Pennsylvania 2025-2026 Regular Session

Pennsylvania House Bill HB505 Latest Draft

Bill / Introduced Version

                             
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:
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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 
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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, 
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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 
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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.
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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.
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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 
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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, 
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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 
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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 
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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.
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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.
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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:
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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 
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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. 
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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 
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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 
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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 
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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.
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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 
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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 
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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.
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