On November 30, 2004, Governor Edward Rendell signed Act 213 - The Alternative Energy Portfolio Standards Act - into law. Generally, Act 213 requires that electric distribution companies (EDCs) and electric generation suppliers include a specific percentage of electricity from alternative resources in the generation that they sell to Pennsylvania customers. The level of alternative energy (often called renewable credits) required gradually increases according to a fifteen year schedule set forth in Act 213. While Act 213 does not mandate exactly which resources must be used and in what quantities, certain minimum thresholds must be met for the use of Tier I, Tier II and solar photovoltaic resources.

Act 213 includes demand side management (DSM), energy efficiency (EE) and load management programs and technologies among the resources eligible for participation in Pennsylvania's alternative energy market. Act 129 standards govern the tracking and verification of DSM/EE measures and will also be used to measure and verify applicable DSM/EE measures used by EDCs to meet the Act 129 consumption and peak demand reduction targets. The DSM/EE measures are considered Tier II resources under the Alternative Energy Portfolio Standards Act.

The Pennsylvania Public Utility Commission (PA PUC) maintains a Web site that shows the value of alternative energy credits. As of April 6, 2010, the average weighted price for Tier II credits as shown on the PA PUC website is $0.36 per MWh. One MWh is equivalent to 1,000 kWh. The link to the Web site is: http://www.puc.state.pa.us/electric/electric_alt_energy.aspx

By checking the "I would like to retain ownership" box, a customer has the ability to take ownership of the Tier II alternative energy credits resulting from their DSM/EE project. For example, if a customer installs energy efficient equipment that generates 1 MWh or 1000 kWh of energy efficient savings, the customer may be able to sell the alternative energy credit to a broker for $0.36, assuming the broker pays $0.36 per MWh for the alternative energy credit.

Alternatively, a customer has the ability to allow Met-Ed, Penelec or Penn Power, depending on which entity is the local EDC, to take ownership of the alternative energy credit associated with their DSM/EE project. If a customer does not elect to take ownership or does not check either box, Met-Ed, Penelec or Penn Power will accumulate and sell the alternative energy credits to help reduce the cost of the companies' conservation programs by the amount of revenue received.