BILL REQ. #:  H-1318.4 

READ FIRST TIME 02/17/11.   

     AN ACT Relating to net metering of electricity; amending RCW 80.60.010, 80.60.020, and 80.60.030; adding a new section to chapter 80.60 RCW; and providing an effective date.

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

Sec. 1   RCW 80.60.010 and 2007 c 323 s 1 are each amended to read as follows:
     The definitions in this section apply throughout this chapter unless the context clearly ((indicates)) requires otherwise.
     (1) "Commission" means the utilities and transportation commission.
     (2) "Customer-generator" means either: (a) A user of a net metering system located on the premises of a customer-generator; or (b) a customer of an electric utility with an assigned fraction of a community 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.
     (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.
     (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 ninety-nine 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.
     (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.
     (13) "Public utility district" means a district authorized by chapter 54.04 RCW.
     (14) "Renewable energy" means ((energy generated by a facility that uses water, wind, solar energy, or biogas from animal waste as a fuel)) electrical energy derived from a "renewable resource" as defined in RCW 19.285.030.
     (15) "Community net metering" means measuring the difference between the electricity supplied by an electric utility and that generated by a customer-generator's assigned fraction over the applicable billing period.
     (16) "Community net metering aggregator" means an entity that:
     (a) Is responsible for professionally managing the community net metering system for the life of the project;
     (b) Acts as the sole point of contact with the electric utility, responsible for maintaining and communicating to the electric utility a list of assigned fractions and an operating fraction of the electrical output of a net metering system; and
     (c) Registers the net metering system with the western renewable energy generation information system and accounts for all renewable energy credit transactions on that system.
     (17) "Assigned fraction" means the percentage of all kilowatt-hours generated by a net metering system as contracted for by a customer-generator with a community net metering aggregator.
     (18) "Operating fraction" means the percentage of all kilowatt-hours generated by a net metering system that is:
     (a) Specified by the community net metering aggregator;
     (b) Not assigned to a customer-generator for community net metering; and
     (c) Sold by the community net metering aggregator to the electric utility under terms as determined through negotiations between the community net metering aggregator and the electric utility.
     (19) "Distribution system" means all of the distribution lines, substations, switches, and other distribution hardware contiguously connected at voltages below ninety kilovolts that are:
     (a) Owned and operated by a single utility; or
     (b) Owned and operated by two or more utilities with adjoining distribution systems agreeing to combine their distribution systems for the purpose of virtual net metering.
     (20) "Full requirements customer" has the same meaning as defined in RCW 19.280.020.
     (21) "Aggregate assigned fraction" means the total percentage of the output of a net metering system assigned to customer-generators for community net metering. The sum of the aggregate assigned fraction and the operating fraction must equal one hundred percent.

Sec. 2   RCW 80.60.020 and 2007 c 323 s 2 are each amended to read as follows:
     (1) An electric utility:
     (a) ((Shall)) Must offer to make net metering and community 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)) may be reserved for the cumulative generating capacity attributable to net metering systems that generate renewable energy;
     (b) ((Shall)) Must 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:
     (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
     (ii) How the cost of purchasing and installing an additional meter is to be allocated between the customer-generator and the utility;
     (c) ((Shall)) Must 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)) may 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:
     (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
     (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;
     (d) May require customer-generators participating in meter aggregation or community net metering to have their meters read on the same billing cycle.
     (2)(a) If a production meter ((and)), software, associated interconnection equipment, or distribution system upgrade is required by the electric utility to provide meter aggregation under RCW 80.60.030(4), or to provide net metering of systems larger than one hundred ninety-nine kilowatts, the customer-generator is responsible for the purchase of the production meter ((and)), software, associated interconnection equipment, and distribution system upgrade.
     (b) If any requirements to provide meter aggregation in addition to the requirements of (a) of this subsection are imposed by the Bonneville power administration, the customer-generator is responsible for any such requirements.

