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 Amending Title 66 (Public Utilities) of the Pennsylvania Consolidated Statutes, in restructuring of electric utility industry, further providing for energy efficiency and conservation program. The General Assembly of the Commonwealth of Pennsylvania hereby enacts as follows: Section 1. Section 2806.1 of Title 66 of the Pennsylvania Consolidated Statutes is amended to read: § 2806.1. Energy efficiency , resilience and conservation program. (a) Program.--The commission shall[ , by January 15, 2009, ] adopt an energy efficiency , resilience and conservation program to require electric distribution companies to adopt and implement cost-effective energy efficiency , resilience and conservation plans to reduce energy demand and consumption within the service territory of each electric distribution company in this Commonwealth. The program shall include: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 (1) Procedures for the approval of plans submitted under subsection (b). (2) An evaluation process, including a process to monitor and verify data collection, quality assurance and results of each plan and the program. (3) An analysis of the cost and benefit of each plan submitted under subsection (b) in accordance with a total resource cost test approved by the commission. (4) An analysis of how the program and individual plans will enable each electric distribution company to achieve or exceed the requirements for reduction in consumption under subsections (c) and (d). (5) Standards to ensure that each plan includes a variety of energy efficiency , resilience and conservation measures, including measures that increase consumer resilience to extreme weather events, and will provide the measures equitably to all classes of customers. (6) Procedures to make recommendations as to additional measures that will enable an electric distribution company to improve its plan and exceed the required reductions in consumption under subsections (c) and (d) while increasing consumer resilience to extreme weather events . (7) Procedures to require that electric distribution companies competitively bid all contracts with conservation service providers, unless alternative procedures are otherwise authorized by the commission . (8) Procedures to review all proposed contracts prior to the execution of the contract with conservation service providers to implement the plan. The commission may order the modification of a proposed contract to ensure that the plan 20250HB0505PN1482 - 2 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 meets the requirements for reduction in demand and consumption under subsections (c) and (d). (9) Procedures to ensure compliance with requirements for reduction in consumption under subsections (c) and (d). (10) A requirement for the participation of conservation service providers in the implementation of all or part of a plan. (11) Cost recovery to ensure that measures approved are financed by the same customer class or classes that will receive the direct energy and conservation benefits. (b) Duties of electric distribution companies.-- (1) (i) [By July 1, 2009, each ] Each electric distribution company shall develop and file an energy efficiency, resilience and conservation plan with the commission for approval to meet the requirements of subsection (a) and the requirements for reduction in consumption under subsections (c) and (d). The plan shall be implemented upon approval by the commission. The following are the plan requirements: (A) The plan shall include specific proposals to implement energy efficiency , resilience and conservation measures , including measures that increase consumer resilience to extreme weather events, to achieve or exceed the required reductions in consumption under subsections (c) and (d). (B) [A minimum of 10%] The commission shall approve a targeted required reduction requiring a minimum of no greater than 10% of the required reductions in consumption under subsections (c) and (d) [shall] to be obtained from units of Federal, 20250HB0505PN1482 - 3 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 State and local government, including municipalities, school districts, institutions of higher education [and], nonprofit entities and housing authorities, and from subsidized housing . (C) The plan shall explain how quality assurance and performance will be measured, verified and evaluated. (D) The plan shall state the manner in which the plan will achieve the requirements of the program under subsection (a) and will achieve or exceed the required reductions in consumption under subsections (c) and (d) while increasing consumer resilience to extreme weather events . (E) The plan shall include a contract with one or more conservation service providers selected by competitive bid or other selection mechanism to implement the plan or a portion of the plan as approved by the commission. (F) The plan shall include estimates of the cost of implementation of the energy efficiency , resilience and conservation measures in the plan. (G) The plan shall include specific energy efficiency measures and programs that result in reductions in consumption for households at or below 150% of the Federal poverty income guidelines[ . The number of measures] or an alternative income level established by the commission not less than 150% of the Federal poverty income guidelines. The reductions in consumption shall be proportionate to those households' share of the total energy usage in the 20250HB0505PN1482 - 4 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 service territory. The