The New State Agency Green Technology Implementation Act – Any “There” There?
November 4, 2014
Last month Pennsylvania Governor Tom Corbett signed a new law which establishes a pilot program to test “new technologies, products and processes” in state agencies with the objective of increasing energy conservation, reducing costs and promoting demand-side management. The State Agency Green Technology Implementation Act (“Act”), introduced as House Bill 1672, authorizes state government pilot program that will be administered by the Department of General Services (“Department”). To qualify for the pilot program, a technology, product or process is required to be certified to produce energy savings by an approved, independent, nationally recognized testing or certification program. In addition, the technology must be tested, researched and proven safe. The technology, product or process must also have the potential for commercialization in two years or less. The implementation of a technology, product or process for testing at a state agency will run from no less than 30 days to no more than 200 days, unless the testing agency determines that an extended testing period is warranted.
Significantly, the business manufacturing or marketing the technology, product or process is required to pay the associated costs under the pilot program. After the testing period has expired, the Department may (but is, of course, not required to) purchase the technology, product or process. Participating businesses would assume upfront costs and be restricted in their ability to market the Commonwealth’s use of such technology, product or process. For some technologies covered by the Act, such as distributed generation, it is not uncommon for a contractor to install new energy efficient equipment at no upfront cost to the customer, in return for receiving a share of the savings created by the technology. Absent a state rule that would limit this, the Commonwealth could pass on its energy savings to participating businesses during the trial period authorized by the Act. Will this type of arrangement be necessary to incent businesses to participate in the program? Only time will tell.
If you have any questions about the pilot program, please contact Sarah Stoner at (717) 237-6026; sstoner@eckertseamans.com or Dan Clearfield at (717) 237-7173; dclearfield@eckertseamans.com.
This Eckert Seamans Energy and Utilities Blog is intended to keep readers current on matters affecting businesses and is not intended to be legal advice.