Chapter 188
2017 -- H 5618 SUBSTITUTE A AS AMENDED
Enacted 07/18/2017

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

It is enacted by the General Assembly as follows:
     SECTION 1. Section 39-26.4-2 Sections 39-26.4-2 and 39-26.4-3 of the General Laws in
Chapter 39-26.4 entitled "Net Metering" is are hereby amended to read as follows:
     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) "Community remote-net-metering system" means a facility generating electricity
using an eligible net-metering resource that allocates net-metering credits to a minimum of one
account for system associated with low or moderate housing eligible credit recipients, or three (3)
eligible credit-recipient customer accounts, provided that no more than fifty percent (50%) of the
credits produced by the system are allocated to one eligible credit recipient, and provided further
at least fifty percent (50%) of the credits produced by the system are allocated to the remaining
eligible credit recipients in an amount not to exceed that which is produced annually by twenty-
five kilowatt (25 kW) AC capacity. The community remote-net-metering system may transfer
credits to eligible credit recipients in an amount that is equal to or less than the sum of the usage
of the eligible credit recipient accounts measured by the three-year (3) average annual
consumption of energy over the previous three (3) years. A projected annual consumption of
energy may be used until the actual three-year (3) average annual consumption of energy over the
previous three (3) years at the eligible credit recipient accounts becomes available for use in
determining eligibility of the generating system. The community remote-net-metering system
may be owned by the same entity that is the customer of record on the net-metered account or
may be owned by a third party.
     (2) "Electric-distribution company" shall have the same meaning as § 39-1-2, but shall
not include block island power company or Pascoag utility district, each of whom shall be
required to offer net metering to customers through a tariff approved by the public utilities
commission after a public hearing. Any tariff or policy on file with the public utilities
commission on the date of passage of this chapter shall remain in effect until the commission
approves a new tariff.
     (3) "Eligible credit recipient" means one of the following eligible recipients in the
electric-distribution company's service territory whose electric service account or accounts may
receive net-metering credits from a community remote net-metering system. Eligible credit
recipients include the following definitions:
     (i) Residential accounts in good standing.
     (ii) "Low- or moderate-income housing eligible credit recipient" means an electric service
account or accounts in good standing associated with any housing development or developments
owned operated by a public agency, nonprofit organization, limited-equity housing cooperative,
or private developer, that receives assistance under any federal, state, or municipal government
program to assist the construction or rehabilitation of housing affordable to low- or moderate-
income households, as defined in the applicable federal or state statute, or local ordinance,
encumbered by a deed restriction or other covenant recorded in the land records of the
municipality in which the housing is located, that:
     (A) Restricts occupancy of no less than fifty percent (50%) of the housing to households
with a gross, annual income that does not exceed eighty percent (80%) of the area median income
as defined annually by the United States Department of Housing and Urban Development (HUD);
     (B) Restricts the monthly rent, including a utility allowance, that may be charged to
residents, to an amount that does not exceed thirty percent (30%) of the gross, monthly income of
a household earning eight percent (80%) of the area, median income as defined annually by
HUD;
     (C) That has an original term of not less than thirty (30) years from initial occupancy.
Electric service account or accounts in good standing associated with housing developments that
are under common ownership or control may be considered a single low- or moderate-income
housing-eligible credit recipient for purposes of this section. The value of the credits shall be used
to provide benefits to tenants.
     (iii) "Educational institutions" means public and private schools at the primary,
secondary, and post-secondary postsecondary levels.
     (4) "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;.
     (5) "Eligible net-metering system" means a facility generating electricity using an eligible
net-metering resource that 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-year (3) 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-year (3) 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 may
be owned by the same entity that is the customer of record on the net-metered accounts or may be
owned by a third party that is not the customer of record at the eligible net-metering system site
and which may offer a third-party, net-metering financing arrangement or public entity, net-
metering financing arrangement, as applicable. Notwithstanding any other provisions of this
chapter, any eligible net-metering resource: (i) Owned by a public entity, educational institution,
hospital, nonprofit, or multi-municipal collaborative or (ii) Owned and operated by a renewable-
generation developer on behalf of a public entity, educational institution, hospital, nonprofit, 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,
educational institution, hospital, nonprofit, or multi-municipal collaborative for net metering shall
be treated as accounts eligible for net metering within an eligible net-metering-system site.
