Pennsylvania HB 2264: An Act amending Title 66 (Public Utilities) of the Pennsylvania Consolidated Statutes, in restructuring of electric utility industry, providing for virtual power plant program.

Bill Text

PRIOR PRINTER'S NO. 2962 PRINTER'S NO. 3369
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 2264
Session of
2026
INTRODUCED BY DAVIDSON, RIVERA, FIEDLER, WAXMAN, KHAN, HILL-
EVANS, OTTEN, INGLIS, MAYES, BOROWSKI, SANCHEZ, CEPEDA-
FREYTIZ, MADDEN, KAZEEM, CIRESI, FLEMING, PIELLI, MUNROE AND
D. WILLIAMS, MARCH 4, 2026
AS REPORTED FROM COMMITTEE ON ENERGY, HOUSE OF REPRESENTATIVES,
AS AMENDED, MAY 6, 2026
AN ACT
Amending Title 66 (Public Utilities) of the Pennsylvania
Consolidated Statutes, in restructuring of electric utility
industry, providing for virtual power plant program.
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:
§ 2806.3. Virtual power plant program.
(a) Program.--No later than July 1, 2027, the commission
shall require each electric distribution company to develop and
submit to the commission a proposal to implement a virtual power
plant program consistent with this section.
(b) Commission review and approval.--
(1) The commission shall conduct a public hearing on a
proposal submitted under subsection (a) and provide an
opportunity for the Office of Consumer Advocate and other
stakeholders to submit recommendations on the program
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proposed by the electric distribution company.
(2) THE ELECTRIC DISTRIBUTION COMPANY SHALL DEMONSTRATE
THAT THE PROPOSAL IS COST EFFECTIVE USING A COST-BENEFIT
ANALYSIS DETERMINED BY THE COMMISSION, WHICH SHALL INCLUDE AN
ANALYSIS OF THE ELECTRIC DISTRIBUTION COMPANY'S ESTIMATED
ADMINISTRATIVE COSTS.
(2) (3) The commission shall approve or disapprove a
proposal submitted under subsection (a) within 180 days after
submission. If the commission disapproves the proposal, all
of the following shall apply:
(i) The commission shall state in detail the reasons
for the disapproval.
(ii) The electric distribution company shall submit
a revised proposal within 60 days after entry of an order
disapproving the proposal. The revised proposal shall
address the deficiencies identified by the commission.
The commission shall approve or disapprove the revised
proposal within 90 days after submission.
(3) (4) A proposal submitted under subsection (a) shall
include a reasonable enrollment target for the electric
distribution company to achieve in collaboration with
contracted third-party distributed energy resource management
system providers and device installers. The enrollment target
shall be sufficient to drive market participation.
(c) Requirements.--A program shall harness distributed
energy resources to provide system peak load demand reduction
and other grid services. The program shall meet all of the
following requirements:
(1) Permit a customer with an eligible technology to
enroll in the program through an aggregator or the electric
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distribution company.
(2) To the extent practicable, include a mechanism to
incorporate existing demand response programs.
(3) (2) Provide compensable grid services for each
eligible technology that a participant may provide, including
local and system peak demand response and the avoidance or
deferral of transmission or distribution upgrades or capacity
expansion. The program may also include any of the following:
(i) Clean peak service.
(ii) Locational value.
(iii) Voltage support and other ancillary services.
(iv) Daily load shifting.
(v) Emergency services.
(vi) Other functions and grid services the
commission determines support efficient planning and
operation of the electrical grid.
(4) (3) Establish operational parameters for grid
services by distributed energy resource type, including all
of the following:
(i) The minimum and maximum number of grid events
during which the electric distribution company OR
PARTICIPATING AGGREGATOR may dispatch enrolled
distributed energy resources.
(ii) The months of the year during which a grid
event may occur.
(iii) The days of the week during which a grid event
may occur.
(iv) The times of day during which a grid event may
occur.
(v) A maximum duration of three hours for a grid
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event.
(vi) Minimum advance notice of a grid event to
participants, except that, as practicable, notice for an
emergency event may be provided in less than 24 hours.
(vii) Other information the commission determines
necessary to operate the program efficiently.
(5) (4) Provide for an aggregator to perform all of the
following:
(i) Participate in the program.
(ii) Enroll and manage customer participation.
(iii) Receive dispatch signals and other
communications from the electric distribution company.
(iv) Receive OR MANAGE performance-based
compensation or other appropriate compensation from the
electric distribution co