The House Consumer Affairs Committee held a hearing on House Bill 1580 last week. The bill, sponsored by Rep. Chris Ross (R-Chester) amends the Alternative Energy Portfolio Standards Act, temporarily increasing solar Tier One requirements and limiting the credits to in-state solar companies that directly distribute solar generated electricity to an in-state distribution system, closing the state’s borders for acceptable projects and SRECs.
Ross has been working with the solar industry for more than a year in an attempt to shore up the value of Solar Renewable Energy Credits in the state. SRECs have dropped by more than 200 percent, making it extremely difficult to finance new systems and payoff existing systems.
Bill supporters who testified – mostly owners of Pennsylvania solar energy companies – said doing nothing will put many small companies out of business and cause many workers to lose their jobs. Opponents argued the state should not be picking winners, and rhetorically asked when enough is enough, citing the state’s carve out for solar under AEPS and targeted grants of more than $200 million in taxpayer dollars to promote the industry. Others voiced concern that the state would be continuing to artificially manipulate the market instead of allowing the marketplace to work.
Ross said the legislation simply addresses “a specific imbalance” in the current SREC market, stemming from an oversupply of solar energy in Pennsylvania, and said he would have further amendments to the bill that would make mandated purchases neutral in the long run. His amendment would include a 4.5 percent increase in solar purchase requirements between 2012 and 2016, and a mandated decrease of 4.5 percent between 2019 and 2026.
The PUC provided written opposition to the bill, citing increased costs for consumers and undermining wholesale market competition. The Commission also expressed a desire to see the competitive market work, and opposed continuing changes to the rules under which the state’s electric markets plan and operation. Finally, the PUC said it was convinced that the bill as written is unconstitutional, and a violation of the Commerce Clause.
Governor Corbett also provided written comments on the bill. The Governor clearly stated that he opposed any further increases in costs for Pennsylvania businesses and consumers due to government mandates. Corbett also cited concerns about the Commerce Clause, and ultimately said he opposed the legislation as written.
Solar industry companies intend to continue seeking a vote in committee and the floor. If the bill does get committee consideration, the only certainty is that there will be at least several amendments offered, including language that would: 1.) include nuclear energy and waste to energy facilities under AEPS; 2.) further define eligible biomass, 3.) include demand side management in Tier one, and 4.) include natural gas as an alternative or renewable source.
Under the state’s Alternative Energy Portfolio Standards Act of 2004, 18 percent of retail sales from electric generator and distribution companies by 2021 must come from alternative energy sources: 10 percent from waste coal and hydropower, and 8 percent from renewable sources like solar, wind and biomass.