electric distribution company shall coordinate measures under this clause with other programs administered by the commission or another Federal or State agency. Upon request by an electric distribution company, the commission may establish an alternative compliance mechanism for direct installation of energy-efficient equipment that produces quantifiable and verified reductions in energy consumption for households at or below the income level established in this clause. The amount of funding proposed for an alternative compliance mechanism may not be less than the amount expended by the electric distribution company for specific energy efficiency measures or programs for households at or below 150% of the Federal poverty income guidelines, or the alternative income level established by the commission under this clause, in the prior five-year evaluation period. The expenditures of an electric distribution company under this clause shall be in addition to expenditures made under 52 Pa. Code Ch. 58 (relating to residential low income usage reduction programs). (H) The plan shall include a proposed cost- recovery tariff mechanism, in accordance with [section 1307 (relating to sliding scale of rates; adjustments)] subsection (k), to fund the energy efficiency, resilience and conservation measures and to ensure full and current recovery of the prudent and reasonable costs of the plan, including administrative costs, as approved by the commission. 20250HB0505PN1482 - 5 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 (I) The electric distribution company shall demonstrate that the plan is cost effective using a total resource cost test approved by the commission and provides a diverse cross section of alternatives for customers of all rate classes. (J) The plan shall require an annual independent evaluation of its cost-effectiveness and a full review of the results of each five-year plan required under subsection (c)(3) and, to the extent practical, how the plan will be adjusted on a going-forward basis as a result of the evaluation. (K) The plan shall include an analysis of the electric distribution company's administrative costs. (ii) A new plan shall be filed with the commission every five years or as otherwise required by the commission. The plan shall set forth the manner in which the company will meet the required reductions in consumption under subsections (c) and (d). [(iii) No more than 2% of funds available to implement a plan under this subsection shall be allocated for experimental equipment or devices. ] (iv) No more than 5% of funds available to implement a plan under this subsection shall be allocated for behind-the-meter pilot programs, experimental equipment or devices or other investments in innovative technologies and management practices that reduce energy consumption. (v) Up to 15% of funds available to implement a plan under this subsection may be allocated for measures to reduce distribution system loss. 20250HB0505PN1482 - 6 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 (vi) Up to 10% of funds available to implement a plan under this subsection may be allocated for preweatherization health and safety upgrades necessary for enabling energy efficiency, resilience and conservation measures, including mold and moisture remediation, electrical panel upgrades and structural repairs, for households at or below 150% of the Federal poverty income guidelines or the alternative income level established by the commission under subparagraph (i)(G). (2) The commission shall direct an electric distribution company to modify or terminate any part of a plan approved under this section if, after an adequate period for implementation, the commission determines that an energy efficiency, resilience or conservation measure included in the plan will not achieve the required reductions in consumption in a cost-effective manner under subsections (c) and (d). (3) If part of a plan is modified or terminated under paragraph (2), the electric distribution company shall submit a revised plan describing actions to be taken to offer substitute measures or to increase the availability of existing measures in the plan to achieve the required reductions in consumption under subsections (c) and (d). (c) Reductions in consumption.--The plans adopted under subsection (b) shall reduce [ electric] energy consumption as follows: (1) By May 31, 2011, total annual weather-normalized consumption of the retail customers of each electric distribution company shall be reduced by a minimum of 1%. The 1% load reduction in consumption shall be measured against 20250HB0505PN1482 - 7 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 the electric distribution company's expected load as forecasted by the commission for June 1, 2009, through May 31, 2010, with provisions made for weather adjustments and extraordinary loads that the electric distribution company must serve. (2) By May 31, 2013, the total annual weather-normalized consumption of the retail customers of each electric distribution company shall be reduced by a minimum of 3%. The 3% load reduction in consumption shall be measured against the electric distribution company's expected load as forecasted by the commission for June 1, 2009, through May 31, 2010, with provisions made for weather adjustments and extraordinary loads that the electric distribution company must serve. (3) By November 30, 2013, and every five years thereafter, the commission shall evaluate the costs and benefits of the program established under subsection (a) and of approved energy efficiency , resilience and conservation plans submitted to the