferred to the
25        commission. The commission shall do all of the following:
26                     (A)   Implement a plan to achieve the required
27              reductions in consumption under subsection (c) or
28              (d).
29                     (B)   Contract with conservation service providers
30              as necessary to implement any portion of the plan.

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 1                  (iii)    Penalties collected under this paragraph shall
 2            be deposited into the hardship fund of the energy
 3            distribution company for the respective service
 4            territory.
 5                  (iv)    No penalty assessed under this paragraph shall
 6            be assessed upon an electric distribution company that
 7            has timely and in good faith filed a plan subsequently
 8            approved by the commission to achieve the required
 9            reductions in consumption, and that complies entirely
10            with that plan, based on a failure to achieve the
11            required reductions during the period of that plan's
12            performance, if the electric distribution company:
13                         (A)   files a corrective action plan within 90
14                  days to achieve the required reductions;
15                         (B)   does not pass the costs of developing or
16                  implementing the corrective action plan along to
17                  ratepayers; and
18                         (C)   complies with the corrective action plan and
19                  achieves the required reductions within the time
20                  frame specified in the corrective action plan.
21      (g)   Limitation on costs.--The total cost of any plan
22   required under this section shall be set as follows:
23            (1)   The total cost of any plan required under this
24      section prior to May 31, 2031, shall not exceed 2% of the
25      electric distribution company's total annual revenue as of
26      December 31, 2006.
27            (2)   The total cost of any plan required under this
28      section after May 31, 2031, shall be set by the commission
29      after considering the following for each electric
30      distribution company in the prior commission program period:

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 1                (i)    The total resource cost test.
 2                (ii)    The costs of implementing the program per
 3          megawatt hour of electricity distributed.
 4                (iii)    The costs of implementing the program per
 5          customer served.
 6                (iv)    The types and classes of customers served.
 7          (3)   The amount established under paragraph (2) shall not
 8    be:
 9                (i)    Less than the amount established under paragraph
10          (1), increased by the same percentage as the total
11          percentage increase in the electric distribution
12          company's distribution base revenues between December 31,
13          2024, and January 1 of the penultimate year of the most
14          recent evaluation period.
15                (ii)    More than the greater of:
16                       (A)   the amount specified in subparagraph (i); or
17                       (B)   the amount established under paragraph (1),
18                increased by the same percentage as the total
19                percentage increase in the Consumer Price Index for
20                household energy as published by the United States
21                Department of Labor, Bureau of Labor Statistics,
22                between December 31, 2006, and January 1 of the
23                penultimate year of the most recent evaluation
24                period.
25                (iii)    Increased in any given evaluation period
26          beyond the amount specified in subparagraph (i) plus 20%
27          of the same amount.
28          (4)   The amount established under paragraph (2) for each
29    evaluation period shall be published by the commission no
30    later than January 31 of the penultimate year of the

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 1      preceding evaluation period.
 2            (5)   The provisions of this paragraph shall not apply to
 3      the cost of low-income usage reduction programs established
 4      under 52 Pa. Code Ch. 58 (relating to residential low income
 5      usage reduction programs).
 6      (h)   Costs.--The commission shall recover from electric
 7   distribution companies the costs of implementing the program
 8   established under this section.
 9      (i)   Report.--The following shall apply:
10            (1)   Each electric distribution company shall submit an
11      annual report to the commission relating to the results of
12      the energy efficiency, resilience and conservation plan
13      within each electric distribution service territory. The
14      report shall include all of the following:
15                  (i)    Documentation of program expenditures.
16                  (ii)    Measurement and verification of energy savings
17            under the plan.
18                  (iii)    Evaluation of the cost-effectiveness of
19            expenditures.
20                  (iv)    Any other information required by the
21            commission.
22            (2)   Beginning five years following the effective date of
23      this section and annually thereafter, the commission shall
24      submit a report to the Consumer Protection and Professional
25      Licensure Committee of the Senate and the Consumer Affairs
26      Committee of the House of Representatives.
27      (j)   Existing funding sources.--Each electric distribution
28   company shall, upon request by any person, provide a list of all
29   eligible Federal and State funding programs available to
30   ratepayers for energy efficiency, resilience and conservation.

