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PRINTER'S NO. 1717
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 1323
Session of
2026
INTRODUCED BY FLYNN, SAVAL, SANTARSIERO, FONTANA, BOSCOLA,
MALONE, KANE AND SCHWANK, MAY 20, 2026
REFERRED TO CONSUMER PROTECTION AND PROFESSIONAL LICENSURE,
MAY 20, 2026
AN ACT
Providing for the regulation of commercial data centers;
imposing duties on the Pennsylvania Public Utility
Commission, the Department of Human Services and the
Pennsylvania Energy Development Authority; establishing the
Data Center Low-Income Home Energy Assistance Program
Enhancement Account and the Pennsylvania Energy Independence
Account; providing for clean firm energy requirements,
contract filing, commission review, disclosure requirements,
backup generation standards, curtailment standards and
certification and expedited interconnection for commercial
data centers bringing incremental clean firm energy
resources; and imposing penalties.
TABLE OF CONTENTS
Section 1. Short title.
Section 2. Definitions.
Section 3. Duties of commission.
Section 4. Prohibition on cost shifting and recovery of costs.
Section 5. Contributions to Low-Income Home Energy Assistance
Program.
Section 6. Pennsylvania Energy Independence Account.
Section 7. Clean firm energy requirements.
Section 8. Contract filing and commission review.
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Section 9. Annual report.
Section 10. Disclosure requirements.
Section 11. Backup generation standards.
Section 12. Curtailment standards.
Section 13. Certification and expedited interconnection for
commercial data centers bringing incremental clean
firm energy resources.
Section 14. Enforcement.
Section 15. Construction.
Section 16. Effective date.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Data Center
Act.
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:
"Alternative compliance payment." A per-megawatt-hour
payment made by a commercial data center under section 7(e) if
the commercial data center elects to satisfy its clean firm
energy procurement requirement through payment in lieu of
procurement.
"Backstop procurement of capacity." An emergency or backstop
procurement of capacity by the applicable regional transmission
organization or its successor organization.
"Clean firm energy." Energy derived from nuclear energy,
hydroelectric power, including pumped storage, geothermal
energy, fuel cells, solar energy, including solar energy paired
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with storage resources, wind energy, including wind energy
paired with storage resources, clean hydrogen-fueled energy
generation, battery energy storage systems and long-duration
storage resources that meet all of the following:
(1) The resource is dispatchable or capable of providing
firm service so that the resource can deliver electricity on
demand with an availability factor consistent with standards
established by the commission.
(2) The resource constitutes incremental capacity,
including any of the following:
(i) Placement in service of a new clean firm energy
generation facility on or after January 1, 2025.
(ii) An uprate or efficiency improvement at an
existing clean firm energy generation facility completed
on or after January 1, 2025, that increases accredited
capacity or net output.
(iii) Placement in service of a battery energy
storage system on or after January 1, 2025, that provides
at least two hours of continuous discharge or another
duration determined by the commission to provide reliable
capacity value.
(iv) Placement in service of a long-duration storage
resource on or after January 1, 2025, that provides not
less than four hours of continuous discharge capability
and firm service as determined by the commission.
"Clean firm energy certificate." A tradable instrument
representing one megawatt-hour of eligible incremental clean
firm energy, issued and retired through a registry established
by the commission to demonstrate additionality and
deliverability consistent with section 7 and regulations
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promulgated under this act.
"Clean firm energy generation." Electricity generated from
clean firm energy. The term does not include a battery energy
storage system or long-duration storage resource. The term
includes solar energy paired with storage resources and wind
energy paired with storage resources.
"Clean hydrogen." Hydrogen produced through a process that
results in a lifecycle greenhouse gas emissions rate of less
than four kilograms of carbon dioxide equivalent per kilogram of
hydrogen.
"Clean oil furnace." An oil-fired furnace that meets all of
the following:
(1) Is Energy Star-certified.
(2) Is designed to operate on a blended liquid fuel
containing not less than 20% biodiesel, renewable diesel
or second generation biofuel.
(3) Demonstrates improved efficiency or reduced
emissions relative to the system being replaced, as
determined by the Department of Environmental Protection.
"Commercial data center." A facility, campus of facilities
or array of interconnected facilities in this Commonwealth that
meets all of the following:
(1) Is used by a business entity or other enterprise to
operate, manage or maintain a computer, group of computers or
other organized assembly of hardware and software for the
primary purpose of processing, storing, retrieving or
transmitting data.
(2) Has a peak demand of 25 megawatts or greater.
(3) Is interconnected to a public utility at a single
point of interconnection or multiple points of
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interconnection or is interconnected to multiple public
utilities within this Commonwealth through multiple points of
interconnection.
"Commission." The Pennsylvania Public Utility Commission.
"Community energy facility." A facility that complies with
the requirements necessary to achieve designation as a community
energy facility under a State law enacted on or after the
effective date of this definition establishing a community
energy program in this Commonwealth.
