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PRIOR PRINTER'S NO. 3424 PRINTER'S NO. 3630
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 2380
Session of
2026
INTRODUCED BY RIVERA, FIEDLER, WEBSTER, OTTEN, WAXMAN, SANCHEZ,
HILL-EVANS, CEPEDA-FREYTIZ, HOHENSTEIN, PROBST, PIELLI,
VENKAT, McNEILL, VITALI, NEILSON, INGLIS, BOROWSKI, BOYD,
MAYES, CURRY, CIRESI, STEELE, RABB, MALAGARI, MAZZOCCO,
KRAJEWSKI, FRANKEL, FRIEL, SALISBURY, FREEMAN, O'MARA,
SHUSTERMAN, BRENNAN AND KHAN, MAY 21, 2026
AS REPORTED FROM COMMITTEE ON ENERGY, HOUSE OF REPRESENTATIVES,
AS AMENDED, JUNE 17, 2026
AN ACT
Amending Title 66 (Public Utilities) of the Pennsylvania
Consolidated Statutes, in restructuring of electric utility
industry, providing for energy storage procurement.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Title 66 of the Pennsylvania Consolidated
Statutes is amended by adding a section to read:
§ 2807.1. Energy storage procurement.
(a) Energy storage program.--The commission shall require
each electric distribution company to establish an energy
storage program that is designed to achieve at least 3,000 3,500
total megawatts of capacity in the aggregate from front-of-the-
meter energy storage systems by July 1, 2033 31, 2035 . The total
megawatts of capacity shall consist of at least 2,000 megawatts
of short-duration storage and , 1,000 megawatts of long-duration
storage . AND 500 MEGAWATTS OF MULTIDAY STORAGE. <--
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(B) PERMITTED USES.--AN ELECTRIC DISTRIBUTION COMPANY SHALL
UTILIZE THE DISTRIBUTION-CONNECTED AND TRANSMISSION-CONNECTED
ENERGY STORAGE SYSTEMS PROCURED UNDER THIS SECTION TO PERFORM
GRID SERVICES DURING PEAK OR OFF-PEAK DEMAND PERIODS, INCLUDING
THE FOLLOWING:
(1) PEAK DEMAND REDUCTION AND PEAK LOAD MANAGEMENT.
(2) FREQUENCY REGULATION, VOLTAGE SUPPORT AND OTHER
ANCILLARY SERVICES.
(3) AVOIDING OR DEFERRING TRADITIONAL CAPITAL
INVESTMENTS ON THE DISTRIBUTION SYSTEM OR TRANSMISSION
SYSTEM.
(4) BACKUP GENERATION SERVICES DURING OUTAGES OR OTHER
ELECTRIC SERVICE DISRUPTIONS.
(5) EXCEPT FOR DISTRIBUTION-CONNECTED STORAGE,
PARTICIPATION IN THE WHOLESALE ENERGY, CAPACITY OR ANCILLARY
MARKETS OF THE REGIONAL TRANSMISSION ORGANIZATION IN WHICH
THE ELECTRIC DISTRIBUTION COMPANY PARTICIPATES.
(6) ANY OTHER GRID SERVICES APPROVED BY THE COMMISSION
TO BENEFIT RATEPAYERS AND IMPROVE THE RELIABILITY OF THE
DISTRIBUTION OR TRANSMISSION SYSTEM.
(C) SYSTEM RELIABILITY ASSESSMENT.--
(1) WITHIN 180 DAYS OF THE EFFECTIVE DATE OF THIS
SECTION, EACH ELECTRIC DISTRIBUTION COMPANY SHALL CONDUCT AND
SUBMIT AN ASSESSMENT TO THE COMMISSION ON THE RELIABILITY OF
THE DISTRIBUTION AND TRANSMISSION SYSTEM WITHIN THE ELECTRIC
DISTRIBUTION COMPANY'S SERVICE TERRITORY.
