PA HB2264

Electric distribution companies with 100,000+ customers must submit virtual power plant program proposals to the Public Utility Commission by July 1, 2027, enabling aggregation of customer-owned distributed energy resources (batteries, smart thermostats, EVs, solar) to reduce peak demand and provide grid services.

Customers can enroll eligible technologies through aggregators or directly with utilities, receiving upfront payments and/or performance-based compensation for grid services, with enhanced payments for low-income customers and those in historically disadvantaged communities.

Grid events are limited to a maximum of 3 hours duration, with advance notice required to participants (except for emergencies), and enrolled customers maintain their compensation rate for a minimum of 5 years with renewal options.

The commission must establish electricity consumption reduction targets within 270 days, with corresponding financial incentives for utilities meeting targets and penalties for failure, plus annual reporting requirements beginning July 1, 2028.

Utilities may recover all reasonable program costs through customer rate adjustments, and utility-owned resources are prohibited from participating in the program to preserve competitive markets for aggregators.