program[ .], subject to the following: (i) The evaluation shall be consistent with a total resource cost test or a cost-benefit analysis determined by the commission. If the commission determines that the benefits of the program exceed the costs, the commission shall adopt additional required incremental reductions in consumption. (ii) The assessment of costs and benefits shall incorporate an assessment of the benefits of the program with respect to increased grid and consumer resilience to extreme weather events. (iii) As of the effective date of this subparagraph, 20250HB0505PN1482 - 8 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 the effective life of a plan adopted under subsection (b) shall be the greater of 15 years or an alternative term approved by the commission. The effective life of any individual measure included in such a plan may exceed 15 years. (iv) Measures and programs that result in reductions in energy consumption for households at or below 150% of the Federal poverty income guidelines, or the alternative income level established by the commission under subsection (b)(1)(i)(G), shall, with respect to those reductions and for the exclusive purpose of the cost- benefit evaluation of that specific measure or program under this subsection, multiply the calculation of benefits by two. The multiplication shall not be undertaken for the purposes of calculating reductions in consumption under subsection (b)(1)(i)(G) or the financial incentive in subsection (k.1)(1)(ii). (d) Peak demand.--The plans adopted under subsection (b) shall reduce [electric] energy demand as follows: (1) By May 31, 2013, the weather-normalized demand of the retail customers of each electric distribution company shall be reduced by a minimum of 4.5% of annual system peak demand in the 100 hours of highest demand. The reduction shall be measured against the electric distribution company's peak demand for June 1, 2007, through May 31, 2008. (2) By November 30, 2013, the commission shall compare the total costs of energy efficiency , resilience and conservation plans implemented under this section to the total savings in energy and capacity costs to retail customers in this Commonwealth or other costs determined by 20250HB0505PN1482 - 9 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 the commission. If the commission determines that the benefits of the plans exceed the costs, the commission shall set additional incremental requirements for reduction in peak demand for the 100 hours of greatest demand or an alternative reduction approved by the commission. Reductions in demand shall be measured from the electric distribution company's peak demand for the period from June 1, 2011, through May 31, 2012. The reductions in consumption required by the commission shall be accomplished no later than May 31, 2017. (3) By November 30, 2030, the commission shall compare the total costs of energy efficiency, resilience and conservation plans implemented under this section to the total savings in energy, resilience and capacity costs to retail customers in this Commonwealth or other costs determined by the commission. If the commission determines that the benefits of the plans exceed the costs, the commission shall set requirements for electric distribution companies to establish a program addressing daily peak demand or an alternative reduction program approved by the commission. The reductions in consumption required by the commission shall be accomplished no later than May 31, 2032. (e) Commission approval.-- (1) The commission shall conduct a public hearing on each plan and allow for the submission of recommendations by the Office of Consumer Advocate and the Office of Small Business Advocate and by members of the public as to how the electric distribution company could improve its plan or exceed the required reductions in consumption under subsections (c) and (d). (2) The commission shall approve or disapprove a plan 20250HB0505PN1482 - 10 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 filed under subsection (b) within 120 days of submission. The following shall apply to an order disapproving a plan: (i) The commission shall describe in detail the reasons for the disapproval. (ii) The electric distribution company shall have 60 days to file a revised plan to address the deficiencies identified by the commission. The revised plan shall be approved or disapproved by the commission within 60 days. (iii) The commission may not disapprove a plan solely due to the inclusion of mechanical insulation, including insulation materials, facings and accessory products used for thermal requirements for mechanical piping and equipment, hot and cold applications and heating, venting and air conditioning applications. (f) Penalties.-- (1) The following shall apply for failure to submit a plan: (i) An electric distribution company that fails to file a plan under subsection (b) shall [ be subject to a civil penalty of $100,000 per ] forfeit and pay to the Commonwealth a sum determined by the commission pursuant to its authority under section 3301 (relating to civil penalties for violations) for each day until the plan is filed. (ii) An electric distribution company that fails to file a revised plan under subsection (e)(2)(ii) shall [ be subject to a civil penalty of $100,000 per] forfeit and pay to the Commonwealth a sum determined by the commission pursuant to its authority under section 3301 for each day until the plan is filed. 