(2) THE COMMISSION'S CALCULATIONS AND ASSIGNMENT OF
CAPACITY TARGETS UNDER SUBSECTION (D) SHALL BE BASED ON THE
COMMISSION'S REVIEW AND FINDINGS FROM THE ASSESSMENT
COMPLETED UNDER THIS SUBSECTION, INCLUDING THE ASSIGNMENT OF
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SPECIFIC TARGETS FOR DISTRIBUTION-CONNECTED AND TRANSMISSION-
CONNECTED ENERGY STORAGE SYSTEMS BASED ON THE IDENTIFIED
RELIABILITY NEEDS DESCRIBED IN THE ASSESSMENT.
(3) THE ASSESSMENT SHALL IDENTIFY, AT MINIMUM, THE
FOLLOWING:
(I) SPECIFIC AREAS OF THE DISTRIBUTION SYSTEM AND
TRANSMISSION SYSTEM WITH SYSTEM CONSTRAINTS AND
CONGESTION POINTS.
(II) THE RELIABILITY NEEDS OF THE TRANSMISSION AND
DISTRIBUTION SYSTEM THAT MAY BE ADDRESSED BY THE
PROCUREMENT OF ENERGY STORAGE SYSTEMS, INCLUDING SHORT-
DURATION, LONG-DURATION AND MULTIDAY STORAGE.
(III) AN ANALYSIS OF THE MEGAWATTS OR MEGAWATT-HOURS
OF CAPACITY FROM ENERGY STORAGE SYSTEMS NEEDED TO SERVE
AS A COST-EFFECTIVE ALTERNATIVE TO TRADITIONAL CAPITAL
INVESTMENTS ON THE DISTRIBUTION AND TRANSMISSION SYSTEM.
(IV) AN ANALYSIS TO DETERMINE THE TECHNICAL
FEASIBILITY OF THE PROCUREMENT OF DISTRIBUTION-CONNECTED
AND TRANSMISSION-CONNECTED ENERGY STORAGE SYSTEMS TO
PROVIDE GRID SERVICES OR ADDRESS THE RELIABILITY NEEDS OF
THE TRANSMISSION AND DISTRIBUTION SYSTEM.
(V) AN ANALYSIS OF THE MOST PRACTICAL AND COST-
EFFECTIVE APPLICATIONS OF SHORT-DURATION, LONG-DURATION
AND MULTIDAY DURATION STORAGE ON THE DISTRIBUTION AND
TRANSMISSION SYSTEM TO IMPROVE SYSTEM PERFORMANCE AND
DELIVER COST SAVINGS TO RATEPAYERS.
(VI) ANY OTHER INFORMATION OR SUPPORTING DATA
REQUIRED BY THE COMMISSION TO PROPERLY CALCULATE THE
APPORTIONED SHARE OF ENERGY STORAGE CAPACITY FOR EACH
ELECTRIC DISTRIBUTION COMPANY.
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(b) (D) Allocation of capacity targets.--Within 60 days of
the effective date of this subsection, FOLLOWING THE SUBMISSION
OF AN ASSESSMENT UNDER SUBSECTION (C), the commission shall
calculate and assign each electric distribution company's
apportioned share of the 3,000 3,500 total megawatts of capacity
for short-duration storage and , long-duration storage AND
MULTIDAY STORAGE in a manner consistent with subsection (a). The
commission's calculations shall be based on the service load and
annual system peak demand of each applicable electric
distribution company's service territory, in addition to any
other criteria that the commission determines to be
appropriate.
(c) (E) Target modifications.--
(1) The commission may adjust or modify the apportioned
share of energy storage system capacity under subsection (b)
(D) for each electric distribution company if there is a
demonstrated lack of commercially available energy storage
systems or procurement proposals received, as determined by
the commission.
(2) If found by the commission to be in the public
interest, the commission may establish a cap on the total
megawatts of energy storage system capacity that may be
procured or owned by an electric distribution company under
this section.
