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Pennsylvania's "Alternative" Energy Law: 2007 Amendments

[The following is the action alert we distributed on 6/22/2007. More details on the bills that amend the state's alternative energy law (and how they work) is below.]

Save Clean Energy in PA!

** Oppose House Bill 1203 and Senate Bill 715 **

PA legislators may vote as early as Monday, June 25th!

Call/email your State Rep and State Senator, as well as the House and Senate Majority Leaders:

You can call/email over the weekend. Leaving phone messages is fine.

SENATE MAJORITY LEADER: Dominic Pileggi 717-787-4712
HOUSE MAJORITY LEADER: William DeWeese 717-783-3797 (webmail)

Find your own State Rep and Senators' info here: (see box in upper right corner of page)

What the bills are about:

In late 2004, Pennsylvania became the 17th state to pass a law that requires that certain percentages of the state's electricity must come from renewable energy sources. However, Pennsylvania's law calls it "alternative" (not "renewable") energy because we were the first state to include fossil fuels in such a law -- making it the dirtiest law of this sort in the nation.

HB 1203 and SB 715 set out to fix a few of the many loopholes in the law (yet didn't attempt to remove any of the dirty energy technologies from the "alternative energy" mandate). These few fixes aren't worth the damage created by the amendments described below.

Why we oppose them:

These bills were both amended in the past week with language sought by the trash incineration industry. These amended bills will now provide increased financial incentives to both the trash incineration and waste coal burning industries -- the two most polluting technologies to be considered "alternative energy" in the law. This amendment was accomplished through obscure language that pertains to whether an electricity generator is the initial owner of the alternative energy credits. These amendments aren't needed to support clean, new energy generation, like wind and solar.

The House version also includes an amendment that would subsidize large farming operations (primarily those that would be considered "factory farms") by increasing the size-limit on eligible "customer-generator" alternative energy sources. This amendment was sought by the Farm Bureau (the lobby group that advocates for big agribusiness interests) so that animal waste digesters can take advantage of the financial advantages that would otherwise go to wind. We'd rather see these advantages go to wind power, not to subsidize factory farm waste management methods.

There is also talk about additional amendments that would completely kill anything good about the law, by adding waste coal burning, tire incineration and the burning of toxic pulp and paper mill wastes to Tier I of the law -- putting these filthy technologies in competition with wind power. There is enough existing power from these dirty sources that this amendment would destroy the law's incentives for new wind power generation.

ActionPA has been at the forefront of supporting communities threatened by trash incineration, waste coal burning and tire incineration in this state. In fact, we just returned from Erie, PA where we helped launch a community group to oppose plans for the nation's largest tire incinerator, planned by a company that seems to think that tire burning is renewable energy. Let's not let their dreams come true.

If it has a smokestack, it's NOT clean energy!

Support wind power! Stop incineration in all of its forms!

For background information on the state's existing Alternative Energy Portfolio Standard law and for links to sites with info on the hazards of these incineration technologies, see

Mike Ewall, ActionPA

Details on how House Bill 1203 and Senate Bill 715 would amend Pennsylvania's Alternative Energy Portfolio Standard law.

X MixedDefines Alternative Energy Credits and has language that could be interpreted as granting initial ownership of credits to the generator (more on how this helps the incinerator and waste coal industry below).
X BadRedefines the "customer-generator" definition, raising the size limits to enable digesters. This is an amendment sought primarily by the PA Farm Bureau and Native Energy (which profits from selling "green" energy from (as yet unbuilt) digesters on large dairy farms in PA -- those with anywhere from 400 to over 1,000 animals... some qualifying as CAFOs (confined animal feeding operations... commonly known as factory farms). Digesters compete with wind in Tier I.
XxGoodDefines "force majeure" (the conditions upon which companies wouldn't have to follow the law's requirements). The House version is better, including language in the definition that ensures that if the Public Utility Commission modifies (reduces) the alternative energy obligation, that such reductions are only for one year at a time and can be made up in subsequent years if the resources are available.
X Good, but not neededAdds solar thermal to Tier I definition. This is just a technical correction to the law, but it makes no difference, since the law was already interpreted in such a way that solar thermal would fall within the solar part of that definition.
XXGoodSmooths out the schedule for solar photovoltaic requirements. This helps ensure that the solar market will work out, as the jagged schedule in the law could risk triggering force majeure if companies wait until the last minute to meet the requirement and can't develop enough solar fast enough. See the law's solar share schedule on our chart. The new language also ensures that the requirement (for 0.5% solar) stays steady after 2021 and can't be interpreted as dropping to zero after 2021.
X BadExempts the state from using a competitive bidding process to hire the program administrator. Enerwise, a company that has had intimate ties to PennFuture (the group that has pushed for this law all along), has been selected as the program administrator. Enerwise (formerly Clean Power Markets, Inc.) has been very elusive about their connections to PennFuture (not a good sign for a company we need to trust to be transparent) and there have been concerns raised by a PUC commissioner about their ability to be objective. We see no valid reason to exempt them from competitive bidding requirements.
X BadAllows companies to bank more than 30% of their alternative energy requirements, eliminating this limit that was in the initial law. This could lead to anti-competitive hoarding of credits, risking force majeure.
XXVERY BadEnsures that the initial ownership of credits goes to the generator. This is an amendment sought by the trash incineration industry. It's only necessary because the Public Utility Commissions in PA (and other states like NJ) have determined that the initial owner of the credits for old contracts developed over a decade ago should belong to the company that buys the power. This is a GOOD thing, since it keeps the profits out of the hands of these filthy old trash incinerators and waste coal power plants -- plants that we'd like to see close and which are more likely to close if they don't get the economic boost of getting to sell their "alternative energy credits."
XXGoodRaises the penalties for not complying with the solar requirement by making sure that state rebates in other states (like NJ) are part of the amount that is doubled for calculating the penalty.
XXBadRemoves the PUC's ability to raise the penalty fees for non-compliance if such an increase were necessary to maintain the integrity of the law (i.e. if too many companies were opting to pay the penalty rather than comply).
XXGoodProtects against double-counting with green pricing programs. The law would now protect against only two of the six types of double-counting that we've warned legislators and the PUC about. This protection is the least needed one, since the safeguards already in place would protect this better than the other types of consumer fraud (double and triple selling of credits) that will be possible under the law.
XXMixedLimits the geography from where power can come from to meet the law's requirement -- primarily prevents midwestern energy sources from being used anywhere in the state other than in the tiny slice of western PA that sits in the midwestern grid. This is good and bad. As far as wind power goes, far more wind power would be built in Appalachia, which is more expensive and more destructive than on flat midwestern lands, but it requires less use of transmission lines and focuses the job creation in PA. Limiting the geography could also be good in that it means less support for dirty technologies being developed in other states (though it would focus that support more in PA and other states in our main grid, which is PJM... the yellow one on the map below).
X GoodFull retail pricing for net metering customer-generators.

MISO-PJM territory map

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