The legislation being considered at the hearing included House Bill 2223 (Fiedler-D- Philadelphia) advanced transmission technologies, House Bill 2264 (Davidson-D-Cumberland) virtual power plants.
Rep. Elizabeth Fiedler (D-Philadelphia), Majority Chair of the Committee, opened the hearing by saying--
“Electricity demand is rising rapidly here in Pennsylvania and across the entire country, and that all of us have our minds on the bills of the people back home who come into our district offices, often facing very, very difficult choices when it comes to how to pay their energy bills.
“We know that we are dealing with serious supply chain problems and demand problems, and that we need to do everything we can to get as much as possible out of our existing infrastructure.
“I believe we need to do that while we are also getting more energy online, and it's the first piece that is the topic of today's hearing.
“Today, we're going to hear about two ideas I think could help Pennsylvania ratepayers and businesses in this moment.
“Advanced transmission technologies, if you are not familiar, they are modern systems that improve how power moves across our grid, potentially reducing the need to build new expensive energy infrastructure.
“These costs are too often shouldered by residential electricity customers, and that goes back to my first point of us all as state representatives, regardless of where we are from, trying to protect our constituents.
“The other item we'll hear about today is called virtual power plants or VPPs.
“They're a network of distributed energy resources, such as rooftop solar panels, battery storage systems, and smart thermostats that are digitally coordinated to operate like a single power plant.
“A VPP aggregates and optimizes many smaller assets to balance supply and demand in real time, potentially reducing energy consumption during the moments when it is most expensive, like on those very hot or very cold days.”
Rep. Martin Causer (R-Cameron), Minority Chair of the Committee, said at the beginning of the hearing-- “The one thing that I know for certain is that we need more energy on our grid, and that has to be our focus. I'm looking forward to the information presented today, looking forward to the details of these two bills to determine whether the bills help us in that effort or hinder that effort.”
The Committee heard comments from--
-- Testimony on Virtual Power Plants--
-- Chris D’Agostino - PA Policy Principal, Advanced Energy United
-- Leah Gibbons - Senior Director of Regulatory Affairs, NRG Energy
-- Rod Williamson - Executive Director, Industrial Energy Consumers of PA
-- Testimony on Advanced Transmission Technology--
-- Jenny Netherton, Energy Modernization Officer, PEW Charitable Trusts
-- Paige Rodrigues - Senior Manager, Policy and Grid Strategy, CTC Global
-- Kelt Wilska - Senior Manager of State Policy for Advanced Transmission Technologies,
-- Written testimony provided by PUC Chairman Stephen DeFrank
Here’s a summary of some of the key points raised by presenters.
Virtual Power Plants - House Bill 2264
Chris D’Agostino, PA Policy Principal, Advanced Energy United, said-- “Virtual power plants operate on the same core principle as conventional plants—providing power and grid services when needed—but instead of relying on traditional energy assets, they coordinate many smaller energy resources located in homes, businesses, and other distributed sites.
“These resources include devices that can rapidly adjust electricity use or supply energy, such as battery storage systems in homes and businesses, electric vehicle batteries and chargers, smart thermostats, and building automation systems that manage commercial and industrial energy use.
“When coordinated through a virtual power plant program, these resources are aggregated and synchronized, allowing them to operate as a single power plant from the grid operator’s perspective.
“They can either supply electricity to the grid—the equivalent to a traditional power plant ramping up generation—or reduce demand during periods of system stress, similar to a power plant scaling down.
Effective At Reducing Peak Demands
“Virtual power plants are activated during peak-demand hours, when the grid would otherwise rely on traditional peaker plants.
“Because they rely on digital coordination of distributed devices, they can respond to grid signals almost instantaneously and scale as more resources participate.”
“These adjustments are typically minor—sometimes shifting a charging schedule or adjusting a thermostat by a fraction of a degree—and are usually barely noticeable to customers.
“But when coordinated across thousands of devices, they can significantly reduce peak demand and relieve stress on the grid.”
“Participation in these programs is entirely voluntary.
“Customers who own distributed energy resources can choose to enroll and allow program operators to make these small adjustments during periods of grid stress.
Compensation For Participation
“In return, participants are compensated for the flexibility their devices provide.
“Depending on the devices enrolled and the services they provide, payments can reach hundreds or even thousands of dollars per year.
“Many Pennsylvanians already own the technologies that make virtual power plants possible, but today these devices are largely operating independently rather than being coordinated to benefit the broader electric system.
“This legislation would create a program to unlock that value—helping to make electricity more affordable and reliable for everyone.”
