Pennsylvania PRESS Act vs. AEPS: What Changes for Tier II AECs

The Pennsylvania Reliable Energy Sustainability Standard (PRESS) Act — introduced as SB 501 in the Senate and HB 501 in the House — would replace the 2004 Alternative Energy Portfolio Standards Act (Act 213) and reorganize how Pennsylvania defines and counts alternative energy credits (AECs). For anyone who owns, contracts for, or sells Pennsylvania Tier II AECs today, PRESS is the most consequential policy change in more than two decades. This article walks through what would actually change, why the 2035 Tier I target matters, and how compliance buyers and certificate holders should think about positioning their portfolios while the bill remains unpassed.

A successor to Act 213, not an amendment

Act 213 of 2004 created Pennsylvania's two-tier Alternative Energy Portfolio Standards (AEPS) framework, with a terminal Tier I obligation of 8% and a terminal Tier II obligation of 10% of retail electricity sales — roughly 18% combined by the end of the compliance ramp. Tier I covered solar, wind, low-impact hydro, geothermal, biomass, biologically derived methane, coal mine methane, and fuel cells. Tier II covered waste coal, distributed generation, demand-side management, large-scale hydro, municipal solid waste, integrated coal gasification, wood pulping byproducts, and combined heat and power. That structure has been the spine of the Pennsylvania AEC market for twenty years.

PRESS does not patch Act 213. It proposes to retire the AEPS construct entirely and substitute a modernized standard built around a three-tier resource map carrying a materially larger combined obligation. The two terminal percentages, the legacy resource definitions, and the geographic sourcing rules all change at once. For background on how Act 213 actually operates today, see our explainer on PA AEPS Act 213.

The headline numbers: at least 35% Tier I by 2035

PRESS raises the Tier I obligation to at least 35% of retail sales by 31 May 2035, starting at 10.7% and rising by at least 3% a year from 1 June 2027. Added to the Tier II obligation (at least 10%) and the new Tier III obligation (5%), the combined three-tier requirement approaches 50% of retail load by 2035, against roughly 18% under AEPS today. The bill does not impose an in-state target. Section 4 keeps PJM-located generation eligible for every Pennsylvania supplier. Its location mechanisms are narrower and later: Section 3(e)(16)(iii) requires 6% of the energy sold toward Tier I obligations to come from sources meeting Pennsylvania delivery or DEP-permit criteria from 1 June 2031, rising 1.333% a year through 2036 and 0.6% a year through 2051, and Section 3(e)(14) confines units above 250 MW to sites in or within 15 miles of Pennsylvania.

From an economic-development standpoint, that geographic narrowing is the entire policy lever. From a compliance-buyer standpoint, it materially changes which certificates clear the bar — and therefore which projects are bankable for offtake contracts that extend past the projected enactment window.

Three tiers instead of two

PRESS reorganizes alternative energy credits into three buckets. The terminal obligations shown below are proposals and may change through amendment:

• Tier I (~35%) — low-impact hydro, geothermal, wind, solar, coal-bed methane, small modular reactors (SMRs), and fusion.
• Tier II (~10%) — fuel cells, biomass, co-located energy storage, high-percentage hydrogen plants, combined heat and power (CHP), hydro, distributed generation, and demand-side management (DSM).
• Tier III (~5%, new) — waste coal, municipal solid waste, integrated coal gasification, wood pulping byproducts, and lower-percentage hydrogen.

The three-tier structure is more than a relabeling. It removes legacy thermal resources (waste coal, MSW, IGCC, wood pulping) from the Tier II pool and gives them their own dedicated Tier III obligation. It also explicitly admits SMRs and fusion into Tier I — the first time either has been named in a Pennsylvania portfolio standard. See the resource-by-resource breakdown in Tier II vs. Tier III.

AEPS vs. PRESS at a glance

What it means for compliance buyers

EGSs and EDCs. The total alternative energy obligation grows materially under PRESS. Tier I, II, and III combined sit near 50% of retail load by 2035, versus the ~18% terminal under AEPS. That implies higher long-run demand for qualifying certificates in aggregate, but the mix shifts: substantially more Tier I demand, a redefined and narrower Tier II demand pool, and a small new Tier III bucket carved out of what used to be Tier II. Retail suppliers writing long-dated load contracts should price each tier separately rather than rolling everything into a single "AEPS line."

