2016 -- S 2592

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LC004420

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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: Senators DiPalma, Sosnowski, Miller, Archambault, and Kettle

     Date Introduced: February 25, 2016

     Referred To: Senate Environment & Agriculture

     It is enacted by the General Assembly as follows:

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

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

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

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

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

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

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

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

distribution system costs.

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

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

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

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

excluding all other listed eligible biomass fuels;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

metering system site.

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

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%)

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

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

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

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

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

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

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

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

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

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

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

facilities to the extent there is any uncertainty or disagreement.

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

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

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

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

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

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

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

financing arrangement pursuant to subdivision (7).

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

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

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

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

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

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

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

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

the designated net metered accounts.

      (8) "Net metering" means using electricity generated by an eligible net metering system

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

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

established in this chapter.

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

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

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

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

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

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

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

of the state.

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

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

time, or involves a different type of renewable energy.

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

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

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

board of the city of Providence.

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

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

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

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

on-site during the billing period multiplied by the sum of the distribution company's:

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

metering customer;

      (ii) Distribution kilowatt hour charge;

      (iii) Transmission kilowatt hour charge; and

      (iv) Transition kilowatt hour charge.

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

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

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

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

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

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

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

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

distribution infrastructure investments, improved local reliability and reduced vulnerability to

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failures, reduced line losses, energy price suppression, fuel price risk mitigation and avoided

health and environmental compliance costs, as determined by the Public Utilities Commission.

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

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

renewable self-generator shall apply to net metering customers:

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

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

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

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

eligible net metering systems on a single parcel of property.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

credits to carry forward into following billing period.

     (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

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

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

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

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

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

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

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

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

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

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

shall carry forward into subsequent billing periods.

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

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

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

metering credits.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

reflected on customer bills.

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

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

***

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

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

energy system credit benefit or charge.

     This act would take effect upon passage.

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LC004420

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