“Virtual power plants harness efficiency benefits by maximizing the use of existing energy resources, helping to defer major system costs.
“Just as advanced transmission technologies maximize existing transmission assets, virtual power plants can do the same on the distribution side.
“By shaving peak demand on distribution wires, VPPs can delay the need for new power plants and avoid expensive grid upgrades.
Can Be Deployed Quickly and Expand
“Unlike traditional generation, virtual power plants can be deployed quickly and operate without fuel costs due to leveraging assets already on the grid.
“They can deliver electricity and shave demand within months—often faster than building a conventional peaker plant—while bypassing lengthy interconnection queues and siting challenges.
“Unlike traditional plants, however, virtual power plants can grow over time as more customers install eligible devices and choose to participate.”
“At a time when capacity costs in the PJM market are elevated, virtual power plants offer a way to bring new capacity online quickly and begin lowering system costs.
“According to a 2025 report from the U.S. Department of Energy, virtual power plants can provide capacity at 40 to 60 percent lower cost than conventional power plants.
“Analyses of existing utility programs across the country also show that virtual power plants are among the lowest-cost resources available for reducing electricity consumption and meeting peak demand.
“Because they reduce system-wide costs, their benefits extend to all ratepayers—not just those who participate in the programs.”
“The opportunity to capture these savings is significant.
10-20% Reductions In Peak Demand
“The Department of Energy estimates that by 2030 there will be enough distributed energy resources nationwide to account for 10 to 20 percent of peak electricity demand, ripe for coordinating through virtual power plant programs."
“Pennsylvania would also be aligning with neighboring states that are advancing virtual power plant programs.
“Virginia, which faces similar challenges from a congested interconnection queue, recently passed bipartisan legislation supporting virtual power plants.
“In New Jersey, recently elected Governor Sherrill directed the state’s utility commission earlier this year to advance virtual power plant programs.
“Illinois recently enacted legislation requiring utilities to establish such programs, and Maryland is also moving forward with virtual power plants through both legislative and regulatory action.”
“Recent research also highlights the significant national cost-saving potential of virtual power plants.
“Studies estimate that they could reduce annual U.S. power-sector expenditures by roughly $17 billion by 2030.
“Deploying up to 60 gigawatts of virtual power plants nationwide could generate between $15 billion and $35 billion in system-wide savings by avoiding costly peak generation, reducing the need for transmission and distribution upgrades, and lowering wholesale power prices during the most expensive hours.
“These savings ultimately flow to customers through lower electricity bills and improved grid reliability. Pennsylvanians deserve the opportunity to realize these benefits as well.”
Leah Gibbons, Senior Director of Regulatory Affairs, NRG Energy, said-- “Last year NRG announced a partnership with Renew Home and Google Cloud to expand what will be one of, if not the largest residential smart-thermostat VPP in the United States.
1 GW In Reductions
“We are targeting the enrollment of nearly half a million VPP customers in ERCOT by the end of the decade, with a goal to deliver one gigawatt (1 GW) of peak demand by 2035.
“While initially focusing on Texas due to the value its energy-only wholesale market conveys to demand-side resources, NRG is eager to expand these activities to other regions.
“PJM, and Pennsylvania in particular, represents a marketplace where dispatchable smart thermostats, as part of a VPP, could, with the elimination of certain hurdles, have substantial value in the face of elevated capacity prices, as well as due to other demand-related charges that EGSs are responsible for, including transmission.
VPP For Businesses
“NRG offers VPP for Businesses as well. In 2025 alone, NRG Business customers saved nearly $5 million by curtailing usage during peak demand events through NRG’s Responsive Economic Dispatch (RED) program.
NRG recently acquired CPower, a leading Virtual Power Plant platform, that monetizes the value of customer-sited energy to intelligently strengthen the grid.
“For over a decade, CPower has made turning flexible energy into revenue simple for partners and large energy users such as businesses, manufacturers, public institutions and healthcare organizations.
“CPower has delivered $1.4 billion in value from demand response and energy flexibility programs to its customers since 2015.”
“The potential cost savings of smart thermostat VPP to residential consumers in Pennsylvania is substantial.
“The typical residential customer that reduces electricity usage by just 20 – 30% during peak periods – which in NRG’s experience is typical – could reduce costs by approximately $80 to $120 per year.
“When added to the efficiency improvements a customer realizes from simply installing a smart thermostat, the cumulative annual savings to a typical consumer is significant.”
“Smart-thermostat VPP programs enable a customer’s utility, chosen retail supplier, or other demand response aggregator to remotely adjust enrolled smart thermostats during a peak load event or small daily load shifting.