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 1   The list shall be posted on the electric distribution company's
 2   Internet website.
 3      (k)   Recovery.--
 4            (1)    An electric distribution company shall recover on a
 5      full and current basis from customers, through a reconcilable
 6      adjustment clause under section 1307, all reasonable and
 7      prudent costs incurred in the provision or management of a
 8      plan provided under this section. This paragraph shall apply
 9      to all electric distribution companies, including electric
10      distribution companies subject to generation or other rate
11      caps.
12            [(2)    Except as set forth in paragraph (3), decreased
13      revenues of an electric distribution company due to reduced
14      energy consumption or changes in energy demand shall not be a
15      recoverable cost under a reconcilable automatic adjustment
16      clause.]
17            (3)    Decreased revenue and reduced energy consumption may
18      be reflected in revenue and sales data used to calculate
19      rates in a distribution-base rate proceeding filed by an
20      electric distribution company under section 1308 (relating to
21      voluntary changes in rates).
22            (4)    An electric distribution company may not include
23      costs incurred in the provision or management of a plan
24      provided under this section in rate based or the purposes of
25      calculating a rate-based rate of return.
26      (k.1)   Incentives.--
27            (1)    An energy efficiency, resilience and conservation
28      plan filed by an electric distribution company under this
29      section may include a financial incentive mechanism for the
30      electric distribution company. Payment and design of a

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 1    financial incentive authorized in the plan is subject to the
 2    approval of the commission and the following conditions:
 3              (i)    A financial incentive may only be approved by
 4        the commission based on quantifiable and verified
 5        reductions in energy consumption beyond the target values
 6        set by the commission, produced by investments made under
 7        this part and not in the performance of other obligations
 8        or as the result of energy savings attributed to
 9        participation in other programs.
10              (ii)    The total amount of a financial incentive
11        earned may not exceed the total of:
12                     (A)   Ten percent of the net benefits experienced
13              by electric distribution companies' customers above
14              150% of Federal poverty income guidelines or the
15              alternative income level established by the
16              commission under subsection (b)(1)(i)(G).
17                     (B)   Twenty-five percent of the net benefits
18              experienced by electric distribution companies'
19              customers at or below 150% of Federal poverty income
20              guidelines or the alternative income level
21              established by the commission under subsection (b)(1)
22              (i)(G).
23        (2)   An incentive authorized under this subsection may
24    not be based on reductions in energy consumption over the
25    course of more than a single evaluation period.
26    (k.2)   Industrial sector study.--
27        (1)   Within one year of the effective date of this
28    subsection, the commission shall direct the Statewide
29    evaluator to undertake a review of the effectiveness of the
30    energy efficiency, resilience and conservation program with

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 1      respect to the industrial sector and prepare a report with
 2      recommendations, if any, for the improvement of the program.
 3            (2)   The commission shall post the report to the
 4      commission's publicly accessible Internet website. The report
 5      shall address the effectiveness of the program, evaluate
 6      inter-sector transfers and suggest other potential models for
 7      reducing industrial energy demand.
 8      (l)   Applicability.--This section shall not apply to an
 9   electric distribution company with fewer than 100,000 customers.
10      (m)   Definitions.--As used in this section, the following
11   words and phrases shall have the meanings given to them in this
12   subsection:
13      "Conservation service provider."      An entity that provides
14   information and technical assistance on measures to enable a
15   person to increase energy efficiency or reduce energy
16   consumption and that has no direct or indirect ownership,
17   partnership or other affiliated interest with an electric
18   distribution company.
19      "Consumer resilience."    The ability of consumers to prepare
20   for threats and hazards, adapt to changing conditions and
21   withstand and recover rapidly from adverse conditions and
22   disruptions.
23      "Electric distribution company total annual revenue."
24   Amounts paid to the electric distribution company for
25   generation, transmission, distribution and surcharges by retail
26   customers.
27      "Energy efficiency, resilience and conservation measures."
28   The term includes:
29            (1)   Technologies, management practices or other measures
30      employed by retail customers that reduce [electricity] energy

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 1    consumption or demand if all of the following apply:
 2              (i)    The technology, practice or other measure is
 3        installed on or after the effective date of this section
 4        at the location of a retail customer.
 5              (ii)    The technology, practice or other measure
 6        reduces consumption of energy or peak load by the retail
 7        customer.
 8              (iii)    The cost of the acquisition or installation of
 9        the measure is directly incurred in whole or in part by
10        the electric distribution company.
11        (2)   [Energy efficiency and conservation measures shall
12    include solar] Solar or solar photovoltaic panels, battery
13    systems, home fuel cells, energy efficient and temperature-
14    moderating windows, building envelope upgrades and doors,
15    cool roofs, energy efficient lighting, including exit sign
16    retrofit, high bay fluorescent retrofit and pedestrian and
17    traffic signal conversion, electrical panel and component
18    upgrades, smart grid home energy technologies, virtual power
19    plant systems, heat pump installation or retrofit, geothermal
20    heating, insulation, air sealing, reflective roof coatings,
21    energy efficient heating and cooling equipment or systems and
22    energy efficient appliances, smart connected thermostats and
23    other technologies, practices or measures approved by the
24    commission.
25        (3)   Measures that increase consumer resilience to
26    extreme weather events and independently reduce energy
27    consumption or demand if all of the following apply:
28              (i)    The measure is installed on or after the
29        effective date of this section at the location of a
30        retail customer.

