BILL REQ. #:  H-3652.1 

Prefiled 1/7/2004. Read first time 01/12/2004.   Referred to Committee on Technology, Telecommunications & Energy.

     AN ACT Relating to the model distributed generation interconnection procedures and net metering provisions; and adding a new chapter to Title 80 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   The legislature finds it is in the public interest to adopt this chapter to simplify the process of interconnecting distributed generation facilities that will be used for net metered customers. This chapter is intended to both identify a class of distributed generators that, because of their selected point of common coupling, can be interconnected with ease and expedition as well as the standards to be used for ordinary interconnections by all utilities subject to commission regulation.

NEW SECTION.  Sec. 2   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Applicant" means a person who has filed an application to interconnect a customer-generator facility to an electric delivery system.
     (2) "Annualized period" means a period of twelve consecutive monthly billing periods. A customer-generator's first annualized period begins on the first day of the first full monthly billing period after which the customer-generator's facility is interconnected and is generating electricity.
     (3) "Area network" means a type of electric delivery system served by multiple transformers interconnected in an electrical network circuit generally used in large metropolitan areas that are densely populated to provide high reliability of service and having the same definition as the term "secondary grid network" as defined in the institute of electrical and electronic engineers standards.
     (4) "Class I energy" means electrical energy generation. It may include all types of generation or be limited to certain types of renewable and/or combined heat and power systems.
     (5) "Commission" means the utilities and transportation commission.
     (6) "Customer-generator" means a residential or commercial customer that generates electricity, typically on the customer's side of the meter.
     (7) "Customer-generator facility" means the equipment used by a customer-generator to generate, manage, and monitor electricity. A customer-generator facility typically includes an electric generator and/or an equipment package.
     (8) "Electric delivery system" means the infrastructure constructed and maintained by an electric distribution company to deliver electric service to end-users.
     (9) "Electric generation service" means the provision of retail electric energy that is generated off-site from the location at which the consumption of the electric energy and capacity is metered for retail billing purposes, including agreements and arrangements for the provision of electric generation service.
     (10) "Electric power supplier" means a person or entity that is licensed by the commission to offer and to assume the contractual and legal responsibility to provide electric generation service to retail customers. This includes load serving entities, marketers, and brokers that offer or provide electric generation service to retail customers. This term does not include electric distribution companies.
     (11) "Equipment package" means a group of components connecting an electric generator with an electric delivery system, and includes all interface equipment including switchgear, inverters, or other interface devices. An equipment package may include an integrated generator or electric source.
     (12) "Fault current" means electrical current that flows through a circuit and is produced by an electrical fault, such as to ground, double-phase to ground, three-phase to ground, phase-to-phase, and three-phase. A fault current is several times larger in magnitude than the current that normally flows through a circuit.
     (13) "Good utility practice" means a practice, method, policy, or action engaged in and/or accepted by a significant portion of the electric industry in a region that accomplishes the desired result reliably, safely, and expeditiously consistent with this chapter.
     (14) "Interconnection agreement" means an agreement between a customer-generator and an electric distribution company, that governs the connection of the customer-generator facility to the electric delivery system, as well as the ongoing operation of the customer-generator facility after it is connected to the system.
     (15) "Net metering" means that the customer-generator is billed according to the difference between the amount of electricity supplied by the electric power supplier or basic generation service provider in a given billing period and the electricity delivered from the customers' side of the meter using class I energy systems, with customer generation in excess of electricity supplied credited over an annualized period.
     (16) "Minor system modifications" include activities such as changing the fuse in a fuse holder cut-out, changing the settings on a circuit recloser, and other activities that usually entail less than four hours of work and one thousand dollars in materials.
     (17) "Point of common coupling" means the point in the interconnection of a customer-generator facility with an electric delivery system at which the harmonic limits are applied.
     (18) "Spot network" means a type of electric delivery system that uses two or more intertied transformers to supply an electrical network circuit. A spot network is generally used to supply power to a single customer or a small group of customers.
     (19) "Supplier/provider" means an electric power supplier of competitive electricity supply in a retail competition market.