     (6) "Eligible net-metering-system site" means the site where the eligible net-metering
system or community remote 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 or
community remote-net-metering system is located or a farm in which the eligible net-metering
system or community remote-net-metering system is located. Except for an eligible net-metering
system owned by or operated on behalf of a public entity, educational institution, hospital,
nonprofit, 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. All energy
generated from any eligible net-metering system is, and will be considered, consumed at the
meter where the renewable-energy resource is interconnected for valuation purposes. Except for
an eligible net-metering system owned by, or operated on behalf of, a public entity, educational
institution, hospital, nonprofit, or multi-municipal collaborative through a public entity net-
metering financing arrangement, or except for a community remote-net-metering system, 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.
     (7) "Excess renewable net-metering credit" means a credit that applies to an eligible net-
metering system or community remote-net-metering system for that portion of the production of
electrical energy 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 or the sum of the usage of the eligible credit recipient accounts associated
with the community remote-net-metering system 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
kilowatt hour (kWh) charge for the rate class and time-of-use billing period (if applicable)
applicable to the customer of record for the eligible net-metering system or applicable to the
customer of record for the community remote-net-metering system. 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.
     (8) "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.
     (9) "Hospital" means and shall be defined and established as set forth in chapter 17 of
title 23.
     (9)(10) "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 (16)(18)(14).
     (10)(11) "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.
     (11)(12) "Net metering" means using electrical energy generated by an eligible, net-
metering system for the purpose of self-supplying electrical energy and power at the eligible net-
metering-system site, or with respect to a community remote-net-metering system, for the
purpose of generating net-metering credits to be applied to the electric bills of the eligible credit
recipients associated with the community net-metering system. The amount so generated will
thereby offset consumption at the eligible net-metering system site through the netting process
established in this chapter, or with respect to a community remote-net-metering system, the
amounts generated in excess of that amount will result in credits being applied to the eligible
credit-recipient accounts associated with the community remote-net-metering system.
     (12)(13) "Net-metering customer" means a customer of the electric-distribution company
receiving and being billed for distribution service whose distribution account(s) are being net
metered.
     (14)(15) "Nonprofit" means a nonprofit corporation as defined and established through
chapter 6 of title 7, and shall include religious organizations that are tax exempt pursuant to 26
U.S.C. §501(d).
     (13)(15)(16) "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.
     (14)(16)(17) "Project" means a distinct installation of an eligible net-metering system or a
community remote-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.
     (15)(17)(18) "Public entity" means the federal government, 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.
     (16)(18)(14) "Public entity net-metering Net-metering financing arrangement" means
arrangements entered into by a public entity, educational institution, hospital, nonprofit, 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, educational institution, hospital, nonprofit, or multi-municipal
collaborative, where: (i) The eligible net-metering resource is located on property owned or
controlled by the public entity, educational institution, hospital, 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, educational institution, hospital, nonprofit, 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.
     (17)(19) "Renewable net-metering credit" means a credit that applies to an eligible net-
metering system or a community remote-net-metering system up to one hundred percent (100%)
of either the renewable self-generator's usage at the eligible net-metering-system site or the sum
of the usage of the eligible credit-recipient accounts associated with the community remote net-
metering system over the applicable billing period. This credit shall be equal to the total kilowatt
hours of electrical energy generated up to the amount consumed on-site, and/or generated up to
the sum of the eligible credit-recipient account usage 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, except that for remote public entity and multi-municipality collaborative net-
metering systems that submit an application for an interconnection study on or after July 1, 2017,
and community remote-net-metering systems, the standard offer service kilowatt-hour charge
shall be net of the renewable energy standard charge or credit;
     (ii) Distribution kilowatt-hour charge;
     (iii) Transmission kilowatt-hour charge; and
     (iv) Transition kilowatt-hour charge.
