2022 -- H 6662

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LC003615

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2022

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A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS -- NET METERING

     

     Introduced By: Representatives Potter, Baginski, Felix, Batista, Ruggiero, Speakman,
Knight, Kislak, Shallcross Smith, and Fogarty

     Date Introduced: January 06, 2022

     Referred To: House Corporations

     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 this title. When used in this chapter:

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

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

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for a system associated with low- or moderate-income housing eligible credit recipients, or three

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

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the 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 of

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

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

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until the actual three-year (3) average annual consumption of energy over the previous three (3)

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years at the eligible credit recipient accounts becomes available for use in determining eligibility

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of the generating system. The community remote net-metering system may be owned by the same

 

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entity that is the customer of record on the net-metered account or 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 not

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include Block Island Power Company or Pascoag Utility District, each of whom shall be required

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

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

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passage of this chapter shall remain in effect until the commission approves a new tariff.

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

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

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

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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 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 municipality

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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 HUD;

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     (C) 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, secondary,

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and postsecondary levels.

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

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

 

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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-metering

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

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three (3) years at the electric distribution account(s) located at the eligible net-metering system site.

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

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

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

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eligibility of the generating system. The eligible net-metering system may be owned by the same

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

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that is not the customer of record at the eligible net-metering system site and which may offer a

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third-party, net-metering financing arrangement or net-metering financing arrangement, as

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

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resource: (i) Owned by a public entity, educational institution, hospital, nonprofit, or multi-

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municipal collaborative or (ii) Owned and operated by a renewable-generation developer on behalf

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

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through a 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, or

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multi-municipal collaborative for net metering shall be treated as accounts eligible for net metering

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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 net-metering financing arrangement, the

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purpose of this definition is to reasonably assure that energy generated by the eligible net-metering

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system is consumed by net-metered electric service account(s) that are actually located in the same

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geographical location as the eligible net-metering system. All energy generated from any eligible

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net-metering system is, and will be considered, consumed at the meter where the renewable energy

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resource is interconnected for valuation purposes. Except for an eligible net-metering system

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

 

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multi-municipal 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-metering

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

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

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artificially expanding the eligible net-metering system site to contiguous sites in an attempt to avoid

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this restriction. However, a property owner may change the nature of the metered service at the

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

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

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the property at which the account is located. As long as the net-metered accounts meet the

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requirements set forth in this definition, there is no limit on the number of accounts that may be net

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metered within the eligible net-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-five

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

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

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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 the

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

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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 (ii)

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The buildings are on the same farmland as the project on either a tract of land contiguous with, or

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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 title

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23.

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

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

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financing arrangement pursuant to subsection (14).

 

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     (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.

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

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

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

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

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

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consumption at the eligible net-metering system site through the netting process established in this

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chapter, or with respect to a community remote net-metering system, the amounts generated in

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excess of that amount will result in credits being applied to the eligible credit-recipient accounts

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associated with the community remote net-metering system.

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     (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) "Net-metering financing arrangement" means arrangements entered into by a public

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entity, educational institution, hospital, nonprofit, or multi-municipal collaborative with a private

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entity to facilitate the financing and operation of a net-metering resource, in which the private entity

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owns and operates an eligible net-metering resource on behalf of a public entity, educational

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institution, hospital, nonprofit, or multi-municipal 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, or one of the municipalities, as applicable; and (ii) The production from the

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eligible net-metering resource and primary compensation paid by the public entity, educational

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institution, hospital, nonprofit, or multi-municipal collaborative to the private entity for such

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production is directly tied to the consumption of electricity occurring at the designated net-metered

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accounts.

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

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6 of title 7, and shall include religious organizations that are tax exempt pursuant to 26 U.S.C. §

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501(d).

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

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or city of the state of Rhode Island, multi-municipal collaborative, or the state of Rhode Island or

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

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state.

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     (17) "Previously disturbed sites" means landfills, gravel pits, golf courses, brownfields,

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carports, parking lots, and rooftops including, commercial, industrial and municipal buildings.