(3) The commission may, after an adequate period of
implementation, increase the total megawatts of capacity
required under subsection (a) and calculate new apportioned
shares for each electric distribution company if the
commission finds doing so to be in the public interest for
efficient, reliable and affordable service.
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(d) Competitive procurement.--Subject to approval by the
commission, each electric distribution company shall use an
open, fair and nondiscriminatory competitive procurement
process, including the use of auctions or requests for
proposals, to reach the company's apportioned share of the total
megawatts of capacity as described under subsection (b).
(4) THE COMMISSION MAY ADJUST THE PROCUREMENT SCHEDULE
UNDER SUBSECTION (F) IF THERE IS A DEMONSTRATED LACK OF
COMMERCIALLY AVAILABLE ENERGY STORAGE SYSTEMS OR PROCUREMENT
PROPOSALS RECEIVED, AS DETERMINED BY THE COMMISSION, OR ANY
EXTERNAL DELAYS BEYOND CONTROL OF THE ELECTRIC DISTRIBUTION
COMPANY, INCLUDING ANY IMPACTS TO THE PROCUREMENT CYCLE
ATTRIBUTABLE TO PJM INTERCONNECTION, LLC.
(F) COMPETITIVE PROCUREMENT.--
(1) SUBJECT TO APPROVAL BY THE COMMISSION, EACH ELECTRIC
DISTRIBUTION COMPANY SHALL USE AN OPEN, FAIR AND
NONDISCRIMINATORY COMPETITIVE PROCUREMENT PROCESS, INCLUDING
THE USE OF AUCTIONS OR REQUESTS FOR PROPOSALS, TO REACH THE
COMPANY'S APPORTIONED SHARE OF THE TOTAL MEGAWATTS OF
CAPACITY AS DESCRIBED UNDER SUBSECTION (D).
(2) THE COMMISSION SHALL REVIEW EACH ELECTRIC
DISTRIBUTION COMPANY'S PROPOSED COMPETITIVE PROCUREMENT
PROCESS AND SOLICIT FEEDBACK FROM STAKEHOLDERS FOR ANY
POTENTIAL ADJUSTMENTS PRIOR TO EACH PROCUREMENT.
(3) UNDER THE COMPETITIVE PROCUREMENT PROCESS, EACH
ELECTRIC DISTRIBUTION COMPANY SHALL ISSUE A SOLICITATION FOR
ENERGY STORAGE SYSTEM PROJECTS AND OPEN BIDDING TO
INDEPENDENT POWER PRODUCERS IN ORDER TO REACH THE TOTAL
MEGAWATTS OF CAPACITY REQUIRED UNDER SUBSECTION (A).
(4) EACH ELECTRIC DISTRIBUTION COMPANY SHALL PROCURE A
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MINIMUM OF 100 MEGAWATTS FOR EACH PROCUREMENT, REGARDLESS OF
THE ELECTRIC DISTRIBUTION COMPANY'S APPORTIONED SHARE OF
CAPACITY DETERMINED BY THE COMMISSION.
(e) (G) Use of independent monitor.--The commission shall
appoint an independent evaluator to monitor and report on each
competitive procurement process under subsection (d) (F) . An
independent evaluator shall have access to all information and
data relating to the competitive procurement process, provided
that all proprietary information shall remain confidential. For
the purposes of ensuring an open, fair and transparent
solicitation and bid selection process, the independent
evaluator appointed by the commission shall have the following
duties:
(1) Monitor the competitive procurement process to
identify any noncompliance with the requirements under this
section.
(2) Issue a report to the commission that analyzes the
procedures, methods of solicitation and timeline of each
competitive procurement process, including any
recommendations to improve the process.
(3) For each proposed contract of a winning bid
proposal, issue a report to the commission that analyzes the
solicitation and bid selection process, including an
assessment of whether all bids were evaluated in a fair and
nondiscriminatory manner.
