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U.S. Department of Energy Energy Efficiency and Renewable Energy

Energy Incentive Programs, Pennsylvania

Updated December 2011

What public-purpose-funded energy efficiency programs are available in my state?

Pennsylvania's Act 129, signed into law in 2008, sets ambitious savings goals for the state's large electric utilities. Each utility submitted an energy conservation plan to the Pennsylvania Public Utilities Commission in 2009 that would enable it to meet a 3% energy savings goal (relative to forecasted load) for the year ending May 31, 2013. The act also includes a 4.5% peak demand reduction goal (relative to 2007-8 levels) by May 31, 2013. All customer classes are covered, and the act has a special provision that not less than 10% of the energy reductions will be derived from "units of federal, state, and local government." Each utility has rolled out its initial set of programs (see below).

What utility energy efficiency programs are available to me?

Utilities in Pennsylvania are the administrators of the energy conservation programs (see above).

PECO's efficiency programs all fall under the rubric of its Smart Ideas initiative. The business incentives program includes rebates for HVAC equipment – ranging from room air conditioners to large centrifugal chillers - as well as lighting, energy management controls upgrades, drives and motors, and food service equipment. These electric incentives are currently (Fall, 2011) on wait list status, but some high-efficiency natural gas heating rebates are available.

PPL's e-power campaign includes a number of opportunities that may interest federal customers, all clustered under its institutional campaign. Rebate are offered for appliances, lighting, motors and drives, HVAC, and refrigeration measures. In addition, for any measure that might not fit into the array of prescriptive e-power programs, PPL provides custom incentives of $0.10/kWh of first-year savings. The custom program includes a required commissioning component. Total incentives per customer are capped at $500,000.

Duquesne Light Company's conservation incentives are all organized under its Watt Choices initiative. There is a full array of prescriptive incentives through the Watt Choices business program, covering measures from screw-in compact fluorescent lamps to packaged terminal air conditioners (PTACs) to insulation on refrigeration suction pipes. Custom incentives are also available to cover less common equipment or more comprehensive "whole building" types of projects. To learn more about these incentives and the Watt Choices Public Agencies campaign, contact Duquesne's Ron Rydzak (rrydzak@duqlight.com 412.393.6608).

FirstEnergy customers - those in the Penelec, Metropolitan Edison, and Penn Power service areas - can also take advantage of an array of incentives. As with the other large Pennsylvania utilities, FirstEnergy offers a standard set of prescriptive incentives covering the most common types of efficiency retrofits - lighting, HVAC, and motors and drives - but there is also a specialty equipment program, which covers refrigeration, food service, and other miscellaneous equipment, and a custom incentive program, to cover almost any other type of energy-saving project.

Allegheny Power (formerly West Penn Power) hosts a similar slate of efficiency offerings through its Watt Watchers initiative. Prescriptive rebates are available for a range of energy-conserving lighting products, variable frequency drives, and high-efficiency packaged air conditioners and heat pumps. For projects that range outside of the scope of the prescriptive rebates, Allegheny's Custom Applications Program offers up to 50% of project cost (maximum $500,000) for retrofit installations that aim to save at least 5-10% of a large (>2,500,000 kWh/yr.) facility's energy usage. For smaller facilities (1,000,000 - 2,500,000 kWh/yr.), a similar offering, the Custom Technologies Applications Program, will provide up to 25% of project cost, with a $100,000 maximum incentive.

What load management/demand response options are available to me?

The PJM Interconnection (PJM), a regional transmission organization (RTO), offers several demand response programs. Two specific programs may be attractive to federal facilities in the PJM footprint:

  • The Economic Load Response program allows electricity users to provide load reductions in exchange for a payment based on hourly wholesale electricity prices. Participation is fully voluntary. Customers start by submitting load reduction bids through their curtailment service provider (any existing PJM member, such as their utility, a third-party electricity supplier, or a specialty CSP) of at least 100 kW into the day-ahead energy market. Participants whose bids are accepted are paid for their load reductions based upon the day-ahead, hourly electricity market prices (the day-ahead "locational marginal price," or LMP). Reductions are figured based on a customer baseline load (CBL), which is essentially the average load levels for the same hours in four of the facility's previous non-responding days. Regardless of which type of firm it is, the CSP will generally offer to split the revenues with the customer at a pre-determined percentage.

