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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| SENATE BILL |
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| INTRODUCED BY HUGHES, TARTAGLIONE AND FERLO, JUNE 14, 2011 |
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| REFERRED TO ENVIRONMENTAL RESOURCES AND ENERGY, JUNE 14, 2011 |
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| AN ACT |
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1 | Amending the act of November 30, 2004 (P.L.1672, No.213), |
2 | entitled, "An act providing for the sale of electric energy |
3 | generated from renewable and environmentally beneficial |
4 | sources, for the acquisition of electric energy generated |
5 | from renewable and environmentally beneficial sources by |
6 | electric distribution and supply companies and for the powers |
7 | and duties of the Pennsylvania Public Utility Commission," |
8 | further providing for definitions and for alternative energy |
9 | portfolio standards; and making a related repeal. |
10 | The General Assembly of the Commonwealth of Pennsylvania |
11 | hereby enacts as follows: |
12 | Section 1. The definition of "force majeure" in section 2 of |
13 | the act of November 30, 2004 (P.L.1672, No.213), known as the |
14 | Alternative Energy Portfolio Standards Act, amended July 17, |
15 | 2007 (P.L.114, No.35), is amended to read: |
16 | Section 2. Definitions. |
17 | The following words and phrases when used in this act shall |
18 | have the meanings given to them in this section unless the |
19 | context clearly indicates otherwise: |
20 | * * * |
21 | "Force majeure." Upon its own initiative or upon a request |
22 | of an electric distribution company or an electric generator |
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1 | supplier, the Pennsylvania Public Utility Commission, within 60 |
2 | days, shall determine if alternative energy resources are |
3 | reasonably available in the marketplace in sufficient quantities |
4 | for the electric distribution companies and electric generation |
5 | suppliers to meet their obligations for that reporting period |
6 | under this act. The commission shall declare a force majeure for |
7 | any reporting period if it determines the price of available |
8 | alternative energy credits exceeds the cost of applicable |
9 | alternative energy compliance payments established under this |
10 | act. The commission shall not declare a force majeure for any |
11 | reporting period based solely on the price of alternative energy |
12 | credits if the alternative energy credit prices are less than |
13 | the cost of applicable alternative compliance payments |
14 | established under this act. In making this determination, the |
15 | commission shall consider whether electric distribution |
16 | companies or electric generation suppliers have made a good |
17 | faith effort to acquire sufficient alternative energy to comply |
18 | with their obligations. Such good faith efforts shall include, |
19 | but are not limited to, banking alternative energy credits |
20 | during their transition periods, seeking alternative energy |
21 | credits through competitive solicitations and seeking to procure |
22 | alternative energy credits or alternative energy through long- |
23 | term contracts. In further making its determination, the |
24 | commission shall assess the availability of alternative energy |
25 | credits in the Generation Attributes Tracking System (GATS) or |
26 | its successor and the availability of alternative energy credits |
27 | generally in Pennsylvania and other jurisdictions in the PJM |
28 | Interconnection, L.L.C. regional transmission organization (PJM) |
29 | or its successor. The commission may also require solicitations |
30 | for alternative energy credits as part of default service before |
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1 | requests of force majeure can be made. If the commission further |
2 | determines that alternative energy resources are not reasonably |
3 | available in sufficient quantities in the marketplace for the |
4 | electric distribution companies and electric generation |
5 | suppliers to meet their obligations under this act, then the |
6 | commission shall modify the underlying obligation of the |
7 | electric distribution company or electric generation supplier or |
8 | recommend to the General Assembly that the underlying obligation |
