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January 2005 The Act requires that, beginning in 2006, at least 1.5 % of the electricity sold at retail come from solar, wind, low impact hydro, geothermal, biological or coal mine methane gas, fuel cells, or biomass generation sources. This percentage is to increase by 0.5% per year until at least 8% of the electricity sold at retail comes from these sources. The Act also requires that, beginning in 2006, at least 4.2% of the electricity sold at retail within the Commonwealth be derived from waste coal, distributed generation systems, demand-side management, large scale hydropower, municipal solid waste, wood waste, or integrated combined coal gasification technology. This percentage will increase to 6.2% in 2010, to 8.2% in 2015, and to 10.0% in 2020. By 2020, at least 18% of the electricity sold at retail in Pennsylvania will have to be generated by the types of sources approved in the Act. Only generating facilities located inside the geographic boundaries of the Commonwealth or “within the service territory of any regional transmission organization that manages the transmission system in any part of the Commonwealth” are eligible to satisfy these requirements. Electric distribution companies and generation suppliers must demonstrate compliance with the Act by accumulating “alternative energy credits.” One credit corresponds to one megawatt hour of qualified alternative electric generation. Alternative energy credits may be accumulated through self-generation, purchasing credits in conjunction with electricity, or purchasing credits that are traded separately from qualified alternative electric generation. Companies that fail to comply with the percentage requirements will be required to pay a fee into a special fund of the Pennsylvania Sustainable Energy Board. These fees are to be used solely to fund projects that will increase the amount of qualified alternative generation. Between now and February 2006, the Pennsylvania Public Utilities Commission is charged with the responsibility of establishing the alternative energy credits program needed to implement the Act and with approving an independent entity to serve as the program’s administrator. The Commission must also develop a registry of information regarding credit availability and sales, regulations governing the verification and tracing of energy efficiency and demand-side management measures that qualify under the Act, and regulations governing interconnection of customer-generators. Lastly, the Commission is responsible for reviewing the renewable energy practices and policies of the Commonwealth on a regular basis.
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