Bill Text: MI HB5862 | 2017-2018 | 99th Legislature | Introduced

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Bill Title: Energy; alternative sources; net metering programs, standard offer contracts for large generators and fair value tariffs; provide for in distributed generation program. Amends secs. 3, 5, 7, 9, 13, 173, 175 & 177 of 2008 PA 295 (MCL 460.1003 et seq.). TIE BAR WITH: HB 5863'18

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2018-04-25 - Bill Electronically Reproduced 04/24/2018 [HB5862 Detail]

Download: Michigan-2017-HB5862-Introduced.html

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HOUSE BILL No. 5862

 

 

April 24, 2018, Introduced by Reps. Dianda, Rabhi, Chirkun, Cochran, Barrett and Glenn and referred to the Committee on Energy Policy.

 

     A bill to amend 2008 PA 295, entitled

 

"Clean and renewable energy and energy waste reduction act,"

 

by amending sections 3, 5, 7, 9, 13, 173, 175, and 177 (MCL

 

460.1003, 460.1005, 460.1007, 460.1009, 460.1013, 460.1173,

 

460.1175, and 460.1177), as amended by 2016 PA 342.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 3. As used in this act:

 

     (a) "Applicable regional transmission organization" means a

 

nonprofit, member-based organization governed by an independent

 

board of directors that serves as the regional transmission

 

organization approved by the Federal Energy Regulatory Commission

 

with oversight responsibility for the region that includes the

 

provider's service territory.

 

     (b) "Biogas" means landfill gas or a mixture of gases composed

 

primarily of methane and carbon dioxide produced by biomass.

 

     (c) (b) "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.

 

     (d) (c) "Board" means the wind energy resource zone board

 

created under section 143.

 

     (e) (d) "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 or an integrated

pyrolysis 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.

 

     (f) (e) "Cogeneration facility" means a facility that produces

 

both electricity and useful thermal energy, such as heat or steam,

 

in a way that is more efficient than the separate production of

 

those forms of energy.

 

     (g) (f) "Commission" means the Michigan public service

 

commission.Public Service Commission.

 

     (h) (g) "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, or time-

 

of-day tariffs.

 

     (i) (h) "Distributed generation program" means the program

 

established by the commission under section 173.

 

     Sec. 5. As used in this act:

 

     (a) "Electric provider" 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 C of part 2, an alternative

 

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

460.10a.

 

     (b) "Eligible electric generator" means a methane digester or

 

a customer's renewable energy system, with cogeneration facility

 

fueled by natural gas or biogas, 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:

 

     (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.that is consistent with the safety and

 

reliability requirements of the customer's interconnection.

 

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

 

energy use through the installation of measures or changes in

 

energy usage behavior.

 

     (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 star" means the voluntary partnership among the

 

United States Department of Energy, the United States Environmental

 

Protection Agency, product manufacturers, local utilities, and

 

retailers to help promote energy efficient products by labeling

 

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

 

energy efficiency, and help promote energy efficiency in buildings

 

by benchmarking and rating energy performance.

     (f) "Energy waste reduction", subject to subdivision (g),

 

means all of the following:

 

     (i) Energy efficiency.

 

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

 

reduces provider costs.

 

     (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 waste reduction plan.

 

     (g) Energy waste reduction does not include electric provider

 

infrastructure projects that are approved for cost recovery by the

 

commission other than as provided in this act.

 

     (h) "Energy waste reduction credit" means a credit certified

 

pursuant to section 87 that represents achieved energy waste

 

reduction.

 

     (i) "Energy waste reduction plan" means a plan under section

 

71.

 

     (j) "Energy waste reduction standard" means the minimum energy

 

savings required to be achieved under section 77 or 78(1), as

 

applicable.

 

     (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 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 October 6, 2008.

 

     (iv) Any other Federal Energy Regulatory Commission-approved

 

transmission planning process for a transmission project.

 

     Sec. 7. As used in this act:

 

     (a) "Gasification facility" means a facility located in this

 

state that, using a thermochemical process that does not involve

 

direct combustion, produces synthesis gas, composed of carbon

 

monoxide and hydrogen, from carbon-based feedstocks, ( such as

 

coal, petroleum coke, wood, biomass, hazardous waste, medical

 

waste, industrial waste, and solid waste, including, but not

 

limited to, municipal solid waste, electronic waste, and waste

 

described in section 11514 of the natural resources and

 

environmental protection act, 1994 PA 451, MCL 324.11514, ) and

 

that uses the synthesis gas or a mixture of the synthesis gas and

methane to generate electricity for commercial use. Gasification

 

facility includes the transmission lines, gas transportation lines

 

and facilities, and associated property and equipment specifically

 

attributable to such a facility. Gasification facility includes,

 

but is not limited to, an integrated gasification combined cycle

 

facility and a plasma arc gasification facility.

