2017 -- H 5618 SUBSTITUTE A AS AMENDED

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2017

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A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS -- NET METERING

     

     Introduced By: Representatives Regunberg, Knight, Handy, Carson, and Ruggiero

     Date Introduced: March 01, 2017

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 39-26.4-2 Sections 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" is are hereby amended to read as follows:

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     39-26.4-2. Definitions.

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     Terms not defined in this section herein shall have the same meaning as contained in

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

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     (1) "Community remote-net-metering system" means a facility generating electricity

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using an eligible net-metering resource that allocates net-metering credits to a minimum of one

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account for system associated with low or moderate housing eligible credit recipients, or three (3)

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eligible credit-recipient customer accounts, provided that no more than fifty percent (50%) of the

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credits produced by the system are allocated to one eligible credit recipient, and provided further

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at least fifty percent (50%) of the credits produced by the system are allocated to the remaining

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eligible credit recipients in an amount not to exceed that which is produced annually by twenty-

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five kilowatt (25 kW) AC capacity. The community remote-net-metering system may transfer

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credits to eligible credit recipients in an amount that is equal to or less than the sum of the usage

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of the eligible credit recipient accounts measured by the three-year (3) average annual

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consumption of energy over the previous three (3) years. A projected annual consumption of

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

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previous three (3) years at the eligible credit recipient accounts becomes available for use in

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determining eligibility of the generating system. The community remote-net-metering system

 

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may be owned by the same entity that is the customer of record on the net-metered account or

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may be owned by a third party.

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     (2) "Electric-distribution company" shall have the same meaning as § 39-1-2, but shall

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not include block island power company or Pascoag utility district, each of whom shall be

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required to offer net metering to customers through a tariff approved by the public utilities

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commission after a public hearing. Any tariff or policy on file with the public utilities

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commission on the date of passage of this chapter shall remain in effect until the commission

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approves a new tariff.

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     (3) "Eligible credit recipient" means one of the following eligible recipients in the

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electric-distribution company's service territory whose electric service account or accounts may

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receive net-metering credits from a community remote net-metering system. Eligible credit

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recipients include the following definitions:

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     (i) Residential accounts in good standing.

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     (ii) "Low- or moderate-income housing eligible credit recipient" means an electric service

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account or accounts in good standing associated with any housing development or developments

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owned operated by a public agency, nonprofit organization, limited-equity housing cooperative,

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or private developer, that receives assistance under any federal, state, or municipal government

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program to assist the construction or rehabilitation of housing affordable to low- or moderate-

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income households, as defined in the applicable federal or state statute, or local ordinance,

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encumbered by a deed restriction or other covenant recorded in the land records of the

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municipality in which the housing is located, that:

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     (A) Restricts occupancy of no less than fifty percent (50%) of the housing to households

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with a gross, annual income that does not exceed eighty percent (80%) of the area median income

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as defined annually by the United States Department of Housing and Urban Development (HUD);

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     (B) Restricts the monthly rent, including a utility allowance, that may be charged to

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residents, to an amount that does not exceed thirty percent (30%) of the gross, monthly income of

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a household earning eight percent (80%) of the area, median income as defined annually by

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HUD;

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     (C) That has an original term of not less than thirty (30) years from initial occupancy.

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Electric service account or accounts in good standing associated with housing developments that

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are under common ownership or control may be considered a single low- or moderate-income

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housing-eligible credit recipient for purposes of this section. The value of the credits shall be used

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to provide benefits to tenants.

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     (iii) "Educational institutions" means public and private schools at the primary, secondary

 

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and post-secondary levels.

