2024 -- H 7808

========

LC005420

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2024

____________

A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS -- NET METERING

     Introduced By: Representatives Potter, Boylan, Solomon, Cotter, Knight, Tanzi, McGaw,
Cortvriend, Felix, and Speakman

     Date Introduced: March 01, 2024

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

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

entitled "Net Metering" are hereby amended to read as follows:

     39-26.4-2. Definitions.

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

chapter 26 of this title. 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 a system associated with low- or moderate-income 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) “Core forest” refers to unfragmented forest blocks of single or multiple parcels totaling

two hundred fifty (250) acres or greater unbroken by development and at least twenty-five (25)

yards from mapped roads, with eligibility questions to be resolved by the director of the department

of environmental management. Such determination shall constitute a contested case as defined in

§ 42-35-1.

     (3) “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.

     (4) “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 or 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 eighty percent (80%) of the area median income as defined annually by HUD;

     (C) 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

LC005420 - Page 2 of 12

credits shall be used to provide benefits to tenants.

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

and postsecondary levels.

     (iv) “Commercial or industrial customers” means any nonresidential customer of the

electric distribution company.

     (5) “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.

     (6) “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 to self-supply electrical energy and power for an eligible net-

metering customer. No electric distribution company shall limit the eligibility of a net-metering site

based on prior consumption. 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 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, multi-municipal collaborative; or (ii)

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

institution, hospital, nonprofit, multi-municipal collaborative through a 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, multi-municipal collaborative for net

metering shall be treated as accounts eligible for net metering within an eligible net-metering

system site; or (iii) Owned and operated by a renewable-generation developer on behalf of one or

more commercial or industrial customer(s) through net-metering financing arrangement(s) shall be

treated as an eligible net-metering system within an eligible net-metering system site.

Notwithstanding any other provision to the contrary, effective July 1, 2060, an eligible net-metering

system means a facility generating electricity using an eligible net-metering resource that is

LC005420 - Page 3 of 12

interconnected behind the same meter as the net-metering customer’s load.

     (7) “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 on 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 or for a commercial or industrial customer through a

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, multi-municipal collaborative, or for a

commercial or industrial customer through a 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.

     (8) “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 last resort service kilowatt

LC005420 - Page 4 of 12

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.

     (i) For electrical energy produced greater than one hundred percent (100%) of the

renewable self-generator's own electricity 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, excess renewable net-metering credits

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

be the electric distribution company's last resort 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.

     (9) “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.

     (10) “Hospital” means and shall be defined and established as set forth in chapter 17 of

title 23.

     (11) “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 subsection (15).

     (12) “Municipality” means any Rhode Island town or city, including any agency or

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

     (13) “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

LC005420 - Page 5 of 12

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.

     (14) “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.

     (15) “Net-metering financing arrangement” means arrangements entered into by a public

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

or industrial customer 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, multi-municipal collaborative, or

commercial or industrial customer, where: (i) The eligible net-metering resource is located on

property owned or controlled by the public entity, educational institution, hospital, municipality,

multi-municipal collaborative, or commercial or industrial customer as applicable; and (ii) The

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

entity, educational institution, hospital, nonprofit, multi-municipal collaborative, or commercial or

industrial customer to the private entity for such production is directly tied to the consumption of

electricity occurring at the designated net-metered accounts.

     (16) “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).

     (17) “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.

     (18) “Preferred site” means a location for a renewable energy system that has had prior

development, including, but not limited to: landfills, gravel pits and quarries, highway and major

road median strips, brownfields, superfund sites, parking lots or sites that are designated

appropriate for carports, and all rooftops including, but not limited to, residential, commercial,

industrial, and municipal buildings.

     (19) “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.

Subject to the safe-harbor provisions in § 39-26.4-3(a)(1), new and distinct projects cannot be

LC005420 - Page 6 of 12

located on adjoining parcels of land within core forests, except for preferred sites.

     (20) “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.

     (21) “Public entity net-metering system” means a system generating renewable energy at

a property owned or controlled by the public entity that is participating in a net-metering financing

arrangement where the public entity has designated accounts in its name to receive net-metering

credits.

     (22) “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) Last resort 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 last resort 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.