Alternative compliance payments (ACPs). Under Act 213, the Tier II ACP has historically been set at $45/MWh, and the cleared Tier II AEC price has historically traded well below that ceiling. PRESS will set its own ACPs by tier; the relative ACP levels — and the difference between cleared price and ACP — will determine whether suppliers self-supply through certificates or simply pay the ACP. Watch the final ACP schedule closely once the bill moves out of committee.

What it means for certificate holders

Today's Tier II AEC holders should look at the reclassification line-by-line. Waste coal and MSW operators — historically a large share of cleared Tier II volume — would settle into the new Tier III rather than Tier II. CHP, DSM and distributed generation project owners stay in Tier II under the proposed framework, while fuel cell owners move into it from Tier I and may benefit from a tighter, more clean-energy-coherent bucket where the cleared field shrinks even as the underlying obligation stays in the ~10% range.

For new projects in development, the practical implication is to underwrite both the AEPS scenario (the project monetizes Tier II AECs as today) and the PRESS scenario (the project monetizes whichever tier it would fall into post-enactment) and contract accordingly.

Grandfathering and vintage considerations

Existing Tier II certificates already minted at PJM-EIS GATS were issued under Act 213 rules. How PRESS treats those certificates at enactment — full grandfathering, partial transition, or reclassification — is one of the most important details still to be settled through amendment. Until the final bill text addresses transition mechanics, any long-dated contract that references "Tier II AECs" without specifying the underlying generator and vintage carries unresolved tier-classification risk.

Timeline and what to watch next

As of 6 November 2026, PRESS has not passed either chamber: HB 501 approved by the House Environmental and Natural Resource Protection Committee on 2 June 2025 and laid on the table under House Rule 71 on 23 March 2026 — it has not passed the House and is not pending Senate action, and SB 501 referred to Senate Environmental Resources & Energy on 12 May 2025 with no votes and no committee meetings since. PRESS was not included in the 2026-27 state budget. PRESS would need to come off the table, pass both chambers, and be reconciled before any of the changes above take effect. The signals worth monitoring: committee hearing schedules on SB 501 and HB 501, amendment activity on tier definitions and ACPs, language addressing certificate grandfathering, and the trajectory of the parallel Lightning Plan bills (PACER, Community Energy, permitting reform) since the package was designed to move together. Track the latest in our PA Clean Energy Legislation Tracker.

Bottom line

PRESS is not a tweak to AEPS — it is a replacement. The near-tripling of the Tier I obligation, the three-tier resource map, the explicit inclusion of SMRs and fusion in Tier I, and the redefinition of Tier II all change how value flows through the Pennsylvania AEC market. Until SB 501 / HB 501 pass both chambers, today's Act 213 framework remains in effect, and current Tier II AEC contracts continue to settle under existing rules. But anyone signing multi-year offtake or supply contracts now should be modeling PRESS scenarios alongside the AEPS baseline.

What happens to the solar carve-out

PRESS keeps the Tier I solar photovoltaic share at 0.5% of retail sales, but it does not keep it open-ended. Act 213 runs that 0.5% figure from June 2020 and thereafter. PRESS replaces "and thereafter" with an end date of 31 May 2031 and states no solar share for any year beyond it. Solar photovoltaic credits counted toward the carve-out must also satisfy the Section 3(e)(16)(i) delivery test.

If the bill passed as printed, the dedicated solar obligation would expire at the close of the 2030-31 compliance year, and solar credits would compete inside the general Tier I pool against wind, geothermal, low-impact hydro, coal mine fugitive emissions, biogas, advanced reactors and fusion. How much that matters depends on where the Tier I obligation sits by then — the bill has Tier I above 25% of retail sales by 2031, against 8% today — but it removes the structural floor that has supported Pennsylvania solar credit pricing since 2004. Anyone writing solar offtake that runs past the 2030-31 compliance year should treat the carve-out as a term that ends rather than one that continues. The separate solar alternative compliance payment at 200% of average market value under Section 3(f)(4) is not given an end date.