Press Release

PUC Establishes Energy Efficiency, Conservation Program for Electric Utilities

Published on 1/15/2009

Filed under: Electric

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today established an energy efficiency and conservation program that included the plan requirements for most of the state’s electric distribution companies (EDCs) to reduce energy demand and consumption within its service territories.

The Commission voted 5-0 on a motion by Commissioner Kim Pizzingrilli to approve an implementation plan that establishes the standards each EDC’s energy efficiency and conservation plan must meet, and provide guidance on the procedures to be followed for submittal, review and approval of all aspects of the EDC plans. Plans must be filed with the Commission by July 1, 2009. The PUC must rule on each plan within 120 days of submission.

“This schedule, while aggressive, is reflective of the immediacy of the energy challenges the Commonwealth is addressing, and I appreciate the hard work by all involved in helping us comply with this timetable,” Commissioner Pizzingrilli said in her motion.

“The Energy Efficiency and Conservation Program offers the most meaningful tool available to the Commission to cushion the rate shock that likely will occur as rate caps continue to expire in additional utility service territories in the Commonwealth over the next 23 months,” said Commission Vice Chairman Tyrone J. Christy in a statement. “As electric rate caps continue to expire, Pennsylvania customers increasingly will be exposed to higher electric prices that are to large extent beyond our current ability to control given federal jurisdiction over the wholesale power market.”

Commission Chairman James H. Cawley and Commissioner Wayne E. Gardner issued a joint statement.

Today’s action completes the first phase of the Commission’s implementation of the energy efficiency and conservation provisions of Act 129 of 2008, which expands the Commission’s oversight responsibilities and imposes new requirements on EDCs with at least 100,000 customers and as the overall goal of reducing energy consumption and demand.

Under the Act, the EDCs must reduce electricity consumption by 1 percent by May 31, 2011, and by 3 percent by May 31, 2013. The Act also requires a 4.5 percent reduction in peak demand by May 31, 2013.

As required under the Act, the Commission established:

• Consumption forecast guidelines;
• Requirements for filing peak demand data;
• Standards to ensure measures are applied equitably to all customer classes;
• EDC cost recovery guidelines; and
• Guidelines for determining allowable costs and allocation of costs to customer classes.

The Commission also established processes for:

• Conservation service provider contract review;
• Energy efficiency and conservation plan approval;
• Plan effectiveness evaluation;
• Cost-benefit analysis approval;
• Consumption reduction requirement analysis;
• Measurement of annual consumption and peak demand reductions;
• Recommendations for additional measures;
• Competitive bidding and approval of contracts with conservation service providers;
• Compliance with consumption reduction requirements; and
• Participation of conservation service providers.

Act 129 adds several new sections to, and amends several existing sections of the Public Utility Code.  The Commission will continue to implement the Act in phases.  Subsequent phases of the Commission’s Act 129 implementation process will address EDC 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.

The Pennsylvania Public Utility Commission balances the needs of consumers and utilities to ensure safe and reliable utility service at reasonable rates; protect the public interest; educate consumers to make independent and informed utility choices; further economic development; and foster new technologies and competitive markets in an environmentally sound manner.

For recent news releases, audio of select Commission proceedings or more information about the PUC, visit our Web site at www.puc.state.pa.us.

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Docket No.  M-2008-2069887

Contact:

• Press Secretary
  717-787-5722