Act 129

Issue context, Background, & Resources

Pennsylvania’s Energy Efficiency Law

Act 129 is Pennsylvania’s flagship energy efficiency law. Signed into law by Governor Ed Rendell in 2008, the Act requires each of Pennsylvania’s seven major electric distribution companies (EDCs) to reduce energy use within their service territories. In the first seven years of the law, utility programs were established to meet reduction targets; these programs delivered $6.4 billion in benefits to all customer classes.

How Act 129 Works

The Public Utility Commission (PUC) sets efficiency targets for each EDC based on a third-party expert review of energy efficiency potential.

  • Utilities meet these targets over the course of a three to five year “Phase” determined by the Commission.

  • Phase III of Act 129 began in June 2016 and will end in June 2021. This is the longest implementation phase of a law of this kind in the United States.

  • KEEA submitted comments in response to the PUC’s Phase IV draft implementation order, which can be read in their entirety here.

Utilities meet Act 129 targets by contracting with conservation service providers (CSPs) to implement energy efficiency programs.

  • Types of programs include rebates and incentives for high-efficiency appliances and lighting, upgrades to industrial processes, advanced building controls, and construction of efficient new buildings.

  • Efficiency programs must be cost-effective over 15 years and savings are verified by third parties.

Benefits Delivered: Energy Savings and Local Jobs

Act 129 delivered $6.4 billion in benefits to Pennsylvania electric customers in its first seven years.

  • Customers who take advantage of Act 129 programs directly benefit through bill savings.

  • Efficiency investments on a large scale have reduced energy demand, avoiding the need for expensive utility investments in new power generation, transmission, and distribution infrastructure.

Energy efficiency creates jobs.

  • In early 2020, energy efficiency accounted for more than 71,000 Pennsylvania jobs, according to the Department of Energy.

  • Efficiency jobs can be found in every county in the Commonwealth, and most jobs are in fields that can’t be outsourced, like construction.

  • The energy efficiency workforce includes electricians, engineers, architects, trained technicians, financial analysts, construction workers, facility managers, software developers, marketing professionals, and other specialists.

KEEA and Act 129

KEEA has been at the forefront of Act 129 advocacy since its founding in 2007.

  • KEEA advocacy was critical in developing legislation and building support to win Act 129’s passage through the legislature in 2008.

  • KEEA has intervened in utility rate cases to strengthen Act 129 implementation targets and defend energy efficiency.

  • KEEA has been a consistent voice at the PUC in strengthening efficiency programs during each phase of Act 129 implementation.

  • Over the last several years, KEEA has successfully protected customers against multiple attempts to cut Act 129 budgets by making large customer contributions to the program voluntary.

Next Steps for Act 129

With the Phase IV implementation deliberations underway, and with the devastating impacts of COVID-19 threatening to destroy our industry, KEEA continues to advance robust investment and strong policy solutions on behalf of and alongside our member business.

 In late January 2021, KEEA submitted comments to the PUC on the Act 129 Phase IV plans that emphasized the need for truly comprehensive, whole-building programming, the continuation of programs beyond savings targets, and adjustment of plans for the impacts of COVID-19, the growing demand for the EE workforce, and the anticipated influx of RGGI funds. The comments can be read in full here.

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