Bill Text: MI HB4879 | 2015-2016 | 98th Legislature | Introduced

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Bill Title: Energy; alternative sources; net metering programs; require fair pricing for eligible participants. Amends title, heading of pt. 5 & secs. 3, 5, 173, 175, 177 & 179 of 2008 PA 295 (MCL 460.1003 et seq.). TIE BAR WITH: HB 4880'15, HB 4881'15

Spectrum: Slight Partisan Bill (Democrat 6-2)

Status: (Introduced - Dead) 2015-09-22 - Printed Bill Filed 09/18/2015 [HB4879 Detail]

Download: Michigan-2015-HB4879-Introduced.html

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HOUSE BILL No. 4879

 

September 17, 2015, Introduced by Reps. Dianda, Robinson, Hovey-Wright, Sarah Roberts, Irwin, Cochran, McBroom and Inman and referred to the Committee on Energy Policy.

 

     A bill to amend 2008 PA 295, entitled

 

"Clean, renewable, and efficient energy act,"

 

by amending the title, the heading of part 5, and sections 3, 5,

 

173, 175, 177, and 179 (MCL 460.1003, 460.1005, 460.1173, 460.1175,

 

460.1177, and 460.1179).

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

                                TITLE

 

     An act to require certain providers of electric service to

 

establish renewable energy programs; to require certain providers

 

of electric or natural gas service to establish energy optimization

 

programs; to authorize the use of certain energy systems to meet

 

the requirements of those programs; to provide for the approval of

 

energy optimization service companies; to provide for certain

 

charges on electric and natural gas bills; to promote energy

 

conservation by state agencies and the public; to create a wind

energy resource zone board and provide for its power and duties; to

 

authorize the creation and implementation of wind energy resource

 

zones; to provide for expedited transmission line siting

 

certificates; to provide for a net metering customer electric

 

generation program and the responsibilities of certain providers of

 

electric service and customers with respect to net metering; that

 

program; to provide for fees; to prescribe the powers and duties of

 

certain state agencies and officials; to require the promulgation

 

of rules and the issuance of orders; and to provide for civil

 

sanctions, remedies, and penalties.

 

     Sec. 3. As used in this act:

 

     (a) "Advanced cleaner energy" means electricity generated

 

using an advanced cleaner energy system.

 

     (b) "Advanced cleaner energy credit" means a credit certified

 

under section 43 that represents generated advanced cleaner energy.

 

     (c) "Advanced cleaner energy system" means any of the

 

following:

 

     (i) A gasification facility.

 

     (ii) An industrial cogeneration facility.

 

     (iii) A coal-fired electric generating facility if 85% or more

 

of the carbon dioxide emissions are captured and permanently

 

geologically sequestered.

 

     (iv) An electric generating facility or system that uses

 

technologies not in commercial operation on the effective date of

 

this act.October 6, 2008.

 

     (d) "Affiliated transmission company" means that term as

 

defined in section 2 of the electric transmission line

 

certification act, 1995 PA 30, MCL 460.562.

 

     (e) "Applicable regional transmission organization" means a

 

nonprofit, member-based organization governed by an independent

 

board of directors that serves as the federal energy regulatory

 

commission-approved commission approved regional transmission

 

organization with oversight responsibility for the region that

 

includes the provider's service territory.

 

     (f) "Biomass" means any organic matter that is not derived

 

from fossil fuels, that can be converted to usable fuel for the

 

production of energy, and that replenishes over a human, not a

 

geological, time frame, including, but not limited to, all of the

 

following:

 

     (i) Agricultural crops and crop wastes.

 

     (ii) Short-rotation energy crops.

 

     (iii) Herbaceous plants.

 

     (iv) Trees and wood, but only if derived from sustainably

 

managed forests or procurement systems, as defined in section 261c

 

of the management and budget act, 1984 PA 431, MCL 18.1261c.

 

     (v) Paper and pulp products.

 

     (vi) Precommercial wood thinning waste, brush, or yard waste.

 

     (vii) Wood wastes and residues from the processing of wood

 

products or paper.

 

     (viii) Animal wastes.