9 | be eliminated. Commission modification of the electric |
10 | distribution company or electric generation supplier obligations |
11 | under this act shall be for that compliance period only. |
12 | Commission modification shall not automatically reduce the |
13 | obligation for subsequent compliance years. If the commission |
14 | modifies the electric distribution company or electric |
15 | generation supplier obligations under this act, the commission |
16 | may require the electric distribution company or electric |
17 | generation supplier to acquire additional alternative energy |
18 | credits in subsequent years equivalent to the obligation reduced |
19 | due to a force majeure declaration if the commission determines |
20 | that sufficient alternative energy credits exist in the |
21 | marketplace. |
22 | * * * |
23 | Section 2. Section 3(b), (c), (e)(7) and (12), (f), (g) and |
24 | (h) of the act, amended July 17, 2007 (P.L.114, No.35), are |
25 | amended and the section is amended by adding a subsection to |
26 | read: |
27 | Section 3. Alternative energy portfolio standards. |
28 | * * * |
29 | (b) Tier I and solar photovoltaic shares.-- |
30 | (1) [Two years after the effective date of this act, at |
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1 | least 1.5% of the electric energy sold by an electric |
2 | distribution company or electric generation supplier to |
3 | retail electric customers in this Commonwealth shall be |
4 | generated from Tier I alternative energy sources. Except as |
5 | provided in this section, the minimum percentage of electric |
6 | energy required to be sold to retail electric customers from |
7 | alternative energy sources shall increase to 2% three years |
8 | after the effective date of this act. The minimum percentage |
9 | of electric energy required to be sold to retail electric |
10 | customers from alternative energy sources shall increase by |
11 | at least 0.5% each year so that at least 8% of the electric |
12 | energy sold by an electric distribution company or electric |
13 | generation supplier to retail electric customers in that |
14 | certificated territory in the 15th year after the effective |
15 | date of this subsection is sold from Tier I alternative |
16 | energy resources.] The minimum percentage of electric energy |
17 | required to be sold to retail electric customers from Tier I |
18 | alternative energy sources is: |
19 | (i) 1.5013% for June 1, 2006, through May 31, 2007. |
20 | (ii) 1.503% for June 1, 2007, through May 31, 2008. |
21 | (iii) 2.0063% for June 1, 2008, through May 31, |
22 | 2009. |
23 | (iv) 2.512% for June 1, 2009, through May 31, 2010. |
24 | (v) 3.0203% for June 1, 2010, through May 31, 2011. |
25 | (vi) 3.5504% for June 1, 2011, through May 31, 2012. |
26 | (vii) 4.0752% for June 1, 2012, through May 31, |
27 | 2013. |
28 | (viii) 4.6218% for June 1, 2013, through May 31, |
29 | 2014. |
30 | (ix) 5.4516% for June 1, 2014, through May 31, 2015. |
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1 | (x) 6.05% for June 1, 2015, through May 31, 2016. |
2 | (xi) 6.66% for June 1, 2016, through May 31, 2017. |
3 | (xii) 7.25% for June 1, 2017, through May 31, 2018. |
4 | (xiii) 7.87% for June 1, 2018, through May 31, 2019. |
5 | (xiv) 8.75% for June 1, 2019, through May 31, 2020. |
6 | (xv) 9.72% for June 1, 2020, through May 31, 2021. |
7 | (xvi) 10.85% for June 1, 2021, through May 31, 2022. |
8 | (xvii) 12.15% for June 1, 2022, through May 31, |
9 | 2023. |
10 | (xviii) 13.45% for June 1, 2023, through May 31, |
11 | 2024. |
12 | (xix) 15.00% for June 1, 2024, and thereafter. |
13 | (1.1) The commission shall comply with the requirements |
14 | of 66 Pa.C.S. § 2814 (relating to additional alternative |
15 | energy sources) by annually increasing the percentage share |
16 | of Tier I alternative energy sources required to be sold by |
17 | an electric distribution company or electric generation |
18 | supplier under paragraph (1) to reflect any new alternative |
19 | energy source provided for by 66 Pa.C.S. § 2814. Any annual |
20 | increase will be applied to the next compliance year |
21 | requirement. |
22 | (2) The total percentage of the electric energy sold by |
23 | an electric distribution company or electric generation |
24 | supplier to retail electric customers in this Commonwealth |