NEW SECTION.  Sec. 3   (1) All electric distribution companies and electric power suppliers shall offer net metering at nondiscriminatory rates to their customers that generate electricity, on the customer's side of the meter, using class I energy.
     (2) A customer-generator may not net meter if the capacity of the customer-generator's generating facility exceeds two megawatts.
     (3) The commission shall develop a standard tariff providing for net metering. Each supplier and electric distribution company shall make the tariff available to eligible customer-generators on a first-come, first-served basis.
     (4) When the amount of electricity delivered by the customer-generator plus any kilowatt hour credits held over from previous billing periods exceed the electricity supplied by the supplier or electric distribution company, the supplier or electric distribution company shall credit the customer-generator for the excess kilowatt hours until the end of the annualized period at which point the customer-generator will be compensated for any remaining credits at the supplier's avoided cost of wholesale power. When a customer-generator switches electric suppliers, the supplier with whom service is terminating shall treat the end of the service period as if it were the end of the annualized period.
     (5) Each supplier shall submit an annual net metering report to the commission. The report shall include:
     (a) The total number of systems and the total estimated rated generating capacity of its net metering customer-generators; and
     (b) The total estimated net kilowatt hours received from customer-generators.
     (6) A customer-generator owns any renewable attributes of the electricity it generates, and may sell any renewable energy certificates created as a result of that generation, individually or through an aggregator, or through a certificate trading program authorized by the commission. A customer-generator that wishes to estimate the generation resulting from a facility for purposes of this subsection shall do so using commission-approved estimation procedures for facilities smaller than ten kilowatts.
     (7) The metering used to effectuate net metering shall be capable of measuring the flow of electricity in both directions, typically through the use of a single bidirectional meter. A customer may use their existing electric revenue meter if it is capable of measuring the bidirectional flow of electricity and is within plus or minus five percent tolerance when measuring electricity flowing from the customer to the supplier or electric distribution company.
     (8) If the existing customer's electricity revenue meter is not capable of measuring the bidirectional flow of electricity within the tolerances specified in subsection (7) of this section, an electric distribution company shall install a new meter for the customer-generator, at the company's expense.
     (9) The electric distribution company may not require more than one meter per customer-generator. However, an additional meter may be installed under either of the following circumstances:
     (a) The electric distribution company may install an additional meter at its own expense if the customer-generator consents; or
     (b) The customer-generator may request that the company install an additional meter at the customer-generator's expense. The cost for the meter is limited to the actual cost of the meter and its installation.
     (10) A supplier or electric distribution company may not charge a net metered customer any fee or charges or require additional equipment, insurance or any other requirement unless the same would be required of the customer if the customer were not a net metered customer. However, a supplier or electric distribution company may use a special load profile for the customer that incorporates the customer's real time generation provided the special load profile is approved by the commission.
     (11) Future revisions to the requirements of this section may be made by commission rule.

NEW SECTION.  Sec. 4   (1) There are three interconnection review paths for interconnection of customer-sited generation.
     (a) Simplified. This is for qualified inverter-based facilities with a power rating of ten kilowatts or less on radial or spot network systems under certain conditions.
     (b) Expedited. This is for certified generating facilities that pass certain prespecified screens and have a power rating of two megawatts or less.
     (c) Standard. This is for all generating facilities not qualifying for either the simplified or expedited interconnection review processes that have a power rating of twenty megawatts or less.
     (2) To qualify for simplified or expedited interconnection procedures, generators no larger than two megawatts must be certified under subsection (3) of this section to comply with the following codes and standards as applicable:
     (a) The institute of electrical and electronic engineers' 1547 standard for interconnecting distributed resources with electric power systems or 929 standard for inverters less than ten kilowatts in size; and
     (b) UL 1741 inverters, converters, and controllers for use in independent power systems.
