An Act providing for community energy facilities; imposing duties on the Pennsylvania Public Utility Commission, electric distribution companies and subscriber organizations; and providing for prevailing wage and labor requirements.

PRINTER'S NO. 772
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 504
Session of
2025
INTRODUCED BY SCHWANK, COSTA, TARTAGLIONE, SANTARSIERO, KANE,
STREET, COMITTA, COLLETT, FONTANA, SAVAL, CAPPELLETTI,
HUGHES, HAYWOOD, PISCIOTTANO AND MILLER, MAY 12, 2025
REFERRED TO CONSUMER PROTECTION AND PROFESSIONAL LICENSURE,
MAY 12, 2025
AN ACT
Providing for community energy facilities; imposing duties on
the Pennsylvania Public Utility Commission, electric
distribution companies and subscriber organizations; and
providing for prevailing wage and labor requirements.
TABLE OF CONTENTS
Section 1. Short title.
Section 2. Findings and declarations.
Section 3. Definitions.
Section 4. Authorization to own or operate community energy
facilities.
Section 5. Bill credit for subscribers to community energy
facilities.
Section 6. Protection for customers.
Section 7. Duties of electric distribution companies.
Section 8. Compensation and cost recovery for electric
distribution companies.
Section 9. Interconnection standards for community energy
facilities.
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Section 10. Unsubscribed energy.
Section 11. Customer participation in community energy
programs.
Section 12. Location of multiple community energy facilities.
Section 13. Prevailing wage and labor requirements.
Section 14. Ratepayer protections.
Section 15. 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 Community
Energy Act.
Section 2. Findings and declarations.
The General Assembly finds and declares as follows:
(1) Growth in energy generation provides family-
sustaining jobs and investments in this Commonwealth.
(2) Programs for community energy generation provide
customers with additional energy choices and access to
affordable energy options.
(3) Community energy programs provide customers,
including homeowners, renters and businesses, access to the
benefits of Pennsylvania community energy generation that is
unconstrained by the physical attributes of their home, farm
or business, including roof space, shading or ownership
status.
(4) In addition to its provision of standard electricity
market commodities and services, local energy generation can
contribute to a more resilient grid and defer the need for
costly new transmission and distribution system investment.
(5) The intent of this act is to:
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(i) Allow electric distribution customers of this
Commonwealth to subscribe to a portion of a community
energy facility and have the result of the subscription
be guaranteed savings.
(ii) Reasonably allow for the creation, financing,
accessibility and operation of third-party-owned
community energy generating facilities and enable robust
customer participation.
(iii) Encourage the development of community energy
programs that will facilitate participation by and for
accessibility and operation of third-party-owned
community energy generating facilities and enable robust
customer participation.
(iv) Encourage the development of community energy
programs that will facilitate participation by and for
the benefit of low-income and moderate-income customers
and the communities where they live, reduce barriers to
participation by renters and small businesses, promote
affordability and improve access to basic public utility
services.
(v) Maximize the use of Federal money to provide for
the development of community energy programs.
Section 3. 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:
"Bill credit." The commission-approved monetary value of
each kilowatt hour of electricity generated by a community
energy facility and allocated to a subscriber's monthly bill to
offset any part of the subscriber's retail electric bill other
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than volumetric or demand-based distribution charges.
"Brownfield." Real property, the expansion, redevelopment or
reuse of which may be complicated by the presence or potential
presence of a hazardous substance, pollutant or contaminant.
"Brownfield community energy facility." A community energy
facility that is primarily located on land that is a brownfield.
"Commission." The Pennsylvania Public Utility Commission.
"Community energy facility." A facility that meets all of
the following criteria:
(1) Is located within this Commonwealth.
(2) Is connected to and delivers electricity to a
distribution system operated by an electric distribution
company operating in this Commonwealth and in compliance with
requirements under this act.