“A customer may opt-out by manually adjusting her thermostat. Customers are typically solicited to enroll in the program in exchange for a bill credit, payable on either a one-time or ongoing basis.
“Many programs provide rebates for smart thermostats, but also allow customers to “bring your own thermostat” for a reduced rebate amount.”
Home Base Essentials
“NRG has developed the Home Base Essentials product bundle that is currently available to customers in Texas.
“With Home Base Essentials, customers receive free professional installation of a Vivint Smart Thermostat and VPP enrollment, ensuring the thermostat is capable of being utilized for demand response, in addition to their ordinary supply service and other amenities.
“NRG has also partnered with multiple battery companies to enroll solar customers with batteries in our VPP.
“Customers’ lease payment for the battery is reduced by $20 - $40 per month. Customers with existing stand-alone batteries receive a $50 bill credit per month.
“NRG’s VPP offering has been so successful in ERCOT that our goal for that market has increased from 100MW to 1GW by 2035.”
Rod Williamson, Executive Director, Industrial Energy Consumers of PA, recommended changes to the bill to--
-- Avoid the risk of duplicate payments for the same demand response
-- Cap program recovery costs
-- Require cost-effectiveness testing
-- Ensure fair access for industrial customers
-- Require a program pilot phase
In written testimony, PUC Chairman Stephen DeFrank said-- “As detailed in HB 2264, VPPs would harness distributed energy resources (DERs) to provide peak load reductions along with other grid services such as voltage support, emergency grid management, and other functions determined by the Commission to support efficient operation of the electric grid.
“VPPs have garnered attention from regulators and utilities throughout the country, especially in the wake of FERC’s [Federal Energy Regulatory Commission] Order No. 22222 issued in 2020.
“That Order directed RTOs, such as PJM, to establish rules and procedures enabling DER participation in their markets.
“In essence, Order No. 2222 permits broadly dispersed energy resources sized less than 5 MWs and interconnected to the distribution grid access to wholesale RTO markets that previously were the domain of generation resources interconnected to the transmission grid.
“PJM has made a number of Order No. 2222 compliance filings at FERC and awaits FERC’s decision on these filings.
“In recognition of the marketplace that Order No. 2222 would create in the Commonwealth, the Commission recently issued a Notice of Proposed Rulemaking (NOPR) regarding DER participation in wholesale markets.
“The NOPR seeks to establish regulations facilitating necessary coordination protocols between EDCs, as distribution system operators, and DERs, as interconnected facility operators.”
“The Commission recently recognized the value of the VPP construct when we approved PPL’s Distributed Energy Resource Management Plan (DER Management Plan) at our November 20, 2025, Public Meeting.
PPL Demand Response Plan
“PPL’s DER Management Plan requires the Company to install monitoring and control devices on DERs installed on its distribution system.
“Through this active management of DERs, the Company will be better situated to manage voltage and increase grid hosting capacity thereby reducing demand on its distribution system, and by extension, reducing demand on the transmission system.
“The DER Management Plan is projected to increase hosting capacity by up to 258 MWs.
“The Commission has directed PPL to conduct a request-for-proposals from third-party aggregators as the Company moves forward with implementation.”
“The Commission is currently reviewing how HB 2264 and its various requirements comport with related provisions established in statute, regulations, and Commission orders.
“Most notably, we are evaluating how these VPP requirements may be administered in tandem with the energy efficiency and conservation efforts required by Act 129 of 2008 and existing net-metering rules pursuant to the Alternative Energy Portfolio Standards (AEPS) Act, 73 P.S. §§ 1648.1-1648.9, as well as EDC default service programs.”
“We have continually stated that electric resource adequacy must be met with an ‘all-of-the’ above approach.
“The Commission believes VPPs represent a viable tool in the ‘all-of-the above’ approach that policymakers should deliberate.
“To that end, the Commission generally supports endeavors that assist in our consideration of well-designed VPP constructs. With that said, we must highlight a significant area of concern in HB 2264.
“HB 2264, at Section 2806.3(c)(10), would require all excess generation provided by VPP resources to be credited at “...the full retail value at the time of export....” This language closely mimics language in the AEPS [Alternative Energy Portfolio Standards] Act pertaining to excess generation that has led to significant affordability concerns by the Commission."
“As detailed in my previous testimony before this Committee on March 2, 2026, prescribing the compensation terms with such language creates a significant inequity between the value the distributed resources are providing to the grid and the costs EDC customers must pay to those resources.
“This inequity is projected to reach up to $700 million annually in the existing AEPS net metering marketplace.