     (3) An equipment package is certified for interconnected operation if it has been submitted by a manufacturer, tested and listed by a nationally recognized testing and certification laboratory for continuous interactive operation with a utility grid in compliance with the applicable codes and standards listed in subsection (2) of this section. An "equipment package" includes all interface components including switchgear, inverters, or other interface devices and may include an integrated generator or electric source. If the equipment package has been tested and listed as an integrated package, which includes a generator or other electric source, it shall not require further design review, testing, or additional equipment to meet the certification requirements of this interconnection procedure. If the equipment package includes only the interface components such as switchgear, inverters, or other interface devices, then an interconnection applicant must show that the generator or other electric source being used with the equipment package is compatible with the equipment package and consistent with the testing and listing specified for the package. If the generator or electric source combined with the equipment package is consistent with the testing and listing performed by the nationally recognized testing and certification laboratory, no further design review, testing, or additional equipment is required to meet the certification requirements of this interconnection procedure. A certified equipment package does not include equipment provided by the utility.
     (4) A proposed interconnection that meets the following applicable screening criteria shall be processed by the electric distribution company under expedited procedures for interconnection and, if qualified, for net metering.
     (a) For interconnection of a proposed generator to a radial distribution circuit, the aggregated generation, including the proposed generator, on the circuit will not exceed ten percent or fifteen percent for solar based generation, of the total circuit annual peak load as most recently measured at the substation.
     (b) The proposed generator, in aggregation with other generation on the distribution circuit, will not contribute more than ten percent to the distribution circuit's maximum fault current at the point on the high voltage primary level nearest the proposed point of common coupling.
     (c) The proposed generator, in aggregate with other generation on the distribution circuit, will not cause any distribution protective devices and equipment including but not limited to substation breakers, fuse cutouts, and line reclosers, or customer equipment on the system, to exceed ninety percent of the short circuit interrupting capability; nor is the interconnection proposed for a circuit that already exceeds ninety percent of the short circuit interrupting capability.
     (d) The proposed generator, in aggregate with other generation interconnected to the distribution low voltage side of the substation transformer feeding the distribution circuit where the generator proposes to interconnect, will not exceed ten megawatts in an area where there are known or posted transient stability limitations to generating units located in the general electrical vicinity.
     (e) The proposed generator is interconnected to the electric power supplier as follows:
     (i) If the primary distribution line configuration is three-phase, three wire, interconnection must be phase-to-phase; and
     (ii) If the primary distribution line configuration is three-phase, four wire, interconnection must be line-to-neutral.
     (f) If the proposed generator is to be interconnected on single-phase shared secondary, the aggregate generation capacity on the shared secondary, including the proposed generator, may not exceed twenty kilovolt amps.
     (g) If the proposed generator is single-phase and is to be interconnected on a transformer center tap neutral of a two hundred forty volt service, its addition will not create an imbalance between the two sides of the two hundred forty volt service of more than twenty percent of nameplate rating of the service transformer.
     (h) The proposed generator's point of common coupling may not be on a transmission line.
     (5) The screening criteria under this subsection is in addition to the applicable screens in subsection (4) of this section.
     (a) For interconnection of a proposed generator to a spot network circuit where the generator or aggregate of total generation exceeds five percent of the spot network's maximum load, the generator must use a protective scheme that ensures that its current flow will not affect the network protective devices including reverse power relays or a comparable function.
     (b) For interconnection of a proposed generator that uses inverter based protective functions to an area network, the generator, in aggregate with other exporting generators interconnected on the load side of network protective devices, will not exceed the lesser of ten percent of the minimum annual load on the network or five hundred kilowatts. For a solar photovoltaic customer-generator facility, the ten percent minimum shall be determined as a function of the minimum load occurring during an off-peak daylight period.
     (c) For interconnection of generators to area networks that do not use inverter based protective functions or inverter based generators that do not meet the requirements of (b) of this subsection, the generator must use reverse power relays or other protection devices that ensure no export of power from the customer's site including any inadvertent export, under fault conditions, that could adversely affect protective devices on the network circuit.
