[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 729 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 729

To amend the Public Utility Regulatory Policies Act of 1978 to promote 
 energy independence and self-sufficiency by providing for the use of 
 net metering by certain small electric energy generation systems, and 
                          for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 30, 2007

Mr. Inslee (for himself, Mr. Bartlett of Maryland, Mr. Ehlers, Ms. Lee, 
    Mr. Farr, Mr. Smith of Washington, Ms. Kaptur, Mr. Hinchey, Mr. 
Grijalva, Mr. DeFazio, Mr. Payne, Mr. Honda, and Ms. Hooley) introduced 
 the following bill; which was referred to the Committee on Energy and 
                                Commerce

_______________________________________________________________________

                                 A BILL


 
To amend the Public Utility Regulatory Policies Act of 1978 to promote 
 energy independence and self-sufficiency by providing for the use of 
 net metering by certain small electric energy generation systems, and 
                          for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Home Energy Generation Act''.

SEC. 2. FINDINGS.

    The Congress finds that it is in the public interest to:
            (1) Enable small businesses, residences, schools, churches, 
        farms with small electric generation units, and other retail 
        electric customers who generate electric energy to return or 
        sell surplus electric energy on the open market.
            (2) Encourage private investment in renewable and alternate 
        energy resources.
            (3) Stimulate the economic growth.
            (4) Enhance the continued diversification section of energy 
        resources used in the United States.
            (5) Remove regulatory barriers for net metering.

SEC. 3. NET METERING AND INTERCONNECTION STANDARDS.