 

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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 installed

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

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

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

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

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

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

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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 shall

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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, the

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

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

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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 eligible

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

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

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

 

LC003615 - Page 6 of 11

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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 remote

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net-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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     (22)(23) "Third-party, net-metering financing arrangement" means the financing of eligible

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

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power/credit purchase agreements between a third party and renewable self-generator, except for

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those entities under a public entity net-metering financing arrangement. A third party engaged in

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providing financing arrangements related to such net-metering systems with a public or private

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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 renewable

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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 energy

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

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by the 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 facilities,

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

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hospitals, or nonprofits. By June 30, 2018, the commission shall conduct a study examining the

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

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metering calculation.; and

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     (iii) Effective immediately, an additional thirty megawatts (30 MW) shall be added to the

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existing community remote net-metering program, "community remote net-metering expansion,"

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bringing the maximum aggregate amount of community remote net-metering system to sixty

 

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megawatts (60 MW). Projects shall be allocated program capacity on a first-come, first-served basis

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based on the community net-metering waiting list. Neither the commission, the electric distribution

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company nor any other entity shall require more than one-half (½) of the expansion to be located

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on previously disturbed sites. Each community remote net-metering system that receives an

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allocation in the expansion shall be subject to the following requirements:

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     (A) Provide bill credits of a minimum of thirty-five percent (35%) of project capacity or

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thirty-five percent (35%) of project savings to low- or moderate-income households defined as:

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being on the A-60 rate class; or participating in a low-income discount program, including, but not

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limited to, the Low Income Home Energy Assistance Program, Medicaid, Supplemental Nutrition

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Assistance Program, Rhode Island Works, Child Care Assistance Program, general public

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assistance, Good Neighbor Energy Fund, or the Universal Service Fund; or living in a zip code

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where the median household income is at or below two hundred percent (200%) of the federal

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poverty level or that is at the top fifteen percent (15%) of the region for low-income residents; or

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living in a low-income master-metered building; or living in qualifying low-income housing

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pursuant to § 44-5-13.11; or by self-attestation; or any combination of the above. The commission

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shall promulgate rules and regulations that establish requirements associated with the manner of

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obtaining and the terms for retaining such customers and the commission may establish penalties

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for failure to meet the requirements of this subsection;

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     (B) The community remote net-metering system must provide proof of project maturity

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by providing a copy of a completed distribution level impact study or a fully executed

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interconnection services agreement and evidence that applicable municipal planning and zoning

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approvals, and department of environmental management wetland permits, are complete;

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     (C) Notwithstanding the foregoing, in no case may multiple distributed generation projects

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be located on one or more contiguous parcels, unless the total capacity of the co-located projects is

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less than or equal to ten megawatts (10 MW) in aggregate for projects that have submitted a

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community remote net-metering application to the electric distribution company by December 31,

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2022, and less than or equal to five megawatts (5 MW) in aggregate for projects that have submitted

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a community remote net-metering application to the electric distribution company by December

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31, 2023, and thereafter.

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     (D) The community remote net-metering system must transfer to the electric distribution

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company rights to the capacity that are created or produced by the project. The electric distribution

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company shall:

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     (I) Sell any products acquired and credit them against the surcharge in § 39-26.4-3(c);

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     (II) Use the products to serve customers and establish a price to be credited by customers

 

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using the products based on recent and near-term projections of market prices; or

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     (III) Use them in a manner specified by the commission; and

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     (E) Community remote net-metering systems enrolled on and after January 1, 2023, shall

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be eligible to receive renewable net-metering credits for a term of twenty-five (25) years.

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Thereafter, the system shall receive the avoided cost rate for the output of the system as defined in

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§ 39-26.4-2(7).

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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 system

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

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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 of

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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 actual

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

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charges to the net-metered accounts for any positive or negative difference, as applicable. Should

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there be a material change in circumstances at the eligible net-metering system site or associated

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

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

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

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

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metering systems and community remote net-metering systems twenty-five kilowatts (25 KW) or

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smaller, the electric distribution company, at its option, may administer renewable net-metering

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credits month to month allowing unused credits to carry 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-recipient

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

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

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

 

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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 subsection (a)(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 with

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

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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 net-

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

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eligible net-metering systems or community remote net-metering systems, shall be aggregated by

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

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

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reflected on customer bills.

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

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

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS -- NET METERING

***

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     This act would increase the maximum aggregate amount of community remote net-

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metering systems from thirty megawatts (30 MW) to sixty megawatts (60 MW), and would require

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the bill credits of a minimum of thirty-five percent (35%) of the generated power to utility

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customers under applicable low-income discount programs. Projects would be allocated to the

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programs on a first-come, first-served basis.

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     This act would take effect upon passage.

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