(f) (H) Schedule.--Each electric distribution company shall
enter into cost-effective long-term purchase contracts OF AT
LEAST 15 YEARS for the company's apportioned share of the 3,000
3,500 total megawatts of capacity under subsection (a) in
accordance with the following schedule:
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(1) By July 31, 2028 2029 , at least 500 megawatts of
transmission-connected short-duration storage and , 100
megawatts of distribution-connected short-duration storage
AND 100 MEGAWATTS OF TRANSMISSION-CONNECTED LONG-DURATION
STORAGE shall be procured, including existing energy storage
systems.
(2) By July 31, 2029 2031 , at least AN ADDITIONAL 500
megawatts of transmission-connected short-duration storage ,
200 MEGAWATTS OF TRANSMISSION-CONNECTED LONG-DURATION STORAGE
AND 100 MEGAWATTS OF MULTIDAY STORAGE shall be procured.
(3) By July 1, 2030, at least 500 31, 2033, AT LEAST AN
ADDITIONAL 500 megawatts of transmission-connected short-
duration storage , 300 MEGAWATTS OF TRANSMISSION-CONNECTED
LONG-DURATION STORAGE AND 200 MEGAWATTS OF MULTIDAY STORAGE
shall be procured.
(4) By July 31, 2033 2035 , all remaining energy storage
systems capacity shall be procured, including AT LEAST 400
total megawatts OF DISTRIBUTION-CONNECTED short-duration
storage and 1,000 megawatts of long- duration storage. , 400
MEGAWATTS OF TRANSMISSION-CONNECTED LONG-DURATION STORAGE AND
200 MEGAWATTS OF MULTIDAY STORAGE.
(g) (I) Procurement standards.--For the purposes of
subsection (d) (F) , each electric distribution company shall
comply with the following competitive procurement requirements:
(1) FOR EACH COMPETITIVE PROCUREMENT PROCESS, EACH
ELECTRIC DISTRIBUTION COMPANY SHALL ESTABLISH AN OPEN AND
TRANSPARENT STAKEHOLDER PROCESS WITH THE COMMISSION,
PROSPECTIVE BIDDERS AND STAKEHOLDERS TO REVIEW THE PROPOSED
TERMS, PROCEDURES, REQUIREMENTS AND OTHER INFORMATION RELATED
TO THE COMPETITIVE PROCUREMENT PROCESS.
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(1) (2) For each competitive procurement process, each
electric distribution company shall provide an initial
description of the following information to prospective
bidders:
(i) The reliability needs of the distribution or
transmission system that may be addressed in a cost-
effective manner by energy storage system capacity,
including the reduction of system constraints, the
deferral or replacement of transmission or distribution
upgrades and reduction in system congestion during peak
demand periods in specific areas of the distribution
system.
(ii) The size, resource type and minimum thresholds
required.
(iii) The qualifications and experience required for
submitting bids under the competitive procurement
process.
(iv) The preferred location of the energy storage
system.
(v) Detailed instructions for preparing bids and the
estimated timeline for bid evaluation.
(vi) The criteria for selecting and awarding
contracts to qualified bidders.
(vii) Any other information deemed necessary by the
commission.
(2) (3) Each electric distribution company shall select
and award the lowest responsible bidder BIDDERS THAT
REPRESENT THE BEST VALUE under a competitive procurement
process based on evaluating, but not limited to, the
following criteria:
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(i) The cost-effectiveness to ratepayers over the
course of the term of the contract after taking into
consideration the benefits to the distribution and
transmission system.
(ii) The ability to meet the reliability needs of
the distribution or transmission system identified by the
electric distribution company under paragraph (1).
(iii) The ability to guarantee firm capacity
performance for the entire duration of the contract
terms.
(iv) The adequate demonstration of project viability
within a commercially reasonable time frame, if
applicable.