(3) Generates electricity by means of:
(i) a solar photovoltaic device with a nameplate
capacity rating that does not exceed:
(A) 5,000 kilowatts of alternating current for a
facility that is not a brownfield community energy
facility or rooftop community energy facility; and
(B) 20,000 kilowatts of alternating current for
a facility that is a brownfield community energy
facility or rooftop community energy facility; or
(ii) a renewable natural gas device with a nameplate
capacity rating that does not exceed:
(A) 5,000 kilowatts of alternating current for a
facility that is not a brownfield community energy
facility; and
(B) 20,000 kilowatts of alternating current for
a facility that is a brownfield community energy
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facility.
(4) Has no single subscriber who subscribes to more than
50% of the facility capacity in kilowatts or output in
kilowatt hours, except if:
(i) the single subscriber is a master-metered
multifamily residential or commercial building; or
(ii) the single subscriber is an agricultural
operation as defined in 26 Pa.C.S. § 202 (relating to
definitions) and the facility has no fewer than three
subscribers.
(5) Has not less than 50% of the facility capacity
subscribed by subscriptions of 25 kilowatts or less or
subscribed by agricultural operations as defined in 26
Pa.C.S. § 202.
(6) Credits some or all of the facility-generated
electricity to the bills of subscribers.
(7) May be located remotely from a subscriber's premises
and is not required to provide energy to on-site load.
(8) Is owned or operated by a community energy
organization.
(9) Delivers the amount of energy and capacity that is
contracted by each customer.
"Community energy organization." As follows:
(1) An entity that owns or operates a community energy
facility and is not required to:
(i) be an existing retail electric customer;
(ii) purchase electricity directly from the electric
distribution company;
(iii) serve electric load independent of the
community energy facility; or
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(iv) operate under an account held by the same
individual or legal entity of the subscribers to the
community energy facility.
(2) For the purpose of this definition, a community
energy organization shall not be deemed a public utility
solely as a result of the organization's ownership or
operation of a community energy facility.
"Department." The Department of Environmental Protection of
the Commonwealth.
"Electric distribution company." As defined in 66 Pa.C.S. §
2803 (relating to definitions).
"Electric distribution customer." A customer that takes
electric distribution service from an electric distribution
company, regardless of whether the company is the customer's
supplier of electric generation or not.
"Guaranteed savings." Realized savings by a subscriber from
a community energy organization manifested as the difference
between the cost of a subscription paid to a community energy
facility and the credit received on the subscriber's electric
bill for the generation attributed to the subscription.
"Initial and replacement subscribers." Each subscriber to a
single community energy facility over the life of the facility.
"Low income." A family income at or below 150% of the
poverty line as defined in 42 U.S.C. § 9902(2) (relating to
definitions) based on the size of the family.
"Pennsylvania Prevailing Wage Act." The act of August 15,
1961 (P.L.987, No.442), known as the Pennsylvania Prevailing
Wage Act.
"Public utility." As defined in 66 Pa.C.S. § 102 (relating
to definitions).
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"Renewable natural gas device." A device that generates
electricity relying upon a fuel source consisting of at least
75% biodiesel or biogas, including biogas derived from municipal
solid waste, industrial and food waste, wastewater treatment
material and animal manure, resulting from the decomposition of
that organic matter under anaerobic conditions, 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.
"Rooftop community energy facility." A community energy
facility that is primarily located on rooftops.
"Subscriber." An electric distribution customer of an
electric distribution company who contracts for a subscription
of a community energy facility interconnected with the
customer's electric distribution company. The term includes an
electric distribution customer who owns a portion of a community
energy facility.
"Subscriber administrator." An entity that recruits and
enrolls a subscriber, administers subscriber participation in a
community energy facility and manages the subscription
relationship between subscribers and an electric distribution
company. The term includes a community energy organization. For
the purpose of this definition, a subscriber administrator shall
not be considered a public utility solely as a result of the
subscriber administrator's operation or ownership of a community
energy facility.
"Subscription." A contract between a subscriber and a
subscriber administrator of a community energy facility that
entitles the subscriber to a bill credit, measured in kilowatt
hours, and applied against the subscriber's retail electric
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bill.
"Unsubscribed energy." The output of a community energy
facility, measured in kilowatt hours, that is not allocated to
subscribers.