    Section 113 of the Public Utility Regulatory Policies Act of 1978 
is amended by adding the following new subsections at the end thereof:
    ``(d) Net Metering.--
            ``(1) Definitions.--As used in this subsection:
                    ``(A) The term `customer-generator' means the owner 
                or operator of a qualified generation unit.
                    ``(B) The term `net metering' means measuring the 
                difference between the electricity supplied to a 
                customer-generator and the electricity generated by a 
                customer-generator that is delivered to a local 
                distribution section system at the same point of 
                interconnection during an applicable billing period and 
                providing an energy credit to a customer-generator in 
                the form of a kilowatt-hour credit for each kilowatt-
                hour of energy produced by a customer-generator from a 
                qualified generation unit.
                    ``(C) The term `qualified generation unit' means an 
                electric energy generation unit that meets each of the 
                following requirements:
                            ``(i) The unit is a fuel cell or uses as 
                        its energy source either solar, wind, biomass, 
                        geothermal, anaerobic digestion or landfill 
                        gas, or a combination of the foregoing.
                            ``(ii) The unit has a generating capacity 
                        of not more than 1,000 kilowatts.
                            ``(iii) The unit is located on premises 
                        that are owned, operated, leased, or otherwise 
                        controlled by the customer-generator.
                            ``(iv) The unit operates in parallel with 
                        the retail electric supplier.
                            ``(v) The unit is intended primarily to 
                        offset part or all of the customer-generator's 
                        requirements for electric energy.
                    ``(D) The term `retail electric supplier' means any 
                electric utility that sells electric energy to the 
                ultimate consumer thereof.
                    ``(E) The term `local distribution system' means 
                any system for the distribution section of electric 
                energy to the ultimate consumer thereof, whether or not 
                the owner or operator of such system is also a retail 
                electric supplier.
            ``(2) Adoption.--Not later than one year after the 
        enactment of this subsection, each State regulatory authority 
        (with respect to each electric utility for which it has 
        ratemaking authority), and each nonregulated electric utility, 
        shall provide public notice and conduct a hearing respecting 
        the standards established by paragraph (3) and, on the basis of 
        such hearing, shall adopt such standard.
            ``(3) Establishment of net metering standard.--Each retail 
        electric supplier shall offer to arrange (either directly or 
        through a local distribution company or other third party) to 
        make net metering available, on a first-come-first-served 
        basis, to each of its retail customers in accordance with the 
        provisions of this subsection and each of the following 
        requirements:
                    ``(A) Rates and charges and contract terms and 
                conditions for the sale of electric energy to customer-
                generators shall be the same as the rates and charges 
                and contract terms and conditions that would be 
                applicable if the customer-generator did not own or 
                operate a qualified generation unit and use a net 
                metering system.
                    ``(B) Each retail electric supplier shall notify 
                all of its retail customers of the standard established 
                under this paragraph upon adoption of such standard.
            ``(4) Net energy measurement.--Each retail electric 
        supplier shall arrange to provide to customer-generators who 
        qualify for net metering under subsection (b) an electrical 
        energy meter capable of net metering and measuring the flow of 
        electricity either to or from the customer and using a single 
        meter and single register, except where it is not practical to 
        do so. Where it is not practical to provide the meter to the 
        customer-generator, the retail electric supplier (either 
        directly or through a local distribution company or other third 
        party) shall, at its own expense, install one or more of such 
        electric energy meters for the customer-generator concerned.
            ``(5) Billing.--Each retail electric supplier subject to 
        subsection (b) shall calculate the electric energy consumption 
        for a customer using a net metering system in the following 
        manner:
                    ``(A) The retail electric supplier shall measure 
                the net electricity produced or consumed during the 
                billing period using the metering installed as provided 
                in paragraph (4).
                    ``(B) If the electricity supplied by the retail 
                electric supplier exceeds the electricity generated by 
                the customer-generator during the billing period, the 
                customer-generator shall be billed for the net electric 
                energy supplied by the retail electric supplier in 
                accordance with normal billing practices
                    ``(C)(i) If electric energy generated by the 
                customer-generator exceeds the electric energy supplied 
                by the retail electric supplier, the customer-generator 
                shall be billed for the appropriate customer charges 
                for that billing period and credited for the excess 
                electric energy generated during the billing period, 
                with this credit appearing as a kilowatt-hour credit on 
                the bill for the following billing period. The 
                kilowatt-hour credits shall be applied to customer-
                generator electric energy consumption on the following 
                billing period bill (except for a billing period that 
                ends in the next calendar year). At the beginning of 
                each calendar year, any remaining unused kilowatt-hour 
                credits shall be extinguished.
                    ``(ii) Except as provided in this clause, if the 
                customer-generator is using a meter and retail billing 
                arrangement that has time differentiated rates, (a 
                `time-of-use meter'), the kilowatt-hour credit shall be 
                based on the ratio representing the difference in 
                retail rates for each time of use rate or the credits 
                shall be shown on the customer-generator's bill as a 
                monetary credit reflecting retail rates at the time of 
                generation of the electric energy by the customer-
                generator. Notwithstanding the standard established 
                under section 11(d)(14), the supplier may require, at 
                the supplier's option, the customer-generator with net 
                metering to take electric service under a non-time 
                differentiated energy rate tariff or service that it 
                offers to customers in the same rate class as the 
                customer-generator.
            ``(6) Percent limitations.--
                    ``(A) Two percent limitation.--The standard 
                established under this subsection shall not apply for a 
                calendar year in the case of a customer-generator 
                served by a local distribution company when the total 
                generating capacity of all customer-generators with net 
                metering systems served by that local distribution 
                company in that calendar year is equal to or in excess 
                of 2 percent of the capacity necessary to meet the 
                local distribution company's average forecasted 
                aggregate customer peak demand for that calendar year.
                    ``(B) One percent limitation.--The standard 
                established under this subsection shall not apply for a 
                calendar year in the case of a customer-generator 
                served by a local distribution company when the total 
                generating capacity of all customer-generators with net 
                metering systems served by that local distribution 
                company in that calendar year using a single type of 
                qualified generation units (as listed in paragraph 
                (1)(C)(i)) is equal to or in excess of 1 percent of the 
                capacity necessary to meet the company's average 
                forecasted aggregate customer peak demand for that 
                calendar year.
                    ``(C) Records and notice.--- Each retail electric 
                supplier shall maintain, and make available to the 
                public, records of the total generating capacity of 
                customer-generators of such system that are using net 
                metering, the type of generating systems and energy 
                source used by the electric generating systems used by 
