BILL REQ. #:  H-0290.3 

Prefiled 01/03/11. Read first time 01/10/11.   Referred to Committee on Technology, Energy & Communications.

     AN ACT Relating to net metering of electricity; amending RCW 80.60.010, 80.60.020, and 80.60.030; 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 virtual 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)(i) For electric utilities that are not full requirements customers, has an electrical generating capacity of not more than ((one hundred kilowatts)) five megawatts; or
     (ii) For electric utilities that are full requirements customers, either: (A) Has an electrical generating capacity of no more than one hundred ninety-nine kilowatts and is metered by one meter; or (B) has an electrical generating capacity of up to five megawatts and is metered by multiple meters with no meter measuring more than one hundred ninety-nine kilowatts in electrical generating capacity;
     (b) Is located on the customer-generator's premises or, for virtual net metering, is located within the same electric distribution system of the customer-generator;
     (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, biomass, or biogas from animal waste as a fuel.
     (15) "Virtual net metering" means the administrative combination of readings from the production meter from a single net metering system and billing for multiple meters, regardless of class, from a group of customer-generators according to an assigned fraction of that net metering system for each customer-generator as contracted with a virtual net metering aggregator. The net metering system and the group of customer-generators must all be within the same electric distribution system.
     (16) "Virtual net metering aggregator" means an entity that:
     (a) Is responsible for professionally managing the 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 operating fractions 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 kilowatt-hours generated by a net metering system deducted from the electrical consumption of a customer-generator. Unless there is a voluntary agreement for smaller fractions, an assigned fraction may not be 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; or
     (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.
     (18) "Operating fraction" means the percentage of kilowatt-hours generated by a net metering system that is:
     (a) Specified by the net metering aggregator;
     (b) Not assigned to a customer-generator for virtual net metering; and
     (c) Sold by the virtual net metering aggregator to the utility at the rates, terms, and conditions that would otherwise apply to a renewable energy generation system of the same size as the net metering system.
     (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.

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 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;
     (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:
     (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 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:
     (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) Shall buy an operating fraction of the net metering aggregator of the net metering system using rates, tariffs, contracts, and conditions as would otherwise apply to the utility buying power from a comparable renewable energy generator.
     (2) If a production meter ((and)), software, and associated interconnection equipment is required by the electric utility to provide meter aggregation under RCW 80.60.030(4), ((the)) customer-generators ((is)) are responsible for the purchase of the production meter ((and)), software, and associated interconnection equipment. If an electric utility chooses to update its billing software to accommodate meter aggregation, the customer-generator may not be required to purchase software.
     (3) A net metering aggregator shall submit an updated list of assigned fractions and operating fractions to the electric utility no more than once per quarter on a date determined by the electric utility. A net metering aggregator must provide information to the electric utility demonstrating that the assigned fractions and operating fractions equal one hundred percent.

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 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) Not more than a total of ((one hundred kilowatts)) five megawatts shall 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 be either: (i) Credited equally by the electric utility to remaining meters located on all premises of a customer-generator at the designated rate of each meter; or (ii) in the case of virtual net metering, credited by the virtual net metering aggregator to remaining meters in proportion to the contracted specified fraction for each customer-generator. An assigned fraction shall be directly proportional to each meter's share of the net consumption or generation at its rate class as related to the total of all aggregated meters of a virtual net metering aggregator.
     (d) 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.
     (6)(a) All renewable energy credits produced as a result of the generation of electricity from a net metering system shall be the property of the customer-generator.
     (b) For renewable energy credits generated through virtual net metering, an assigned fraction of the renewable energy credit shall be assigned to the customer-generator by the virtual net metering aggregator.

NEW SECTION.  Sec. 4   This act takes effect January 1, 2012.