 

     (ix) Wastewater sludge or sewage.

 

     (x) Aquatic plants.

 

     (xi) Food production and processing waste.

 

     (xii) Organic by-products from the production of biofuels.

 

     (g) "Board" means the wind energy resource zone board created

 

under section 143.

 

     (h) "Carbon dioxide emissions benefits" means that the carbon

 

dioxide emissions per megawatt hour of electricity generated by the

 

advanced cleaner energy system are at least 85% less or, for an

 

integrated gasification combined cycle facility, 70% less than the

 

average carbon dioxide emissions per megawatt hour of electricity

 

generated from all coal-fired electric generating facilities

 

operating in this state on January 1, 2008.

 

     (i) "Commission" means the Michigan public service commission.

 

     (j) "Customer generation program" means the program created

 

under section 173.

 

     (k) (j) "Customer meter" means an electric meter of a

 

provider's retail customer. Customer meter does not include a

 

municipal water pumping meter or additional meters at a single site

 

that were installed specifically to support interruptible air

 

conditioning, interruptible water heating, net metering, customer

 

generation, or time-of-day tariffs.

 

     Sec. 5. As used in this act:

 

     (a) "Electric provider", subject to sections 21(1), 23(1), and

 

25(1), means any of the following:

 

     (i) Any person or entity that is regulated by the commission

 

for the purpose of selling electricity to retail customers in this

 

state.

 

     (ii) A municipally-owned electric utility in this state.

 

     (iii) A cooperative electric utility in this state.

 

     (iv) Except as used in subpart B of part 2, an alternative

 

electric supplier licensed under section 10a of 1939 PA 3, MCL

 

460.10a.

 

     (b) "Eligible electric generator" means that a methane

 

digester or a customer's renewable energy system, with cogeneration

 

system fueled by natural gas, or waste heat recovery system that

 

meets both of the following requirements:

 

     (i) Is located in this state.

 

     (ii) Has a generation capacity limited to the customer's

 

electric need and that does not exceed the following:that is

 

consistent with the safety and reliability requirements of the

 

customer's interconnection.

 

     (i) For a renewable energy system, 150 kilowatts of aggregate

 

generation at a single site.

 

     (ii) For a methane digester, 550 kilowatts of aggregate

 

generation at a single site.

 

     (c) "Energy conservation" means the reduction of customer

 

energy use through the installation of measures or changes in

 

energy usage behavior. Energy conservation does not include the use

 

of advanced cleaner energy systems.

 

     (d) "Energy efficiency" means a decrease in customer

 

consumption of electricity or natural gas achieved through measures

 

or programs that target customer behavior, equipment, devices, or

 

materials without reducing the quality of energy services.

 

     (e) "Energy optimization", subject to subdivision (f), means

 

all of the following:

 

     (i) Energy efficiency.

 

     (ii) Load management, to the extent that the load management

 

reduces overall energy usage.

 

     (iii) Energy conservation, but only to the extent that the

 

decreases in the consumption of electricity produced by energy

 

conservation are objectively measurable and attributable to an

 

energy optimization plan.

 

     (f) Energy optimization does not include electric provider

 

infrastructure projects that are approved for cost recovery by the

 

commission other than as provided in this act.

 

     (g) "Energy optimization credit" means a credit certified

 

pursuant to section 87 that represents achieved energy

 

optimization.

 

     (h) "Energy optimization plan" or "EO plan" means a plan

 

approved under section 71.73.

 

     (i) "Energy optimization standard" means the minimum energy

 

savings required to be achieved under section 77.

 

     (j) "Energy star" means the voluntary partnership among the

 

United States department of energy, Department of Energy, the

 

United States environmental protection agency, Environmental

 

Protection Agency, product manufacturers, local utilities, and

 

retailers to help promote energy efficient products by labeling

 

with the energy star logo, to educate consumers about the benefits

 

of energy efficiency, and to help promote energy efficiency in

 

buildings by benchmarking and rating energy performance.

