Solar Projects and UGI’s Latest Billing Shake Up

Written by Keegan Foyles

If you’re involved in renewable energy or large-scale solar projects in Pennsylvania, recent developments with UGI Utilities’ Default Service Plan (DSP) might affect you. Here’s a summary of what happened, why it matters, and what it could mean for you.

What Is The Default Service Plan?

UGI Utilities provides electricity to customers who don’t get their power from private suppliers. Every few years, UGI must file a Default Service Plan (DSP) that explains how it will bill customers and manage electricity supply.

What’s New In The DSP V?

In the latest plan, called DSP V, UGI proposes changing how they classify customers, especially those who both use electricity and generate it – like solar farms. These are called customer-generators.

Under the old system, the DSP IV, customer-generators with a peak load under 25 kW were in the GSR-1 group. This group pays a fixed rate set every six months.

Under the new system, the DSP V, UGI introduced a new measure called System Peak Load Impact (SPLI), which looks at a customer’s overall effect on the electricity system, not just peak usage. Under the DSP V, if your SPLI is over 100 kW, you get reclassified into the GSR-2 group, which pays hourly spot market rates. These rates fluctuate and can cause unpredictability in bills.

Why Does This Matter?

For companies like Penn Renewables, which runs multiple solar farms, this reclassification means their projects move from a stable, predictable billing group (GSR-1) into a riskier, variable group (GSR-2). Penn Renewables argues this makes it harder to plan and finance renewable projects.

What Did The Pennsylvania Public Utility Commission Decide?

After reviewing the case, the Commission approved the DSP V, siding with UGI. Their reasoning included:

• The new SPLI metric is reasonable and better reflects each customer’s impact on the system.
• Keeping large customer-generators in GSR-1 could unfairly increase costs for smaller customers like homeowners and small businesses.
• Penn Renewables did not show clear evidence that the new plan would harm renewables energy development.
• Settlements like this one help avoid long, costly legal battles and serve the public interest.

The new plan went into effect on June 1, 2025 and will run through May 31, 2029.

What Are Penn Renewables’ Concerns?

Penn Renewables believes:

• SPLI is a made-up measure not supported by law.
• The change undermines Pennsylvania’s goal to promote renewable energy.
• The new rates could jeopardize existing and future solar projects.
• The Commission should reconsider to ensure renewable energy projects remain viable.

What Does This Mean For You?

• If you’re a renewable energy developer or customer-generator in UGI’s area, expect more variability in rates if your SPLI is over 100 kW.
• It’s important to understand how your electricity use and generation impact your billing group.
• This case highlights the ongoing balancing act regulators face: supporting renewable energy while protecting smaller consumers from rising costs.
• Monitoring future regulatory updates and potential challenges to the DSP V will be key for project planning.

Why Should You Care?

This decision signals a shift in how utilities may classify and charge customer-generators in Pennsylvania – and potentially beyond. If you’re investing in solar and other alternative energy, understanding these changes can help you manage risks and engage proactively with regulators.

Need help navigating these changes?

Our team at MPL Law Firm is here to help you understand how DSP V and related policies could impact your projects and advise on next steps. Contact us to discuss your situation.