"Electric distribution company." As defined in 66 Pa.C.S. §
2803 (relating to definitions).
"Electric generation supplier." As defined in 66 Pa.C.S. §
2803.
"Electric service." All interconnection services and other
required elements provided by an electric distribution company
for the jurisdictional transmission and distribution of
electricity. The term shall be construed in a manner consistent
with the meaning of service under 66 Pa.C.S. § 102 (relating to
definitions) as applied to public utilities.
"Energy-efficient heat pump." An electric heat pump that
meets or exceeds the highest efficiency tier, excluding an
advanced tier, established by the Consortium for Energy
Efficiency as of the effective date of this definition or a
functionally equivalent program designated by the Department of
Environmental Protection.
"Energy Star." The voluntary energy efficiency
certification program established by the United States
Environmental Protection Agency and the United States
Department of Energy, or any successor program, that
establishes minimum performance and efficiency standards for
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qualifying equipment.
"Fuel cell." An electrochemical device that converts
chemical energy in a hydrogen-rich fuel directly into
electricity, heat and water without combustion.
"Incremental capacity." Additional accredited capacity or
additional net energy output from a clean firm energy generation
resource or long-duration storage resource that meets all of the
following:
(1) Results from the placement in service of a new
resource on or after January 1, 2025.
(2) Results from an uprate or efficiency improvement
completed on or after January 1, 2025, at an existing clean
firm energy generation resource or long-duration storage
resource, to the extent that the improvement increases
accredited capacity or net output available to the grid.
(3) In the case of a battery energy storage system or
long-duration storage resource, results from the installation
of new storage equipment or the expansion or repowering of an
existing storage facility completed on or after January 1,
2025, that increases discharge duration, rated capacity or
firm service capability.
(4) Is verified and certified by the commission as
representing additional accredited capacity or additional net
energy output that would not have been available to the bulk
electric system in this Commonwealth absent the investment
identified under paragraph (1), (2) or (3).
"Interruptible rate." A rate published in an electric
distribution company's tariff and approved by the commission as
just and reasonable that authorizes the electric distribution
company to curtail service to customers taking service under the
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rate during a regional supply shortage, in response to a
projected regional supply shortage, in response to actual or
projected conditions on the bulk power system or under other
conditions specified in the rate when, in the electric
distribution company's discretion, curtailment is necessary to
protect the electric distribution company's ability to provide
firm electric service to customers served under other tariff
rate schedules. The term includes a rate that contains
provisions for coordination with a regional transmission
organization voluntary or mandatory curtailment program under
which load is curtailed in a preemergency condition.
"Lifecycle greenhouse gas emissions." The term shall have
the meaning given to it under 26 U.S.C. § 45V(c)(1)(A) and (B)
(relating to credit for production of clean hydrogen), as in
effect on the effective date of this definition.
"Load-serving entity." An electric distribution company or
electric generation supplier that serves retail load within the
regional transmission organization in which the electric
distribution company or electric generation supplier
participates.
"Long-duration storage resource." A storage resource located
within this Commonwealth that meets all of the following:
(1) Is capable of delivering not less than four hours of
continuous discharge at rated capacity.
(2) Is dispatchable or capable of providing firm service
consistent with standards established by the commission.
(3) Qualifies as incremental capacity placed in service
on or after January 1, 2025.
"Low-Income Home Energy Assistance Program." A federally
funded program that provides financial assistance in the form of
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cash and crisis grants to low-income households for home energy
bills and is administered by the Department of Human Services.
"Material adverse impact." A demonstrable and significant
effect on electric bill affordability for residential customers,
as determined by the commission by regulation or order,
considering rate levels, cumulative riders and surcharges and
income-based affordability metrics.
"Pennsylvania Energy Development Authority." The authority
established under section 2803-C of the act of April 9, 1929
(P.L.177, No.175), known as The Administrative Code of 1929.
"Pennsylvania Energy Independence Account." The restricted
account established under section 6(a).
"Public utility." As defined in 66 Pa.C.S. § 102.
"Ratepayer." A retail customer of an electric distribution
company that purchases electric delivery service.
"Regional supply shortage." A condition in which supply
reserves are less than target supply reserves as determined by
the regional transmission organization.
"Regional transmission organization." An entity approved by
the Federal Energy Regulatory Commission to control and operate
electric transmission facilities in interstate commerce and
ensure nondiscriminatory access to those facilities.
"Renewable natural gas device." A device that generates
electricity using a fuel source consisting of at least 75%
biodiesel or biogas, including biogas derived from municipal
solid waste, industrial waste, food waste, wastewater treatment
material and animal manure resulting from the decomposition of
organic matter under anaerobic conditions, or any methane
resource classified as a Tier I alternative energy source as
defined in section 2 of the act of November 30, 2004 (P.L.1672,
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No.213), known as the Alternative Energy Portfolio Standards
Act, the principal constituents of which are methane and carbon
dioxide, that has been upgraded for use in place of fossil
natural gas, gasoline or diesel fuel.
