"Sec. 1   RCW 80.60.010 and 2006 c 201 s 1 are each amended to read as follows:
     The definitions in this section apply throughout this chapter unless the context clearly indicates otherwise.
     (1) "Commission" means the utilities and transportation commission.
     (2) "Customer-generator" means a user of a net metering system.
     (3) "Electrical company" means a company owned by investors that meets the definition of RCW 80.04.010.
     (4) "Electric cooperative" means a cooperative or association organized under chapter 23.86 or 24.06 RCW.
     (5) "Electric utility" means any electrical company, public utility district, irrigation district, port district, electric cooperative, or municipal electric utility that is engaged in the business of distributing electricity to retail electric customers in the state.
     (6) "Irrigation district" means an irrigation district under chapter 87.03 RCW.
     (7) "Meter aggregation" means the administrative combination of readings from and billing for all meters, regardless of the rate class, on premises owned or leased by a customer-generator located within the service territory of a single electric utility.
     (8) "Municipal electric utility" means a city or town that owns or operates an electric utility authorized by chapter 35.92 RCW.
     (((8))) (9) "Net metering" means measuring the difference between the electricity supplied by an electric utility and the electricity generated by a customer-generator over the applicable billing period.
     (((9))) (10) "Net metering system" means a fuel cell, a facility that produces electricity and used and useful thermal energy from a common fuel source, or a facility for the production of electrical energy that generates renewable energy, and that:
     (a) Has an electrical generating capacity of not more than one hundred kilowatts;
     (b) Is located on the customer-generator's premises;
     (c) Operates in parallel with the electric utility's transmission and distribution facilities; and
     (d) Is intended primarily to offset part or all of the customer-generator's requirements for electricity.
     (((10))) (11) "Premises" means any residential property, commercial real estate, or lands, owned or leased by a customer-generator within the service area of a single electric utility.
     (12) "Port district" means a port district within which an industrial development district has been established as authorized by Title 53 RCW.
     (((11))) (13) "Public utility district" means a district authorized by chapter 54.04 RCW.
     (((12))) (14) "Renewable energy" means energy generated by a facility that uses water, wind, solar energy, or biogas from animal waste as a fuel.

Sec. 2   RCW 80.60.020 and 2006 c 201 s 2 are each amended to read as follows:
     (1) An electric utility:
     (((1))) (a) Shall offer to make net metering available to eligible customers-generators on a first-come, first-served basis until the cumulative generating capacity of net metering systems equals 0.25 percent of the utility's peak demand during 1996. On January 1, 2014, the cumulative generating capacity available to net metering systems will equal 0.5 percent of the utility's peak demand during 1996. Not less than one-half of the utility's 1996 peak demand available for net metering systems shall be reserved for the cumulative generating capacity attributable to net metering systems that generate renewable energy;
     (((2))) (b) Shall allow net metering systems to be interconnected using a standard kilowatt-hour meter capable of registering the flow of electricity in two directions, unless the commission, in the case of an electrical company, or the appropriate governing body, in the case of other electric utilities, determines, after appropriate notice and opportunity for comment:
     (((a))) (i) That the use of additional metering equipment to monitor the flow of electricity in each direction is necessary and appropriate for the interconnection of net metering systems, after taking into account the benefits and costs of purchasing and installing additional metering equipment; and
     (((b))) (ii) How the cost of purchasing and installing an additional meter is to be allocated between the customer-generator and the utility;
     (((3))) (c) Shall charge the customer-generator a minimum monthly fee that is the same as other customers of the electric utility in the same rate class, but shall not charge the customer-generator any additional standby, capacity, interconnection, or other fee or charge unless the commission, in the case of an electrical company, or the appropriate governing body, in the case of other electric utilities, determines, after appropriate notice and opportunity for comment that:
     (((a))) (i) The electric utility will incur direct costs associated with interconnecting or administering net metering systems that exceed any offsetting benefits associated with these systems; and
     (((b))) (ii) Public policy is best served by imposing these costs on the customer-generator rather than allocating these costs among the utility's entire customer base.
     (2) If a production meter and software is required by the electric utility to provide meter aggregation under RCW 80.60.030(4), the customer-generator is responsible for the purchase of the production meter and software.

Sec. 3   RCW 80.60.030 and 2006 c 201 s 3 are each amended to read as follows:
     Consistent with the other provisions of this chapter, the net energy measurement must be calculated in the following manner:
     (1) The electric utility shall measure the net electricity produced or consumed during the billing period, in accordance with normal metering practices.
     (2) If the electricity supplied by the electric utility exceeds the electricity generated by the customer-generator and fed back to the electric utility during the billing period, the customer-generator shall be billed for the net electricity supplied by the electric utility, in accordance with normal metering practices.
     (3) If electricity generated by the customer-generator exceeds the electricity supplied by the electric utility, the customer-generator:
     (a) Shall be billed for the appropriate customer charges for that billing period, in accordance with RCW 80.60.020; and
     (b) Shall be credited for the excess kilowatt-hours generated during the billing period, with this kilowatt-hour credit appearing on the bill for the following billing period.
     (4) If a customer-generator requests, an electric utility shall provide meter aggregation.
     (a) For customer-generators participating in meter aggregation, kilowatt-hours credits earned by a net metering system during the billing period first shall be used to offset electricity supplied by the electric utility.
     (b) Excess kilowatt-hours credits earned by the net metering system, during the same billing period, shall be credited equally by the electric utility to remaining meters located on all premises of a customer-generator at the designated rate of each meter.
     (c) Meters so aggregated shall not change rate classes due to meter aggregation under this section.
     (5) On April 30th of each calendar year, any remaining unused kilowatt-hour credit accumulated during the previous year shall be granted to the electric utility, without any compensation to the customer-generator."