     (6) Each electric distribution company shall have a simplified interconnection procedure for inverter based generators not exceeding ten kilowatts in capacity, which shall require the following steps:
     (a) The customer submits an application filled out properly and completely indicating which certified generator or equipment package the customer intends to use;
     (b) The electric distribution company acknowledges to the customer receipt of the application within three business days of receipt;
     (c) The electric distribution company evaluates the application for completeness and notifies the customer within ten days of receipt that the application is or is not complete and whether the generating facility equipment passes screens in subsection (4)(a), (f), (g), and (h) of this section. If incomplete, the application is rejected and returned to the customer with a list of items needed to make it complete;
     (d) Within three days of the customer notification under (c) of this subsection, the electric distribution company will execute and send a simplified interconnection agreement to the customer unless an agreement is not required by the electric distribution company;
     (e) Upon receipt of a signed application/agreement and completion of installation, the electric distribution company may inspect a generating facility for compliance with standards and may arrange for a witness test;
     (f) If the inspection/test is satisfactory, the electric distribution company will notify the customer in writing that interconnection is allowed and approved. Customers who do not receive any notice from the electric distribution company within fifteen days are deemed approved for interconnection. Final interconnection of the generator is subject to approval by the appropriate electrical code officials.
     (g) The simplified interconnection is provided at a total cost to the customer not to exceed twenty-five dollars. Additional protection equipment not included with the certified generator or interconnection equipment package may be added at the electric distribution company's discretion if the performance of the system is not negatively impacted in any way and the customer is not charged for equipment in addition to that which is included in the certified equipment package.
     (7) Each electric distribution company shall have an expedited interconnection procedure for customer-sited generators not exceeding two megawatts in capacity that will use existing customer facilities, which shall require the following steps:
     (a) To assist customers in the interconnection process the electric distribution company will designate an employee or office from which basic information on the application can be obtained through an informal process. On request, the electric distribution company will provide the applicant with all relevant forms, documents, and technical requirements for filing a complete application for interconnection of generators not exceeding two megawatts to the electric distribution company's electric power system. Upon the customer's request, the electric distribution company will meet with the customer before submission of an application for expedited interconnection.
     (b) The customer shall submit an application for expedited interconnection to the electric distribution company and may, at the same time, submit an interconnection agreement executed by the customer.
     (c) A customer will be notified by the electric distribution company within three business days of its receipt of an interconnection application.
     (d) The electric distribution company will notify the customer within eight business days of its receipt of the application whether it is complete or incomplete. If the application is incomplete, the electric distribution company will at the same time provide the customer a written list detailing all information that must be provided to complete the application. An applicant will have ten business days to submit the listed information following receipt of the notice. If the applicant does not submit the listed information to the electric distribution company within the ten business days, the application shall be deemed withdrawn. An application will be complete upon the applicant's submission of the information identified in the electric distribution company's written list.
     (e) Within ten business days after the electric distribution company notifies the applicant it received a complete application, the electric distribution company shall perform an initial review of the proposed interconnection, which shall consist of an application of the screening criteria set forth in subsections (4) and (5) of this section. The electric distribution company shall notify the applicant of the results, providing copies of the analysis and data underlying the electric distribution company's determinations under the screens. During the initial review, the electric distribution company may conduct, at its own expense, any additional studies or tests it deems necessary to evaluate the proposed interconnection.
     (f) If the initial review determines that the proposed interconnection passes the screens set forth in subsections (4) and (5) of this section as applicable, the interconnection application will be approved and the electric distribution company will provide the applicant an executable interconnection agreement within five business days after the determination.
     (g) If the initial review determines that the proposed interconnection fails one or more screens in subsections (4) and (5) of this section, but the electric distribution company determines through the initial review that the small generator may nevertheless be interconnected consistent with safety, reliability, and power quality standards, with or without minor system modifications, the electric distribution company will provide the applicant an executable interconnection agreement within five business days after the determination. The generator is responsible for the cost of any minor system modifications required.
     (h) If the initial review determines that the proposed interconnection fails one or more screens in subsections (4) and (5) of this section, and the electric distribution company does not or cannot determine from the initial review that the generator may nevertheless be interconnected consistent with safety, reliability, and power quality standards, then the electric distribution company will offer to perform an additional review if the electric distribution company concludes that an additional review might determine that the generator could qualify for interconnection pursuant to the expedited procedures. The electric distribution company will provide a nonbinding, but good faith estimate of the costs of the additional review when it notifies the customer its proposed interconnection has failed one or more screens in subsections (4) and (5) of this section.