"Small-scale energy system." A system with a nameplate
capacity rating that does not exceed two megawatts and that
generates or stores electricity by means of solar panels,
batteries or renewable natural gas devices, or a combination of
those resources. The term includes an energy-efficient heat pump
or clean oil furnace installed at a home or residential
building, a small business as defined in 62 Pa.C.S. § 2102
(relating to definitions), a charitable organization as defined
in section 3 of the act of December 19, 1990 (P.L.1200, No.202),
known as the Solicitation of Funds for Charitable Purposes Act,
an educational institution, a religious institution, a municipal
building or a State government building.
"Universal service and energy conservation." As defined in
66 Pa.C.S. § 2803 for electric service and 66 Pa.C.S. § 2202
(relating to definitions) for natural gas service.
"Useful life." For purposes of cost allocation and recovery
under this act, the depreciable life used in commission-approved
cost recovery or a period determined by the commission.
Section 3. Duties of commission.
(a) Temporary regulations.--
(1) To facilitate the prompt implementation of this act,
the commission shall promulgate temporary regulations no
later than 90 days after the effective date of this
subsection. The commission shall transmit notice of the
promulgation of the temporary regulations to the Legislative
Reference Bureau for publication in the next available issue
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of the Pennsylvania Bulletin.
(2) Temporary regulations promulgated under this
subsection shall expire no later than two years after
publication in the Pennsylvania Bulletin.
(3) The commission may promulgate temporary regulations
under this subsection that are not subject to any of the
following:
(i) Section 612 of the act of April 9, 1929
(P.L.177, No.175), known as The Administrative Code of
1929.
(ii) Sections 201, 202, 203, 204 and 205 of the act
of July 31, 1968 (P.L.769, No.240), referred to as the
Commonwealth Documents Law.
(iii) Sections 204(b) and 301(10) of the act of
October 15, 1980 (P.L.950, No.164), known as the
Commonwealth Attorneys Act.
(iv) The act of June 25, 1982 (P.L.633, No.181),
known as the Regulatory Review Act.
(4) The commission's authority to promulgate temporary
regulations under this subsection shall expire two years
after the effective date of this subsection. Before the
expiration of this authority, the commission shall promulgate
final regulations in accordance with State law and subsection
(b).
(b) Required regulatory topics.--Regulations promulgated
under subsection (a) shall include provisions governing all of
the following:
(1) Retail tariff terms and conditions between a
commercial data center and an electric distribution company
for electric service to safeguard existing customers from
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stranded investment and cost shifting, including all of the
following:
(i) Deposits or other financial security required
from a commercial data center.
(ii) Contributions in aid of construction for
network upgrades or distribution infrastructure and
direct assignment through rates of costs for transmission
service, to the extent permitted by law.
(iii) Minimum contract terms and minimum load
obligations that require a commercial data center, if the
commercial data center ceases operations before
satisfying the minimum contract term or engages in
economic peak-shaving behavior, to take a minimum level
of service for a minimum number of years sufficient to
generate expected revenues that protect other customers.
An electric distribution company shall require the
commercial data center to secure the obligation under
this subparagraph by a letter of credit or other
comparable financial instrument that ensures payment if
the commercial data center ceases operations or otherwise
fails to satisfy the obligation.
(iv) Load-ramping schedules to ensure infrastructure
adequacy.
(v) Exit fees or early termination fees.
(vi) Measures to prevent circumvention of the
commercial data center threshold through multiple
facilities, interconnection points or metering points.
(vii) Tracking of all costs, including transmission
and distribution costs, incurred to serve a commercial
data center and verification that the revenues collected
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exceed the costs incurred.
(viii) An end-of-contract process that provides
sufficient notice of a commercial data center's renewal
or closure.
(ix) To the extent permitted by Federal and State
law, a process for the direct assignment to a commercial
data center of costs assigned by a regional transmission
organization, as determined by the commission.
(2) Curtailment of a commercial data center's load under
an interruptible rate.
(3) Standards governing coordination of an electric
distribution company's interruptible rate with a regional
transmission organization voluntary or mandatory curtailment
program to ensure statewide consistency.
(4) Conditions for interconnection of new commercial
data center load while ensuring the continued provision of
electric service to existing customers that is adequate,
reasonable, reasonably continuous and without unreasonable
interruption or delay. If a regional supply shortage exists
or is likely to exist, as forecasted or determined by the
regional transmission organization in which the electric
distribution system participates, the commission shall impose
any of the following conditions on a new interconnection or
an incremental addition of load associated with an
interconnected commercial data center:
(i) Requiring the commercial data center to take
electric distribution service under the electric
distribution company's interruptible rate.
