Dec 23 - McClatchy-Tribune Regional News - Kathy Mellott Tribune-Democrat, Johnstown, Pa.

The state Senate has approved renewable energy legislation to upgrade the classification of two hydroelectric power plants in the region, making it more desirable for power company suppliers to buy the energy those projects produce.

The legislation, one of three bills approved in a recent special Senate session, next will go to the House. But spirited negotiations are likely there before anything is signed into law.

Impacted would be the William F. Matson Generating Station, commonly known as the Raystown hydroelectric project, at the Raystown Dam, Huntingdon County. Also listed in legislation is the Conemaugh Hydroelectric Power Plant on the Conemaugh River at the Indiana-Westmoreland county line.

The Senate bill would upgrade the two low-impact power plants from their former classification of Tier II alternative energy sources to Tier I sources.

The result would give the power generated at the plants higher credits for utilities purchasing their energy. It also allows the two plants to charge a higher rate for their product -- providing more capital for research and new alternative generation sources.

"Clearly, they'll receive more money for the sale of their electricity," said Patrick Henderson, communications director for the Senate Environmental Resources and Energy Committee and chief of staff for state Sen. Mary Jo White, R-Venango County.

The classification naming the two hydro plants as Tier II sources were part of a 2004 law giving energy companies until 2020 to meet a requirement to purchase 18 percent of their power from alternative energy sources.

Recent legislation corrects the exclusion of these resources, which were intended to be included in the state's Alternative Energy Portfolio Standards Act of 2004, Henderson said.

The breakdown is for 8 percent to come from Tier I, classified in part as wind, solar, geo-thermal and fuel cells.

The remaining 10 percent must come from Tier II sources, classified in part as co-generation plants, large-scale hydro power and landfill methane gas.

Another change in the Tier I classification, along with hydro, includes black liquor, a byproduct of the wood pulping process.

Shifting the two regional hydro plants and the wood byproduct into Tier I is expected to meet with resistance.

One concern cited is a provision to limit Tier I sources only to those generated in the state.

"We have some serious questions about the merits of the bill and the possible legal issues it raises," said Michael Smith, a spokesman with the state Department of Environmental Protection. "The qualifications contained in the bill are very limited and may violate the commerce clause of the U.S. Constitution."

Another concern is that adding sources to Tier I has the potential to drive down the cost and benefits of existing sources such as wind and solar.

State Rep. Tom Yewcic, D-Jackson Township, has concerns of a different nature.

"If as a state we offer incentives, the taxpayers are footing the bill. As a ratepayer, I want to see a reduction in my utility bill," Yewcic said.

State Sen. John Wozniak, D-Westmont, authored a section of the legislation calling for rebates to middle-income Pennsylvanians for conservation efforts including windows and insulation.

"(If) you want to reduce our reliance on foreign oil, you have to reduce consumption, and conservation is one way to do that," he said.

The general view among many local legislators is that something must be done to encourage alternative energy sources.

"Hydro is definitely an environmentally helpful source of power, and it would be a good thing," said state Rep. Gary Haluska, D-Patton. "I think over the next 10 years, there's going to be a lot of emerging technology."