25 | that must be sold from solar photovoltaic technologies is: |
26 | (i) 0.0013% for June 1, 2006, through May 31, 2007. |
27 | (ii) 0.0030% for June 1, 2007, through May 31, 2008. |
28 | (iii) 0.0063% for June 1, 2008, through May 31, |
29 | 2009. |
30 | (iv) 0.0120% for June 1, 2009, through May 31, 2010. |
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1 | (v) 0.0203% for June 1, 2010, through May 31, 2011. |
2 | [(vi) 0.0325% for June 1, 2011, through May 31, |
3 | 2012. |
4 | (vii) 0.0510% for June 1, 2012, through May 31, |
5 | 2013. |
6 | (viii) 0.0840% for June 1, 2013, through May 31, |
7 | 2014. |
8 | (ix) 0.1440% for June 1, 2014, through May 31, 2015. |
9 | (x) 0.2500% for June 1, 2015, through May 31, 2016. |
10 | (xi) 0.2933% for June 1, 2016, through May 31, 2017. |
11 | (xii) 0.3400% for June 1, 2017, through May 31, |
12 | 2018. |
13 | (xiii) 0.3900% for June 1, 2018, through May 31, |
14 | 2019. |
15 | (xiv) 0.4433% for June 1, 2019, through May 31, |
16 | 2020. |
17 | (xv) 0.5000% for June 1, 2020, and thereafter.] |
18 | (vi) 0.0504% for June 1, 2011, through May 31, 2012. |
19 | (vii) 0.0752% for June 1, 2012, through May 31, |
20 | 2013. |
21 | (viii) 0.1218% for June 1, 2013, through May 31, |
22 | 2014. |
23 | (ix) 0.2016% for June 1, 2014, through May 31, 2015. |
24 | (x) 0.3% for June 1, 2015, through May 31, 2016. |
25 | (xi) 0.41% for June 1, 2016, through May 31, 2017. |
26 | (xii) 0.5% for June 1, 2017, through May 31, 2018. |
27 | (xiii) 0.62% for June 1, 2018, through May 31, 2019. |
28 | (xiv) 0.75% for June 1, 2019, through May 31, 2020. |
29 | (xv) 0.97% for June 1, 2020, through May 31, 2021. |
30 | (xvi) 1.35% for June 1, 2021, through May 31, 2022. |
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1 | (xvii) 1.9% for June 1, 2022, through May 31, 2023. |
2 | (xviii) 2.45% for June 1, 2023, through May 31, |
3 | 2024. |
4 | (xix) 3% for June 1, 2024, and thereafter. |
5 | (3) Upon commencement of the beginning of the 6th |
6 | reporting year, and every five years thereafter, the |
7 | commission shall undertake a review of the compliance by |
8 | electric distribution companies and electric generation |
9 | suppliers with the requirements of this act. The review shall |
10 | also include the status of alternative energy technologies |
11 | within this Commonwealth and the capacity to add additional |
12 | alternative energy resources. The commission shall use the |
13 | results of this review to recommend to the General Assembly |
14 | additional compliance goals beyond year [15] 21. The |
15 | commission shall work with the department in evaluating the |
16 | future alternative energy resource potential. |
17 | (4) Electric energy and alternative energy credits from |
18 | solar photovoltaic and solar thermal energy technologies |
19 | supplied to retail customers shall be generated from solar |
20 | photovoltaic and solar thermal energy systems located within |
21 | this Commonwealth in meeting the requirements of paragraph |
22 | (2). This paragraph shall apply to all contracts or short- |
23 | term purchases made after December 31, 2010. |
24 | (5) Notwithstanding the other provisions of this act, |
25 | credits purchased or contracted for prior to the effective |
26 | date of this paragraph may be used to demonstrate compliance |
27 | under this subsection. |
28 | (c) Tier II share.--Of the electrical energy required to be |
29 | sold from alternative energy sources identified in Tier II, the |
30 | percentage that must be from these technologies is for: |
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1 | (1) Years 1 through 4 - 4.2%. |
2 | (2) Years 5 through 9 - 6.2%. |
3 | (3) Years 10 through 14 - [8.2%] 11.2%. |
4 | (4) Years 15 and thereafter - [10.0%] 13.0%. |
5 | * * * |
6 | (e) Alternative energy credits.-- |
7 | * * * |
8 | (7) An electric distribution company or an electric |
9 | generation supplier with sales that are exempted under |
10 | subsection (d) may bank credits for retail sales of |
11 | electricity generated from Tier I and Tier II sources made |
12 | prior to the end of the cost-recovery period and after the |
13 | effective date of this act. Bankable credits shall be limited |
14 | to credits associated with electricity sold from Tier I and |
15 | Tier II sources during a reporting year which exceeds the |
16 | volume of sales from such sources by an electric distribution |