(ii) Permitting firm electric distribution service
on the condition that the commercial data center has been
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certified to have brought its own incremental clean firm
energy resources into service under a certification
program established by the commission, the Federal Energy
Regulatory Commission or the regional transmission
organization or independent system operator in which the
applicable public utility participates.
(iii) Imposing a combination of the requirements
under subparagraphs (i) and (ii).
(5) Cost responsibility standards under section 4.
(6) Establishment of the alternative compliance payment
rate and calculation methods under section 7(e).
(7) Disclosure requirements under section 10.
(8) Backup generation standards under section 11.
(9) Curtailment standards under section 12.
(10) Certification and expedited interconnection
standards under section 13.
Section 4. Prohibition on cost shifting and recovery of costs.
(a) Prohibition on cross-subsidization.--An electric
distribution company may not recover from ratepayers other than
commercial data centers, whether through base rates, riders,
surcharges or another ratemaking mechanism, a cost caused in
whole or in part by the interconnection, service or load of a
commercial data center, including a cost associated with
capacity, energy, ancillary services, transmission,
distribution, network upgrades or dedicated facilities, if
either of the following applies:
(1) The cost is directly attributable to the provision
of electric service to a commercial data center.
(2) The cost would not have been incurred but for the
electricity demand of a commercial data center.
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(b) Rate review and allocation.--The commission shall review
rates to ensure that the cost of providing service to a
commercial data center is not subsidized by another customer
class. For purposes of a rate determination, each electric
distribution company serving a commercial data center shall have
the following duties:
(1) To allocate or assign costs in one of the following
ways:
(i) Allocate the cost of serving commercial data
centers to a customer class consisting solely of
commercial data centers in an amount equal to the cost of
serving commercial data centers, including direct and
indirect costs associated with providing service to
commercial data centers through new or existing
facilities.
(ii) Directly assign the cost of serving a
commercial data center to the commercial data center.
(2) To mitigate the risk of any of the following:
(i) Another electric service customer paying a cost
associated with providing service to a commercial data
center if the cost does not benefit another customer
class.
(ii) Shifting to another electric service customer
the cost of serving a commercial data center, including a
cost incurred by an electric distribution company to meet
load requirements resulting from the provision of
electric service to a commercial data center.
(c) Cost-of-service study.--A public utility that serves or
is reasonably expected to serve commercial data center load
shall submit a full cost-of-service study when seeking a rate
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increase under 66 Pa.C.S. § 1308 (relating to voluntary changes
in rates) to support the public utility's proposed allocation of
shared or indirect costs that benefit multiple customer classes,
including commercial data centers.
(d) Universal service and energy conservation programs.--A
public utility shall recover from commercial data centers the
costs incurred by the public utility in connection with the
development, implementation and support of universal service and
energy conservation programs, consistent with 66 Pa.C.S. §§
2203(6), (7), (8), (9) and (10) (relating to standards for
restructuring of natural gas utility industry) and 2804(8) and
(9) (relating to standards for restructuring of electric
industry), through a tariff rate approved by the commission.
(e) Duration of allocation and recovery standards.--The
commission shall establish standards to ensure that a commercial
data center responsible for costs specified under subsection
(a), including construction, transmission and distribution
costs, remains responsible for those costs for the useful life
of the associated infrastructure or for the duration of the
service obligation, whichever is longer, in a manner that
supports business development in this Commonwealth while
minimizing the risk of stranded infrastructure costs,
maintaining customer affordability and maintaining overall
system reliability.
(f) Transmission and regional cost impacts.--To the maximum
extent permitted under Federal law, the commission shall ensure
that a cost allocated to an electric distribution company or
electric generation supplier under a tariff approved by the
Federal Energy Regulatory Commission and associated with
transmission facilities, network upgrades, capacity obligations
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or another regional system cost, if caused in whole or in part
by a commercial data center, is appropriately allocated at
retail and recovered from the commercial data center and does
not result in unreasonable cost impacts to residential customers
or small commercial customers.
(g) Curtailment obligations.--
(1) If a regional transmission organization issues a
curtailment obligation or directive and assigns the
obligation or directive to an electric distribution company
or electric generation supplier in its capacity as a load-
serving entity, in whole or in part due to the provision of
electric service to a commercial data center, the electric
distribution company or electric generation supplier shall
require the commercial data center to satisfy the curtailment
obligation or directive under contractual terms or tariff
provisions approved by the commission.
(2) Another customer of the electric distribution
company or electric generation supplier may not be assigned
responsibility for a curtailment obligation resulting from
the commercial data center's service.
(3) Nothing in this subsection shall be construed to:
(i) prevent or hinder an electric distribution
company or electric generation supplier from taking
action necessary to maintain system reliability; or
(ii) prohibit an electric distribution company or
electric generation supplier from implementing a
voluntary load curtailment program approved by the
commission.
