Pennsylvania Passes Bill and Provides Grants to Support Energy Efficiency

October 16, 2008

Pennsylvania Governor Edward Rendell has signed an energy efficiency bill that will require utilities to save energy, in part by installing smart meters on every home and business in the state. He also announced grants to small businesses to help them reduce energy consumption.

On October 15, Rendell signed House Bill 2200, which he said will help save the average Pennsylvania household more than 20 percent on its electricity bill. Those savings are expected to add up to $500 million by 2013.

Under the bill, utilities will be required to work with customers to cut electricity use 1 percent by 2011 and 3 percent by 2013. In addition, utilities must cut energy use 4.5 percent during peak demand periods when prices are highest, typically the hottest days of summer and the coldest days of winter. Electric utilities that fail to meet the law's requirements will face steep penalties.

The utilities will be directed to offer customers new pricing plans that reward customers who shift heavy use to off-peak hours and to equip every home and business in the state with "smart meters" within 15 years. A smart meter gives consumers real-time information, such as the cost of power and whether or not they are in a peak rate period. Armed with this information, consumers can choose to use energy when it is cheapest and cut back at times when it is most expensive.

The new legislation also will require Pennsylvania's utilities to engage in "least cost" purchasing. Utilities will now need to make economical purchases of energy via auctions, limited long-term contracts, spot market purchases, and short-term contracts.

For larger businesses, the bill permits them to enter into long-term contracts with utilities allowing the businesses to better predict their energy purchases.

In a related announcement, also on October 15, the governor said small businesses will get some energy cost relief as well. The commonwealth is investing $553,000 through the Small Business Advantage Grant Program to help 92 companies reduce energy consumption.

The Small Business Advantage Grant Program provides a 50 percent match of up to $7,500 for equipment or processes that reduce energy consumption, promote pollution prevention, and increase profitability. The program has invested more than $4.2 million in 764 businesses across the state since the program was launched in 2004.

"Small businesses across the state are bracing for high heating costs this winter as they try to cope with the current international financial crisis," Rendell said. "Companies that invest in equipment to reduce their energy costs or cut waste will be better positioned to compete and succeed in this difficult environment."

For more information, see the governor's October 15 press releases regarding the energy conservation bill and the small business grants.

To read more about renewable energy and energy efficiency projects in Pennsylvania, see: