[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1016 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 1016

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 SENATE OF THE UNITED STATES

                             March 28, 2007

 Mr. Menendez introduced the following bill; which was read twice and 
       referred to the Committee on Energy and Natural Resources

_______________________________________________________________________

                                 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 ``Solar Opportunity and Local Access 
Rights Act''.

SEC. 2. NET METERING AND INTERCONNECTION STANDARDS.

    (a) In General.--Section 113 of the Public Utility Regulatory 
Policies Act of 1978 (16 U.S.C. 2623) is amended by adding at the end 
the following:
    ``(d) Net Metering.--
            ``(1) Definitions.--In this subsection and subsection (e):
                    ``(A) Customer-generator.--The term `customer-
                generator' means the owner or operator of a qualified 
                generation unit.
                    ``(B) Electric generation unit.--The term `electric 
                generation unit' means--
                            ``(i) a qualified generation unit; and
                            ``(ii) any electric generation unit that 
                        qualifies for net metering under a net metering 
                        tariff or rule approved by a State.
                    ``(C) Local distribution system.--The term `local 
                distribution system' means any system for the 
                distribution of electric energy to the ultimate 
                consumer of the electricity, whether or not the owner 
                or operator of the system is a retail electric 
                supplier.
                    ``(D) Net metering.--The term `net metering' means 
                the process of--
                            ``(i) measuring the difference between the 
                        electricity supplied to a customer-generator 
                        and the electricity generated by the customer-
                        generator that is delivered to a local 
                        distribution system at the same point of 
                        interconnection during an applicable billing 
                        period; and
                            ``(ii) providing an energy credit to the 
                        customer-generator in the form of a kilowatt-
                        hour credit for each kilowatt-hour of energy 
                        produced by the customer-generator from a 
                        qualified generation unit.
                    ``(E) Qualified generation unit.--The term 
                `qualified generation unit' means an electric energy 
                generation unit that--
                            ``(i) is a fuel cell or uses as the energy 
                        source of the unit solar energy, wind, biomass, 
                        geothermal energy, anaerobic digestion, or 
                        landfill gas, or a combination of the any of 
                        those sources;
                            ``(ii) has a generating capacity of not 
                        more than 2,000 kilowatts;
                            ``(iii) is located on premises that are 
                        owned, operated, leased, or otherwise 
                        controlled by the customer-generator;
                            ``(iv) operates in parallel with the retail 
                        electric supplier; and
                            ``(v) is intended primarily to offset all 
                        or part of the requirements of the customer-
                        generator for electric energy.
                    ``(F) Retail electric supplier.--The term `retail 
                electric supplier' means any electric utility that 
                sells electric energy to the ultimate consumer of the 
                energy.
            ``(2) Adoption.--Not later than 1 year after the date of 
        enactment of this subsection, each State regulatory authority 
        (with respect to each electric utility for which the State 
        regulatory authority has ratemaking authority), and each 
        nonregulated electric utility, shall--
                    ``(A) provide public notice and conduct a hearing 
                with respect to the standards established under 
                paragraph (3); and
                    ``(B) on the basis of the hearing, adopt the 
                standard.
            ``(3) Establishment of net metering standard.--
                    ``(A) In general.--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 the retail customers of the 
                retail electric supplier in accordance with the 
                requirements described in subparagraph (B) and other 
                provisions of this subsection.
                    ``(B) Requirements.--The requirements referred to 
                in subparagraph (A) are, with respect to a retail 
                electric supplier, that--
                            ``(i) 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; and
                            ``(ii) each retail electric supplier shall 
                        notify all of the retail customers of the 
                        retail electric supplier of the standard 
                        established under this paragraph as soon as 
                        practicable after the adoption of the standard.
            ``(4) Net energy measurement.--
                    ``(A) In general.--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, to the maximum extent practicable, the flow 
                of electricity to or from the customer, using a single 
                meter and single register.
                    ``(B) Impracticability.--In a case in which it is 
                not practicable to provide a meter to a customer-