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 1              (ii)    The measure reduces consumption of energy or
 2          peak load by the retail customer.
 3              (iii)     The cost of the acquisition or installation of
 4          the measure is directly incurred in whole or in part by
 5          the electric distribution company.
 6      "Measures that increase consumer resilience to extreme
 7   weather events."   Technologies, management practices or other
 8   measures employed by retail customers that reduce the likelihood
 9   or severity of power outages experienced by retail customers due
10   to extreme weather conditions, which are installed on or after
11   the effective date of this definition at the location of a
12   retail customer.
13      "Measures to reduce distribution system loss."    The term
14   includes the retrofit or replacement of distribution systems
15   with advanced, resilient and energy-efficient conductors and
16   transformers and deployment of advanced sensors, meters,
17   switches, control systems and other components that increase
18   energy efficiency and grid resilience between and including the
19   substation and the individual consumer and other technologies,
20   practices or measures approved by the commission. The commission
21   shall review such technologies, practices or measures for
22   overall prudence and consistency with the long-term improvement
23   plan of the electric distribution company seeking approval of
24   the technology, practice or measure. The term shall not include
25   expenditures related to regular maintenance, measures mandated
26   under State law or regulation or measures for which an electric
27   distribution company would otherwise levy a distribution system
28   improvement charge.
29      "Net benefits."    The value to consumers as a result of
30   quantifiable reductions in energy consumption from investments

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 1   made by the electric distribution company in the current
 2   evaluation period, beyond the target values in the then-
 3   applicable phase as established by the commission. The term does
 4   not include value to consumers resulting from measures paid for
 5   from sources other than the tariff mechanism provided for under
 6   subsection (b)(1)(i)(K) or any savings carried over from a prior
 7   phase.
 8      "Peak demand."    The highest electrical requirement occurring
 9   during a specified period. For an electric distribution company,
10   the term shall mean the sum of the metered consumption for all
11   retail customers over that period.
12      "Quality assurance."    All of the following:
13            (1)   The auditing of buildings, equipment and processes
14      to determine the cost-effectiveness of energy efficiency,
15      resilience and conservation measures using nationally
16      recognized tools and certification programs.
17            (2)   Independent inspection of completed energy
18      efficiency, resilience and conservation measures completed by
19      third-party entities to evaluate the quality of the completed
20      measure.
21      "Real-time price."    A rate that directly reflects the
22   different cost of energy during each hour.
23      "Time-of-use rate."    A rate that reflects the costs of
24   serving customers during different time periods, including off-
25   peak and on-peak periods, but not as frequently as each hour.
26      "Total resource cost test."     A standard test that is met if,
27   over the effective life of [each plan not to exceed 15 years,
28   the net present value of the avoided monetary cost of supplying
29   electricity is greater than the net present value of the
30   monetary cost of energy efficiency conservation measures.] the

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 1   energy efficiency, resilience and conservation measures, the net
 2   present value of the avoided cost of supplying utility service,
 3   including the cost of generation, transmission and distribution
 4   of electricity, gas, water and other nonenergy benefits, is
 5   greater than the net present value of the incremental monetary
 6   cost of the energy efficiency, resilience and conservation
 7   measures. Nonenergy benefits considered in the test shall be
 8   quantifiable and directly related to a program or service. The
 9   value of avoided cost may include the time, location or load-
10   shifting value of the energy efficiency, resilience and
11   conservation measures. Spending on preweatherization health and
12   safety upgrades under subsection (b)(1)(v) may not be included
13   in the calculation of the standard test under this definition.
14      Section 2.   In addition to the requirement under 66 Pa.C.S. §
15   2806.1(b)(1)(ii), the commission may require an electric
16   distribution company to file a new plan which meets the
17   requirements of this act.
18      Section 3.   This act shall take effect as follows:
19          (1)   The amendment or addition of 66 Pa.C.S. § 2806.1(e)
20      (2)(iii), (f), (k.1) and (k.2) shall take effect in 60 days.
21          (2)   This section shall take effect immediately.
22          (3)   The remainder of this act shall take effect May 31,
23      2031.




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