                such customer-generators. Each such retail electric 
                supplier shall notify the State regulatory authority 
                and the Federal Energy Regulatory Commission when the 
                total generating capacity of such customer-generators 
                is equal to or in excess of the limitations set forth 
                in subparagraph (B).
            ``(7) Ownership of credits.--For purposes of Federal and 
        State laws providing renewable energy credits or greenhouse gas 
        credits, the customer-generator with a qualified generating 
        unit and net metering shall be treated as owning and having 
        title to the renewable energy attributes, renewable energy 
        credits and greenhouse gas emission credits related to any 
        electricity produced by the qualified generating unit. No 
        retail electric supplier shall claim title to or ownership of 
        any renewable energy attributes, renewable energy credits or 
        greenhouse gas emission credits of the customer-generator as a 
        result of interconnecting the customer-generator or providing 
        or offering the customer-generator net metering.
            ``(8) Safety and performance standards.--(A) A qualified 
        generation unit and net metering system used by a customer-
        generator shall meet all applicable safety and performance and 
        reliability standards established by the national electrical 
        code, the Institute of Electrical and Electronics Engineers, 
        Underwriters Laboratories, or the American National Standards 
        Institute.
            ``(B) The Commission shall, after consultation with State 
        regulatory authorities and nonregulated local distribution 
        systems and after notice and opportunity for comment, prohibit 
        by regulation the imposition of additional charges by electric 
        suppliers and local distribution systems for equipment or 
        services for safety or performance that are additional to those 
        necessary to meet the standards and requirements referred to in 
        subparagraph (A) of this paragraph and subsection (e) of this 
        section (relating to interconnection).
            ``(9) Determination of compliance.--Any State regulatory 
        authority (with respect to each electric utility for which it 
        has ratemaking authority), and each nonregulated electric 
        utility may apply to the Commission for a determination that 
        any State net metering requirement or regulations complies with 
        the requirements of this subsection. In the absence of such a 
        determination, the Commission, on its own motion or pursuant to 
        the petition of any interested person, may, after notice and 
        opportunity for a hearing on the record, issue an order 
        requiring against any retail electric supplier or local 
        distribution company, or both, to require compliance with this 
        subsection. Any person who violates any requirement of this 
        subsection or any order of the Commission under this subsection 
        shall be subject to civil penalties in the amount of $10,000 
        for each day that such violation continues. Such penalties may 
        be assessed by the Commission, after notice and opportunity for 
        hearing, in the same manner as penalties are assessed under 
        section 31(d) of the Federal Power Act.
    ``(e) Interconnection Standards.--
            ``(1) Definitions.--For purposes of this subsection, the 
        terms defined in subsection (d) shall apply.
            ``(2) Model standards.--(A) Within one year after the 
        enactment of this subsection the Commission shall publish model 
        standards for the physical connection between local 
        distribution systems and qualified generation units and 
        electric generation units that meet the requirements of 
        subsection (d)(1)(C) other than clause (ii) thereof and that do 
        not exceed 20,000 kilowatts of capacity. Such model standards 
        shall be designed to encourage the use of qualified generation 
        units and to ensure the safety and reliability of such units 
        and the local distribution systems interconnected with such 
        units.
            ``(B) The model standards shall have two separate expedited 
        procedures for interconnecting qualified generation units up to 
        15 kilowatts and a separate standard that expedites 
        interconnection for qualified generation units up to 2000 
        kilowatts. Such expedited procedures shall be based on those 
        best practices among the States that have adopted 
        interconnection standards. In designing such expedited 
        procedures, the Commission shall consider Interstate Renewable 
        Energy Council Model Rule MR-I2005.
            ``(C) Within 2 years after the enactment of this 
        subsection, each State shall adopt the model standards 
        published under this paragraph, with or without modification, 
        and submit such standards to the Commission for approval. The 
        Commission shall approve a modification of the model standards 
        only if the Commission determines that such modification is 
        consistent with or superior to the purpose of such standards 
        and is required by reason of local conditions.
            ``(D) If standards have not been approved under this 
        paragraph by the Commission for any State within 2 years after 
        the enactment of this subsection, the Commission shall, by rule 
        or order, enforce the Commission's model standards in such 
        State until such time as State standards are approved by the 
        Commission.
            ``(E) Within two years after the enactment of this 
        subsection, and after notice and opportunity for comment, the 
        Commission shall publish an update of such model standards, 
        considering changes in the underlying standards and 
        technologies. Such updates shall be made available to State 
        regulatory authorities for their consideration.
            ``(3) Safety, reliability, performance, and cost.--The 
        standards under this section shall establish those measures for 
        the safety and reliability of the affected equipment and local 
        distribution systems as may be appropriate. Such standards 
        shall be consistent with all applicable safety and performance 
        standards established by the national electrical code, the 
        Institute of Electrical and Electronics Engineers, Underwriters 
        Laboratories, or the American National Standards Institute yet 
        constitute the minimum cost and technical burdens to the 
        interconnecting customer generator as the Commission shall, by 
        rule, prescribe.
            ``(4) Additional charges.--The model standards under this 
        subsection prohibit the imposition of additional charges by 
        local distribution systems for equipment or services for 
        interconnection that are additional to those necessary to meet 
        such standards and that are in excess of the charges and 
        equipment requirements identified in the best practices of 
        states with interconnection standards.
            ``(5) Relationship to existing law regarding 
        interconnection.--Nothing in this subsection affects the 
        application of section 111(d)(15) relating to interconnection.
            ``(6) Consumer friendly contracts.--The Commission shall 
        promulgate regulations insuring that simplified contracts will 
        be used for the interconnection of electric energy by electric 
        energy transmission or distribution systems and generating 
        facilities that have a power production capacity not greater 
        than 2000 kilowatts and shall consider the best practices for 
        consumer friendly contracts adopted by States or national 
        associations of state regulators. Such contracts shall not 
        require liability or other insurance in excess of what is 
        typically carried by customer-generators for general liability.
            ``(7) Enforcement.--Any person who violates any requirement 
        of this subsection shall be subject to civil penalties in the 
        amount of $10,000 for each day that such violation continues. 
        Such penalties may be assessed by the Commission, after notice 
        and opportunity for hearing, in the same manner as penalties 
        are assessed under section 31(d) of the Federal Power Act.''.

SEC. 4. RELATIONSHIP TO STATE LAW.

    Section 117 of the Public Utility Regulatory Policies Act of 1978 
is amended by striking ``Nothing'' and inserting ``(1) Except as 
provided in paragraph (2), nothing'' and by adding the following at the 
end thereof:
    ``(2) No State or nonregulated utility may adopt or enforce any 
standard or requirement concerning net metering or interconnection that 
restricts access to the electric power transmission or distribution 
system by qualified generators beyond those standards and requirements 
identified in section 113. Nothing in this Act shall preclude a State 
from adopting or enforcing incentives or requirements to encourage 
qualified generation and net metering that are additional to or 
equivalent to those required under section 113 or that afford greater 
access to the electric power transmission and distribution system by 
qualified generators as defined in section 113 or afford greater 
compensation or credit for electricity generated by such generators.''.
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