 

     (k) "Federal approval" means approval by the applicable

 

regional transmission organization or other federal energy

 

regulatory commission approved transmission planning process of a

 

transmission project that includes the transmission line. Federal

 

approval may be evidenced in any of the following manners:

 

     (i) The proposed transmission line is part of a transmission

 

project included in the applicable regional transmission

 

organization's board-approved transmission expansion plan.

 

     (ii) The applicable regional transmission organization has

 

informed the electric utility, affiliated transmission company, or

 

independent transmission company that a transmission project

 

submitted for an out-of-cycle project review has been approved by

 

the applicable regional transmission organization, and the approved

 

transmission project includes the proposed transmission line.

 

     (iii) If, after the effective date of this act, October 6,

 

2008, the applicable regional transmission organization utilizes

 

another approval process for transmission projects proposed by an

 

electric utility, affiliated transmission company, or independent

 

transmission company, the proposed transmission line is included in

 

a transmission project approved by the applicable regional

 

transmission organization through the approval process developed

 

after the effective date of this act.October 6, 2008.

 

     (iv) Any other federal energy regulatory commission approved

 

transmission planning process for a transmission project.

 

PART 5.

 

NET METERING CUSTOMER GENERATION

 

     Sec. 173. (1) The commission shall establish a statewide net

 

metering program by By order issued not later than 180 days after

 

the effective date of this act. the 2015 act that amended this

 

section, the commission shall establish a customer generation

 

program by which any customer of an electric utility or alternative

 

electric supplier may generate electricity using an eligible

 

electric generator interconnected with the local electric utility

 

and operated parallel to the distribution system. The value of

 

electricity generated by the customer shall be credited to the

 

customer pursuant to a fair value tariff, a standard-offer

 

contract, or net metering. However, an electric utility or

 

alternative electric supplier is only required to participate in

 

the net metering component of the customer generation program.

 

     (2) No later than 180 days after the effective date of this

 

act, the 2015 act that amended this section, the commission shall

 

promulgate rules regarding any time limits on the submission of net

 

metering applications or customer applications to participate in

 

the customer generation program, inspections of net metering

 

equipment eligible electric generators, and any other matters the

 

commission considers necessary to implement this part. Any rules

 

adopted regarding time limits for approval of parallel operation

 

shall recognize reliability and safety complications including

 

those arising from equipment saturation, use of multiple

 

technologies, and proximity to synchronous motor loads. The program

 

shall apply to all electric utilities and alternative electric

 

suppliers in this state. Except as otherwise provided under this

 

part, customers of any class are eligible to interconnect eligible

 

electric generators with the customer's local electric utility and

 

operate the generators in parallel with the distribution system.

 

The customer generation program shall be designed for a period of

 

not less than 10 20 years. and limit each customer to generation

 

capacity designed to meet only the customer's electric needs. The

 

commission may waive the application, interconnection, and

 

installation requirements of this part for customers participating

 

in the net metering program under the commission's March 29, 2005

 

order in case no. U-14346.

 

     (2) An electric utility or alternative electric supplier is

 

not required to allow for net metering that is greater than 1% of

 

its in-state peak load for the preceding calendar year. The utility

 

or supplier shall notify the commission if its net metering program

 

reaches the 1% requirement under this subsection. The 1% limit

 

under this subsection shall be allocated as follows:

 

     (a) No more than 0.5% for customers with a system capable of

 

generating 20 kilowatts or less.

 

     (b) No more than 0.25% for customers with a system capable of

 

generating more than 20 kilowatts but not more than 150 kilowatts.

 

     (c) No more than 0.25% for customers with a system capable of

 

generating more than 150 kilowatts.

 

     (3) Selection of customers for participation in the net

 

metering customer generation program shall be based on the order in

 

which the applications for participation in the net metering

 

program are received by the electric utility or alternative

 

electric supplier.solely on meeting the interconnection and

 

equipment requirements for participation. An electric utility or

 

alternative electric supplier shall not restrict the number of

 

participants in the customer generation program unless it

 

demonstrates to the satisfaction of the commission that the

 

restriction is necessary to protect the public health and safety or

 

the integrity of the distribution system in a hearing before the

 

commission.