(h) Backstop procurement obligations.--
(1) If a regional transmission organization undertakes
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backstop procurement of capacity or a comparable reliability
service and assigns a financial or other obligation to an
electric distribution company or electric generation supplier
in its capacity as a load-serving entity, in whole or in part
due to a commercial data center's service, the electric
distribution company or electric generation supplier shall
allocate the obligation at retail to and recover the
obligation from the commercial data center or commercial data
centers that gave rise to the obligation under terms
comparable to those under which the obligation is assigned to
the electric distribution company or electric generation
supplier.
(2) If an electric distribution company does not provide
retail default service to a commercial data center and, in
its capacity as a load-serving entity, receives an assignment
of cost obligations related to backstop procurement from a
regional transmission organization, the electric distribution
company may establish a nonbypassable surcharge to pass
through the obligation on a pro rata basis to each commercial
data center taking electric service under the electric
distribution company's tariff if the rebuttable presumption
under subsection (i)(2) applies.
(i) Regional generation, capacity and reliability costs.--
(1) To the maximum extent permitted under Federal law,
if a regional transmission organization assigns, under a
tariff approved by the Federal Energy Regulatory Commission,
to an electric distribution company or electric generation
supplier in its capacity as a load-serving entity a cost
associated in whole or in part with the procurement of new
generation supply, capacity or a comparable reliability
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service undertaken to meet the electricity demand of one or
more commercial data centers, the electric distribution
company or electric generation supplier shall directly
assign, allocate and recover the cost from the applicable
commercial data center or commercial data centers.
(2) There shall be a rebuttable presumption that a cost
described under paragraph (1) is attributable to a commercial
data center if any of the following apply:
(i) The regional transmission organization or its
independent market monitor identifies the load addition
as a material driver of the procurement.
(ii) The timing of the procurement is reasonably
correlated with the commercial data center's load
addition.
(iii) The procurement would not have occurred in
substantially the same form or time frame absent the
commercial data center's load addition.
(3) The presumption under paragraph (2) shall apply
solely to retail allocation and recovery by the commission
and may not be construed to alter an assignment or
determination made under a tariff approved by the Federal
Energy Regulatory Commission.
(4) If a regional transmission organization does not
directly allocate the costs described under paragraph (1) to
the commercial data center or commercial data centers that
gave rise to the costs, the commission shall establish and
implement, consistent with Federal law, a just and reasonable
mechanism to allocate and recover the costs from the
applicable commercial data center or commercial data centers
without altering the wholesale assignment established under a
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tariff approved by the Federal Energy Regulatory Commission.
(5) If an electric distribution company does not provide
retail default service to a commercial data center and, in
its capacity as a load-serving entity, receives an assignment
of generation supply, capacity or comparable reliability
service cost obligations from a regional transmission
organization, the electric distribution company may establish
a nonbypassable surcharge to pass through the obligation on a
pro rata basis to each commercial data center taking service
under the electric distribution company's tariff if the
rebuttable presumption under paragraph (2) applies.
(j) Financial security.--
(1) As a condition of taking electric service, a
commercial data center whose load is reasonably likely to
trigger or contribute to an obligation under subsection (h)
shall provide financial security, in a form and amount
approved by the commission, sufficient to ensure that
existing and future customers of the public utility are held
harmless for the full term and value of the obligation.
(2) The financial security required under paragraph (1)
shall remain in effect for the duration of the applicable
capacity obligation and any associated cost recovery period.
(3) As a condition of taking electric service, a
commercial data center reasonably expected to trigger or
contribute to a cost described under subsection (i) shall
provide and maintain financial security, in a form and amount
approved by the commission, sufficient to ensure full
recovery of the cost for the duration of the obligation and
to hold harmless existing and future customers of the
electric distribution company.
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(k) Duration of responsibility.--Cost responsibility under
subsections (h) and (i) shall apply for the useful life of the
associated facilities or the duration of the regional
obligation, whichever is longer.
(l) Federal law.--Nothing in subsections (g), (h), (i), (j)
and (k) shall be construed to conflict with or preempt the
jurisdiction of the Federal Energy Regulatory Commission or to
require an electric distribution company or electric generation
supplier to take action inconsistent with a tariff approved by
the Federal Energy Regulatory Commission.
(m) Implementation.--The commission shall promulgate
regulations or issue orders necessary to implement subsections
(g), (h), (i), (j), (k) and (l) in a manner consistent with
Federal law governing regional transmission organizations and
applicable tariffs and agreements.
(n) Alternative compliance payments not recoverable.--An
electric distribution company may not recover, through base
rates, riders, surcharges or another ratemaking mechanism, an
alternative compliance payment under section 7(e) from a
ratepayer other than the commercial data center responsible for
the payment.
Section 5. Contributions to Low-Income Home Energy Assistance
Program.
(a) Establishment of account.--The Data Center Low-Income
Home Energy Assistance Program Enhancement Account is
established as a restricted account in the General Fund. The
Department of Human Services shall use money appropriated from
the Data Center Low-Income Home Energy Assistance Program
Enhancement Account under subsection (d) for a supplemental
program to enhance the Low-Income Home Energy Assistance
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Program. The supplemental program shall include a summer cooling
component.