                generator under subparagraph (A), a retail electric 
                supplier (either directly or through a local 
                distribution company or other third party) shall, at 
                the expense of the retail electric supplier, install 1 
                or more of those electric energy meters for the 
                customer-generators concerned.
            ``(5) Billing.--
                    ``(A) In general.--Each retail electric supplier 
                subject to subsection (b) shall calculate the electric 
                energy consumption for a customer using a net metering 
                system in accordance with subparagraphs (B) through 
                (D).
                    ``(B) Measurement of electricity.--The retail 
                electric supplier shall measure the net electricity 
                produced or consumed during the billing period using 
                the metering installed in accordance with paragraph 
                (4).
                    ``(C) Billing and crediting.--
                            ``(i) Billing.--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
                            ``(ii) Crediting.--
                                    ``(I) In general.--If electric 
                                energy generated by the customer-
                                generator exceeds the electric energy 
                                supplied by the retail electric 
                                supplier during the billing period, 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 the 
                                credit appearing as a kilowatt-hour 
                                credit on the bill for the following 
                                billing period.
                                    ``(II) Application of credits.--Any 
                                kilowatt-hour credits provided to a 
                                customer-generator under this clause 
                                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).
                                    ``(III) Carryover of unused 
                                credits.--At the beginning of each 
                                calendar year, any unused kilowatt-hour 
                                credits remaining from the preceding 
                                year will carry over to the new year.
                    ``(D) Use of time-differentiated rates.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), if a customer-generator is using a 
                        meter and retail billing arrangement that has 
                        time-differentiated rates--
                                    ``(I) the kilowatt-hour credit 
                                shall be based on the ratio 
                                representing the difference in retail 
                                rates for each time-of-use rate; or
                                    ``(II) the credits shall be 
                                reflected on the bill of the customer-
                                generator as a monetary credit 
                                reflecting retail rates at the time of 
                                generation of the electric energy by 
                                the customer-generator.
                            ``(ii) Different tariffs or services.--A 
                        retail electric supplier shall offer a 
                        customer-generator the choice of a time-
                        differentiated energy tariff rate or a nontime-
                        differentiated energy tariff rate, if the 
                        retail electric supplier offers the choice to 
                        customers in the same rate class as the 
                        customer-generator.
            ``(6) Percent limitations.--
                    ``(A) 4 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 if the total 
                generating capacity of all customer-generators with net 
                metering systems served by the local distribution 
                company in the calendar year is equal to or more than 4 
                percent of the capacity necessary to meet the average 
                forecasted aggregate customer peak demand of the 
                company for the calendar year.
                    ``(B) 2 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 if the total 
                generating capacity of all customer-generators with net 
                metering systems served by the local distribution 
                company in the calendar year using a single type of 
                qualified generation units (as described in paragraph 
                (1)(D)(i)) is equal to or more than 2 percent of the 
                capacity necessary to meet the average forecasted 
                aggregate customer peak demand of the company for the 
                calendar year.
                    ``(C) Records and notice.--
                            ``(i) Records.--Each retail electric 
                        supplier shall maintain, and make available to 
                        the public, records of--
                                    ``(I) the total generating capacity 
                                of customer-generators of the system of 
                                the retail electric supplier that are 
                                using net metering; and
                                    ``(II) the type of generating 
                                systems and energy source used by the 
                                electric generating systems used by the 
                                customer-generators.
                            ``(ii) Notice.--Each such retail electric 
                        supplier shall notify the State regulatory 
                        authority and the Commission at each time at 
