An Act amending the act of November 30, 2004 (P.L.1672, No.213), known as the Alternative Energy Portfolio Standards Act, further providing for definitions, for interconnection standards for customer-generator facilities and for interagency responsibilities.

PRINTER'S NO. 3139
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 2348
Session of
2026
INTRODUCED BY FIEDLER, HILL-EVANS, PROBST, WAXMAN, SANCHEZ,
NEILSON, MAYES, STEELE, CEPEDA-FREYTIZ AND FREEMAN,
APRIL 6, 2026
REFERRED TO COMMITTEE ON ENERGY, APRIL 7, 2026
AN ACT
Amending the act of November 30, 2004 (P.L.1672, No.213),
entitled "An act providing for the sale of electric energy
generated from renewable and environmentally beneficial
sources, for the acquisition of electric energy generated
from renewable and environmentally beneficial sources by
electric distribution and supply companies and for the powers
and duties of the Pennsylvania Public Utility Commission,"
further providing for definitions, for interconnection
standards for customer-generator facilities and for
interagency responsibilities.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The definitions of "customer-generator" and "net
metering" in section 2 of the act of November 30, 2004
(P.L.1672, No.213), known as the Alternative Energy Portfolio
Standards Act, are amended and the section is amended by adding
definitions to read:
Section 2. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
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"Abandoned mine land." An area of land no longer in use
that, in connection with extracting a natural resource from its
natural deposits in the earth by any means, has had material
placed upon, under or above the surface.
"Agricultural operations." As defined in 3 Pa.C.S. § 503
(relating to definitions).
* * *
"Avoided cost." The average locational marginal price of
energy, capacity and transmission and distribution grid services
values, as determined by the commission, in the applicable
transmission zone over the customer-generator's billing period.
"Brownfield." A property that the expansion, redevelopment
or reuse of which may be complicated by the presence or
potential presence of a hazardous substance, pollutant or
contaminant.
"Capped landfill." A capped facility for disposal of trash
or garbage in which waste is buried between layers of earth and
covered by a cap.
"Commercial rooftop." A roof located on a building or group
of buildings used primarily for indoor storage, transfer,
manufacture, assembly and distribution or sale of products,
services and materials.
* * *
"Customer-generator." A [nonutility owner or operator of a
net metered distributed generation system with] retail electric
customer that owns and operates, leases or operates or contracts
with a third party that owns or operates an alternative energy
system that has a nameplate capacity of not greater than 50
kilowatts if installed at a residential service or not larger
than 3,000 kilowatts at other customer service locations, except
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for customers whose systems are above three megawatts and up to
five megawatts who make their systems available to operate in
parallel with the electric utility during grid emergencies as
defined by the regional transmission organization or where a
microgrid is in place for the primary or secondary purpose of
maintaining critical infrastructure, such as homeland security
assignments, emergency services facilities, hospitals, traffic
signals, wastewater treatment plants or telecommunications
facilities, provided that technical rules for operating
generators interconnected with facilities of an electric
distribution company, electric cooperative or municipal electric
system have been promulgated by the Institute of Electrical and
Electronic Engineers and the Pennsylvania Public Utility
Commission.
* * *
"Full retail value." The value of electric energy credited
to a customer-generator at the retail rate, including the
generation, capacity, transmission and distribution components
of the electric distribution company's approved tariff.
"Industrial land." Land planned and zoned for industrial
use. The term includes land used for manufacturing, assembly,
fabrication, processing, storage, logistics, warehousing,
importation, distribution, transshipment or research and
development.
"Large customer-generator." A customer-generator with a
nameplate capacity greater than 50 kilowatts but not greater
than 3,000 kilowatts at nonresidential service locations. Except
for existing systems and applications provided under section
5(e), the following apply:
(1) A large customer-generator m ust have electric load,
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independent of the alternative energy system, behind the
meter and the point of interconnection of the alternative
energy system. To be independent of the alternative energy
system, the electric load must have a purpose other than to
support operation, maintenance or administration of the
alternative energy system. This paragraph shall not apply to
alternative energy systems under section 5(c).
(2) The alternative energy system shall be sized to
generate no more than 200% of the large customer-generator's
annual electric consumption at the interconnection meter
location when combined with all qualifying virtual meter
aggregation locations as of the date of the interconnection
application. The following shall apply:
(i) For existing service location accounts on the
effective date of this subparagraph, annual electric
consumption shall be based on the highest electric usage
from any 12 consecutive-month period within 24 months
before submission of the interconnection application.