(v) The project developer's qualifications and
experience.
(vi) The proximity to the distribution or
transmission system experiencing constraints or
congestion.
(vii) Benefits to the businesses and workforce of
the Commonwealth.
(3) Each (4) IF THE COST-EFFECTIVENESS AND VALUE OF
SERVICES ARE COMPARABLE TO OTHER QUALIFIED BIDDERS, EACH
electric distribution company shall prioritize the evaluation
of GIVE PRIORITY TO a qualified bidder that demonstrates any
of the following:
(i) For construction, expansion, rehabilitation,
renovation or site work performed on energy storage
system, all contractors and subcontractors comply with
fair wage standards, including compliance with the
provisions of the act of August 15, 1961 (P.L.987,
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No.442), known as the Pennsylvania Prevailing Wage Act.
(ii) The supply chain of equipment, components and
materials relating to the energy storage system is
sourced within the United States.
(iii) A third-party developer has made investments
in the manufacturing or assembly workforce of the energy
storage system that is located within this Commonwealth.
(h) Decommissioning.--Each contract agreement entered into
under this section shall include provisions requiring the owner
or operator to provide a decommissioning plan for the procured
energy storage systems, including the recycling or reuse of all
qualifying components of each system.
(J) DECOMMISSIONING AND SAFETY.--EACH CONTRACT AGREEMENT
ENTERED INTO UNDER THIS SECTION SHALL INCLUDE PROVISIONS
REQUIRING THE OWNER OR OPERATOR TO:
(1) PROVIDE A DECOMMISSIONING PLAN FOR THE PROCURED
ENERGY STORAGE SYSTEMS, INCLUDING THE RECYCLING OR REUSE OF
ALL QUALIFYING COMPONENTS OF EACH SYSTEM TO THE EXTENT THAT
THE RECYCLING AND REUSE CAN BE REASONABLY ACHIEVED BY
EXISTING COMMERCIAL PRACTICES.
(2) COMPLY WITH THE NATIONAL FIRE PROTECTION ASSOCIATION
855 STANDARD IN EFFECT ON THE EFFECTIVE DATE OF THIS SECTION
FOR THE INSTALLATION OF STATIONARY ENERGY STORAGE SYSTEMS, IF
APPLICABLE, TO THE CHEMISTRY OF THE ENERGY STORAGE SYSTEM.
(K) CONFIDENTIAL INFORMATION.--A THIRD-PARTY DEVELOPER THAT
PARTICIPATES IN A COMPETITIVE PROCUREMENT PROCESS TO ENTER INTO
A CONTRACT WITH AN ELECTRIC DISTRIBUTION COMPANY UNDER THIS
SECTION SHALL NOT DISCLOSE, DISTRIBUTE OR OTHERWISE MAKE
AVAILABLE ANY INFORMATION RELATING TO THE OPERATIONS OF THE
ELECTRIC GRID WITHOUT THE CONSENT OF THE ELECTRIC DISTRIBUTION
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COMPANY. A VIOLATION OF THIS SUBSECTION SHALL BE SUBJECT TO
ENFORCEMENT BY THE COMMISSION UNDER CHAPTER 33 (RELATING TO
VIOLATIONS AND PENALTIES).
(i) (L) Ownership.--The energy storage systems procured
under the program shall be owned by a combination of the
electric distribution company and third-party developers. The
following apply:
(1) An electric distribution company may enter into
bilateral agreements under a competitive procurement process
to construct, own and operate distribution-connected energy
storage systems to reach part of the company's apportioned
share of the 3,000 total megawatts of capacity under
subsection (b).
(2) An electric distribution company may not acquire
ownership of more than 50% of the distribution-connected
energy storage systems that are procured under this section.
(3) An electric distribution company may not acquire
ownership of any transmission-connected energy storage
systems that are required to be procured under this section.