Section 4. Authorization to own or operate community energy
facilities.
A community energy organization or subscriber administrator
may develop, build, own or operate a community energy facility.
A community energy organization may serve as a subscriber
administrator or may contract with a third party to serve as a
subscriber administrator on behalf of the community energy
organization. Renewable energy credits that are associated with
the generation of electricity by a community energy facility
shall be the property of the community energy organization and
may be retired or transferred by the community energy
organization or retired on behalf of the subscribers.
Section 5. Bill credit for subscribers to community energy
facilities.
(a) Credit.--A subscriber to a community energy facility
shall receive a monetary bill credit for every kilowatt hour
produced by the subscriber's subscription. A community energy
facility that demonstrates all of the following to the
commission shall have the initial and replacement subscribers of
the community energy facility receive a bill credit from the
date the community energy facility is authorized by the
commission to operate:
(1) An executed interconnection agreement with an
electric distribution company obtained in accordance with 52
Pa. Code Ch. 75 (relating to alternative energy portfolio
standards).
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(2) Proof of site control.
(3) The required nonministerial permits.
(4) Proof that the community energy facility will be at
least 50% subscribed on the date the community energy
facility receives permission to operate.
(5) A signed agreement for a commission-approved
workforce development requirement.
(6) Proof that the community energy facility is
constructed or, if not yet constructed, an attestation that
the community energy facility will be in compliance with
section 13.
(7) A community energy organization or subscriber
administrator will not bill a subscriber for services
provided by an electric distribution company. An electric
distribution company may not bill a subscriber for
subscription costs to a community energy organization.
(b) Establishment of credit.--Within 180 days of the
effective date of this subsection, the commission shall
establish a bill credit for a public utility that appropriately
values the energy, capacity and transmission values produced by
a community energy facility and is not less than the bill credit
established under 52 Pa. Code § 75.13(e) (relating to general
provisions). The terms and conditions of receiving the bill
credit may not limit or inhibit participation of subscribers
from any rate class.
Section 6. Protection for customers.
(a) Customer protection provisons.--The commission shall
promulgate regulations providing for the protection of a
residential customer who has a subscription with a community
energy organization or subscriber administrator.
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(b) Standardized customer disclosure form.--The commission
shall develop a standardized customer disclosure form in English
and Spanish for a residential customer that identifies key
information that is required to be provided by a subscriber
administrator to a potential residential subscriber, including
future costs and benefits of a subscription and the subscriber's
rights and obligations pertaining to a subscription.
(c) Subscription costs.--The subscription costs for a
subscriber must be lesser than the value of the bill credit and
may not include any up-front or sign-on fees or credit checks.
The subscription costs shall be nonbasic public utility charges.
Failure to pay a subscription may result in the loss of a
subscription but shall not impact public utility services.
(d) Benefits and costs.--The commission shall maximize
benefits and minimize costs to each rate class, notwithstanding
participation in a community energy program.
(e) Fees prohibited.--A community energy organization may
not impose a termination or cancellation fee on a subscriber.
(f) Net crediting.--An electric distribution company shall
enter into a net crediting agreement with a community energy
organization to include a subscriber's subscription fee on a
monthly bill and provide a customer with a new credit equivalent
to the total bill credit value for the generation period minus
the subscription fee. The net crediting agreement shall specify
payment terms from the electric distribution company to the
community energy organization. The electric distribution company
may charge a net crediting fee to the community energy
organization that may not exceed 1% of the bill credit value. A
nonresidential customer may subscribe to multiple community
energy facilities, except that no more than one of the
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subscriptions may be under a net credit agreement with an
electric distribution company. The electric distribution company
shall continue to have the duty for billing all basic electric
services, including transmission, distribution and generation
charges, consistent in accordance with this act and regulations
promulgated by the commission. The electric distribution company
shall also continue to maintain customer services, at a minimum,
consistent with existing standards prior to the implementation
of a net crediting agreement with a community energy
organization in accordance with this act and regulations
promulgated by the commission.
Section 7. Duties of electric distribution companies.