20250HB0505PN1482 - 11 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 (iii) Penalties collected under this paragraph shall be deposited in the low-income electric customer assistance program of the energy distribution company for the respective service territory. (2) The following shall apply to an electric distribution company that fails to achieve the reductions in consumption required under subsection (c) or (d): (i) The electric distribution company shall [ be subject to a civil penalty not less than $1,000,000 and not to exceed $20,000,000 ] forfeit and pay to the Commonwealth a sum determined by the commission pursuant to its authority under section 3301 for failure to achieve the required reductions in consumption under subsection (c) or (d). In determining the sum, the commission shall consider the extent to which an electric distribution company undertook good faith efforts to achieve the required reductions in consumption proposed in its plan. Any penalty paid by an electric distribution company under this subparagraph shall not be recoverable from ratepayers. (ii) If an electric distribution company fails to achieve the required reductions in consumption under subsection (c) or (d), responsibility to achieve the reductions in consumption shall be transferred to the commission. The commission shall do all of the following: (A) Implement a plan to achieve the required reductions in consumption under subsection (c) or (d). (B) Contract with conservation service providers as necessary to implement any portion of the plan. 20250HB0505PN1482 - 12 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 (iii) Penalties collected under this paragraph shall be deposited into the hardship fund of the energy distribution company for the respective service territory. (iv) No penalty assessed under this paragraph shall be assessed upon an electric distribution company that has timely and in good faith filed a plan subsequently approved by the commission to achieve the required reductions in consumption, and that complies entirely with that plan, based on a failure to achieve the required reductions during the period of that plan's performance, if the electric distribution company: (A) files a corrective action plan within 90 days to achieve the required reductions; (B) does not pass the costs of developing or implementing the corrective action plan along to ratepayers; and (C) complies with the corrective action plan and achieves the required reductions within the time frame specified in the corrective action plan. (g) Limitation on costs.--The total cost of any plan required under this section shall be set as follows: (1) The total cost of any plan required under this section prior to May 31, 2031, shall not exceed 2% of the electric distribution company's total annual revenue as of December 31, 2006. (2) The total cost of any plan required under this section after May 31, 2031, shall be set by the commission after considering the following for each electric distribution company in the prior commission program period: 20250HB0505PN1482 - 13 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 (i) The total resource cost test. (ii) The costs of implementing the program per megawatt hour of electricity distributed. (iii) The costs of implementing the program per customer served. (iv) The types and classes of customers served. (3) The amount established under paragraph (2) shall not be: (i) Less than the amount established under paragraph (1), increased by the same percentage as the total percentage increase in the electric distribution company's distribution base revenues between December 31, 2024, and January 1 of the penultimate year of the most recent evaluation period. (ii) More than the greater of: (A) the amount specified in subparagraph (i); or (B) the amount established under paragraph (1), increased by the same percentage as the total percentage increase in the Consumer Price Index for household energy as published by the United States Department of Labor, Bureau of Labor Statistics, between December 31, 2006, and January 1 of the penultimate year of the most recent evaluation period. (iii) Increased in any given evaluation period beyond the amount specified in subparagraph (i) plus 20% of the same amount. (4) The amount established under paragraph (2) for each evaluation period shall be published by the commission no later than January 31 of the penultimate year of the 20250HB0505PN1482 - 14 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 preceding evaluation period. (5) The provisions of this paragraph shall not apply to the cost of low-income usage reduction programs established under 52 Pa. Code Ch. 58 (relating to residential low income usage reduction programs). (h) Costs.--The commission shall recover from electric distribution companies the costs of implementing the program established under this section. (i) Report.--The following shall apply: (1) Each electric distribution company shall submit an annual report to the commission relating to the results of the energy efficiency , resilience and conservation plan within each electric distribution service territory. The report shall include all of the following: (i) Documentation of program expenditures. (ii) Measurement and verification of energy savings under the plan. (iii) Evaluation of the cost-effectiveness of expenditures. (iv) Any other information required by the commission. (2) Beginning five years following the effective date of this section and annually thereafter, the commission shall submit a report to the Consumer Protection and Professional Licensure Committee of the Senate and the Consumer Affairs Committee of the House of Representatives. (j) Existing funding sources.