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     (4) "Eligible net-metering resource" means eligible renewable-energy resource, as

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defined 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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     (5) "Eligible net-metering system" means a facility generating electricity using an eligible

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net-metering resource that is reasonably designed and sized to annually produce electricity in an

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amount that is equal to, or less than, the renewable self-generator's usage at the eligible net-

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metering-system site measured by the three-year (3) average annual consumption of energy over

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the previous three (3) years at the electric-distribution account(s) located at the eligible net-

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metering-system site. A projected annual consumption of energy may be used until the actual

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three-year (3) average annual consumption of energy over the previous three (3) years at the

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electric-distribution account(s) located at the eligible net-metering-system site becomes available

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for use in determining eligibility of the generating system. The eligible net-metering system may

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be owned by the same entity that is the customer of record on the net-metered accounts or may be

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owned by a third party that is not the customer of record at the eligible net-metering system site

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and which may offer a third-party, net-metering financing arrangement or public entity, net-

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metering financing arrangement, as applicable. Notwithstanding any other provisions of this

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chapter, any eligible net-metering resource: (i) Owned by a public entity, educational institution,

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hospital, nonprofit or multi-municipal collaborative or (ii) Owned and operated by a renewable-

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generation developer on behalf of a public entity, educational institution, hospital, nonprofit or

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multi-municipal collaborative through public entity net-metering financing arrangement shall be

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treated as an eligible net-metering system and all accounts designated by the public entity,

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educational institution, hospital, nonprofit 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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     (6) "Eligible net-metering-system site" means the site where the eligible net-metering

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system or community remote net-metering system is located or is part of the same campus or

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complex of sites contiguous to one another and the site where the eligible net-metering system or

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community remote-net-metering system is located or a farm in which the eligible net-metering

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system or community remote-net-metering system is located. Except for an eligible net-metering

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system owned by or operated on behalf of a public entity, educational institution, hospital,

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nonprofit or multi-municipal collaborative through a public entity net-metering financing

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

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

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actually located in the same geographical location as the eligible net-metering system. All energy

 

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generated from any eligible net-metering system is, and will be considered, consumed at the

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meter where the renewable-energy resource is interconnected for valuation purposes. Except for

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

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institution, hospital, nonprofit or multi-municipal collaborative through a public entity net-

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metering financing arrangement, or except for a community remote-net-metering system, all of

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the net-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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     (7) "Excess renewable net-metering credit" means a credit that applies to an eligible net-

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metering system or community remote-net-metering system for that portion of the production of

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electrical energy beyond one hundred percent (100%) and no greater than one hundred twenty-

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five percent (125%) of the renewable self-generator's own consumption at the eligible net-

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metering-system site or the sum of the usage of the eligible credit recipient accounts associated

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with the community remote-net-metering system during the applicable billing period. Such excess

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renewable net-metering credit shall be equal to the electric-distribution company's avoided cost

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rate, which is hereby declared to be the electric-distribution company's standard offer service

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kilowatt hour (kWh) charge for the rate class and time-of-use billing period (if applicable)

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applicable to the customer of record for the eligible net-metering system or applicable to the

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customer of record for the community remote-net-metering system. The commission shall have

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the 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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     (8) "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

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

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     (9) "Hospital" means and shall be defined and established as set forth in chapter 17 of

 

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title 23.

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

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into 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 (16)(18).

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     (10)(11) "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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     (11)(12) "Net metering" means using electrical energy generated by an eligible, net-

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

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metering-system site, or with respect to a community remote-net-metering system, for the

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purpose of generating net-metering credits to be applied to the electric bills of the eligible credit

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recipients associated with the community net-metering system. The amount so generated will

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

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established in this chapter, or with respect to a community remote-net-metering system, the

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amounts generated in excess of that amount will result in credits being applied to the eligible

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credit-recipient accounts associated with the community remote-net-metering system.

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     (12)(13) "Net-metering customer" means a customer of the electric-distribution company

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receiving and being billed for distribution service whose distribution account(s) are being net

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metered.

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     (14) "Nonprofit" means a nonprofit corporation as defined and established through

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chapter 6 of title 7, and shall include religious organizations that are tax exempt pursuant to 26

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U.S.C. §501(d).