     Notwithstanding the foregoing, except for systems that have requested an interconnection
study for which payment has been received by the distribution company, or if an interconnection
study is not required, a completed and paid interconnection application, by December 31, 2018,
the renewable net-metering credit for all remote public entity and multi-municipal collaborative
net-metering systems shall not include the distribution kilowatt hour charge commencing on
January 1, 2050.
     (18)(20) "Renewable self-generator" means an electric distribution service customer of
record for the eligible net-metering system or community remote-net-metering system at the
eligible net-metering-system site which system is primarily designed to produce electrical energy
for consumption by that same customer at its distribution service account(s), and/or, with respect
to community remote-net-metering systems, electrical energy which generates net-metering
credits to be applied to offset the eligible credit-recipient account usage.
     (19)(21) "Third party" means and includes any person or entity, other than the renewable
self-generator, who or that owns or operates the eligible net-metering system or community
remote-net-metering system on the eligible net-metering-system site for the benefit of the
renewable self-generator.
     (20)(22) "Third-party, net-metering financing arrangement" means the financing of
eligible net-metering systems or community remote-net-metering systems through lease
arrangements or power/credit purchase agreements between a third party and renewable self-
generator, except for those entities under a public entity net-metering finance arrangement. A
third party engaged in providing financing arrangements related to such net-metering systems
with a public or private entity is not a public utility as defined in § 39-1-2.
     39-26.4-3. Net metering.
     (a) The following policies regarding net metering of electricity from eligible net-metering
systems and community remote-net-metering systems and regarding any person that is a
renewable self-generator shall apply:
     (1) (i) The maximum, allowable capacity for eligible net-metering systems, based on
nameplate capacity, shall be ten megawatts (10 MW), effective sixty (60) days after passage. 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; and
     (ii) Through December 31, 2018, the maximum, aggregate amount of community remote-
net-metering systems built shall be thirty megawatts (30 MW). Any of the unused MW amount
after December 31, 2018, shall remain available to community remote-net-metering systems until
the MW aggregate amount is interconnected. After December 31, 2018, the commission may
expand or modify the aggregate amount after a public hearing upon petition by the office of
energy resources. The commission shall determine within six (6) months of such petition being
docketed by the commission whether the benefits of the proposed expansion exceed the cost. This
aggregate amount shall not apply to any net-metering finance financing arrangement involving
public entity facilities, or multi-municipal collaborative facilities, educational institutions, the
federal government, hospitals, or nonprofits. By June 30, 2019, the commission shall conduct a
study examining the cost to all customers of the inclusion of the distribution charge as a part of
the net-metering calculation.
     (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:
     (i) The production from the eligible net-metering system or community remote-net-
metering system; and
     (ii) Aggregate consumption of the net-metered accounts at the eligible net-metering-
system site or the sum of the consumption of the eligible credit-recipient accounts associated with
the community remote-net-metering system, 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 and community-remote-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 the following billing period.
     (3) If the electricity generated by an eligible net-metering system or community remote-
net-metering system during a billing period is equal to, or less than, the net-metering customer's
usage at the eligible net-metering-system site or the sum of the usage of the eligible credit-
recipient accounts associated with the community remote-net-metering system during the billing
period, the customer shall receive renewable net-metering credits, that shall be applied to offset
the net-metering customer's usage on accounts at the eligible net-metering-system site, or shall be
used to credit the eligible credit-recipient's electric account.
     (4) If the electricity generated by an eligible net-metering system or community remote-
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 or the sum of the usage of the eligible credit-
recipient accounts associated with the community remote-net-metering system during the billing
period, the customer shall be paid by excess renewable net-metering credits for the excess
electricity generated up to an additional twenty-five percent (25%) beyond the net-metering
customer's usage at the eligible net-metering-system site, or the sum of the usage of the eligible
credit-recipient accounts associated with the community remote net-metering system during the
billing period; unless the electric-distribution company and net-metering customer have agreed to
a billing plan pursuant to subdivision (2).
     (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.
     (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 any renewable
net-metering credits or excess, renewable net-metering credits provided to accounts associated
with eligible net-metering systems or community remote-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.
     SECTION 2. This act shall take effect upon passage.
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LC001560/SUB A/2
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