 

     (b) "Incremental costs of compliance" means the net revenue

 

required by an electric provider to comply with the renewable

 

energy standard, calculated as provided under section 47.

 

     (c) "Independent transmission company" means that term as

 

defined in section 2 of the electric transmission line

 

certification act, 1995 PA 30, MCL 460.562.

 

     (d) "Integrated gasification combined cycle facility" means a

 

gasification facility that uses a thermochemical process, including

 

high temperatures and controlled amounts of air and oxygen, to

 

break substances down into their molecular structures and that uses

 

exhaust heat to generate electricity.

 

     (e) "Integrated pyrolysis combined cycle facility" means a

 

pyrolysis facility that uses exhaust heat to generate electricity.

 

     (f) "Island mode" means that a generation system is in a

 

status in which loads and energy resources are able to operate on-

 

site or within a local microgrid but power is not exchanged with

 

the utility-owned transmission or distribution network.

 

     (g) (f) "LEED" means the leadership in energy and

 

environmental design green building rating system developed by the

 

United States Green Building Council.

 

     (h) (g) "Load management" means measures or programs that

target equipment or behavior to result in decreased peak

 

electricity demand such as by shifting demand from a peak to an

 

off-peak period.

 

     (i) (h) "Megawatt", "megawatt hour", or "megawatt hour of

 

electricity", unless the context implies otherwise, includes the

 

steam equivalent of a megawatt or megawatt hour of electricity.

 

     (i) "Modified net metering" means a utility billing method

 

that applies the power supply component of the full retail rate to

 

the net of the bidirectional flow of kilowatt hours across the

 

customer interconnection with the utility distribution system,

 

during a billing period or time-of-use pricing period. A negative

 

net metered quantity during the billing period or during each time-

 

of-use pricing period within the billing period reflects net excess

 

generation for which the customer is entitled to receive credit

 

under section 177(4). Under modified net metering, standby charges

 

for distributed generation customers on an energy rate schedule

 

shall be equal to the retail distribution charge applied to the

 

imputed customer usage during the billing period. The imputed

 

customer usage is calculated as the sum of the metered on-site

 

generation and the net of the bidirectional flow of power across

 

the customer interconnection during the billing period. The

 

commission shall establish standby charges under modified net

 

metering for distributed generation customers on demand-based rate

 

schedules that provide an equivalent contribution to utility system

 

costs. A charge for net metering and distributed generation

 

customers established pursuant to section 6a of 1939 PA 3, MCL

 

460.6a, shall not be recovered more than once. This subdivision is

subject to section 177(5).

 

     (j) "Microgrid" means a group of interconnected loads and

 

distributed energy resources with clearly defined electrical

 

boundaries that acts as a single controllable entity with respect

 

to the macrogrid and that connects and disconnects from the

 

macrogrid to enable it to operate in grid-connected or island mode.

 

     Sec. 9. As used in this act:

 

     (a) "Natural gas provider" means an investor-owned business

 

engaged in the sale and distribution at retail of natural gas

 

within this state whose rates are regulated by the commission.

 

     (b) "Net metering" means a utility billing method that applies

 

the full retail rate to the net of the bidirectional flow of

 

kilowatt hours across the customer interconnection with the utility

 

distribution system, during a billing period or time-of-use pricing

 

period. A negative net metered quantity during the billing period

 

or during each time-of-use pricing period within the billing period

 

reflects net excess generation for which the customer is entitled

 

to receive credit under section 177(4).

 

     (c) (b) "Pet coke" means a solid carbonaceous residue produced

 

from a coker after cracking and distillation from petroleum

 

refining operations.

 

     (d) (c) "Plasma arc gasification facility" means a

 

gasification facility that uses a plasma torch to break substances

 

down into their molecular structures.

 

     (e) (d) "Provider" means an electric provider or a natural gas

 

provider.

 

     (f) (e) "PURPA" means the public utility regulatory policies

act of 1978, Public Law 95-617.

