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DATE: June 17, 2010

TO: Sen. Mary Jo White, Sen. Ray Musto, Rep. Bud George, Rep. Scott Hutchinson
CC: Sen. Ted Erickson, Sen, Jane Orie, Sen Mike Waugh, Sen. Jane Earll, Sen. John Pippy,
Sen. Lisa Boscola, Sen. John Rafferty, Rep. Eugene DePasquale, Rep. Greg Vitali, Jim
Cawley, PUC Chair
FROM: Nathan Benefield, Director of Policy Research
RE: Missing AEPS Report

I am writing concerning recent news that the Pennsylvania Utilities Commission has failed to
produce an annual report on Pennsylvanias Alternative Energy Portfolio Standards (AEPS), and
has not produced such a report since May 2008 (see story from Pennsylvania Independent).

As Im sure you are aware. Act 213 of 2004, which established the AEPS, mandates the PUC to:

[P]rovide for, at least annually, a review of the alternative energy market within
this Commonwealth and the service territories of the regional transmission
organizations that manage the transmission system in any part of this
Commonwealth [emphasis added].

This is troubling both because the PUC appears to be in violation of their charge, and
because legislation is moving to increase the Alternative Energy Portfolio Standards, and
without adequate and up-to-date information on the effects of the 2004 law. This report
should be released and studied before consideration of any mandates to artificially
increase the AEPS. We should not be designing Pennsylvanias future energy market
while lawmakers, and more importantly the public, cannot get basic information about the
current energy market.
The 2008 PUC report states: "There should be no changes or improvements to the program
at this time", following estimates that per kWh cost of solar is over 700%, and wind 23%,
more expensive than the cost of coal. New mandates under HB 2405 would represent a
400% increase in alternative energy production, and a whopping 1,700% increase in solar
electricity, from the latest PUC data.
Moreover, instead of relying on data on the effects of the AEPS, advocates of higher
alternative energy mandates, and seemingly even the PUC, cite a study done by Black &
Veatch touting green job creating, which was paid for by foundations which have long
supported alternative energy mandates.
Yet this analysis is based on faulty assumptions and fails to look at the other side of the
ledgerpresuming both federal legislation to make traditional energy sources more
expensive (and alternative sources more competitive) and perpetual state and federal
subsidies for alternative energy. We recently offered testimony on the fallacy of green
jobs policies like alternative energy mandates, you can find this online at

225 State Street, Suite 302 | Harrisburg, PA 17101 | 717.671.1901 phone | 717.671.1905 fax |