 

     (4) An electric utility or alternative electric supplier shall

 

not refuse to provide or discontinue fail to continue electric

 

service to a customer solely for the reason that because the

 

customer participates in the net metering customer generation

 

program.

 

     (5) The customer generation program created under subsection

 

(1) shall include all of the following:

 

     (a) Statewide uniform interconnection requirements for all

 

eligible electric generators. The interconnection requirements

 

shall be designed to protect electric utility workers and equipment

 

and the general public.

 

     (b) Net metering equipment and its installation must

 

Requirements that an eligible electric generator and its

 

installation meet all current local and state electric and

 

construction code requirements. Any equipment that is certified by

 

a nationally recognized testing laboratory to IEEE 1547.1 testing

 

standards and in compliance with UL 1741 scope 1.1A, effective May

 

7, 2007, or updates to those testing standards and scope approved

 

by the commission, and that is installed in compliance with this

 

part is considered to be eligible equipment. Within the time

 

provided by the commission in rules promulgated under subsection

 

(1) (2) and consistent with good utility practice , and the

 

protection of electric utility workers, protection of electric

 

utility equipment, and protection of the general public, an

 

electric utility may study, confirm, and ensure that an eligible

 

electric generator installation at the customer's site meets the

 

"IEEE 1547 anti-islanding requirements. Standard for

 

Interconnecting Distributed Resources with Electric Power Systems",

 

a commission-approved update to IEEE 1547, or standards approved by

 

the commission that enable intentional islanding. Utility testing

 

and approval of the interconnection and execution of a parallel

 

operating agreement must be completed prior to before the equipment

 

operating is operated in parallel with the distribution system of

 

the utility.

 

     (c) A uniform customer generation application form and process

 

to be used by all electric utilities and alternative electric

 

suppliers in this state. Customers Applicants who are served by an

 

alternative electric supplier shall submit a copy of the

 

application to the electric utility for the customer's service

 

area.

 

     (d) Net metering customers with a system capable of generating

 

20 kilowatts or less qualify for true net metering.

 

     (e) Net metering customers with a system capable of generating

 

more than 20 kilowatts qualify for modified net metering. 

 

     (d) (6) Each A requirement that each electric utility and

 

alternative electric supplier shall maintain records of all

 

applications and up-to-date records of all active eligible electric

 

generators located within their its service area.

 

     (6) The customer generation program shall include a statewide

 

uniform methodology by which an electric utility or alternative

 

electric supplier may establish a fair value tariff if approved by

 

the commission after a contested case hearing under the

 

administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

 

24.328. Both of the following apply to a fair value tariff:

 

     (a) A fair value tariff shall meet all of the following

 

requirements:

 

     (i) Apply only to customers whose eligible electric generators

 

have a capacity of 500 kilowatts or more.

 

     (ii) Allow customer generation for immediate self-service

 

without any charge to the customer.

 

     (iii) Apply the same delivery and power supply charge for

 

electricity delivered to a customer that participates in the

 

customer generation program as to a customer that is similarly

 

situated but does not participate.

 

     (iv) Credit the customer for generation in excess of immediate

 

customer self-service at a rate that meets both of the following

 

requirements:

 

     (A) Is not less than the full retail rate for a customer that

 

is similarly situated but does not participate in the customer

 

generation program at the time of excess generation, minus the

 

delivery charge.

 

     (B) Includes the value of avoided generation costs including

 

line losses, avoided costs of long-term generation capacity and

 

reserve requirements including line losses, avoided transmission

 

and distribution costs, and avoided health and environmental

 

effects.

 

     (v) Allow the customer to retain any renewable energy credits

 

associated with electricity generated by the customer's eligible

 

electric generator. The rate or terms of the tariff shall not be

 

based on consideration of whether or to whom the customer sells the

 

renewable energy credits. The customer may sell the renewable

 

energy credits to the electric utility, the alternative electric

 

supplier, or a third party under a separate contract.

 

     (vi) Require a utility to recalculate a fair value tariff,

 

subject to commission approval, in any proceeding that changes

 

power supply tariffs.

 

     (vii) Not impose any additional charges on a customer for

 

participation in the customer generation program.