17 | company or electric generation supplier during the 12-month |
18 | period immediately preceding the effective date of this act. |
19 | All credits banked under this subsection shall be available |
20 | for compliance with subsections (b) and (c) for no more than |
21 | [two] four reporting years following the conclusion of the |
22 | cost-recovery period. |
23 | * * * |
24 | (12) (i) Unless a contractual provision explicitly |
25 | assigns alternative energy credits in a different manner, |
26 | the owner of the alternative energy system or a customer- |
27 | generator owns any and all alternative energy credits |
28 | associated with or created by the production of electric |
29 | energy by such facility or customer, and the owner or |
30 | customer shall be entitled to sell, transfer or take any |
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1 | other action to which a legal owner of property is |
2 | entitled to take with respect to the credits. |
3 | (ii) This paragraph shall apply to all alternative |
4 | energy credits created pursuant to this act. |
5 | (f) Market Development and Long-Term Contracting.-- |
6 | (1) The commission shall promote the development of |
7 | alternative energy through the adoption of alternative energy |
8 | credit procurement rules that ensure market diversity, |
9 | competition and a reliable supply of alternative energy |
10 | credits to all electric distribution companies and electric |
11 | generation suppliers. These rules shall include, but are not |
12 | limited to, long-term contracts for alternative energy |
13 | credits and electric distribution company procurement of |
14 | alternative energy credits at the request of competitive |
15 | retail suppliers. |
16 | (2) These rules shall require that each winning bid be |
17 | selected solely on the least cost alternative energy credit |
18 | offered and shall award contracts on a pay-as-bid basis. For |
19 | purposes of this subsection, the term "pay-as-bid" shall mean |
20 | winning bidders are paid according to their bid price and not |
21 | a single clearing price. |
22 | (3) The commission shall determine that each procurement |
23 | under this subsection is competitive based on its standard |
24 | protocols for determining competitiveness. If it is |
25 | determined that a procurement event was not competitive, the |
26 | commission shall set a date for another procurement event |
27 | which, in the case of the first procurement event, shall take |
28 | place no later than 180 days after the initial procurement |
29 | event and, in the case of the second procurement event, shall |
30 | take place no later than one year after the initial |
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1 | procurement event. |
2 | (4) The commission shall require procurement of |
3 | qualifying Tier I alternative energy credits, other than |
4 | solar energy credits, subject to the following terms: |
5 | (i) The first procurement for 25% of the following |
6 | compliance year obligations under subsection (b), for a |
7 | contract period of at least ten years, shall be conducted |
8 | no later than 120 days after the effective date of this |
9 | subsection. |
10 | (ii) The second procurement for an additional 25% of |
11 | the following compliance year obligations under |
12 | subsection (b), for a contract period of at least ten |
13 | years, shall be conducted no later than December 31, |
14 | 2011. |
15 | (iii) Alternative energy credits from resources |
16 | eligible to participate under these procurement rules |
17 | shall have an in-service date as of the effective date of |
18 | this section or later and shall be located in this |
19 | Commonwealth. |
20 | (5) The commission shall require procurement of |
21 | qualifying solar energy alternative energy credits subject to |
22 | the following terms: |
23 | (i) The process shall recognize that different |
24 | procurement approaches are necessary based on the size of |
25 | the solar energy systems used to serve residential, |
26 | commercial and government customers. |
27 | (ii) Aggregation of solar energy resources shall be |
28 | used for solar energy systems with a nameplate capacity |
29 | of no greater than 200 kilowatts and may be used for |
30 | other resources. |
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1 | (iii) Financial security requirements imposed on |
2 | solar developers and other sellers not render solar |
