2016 -- H 7585

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LC004273

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS - NET METERING

     

     Introduced By: Representatives Regunberg, Ruggiero, Carnevale, Edwards, and

     Date Introduced: February 11, 2016

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 39-26.4-1, 39-26.4-2 and 39-26.4-3 of the General Laws in

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Chapter 39-26.4 entitled "Net Metering" are hereby amended to read as follows:

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     39-26.4-1. Purpose. -- The purpose of this chapter is to facilitate and promote installation

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of customer-sited, grid-connected generation of renewable energy; to support and encourage

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customer development of renewable generation systems; to reduce environmental impacts; to

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reduce carbon emissions that contribute to climate change by encouraging the local siting of

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renewable energy projects; to diversify the state's energy generation sources; to stimulate

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economic development; to improve distribution system resilience and reliability; and to reduce

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distribution system costs.

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     39-26.4-2. Definitions. -- Terms not defined in this section herein shall have the same

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meaning as contained in chapter 26 of title 39 of the general laws. When used in this chapter:

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      (1) "Eligible net metering resource" means eligible renewable energy resource as defined

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in § 39-26-5 including biogas created as a result of anaerobic digestion, but, specifically

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excluding all other listed eligible biomass fuels;

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      (2) "Eligible Net Metering System" means a facility generating electricity using an

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eligible net metering resource that is connected to the electric distribution company's distribution

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system. is reasonably designed and sized to annually produce electricity in an amount that is

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equal to or less than the renewable self-generator's usage at the eligible net metering system site

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measured by the three (3) year average annual consumption of energy over the previous three (3)

 

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years at the electric distribution account(s) located at the eligible net metering system site. A

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projected annual consumption of energy may be used until the actual three (3) year average

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annual consumption of energy over the previous three (3) years at the electric distribution

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account(s) located at the eligible net metering system site becomes available for use in

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determining eligibility of the generating system. The eligible net metering system must be owned

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by the same entity that is the customer of record on the net metered accounts. Notwithstanding

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any other provisions of this chapter, any eligible net metering resource: (i) owned by a public

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entity or multi-municipal collaborative or (ii) owned and operated by a renewable generation

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developer on behalf of a public entity or multi-municipal collaborative through public entity net

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metering financing arrangement shall be treated as an eligible net metering system and all

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accounts designated by the public entity or multi-municipal collaborative for net metering shall

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be treated as accounts eligible for net metering within an eligible net metering system site.

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      (3) "Eligible Net Metering System Site" means the site where the eligible net metering

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system is located or is part of the same campus or complex of sites contiguous to one another and

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the site where the eligible net metering system is located or a farm in which the eligible net

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metering system is located. Except for an eligible net metering system owned by or operated on

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behalf of a public entity or multi-municipal collaborative through a public entity net metering

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financing arrangement, the purpose of this definition is to reasonably assure that energy generated

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by the eligible net metering system is consumed by net metered electric service account(s) that

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are actually located in the same geographical location as the eligible net metering system. Except

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for an eligible net metering system owned by or operated on behalf of a public entity or multi-

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municipal collaborative through a public entity net metering financing arrangement, all of the net

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metered accounts at the eligible net metering system site must be the accounts of the same

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customer of record and customers are not permitted to enter into agreements or arrangements to

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change the name on accounts for the purpose of artificially expanding the eligible net metering

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system site to contiguous sites in an attempt to avoid this restriction. However, a property owner

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may change the nature of the metered service at the accounts at the site to be master metered in

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the owner's name, or become the customer of record for each of the accounts, provided that the

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owner becoming the customer of record actually owns the property at which the account is

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located. As long as the net metered accounts meet the requirements set forth in this definition,

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there is no limit on the number of accounts that may be net metered within the eligible net

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metering system site.

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     (4) "Excess Renewable Net Metering Credit" means a credit that applies to an eligible net

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metering system for that portion of the renewable self-generator's production of electricity

 

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beyond one hundred percent (100%) and no greater than one hundred twenty-five percent (125%)

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of the renewable self-generator's own consumption at the eligible net metering system site during

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the applicable billing period. Such excess renewable net metering credit shall be equal to the

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electric distribution company's avoided cost rate, which is hereby declared to be the electric

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distribution company's standard offer service kilo-watt hour (kWh) charge for the rate class and

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time-of-use billing period (if applicable) applicable to the distribution customer account(s) at the

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eligible net metering system site. Where there are accounts at the eligible net metering system site

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in different rate classes, the electric distribution company may calculate the excess renewable net

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metering credit based on the average of the standard offer service rates applicable to those on- site

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accounts. The electric distribution company has the option to use the energy received from such

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excess generation to serve the standard offer service load. The commission shall have the

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authority to make determinations as to the applicability of this credit to specific generation

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facilities to the extent there is any uncertainty or disagreement.