(4) Nothing in this subsection shall be construed to
prohibit a third-party developer from originating, securing
site control, developing, constructing, owning, operating or
transferring ownership of a distribution-connected energy
storage system to an electric distribution company. THIRD-
PARTY DEVELOPERS. AN ELECTRIC DISTRIBUTION COMPANY MAY NOT
OWN THE ENERGY STORAGE SYSTEMS CONSTRUCTED OR PROCURED TO
COMPLY WITH THE REQUIREMENTS OF THIS SECTION.
(j) (M) Commission approval.--The commission, in
consultation with the independent evaluator under subsection (e)
(G) , shall establish procedures to review all proposed contracts
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prior to the execution of the contract with the lowest
responsible WINNING bidder. The following apply:
(1) An electric distribution company shall file a
proposed contract with the commission and provide sufficient
documentation to permit the commission to conduct the review
required under paragraph (3), including the cost-benefit
analysis used to determine the cost-effectiveness of the
procurement and methods used to select a qualified bidder.
(2) The commission shall review each proposed contract
to determine the following:
(i) The cost-effectiveness of the contract terms and
impact on ratepayer affordability . , INCLUDING
CONSIDERATION OF THE FOLLOWING:
(A) AVOIDED OR DEFERRED TRANSMISSION,
DISTRIBUTION, GENERATION AND OTHER TRADITIONAL
INFRASTRUCTURE UPGRADE COSTS, INCLUDING THE EXTENT TO
WHICH THE ENERGY STORAGE SYSTEM FUNCTIONS AS A
NONWIRES ALTERNATIVE.
(B) SYSTEM EFFICIENCY AND OPERATIONAL BENEFITS,
INCLUDING CONGESTION REDUCTION, PEAK LOAD REDUCTION,
REDUCTION OF MARGINAL LINE LOSSES, PROVISION OF
VOLTAGE SUPPORT AND REACTIVE POWER SERVICES,
MITIGATION OF LOCALIZED SYSTEM CONSTRAINTS AND
INCREASED DISTRIBUTED ENERGY RESOURCE HOSTING
CAPACITY.
(C) RELIABILITY AND RESILIENCY BENEFITS,
INCLUDING ENHANCEMENT OF SYSTEM RELIABILITY IN
CONSTRAINED OR HIGH-RISK AREAS AND BENEFITS TO
DISTRIBUTION CUSTOMERS.
(D) MARKET AND RATEPAYER SAVINGS, INCLUDING
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REDUCTION IN THE ELECTRIC DISTRIBUTION COMPANY'S
OBLIGATION TO PROCURE CAPACITY IN PJM
INTERCONNECTION, LLC, THROUGH MEASURABLE REDUCTIONS
IN PEAK LOAD CONTRIBUTION THAT RESULT IN REDUCED
INSTALLED CAPACITY OBLIGATIONS CONSISTENT WITH THE
MARKET RULES OF PJM INTERCONNECTION, LLC.
(E) THE AVAILABILITY AND UTILIZATION OF
APPLICABLE FEDERAL OR STATE TAX CREDITS OR
EXEMPTIONS.
(ii) Whether the projected benefits to the
distribution and transmission system exceed the costs of
the proposed contract terms.
(iii) Whether the electric distribution company has
made all reasonable efforts to design the procurement
contract to protect ratepayers from stranded assets,
energy storage system degradation risks, supply chain
volatility and other unforeseen circumstances that may
increase costs over time or delay project development.
(iv) Whether the electric distribution company has
complied with the requirements under this section.
(3) The commission may not approve the proposed contract
under this section unless the commission finds that:
(i) the procurement of the energy storage system is
in the public interest;
(ii) the proposed contract is a cost-effective
mechanism to reliably procure energy storage system
capacity to benefit the distribution system or
transmission system, or both; and
(iii) the bid selection and solicitation process are
found to be fair, objective and nondiscriminatory by the
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independent evaluator . ; AND
(IV) THE PROCUREMENT OF THE ENERGY STORAGE SYSTEM
DEMONSTRATES THE ABILITY TO PROVIDE MEASURABLE
RELIABILITY, RESILIENCY OR PEAK DEMAND REDUCTION BENEFITS
TO THE DISTRIBUTION SYSTEM.