(ii) For new service location accounts, annual
electric consumption shall be based on the building type
and size and the anticipated usage of electric equipment
and fixtures planned for the new service location, as
well as the customer's annual consumption from dependent
accounts to be included for virtual meter aggregation.
(iii) This paragraph shall not apply to alternative
energy systems under section 5(c).
(3) Excess generation shall be subject to an annual net-
metered accounting period, and compensation to the large
customer-generator for any remaining excess generation shall
be in accordance with section 5.
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* * *
"Net metering." The means of measuring the difference
between the electricity supplied by an electric utility and the
electricity generated by a customer-generator when any portion
of the electricity generated by the alternative energy
generating system is used to offset part or all of the customer-
generator's requirements for electricity. Virtual meter
aggregation on properties owned or leased and operated by a
customer-generator [and located within two miles of the
boundaries of the customer-generator's property and] within a
single electric distribution company's service territory shall
be eligible for net metering. All service locations to be
aggregated must be metered electric utility service location
retail customer accounts, held by the same individual, legal
entity or parent corporation.
"Parking facility canopy." A structure constructed over a
public or private parking lot.
"Preferred site." A location determined by the commission to
qualify based on whether a majority of the facility's generating
capacity or physical footprint is located on one or more of the
following:
(1) A brownfield.
(2) An abandoned mine land.
(3) A capped landfill.
(4) A parking facility canopy.
(5) A site on or adjacent to coal-fired electric
generation plants that have closed or will close within one
year of the effective date of this definition.
(6) A school facility.
(7) Industrial land.
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(8) Land with ongoing agricultural operations, if the
facility's generating capacity is sourced from biologically
derived methane gas.
* * *
"Routine maintenance." The repair or replacement of
equipment necessary to maintain safe and reliable operation of
the system, including inverters, wiring transformers, combiner
boxes and monitoring equipment, if the action does not increase
the nameplate capacity of the system or materially alter system
design.
"School facility." An educational building and surrounding
premises owned by any of the following:
(1) A school entity as defined in the act of March 10,
1 949 (P.L.30, No.14), known as the Public School Code of
1949, including any of the following:
(i) A school district.
(ii) An intermediate unit.
(iii) An area career and technical school.
(iv) A charter school.
(v) A cyber charter school.
(vi) A regional charter school.
(2) A charter school for the education of the deaf or
the blind.
(3) A nonpublic school recognized by the Department of
Education.
(4) A community college.
(5) The Thaddeus Stevens College of Technology.
(6) The Pennsylvania College of Technology.
"Small customer-generator." A customer-generator with a
nameplate capacity of not larger than 50 kilowatts at a
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residential or other customer service location.
* * *
"Virtual meter aggregation." The combination of readings and
billing for meters, regardless of rate class, on properties
owned or leased and operated by a customer-generator by means of
the electric distribution company's billing process rather than
through physical rewiring of the customer-generator's property
for a single physical point of contact. Virtual meter
aggregation on properties owned or leased by the same customer-
generator or alternative energy system operator and within a
single electric distribution company's service territory shall
be eligible for net metering. Service locations of dependent
accounts to be aggregated must be electric distribution company
service location accounts, held by a customer receiving retail
electric service from the same electric distribution company.
The location of an alternative energy system that serves virtual
meter aggregation service locations of dependent accounts shall
not be required to have measurable electric load independent of
the alternative energy system.
"Warehouse rooftop." A roof located on a distribution
facility, storage facility, fulfillment center, logistics
facility or other facility engaged in similar uses.
Section 2. Section 5 of the act is amended to read:
Section 5. Interconnection standards for customer-generator
facilities.
(a) Compensation for small customer-generator systems.--
Excess generation from [net-metered] small customer-generators
shall receive full retail value for all energy produced on an
annual basis.
(b) Compensation for large customer-generator systems.--
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Excess generation from large customer-generators shall receive
the value of the avoided cost for all energy produced on an
annual basis.
(c) Warehouse or commercial rooftop net metering systems.--
Notwithstanding subsection (b), excess generation from a net-
metered alternative energy system located on a warehouse rooftop
or commercial rooftop shall receive full retail value under the
electric distribution company's small general service or small
commercial rate schedule for all energy produced on an annual
basis. The following shall apply:
(1) Eligibility for a large customer-generator to
receive the full retail value for excess generation under
this subsection shall be determined by the commission based
on a majority of the facility's generating capacity or
physical footprint being located on a warehouse rooftop or
commercial rooftop.