     (i) Each electric distribution company will include in its net metering and interconnection compliance tariff the procedure it will follow for any additional review including the allocation of cost responsibility to the customer.
     (j) Final interconnection of the customer's generator is subject to commissioning tests as set forth in subsection (2)(a) of this section and approval by the appropriate local electrical code officials.
     (k) An application and processing fee may be imposed on customers proposing interconnection of generators under expedited interconnection procedures if the total of all fees to complete the interconnection does not exceed fifty dollars plus one dollar per kilowatt of the capacity of the proposed generator. Additional fees may only be charged to customers if their generator interconnection requires minor system modifications under (g) of this subsection or additional review under (h) of this subsection. Costs for minor system modifications or additional review will be based on quotations for services from the electric distribution company and subject to review by the commission or its designee for such review. Hourly engineering fees for additional review may not exceed one hundred dollars per hour.
     (8) An electric distribution company may not require an eligible customer-generator whose system meets the simplified or expedited interconnection standards in subsections (2) through (7) of this section, as applicable, to install additional controls, perform, or pay for additional tests or purchase additional liability insurance, except as agreed to by the customer in subsection (7) of this section.
     (9) Each customer generator approved for interconnection shall affix to their electric revenue meter a standard warning sign as approved by the commission that notifies utility personnel of the existence of customer sited parallel generation.
     (10) Each electric distribution company shall have a standard interconnection procedure available for generators not exceeding twenty megawatts in capacity interconnecting to distribution level voltages that do not qualify for simplified or expedited interconnection procedures, which shall consist of the following:
     (a) The customer submits an application for standard interconnection review, or a customer's interconnection application is transferred from the simplified or expedited interconnection procedures for failure to meet all of the requirements of those procedures;
     (b) The electric distribution company acknowledges to the interconnecting customer receipt of the application or the transfer from the simplified or expedited interconnection procedures within three business days;
     (c) The electric distribution company evaluates the application for completeness and notifies the customer within ten days of receipt that the application is or is not complete and, if not, advises what is missing;
     (d) The electric distribution company will conduct an initial review that may include a scoping meeting or discussion with the customer to review the application. At the scoping meeting the electric distribution company will provide pertinent information such as: The available fault current at the proposed location; the existing peak loading on the lines in the general vicinity of the proposed generator; and the configuration of the distribution lines at the proposed point of interconnection;
     (e) At the customer's request, the electric distribution company will undertake a feasibility study that provides a preliminary review of the potential impacts on the distribution system that will result from the proposed interconnection. The feasibility study may be combined with any feasibility study conducted to determine transmission impacts. The feasibility study will preliminarily review short circuit currents including contribution from the proposed generator as well as coordination of and potential overloading of distribution circuit protection devices. If no violations are found in the feasibility study, the impact study in (f) of this subsection may be waived;
     (f) The electric distribution company provides an impact study agreement, including a cost estimate for the impact study. Where the proposed interconnection may affect electric transmission or distribution systems other than that of the electric distribution company where the interconnection is proposed, the electric distribution company shall coordinate, but not be responsible for the timing of any studies required to determine the impact of the interconnection request on other potentially affected electric systems. The customer will be responsible to any other affected systems for all costs of any additional studies incurred by any other affected system to evaluate the impact of the proposed generator interconnection.
     (i) For generators greater than two megawatts, the interconnection study may require analysis of power flows and other impacts on the transmission system if the utility has a reasonable belief that the interconnection of the generator will create power flows that reach the transmission system.
     (ii) Transmission system interconnection studies will be governed by separate procedures that may include submission of an application into a transmission interconnection queue.