  • PJM's emergency "capacity" program allows demand resources to participate in PJM's Reliability Pricing Model (RPM) forward capacity market via a CSP. Participants pledge to either reduce their load by a specified amount (guaranteed load drop, GLD), or to a specific kW level (known as firm service level, FSL), within one or two hours of an event notification. Load reductions are mandatory and may occur up to ten times per year, lasting up to six hours per event. Penalties for non-compliance are substantial. Remuneration is based on the results of the annual RPM capacity auctions in various PJM regions. Remuneration levels for the 2012-13 and 2013-14 PJM years (which begin June 1, 2012 and June 1, 2013, respectively) in PJM's western region (of which western Pennsylvania is a part) are as low as $6,000 per MW in 2012-13 and $10,000 in 2013-2014, compared to roughly $40,000 in 2011-12, but for eastern PA customers, the payments will continue to be high (in the $50,000-90,000/MW range). Participants are also eligible to receive energy payments for actual reductions, if and when the program is called.

In both programs, participants can provide load reductions either through curtailing electricity use or operating on-site generation consistent with local environmental regulations and permits. PECO's Smart A/C Saver is a direct load control program in which PECO will install a programmable thermostat that gives the company the capability to cycle the facility's air conditioners up to thirty minutes in each hour when events are called. In exchange, customers receive $120/summer for each thermostat installed (i.e., per each air conditioner controlled).

PPL is offering a direct load control program, E-Power Peak Saver, that pays customers $50 per year for allowing the company to cycle their packaged air-conditioning units.

What distributed energy resource options are available to me?

The Database of State Incentives for Renewables and Efficiency (DSIRE) provides information on programs that offer incentives for renewable distributed generation. The following programs may be of interest to federal customers:

  • The Pennsylvania Energy Development Authority (PEDA), part of Pennsylvania's Department of Environmental Protection, offers periodic opportunities for loans, loan guarantees, and grants for alternative energy, energy efficiency, and load management projects. Check their web site to see what's available at any given time.

  • The Pennsylvania Sunshine Solar program offers rebates of $0.25/kW (more for the first ten kW) towards grid-connected PV systems up to 200 kW and 25% of the installed cost (maximum $20,000) for solar thermal (water or space heat) installations. The program is currently (Fall, 2011) in "wait list" mode.

  • Pennsylvania's Alternative Energy Portfolio Standard Act, passed in 2004, provides for alternative energy credit (AEC) sales by generators of renewable and alternatively generated power to the state's electric utilities, which are beholden to the AEPS. The act made special provisions for solar photovoltaics, such that solar renewable energy credits (SRECs) were particularly valuable, trading for an average of about $0.25 per kWh; however, with an over-supply the value has recently plummeted such that PA SRECs recently (October, 2011) sold for one-tenth this value. More information on this program can be obtained from the Pennsylvania Public Utility Commission and the Database of State Incentives for Renewables and Efficiency.

Are there energy efficiency programs sponsored by state government?

Pennsylvania's Department of Environmental Protection and Department of Community and Economic Development jointly administer several alternative energy grant and loan programs funded pursuant to the Alternative Energy Investment Act, passed by the state legislature in 2008. However, none of these programs is available to federal government customers.

What additional opportunities are available to me?

Federal customers whose utilities have area-wide supply contracts through GSA (e.g., PGW, PECO, PPL, First Energy, and Allegheny Power), may be able to take advantage of 3rd-party financed energy efficiency projects called utility energy services contracts (UESCs). Information is available on GSA's Energy Center of Expertise Library Page. Federal facilities should contact their account executive to determine the level of each utility's participation.

PJM (see above in the demand response section) now allows energy efficiency projects to participate in its forward capacity markets, based on its Reliability Pricing Model (RPM). To be eligible, EE projects must reduce load continuously by at least 100 kW during peak summer hours, and not be dispatchable. This load reduction can be bid into PJM's annual (for three years in advance) and "residual" (nearer-term) capacity auctions, and if selected will receive the auction clearing price. Interested customers can participate through energy service companies conducting ESPCs or utilities executing UESCs at their sites.