“As such, the Commission has strongly pushed for reforms to this existing compensation scheme.
“While the language in HB 2264 is an incremental improvement given the addition of the phrase “...at the time of export...,” the Commission still believes this prescriptive language will ultimately lead to further cost inequities and likewise affordability concerns.
“We ask that the Committee consider language that would permit the Commission to establish rules compensating these VPP resources for excess generation at ‘a value commensurate with the benefits the resources provide to the electricity grid at the time of export.’”
“Additionally, the Commission wishes to highlight Section 2806.3(c)(7) of HB 2264.
“This section would prohibit the Commission from establishing mechanisms to penalize VPPs for non-performance.
“We appreciate the apparent goal to establish prudent administrative rules for VPPs. However, prohibiting penalties for non-performance may inherently shift the risk of non-performance unfairly to EDC customers, further compounding affordability concerns.”
All testimony on House Bill 2264 -Virtual Power Plants.
Advanced Transmission Technology
Jenny Netherton, Energy Modernization Officer, PEW Charitable Trusts, said-- “At least 18 states, including five in PJM – Delaware, Illinois, Indiana, Ohio, and Virginia – have enacted policies to encourage utility evaluation and deployment of ATTs.
“If passed in Pennsylvania, HB 2223 would help ease rising energy costs and make the state’s grid stronger and more resilient by requiring transmission owners to consider ATTs when proposing transmission projects.
“This assessment will help regulators make cost-effective decisions to meet energy demand and balance ratepayer impacts.”
“ATTs encompass both Grid-Enhancing Technologies (GETs) and High-Performance Conductors (HPCs), and work in different ways to increase the capacity of the transmission system and reduce costs for consumers.
Quick Deployment
“ATTs can be deployed within existing transmission rights-of-way often within three months to three years, compared to an average of ten years to plan, permit, and pay for new transmission lines.”
“ATTs can be used to target areas of grid congestion, resulting in significant cost savings for consumers and large energy users.
“Congestion occurs when the transmission system lacks sufficient capacity to deliver the lowest-cost electricity from where it is generated to where it is needed.
“Typically, transmission operators dispatch the lowest-cost energy first, but during periods of high demand or outages, more expensive generation is dispatched on available lines, raising prices for consumers.”
Savings Billions In Congestion Costs
“These congestion costs reached an estimated $12 billion nationwide in 2024, including $1.75 billion within PJM, up from $1.07 billion in 2023.
“ATTs mitigate congestion by giving grid operators more situational control of the transmission system, allowing them to increase the flow of power on lines or efficiently reroute electrons so that the most cost-effective resources are dispatched.
PPL Example
“For example, in 2022, PPL deployed Dynamic Line Rating systems (DLRs) – small sensors installed on lines that monitor real-time weather conditions and allow operators to safely increase the flow of power – on three bottlenecked lines.
“This resulted in a $65 million reduction in congestion costs, a 16% increase in capacity, and $50 million in savings by deferring a transmission line rebuild.”
“The potential savings from reducing congestion systemwide are substantial: in a 2024 report that modeled individual ATTs as well as their aggregate effects, Quanta Analysis found that new generation enabled by ATTs combined with reduced congestion would lower energy production costs in five PJM states, including Pennsylvania, by just under $1 billion starting in 2027, ramping up to more than $1 billion in savings per year by 2030.”
“ATTs provide an alternative to constructing new transmission lines and can reduce the amount of construction necessary to upgrade the grid or defer construction altogether, protecting ratepayers who are responsible for transmission costs.
“In PJM, it is cheaper by $272 million to $523 million to utilize ATTs to bring new generation online compared to traditional network upgrades like building new lines.”
Improved Reliability
“ATTs increase the reliability of the transmission system, which means fewer power outages for consumers.
“More than 2.8 million Pennsylvanians lost service in 71 reportable outage events in 2024, an increase from the 1.67 million who lost service in 49 reportable outage events in 2023.
“ATTs like DLRs increase situational awareness to reduce restoration time, allowing operators to isolate the cause of outages and respond quickly.
“Other ATTs like Advanced Power Flow Controllers (APFCs) – modular devices that allow grid operators to reroute power by changing the reactance of the lines – minimize the number of customers impacted.
Increase Wire Capacity 10-110%
“Another major benefit of upgrading transmission lines with ATTs is their ability to increase wire capacity by 10-110% depending on the technology used, which can help bring new generation projects online from the interconnection queue.
“Currently, an estimated 103 GW of energy projects are in the PJM queue, with 21 GW in Pennsylvania.