(2) Excess generation from virtual meter aggregation
projects that are constructed on a warehouse rooftop or
commercial rooftop and that commence operation after the
effective date of this paragraph shall receive full retail
value at the applicable rate schedule of the dependent
accounts for all energy produced on a monthly basis.
(3) An alternative energy system under this subsection
that serves virtual meter aggregation service locations of
dependent accounts shall not be required to have measurable
electric load independent of the alternative energy system.
(d) Technical rules.--The commission shall develop technical
and net metering interconnection rules for customer-generators
intending to operate renewable onsite generators in parallel
with the electric utility grid, consistent with rules defined in
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other states within the service region of the regional
transmission organization that manages the transmission system
in any part of this Commonwealth. The commission shall convene a
stakeholder process to develop Statewide technical and net
metering rules for customer-generators. The commission shall
develop these rules within nine months of the effective date of
this act.
(e) Safe-harbored net metering for existing systems and
applications of large customer-generators.--
(1) Excess generation from net-metered large customer-
generators in operation as of the effective date of this
paragraph, or that have submitted an interconnection
application to an electric distribution company before
September 1, 2025, shall receive full retail value under the
electric distribution company's small general service or
small commercial rate schedule for all energy produced on an
annual basis until the earlier of:
(i) replacement of generation equipment that extends
the life of the system or changes the nameplate
generating capacity, except when the large customer-
generator is actively working to recommence production
after routine maintenance or a vis major event; or
(ii) December 31, 2050.
(2) After the applicable time period specified under
paragraph (1), excess generation shall be subject to an
annual net metered accounting period, and compensation to the
large customer-generator for any remaining excess generation
shall be capped at the avoided cost.
(3) A large customer-generator shall be responsible for
interconnection costs and distribution system upgrades
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related to the interconnection of the large customer-
generator's facility in accordance with the commission's
regulations.
(4) The commission, in collaboration with the Office of
Consumer Advocate, electric distribution companies and solar
energy organizations, may establish, by order, a cap on the
total megawatts of customer-generators that are eligible for
safe harbor under this subsection. A cap established under
this paragraph may not exceed a defined percentage of each
electric distribution company's default service peak load.
The commission shall establish a wait list for net-metered
large customer-generators with an interconnection application
submitted to an electric distribution company, as specified
under paragraph (1), until it determines the cap on the total
megawatts of large-customer generators that are eligible for
safe harbor under this section. A net-metered large customer-
generator that has an interconnection agreement with an
electric distribution company that was executed before the
effective date of this paragraph, qualifies for safe harbor
under this subsection and may not be excluded by a cap
established under this paragraph.
(f) Preferred site virtual meter aggregation projects.--
(1) Notwithstanding subsection (b) or (e), excess
generation from virtual meter aggregation projects that are
constructed on a preferred site and that commence operation
after the effective date of this paragraph shall receive full
retail value at the applicable rate schedule of the dependent
accounts for all energy produced on a monthly basis until the
earlier of:
(i) replacement of generation equipment that extends
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the life of the system or changes the nameplate
generating capacity, except when the customer-generator
is actively working to recommence production after
routine maintenance or a vis major event; or
(ii) December 31, 2050, if the project is
constructed primarily on a preferred site, as determined
by the commission based on a majority of the facility's
generating capacity or physical footprint.
(2) A preferred-site alternative energy system that
serves virtual meter aggregation service locations of
dependent accounts shall not be required to have measurable
electric load independent of the alternative energy system.
(3) After the applicable time period specified under
paragraph (1), excess generation shall be subject to an
annual net metered accounting period, and compensation to the
customer-generator for any remaining excess generation shall
be capped at the avoided cost.
(g) Rate schedule classification.--The installation of a net
metered facility or the participation in virtual meter
aggregation shall not constitute grounds for reclassification of
the customer-generator's applicable rate schedule.
Section 3. Section 7 of the act is amended by adding a
subsection to read:
Section 7. Interagency responsibilities.
* * *
(d) Enforcement of provisions.--The commission shall have
authority to enforce this act in accordance with the
commission's regulations and orders. The commission may issue,
modify or rescind a regulation or order to enforce this act,
whether issued before or after the effective date of this
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subsection. Nothing in this subsection shall be construed to
limit authority granted to the commission under 66 Pa.C.S .
(relating to public utilities).
Section 4. This act shall take effect in 60 days.
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