(4) Within 45 days of submission, the commission shall
approve or reject a proposed contract. If the commission
rejects a proposed contract, the commission may, as a
condition of approval, require an electric distribution
company to modify the proposed contract terms to address any
deficiencies identified by the commission or independent
evaluator. An electric distribution company shall have 60
days to file a modified proposed contract with the
commission. The modified proposal shall be approved or
rejected by the commission within 30 days.
(k) (N) Annual report.--
(1) Each electric distribution company shall submit an
annual report to the commission relating to the progress and
results of the energy storage program within each electric
distribution service territory. The report shall include the
following:
(i) Documentation of the expenditures for all
procurement contracts entered into with a third-party
developer.
(ii) Measurement and verification of each energy
storage system's performance to improve the reliability
of distribution system and provide peak demand
management, if applicable at the time of submission.
(iii) The location and ownership status each energy
storage system procured.
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(iv) (III) Evaluation of the cost-effectiveness of
program expenditures.
(v) (IV) Any other information required by the
commission.
(2) Beginning five years after the effective date of
this paragraph and annually thereafter, the commission shall
submit a report to the CONSUMER PROTECTION AND PROFESSIONAL
LICENSURE COMMITTEE OF THE SENATE, THE CONSUMER PROTECTION,
TECHNOLOGY AND UTILITIES COMMITTEE OF THE HOUSE OF
REPRESENTATIVES, THE Environmental Resources and Energy
Committee of the Senate and the Energy Committee of the House
of Representatives.
(l) Cost recovery.--An electric distribution company may
recover on a full and current basis from customers, through a
reconcilable adjustment clause under section 1307 (relating to
sliding scale of rates; adjustments), all reasonable and prudent
costs in the procurement of a transmission-connected energy
storage system under a competitive procurement process under
this section, as determined by the commission. Any decreased
revenues of an electric distribution company due to changes in
energy demand or avoided infrastructure costs shall not be a
recoverable cost under a reconcilable automatic adjustment
clause. Subject to commission approval, an electric distribution
company's ownership of a distribution-connected energy storage
system under an executed bilateral agreement may be included in
the rate base of the public utility and recovered in accordance
with section 1308(d) (relating to voluntary changes in rates).
(m) Applicability.--This section shall not apply to an
electric distribution company with fewer than 600,000 customers.
(O) COST RECOVERY.--
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(1) AN ELECTRIC DISTRIBUTION COMPANY MAY RECOVER ON A
FULL AND CURRENT BASIS FROM CUSTOMERS, THROUGH A RECONCILABLE
ADJUSTMENT CLAUSE UNDER SECTION 1307 (RELATING TO SLIDING
SCALE OF RATES; ADJUSTMENTS), ALL REASONABLE AND PRUDENT
COSTS IN THE PROCUREMENT OF ENERGY STORAGE SYSTEMS UNDER A
COMPETITIVE PROCUREMENT PROCESS UNDER THIS SECTION, AS
APPROVED BY THE COMMISSION.
(2) ANY DECREASED REVENUES OF AN ELECTRIC DISTRIBUTION
COMPANY DUE TO CHANGES IN ENERGY DEMAND OR AVOIDED
INFRASTRUCTURE COSTS SHALL NOT BE A RECOVERABLE COST UNDER A
RECONCILABLE AUTOMATIC ADJUSTMENT CLAUSE.