(a) Report on bill credit.--On a monthly basis, an electric
distribution company shall provide to a community energy
organization or subscriber administrator a report in a
standardized electronic format indicating the total value of the
bill credit generated by the community energy facility in the
prior month, the calculation used to arrive at the total value
of the bill credit and the amount of the bill credit applied to
each subscriber.
(b) Application of bill credit.--An electric distribution
company shall apply a bill credit to a subscriber's next monthly
electric bill for the proportional output of a community energy
facility attributable to the subscriber. Excess credits on a
subscriber's bill shall roll over from month to month. An
electric distribution company shall automatically apply excess
credits to the final electric bill when a subscription is
terminated for any cause.
(c) Transferability.--An electric distribution company shall
permit the transferability and portability of subscriptions if a
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subscriber relocates within the same electric distribution
company territory.
Section 8. Compensation and cost recovery for electric
distribution companies.
(a) Compensation.--A community energy organization shall
compensate an electric distribution company for the electric
distribution company's reasonable administrative costs of
interconnection of a community energy facility.
(b) Cost recovery.--An electric distribution company may
recover reasonable costs from each subscriber organization,
subject to approval by the commission, to administer a community
energy program within the electric distribution company's
service territory of a community energy facility. The
Commonwealth shall maximize Federal and State funds for energy
assistance, clean energy deployment or any other applicable
funding to minimize the cost recovery impact on each subscriber.
Section 9. Interconnection standards for community energy
facilities.
(a) Applications.--Beginning on the effective date of this
subsection, an electric distribution company shall have the
following duties:
(1) Accept interconnection applications for community
energy facilities on a nondiscriminatory basis and study the
impact of interconnecting the facilities to the grid using
the current commission-approved interconnection rules and
tariffs and in accordance with best practices.
(2) Include, in an interconnection application for a
community energy facility, proof of site control by the
community energy facility for the purposes of the study under
paragraph (1).
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(b) Administrative fees.--The commission may impose an
administrative fee on an initial interconnection application for
community energy facilities under subsection (a). The commission
may impose a fee equivalent to up to 5% of the electric
distribution company's initial interconnection application fee.
The commission may use fees collected under this subsection for
the administrative costs directly associated with this act.
Section 10. Unsubscribed energy.
An electric distribution company shall purchase unsubscribed
energy from a community energy facility at the electric
distribution company's wholesale energy cost as determined by
the commission. To offset real or perceived costs, an electric
distribution company shall sell unsubscribed energy to
PJM Interconnection, L.L.C., regional transmission organization
(PJM) or its successor service territory markets or otherwise
decrease energy purchases.
Section 11. Customer participation in community energy
programs.
(a) Participation in programs.--The commission shall
promulgate permanent regulations to enable participation in
community energy programs by each customer class and economic
group in accordance with the laws of this Commonwealth within
365 days of the effective date of this subsection.
(b) Temporary regulations.--In order to facilitate the
prompt implementation of this section, the commission and
department may promulgate temporary regulations. The temporary
regulations shall be implemented within 180 days of the
effective date of this subsection and expire following the date
of publication of the permanent regulations under subsection (a)
in the Pennsylvania Bulletin. The temporary regulations shall
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not be subject to any of the following:
(1) Section 612 of the act of April 9, 1929 (P.L.177,
No.175), known as The Administrative Code of 1929.
(2) 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.
(3) Sections 204(b) and 301(10) of the act of October
15, 1980 (P.L.950, No.164), known as the Commonwealth
Attorneys Act.
(4) The act of June 25, 1982 (P.L.633, No.181), known as
the Regulatory Review Act.
(c) Expiration.--The authority of the commission and
department to promulgate temporary regulations under subsection
(b) shall not expire until the commission promulgates the
permanent regulations under subsection (a).
(d) Contents.--The temporary regulations under subsection
(b) shall meet all of the following criteria:
(1) Be based on consideration of formal and informal
input from all stakeholders.
(2) Establish requirements that ensure access to
programs and equitable opportunities for participation for
residential and small commercial customer classes.