3 | energy projects financially infeasible. |
4 | (iv) Contract periods for procurement mandated under |
5 | this subsection shall be at least ten years and shall be |
6 | subject to the following: |
7 | (A) The first procurement for at least 55% of |
8 | the following compliance year obligation under |
9 | subsection (b) shall be conducted no later than 120 |
10 | days after the effective date of this subsection. |
11 | (B) The second procurement for at least 45% of |
12 | the compliance obligation under subsection (b) for |
13 | the following compliance year shall be conducted no |
14 | later than December 31, 2011. |
15 | (C) The third procurement for at least 30% of |
16 | the compliance obligation under subsection (b) for |
17 | the following compliance year shall be conducted no |
18 | later than December 31, 2012. |
19 | (D) The fourth procurement for at least 25% of |
20 | the compliance obligation under subsection (b) for |
21 | the following compliance year shall be conducted no |
22 | later than December 31, 2013. |
23 | (E) The fifth procurement for at least 20% of |
24 | the compliance obligation under subsection (b) for |
25 | the following compliance year shall be conducted no |
26 | later than December 31, 2014. |
27 | (F) For each compliance year commencing with |
28 | June 1, 2015, the procurement of at least 15% of the |
29 | compliance obligation under subsection (b) shall be |
30 | conducted no later than December 31 of the year |
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1 | preceding that compliance year. |
2 | (v) Upon commencement of the compliance year ending |
3 | May 31, 2015, and thereafter in conjunction with the |
4 | reviews required under subsection (b)(3), the commission |
5 | shall undertake a review of the procurement processes |
6 | under this subsection, the compliance by electric |
7 | distribution companies and electric generation suppliers |
8 | with the requirements of this act and the overall market |
9 | conditions. The commission shall use the results of this |
10 | review to determine whether to modify the procurement |
11 | processes established in accordance with this subsection. |
12 | [(f)] (g) Alternative compliance payment.-- |
13 | (1) At the end of each program year, the program |
14 | administrator shall provide a report to the commission and to |
15 | each covered electric distribution company showing their |
16 | status level of alternative energy acquisition. |
17 | (2) The commission shall conduct a review of each |
18 | determination made under subsections (b) and (c). If, after |
19 | notice and hearing, the commission determines that an |
20 | electric distribution company or electric generation supplier |
21 | has failed to comply with subsections (b) and (c) in the |
22 | absence of force majeure, the commission shall impose an |
23 | alternative compliance payment on that company or supplier. |
24 | (3) The alternative compliance payment, with the |
25 | exception of the solar photovoltaic share compliance |
26 | requirement set forth in subsection (b)(2), shall be $45 |
27 | times the number of additional alternative energy credits |
28 | needed in order to comply with subsection (b) or (c). |
29 | (4) [The alternative compliance payment for the solar |
30 | photovoltaic share shall be 200% of the average market value |
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1 | of solar renewable energy credits sold during the reporting |
2 | period within the service region of the regional transmission |
3 | organization, including, where applicable, the levelized up- |
4 | front rebates received by sellers of solar renewable energy |
5 | credits in other jurisdictions in the PJM Interconnection, |
6 | L.L.C. transmission organization (PJM) or its successor] The |
7 | alternative compliance payment for the solar alternative |
8 | share shall be set at $450 per megawatt hour (MWh) per year |
9 | beginning January 1, 2011, and the amount shall be reduced by |
10 | 3% each year thereafter. |
11 | (5) The commission shall establish a process to provide |
12 | for, at least annually, a review of the alternative energy |
13 | market within this Commonwealth and the service territories |
14 | of the regional transmission organizations that manage the |
15 | transmission system in any part of this Commonwealth. The |
16 | commission will use the results of this study to identify any |