 

     (b) A fair value tariff may do any of the following:

 

     (i) If the tariff credits the customer for capacity without

 

deducting for forced outages, deduct standby charges for an

 

eligible electric generator with capacity in excess of 500

 

kilowatts based on the product of the utility's market cost of

 

capacity and the average peak-coincident forced outage rate of

 

customer generators using similar generation technology.

 

     (ii) Based on known and measurable evidence of the cost or

 

benefit of the customer generation program to the electric utility

 

or alternative electric supplier, incorporate other values into the

 

fair value tariff, including credit for an eligible electric

 

generator that is installed at a high-value location on the

 

distribution grid.

 

     (7) The customer generation program shall include uniform

 

provisions pursuant to which an electric utility or alternative

 

energy supplier may enter a standard-offer contract for electricity

 

generated by customers with eligible electric generators with a

 

capacity of 500 kilowatts or more. A standard-offer contract shall

 

meet all of the following requirements:

 

     (a) Be on a form approved by the commission.

 

     (b) In net present value, be economically equivalent to or

 

larger than the customer compensation that would be expected under

 

a fair value tariff and assign appropriate value to any reduced

 

uncertainty about future power supply costs for the electric

 

utility or alternative electric supplier and its other customers.

 

     (c) Provide a fixed price schedule for power delivered from

 

the eligible electric generator over the full term of the contract,

 

subject to adjustment for changes in the consumer price index. As

 

used in this subdivision, "consumer price index" means the most

 

comprehensive index of consumer prices available for this state

 

from the Bureau of Labor Statistics of the United States Department

 

of Labor.

 

     (d) Have a term of at least 20 years, unless a shorter term is

 

agreed to by the parties.

 

     (e) Provide a satisfactory basis for the customer to finance

 

the eligible electric generator through a lending institution under

 

normal commercial terms.

 

     (f) Allow the customer to retain any renewable energy credits

 

associated with electricity generated by the customer's eligible

 

electric generator. The price or other terms of the standard-offer

 

contract shall not be based on consideration of whether or to whom

 

the customer sells the renewable energy credits. The customer may

 

sell the renewable energy credits to the electric utility, the

 

alternative electric supplier, or a third party under a separate

 

contract.

 

     (8) The customer generation program shall include net

 

metering. An electric utility or alternative electric supplier

 

shall make net metering available to any customer that submits an

 

application. However, the commission may authorize an electric

 

utility or alternative electric supplier to suspend receipt of

 

applications to participate in net metering from customers with an

 

eligible electric generator with a capacity exceeding 500 kilowatts

 

when the electric utility or alternative supplier is offering a

 

fair value tariff or a standard-offer contract approved by the

 

commission for electricity from that type of eligible electric

 

generator. The commission may waive the application,

 

interconnection, and installation requirements under this part for

 

customers participating in the net metering program under the

 

commission's March 29, 2005 order in case no. U-14346.

 

     Sec. 175. (1) An electric utility or alternative electric

 

supplier may charge a fee not to exceed $100.00 to process an

 

application for net metering. to participate in the customer

 

generation program. A customer with a system an eligible electric

 

generator capable of generating more than 20 kilowatts shall pay

 

all interconnection costs. A customer with a system capable of

 

generating more than 150 kilowatts shall pay standby costs. The

 

commission shall recognize the reasonable cost for each electric

 

utility and alternative electric supplier to operate a net metering

 

customer generation program. For an electric utility with 1,000,000

 

or more retail customers in this state, the commission shall

 

include in that utility's nonfuel base rates all costs of meeting

 

all customer generation program requirements except that all energy

 

costs of the program shall be recovered through the utility's power

 

supply cost recovery mechanism under sections 6j and 6k of 1939 PA

 

3, MCL 460.6j and 460.6k. For The commission shall allow an

 

electric utility with less fewer than 1,000,000 base distribution

 

customers in this state , the commission shall allow that utility

 

to recover all energy costs of the program through the power supply

 

cost recovery mechanism under sections 6j and 6k of 1939 PA 3, MCL

 

460.6j and 460.6k, and shall develop a cost recovery mechanism for

 

that utility to contemporaneously recover all other costs of

 

meeting the program requirements.