Sec. 3   RCW 80.60.030 and 2007 c 323 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)) must 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)) must 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)) Must be billed for the appropriate customer charges for that billing period, in accordance with RCW 80.60.020; and
     (b) ((Shall)) Must 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)) must 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)) must be used to offset electricity supplied by the electric utility.
     (b) Not more than a total of ((one hundred kilowatts shall)) five megawatts may be aggregated among all customer-generators participating in a ((generating facility)) net metering system under this subsection.
     (c) Excess kilowatt-hours credits earned by the net metering system, during the same billing period, ((shall)) must 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.
     (d) Meters so aggregated ((shall)) may 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)) must be granted to the electric utility, without any compensation to the customer-generator, unless the electric utility establishes:
     (a) A date other than April 30th that is more appropriate for the seasonal output of a specific net metering system; or
     (b) A program for rolling over all or part of a customer-generator's kilowatt-hour credit to the subsequent year.
     (6) All renewable energy credits produced as a result of the generation of electricity from a net metering system are the property of the electric utility.

NEW SECTION.  Sec. 4   A new section is added to chapter 80.60 RCW to read as follows:
      (1) For community net metering, kilowatt-hour credits generated by the net metering system, during the same billing period must be credited to participating customer-generators in proportion to each customer-generator's assigned fraction.
     (2) On April 30th of each calendar year, any remaining unused kilowatt-hour credit accumulated by a customer-generator during the previous year must be granted to the electric utility, without any compensation to the customer-generator, unless:
     (a) The utility establishes a date other than April 30th that is more appropriate for the seasonal output of a specific net metering system; or
     (b) The utility establishes a program for rolling over all or part of a customer-generator's kilowatt-hour credit to the subsequent year.
     (3)(a) If a production meter, project specific software, associated interconnection equipment, or distribution system upgrade is required by the electric utility to connect a community net metering system, the community net metering system aggregator is responsible for the purchase of the production meter, project specific software, associated interconnection equipment, or distribution system upgrade required. If an electric utility chooses to update its billing software to accommodate meter aggregation, the customer-generator of the connected community net metering system is not responsible for the costs of such billing software update.
     (b) If any requirements to connect a community net metering system in addition to the requirements of (a) of this subsection are imposed by the Bonneville power administration, the community net metering system aggregator is responsible for any such requirements.
     (4) A community net metering aggregator may choose to retain an operating fraction of the electrical output of a community net metering system and sell the electricity to the electric utility, under terms negotiated with the electric utility, in order to provide operating income to maintain the community net metering system.
     (5) A net metering aggregator must submit an updated list of assigned fractions and operating fractions to the electric utility no more than once per quarter by a date determined by the electric utility. A net metering aggregator must provide information to the electric utility demonstrating that the sum of assigned fractions and operating fraction equals one hundred percent.
     (6) A community net metering system may not have assigned fractions smaller than:
     (a) One-tenth of one percent (1/1000) and on average produce no less than one thousand kilowatt-hours annually for utilities with more than twenty-five thousand ratepayers;
     (b) One percent (1/100) and on average produce no less than two thousand kilowatt-hours annually for utilities with less than twenty-five thousand ratepayers; or
     (c) A size limit set at an electric utility's discretion that is less than required of the electric utility under (a) and (b) of this subsection.
     (7) All renewable energy credits generated by a community net metering system are the property of the electric utility.
     (8) An electric utility must provide to prospective community net metering aggregators and customer-generators sufficient information to determine the boundaries of a distribution system.
     (9) An electric utility may negotiate a power purchase agreement for an operating fraction with the community net metering aggregator of the community net metering system using rates, tariffs, contracts, and conditions as would otherwise apply to the utility buying power from a comparable renewable energy generator. An electric utility must treat an operating fraction in a similar manner as it would a qualifying small power production facility under 18 C.F.R. 292.204 of the federal regulations for the federal public utility regulatory policies act.

NEW SECTION.  Sec. 5   This act takes effect January 1, 2012.