Stakeholders split over scope and incentives in proposed rewrite of Pennsylvania's Act 129

At a public hearing of the House Consumer Protection, Technology and Utilities Committee, stakeholders debated proposed changes to Act 129 contained in House Bill 505 and what those changes would mean for ratepayers, utilities and industry.

House Bill 505 would modernize Act 129, Pennsylvania’s energy efficiency and conservation statute, by broadening eligible measures to include resilience technologies such as solar and batteries, changing how savings are counted, and adjusting penalties and incentives for utilities.

The bill’s sponsors presented the measure as a way to update Act 129 for current energy challenges; witnesses and commissioners instead focused the hearing on where responsibility and cost should fall and on whether resilience and demand‑response belong inside Act 129.

“In our view, the energy efficiency and conservation program is not the appropriate program to address this issue,” said Rod Williamson, Executive Director of the Industrial Energy Consumers of Pennsylvania, arguing that resiliency measures for continuing consumption during outages are distinct from the consumption‑reduction goals of Act 129. Williamson urged that resiliency be explored separately and opposed giving electric distribution companies (EDCs) additional financial incentives tied to Act 129 programs.

Andy Tubbs, president and CEO of the Energy Association of Pennsylvania, told the committee “the time is right to modernize Act 1 29,” praising provisions in House Bill 505 that would replace the statute’s fixed penalty schedule with discretionary civil‑penalty authority, allow longer measure lifetimes, and permit cost recovery and performance incentives tied to results. Tubbs recommended clarifying budget‑cap calculations and said demand‑response and resiliency measures may merit separate treatment from the core consumption‑reduction program.

Commissioner Steve DeFrank of the Pennsylvania Public Utility Commission (PUC) described how the commission implements Act 129 and noted the PUC issued a Phase 5 implementation order on June 18, 2025. DeFrank said Act 129 remains a cost‑effective demand‑side tool and highlighted PUC interest in measures such as time‑of‑use rates, incentives for large loads like data centers to participate in demand management, and extending useful‑life accounting for measures.

Brad Bartow of the Keystone Energy Efficiency Alliance (KEEA) emphasized program outcomes and workforce impacts: program year 15 (June 2023–May 2024) produced 894,000 megawatt‑hours of gross energy savings and 156 megawatts of peak demand reduction, he said, and Act 129 has delivered multibillion‑dollar benefits since inception. Bartow asked for more flexibility for pilots, smoother multi‑phase industrial project treatment and stakeholder working groups to speed implementation.

Daryl Lawrence, Pennsylvania’s consumer advocate, said parts of House Bill 505 are positive—such as allowing the PUC to set income eligibility consistent with other programs and funding health and safety work—but he opposed provisions that would add financial incentives for utilities, calling them unnecessary and not in the public interest.

Committee members pressed witnesses on practical effects. Representative Steele asked how HB505 would affect consumer bills; DeFrank said the Phase 5 order would amount to about $1.37 per month on an average residential bill under the implementation order the commission issued. Lawmakers also asked whether data centers could be used to manage peak demand; DeFrank and other witnesses said front‑of‑meter arrangements and interconnection agreements provide avenues for demand management, while acknowledging behind‑the‑meter installations present different contract and reliability constraints.

Where stakeholders disagreed: - Industrial users urged removing resiliency from Act 129, opposed utility performance incentives, and asked for a reduced non‑participation fee for highly efficient industrial customers. - Utilities’ trade groups supported modernization, discretionary penalty authority, performance incentives linked to overachievement, removing the 15‑year limit on measure life, and clearer budget‑cap math. - Efficiency contractors and implementers highlighted the program’s measured savings, job creation and the need for faster pilot approvals and plan flexibility. - The consumer advocate supported some expansions for low‑income eligibility and distributed resources but opposed adding profit incentives for utilities.

No committee vote on House Bill 505 was recorded at the hearing; the session was a legislative fact‑finding and stakeholder input event. Witnesses and committee members said they expect further negotiations on budget‑cap calculations, whether resiliency and demand response should be included in Act 129, and the design of any utility performance incentives.

The PUC’s Phase 5 implementation order and the committee’s deliberations indicate lawmakers and regulators will continue to weigh tradeoffs among cost, program flexibility, grid resilience and protections for low‑income ratepayers as the bill proceeds.