Pennsylvanians are facing an affordability crisis. Whether it be at the grocery store, the gas pump, or most notably, when their electric bill arrives in the mail.
 
Pennsylvania electric ratepayers are facing a growing and unsustainable financial burden driven, in part, by the Tier II component of the Alternative Energy Portfolio Standard (AEPS). Since our state borders were closed to qualify as a Tier II resource Act 114 of 2020, Tier II Alternative Energy Credit (AEC) prices have surged from historic lows of $0.25 to over $38 per credit in 2025 — a staggering 12,000% increase. According to the Pennsylvania Public Utility Commission (PUC), the ratepayer impact from Tier II AECs has grown from just $1 million in 2016 to $355 million in 2024, with projections reaching $500 million in 2026.  The PUC has characterized this as a “meteoric increase” in Tier II AEC pricing — one that is imposing substantial compliance costs on utilities and customers alike. This trajectory is not merely concerning; it is a direct threat to energy affordability across the Commonwealth. Despite escalating Tier II AEC prices, generation from Tier II sources has remained flat or declined — demonstrating clearly that elevated credit prices have not spurred new output or investment. Further, the current alternative compliance payment (ACP) ceiling of $45 per AEC provides no meaningful cost protection for utilities or their customers, particularly with supply projected to fall short of demand beginning in 2028.

That’s why I will be introducing legislation that lowers the Tier II ACP from $45 to $15 per AEC. This targeted reform would immediately contain compliance costs for electric distribution companies and electric generation suppliers, providing meaningful and direct relief to Pennsylvania ratepayers. Reducing the ACP cap to $15 would save Pennsylvania consumers an estimated $300 million or more annually. Importantly, this reform does not undermine Tier II  generation — even at $15 per AEC, Tier II generators such as waste coal and pumped hydro storage can maintain healthy gross margins comparable to those of natural gas, wind, and solar generation. The proposal is financially sound, competitively fair, and structurally consistent with what neighboring states have already implemented. Reducing the ACP is a measured, evidence-based step that can be taken immediately to protect ratepayers without undermining generator viability.

The momentum for Renewable Portfolio Standard reform is building across the Northeast. Both New Jersey and Connecticut acted to contain ratepayer costs without abandoning their clean energy commitments — and Pennsylvania should follow their example. PJM is projecting a 29% increase in electricity bills for Pennsylvania, and bipartisan concern over energy affordability is mounting at every level of government. Reducing the Tier II ACP to $15 is a common-sense, pro-consumer reform that reflects market realities, regional norms, and the urgent need to ensure that Pennsylvania’s energy policies serve working families and businesses.

I respectfully urge your support for this legislation.