peak demand if it determines that the benefits of the EE&C Program exceed its costs. In accordance with that directive, the Commission issued a Secretarial Letter on March 1, 2012, at Docket No. M-2012-2289411 seeking comments on several issues related to the design and implementation of any future phase of the EE&C Program, and whether additional incremental consumption and peak demand reduction targets would be adopted. On May 10, 2012, in response to the comments received pursuant to the Secretarial Letter, the Commission issued a Tentative Implementation Order (Phase II Tentative Implementation Order) to begin the process of evaluating the costs and benefits of the initial EE&C Program and the possible establishment of new reduction targets. In the Phase II Tentative Implementation Order, the Commission found that the benefits of a Phase II Act 129 Program would exceed the costs. Therefore, the Commission proposed the adoption of additional required incremental reductions in consumption for another program term and sought additional comments on its specific proposals. Subsequently, in response to the comments filed pursuant to the Phase II Tentative Implementation Order, on August 3, 2012, the Commission issued the Phase II Implementation Order, which established required standards for Phase II EDC EE&C plans (including the additional incremental reductions in consumption that each EDC must meet), and provided guidance on the procedures to be followed for submittal, review and approval of all aspects of the EDCs’ EE&C plans. Within the Phase II Implementation Order, the Commission tentatively adopted EDC-specific consumption reduction targets as set forth in Table 1 in Section A.2.c.1 of that Order. The targets varied from a high of 2.9% for PECO Energy Company (PECO) to a low of 1.6% for West Penn Power Company. Phase II Implementation Order at 24. The Phase II Implementation Order provided that these targets would become final for any covered EDC that did not petition the Commission for an evidentiary hearing by August 20, 2012. Id. at 30-32. On August 20, 2012, Metropolitan Edison Company, Pennsylvania Electric
eligible for funding in a manner that is equivalent to other measures under the Plan. Comverge submits that these changes will allow more CHP projects to be developed in Duquesne’s service territory, and that the Settlement terms are similar to other pending EDC Phase II Plans and/or settlements. Comverge submits that the Settlement is a reasonable resolution of its concerns and should be approved. Comverge Statement at 3. As stated above, all Parties to this proceeding either support, or do not oppose, the terms of the proposed Settlement. The Settlement provides for certain modifications to the Phase II Plan initially proposed by Duquesne, and represents a compromise among the Joint Petitioners that resolves all of the issues that have been raised in this proceeding, with the exception of the issues raised by DII, which are discussed, infra. Based on our review of the record, we conclude that the proposed Settlement is in the public interest, and shall approve it without modification. Our conclusion is based on several considerations. First, the proposed Settlement is consistent with the requirements set forth in our Phase II Implementation Order. As noted above, the Joint Petitioners assert that, consistent with the requirements set forth in Act 129 and the Commission’s Phase II Implementation Order, Duquesne’s Phase II Plan: (a) includes measures to achieve or exceed the required reductions; (b) complies with the designated expenditure cap of 2% of 2006 annual revenues for each year of the three-year plan; (c) achieves a total cumulative energy reduction of at least 276,722 MWh by May 31, 2016, with at least 25% of the savings achieved in each of the three program years; (d) achieves a minimum of 10% of all consumption reduction requirements from units of federal, state and local governments; (e) achieves a minimum of 4.5% of the total required reductions from the low-income customer sector by May 31, 2016; (f) includes a proportionate number of energy efficiency measures for low income households; (g) offers at least one energy efficiency program for each customer sector and at least one comprehensive measure for the residential and small commercial rate classes; (h) includes an approved contract(s) with one or more CSPs; and
efficiency resources into PJM’s capacity markets will not be a requirement imposed upon EDCs, the Commission will not provide specific guidelines on the EDCs on how to do such bidding. Phase II Implementation Order at 110 (emphasis added). Therefore, according to Duquesne, it is clear that Duquesne is not required to bid energy efficiency savings into PJM’s capacity markets. Moreover, Duquesne reiterates that the Commission’s Phase II Implementation Order encouraged interested stakeholders to raise this issue in the context of an EDC’s stakeholder meetings. Should DII wish to pursue this matter, Duquesne opines that DII should adhere to the Commission’s directive and raise this issue directly with Duquesne or in the context of a Phase II stakeholder meeting. Duquesne R.B. at 14-15. Duquesne claims that, for the first time in this proceeding, DII states in its Main Brief, that Large C&I customers “may have the resources” to bid in their energy savings and that such customers “may be more likely to participate in Phase II measures.” According to Duquesne, these statements by DII do not constitute facts. Duquesne opines that DII has failed to provide any evidence relative to: (1) the number of Large C&I customers that want to bid their energy savings into PJM; (2) the ability of Large C&I customers to bid their own savings into PJM; and (3) the potential impact on Duquesne’s Plan to accommodate customer bidding of energy savings into PJM. As a result, Duquesne is not able to discern from DII’s request what, if anything, would be required from the Company. Id. at 15-16. Finally, Duquesne states that the issue of whether Large C&I customers may bid their energy savings into the PJM capacity markets is between those customers and PJM. According to Duquesne, the Commission’s jurisdiction does not extend to whether Large C&I customers may participate in PJM auctions. Duquesne explains that customer participation and eligibility for participation in PJM’s capacity markets is