The Pennsylvania Public Utility Commission has denied petitions by PECO and other electricity providers to lower the energy consumption reduction targets imposed under Phase II of PA’s 2008 Act 129.
Act 129 required large electric companies to adopt energy efficiency conservation programs to meet reduction targets set by the PUC. Rather than set a single statewide reduction target, the PUC used data from the Statewide Evaluator’s Market Potential Study and Baseline Studies to develop consumption reduction targets for each EDC based on maximum permitted funding levels and projected acquisition costs.
The PUC set PECO’s target for reduced energy consumption at 2.9% between June 1, 2013 and May 31, 2016. This was the highest consumption reduction target set by the PUC; the lowest was 1.6% for West Penn Power Company. In order to allow electric companies the opportunity for an evidentiary hearing on their reduction goals, the PUC’s Phase II Implementation Order provided that the targets would become final for any covered electric distribution company (EDC) that did not petition the Commission.
In response, PECO and other companies filed petitions, arguing that the reduction targets were too aggressive and would expose them to the threat of harsh penalties for noncompliance. Act 129 authorizes the commission to impose penalties of not less than $1 million and not more than $20 million on any EDC that fails to achieve the reduction targets.
PECO argued that its Phase II reduction targets were overstated because: (1) the Commission failed to allocate Phase II funds for ongoing and future demand reduction programs; and (2) the Commission failed to use PECO’s current revenue and exclude revenue collected on behalf of EGSs in determining an appropriate Phase II funding level.
After evidentiary hearings, the PUC concluded: “While PECO would prefer that its Phase II target be reduced, it has failed to demonstrate that implementing an EE program to meet the 2.9% energy consumption reduction would not result in benefits to all PECO customers that exceed program costs borne by those customers, as required by Section 2806.1(c)(3). Therefore, we shall not reduce PECO’s Phase II targets at this juncture. “
The full decision can be read here.