(b) Sources of money.--The following shall be deposited into
the Data Center Low-Income Home Energy Assistance Program
Enhancement Account:
(1) Payments made under subsection (c).
(2) Interest accrued on money in the Data Center Low-
Income Home Energy Assistance Program Enhancement Account.
(3) Money from another source authorized by Federal or
State law.
(c) Annual payments.--
(1) No later than June 1 of each year, each commercial
data center with an annual peak load of at least 25 megawatts
shall pay into the Data Center Low-Income Home Energy
Assistance Program Enhancement Account as follows:
(i) $40,000 per megawatt of annual peak load up to
and including 25 megawatts.
(ii) For each additional megawatt of annual peak
load above 25 megawatts, an additional $40,000 per
megawatt.
(2) A payment under this subsection shall be required
for the duration of the load.
(3) The commission may adjust the payment amounts under
this subsection periodically to account for inflation. The
commission shall make an adjustment under this paragraph by
promulgating regulations.
(d) Appropriation.--Money in the Data Center Low-Income Home
Energy Assistance Program Enhancement Account is appropriated to
the Department of Human Services on a continuing basis for the
purposes of this section.
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(e) Regulations and guidelines.--The Department of Human
Services may promulgate regulations or issue guidelines
necessary to implement this section.
Section 6. Pennsylvania Energy Independence Account.
(a) Establishment of account.--The Pennsylvania Energy
Independence Account is established as a restricted account in
the General Fund. The Pennsylvania Energy Development Authority
shall expend money from the Pennsylvania Energy Independence
Account for the purposes of this act and may establish
subaccounts within the Pennsylvania Energy Independence Account.
(b) Sources of money.--The following shall be deposited into
the Pennsylvania Energy Independence Account:
(1) Money appropriated or transferred by the General
Assembly for deposit into the Pennsylvania Energy
Independence Account.
(2) Supplemental Federal funding available for the
purposes of this act and appropriated by the General Assembly
for deposit into the Pennsylvania Energy Independence
Account.
(3) Interest and other amounts resulting from the
investment of money in the Pennsylvania Energy Independence
Account.
(4) Gifts, grants and donations made to the Pennsylvania
Energy Independence Account.
(c) Use of money.--Money in the Pennsylvania Energy
Independence Account is appropriated to the Pennsylvania Energy
Development Authority on a continuing basis to provide grants,
loans and loan guarantees to finance new clean firm energy
systems, small-scale energy systems, energy efficiency projects
and community energy facilities.
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(d) Construction loans.--The Pennsylvania Energy Development
Authority may provide a construction loan under this section
only if the loan constitutes the senior debt secured by the
facility and does not exceed 60% of the facility's estimated
construction cost.
(e) Administrative costs.--The Pennsylvania Energy
Development Authority may use not more than 5% annually of the
money in the Pennsylvania Energy Independence Account for
administrative costs relating to the authority's
responsibilities under this act.
(f) Application criteria.--In evaluating an application for
a loan under this section, the Pennsylvania Energy Development
Authority shall consider all of the following:
(1) The applicant's:
(i) quality of services and management;
(ii) efficiency of operations;
(iii) history of operations in this Commonwealth and
the United States;
(iv) resource operation attributes;
(v) ability to address regional, local and
reliability needs;
(vi) access to resources essential for operating the
project for which the loan is requested, including land,
water and reliable infrastructure, as applicable; and
(vii) evidence of creditworthiness and ability to
repay the loan on the terms established in the loan
agreement, including total assets, total liabilities, net
worth and credit ratings issued by major credit rating
agencies.
(2) The generation capacity and estimated cost of the
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project for which a grant, loan or loan guarantee is
requested.
(3) Any other factor the Pennsylvania Energy Development
Authority considers appropriate.
(g) Annual payments.--
(1) No later than June 1 of each year, each commercial
data center with an annual peak load of at least 25 megawatts
shall pay into the Pennsylvania Energy Independence Account
as follows:
(i) $2,000 per megawatt of annual peak load up to
and including 25 megawatts.
(ii) For each additional megawatt of annual peak
load above 25 megawatts, an additional $2,000 per
megawatt.
(2) A payment under this subsection shall be required
for the duration of the load.
(3) The commission may adjust the payment amounts under
this subsection periodically to account for inflation. The
commission shall make an adjustment under this paragraph by
promulgating regulations.
(h) Exemption.--A commercial data center certified by the
commission under section 13 to have brought its own incremental
clean firm energy resources shall be exempt from subsection (g).
Section 7. Clean firm energy requirements.
(a) Procurement requirement.--Energy supplied to a
commercial data center shall include electricity procured from
incremental clean firm energy resources located within this
Commonwealth in an amount not less than the following
percentages of the commercial data center's annual electricity
consumption:
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(1) Beginning January 1, 2027, 10%.
