HB 505 amends Title 66 of Pennsylvania’s Public Utilities statutes and represents the most substantial revision to the state’s Act 129 energy efficiency framework in more than a decade. The legislation expands the scope of existing programs by formally incorporating grid and customer resilience—particularly in response to extreme weather—into utility planning requirements.
Under HB 505, the Pennsylvania Public Utility Commission (PUC) would require electric distribution companies to submit updated energy efficiency, resilience, and conservation plans on a five-year cycle. While existing programs have historically focused on reducing consumption and peak demand, the amended statute broadens that mandate to include measures that reduce outage risk and strengthen system performance during extreme weather events.
Eligible measures extend beyond traditional efficiency upgrades to include battery systems, home fuel cells, heat pumps, geothermal heating, smart grid technologies, and targeted distribution system improvements designed to reduce energy losses. By embedding resilience directly into program objectives, the bill reflects a shift toward treating efficiency investments as part of broader grid planning rather than stand-alone demand-side initiatives.
The legislation places added emphasis on equitable access to energy efficiency and resilience measures. Utilities would be required to ensure programs serve all customer classes, with specific provisions for households at or below 150 percent of federal poverty guidelines, or an alternative income threshold approved by the PUC.
HB 505 also adjusts how benefits from low-income programs are evaluated. For cost-effectiveness reviews, quantified benefits associated with qualifying low-income measures would be multiplied by two, reflecting their broader system and societal value. Utilities may pursue alternative compliance options, including direct installation programs, provided funding levels meet or exceed prior low-income efficiency investments.
From a regulatory standpoint, HB 505 strengthens oversight while maintaining long-standing cost limitations. Overall program spending remains capped at levels tied to historical utility revenues, though the PUC gains additional authority after 2031 to adjust funding based on performance, customer impacts, and changes in household energy costs.
The bill reinforces evaluation, measurement, and verification requirements, including annual independent reviews and periodic full program assessments. Utilities that fail to meet required energy or demand reduction targets may face financial penalties determined by the PUC, with collected funds directed to hardship and low-income assistance programs rather than recovered through rates.
At the same time, the legislation allows for performance-based incentives when utilities exceed established reduction targets, provided savings are quantifiable, independently verified, and achieved beyond baseline obligations.
HB 505 passed the House along largely partisan lines, underscoring continued divisions over the role of utility regulation, rate impacts, and long-term infrastructure investment. Supporters describe the bill as a necessary modernization of Pennsylvania’s efficiency framework, while critics have raised concerns about cost exposure and regulatory complexity.
The measure now advances for further consideration, where its future will depend on Senate action and potential revisions. Several provisions would take effect on staggered timelines, with select enforcement mechanisms activating within 60 days and broader program changes scheduled to begin in 2031.