     For projects after April 15, 2023, subject to the allowable two hundred seventy-five

megawatts alternating current (275 MWac), under § 39-26.4-3(a)(1)(vi), the credit shall be reduced

by twenty percent (20%).

     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.

LC005420 - Page 7 of 12

     (23) “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.

     (24) “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.

     (25) “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 financing 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).

     (ii) Eligible net-metering systems shall be sited outside of core forests with the exception

of development on preferred sites in the core forest and the exception of systems that, as of April

15, 2023, (A) Have submitted a complete application to the appropriate municipality for any

required permits and/or zoning changes, or (B) Have requested an interconnection study for which

payment has been received by the distribution company, or (C) If an interconnection study is not

required, systems that have a completed and paid interconnection application.

     (iii) For systems developed in core forests on preferred sites, no more than one hundred

thousand square feet (100,000 sq. ft) of core forest shall be removed, including for work required

for utility interconnection or development of a brownfield, in which case no more core forest than

necessary for interconnection or brownfield development shall be removed.

     (iv) The aggregate amount of net metering in the Block Island Utility District doing

business as Block Island Power Company and the Pascoag Utility District shall not exceed a

LC005420 - Page 8 of 12

maximum percentage of peak load for each utility district as set by the utility district based on its

operational characteristics, subject to commission approval.

     (v) 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.

     (vi) The maximum aggregate capacity of remote net metering allowable for ground-

mounted eligible net-metering systems, as defined by § 39-26.4-2(6), with the exception of systems

that have, as of April 15, 2023, submitted a complete application to the appropriate municipality

for any required permits and/or zoning changes or 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 the distribution company date of

passage, shall be two hundred seventy-five megawatts, alternating current (275 MWac), excluding

off-shore wind. None of the systems to which this cap applies shall be in core forests unless on a

preferred site located within the core forest. A project counts against this maximum if it is in

operation or under construction by July 1, 2030, as determined by the local distribution company.

All eligible ground-mounted net-metering systems must be under construction or in operation by

July 1, 2030. This restriction shall not apply to the following: (A) The eligible net-metering system

is interconnected behind the same meter as the net-metering customer’s load; and/or (B) The

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

account(s) of the same owner of record that are actually located on the same or contiguous parcels

as the eligible net-metering system.

     (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

LC005420 - Page 9 of 12

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, or if requested by a net-metering customer,

shall be distributed as a cash payment to the net-metering customer. Credit determinations pursuant

to this subsection shall occur and be reconciled annually by April 1.

     (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 subsection (a)(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

LC005420 - Page 10 of 12

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.

     (e) The Rhode Island office of energy resources shall redesign the community solar remote

net metering program to reflect the provisions of this chapter and to include a commercial or

industrial anchor tenant up to but not to exceed fifty percent (50%) of the project. The remaining

fifty percent (50%) must be allocated or subscribed to low- and moderate-income (LMI) residents

and/or those living in areas defined as disadvantaged and environmental justice communities. The

Rhode Island office of energy resources shall design the net metering credit rate and factor in

federal energy funding and tax credits to develop the most cost-effective rate for community solar

projects. It is expected that these projects will be operational for a twenty-year (20) period. The

Rhode Island office of energy resources shall file a benefit and cost analysis with any program

proposal filed to the Rhode Island public utilities commission. Once the Rhode Island office of

energy resources files a program proposal to the Rhode Island public utilities commission, a docket

shall be established, and the Rhode Island public utilities commission shall issue a ruling on the

program no later than one hundred and fifty (150) days. If a program is approved, it will be subject

to no greater than twenty megawatts (20 MW) per year for two years until the forty megawatts (40

MW) cap is met. Eligible net-metering systems shall be sited outside of core forests with the

exception of development on preferred sites in the core forest.

     SECTION 2. This act shall take effect upon passage.

========

LC005420

========

LC005420 - Page 11 of 12

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS -- NET METERING

***

     This act would prohibit utility companies from limiting the eligibility of a net metering site

based on prior consumption and require excess energy not consumed under the net metering system

to be credited to the consumer. It would also amend the definition of excess renewable net-metering

credit.

     This act would take effect upon passage.

========

LC005420

========

LC005420 - Page 12 of 12