                        which the total generating capacity of the 
                        customer-generators of the retail electric 
                        supplier reaches a level that equals or 
                        exceeds--
                                    ``(I) 75 percent of the limitation 
                                specified in subparagraph (B); or
                                    ``(II) the limitation specified in 
                                subparagraph (B).
            ``(7) Ownership of credits.--
                    ``(A) In general.--For purposes of Federal and 
                State laws providing renewable energy credits or 
                greenhouse gas credits, a customer-generator with a 
                qualified generation 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 relating to any 
                electricity produced by the qualified generation unit.
                    ``(B) Retail electric suppliers.--No retail 
                electric supplier shall claim title to or ownership of 
                any renewable energy attributes, renewable energy 
                credits, or greenhouse gas emission credits of a 
                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) In general.--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--
                            ``(i) the national electrical code;
                            ``(ii) the Institute of Electrical and 
                        Electronics Engineers;
                            ``(iii) Underwriters Laboratories; or
                            ``(iv) the American National Standards 
                        Institute.
                    ``(B) Additional charges.--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 
                retail electric suppliers and local distribution 
                systems for equipment or services for safety or 
                performance that are in addition to those necessary to 
                meet the standards and requirements referred to in 
                subparagraph (A) and subsection (e).
            ``(9) Determination of compliance.--
                    ``(A) In general.--Any State regulatory authority 
                (with respect to each electric utility for which the 
                authority 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 this 
                subsection.
                    ``(B) Orders.--In the absence of a determination 
                under subparagraph (A), the Commission, on the motion 
                of the Commission 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 to require compliance with this 
                subsection.
                    ``(C) Penalties.--
                            ``(i) In general.--Any person who violates 
                        this subsection or any order of the Commission 
                        under this subsection shall be subject to a 
                        civil penalty in the amount of $10,000 for each 
                        day that the violation continues.
                            ``(ii) Assessment.--The penalty 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 (16 U.S.C. 823b(d)).
    ``(e) Interconnection Standards.--
            ``(1) Model standards.--
                    ``(A) In general.--Not later than 1 year after the 
                date of 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--
                            ``(i) are qualified generation units (as 
                        defined in subsection (d)(1)(D) (other than 
                        clause (ii) of subsection (d)(1)(D)); and
                            ``(ii) do not exceed 20,000 kilowatts of 
                        capacity.
                    ``(B) Purposes.--The model standards shall be 
                designed to--
                            ``(i) encourage the use of qualified 
                        generation units; and
                            ``(ii) ensure the safety and reliability of 
                        the qualified generation units and the local 
                        distribution systems interconnected with the 
                        qualified generation units.
                    ``(C) Expedited procedures.--
                            ``(i) In general.--The model standards 
                        shall have 2 separate expedited procedures, 
                        including--
                                    ``(I) a standard for 
                                interconnecting qualified generation 
                                units of not more than 15 kilowatts; 
                                and
                                    ``(II) a separate standard that 
                                expedites interconnection for qualified 
                                generation units of more than 15 
                                kilowatts but not more than 2,000 
                                kilowatts.
                            ``(ii) Best practices.--The expedited 
                        procedures shall be based on the best practices 
                        that have been used in States that have adopted 
                        interconnection standards.
                            ``(iii) Model rule.--In designing the 
                        expedited procedures, the Commission shall 
                        consider Interstate Renewable Energy Council 
                        Model Rule MR-I2005.
                    ``(D) Adoption of standards.--
                            ``(i) In general.--Not later than 2 years 
                        after the date of enactment of this subsection, 
                        each State shall--
                                    ``(I) adopt the model standards 
                                established under this paragraph, with 
                                or without modification; and
                                    ``(II) submit the standards to the 