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     (5) "Farm" shall be defined in accordance with § 44-27-2, except that all buildings

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associated with the farm shall be eligible for net metering credits as long as: (i) The buildings are

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owned by the same entity operating the farm or persons associated with operating the farm; and

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(ii) The buildings are on the same farmland as the project on either a tract of land contiguous with

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or reasonably proximate to such farmland or across a public way from such farmland.

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     (6) "Multi-municipal collaborative" means a group of towns and/or cities that enter into

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an agreement for the purpose of co-owning a renewable generation facility or entering into a

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financing arrangement pursuant to subdivision (7).

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      (7) "Public entity net metering financing arrangement" means arrangements entered into

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by a public entity or multi-municipal collaborative with a private entity to facilitate the financing

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and operation of a net metering resource, in which the private entity owns and operates an eligible

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net metering resource on behalf of a public entity or multi-municipal collaborative, where: (i) The

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eligible net metering resource is located on property owned or controlled by the public entity or

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one of the municipalities, as applicable, and (ii) The production from the eligible net metering

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resource and primary compensation paid by the public entity or multi-municipal collaborative to

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the private entity for such production is directly tied to the consumption of electricity occurring at

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the designated net metered accounts.

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      (8) "Net metering" means using receiving on-bill credit for electricity generated by an

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eligible net metering system for the purpose of self-supplying power at the eligible net metering

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system site and offsetting consumption and service charges incurred by the net metering customer

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thereby offsetting consumption at the eligible net metering system site through the netting process

 

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established in this chapter.

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      (9) "Net metering customer" means a customer of the electric distribution company

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receiving and being billed for distribution service in the same load zone as the eligible net

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metering system whose distribution account(s) are being net metered, including those receiving

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renewable net metering credits from an off-site eligible net metering system.

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      (10) "Person" means an individual, firm, corporation, association, partnership, farm,

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town or city of the State of Rhode Island, multi-municipal collaborative, or the State of Rhode

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Island or any department of the state government, governmental agency or public instrumentality

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of the state.

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      (11) "Project" means a distinct installation of an eligible net metering system. An

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installation will be considered distinct if it is installed in a different location, or at a different

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time, or involves a different type of renewable energy.

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      (12) "Public entity" means the state of Rhode Island, municipalities, wastewater

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treatment facilities, public transit agencies or any water distributing plant or system employed for

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the distribution of water to the consuming public within this state including the water supply

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board of the city of Providence.

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      (13) "Renewable Net Metering Credit" means a credit that applies to an Eligible Net

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Metering System up to one hundred percent (100%) of the renewable self-generator's usage at the

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Eligible Net Metering System Site by the net metering customer over the applicable billing

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period. This credit shall be equal to the total kilowatt hours of electricity generated and consumed

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on-site by the eligible net metering system during the billing period multiplied by the sum of the

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distribution company's charges to the net metering customer, including:

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      (i) Standard offer service kilowatt hour charge for the rate class applicable to the net

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metering customer;

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      (ii) Distribution kilowatt hour charge;

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      (iii) Transmission kilowatt hour charge; and

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      (iv) Transition kilowatt hour charge.

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      The credit will also include an energy system benefit credit or charge.

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      (14) "Renewable self-generator" means an electric distribution service customer who

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installs or arranges for an installation of renewable generation that is primarily designed to

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produce electricity for consumption by that same customer at its distribution service account(s).

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      (15) "Municipality" means any Rhode Island town or city, including any agency or

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instrumentality thereof, with the powers set forth in title 45 of the general laws.

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     (16) "Energy system benefit credit or charge" means a credit or charge reflecting the net

 

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value of the eligible system accounting for factors including integration cost, avoided distribution

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infrastructure investments, improved local reliability and reduced vulnerability to failures,

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reduced line losses, energy price suppression, fuel price risk mitigation locational avoided

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distribution capacity costs and avoided health and environmental compliance costs, as determined

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by the Public Utilities Commission.