     (iii) Each electric distribution company will identify the circumstances under which generators larger than two megawatts must submit their application into a transmission interconnection queue;
     (g) For generators that are certified pursuant to subsection (2) or (3) of this section, no review of the generator's protection equipment is required. While a utility may review a certified generator's protection scheme, it cannot charge for such review;
     (h) Each electric distribution company will include in its compliance tariff a description of the various elements of an impact study it would typically undertake under this section including:
     (i) Load flow study;
     (ii) Short-circuit study;
     (iii) Circuit protection and coordination study;
     (iv) Impact on system operation;
     (v) Stability study and the conditions that would justify including this element in the impact study; and
     (vi) Voltage collapse study and the conditions that would justify including this element in the impact study;
     (i) Once the interconnecting customer executes the impact study agreement and pays pursuant to the good faith estimate contained in the agreement, the electric distribution company will conduct the interconnection impact study;
     (j) If the electric distribution company determines, in accordance with good utility practices, that the electric distribution company electric system modifications required to accommodate the proposed interconnection are not substantial, the impact study will identify the scope and cost of the modifications as defined in the study results;
     (k) If the electric distribution company determines, in accordance with good utility practices, that the system modifications to the electric distribution company's electric system are substantial, the results of the impact study will produce an estimate for the modification costs. The detailed costs of, and the electric power supplier's modifications necessary to interconnect the customer's proposed generator will be identified in a facilities study to be completed by the electric distribution company;
     (l) A facilities study agreement, with a good faith estimate of the cost of completing the facilities study shall be submitted to the customer for the customer's approval;
     (m) Once the interconnecting customer executes the facilities study agreement and pays pursuant to the terms thereof, the electric distribution company will conduct the facilities study;
     (n) Upon completion of the impact or facilities study, the electric distribution company shall send the customer an executable interconnection agreement including a quote for any required electric power supplier system modifications;
     (o) The customer returns the signed interconnection agreement;
     (p) The customer completes installation of its generator and the electric distribution company completes any electric power supplier system modifications;
     (q) The electric distribution company inspects the completed generator installation for compliance with requirements and attends any required commissioning tests; and
     (r) Provided any required commissioning tests are satisfactory, the electric distribution company shall notify the customer in writing that interconnection is approved.
     (11) Fees for standard interconnection review shall include an application fee not to exceed one hundred dollars plus two dollars per kilowatt capacity, as well as charges for actual time spent on the interconnection study. Costs for the engineering review may not exceed one hundred dollars per hour. Costs for the electric distribution company's facilities necessary to accommodate the customer's generator interconnection will be the responsibility of the customer.

NEW SECTION.  Sec. 5   (1) An electric distribution company that charges a fee for an interconnection study shall provide the customer-generator with a bill that includes a clear explanation of all charges. In addition, the electric distribution company shall provide to the customer-generator, before the start of the interconnection study, a good faith estimate of the number of hours that will be needed to complete the interconnection study, and an estimate of the total interconnection study fee.
     (2) If a customer-generator's facility complies with all applicable standards under section 4 of this act, the facility shall be presumed to comply with the technical requirements of this chapter. In such a case, the electric distribution company shall not require a customer-generator to install additional controls, including but not limited to a utility accessible disconnect switch, perform or pay for additional tests, or purchase additional liability insurance in order to obtain approval to interconnect.
     (3) Once an interconnection has been approved under this chapter, the electric distribution company shall not require a customer-generator to test its facility except for the following:
     (a) An annual test in which the customer-generator's facility is disconnected from the electric distribution company's equipment to ensure that the generator stops delivering power to the grid; and
     (b) Any manufacturer-recommended testing.
     (4) An electric distribution company may inspect a customer-generator's facility both before and after interconnection approval is granted, at reasonable hours and with reasonable advance notice to the customer-generator. If the electric distribution company discovers the customer-generator's facility is not in compliance with the requirements of section 4 of this act and the noncompliance adversely affects the safety or reliability of the electric system, the electric distribution company may require disconnection of the customer-generator's facility until it complies with this chapter.

NEW SECTION.  Sec. 6   (1) The commission may from time to time designate a technical master for the resolution of interconnection disputes. The parties shall use the technical master to resolve disputes related to interconnection and such resolution is binding on the parties.
     (2) The commission may designate a department of energy national laboratory; college or university; or an approved federal energy regulatory commission regional transmission organization with distribution system engineering expertise as the technical master. Should the federal energy regulatory commission identify a national technical dispute resolution team, the commission may designate the team as its technical master.

NEW SECTION.  Sec. 7   Sections 1 through 6 of this act constitute a new chapter in Title 80 RCW.