                                Commission for approval.
                            ``(ii) Approval of modification.--The 
                        Commission shall approve a modification of the 
                        model standards only if the Commission 
                        determines that the modification is--
                                    ``(I) consistent with or superior 
                                to the purpose of the standards; and
                                    ``(II) required by reason of local 
                                conditions.
                    ``(E) Nonapproval of standards for a state.--If 
                standards have not been approved under this paragraph 
                by the Commission for any State during the 2-year 
                period beginning on the date of enactment of this 
                subsection, the Commission shall, by rule or order, 
                enforce the model standards of the Commission in the 
                State until such time as State standards are approved 
                by the Commission.
                    ``(F) Updates.--
                            ``(i) In general.--Not later than 2 years 
                        after the date of enactment of this subsection 
                        and after notice and opportunity for comment, 
                        the Commission shall publish an update of the 
                        model standards, after considering changes in 
                        the underlying standards and technologies.
                            ``(ii) Availability.--The updates shall be 
                        made available to State regulatory authorities 
                        for the consideration of the authorities.
            ``(2) Safety, reliability, performance, and cost.--
                    ``(A) In general.--The standards under this 
                subsection shall establish such measures for the safety 
                and reliability of the affected equipment and local 
                distribution systems as are appropriate.
                    ``(B) Administration.--The standards shall--
                            ``(i) be consistent with all applicable 
                        safety and performance standards established 
                        by--
                                    ``(I) the national electrical code;
                                    ``(II) the Institute of Electrical 
                                and Electronics Engineers;
                                    ``(III) Underwriters Laboratories; 
                                or
                                    ``(IV) the American National 
                                Standards Institute; and
                            ``(ii) impose not more than such minimum 
                        cost and technical burdens to the 
                        interconnecting customer generator as the 
                        Commission determines, by rule, are 
                        practicable.
            ``(3) Additional charges.--The model standards under this 
        subsection shall prohibit the imposition of additional charges 
        by local distribution systems for equipment or services for 
        interconnection that are in excess of--
                    ``(A) the charges necessary to meet the standards; 
                and
                    ``(B) the charges and equipment requirements 
                identified in the best practices of States with 
                interconnection standards.
            ``(4) Relationship to existing law regarding 
        interconnection.--Nothing in this subsection affects the 
        application of section 111(d)(15) relating to interconnection.
            ``(5) Consumer-friendly contracts.--
                    ``(A) In general.--The Commission shall--
                            ``(i) promulgate regulations that ensure 
                        that simplified contracts will be used for the 
                        interconnection of electric energy by electric 
                        energy transmission or local distribution 
                        systems and generating facilities that have a 
                        power production capacity of not greater than 
                        2,000 kilowatts; and
                            ``(ii) consider the best practices for 
                        consumer-friendly contracts that are used by 
                        States or national associations of State 
                        regulators.
                    ``(B) Liability or insurance.--The contracts shall 
                not require liability or other insurance in excess of 
                the liability or insurance that is typically carried by 
                customer-generators for general liability.
            ``(6) Enforcement.--
                    ``(A) In general.--Any person who violates this 
                subsection shall be subject to a civil penalty in the 
                amount of $10,000 for each day that the violation 
                continues.
                    ``(B) Assessment.--The penalty 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 (16 U.S.C. 
                823b(d)).''.
    (b) Conforming Amendment.--Section 1262 of the Public Utility 
Holding Company Act of 2005 (42 U.S.C. 16451) is amended by striking 
paragraph (5) and inserting the following:
            ``(5) Electric utility company.--
                    ``(A) In general.--The term `electric utility 
                company' means any company that owns or operates 
                facilities used for the generation, transmission, or 
                distribution of electric energy for sale.
                    ``(B) Exclusion.--The term `electric utility 
                company' does not include an electric generation unit 
                (as defined in section 113(d) of the Public Utility 
                Regulatory Policies Act of 1978).''.