“Bringing new resources online increases the total amount of available power, boosting the grid’s capacity and efficiency.”
Paige Rodrigues, Senior Manager, Policy and Grid Strategy, CTC Global, said-- “High-performance conductors are a type of advanced transmission technology (“ATT”) that allows utilities to reconductor existing lines and often double their capacity while maintaining existing towers and corridors.
“Advanced conductors can help save Pennsylvania families and businesses money by:
-- Reducing the amount of money utilities spend on transmission projects;
-- Lowering line losses and reducing the amount of money Pennsylvanians spend on electricity that is lost during delivery;
-- Reducing transmission congestion costs that ultimately show up in customer bills; and
-- Allowing for the interconnection of lower cost generating resources, thereby lowering energy market and capacity market costs to consumers.”
“By requiring electric utilities to evaluate and consider the use of ATTs on new and existing service lines within their transmission siting applications filed with the PUC, HB 2223 will help reduce electricity costs for Pennsylvanians.
“Specifically, the bill encourages utilities to consider cost-effective technologies that can expand transmission capacity faster and at lower cost than traditional approaches.”
-- Kelt Wilska, Senior Manager of State Policy for Advanced Transmission Technologies,
Grid Strategies, LLC, said-- “Pennsylvania is fortunate to be starting with a winning record on ATTs deployment thanks to the innovation of two of its leading utilities, Pennsylvania Power & Light and Duquesne Light Company.
Duquesne Light/PPL Examples
“Duquesne deployed Dynamic Line Ratings in 2022, resulting in an average increase in line capacity of 25%.
“Also in 2022, PPL deployed Dynamic Line Ratings for less than $1 million, compared to the projected $40 to $60 million for a full conventional rebuild of the transmission line.
“It was operational in less than one year with no outages, compared to three to five years with extended outages for a full rebuild.
“A line that had $60 million in congestion the year before only had $1.8 million when DLR was operating."
“Advanced Power Flow Control is a Grid Enhancing Technology that is particularly well-suited to enabling the exponential growth of data centers in Pennsylvania, along with their significant tax revenue and job benefits.
“Last year in 2025, the utility PG&E in San José, California deployed Advanced Power Flow Control to unlock 100 MW of electricity near data centers under construction in less than 12 months.
“Central Hudson Gas & Electric in Upstate New York deployed Advanced Power Flow Control in 2024 to unlock 185 MW in capacity and save $10 million on project costs due to faster delivery.”
In written testimony, PUC Chairman Stephen DeFrank said-- “The Commission supports regulatory policies that foster efficiencies in both the distribution and transmission systems.
“To that end, the Commission generally supports HB 2223. The technologies referenced in HB 2223 can reduce line losses or increase conductor transfer capability, thereby increasing the amount of power we receive from the transmission system.
“The use of these technologies is particularly wise given the ever-present concerns regarding resource adequacy and affordability in the electric sector.”
“As drafted, HB 2223 places its requirements solely on EDCs. The Commission wishes to note that we also have siting authority over Transmission Owners (TOs), which the presently drafted bill does not include.
“These entities are certificated by the Commission for the sole purpose of electricity transmission and under the joint jurisdiction of the Commission for siting and FERC for rates. TOs may be affiliates of EDCs or non-affiliate competitive transmission providers.
“Examples include Keystone Appalachian Transmission Company, Mid-Atlantic Interstate Transmission, LLC, and Trans-Allegheny Interstate Line Company. We offer this input to the Committee as it may wish to consider inclusion of these entities in HB 2223.
“Additionally, the market construct for electric transmission buildout involves the joint jurisdiction of the Commission and FERC.
“While many projects may be decided at the discretion of the EDCs or TOs, especially those for asset management and maintenance, other projects may be initiated under the direction of the market operator, or PJM, in Pennsylvania.
“In the latter situation, the project selection criteria is controlled by PJM’s market rules and procedures, as approved by FERC.
“While cognizant of this complex paradigm, the Commission will continue to advocate for regional transmission organization (RTO) policies at FERC which appropriately encourage ATTs.’
Compiled testimony on House Bill 2223 - Advanced Transmission Technologies.
Click Here to watch the video of hearing.
Rep. Elizabeth Fiedler (D-Philadelphia) serves as Majority Chair of the House Energy Committee and can be contacted by calling 215-271-9190 or click here to contact. Rep. Martin Causer (R-Cameron) serves as Minority Chair and can be contacted by calling 717-787-5075 or by sending email to: mcauser@pahousegop.com.
Resource Link:
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[Posted: March 17, 2026] PA Environment Digest
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