PA HB1272

Allows electric distribution companies to petition the Public Utility Commission to demonstrate "resource inadequacy" exists when reserve margins fall below targets in 10-year forecasts, enabling them to invest in or directly own new generation facilities including natural gas, nuclear, battery storage, and alternative energy sources

Extends maximum long-term power purchase contract terms from 20 years to 30 years and removes the previous 25% cap on long-term contracts, allowing default service providers to use long-term contracts for up to 100% of their projected load

Changes the cost standard for generation supply procurement from "least cost" to "reasonable cost" and eliminates the requirement for a "prudent mix" of short-term, long-term, and spot market contracts

Establishes a nonbypassable surcharge mechanism to recover utility costs for new generation investments from all customer classes, with net revenues from wholesale market sales credited back to customers

Requires commission decisions on resource inadequacy petitions within 9 months (deemed approved if no decision), and provides financial incentives for utilities entering long-term resource adequacy agreements at rates between their weighted cost of capital and authorized return on equity