 

     (g) (f) "Pyrolysis facility" means a facility that effects

 

thermochemical decomposition at elevated temperatures without the

 

participation of oxygen, from carbon-based feedstocks including,

 

but not limited to, coal, wood, biomass, industrial waste, or solid

 

waste, but not including pet coke, hazardous waste, coal waste, or

 

scrap tires. Pyrolysis facility includes the transmission lines,

 

gas transportation lines and facilities, and associated property

 

and equipment specifically attributable to the facility. Pyrolysis

 

facility includes, but is not limited to, an integrated pyrolysis

 

combined cycle facility.

 

     Sec. 13. As used in this act:

 

     (a) "Site" means a contiguous site, regardless of the number

 

of meters at that site. A site that would be contiguous but for the

 

presence of a street, road, or highway is considered to be

 

contiguous for the purposes of this subdivision.

 

     (b) "Transmission line" means all structures, equipment, and

 

real property necessary to transfer electricity at system bulk

 

supply voltage of 100 kilovolts or more.

 

     (c) "True net metering" means a utility billing method that

 

applies the full retail rate to the net of the bidirectional flow

 

of kilowatt hours across the customer interconnection with the

 

utility distribution system, during a billing period or time-of-use

 

pricing period. A negative net metered quantity during the billing

 

period or during each time-of-use pricing period within the billing

 

period reflects net excess generation for which the customer is

 

entitled to receive credit under section 177(4). This subdivision

is subject to section 177(5).

 

     (c) (d) "Utility system resource cost test" means a standard

 

that is met for an investment in energy waste reduction if, on a

 

life cycle basis, the total avoided supply-side costs to the

 

provider, including representative values for electricity or

 

natural gas supply, transmission, distribution, and other

 

associated costs, are greater than the total costs to the provider

 

of administering and delivering the energy waste reduction program,

 

including net costs for any provider incentives paid by customers

 

and capitalized costs recovered under section 89.

 

     (d) (e) "Wind energy conversion system" means a system that

 

uses 1 or more wind turbines to generate electricity and has a

 

nameplate capacity of 100 kilowatts or more.

 

     (e) (f) "Wind energy resource zone" or "wind zone" means an

 

area designated by the commission under section 147.

 

     Sec. 173. (1) The commission shall establish a distributed

 

generation program by order issued not later than 90 days after the

 

effective date of the 2016 2018 act that amended this section.

 

Under the distributed generation program, 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 required to

 

participate only in the net metering component of the customer

generation program. The commission may promulgate rules the

 

commission considers necessary to implement this program. 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 whose rates are regulated by

 

the commission and alternative electric suppliers in this state.

 

     (2) Except as otherwise provided under this part, an electric

 

customer of any class is eligible to interconnect an eligible

 

electric generator with the customer's local electric utility and

 

operate the eligible electric generator in parallel with the

 

distribution system. The distributed 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 up to 100% of the

 

customer's electricity consumption for the previous 12 months. 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.

 

     (3) An electric utility or alternative electric supplier is

 

not required to allow for a distributed generation program that is

 

greater than 1% of its average in-state peak load for the preceding

 

5 calendar years. The electric utility or alternative electric

 

supplier shall notify the commission if its distributed generation

 

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

 

under this subsection shall be allocated as follows:

     (a) No more than 0.5% for customers with an eligible electric

 

generator capable of generating 20 kilowatts or less.

 

     (b) No more than 0.25% for customers with an eligible electric

 

generator capable of generating more than 20 kilowatts but not more

 

than 150 kilowatts.

 

     (c) No more than 0.25% for customers with a methane digester

 

capable of generating more than 150 kilowatts.

 

     (3) (4) Selection of customers for participation in the

 

distributed generation program shall be based on the order in which

 

the applications for participation in the 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 contested case hearing pursuant to chapter 4 of the

 

administrative procedures act of 1969, 1969 PA 306, MCL 24.271 to

 

24.287.

 

     (4) (5) An electric utility or alternative electric supplier

 

shall not discontinue or refuse to provide electric service to a

 

customer solely because the customer participates in the

 

distributed generation program.

