2019 -- S 0760 SUBSTITUTE A

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LC002020/SUB A

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS -- NET METERING

     

     Introduced By: Senators McCaffrey, Lynch Prata, and Miller

     Date Introduced: April 04, 2019

     Referred To: Senate Environment & Agriculture

     It is enacted by the General Assembly as follows:

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

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entitled "Net Metering" 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 or operated by a public agency, nonprofit organization, limited-equity housing

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

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

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

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ordinance, 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 eighty 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

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developments that are under common ownership or control may be considered a single low- or

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moderate-income housing-eligible credit recipient for purposes of this section. The value of the

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credits shall be used to provide benefits to tenants.

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

 

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secondary, and postsecondary 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 net-metering financing

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arrangement, as applicable. Notwithstanding any other provisions of this chapter, any eligible net-

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metering resource: (i) Owned by a public entity, educational institution, hospital, nonprofit, an

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industrial or commercial customer, or multi- municipal party collaborative or (ii) Owned and

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operated by a renewable-generation developer on behalf of a public entity, educational institution,

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hospital, nonprofit, an industrial or commercial customer, or multi- municipal party collaborative

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through net-metering financing arrangement shall be treated as an eligible net-metering system

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and all accounts designated by the public entity, educational institution, hospital, nonprofit,

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industrial or commercial customer, or multi- municipal party 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, industrial or commercial customer, or multi- municipal party collaborative through a

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net-metering financing arrangement, the purpose of this definition is to reasonably assure that

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energy generated by the eligible net-metering system is consumed by net-metered electric service

 

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account(s) that are actually located in the same geographical location as the eligible net-metering

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system. All energy generated from any eligible net-metering system is, and will be considered,

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consumed at the meter where the renewable-energy resource is interconnected for valuation

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purposes. Except for an eligible net-metering system owned by, or operated on behalf of, a public

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entity, educational institution, hospital, nonprofit, industrial or commercial customer, or multi-

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municipal party collaborative through a net-metering financing arrangement, or except for a

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community remote-net-metering system, all of the net-metered accounts at the eligible net-

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metering-system site must be the accounts of the same customer of record and customers are not

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permitted to enter into agreements or arrangements to change the name on accounts for the

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purpose of artificially expanding the eligible net-metering-system site to contiguous sites in an

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attempt to avoid this restriction. However, a property owner may change the nature of the

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metered service at the accounts at the site to be master metered in the owner's name, or become

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the customer of record for each of the accounts, provided that the owner becoming the customer

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of record actually owns the property at which the account is located. As long as the net-metered

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accounts meet the requirements set forth in this definition, there is no limit on the number of

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accounts that may be net metered within the eligible net-metering-system site.

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     (7) “Eligible Off-Taker” means the following accounts eligible for net metering with an

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eligible net metering system site in accordance with this chapter: public entities, educational

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institutions, hospitals, nonprofits, industrial or commercial customers, and multi-party

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collaboratives through net metering financing arrangements.

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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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     (10) "Industrial or commercial customer" means industrial or commercial user of

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electricity, who are classified as such by the company rates that apply to business customers,

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including: the C-06 small commercial rate; the G-02 general commercial rate; the G-32 large

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demand rate; and the B-32 back-up service rate.

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     (10)(11) "Multi- municipal party collaborative" means a group of towns and/or cities

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eligible off-takers that enter into an agreement for the purpose of co-owning a renewable-

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generation facility or entering into a financing arrangement pursuant to subdivision (14) (15).

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     (11)(12) "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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     (12)(13) "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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     (13)(14) "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)(15) "Net-metering financing arrangement" means arrangements entered into by a

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public entity, educational institution, hospital, nonprofit, industrial or commercial customer, or

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multi- municipal party collaborative with a private entity to facilitate the financing and operation

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

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resource on behalf of a public entity, educational institution, hospital, nonprofit, industrial or

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commercial customer, or multi- municipal party collaborative, where: (i) The eligible net-

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metering resource is located on property owned or controlled by the public entity, educational

 

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institution, hospital, nonprofit, industrial or commercial customer, or one of the multi-party

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collaborative members, municipalities, as applicable, or on property owned or controlled by a

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renewable energy developer on behalf of a public entity, educational institution, hospital,

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nonprofit, industrial or commercial customer, or multi-party collaborative, and (ii) The

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production from the eligible net-metering resource and primary compensation paid by the public

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entity, educational institution, hospital, nonprofit, industrial or commercial customer, or multi-

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municipal party 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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     (15)(16) "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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      (16)(17) "Person" means an individual, firm, corporation, association, partnership, farm,

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

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

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instrumentality of the state.

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     (17)(18) "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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     (18)(19) "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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     (19)(20) "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- municipal party collaborative

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

 

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2017, and community remote-net-metering systems, the standard offer service kilowatt-hour

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charge 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 party

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

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commencing on January 1, 2050.

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     (20)(21) "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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     (21)(22) "Third party" means and includes any person or entity, other than the renewable

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

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remote-net-metering system on the eligible net-metering-system site for the benefit of the

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renewable self-generator.

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     (22)(23) "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). Beginning July 1, 2020, an

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additional 30 megawatts shall be added to the aggregate amount of the community remote-net-

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metering systems built. Any of the unused MW amount after December 31, 2018, shall remain

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available to community remote-net-metering systems until the MW aggregate amount is

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interconnected. After December 31, 2018, the The commission may expand or modify the

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aggregate amount after a public hearing upon petition by the office of energy resources. The

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commission shall determine within six (6) months of such petition being docketed by the

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commission whether the benefits of the proposed expansion exceed the cost. This aggregate

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amount shall not apply to any net-metering financing arrangement involving public entity

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

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government, hospitals, or nonprofits, or industrial or commercial customers. By June 30, 2018,

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the commission shall conduct a study examining the cost and benefit to all customers of the

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inclusion of the distribution charge as a part of the net-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 April 1, 2020.

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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 add a definition for "eligible off-taker" and would include the entity under

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the provisions of the net-metering statute and would amend the definition for multi municipal

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collaborative to be called multi-party collaborative. It will add 30 megawatts to the aggregate

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amount of the community remote-net-metering systems built. This act would take effect April 1,

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2020.

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     This act would take effect upon passage.

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