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     (13)(15) "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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     (14)(16) "Project" means a distinct installation of an eligible net-metering system or a

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community remote-net-metering system. An installation will be considered distinct if it is

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installed in a different location, or at a different time, or involves a different type of renewable

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energy.

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     (15)(17) "Public entity" means the federal government, the state of Rhode Island,

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municipalities, wastewater treatment facilities, public transit agencies or any water distributing

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plant or system employed for the distribution of water to the consuming public within this state

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including the water supply board of the city of Providence.

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     (16)(18) "Public entity net-metering Net-metering financing arrangement" means

 

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arrangements entered into by a public entity, educational institution, hospital, nonprofit or multi-

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municipal collaborative with a private entity to facilitate the financing and operation of a net-

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metering resource, in which the private entity owns and operates an eligible net-metering resource

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on behalf of a public entity, educational institution, hospital, nonprofit or multi-municipal

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collaborative, where: (i) The eligible net-metering resource is located on property owned or

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controlled by the public entity, educational institution, hospital or one of the municipalities, as

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applicable, and (ii) The production from the eligible net-metering resource and primary

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compensation paid by the public entity, educational institution, hospital, nonprofit or multi-

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municipal collaborative to the private entity for such production is directly tied to the

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consumption of electricity occurring at the designated net-metered accounts.

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     (17)(19) "Renewable net-metering credit" means a credit that applies to an eligible net-

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metering system or a community remote-net-metering system up to one hundred percent (100%)

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of either the renewable self-generator's usage at the eligible net-metering-system site or the sum

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of the usage of the eligible credit-recipient accounts associated with the community remote net-

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metering system over the applicable billing period. This credit shall be equal to the total kilowatt

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hours of electrical energy generated up to the amount consumed on-site, and/or generated up to

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the sum of the eligible credit-recipient account usage during the billing period multiplied by the

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sum of the distribution company's:

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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, except that for remote public entity and multi-municipality collaborative net-

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metering systems that submit an application for an interconnection study on or after July 1, 2017,

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and community remote-net-metering systems, the standard offer service kilowatt-hour charge

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shall be net of the renewable energy standard charge or credit;

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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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     Notwithstanding the foregoing, except for systems that have requested an interconnection

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study for which payment has been received by the distribution company, or if an interconnection

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study is not required, a completed and paid interconnection application, by December 31, 2018,

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the renewable net-metering credit for all remote public entity and multi-municipal collaborative

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net-metering systems shall not include the distribution kilowatt hour charge commencing on

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January 1, 2050.

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     (18)(20) "Renewable self-generator" means an electric distribution service customer of

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record for the eligible net-metering system or community remote-net-metering system at the

 

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eligible net-metering-system site which system is primarily designed to produce electrical energy

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for consumption by that same customer at its distribution service account(s), and/or, with respect

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to community remote-net-metering systems, electrical energy which generates net-metering

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credits to be applied to offset the eligible credit-recipient account usage.

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     (19)(21) "Third party" means and includes any person or entity, other than the renewable

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self-generator, who owns or operates the eligible net-metering system or community remote-net-

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metering system on the eligible net-metering-system site for the benefit of the renewable self-

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generator.

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     (20)(22) "Third-party, net-metering financing arrangement" means the financing of

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eligible net-metering systems or community remote-net-metering systems through lease

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arrangements or power/credit purchase agreements between a third party and renewable self-

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generator, except for those entities under a public entity net-metering finance arrangement. A

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third party engaged in providing financing arrangements related to such net-metering systems

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with a public or private entity is not a public utility as defined in § 39-1-2.

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     39-26.4-3. Net metering.