 

     (2) The interconnection requirements of the net metering

 

customer generation program shall provide that an electric utility

 

or alternative electric supplier shall, subject to any time

 

requirements imposed by the commission and upon reasonable written

 

notice to the net metering customer participating in the customer

 

generation program, perform testing and inspection of an

 

interconnected eligible electric generator as is necessary to

 

determine that the system eligible electric generator complies with

 

all applicable electric safety, power quality, and interconnection

 

requirements. The costs of testing and inspection are considered a

 

cost of operating a net metering customer generation program and

 

shall be recovered under subsection (1).

 

     (3) The interconnection requirements shall require all

 

eligible electric generators, alternative electric suppliers, and

 

electric utilities to comply with all applicable federal, state,

 

and local laws, rules, or regulations, and any national standards

 

as determined by the commission.

 

     Sec. 177. (1) Electric In the customer generation program,

 

electric meters shall be used to determine the amount of the

 

customer's energy use in each billing period, net of any excess

 

energy the customer's eligible electric generator delivers to the

 

electric utility distribution system during that same billing

 

period. For a customer with a generation system an eligible

 

electric generator capable of generating more than 20 kilowatts,

 

the utility shall install and utilize a generation meter and a

 

meter or meters capable of measuring the flow of energy in both

 

directions. A customer with a system an eligible electric generator

 

capable of generating more than 150 kilowatts shall pay the costs

 

of installing any new meters.

 

     (2) An electric utility serving over 1,000,000 customers in

 

this state may provide its customers participating in the net

 

metering customer generation program, at no additional charge, a

 

meter or meters capable of measuring the flow of energy in both

 

directions.

 

     (3) An electric utility serving fewer than 1,000,000 customers

 

in this state shall provide a meter or meters described in

 

subsection (2) to customers participating in the net metering

 

customer generation program at cost. Only the incremental cost

 

above that for meters provided by the electric utility to similarly

 

situated nongenerating customers shall be paid by the eligible

 

customer participating in the customer generation program.

 

     (4) If the quantity value of electricity generated and

 

delivered to the electric utility distribution system by an

 

eligible electric generator during a billing period exceeds the

 

quantity value of electricity supplied from the electric utility or

 

alternative electric supplier during the billing period, the

 

eligible customer shall be credited by their the supplier of

 

electric generation service for the excess kilowatt hours value

 

generated during the billing period. The credit shall appear on the

 

bill for the following billing period and shall be limited to the

 

total power supply charges on that bill. Any excess kilowatt hours

 

not used to offset electric generation charges in the next billing

 

period will be carried forward to subsequent billing periods.

 

Notwithstanding any law or regulation, net metering customers shall

 

not receive credits for electric utility transmission or

 

distribution charges. The credit per kilowatt hour for kilowatt

 

hours delivered into the utility's distribution system shall be

 

either of the following:

 

     (a) The monthly average real-time locational marginal price

 

for energy at the commercial pricing node within the electric

 

utility's distribution service territory, or for net metering

 

customers on a time-based rate schedule, the monthly average real-

 

time locational marginal price for energy at the commercial pricing

 

node within the electric utility's distribution service territory

 

during the time-of-use pricing period.

 

     (b) The electric utility's or alternative electric supplier's

 

power supply component of the full retail rate during the billing

 

period or time-of-use pricing period.

 

     Sec. 179. An eligible electric generator shall own The

 

customer owns any renewable energy credits granted for electricity

 

generated by the customer under the net metering program created in

 

this part.customer generation program established under section

 

173.

 

     Enacting section 1. This amendatory act takes effect 90 days

 

after the date it is enacted into law.

 

     Enacting section 2. This amendatory act does not take effect

 

unless all of the following bills of the 98th Legislature are

 

enacted into law:

 

     (a) Senate Bill No.____ or House Bill No. 4880 (request no.

 

00951'15 *).

 

     (b) Senate Bill No.____ or House Bill No. 4881 (request no.

 

02967'15 *).