Pennsylvania Bill Would Allow Utilities To Deploy, Recover Costs Of Distributed Generation & Energy Resources, Storage, DR, Etc.

A proposed Pennsylvania bill, House Bill 1782, concerning alternative ratemaking methodologies would grant the PUC with the authority to allow electric and natural gas utilities to recover the costs of distributed energy resources, which are defined broadly to include several new or innovative technologies

Specifically, the bill would authorize the PUC, in a base rate proceeding for an EDC or NGDC, to establish alternative rates and rate mechanisms that include, among other things, "cost-recovery mechanisms and rates to support and fully recover the allocated costs to deploy infrastructure and distributed energy resources"

The bill defines "distributed energy resource" as any of the following:

(1) A distributed generation resource

(2) Energy efficiency

(3) Energy storage

(4) Alternative fuel vehicles and associated infrastructure

(5) Demand response technology

In written comments on the bill, NRG Energy urged a committee to strike the provisions of HB1782 that enable the regulated monopoly utilities to invest in and receive guaranteed cost recovery for distributed energy resources, "resources which are being developed by companies operating in the competitive market, and which the utilities' competitive affiliates are free to invest in if they so choose."

"House Bill 1782 includes provisions that will reverse the competitive market policy adopted 20 years ago. The bill allows the regulated monopoly utilities - both electric and gas - to once again invest in new distributed energy resources, including distributed generation like solar, energy efficiency measures, energy storage, alternative fuel vehicles and the associated infrastructure, and demand response technology. What's more, the bill guarantees full cost recovery for all of these investments and enables rates to support these investments to be automatically adjusted without PUC review," NRG said

"Such investments by the regulated monopolies will have a chilling effect on competitive markets ... Competitive companies, like NRG, will reconsider investing their dollars in Pennsylvania because they cannot compete against a regulated monopoly that gets guaranteed cost recovery for products and services that are otherwise available in the competitive market," NRG said