# Pennsylvania Continues Moving toward Smarter, Cleaner Electric Grid

*Published:* 2015-12-22
*Author:* Dick Munson

Just in time for the h[![Solar-3-2011_11_17_0003 morgue](https://blogs.edf.org/energyexchange/wp-content/blogs.dir/38/files/2015/12/Solar-3-2011_11_17_0003-morgue-300x200.jpg)](https://blogs.edf.org/energyexchange/wp-content/blogs.dir/38/files/2015/12/Solar-3-2011_11_17_0003-morgue.jpg)olidays, the Pennsylvania Public Utility Commission (PUC) quietly gave the gift of more affordable electricity to millions of Pennsylvanians.

PECO Energy Company, a leading Pennsylvania utility, had requested a significant distribution rate increase – meaning higher bills for its approximately 1.6 million electric customers. After months of discussion, last week the PUC [approved](http://www.puc.pa.gov/about_puc/press_releases.aspx?ShowPR=3641) a settlement with a lower rate increase and a directive for PECO to hold a series of collaborative meetings with all interested parties on revenue decoupling, or separating a utility’s profits from its sales. Decoupling suggests a system in which utilities are rewarded based on the overall service they provide, rather than the amount of electricity they sell.

The PUC’s decision represents a win for grid modernization and distributed energy resources like energy efficiency, energy storage, and rooftop solar in the Keystone State.

**PECO settlement encouraging for clean energy**

The U.S. electricity system is currently undergoing a major transformation in which more and more people are using less energy or generating their own power. As a result, utilities across the country have been [trying to obtain](https://blogs.edf.org/energyexchange/2015/11/09/utilities-rate-designs-can-help-or-harm-solar-adoption/) fixed charges – or a set amount all customers must pay each month – to recoup investment and grid maintenance costs.

Higher fixed charges discourage the use of distributed energy resources, because people have to pay a high fee regardless of whether they are conserving or producing their own energy. That’s why the settlement – which reduces PECO’s rate increase request by 33 percent – is good news for small-scale clean energy resources.

\[Tweet “Pennsylvania continues moving toward a smarter, cleaner #moderngrid”\]

Numerous diverse parties support the settlement, including:

- Keystone Energy Efficiency Alliance,
- the Clean Air Council,
- Natural Resources Defense Council,
- the City of Philadelphia,
- Environmental Defense Fund, and
- [many more](http://www.puc.pa.gov/about_puc/press_releases.aspx?ShowPR=3641).

Furthermore, the addition of the decoupling collaborative gatherings reflects a greater trend among Pennsylvania regulators toward building a smarter grid. For example, Commissioner Robert F. Powelson indicated the collaborative is part of a broader discussion, saying, “The time has come to better align rate structures in a way that equally benefits all stakeholders, including ratepayers, utilities and the environmental community.” And Commissioner Andrew G. Place [emphasized](http://www.puc.state.pa.us/pcdocs/1402081.pdf) finding better ways to incorporate distributed energy resources and create a more efficient, reliable grid. Plus, the ruling follows a PUC [move earlier this year](https://blogs.edf.org/energyexchange/2015/06/18/pennsylvania-gives-clean-energy-not-one-but-two-boosts/) toward more fairly valuing two key clean energy resources: energy efficiency and [demand response](https://www.edf.org/climate/demand-response).

The PECO decision demonstrates the Pennsylvania PUC is looking forward and creating pathways for a clean energy future – a fine way to ring in the New Year.