(3) THE COMMISSION SHALL PROMULGATE RULES OR REGULATIONS
TO ENSURE THAT ALL AVOIDED INFRASTRUCTURE COSTS AND REVENUES
GENERATED THROUGH PARTICIPATION IN WHOLESALE MARKETS ARE
CREDITED IN FULL AGAINST THE RECOVERABLE COSTS UNDER A
RECONCILABLE ADJUSTMENT CLAUSE. FOR THE PURPOSES OF THIS
PARAGRAPH, EACH ELECTRIC DISTRIBUTION COMPANY SHALL ESTABLISH
A METHODOLOGY FOR CALCULATING THE AVOIDED INFRASTRUCTURE
COSTS OF THE DISTRIBUTION SYSTEM AND TRANSMISSION SYSTEM
ATTRIBUTABLE TO THE SERVICES OF THE PROCURED ENERGY STORAGE
SYSTEMS.
(4) THE COMMISSION SHALL ESTABLISH A COST ALLOCATION
METHODOLOGY TO ENSURE THAT:
(I) ALL RECOVERABLE COSTS ARE FINANCED BY THE SAME
CUSTOMER CLASS THAT WILL RECEIVE DIRECT BENEFITS FROM THE
SERVICES ATTRIBUTABLE TO THE PROCUREMENT OF ENERGY
STORAGE SYSTEMS.
(II) THE DISTRIBUTION SYSTEM BENEFITS ATTRIBUTABLE
TO EACH CUSTOMER CLASS ARE REFLECTED.
(III) THE ALLOCATION OF COSTS ACCOUNT FOR ALL
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EXISTING SURCHARGES AND COMMISSION-APPROVED TARIFFS
APPLICABLE TO THE PEAK DEMANDS OF LARGE INDUSTRIAL AND
COMMERCIAL CUSTOMERS.
(P) APPLICABILITY.--THIS SECTION SHALL NOT APPLY TO:
(1) AN ELECTRIC DISTRIBUTION COMPANY WITH FEWER THAN
500,000 CUSTOMERS.
(2) ENERGY STORAGE SYSTEMS WITH LESS THAN 50 KILOWATTS
OF CAPACITY.
(Q) CONSTRUCTION.--NOTHING IN THIS SECTION SHALL BE
CONSTRUED TO CONFLICT OR SUPERSEDE THE JURISDICTION OF THE
FEDERAL ENERGY REGULATORY COMMISSION OR THE RULES OR TARIFFS OF
THE INDEPENDENT SYSTEM OPERATOR OR ITS FUNCTIONAL EQUIVALENT.
(n) (R) Definitions.--As used in this section, the following
words and phrases shall have the meanings given to them in this
subsection unless the context clearly indicates otherwise:
"Energy storage system." An integrated set of technologies
connected to the distribution system or transmission system that
can absorb electrical energy, store the energy for a period of
time and deliver the energy for use at a later time. The term
includes all types of electric storage technologies, regardless
of their size, storage medium or operational purpose, including:
(1) thermal storage;
(2) electrochemical storage;
(3) thermo-mechanical storage; and
(4) hydrogen-based storage.
"FRONT-OF-THE-METER ENERGY STORAGE SYSTEM." AN ENERGY
STORAGE SYSTEM INTERCONNECTED TO THE DISTRIBUTION OR
TRANSMISSION SYSTEM AND CAPABLE OF PARTICIPATING IN THE
WHOLESALE MARKET OR DISTRIBUTION SYSTEM GRID SERVICES.
"Long-duration storage." An energy storage system that is
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capable of dispatching energy at the system's full rated
nameplate capacity for a period of 10 hours or more.
"MULTIDAY STORAGE." AN ENERGY STORAGE SYSTEM THAT IS CAPABLE
OF DISPATCHING ENERGY AT ITS FULL RATED NAMEPLATE CAPACITY FOR A
PERIOD OF 24 HOURS OR MORE.
"Short-duration storage." An energy storage system that is
capable of dispatching energy at the system's full rated
nameplate capacity for a period greater than two hours but less
than 10 hours.
Section 2. This act shall take effect immediately.
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