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     (a) The following policies regarding net metering of electricity from eligible net-metering

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systems and community remote-net-metering systems and regarding any person that is a

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renewable self-generator shall apply:

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

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nameplate capacity, shall be ten megawatts (10 MW), effective sixty (60) days after passage. The

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aggregate amount of net metering in the Block Island Power Company and the Pascoag Utility

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District shall not exceed three percent (3%) of peak load for each utility district; and

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     (ii) Through December 31, 2018, the maximum, aggregate amount of community remote-

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net-metering systems built shall be thirty megawatts (30 MW). Any of the unused MW amount

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after December 31, 2018, shall remain available to community remote-net-metering systems until

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the MW aggregate amount is interconnected. After December 31, 2018, the commission may

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expand or modify the aggregate amount after a public hearing upon petition by the office of

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energy resources. The commission shall determine within six (6) months of such petition being

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docketed by the commission whether the benefits of the proposed expansion exceed the cost. This

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aggregate amount shall not apply to any net metering finance arrangement involving public entity

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facilities, or multi-municipal collaborative facilities, educational institutions, the federal

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government, hospitals, or nonprofits. By June 30, 2019, the commission shall conduct a study

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examining the cost to all customers of the inclusion of the distribution charge as a part of the net-

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metering calculation.

 

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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:

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     (i) The production from the eligible net-metering system or community remote-net-

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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 or the sum of the consumption of the eligible credit-recipient accounts associated with

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the community remote-net-metering system, and establish a monthly billing plan that reflects the

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expected credits that would be applied to the net-metered accounts over twelve (12) months. The

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billing plan would be designed to even out monthly billings over twelve (12) months, regardless

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of actual production and usage. If such election is made by the electric-distribution company, the

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electric-distribution company would reconcile payments and credits under the billing plan to

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actual production and consumption at the end of the twelve-month (12) period and apply any

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credits or charges to the net-metered accounts for any positive or negative difference, as

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applicable. Should there be a material change in circumstances at the eligible net-metering system

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site or associated accounts during the twelve-month (12) period, the estimates and credits may be

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adjusted by the electric-distribution company during the reconciliation period. The electric-

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distribution company also may elect (but is not required) to issue checks to any net-metering

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customer in lieu of billing credits or carry-forward credits or charges to the next billing period.

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For residential-eligible net-metering systems and community-remote-net-metering systems

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twenty-five kilowatts (25 kw) or smaller, the electric-distribution company, at its option, may

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administer renewable net-metering credits month to month allowing unused credits to carry

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forward into the following billing period.

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     (3) If the electricity generated by an eligible net-metering system or community remote-

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net-metering system during a billing period is equal to, or less than, the net-metering customer's

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usage at the eligible net-metering-system site or the sum of the usage of the eligible credit-

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recipient accounts associated with the community remote-net-metering system during the billing

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

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the net-metering customer's usage on accounts at the eligible net-metering-system site, or shall be

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used to credit the eligible credit-recipient's electric account.

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     (4) If the electricity generated by an eligible net-metering system or community remote-

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net-metering system during a billing period is greater than the net-metering customer's usage on

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accounts at the eligible net-metering-system site or the sum of the usage of the eligible credit-

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recipient accounts associated with the community remote-net-metering system during the billing

 

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period, the customer shall be paid by excess renewable net-metering credits for the excess

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electricity generated up to an additional twenty-five percent (25%) beyond the net-metering

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customer's usage at the eligible net-metering-system site, or the sum of the usage of the eligible

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credit-recipient accounts associated with the community remote net-metering system during the

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billing period; unless the electric-distribution company and net-metering customer have agreed to

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a billing plan pursuant to subdivision (2).

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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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     (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 any renewable

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net-metering credits or excess, renewable net-metering credits provided to accounts associated

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with eligible net-metering systems or community remote-net-metering systems, shall be

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aggregated by the distribution company and billed to all distribution customers on an annual basis

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

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the rates 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 make educational institutions and nonprofit corporations established

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pursuant to chapter 6 of title 7 eligible for net-metering financing arrangements.

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     This act would take effect upon passage.

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