PA Tier II AEC Pricing History: $0.09 to $26.92 in Nine Years

Pennsylvania's Tier II Alternative Energy Credit (AEC) market has undergone one of the most dramatic price transformations in the U.S. clean energy sector. Across nine reporting years the PA PUC weighted average has climbed from $0.09/MWh in RY2016 to $26.92/MWh in RY2025. This article walks through every reporting year on that one measure, the policy and supply events that drove each move, and what the PRESS Act would change if it passed.

The Full Price History: RY2015 Through RY2025

Source: PA PUC 2025 AEPS Annual Report (Chart 8, Table 2) and the PennAEPS historical pricing table. All figures are weighted averages; spot averages and transaction ranges are different measures and are not mixed into this series.

Separately, the RY2025 PennAEPS transaction range ran from a $0.01 low to a $41.00 high, against the $26.92 weighted average. Those endpoints are individual trades — a single distressed vintage sale and a single near-ceiling compliance purchase — not market levels, and they should not be read as the trend.

Act 114 of 2020: The Event That Changed Everything

Before Act 114, Electric Generation Suppliers (EGSs) could source Tier II AECs from anywhere in the 13-state PJM region. Act 114 restricted compliance to Pennsylvania-certified generators only. This single rule change eliminated the entire pool of out-of-state supply that EGSs had relied on, and it is the inflection point visible in the table above — the jump from $0.16 in RY2019 to $1.92 in RY2020 and $5.76 in RY2021, followed by sustained acceleration through RY2024.

For project owners considering registration, Act 114 is the reason what AECs are trading at today bears no resemblance to the pre-2021 era — and why the supply pool is now structurally constrained to in-state generators.

The Supply Picture: Why 50.5% of Tier II Credits Are at Risk

Per the PA PUC AEPS Annual Report, waste coal accounts for 50.5% of all Tier II AECs retired in compliance year 2025. Waste coal facilities are aging, economically marginal, and retiring on a predictable schedule — meaning more than half of current Tier II supply has a finite remaining lifespan.

Energy efficiency accounted for just 0.5% of RY2025 Tier II credits retired. The most accessible category for building owners — LED retrofits, HVAC upgrades, VFDs, controls — is also the most under-penetrated of the resources retired against the Tier II obligation. As waste coal exits, energy efficiency is positioned to absorb a growing share of compliance demand.

The ACP Ceiling and Its Implications

The Alternative Compliance Payment (ACP) is the per-AEC penalty an EGS pays when it cannot source enough credits to meet its Tier II obligation. The current ACP is $45.00/AEC, which functions as a soft price ceiling: no rational buyer pays more than $45 for a credit when the penalty alternative is $45.

With the RY2025 weighted average at $26.92, the market has $18.08 of headroom to the ACP ceiling. The RY2025 transaction range of $0.01–$41.00 reflects a bifurcated market: a few buyers paying near the ACP for guaranteed compliance-year supply, and a few distressed vintage credits changing hands at token prices. Both endpoints are single trades, not market levels — the $26.92 weighted average is the market level.

What PRESS would change if it passed

The PRESS Act as introduced would reset the Tier II obligation to 6% in energy year 2027, stepping back up to 10% by 2035, set a separate Tier II alternative compliance payment of $35, and move waste coal, municipal solid waste and IGCC into a new Tier III. Those figures come from the bill as introduced and could change in amendment.

We are not publishing a projected price path off them. PRESS has not passed either chamber and HB 501 has been laid on the table under House Rule 71 since 23 March 2026. What the numbers do establish is direction: a lower near-term obligation reduces demand, and moving waste coal out of Tier II removes the majority of the resources currently retired against it. Which of those dominates is not something anyone can price today. Current status is maintained in our PA Tier II AEC Legislation Tracker.

Frequently Asked Questions

Q: Where does PA Tier II AEC price data come from?

The PA PUC AEPS Annual Report, published each fall, is the primary source. It reports total AECs retired, weighted average transaction prices, spot averages, and price ranges for each reporting year. PennAEPS publishes the same data at pennaeps.com/pennsylvania-aeps-historical-pricing. The series on this page is the weighted average throughout.

Q: Why did the weighted average barely move from $26.47 in RY2024 to $26.92 in RY2025?

The weighted average rose just 1.7% while the transaction range widened to $0.01–$41.00. That indicates a bifurcated market — a handful of buyers paying near the ACP ceiling for guaranteed supply while distressed credits changed hands at token prices — rather than a continuing surge in the market level.

Q: Is there a minimum price for PA Tier II AECs?

There is no regulatory minimum. AECs trade at whatever price the buyer and seller agree to. The $45.00 ACP creates a practical ceiling, and market forces create a floor. Emergent Energy's aggregation model ensures generators receive competitive market pricing.