--Each electric distribution company shall, upon request by any person, provide a list of all eligible Federal and State funding programs available to ratepayers for energy efficiency , resilience and conservation. 20250HB0505PN1482 - 15 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 The list shall be posted on the electric distribution company's Internet website. (k) Recovery.-- (1) An electric distribution company shall recover on a full and current basis from customers, through a reconcilable adjustment clause under section 1307, all reasonable and prudent costs incurred in the provision or management of a plan provided under this section. This paragraph shall apply to all electric distribution companies, including electric distribution companies subject to generation or other rate caps. [(2) Except as set forth in paragraph (3), decreased revenues of an electric distribution company due to reduced energy consumption or changes in energy demand shall not be a recoverable cost under a reconcilable automatic adjustment clause.] (3) Decreased revenue and reduced energy consumption may be reflected in revenue and sales data used to calculate rates in a distribution-base rate proceeding filed by an electric distribution company under section 1308 (relating to voluntary changes in rates). (4) An electric distribution company may not include costs incurred in the provision or management of a plan provided under this section in rate based or the purposes of calculating a rate-based rate of return. (k.1) Incentives.-- (1) An energy efficiency, resilience and conservation plan filed by an electric distribution company under this section may include a financial incentive mechanism for the electric distribution company. Payment and design of a 20250HB0505PN1482 - 16 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 financial incentive authorized in the plan is subject to the approval of the commission and the following conditions: (i) A financial incentive may only be approved by the commission based on quantifiable and verified reductions in energy consumption beyond the target values set by the commission, produced by investments made under this part and not in the performance of other obligations or as the result of energy savings attributed to participation in other programs. (ii) The total amount of a financial incentive earned may not exceed the total of: (A) Ten percent of the net benefits experienced by electric distribution companies' customers above 150% of Federal poverty income guidelines or the alternative income level established by the commission under subsection (b)(1)(i)(G). (B) Twenty-five percent of the net benefits experienced by electric distribution companies' customers at or below 150% of Federal poverty income guidelines or the alternative income level established by the commission under subsection (b)(1) (i)(G). (2) An incentive authorized under this subsection may not be based on reductions in energy consumption over the course of more than a single evaluation period. (k.2) Industrial sector study.-- (1) Within one year of the effective date of this subsection, the commission shall direct the Statewide evaluator to undertake a review of the effectiveness of the energy efficiency, resilience and conservation program with 20250HB0505PN1482 - 17 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 respect to the industrial sector and prepare a report with recommendations, if any, for the improvement of the program. (2) The commission shall post the report to the commission's publicly accessible Internet website. The report shall address the effectiveness of the program, evaluate inter-sector transfers and suggest other potential models for reducing industrial energy demand. (l) Applicability.--This section shall not apply to an electric distribution company with fewer than 100,000 customers. (m) Definitions.--As used in this section, the following words and phrases shall have the meanings given to them in this subsection: "Conservation service provider." An entity that provides information and technical assistance on measures to enable a person to increase energy efficiency or reduce energy consumption and that has no direct or indirect ownership, partnership or other affiliated interest with an electric distribution company. "Consumer resilience." The ability of consumers to prepare for threats and hazards, adapt to changing conditions and withstand and recover rapidly from adverse conditions and disruptions. "Electric distribution company total annual revenue." Amounts paid to the electric distribution company for generation, transmission, distribution and surcharges by retail customers. "Energy efficiency, resilience and conservation measures." The term includes: (1) Technologies, management practices or other measures employed by retail customers that reduce [ electricity] energy 20250HB0505PN1482 - 18 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 consumption or demand if all of the following apply: (i) The technology, practice or other measure is installed on or after the effective date of this section at the location of a retail customer. (ii) The technology, practice or other measure reduces consumption of energy or peak load by the retail customer. (iii) The cost of the acquisition or installation of the measure is directly incurred in whole or in part by the electric distribution company. (2) [Energy efficiency and conservation measures shall include solar] Solar or solar photovoltaic panels, battery systems, home fuel cells, energy efficient and temperature- moderating windows, building envelope upgrades and doors, cool roofs, energy efficient lighting, including exit sign retrofit, high bay fluorescent retrofit and pedestrian and traffic signal conversion, electrical panel and component upgrades, smart grid home energy technologies, virtual power plant systems, heat pump installation or retrofit, geothermal heating, insulation, air sealing, reflective roof coatings, energy efficient heating and cooling equipment or systems and energy efficient appliances , smart connected thermostats and other technologies, practices or measures approved by the commission. (3) Measures that increase consumer resilience to extreme weather events and independently reduce energy consumption or demand if all of the following apply: (i) The measure is installed on or after the effective date of this section at the location of a retail customer. 