SENATE BILL REPORT

                   SB 6692

              As Passed Senate, February 14, 1998

Title:  An act relating to net metering for certain renewable energy systems.

Brief Description:  Requiring electric utilities to provide net metering systems to their customer‑generators.

Sponsors:  Senators Jacobsen, Brown and Fraser.

Brief History:

Committee Activity:  Energy & Utilities:  2/3/98 [DP].

Passed Senate, 2/14/98, 48-0.

SENATE COMMITTEE ON ENERGY & UTILITIES

Majority Report:  Do pass.

  Signed by Senators Finkbeiner, Chair; Hochstatter, Vice Chair; Brown, Jacobsen, Rossi, T. Sheldon and Strannigan.

Staff:  Andrea McNamara (786-7483)

Background: ANet metering@ allows electricity customers to offset (over a predetermined time period) their consumption of purchased electricity with electricity generated by their own small-scale renewable system, without considering when the electricity is consumed or generated.  Under net metering, the customer=s small renewable energy system is connected to the utility grid, and electricity produced by the customer=s system flows into the utility grid, spinning a bidirectional electricity meter backwards.

The meter measures the difference between the electricity supplied by the electric utility, and the electricity generated by the customer that is fed back to the electric utility, over the applicable billing period.  At the end of the billing period, the customer may owe the utility for the excess electricity consumed, or may receive a credit for the excess electricity generated.

As part of the Public Utility Regulatory Policies Act of 1978 (PURPA), Congress required utilities to purchase excess power generated by nonutilities using qualifying small power production facilities.  One of the criteria to qualify was that at least 75 percent of the energy used by the facility must be from renewable resources, geothermal resources, biomass, waste, or any combination of those fuel sources.  The utilities were to purchase the electricity at their Aavoided cost@ of having to acquire other resources.

Over time, the Legislature has made findings and enacted a variety of policies encouraging the development and use of renewable resources.

Summary of Bill:  The Legislature finds it is in the public interest to:  (1)  encourage private investment in renewable energy resources; (2) stimulate the economic growth of this state; and (3) enhance the continued diversification of the energy resources used in this state.

All electric utilities serving retail customers must offer to make a bidirectional meter available to each eligible customer who has installed a net metering system.

ANet metering system@ is defined as a facility for the production of electrical energy that:  (1) uses solar, wind, or hydro power; (2) has a generating capacity of not more than 25 kilowatts; (3) is located on the customer=s premises; (4) operates in parallel with the electric utility=s transmission and distribution facilities; and (5) is intended primarily to offset part or all of the customer=s requirements for electricity.

In addition,  a utility may, at its own expense and with the customer=s written consent, install one or more additional meters to monitor the flow of electricity in each direction.

A utility may not charge a customer-generator any fee that would increase the customer=s minimum monthly charge above that of other customers in the same rate class.

The electric utility must measure the net electricity produced or consumed during the billing period using normal metering practices.  If the electricity supplied by the electric utility exceeds the amount generated by the customer, the customer is billed for the net electricity supplied by the utility.  If the electricity generated by the customer exceeds the electricity supplied by the utility, the customer is billed for other charges ordinarily on the bills of customers of the same class, and is credited for the excess electricity on the customer=s bill for the following month.

At the beginning of each calendar year, any remaining unused credit accumulated during the previous year is sold to the utility at the wholesale power rate.

A net metering system must meet all applicable safety and performance standards established by the National Electrical Code, the Institute of Electrical and Electronics Engineers, and Underwriters Laboratories.  In addition, the Washington Utilities and Transportation Commission may adopt rules imposing additional control and testing requirements for electricity customers with net metering systems, if the commission determines such requirements are necessary to protect the public and system reliability.

Appropriation:  None.

Fiscal Note:  Not requested.

Effective Date:  Ninety days after adjournment of session in which bill is passed.

Testimony For:  This bill would encourage a simplified and more standardized approach to net metering systems, making them more cost effective and attractive to residential customers.  It offers a low-cost way for utilities to begin creating a green identity for themselves; it encourages distributed generation; and simplifies the accounting standards required by federal acts.  Customers would get more choices to make environmental decisions about their power, and would have opportunities to generate credit during the summer to be applied toward their winter needs.  The bill would assist in national and international trade expansion and industry investment in renewable resources.

Testimony Against:  None

Testified:  PRO: Tom Starrs, Washington Solar Energy Industries Association, Renewable Northwest Project; John Schlick; Tom Jensen, Applied Power Corporation; Mike Nelson, Washington Solar Energy Industries Association; Tom Rentz, Trace Engineering; K.C. Golden, CTED.