(2) Beginning January 1, 2030, 14.5%.
(3) Beginning January 1, 2035, 32%.
(b) Incremental requirement.--As certified by the
commission, only incremental capacity or incremental net
additional megawatt-hours delivered to the grid relative to a
baseline year may qualify to satisfy subsection (a).
(c) Compliance methods.--A commercial data center may
demonstrate compliance with this section through any of the
following:
(1) A power purchase agreement or other bilateral
contract for clean firm energy.
(2) Retirement of a clean firm energy certificate issued
through a registry established by the commission.
(3) Another method or instrument approved by the
commission.
(d) Cost containment and flexibility.--To protect system
reliability and ratepayer affordability, the commission shall
have the following duties:
(1) Establish an alternative compliance payment
available to a commercial data center.
(2) Permit the banking of clean firm energy certificates
for up to three compliance years.
(3) Authorize limited borrowing of future-year
certificates under conditions determined by the commission.
(4) Temporarily adjust the percentages under subsection
(a) if the commission determines that insufficient eligible
in-State supply of clean firm energy exists for a compliance
year, if the commission issues written findings and a
schedule for restoring full compliance with this section.
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(e) Alternative compliance payment.--
(1) A commercial data center that does not procure or
demonstrate retirement of sufficient clean firm energy
certificates to satisfy subsection (a) for a compliance year
shall make an alternative compliance payment to the
Pennsylvania Energy Independence Account established under
section 6.
(2) The commission shall establish the rate of the
alternative compliance payment by regulation. The rate shall
be expressed in dollars per megawatt-hour and shall be
calculated in a manner that does all of the following:
(i) Ensures that the alternative compliance payment
is a viable cost containment mechanism for commercial
data centers.
(ii) Reflects the commission's assessment of the
market cost of incremental clean firm energy resources.
(iii) Supports the Commonwealth's interest in
facilitating timely investment in clean firm energy and
long-duration storage resources located within this
Commonwealth.
(3) An alternative compliance payment under this
subsection shall be deposited into the Pennsylvania Energy
Independence Account and used for the purposes specified in
section 6(c), including grants, loans and loan guarantees to
finance new clean firm energy systems, energy efficiency
projects, small-scale energy systems, community energy
facilities and other projects that support energy reliability
and independence in this Commonwealth.
(4) Payment of an alternative compliance payment under
this subsection shall constitute full compliance with
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subsection (a) for the corresponding megawatt-hours.
Section 8. Contract filing and commission review.
(a) Filing requirement.--An electric distribution company
shall file with the commission a copy of each contract executed
with a commercial data center on or after the effective date of
this subsection, including any of the following:
(1) A contract for electric service between a public
utility and a commercial data center entered into under a
commission-approved rate schedule for distribution service.
(2) A construction services agreement, engineering
services agreement or similar agreement between a public
utility and a commercial data center relating to the public
utility's high-voltage transmission infrastructure or
distribution infrastructure.
(3) A construction services agreement, engineering
services agreement or similar agreement between a public
utility and a commercial data center relating to transmission
infrastructure that is the subject of the public utility's
application for commission approval and authorization to
locate and construct a transmission line or a portion of a
transmission line with a design voltage greater than 100,000
volts.
(b) Distribution of filed contracts.--A public utility shall
provide a copy of a contract filed under subsection (a) to the
Office of Consumer Advocate, the Office of Small Business
Advocate and the Bureau of Investigation and Enforcement within
the commission, subject to an appropriate confidentiality
agreement, protective agreement or protective order.
(c) Supporting documentation.--An electric distribution
company shall include with a filing under subsection (a)
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sufficient documentation to permit the commission to conduct the
review required under subsection (d).
(d) Commission review.--The commission shall review each
contract filed under this section to determine all of the
following:
(1) The impact of the contract on the continued
provision of electric service that is adequate, safe and
reliable to residents and businesses of this Commonwealth.
(2) The impact of the contract on ratepayers and
electric bill affordability for residential customers and
commercial customers. The impact on low-income customers
shall be determined as a subset of residential customers.
(3) Whether the contract is reasonably likely to result
in a material adverse impact on electric bill affordability
or reliability for residential customers.
(4) Whether the contract complies with sections 3, 4 and
7.
(e) Approval standard.--The commission may not approve a
contract under this act if the commission finds that the
contract is reasonably likely to result in a material adverse
impact on electric bill affordability or reliability for
residential customers. As a condition of approval, the
commission may require the imposition of any reasonable
mitigation measure necessary to ensure that the contract will
not result in a material adverse impact on electric bill
affordability or reliability for residential customers.
Section 9. Annual report.
(a) Report.--For at least 10 years, the commission shall
submit a written report to the General Assembly each year and
shall make a public version of the report available on the
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commission's publicly accessible Internet website.
