PUC Implements Phase IV Of Act 129 Energy Efficiency Program To Reduce Energy Use; Studies Show Could Save Consumers $3 Billion

On June 18, the Public Utility Commission approved the implementation of a five-year fourth phase (Phase IV) of the Act 129 Energy Efficiency and Conservation Program, requiring additional, incremental reductions in consumption and peak demand for Pennsylvania’s largest electric distribution companies (EDCs).

The studies done for the PUC found a new 5-year energy efficiency targets for utilities required by Act 129 are cost-effective and could return $3 billion dollars in benefits to Pennsylvania electric customers.  These benefits could be captured at a savings of $1.65 for every dollar spent.  Read more here.

The Commission voted 4-0 to approve the Final Implementation Order, which addresses issues related to the design and implementation of the next phase of the EDCs’ EE&C programs. As part of the adoption of this Order, the Commission will adopt a five-year phase of the Act 129 EE&C Program that will operate from June 1, 2021, through May 31, 2026.

EDCs’ current EE&C plans are valid through May 31, 2021, at which time the law directs the PUC to re-evaluate the costs and benefits to determine if the programs should continue. 

By initiating this planning process well in advance of 2021, the Commission intends to facilitate a smooth transition to minimize any possible program lapses as EDCs move into the program’s fourth phase.

The Final Implementation Order addresses:

-- The timeline for implementing Phase IV;

-- The length of Phase IV will be five years commencing June 1, 2021;

-- Inclusion of consumption reduction requirements which aim to reduce consumption by 3.1% statewide over the duration of the plan.;

-- Inclusion of peak demand reduction requirements via the use of energy efficiency measures aimed to reduce peak demand by 3.0%;

-- Inclusion of a low-income sector reduction carve-out;

-- Program design considerations;

-- Other transition considerations; and

-- Program cost-recovery considerations.

In preparation for a potential Phase IV, the Commission previously tasked its Phase III Statewide Evaluator with performing an energy efficiency and peak demand reduction potential study, as well as a dispatchable demand response (DDR) potential study.  Read more here.

The EEPDR and DDR Potential Studies were released publicly via a Secretarial Letter served March 2, 2020.  The Commission then issued for public comment its Phase IV Tentative Implementation Order on March 12, 2020.

Act 129 of 2008

Act 129 became law on Oct. 15, 2008 and, among other things, required the implementation of EE&C programs that would produce electricity usage reductions to meet legislatively mandated targets through May 31, 2013 and requires the Commission to continue requiring implementation of EE&C programs so long as they are cost-effective.  

On Aug. 2, 2012, the PUC issued a Final Implementation Order adopting a three-year Phase II Act 129 EE&C program.  

On June 11, 2015, the Commission issued a Final Implementation Order adopting the current five-year Phase III EE&C Program.

Act 129 requires electric distribution companies with at least 100,000 customers to file EE&C plans with the Commission, including Duquesne Light; Met-Ed; PECO; Penelec; Penn Power; PPL Electric; and West Penn Power.  

The Act also addresses issues such as electric utility and default service provider responsibilities; conservation service providers; smart meter technology; time-of-use rates; real-time pricing plans; default service procurement; market misconduct; alternative energy sources; and cost recovery.

For more information, visit the PUC’s Act 129 Information webpage.

Related Article:

PUC Releases Reports Showing Act 129 Energy Efficiency Program Could Deliver $3 Billion In Benefits Over Next 5 Years

[Posted: June 18, 2020]  PA Environment Digest