Sen. Thomas McGarrigle (R-Delaware) Monday introduced bipartisan legislation-- Senate Bill 1236--  updating the Act 129 Energy Conservation Program requirements for electric utilities.

“In the first seven years of implementation of Pennsylvania’s flagship energy efficiency law, Act 129, energy efficiency programs have delivered $6.4 billion in economic benefits to all Pennsylvanians, at a benefit-to-cost ratio of nearly 2-to-1,” said Sen. McGarrigle in announcing the legislation.  “By keeping energy use down, energy efficiency investments have helped Pennsylvania industries remain globally competitive, meet their corporate sustainability goals, and create good-paying local jobs.

“In fact, a 2017 US Department of Energy report found that energy efficiency accounts for over 62,000 Pennsylvania jobs.

“Currently, Pennsylvania’s annual saving from utility energy efficiency program lag behind our peer states—this is largely due in part to the restrictive law that limits utility investment in energy efficiency program to 2 percent in 2006 utility revenues,” explained Sen. McGarrigle.  “The cap artificially restrict the level of energy efficiency investment that Pennsylvania’s utilities can make to eliminate energy waste.”

An analysis conducted for the Keystone Energy Efficiency Alliance shows expanding utility energy efficiency investment, as Senate Bill 1236 allows, could deliver at least $240 million in additional benefits to Pennsylvania electric customers.

“Investments into energy efficiency are among the best our state can make,” said KEEA policy director Julian Boggs. “But current state law actually limits the amount of investment utilities can make into cost-saving energy efficiency measures like LED lighting, heating and cooling upgrades, and industrial processes. Senate Bill 1236 is a commonsense step forward to save Pennsylvania households and businesses money on their energy bills.”

The bill earned praise from a number of Pennsylvania businesses and national associations:

"The DMI Companies are continuously improving energy efficiency to build a better world for ourselves and our children by providing a sustainable environment through our products, operations and personal conduct. It is the right thing to do, and we applaud legislative leaders for taking this step to strengthen investment in energy efficiency across Pennsylvania," said Raymond Yeager, President, DMI Companies.

“Johnson Controls has a long history in Pennsylvania of designing and manufacturing energy efficient products.  We are also proud to deliver energy efficiency projects to customers across the state.  This is important legislation that will encourage more investments in projects and save energy,” said Mark Wagner, Vice President of Government Relations for Johnson Controls.

“CCI works with several utility partners in Western Pennsylvania to help renters and homeowners reduce costs and usage. State programs for low-income energy customers combined with Act 129 bring the biggest impact and relief for neighbors whose energy costs represent a significant burden. Allowing utilities to invest more of their revenue in energy efficiency improvements, as this bill does, could help to introduce more diverse, creative or innovative conservation measures. These measures, such as robust improvements to household furnace motors, could help a number of homeowners significantly reduce their electricity use,” said Jeaneen Zappa, Executive Director, Conservation Consultants, Inc.

"For energy service companies, Senate Bill 1236 will help make our products more competitive and make our services more robust. More importantly, it will help Pennsylvanians across the state cut energy waste, create jobs, and reinvest in our communities. Energy service companies support this bill because we want all Pennsylvania’s businesses to flourish," said Donald Gilligan, President, National Association of Energy Service Companies.

“This important legislation will be a catalyst to advance residential energy savings in Pennsylvania,” Keith Aldridge, President of the Home Performance Coalition.

"Energy efficiency expenditures are always a good investment: for the budgets of Pennsylvania and the state's energy providers and for citizens' pocketbooks and well-being. The cap on energy efficiency investment is counterproductive and should be removed," said Tom Carter, Executive Director, Efficiency First.

Also sponsoring the bill are Senators Tom Killion (R-Delaware), Camera Bartolotta (R-Washington), Mario Scavello (R-Monroe), Bob Mensch (R-Montgomery), John Rafferty (R-Montgomery), David Argall (R-Schuylkill), John Blake (D-Lackawanna) and Andrew Dinniman (D-Chester).

Proposed Changes

Among other changes to the Act 129 program, Senate Bill 1236 would eliminate the 2 percent cap entirely, allow an electric distribution company to recover decreased revenues due to reduced energy consumption and limit upward rate adjustments to not greater than 2 percent.

The bill also specifically authorizes utilities to adopt financial incentives mechanisms for energy conservation based on the achievement of energy savings and peak demand reduction goals established by the Public Utility Commission.

Energy conservation measures counted toward the new Act 129 requirements would also specifically include up to one-third of the energy savings resulting from adopting energy efficiency building codes a utility was directly involved in helping to adopt.

Click Here for a sponsor summary of the legislation.

For more information on the Act 129 program, visit the PUC’s Act 129 webpage.  For Act 129 success stories and more background, visit the Keystone Energy Efficiency Alliance Act 129 webpage.

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[Posted: Sept. 11, 2018]

9/17/2018