SEC. 3. RELATIONSHIP TO STATE LAW.

    Section 117(b) of the Public Utility Regulatory Policies Act of 
1978 (16 U.S.C. 2627(b)) is amended--
            (1) by striking ``Nothing'' and inserting the following:
            ``(1) In general.--Except as provided in paragraph (2), 
        nothing''; and
            (2) by adding at the end the following:
            ``(2) Net metering and interconnection standards.--
                    ``(A) In general.--Subject to subparagraph (B), 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 local distribution system by 
                qualified generators beyond those standards and 
                requirements established under section 113.
                    ``(B) Equivalent or greater access.--Nothing in 
                this Act precludes a State from adopting or enforcing 
                incentives or requirements to encourage qualified 
                generation and net metering that--
                            ``(i) are in addition to or equivalent to 
                        incentives or requirements under section 113; 
                        or
                            ``(ii) afford greater access to the 
                        electric power transmission and local 
                        distribution systems by qualified generators 
                        (as defined in section 113) or afford greater 
                        compensation or credit for electricity 
                        generated by the qualified generators.''.

SEC. 4. CONTRACTS FOR RENEWABLE ENERGY FOR EXECUTIVE AGENCIES.

    Section 501(b)(1)(B) of title 40, United States Code, is amended--
            (1) by striking ``A contract'' and inserting the following:
                            ``(i) In general.--Except as provided in 
                        clause (ii), a contract''; and
            (2) by adding at the end the following:
                            ``(ii) Renewable energy.--A contract for 
                        renewable energy (as defined in section 203(b) 
                        of the Energy Policy Act of 2005 (42 U.S.C. 
                        15852(b))) may be made for a period of not more 
                        than 30 years.''.

SEC. 5. PROHIBITION OF EXCESSIVE FEES FOR SOLAR ENERGY SYSTEMS BUILDING 
              PERMITS.

    (a) Definition of Solar Energy System.--In this section, the term 
``solar energy system'' means, with respect to a structure, equipment 
that uses solar energy to generate electricity for, to heat or cool, or 
provide hot water for use in, the structure.
    (b) Regulations.--Not later than 180 days after the date of 
enactment of this Act, the Secretary of Housing and Urban Development, 
in consultation with the Secretary of Energy, shall issue regulations 
providing that the cost of a permit or license required by a State or 
unit of local government for construction or installation of any solar 
energy system shall not exceed--
            (1) in the case of a structure primarily for residential 
        use, an amount determined to be appropriate by the Secretary of 
        Housing and Urban Development; and
            (2) in the case of a structure primarily for nonresidential 
        use, 1 percent of the total cost of the installation or 
        construction of the solar energy system, but not more than 
        $10,000.

SEC. 6. PROHIBITION OF RESTRICTIONS ON RESIDENTIAL INSTALLATION OF 
              SOLAR ENERGY SYSTEM.

    (a) Regulations.--Within 180 days after the enactment of this Act, 
the Secretary of Housing and Urban Development, in consultation with 
the Secretary of Energy, shall issue regulations--
            (1) to prohibit any private covenant, contract provision, 
        lease provision, homeowners' association rule or bylaw, or 
        similar restriction, that impairs the ability of the owner or 
        lessee of any residential structure designed for occupancy by 1 
        family to install, construct, maintain, or use a solar energy 
        system on such residential property; and
            (2) to require that whenever any such covenant, provision, 
        rule or bylaw, or restriction requires approval for the 
        installation or use of a solar energy system, the application 
        for approval shall be processed and approved by the appropriate 
        approving entity in the same manner as an application for 
        approval of an architectural modification to the property, and 
        shall not be willfully avoided or delayed.
    (b) Contents.--The regulations required under subsection (a) shall 
provide that--
            (1) such a covenant, provision, rule or bylaw, or 
        restriction impairs the installation, construction, 
        maintenance, or use of a solar energy system if it--
                    (A) unreasonably delays or prevents installation, 
                maintenance, or use;
                    (B) unreasonably increases the cost of 
                installation, maintenance, or use; or
                    (C) precludes use of such a system; and
            (2) any fee or cost imposed on the owner or lessee of such 
        a residential structure by such a covenant, provision, rule or 
        bylaw, or restriction shall be considered unreasonable if--
                    (A) such fee or cost is not reasonable in 
                comparison to the cost of the solar energy system or 
                the value of its use; or
                    (B) treatment of solar energy systems by the 
                covenant, provision, rule or bylaw, or restriction is 
                not reasonable in comparison with treatment of 
                comparable systems by the same covenant, provision, 
                rule or bylaw, or restriction.
    (c) Solar Energy System.--For purposes of this section, the term 
``solar energy system'' means, with respect to a structure, equipment 
that uses solar energy to generate electricity for, to heat or cool, or 
provide hot water for use in, the structure.
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