17 | needed changes to the cost associated with the alternative |
18 | compliance payment program. If the commission finds that the |
19 | costs associated with the alternative compliance payment |
20 | program must be changed, the commission shall present these |
21 | findings to the General Assembly for legislative enactment. |
22 | [(g)] (h) Transfer to sustainable development funds.-- |
23 | (1) Notwithstanding the provisions of 66 Pa.C.S. §§ 511 |
24 | (relating to disposition, appropriation and disbursement of |
25 | assessments and fees) and 3315 (relating to disposition of |
26 | fines and penalties), alternative compliance payments imposed |
27 | pursuant to this act shall be paid into Pennsylvania's |
28 | Sustainable Energy Funds created under the commission's |
29 | restructuring orders under 66 Pa.C.S. Ch. 28 (relating to |
30 | restructuring of electric utility industry). Alternative |
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1 | compliance payments shall be paid into a special fund of the |
2 | Pennsylvania Sustainable Energy Board, established by the |
3 | commission under Docket M-00031715, and made available to the |
4 | Regional Sustainable Energy Funds under procedures and |
5 | guidelines approved by the Pennsylvania Energy Board. |
6 | (2) The alternative compliance payments shall be |
7 | utilized solely for projects that will increase the amount of |
8 | electric energy generated from alternative energy resources |
9 | for purposes of compliance with subsections (b) and (c). |
10 | [(h)] (i) Nonseverability.--The provisions of subsection (a) |
11 | are declared to be nonseverable. If any provision of subsection |
12 | (a) is held invalid, the remaining provisions of this act shall |
13 | be void. |
14 | Section 3. Repeals are as follows: |
15 | (1) The General Assembly declares that the repeal under |
16 | paragraph (2) is necessary to effectuate the amendment of |
17 | section 3(e)(12) of the act. |
18 | (2) Section 3.1 of the act of July 17, 2007 (P.L.114, |
19 | No.35), entitled "An act amending the act of November 30, |
20 | 2004 (P.L.1672, No.213), entitled, 'An act providing for the |
21 | sale of electric energy generated from renewable and |
22 | environmentally beneficial sources, for the acquisition of |
23 | electric energy generated from renewable and environmentally |
24 | beneficial sources by electric distribution and supply |
25 | companies and for the powers and duties of the Pennsylvania |
26 | Public Utility Commission,' further providing for the |
27 | definitions of 'alternative energy credit,' 'customer- |
28 | generator,' 'force majeure,' 'net metering,' and 'Tier I |
29 | alternative energy source,' for alternative energy portfolio |
30 | standards, for portfolio requirements in other states and for |
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1 | interconnection standards for customer-generator facilities," |
2 | is repealed. |
3 | Section 4. The following shall apply: |
4 | (1) The amendment of section 3(e)(12) of the act shall |
5 | apply to all alternative energy credits created under the act |
6 | on or after the effective date of this section, regardless of |
7 | when any underlying contract for the purchase of electric |
8 | energy or other products from the generator that qualifies as |
9 | an alternative energy system was executed. |
10 | (2) Notwithstanding 66 Pa.C.S. §§ 508 (relating to |
11 | powers of the commission to vary, reform and revise |
12 | contracts) and 2102 (relating to approval of contracts with |
13 | affiliated interests), the Pennsylvania Public Utility |
14 | Commission may modify contracts or disallow costs of |
15 | alternative energy credit contracts under this act only when |
16 | the party seeking recovery of the costs of these contracts |
17 | is, after hearing, found to be at fault for the following: |
18 | (i) not complying with the commission-approved |
19 | alternative energy credit procurement rules; or |
20 | (ii) fraud, collusion or market manipulation with |
21 | regard to these contracts. |
22 | (3) Notwithstanding the other provisions of this act, |
23 | alternative energy credits acquired or contracted for prior |
24 | to the effective date of this section may be used to |
25 | demonstrate compliance under this act. |
26 | Section 5. This act shall take effect immediately. |
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