(b) Contents.--The report shall include all of the
following:
(1) The commission's efforts during the prior year to
implement this act.
(2) The commission's determinations under section 8(d)
regarding the impact of commercial data centers on the
continued provision of electric service that is adequate,
safe and reliable to residents and businesses of this
Commonwealth, the impact on ratepayers and electric bill
affordability and compliance with sections 3, 4 and 7.
(3) Recommendations for legislative or regulatory
changes to improve the commission's oversight
responsibilities under this act.
Section 10. Disclosure requirements.
(a) Interconnection requests.--The commission shall require
each planned commercial data center to disclose to the
commission, the applicable electric distribution company and the
applicable regional transmission organization or independent
system operator whether the planned commercial data center is
pursuing a substantially similar request for electric service
within this Commonwealth or within the applicable regional
transmission organization or independent system operator if
approval of the substantially similar request would result in a
change, delay or withdrawal of the interconnection request. The
disclosure may withhold or anonymize competitively sensitive
details. The commission shall prohibit or impose reasonable
restrictions on the sale or disclosure of information provided
to an electric distribution company under this subsection.
(b) Backup generation.--The commission shall require each
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planned commercial data center to disclose to the commission,
the applicable electric distribution company and the applicable
regional transmission organization or independent system
operator information regarding the planned commercial data
center's backup generation resources and storage resources and
the planned commercial data center's capability to rely on
backup generation resources or storage resources during a period
of required load shedding or curtailment, including the amount
of notice required to deploy backup generation resources or
storage resources.
Section 11. Backup generation standards.
A commercial data center's onsite fossil-fueled backup
generation shall comply with all of the following:
(1) Meet or exceed the Tier 4 emissions standards of the
United States Environmental Protection Agency or both meet
the Tier 2 emissions standards and be equipped with a
selective catalytic reduction system or another emissions
control system that more stringently reduces nitrogen oxides,
where applicable.
(2) Be limited to emergency use and limited testing and
maintenance consistent with Federal and State air quality
laws and regulations.
(3) Be permitted, monitored and reported in the
aggregate as a single emissions source or as part of a single
emissions source, where practicable, in coordination with the
Department of Environmental Protection.
Section 12. Curtailment standards.
(a) Direction to commercial data centers.--During a period
of emergency curtailment or manual load dump, the commission
shall require an electric distribution company to direct a
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commercial data center to deploy backup generation resources or
storage resources or curtail load before the electric
distribution company curtails service to a residential customer
or small commercial customer.
(b) Priority.--The commission may require an electric
distribution company to give priority under subsection (a) to a
commercial data center that has not been certified to have
brought its own incremental clean firm energy resources into
service under a program established by the commission, the
Federal Energy Regulatory Commission or the regional
transmission organization or independent system operator in
which the applicable public utility participates.
(c) Environmental compliance.--Nothing in this section shall
be construed to authorize or require a violation of a Federal or
State emissions limitation or another Federal or State
environmental law or regulation.
Section 13. Certification and expedited interconnection for
commercial data centers bringing incremental clean
firm energy resources.
(a) Certification program.--The commission shall establish a
program to certify a commercial data center that has brought or
plans to bring incremental clean firm energy resources.
Certification shall be based on a binding financial commitment
by the commercial data center, including a power purchase
agreement, to enable incremental clean firm energy resources on
a one-for-one accredited unforced capacity basis, including a
reasonable reserve margin, tied to the commercial data center's
ramp-up and utilization schedule, through any combination of the
following:
(1) Placement in service by the commercial data center
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or a third party of an incremental clean firm energy resource
or combined generation and storage resource within the
regional transmission organization that serves the commercial
data center.
(2) An uprate or expansion of an existing clean firm
energy resource or combined generation and storage resource
within the regional transmission organization that serves the
commercial data center, to the extent of the additional
accredited unforced capacity.
(3) Participation in a demand response product, if the
participation continues for the duration of the certification
period or until the commercial data center has brought
additional accredited unforced capacity equivalent to the
capacity value of the demand response product.
(4) Another incremental addition of accredited unforced
capacity from incremental clean firm energy resources, as
measured by the applicable regional transmission organization
or independent system operator.
(b) Interconnection priority.--The commission shall require
an electric distribution company to give priority to the
interconnection of a commercial data center certified under
subsection (a). For an interconnection subject to State
jurisdiction, the commission shall also require an electric
distribution company to give priority to the interconnection of
an incremental clean firm energy resource or combined generation
and storage resource associated with a certified commercial data
center.
Section 14. Enforcement.
A violation of this act shall be subject to enforcement by
the commission under 66 Pa.C.S. Ch. 33 (relating to violations
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and penalties).
Section 15. Construction.
Nothing in this act shall be construed to authorize an
electric distribution company to own electric generation supply
in this Commonwealth.
Section 16. Effective date.
This act shall take effect in 60 days.
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