(3) Establish a registration process for community
energy organizations.
(4) Address the reasonable enforcement of minimum
subscription requirements for a community energy facility.
(e) Low-income customers.--The commission, in collaboration
with the Office of Consumer Advocate, electric distribution
companies, community energy organizations and low-income
stakeholders, may promulgate regulations adopting mechanisms to
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increase participation by low-income customers in community
energy programs. The commission shall increase participation by
low-income customers in community energy programs in a manner
that allows the commission to use available Federal funds to do
all of the following:
(1) Deliver larger guaranteed savings to income-
qualified households than those households that would receive
guaranteed savings without the Federal funds.
(2) Maximize State energy assistance programs.
Section 12. Location of multiple community energy facilities.
The commission shall promulgate regulations establishing
limitations on the location of multiple community energy
facilities in close proximity. The regulations shall meet all of
the following criteria:
(1) Prohibit an entity or affiliated entity under common
control from developing, owning or operating more than one
community energy facility on the same parcel or contiguous
parcels of land.
(2) Authorize a brownfield community energy facility or
rooftop community energy facility to be sited on contiguous
parcels if the total brownfield community energy facility or
rooftop community energy facility capacity on all contiguous
parcels does not exceed the limits established by the
commission.
Section 13. Prevailing wage and labor requirements.
(a) Prevailing wage.--A community energy facility for which
a bill credit is sought and awarded to a subscriber under this
act shall be deemed to meet each of the minimum requirements
necessary to apply the wage and benefit rates and related
certification of payroll records required under the
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Pennsylvania Prevailing Wage Act. A community energy
organization and each of the organization's agents, contractors
and subcontractors shall comply with the Pennsylvania Prevailing
Wage Act as attested under section 5 for work undertaken at the
community energy facility in which a bill credit for a
subscriber is sought and awarded.
(b) Community energy projects.--A contractor, subcontractor
or worker performing construction, reconstruction, demolition,
repair or maintenance work on a community energy project funded
under this act shall meet all of the following requirements:
(1) Maintains all valid licenses, registrations or
certificates required by the Federal Government, the
Commonwealth or a local government entity that is necessary
to do business or perform applicable work.
(2) Maintains compliance with the act of June 2, 1915
(P.L.736, No.338), known as the Workers' Compensation Act,
the act of December 5, 1936 (2nd Sp.Sess., 1937 P.L.2897,
No.1), known as the Unemployment Compensation Law, and
bonding and liability insurance requirements as specified in
the contract for the energy project.
(3) Has not defaulted on a project, declared bankruptcy,
been debarred or suspended on a project by the Federal
Government, the Commonwealth or a local government entity
within the previous three years.
(4) Has not been convicted of a misdemeanor or felony
relating to the performance or operation of the business of
the contractor or subcontractor within the previous 10 years.
(5) Has completed a minimum of the United States
Occupational Safety and Health Administration's 10-hour
safety training course or similar training sufficient to
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prepare workers for any hazards that may be encountered
during their work.
(c) Violations.--The Department of Labor and Industry shall
enforce this section in accordance with the laws of this
Commonwealth. The Department of Labor and Industry shall apply
the same administration and enforcement applicable under the
requirements of the Pennsylvania Prevailing Wage Act to ensure
compliance with subsection (a). In addition to enforcement
authorized under the Pennsylvania Prevailing Wage Act, if the
Department of Labor and Industry determines that the community
energy organization intentionally failed to pay prevailing wage
rates or benefit rates in violation of section 11(h) of the
Pennsylvania Prevailing Wage Act for work specified under
subsection (a), the community energy organization or the
organization's agents, contractors and subcontractors shall pay
a fine equivalent to 10% of the value of the bill credit
multiplied by the estimated 25-year production of the community
energy facility.
Section 14. Ratepayer protections.
This act shall be construed to minimize direct or indirect
costs related to community energy facilities to ratepayers of an
electric distribution company that are not subscribers. The
commission shall maximize benefits to all rate classes,
regardless of participation in a community energy program.
Section 15. Effective date.
This act shall take effect in 60 days.
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