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     39-26.4-3. Net metering. -- (a) The following policies shall apply to regarding net

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metering of electricity from eligible net metering systems and regarding any person that is a

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renewable self-generator shall apply to net metering customers:

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      (1) The maximum, allowable capacity for eligible net-metering systems, based on

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nameplate capacity, shall be five megawatts (5 mw). The aggregate amount of net metering in the

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Block Island Power Company and the Pascoag Utility District shall not exceed three percent (3%)

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of peak load for each utility district. There shall be no restrictions regarding the number of

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eligible net metering systems on a single parcel of property.

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      (2) For ease of administering net-metered accounts and stabilizing net metered account

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bills, the electric-distribution company may elect (but is not required) to estimate for any twelve-

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month (12) period: Renewable net metering credits shall be assigned by the eligible net metering

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system to one or more net metering customer accounts. The electric distribution company shall

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provide an online platform for eligible net metering systems to allocate their net metering credits

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to net metering customers and the right to change those allocations two (2) times per year.

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      (i) The production from the eligible net metering system; and

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      (ii) Aggregate consumption of the net-metered accounts at the eligible net-metering

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system site and establish a monthly billing plan that reflects the expected credits that would be

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applied to the net-metered accounts over twelve (12) months. The billing plan would be designed

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to even out monthly billings over twelve (12) months, regardless of actual production and usage.

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If such election is made by the electric-distribution company, the electric-distribution company

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would reconcile payments and credits under the billing plan to actual production and

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consumption at the end of the twelve-month (12) period and apply any credits or charges to the

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net-metered accounts for any positive or negative difference, as applicable. Should there be a

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material change in circumstances at the eligible net-metering system site or associated accounts

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during the twelve-month (12) period, the estimates and credits may be adjusted by the electric-

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distribution company during the reconciliation period. The electric-distribution company also

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may elect (but is not required) to issue checks to any net metering customer in lieu of billing

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credits or carry forward credits or charges to the next billing period. For residential eligible net

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metering systems twenty-five kilowatts (25 kw) or smaller, the electric-distribution company, at

 

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its option, may administer renewable net-metering credits month to month allowing unused

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credits to carry forward into following billing period.

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     (3) If the electricity generated by an eligible net-metering system during a billing period

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is equal to, or less than the net-metering customer's customers' usage during the billing period for

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electric-distribution-company customer accounts at the eligible net-metering system site, the

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customer shall receive renewable net-metering credits, that shall be applied to offset the net-

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metering customer's customers' usage on accounts at the eligible net-metering-system site.

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      (4) If the electricity generated by an eligible net-metering system during a billing period

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is greater than the net-metering customer's usage on accounts at the eligible net-metering-system

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site during the billing period, the customer shall be paid by excess renewable net-metering credits

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for the excess electricity generated beyond the net-metering customer's usage at the eligible net-

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metering-system site up to an additional twenty-five percent (25%) of the renewable self-

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generator's consumption during the billing period; unless the electric-distribution company and

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net-metering customer have agreed to a billing plan pursuant to subdivision (3) unused credits

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shall carry forward into subsequent billing periods.

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      (5) The rates applicable to any net-metered account shall be the same as those that apply

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to the rate classification that would be applicable to such account in the absence of net-metering,

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including customer and demand charges, and no other charges may be imposed to offset net

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metering credits.

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     (6) If a net metering customer has an independent competitive power supplier, that

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customer may elect to have combined billing, paying the independent competitive power supplier

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bill through the electric distribution company's bill. In those cases, the electric distribution

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company will forward full payment to the independent competitive power supplier within thirty

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(30) days of receipt, and renewable net metering credits can be applied to pay the entire bill.

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     (b) The commission shall exempt electric-distribution company customer accounts

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associated with an eligible, net-metering system from back-up or standby rates commensurate

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with the size of the eligible net-metering system, provided that any revenue shortfall caused by

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any such exemption shall be fully recovered by the electric distribution company through rates.

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      (c) Any prudent and reasonable costs incurred by the electric-distribution company

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pursuant to achieving compliance with subsection (a) and the annual amount of the distribution

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component of any renewable net-metering credits or excess, renewable net-metering credits

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provided to accounts associated with eligible net-metering systems, shall be aggregated by the

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distribution company and billed to all distribution customers on an annual basis through a

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uniform, per-kilowatt-hour (kwh) surcharge embedded in the distribution component of the rates

 

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reflected on customer bills.

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      (d) The billing process set out in this section shall be applicable to electric-distribution

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companies thirty (30) days after the enactment of this chapter.

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS - NET METERING

***

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     This act would expand the state's net metering policy to include renewable energy

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projects in which energy is distributed off-site from a customer's account and would establish an

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energy system credit benefit or charge.

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     This act would take effect upon passage.

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