20250HB0505PN1482 - 19 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 (ii) The measure reduces consumption of energy or peak load by the retail customer. (iii) The cost of the acquisition or installation of the measure is directly incurred in whole or in part by the electric distribution company. "Measures that increase consumer resilience to extreme weather events." Technologies, management practices or other measures employed by retail customers that reduce the likelihood or severity of power outages experienced by retail customers due to extreme weather conditions, which are installed on or after the effective date of this definition at the location of a retail customer. "Measures to reduce distribution system loss." The term includes the retrofit or replacement of distribution systems with advanced, resilient and energy-efficient conductors and transformers and deployment of advanced sensors, meters, switches, control systems and other components that increase energy efficiency and grid resilience between and including the substation and the individual consumer and other technologies, practices or measures approved by the commission. The commission shall review such technologies, practices or measures for overall prudence and consistency with the long-term improvement plan of the electric distribution company seeking approval of the technology, practice or measure. The term shall not include expenditures related to regular maintenance, measures mandated under State law or regulation or measures for which an electric distribution company would otherwise levy a distribution system improvement charge. "Net benefits." The value to consumers as a result of quantifiable reductions in energy consumption from investments 20250HB0505PN1482 - 20 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 made by the electric distribution company in the current evaluation period, beyond the target values in the then- applicable phase as established by the commission. The term does not include value to consumers resulting from measures paid for from sources other than the tariff mechanism provided for under subsection (b)(1)(i)(K) or any savings carried over from a prior phase. "Peak demand." The highest electrical requirement occurring during a specified period. For an electric distribution company, the term shall mean the sum of the metered consumption for all retail customers over that period. "Quality assurance." All of the following: (1) The auditing of buildings, equipment and processes to determine the cost-effectiveness of energy efficiency , resilience and conservation measures using nationally recognized tools and certification programs. (2) Independent inspection of completed energy efficiency, resilience and conservation measures completed by third-party entities to evaluate the quality of the completed measure. "Real-time price." A rate that directly reflects the different cost of energy during each hour. "Time-of-use rate." A rate that reflects the costs of serving customers during different time periods, including off- peak and on-peak periods, but not as frequently as each hour. "Total resource cost test." A standard test that is met if, over the effective life of [ each plan not to exceed 15 years, the net present value of the avoided monetary cost of supplying electricity is greater than the net present value of the monetary cost of energy efficiency conservation measures. ] the 20250HB0505PN1482 - 21 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 energy efficiency, resilience and conservation measures, the net present value of the avoided cost of supplying utility service, including the cost of generation, transmission and distribution of electricity, gas, water and other nonenergy benefits, is greater than the net present value of the incremental monetary cost of the energy efficiency, resilience and conservation measures. Nonenergy benefits considered in the test shall be quantifiable and directly related to a program or service. The value of avoided cost may include the time, location or load- shifting value of the energy efficiency, resilience and conservation measures. Spending on preweatherization health and safety upgrades under subsection (b)(1)(v) may not be included in the calculation of the standard test under this definition. Section 2. In addition to the requirement under 66 Pa.C.S. § 2806.1(b)(1)(ii), the commission may require an electric distribution company to file a new plan which meets the requirements of this act. Section 3. This act shall take effect as follows: (1) The amendment or addition of 66 Pa.C.S. § 2806.1(e) (2)(iii), (f), (k.1) and (k.2) shall take effect in 60 days. (2) This section shall take effect immediately. (3) The remainder of this act shall take effect May 31, 2031. 20250HB0505PN1482 - 22 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23