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Last Updated December 2, 2014

Program Overview


Regulatory Policy



Incentive Type:

Public Benefits Fund



Start Date:


Expiration Date:


Web Site:

Applicable Sectors:


Eligible Renewable/Other Technologies:



Note: Currently, the four funds are not collecting revenue. The funds are transitioning toward a revolving loan and investment fund model in order to sustain their capital.

Although Pennsylvania's December 1996 electricity restructuring law did not establish a clean-energy fund, four renewable and sustainable-energy funding programs were subsequently created through individual settlements with the state’s five major distribution utilities: Metropolitan Edison Company (Met-Ed), Pennsylvania Electric Company (Penelec), PECO Energy (PECO), PP&L (PPL), and Allegheny Power/West Penn Power Company (WPP). These utilities created individual "Sustainable Energy Funds" with the goals of promoting (1) the development and use of renewable energy and advanced clean-energy technologies, (2) energy conservation and efficiency, and (3) sustainable-energy businesses. Each utility has established an oversight board and designated a fund administrator.

The four Sustainable Energy Funds (SEF) in Pennsylvania are:

Under terms of the initial settlements, approximately $55 million was collected through the utilities' distribution rates to promote the development of sustainable and renewable energy. The Sustainable Development Fund (in PECO’s territory) received an additional $18.5 million in funding over a five-year period as a result of the PECO/Unicom merger. Likewise, the Met-Ed and Penelec funds received an additional $5 million ($2.5 million each) in funding due to the merger of GPU Energy and FirstEnergy. The PUC agreed to continue funding the PPL SEF though December 31, 2006. The per-kilowatt-hour surcharge included in the utility's distribution rates for 2005 and 2006 was $0.0001 and $0.00005 per kilowatt-hour, respectively.

As of 2011, the West Penn fund was the only fund still scheduled to receive additional revenue, equivalent to a $0.0001/kWh charge on utility distribution sales. The payments were set to sunset at the end of 2010, however, under the terms of a recent settlement agreement (see PUC Docket Number A-2010-2176732 for details) arising from the merger of Allegheny Power and First Energy, funding continued for 2011 and 2012 at the same levels. The annual payments amount to approximately $1.5 - $2 million per year and began in 2006. Without the expectation of significant additional revenue, the collective funds are making efforts to transition towards becoming revolving loan and investment funds in order to sustain their capital.

The Pennsylvania Sustainable Energy Board was formed in 1999 to enhance communications among the four funds and state agencies. The board includes representatives from the PUC; the Pennsylvania Department of Environmental Protection; the Pennsylvania Department of Community and Economic Development; the Pennsylvania Office of Consumer Advocate; the Pennsylvania Environmental Council; and each regional board. The board's annual reports provide details on the projects and activities supported by each of the four funds. In addition, the Pennsylvania Sustainable Energy Board has developed uniform guidelines for the business practices of the sustainable energy funds. The PUC approved these guidelines in 2007. See the program web site for details on fund activities and the guidelines.

See DSIRE's summaries of financial incentives in Pennsylvania for more information about assistance offerings available from the four funds.