Press Release

PUC Issues Ruling on Ownership of Alternative Energy Credits

Published on 12/21/2006

Filed under: Electric

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today ruled that alternative energy credits included in power purchase agreements entered into prior to the passage of the Alternative Energy Portfolio Standards Act (AEPS) belong to the electric distribution companies (EDCs) and electric generation suppliers (EGSs).

The Commission voted 3-1 to approve a motion by Commissioner Terrance Fitzpatrick to issue a declaratory order stating that utilities own the credits under long-term purchase power agreements entered into prior to the November 2004 passage of the AEPS Act. Commission Vice Chairman James Cawley issued a dissenting statement.

The AEPS Act generally requires that a certain percentage of all electric energy sold to retail customers be derived from alternative energy sources such as solar, wind, hydropower, geothermal, biomass, and demand side management resources. The law applies to both EDCs and EGSs who must demonstrate their compliance on an annual basis.  The level of alternative energy required gradually increases according to a 15-year schedule.

Alternative energy credits were created as a tool to measure compliance with the AEPS Act. The credits act as a concrete way to determine if the EDCs are using the required percentage of energy from alternative sources as required by the Act.

The declaratory order was issued in response to a petition filed by Metropolitan Edison Co. and Pennsylvania Electric Co. Declaratory orders are issued to remove any uncertainty in the law.

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. P-00052149

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