 

     (5) (6) The distributed 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) Distributed generation equipment An eligible electric

 

generator and its installation shall 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 compliant. Within the

 

time provided by the commission in rules promulgated under

 

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

 

protection of electric utility workers, electric utility equipment,

 

and 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 or

 

any applicable successor anti-islanding requirements determined by

 

the commission to be reasonable and consistent with the purposes of

 

this subdivision. "IEEE 1547 Standard for Interconnecting

 

Distributed Resources with Electric Power Systems", a commission-

 

approved update to IEEE 1547, or standards approved by the

 

commission that enable operation in island mode. If necessary to

 

promote reliability or safety, the commission may promulgate rules

 

that require the use of inverters that perform specific automated

 

grid-balancing functions to integrate distributed generation onto

 

the electric grid. Inverters that interconnect distributed

generation resources may be owned and operated by electric

 

utilities. Both of the following must be completed before the

 

equipment is operated in parallel with the distribution system of

 

the utility:

 

     (i) Utility testing and approval of the interconnection,

 

including all metering.

 

     (ii) Execution of a parallel operating agreement.

 

     (c) A uniform distributed 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) Distributed generation customers with a system capable of

 

generating 20 kilowatts or less qualify for true net metering.

 

     (e) Distributed generation customers with a system capable of

 

generating more than 20 kilowatts qualify for modified net

 

metering.

 

     (d) (7) 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 service area.

 

     (6) Not later than 1 year after the effective date of the 2018

 

act that amended this section, the commission shall establish 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) Allow distributed generation for immediate self-service

 

without any charge to the customer.

 

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

 

electricity delivered to a customer that participates in the

 

distributed generation program as to a customer that is similarly

 

situated but does not participate.

 

     (iii) Credit the customer for electricity generated by the

 

customer that is delivered to the local utility's distribution

 

system. The customer shall be credited 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 the costs and benefits that will

 

accrue over a period of not less than 20 years, considering the

 

location and time of generation. The costs and benefits include,

 

but are not limited to, the following:

 

     (I) Energy generated.

 

     (II) Generation capacity.

 

     (III) Avoided line losses.

 

     (IV) Avoided transmission capacity.

 

     (V) Avoided or deferred distribution system investments.

     (VI) Voltage support and regulation.

 

     (VII) Health and environmental benefits resulting from

 

pollution reduction.

 

     (VIII) Reduced fuel price risk to utility customers.

 

     (IX) Reasonably quantifiable economic development benefits

 

including job creation and local tax revenue benefits.

 

     (X) Any costs to the electric provider incurred to serve

 

distributed generation customers reflecting actual penetration

 

levels.

 

     (iv) Not establish the rate or other terms based on

 

consideration of whether or to whom the customer sells renewable

 

energy credits owned by the customer under section 179. The

 

customer may, under a separate contract, sell the renewable energy

 

credits to the electric utility, the alternative electric supplier,

 

or a third party.

 

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

 

subject to commission approval, in any proceeding that changes

 

power supply tariffs.

 

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

 

participation in the distributed 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 distributed 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 distributed 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 20 years or more, unless a shorter term is

 

requested by the customer and agreed to by the electric utility or

alternative electric supplier.

 

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

 

the eligible electric generator through a lending institution under

 

normal commercial terms.

 

     (f) Not establish the price or other terms based on

 

consideration of whether or to whom the customer sells the

 

renewable energy credits owned by the customer under section 179.

 

The customer may, under a separate contract, sell the renewable

 

energy credits to the electric utility, the alternative electric

 

supplier, or a third party.

 

     (8) The distributed 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 $50.00 to process an

 

application to participate in the distributed generation program.

The A customer shall pay all interconnection costs. The commission

 

shall recognize the reasonable cost for each electric utility and

 

alternative electric supplier to operate a distributed generation

 

program. For an electric utility with 1,000,000 or more retail

 

customers in this state, the commission shall include in that

 

electric utility's nonfuel base rates all costs of meeting all

 

program requirements except that all energy costs of the program

 

shall be recovered through the utility's power supply cost recovery

 

mechanism under section 6j of 1939 PA 3, MCL 460.6j. For an

 

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

 

customers in this state, the commission shall allow that electric

 

utility to recover all energy costs of the program through the

 

power supply cost recovery mechanism under section 6j of 1939 PA 3,

 

MCL 460.6j, 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 distributed

 

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 distributed generation customer, 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, including metering, requirements. The costs of

 

testing and inspection are considered a cost of operating a

 

distributed 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 distributed 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

 

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

 

distributed 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 distributed

 

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 distributed 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

 

value 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, distributed

 

generation 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 distributed

 

generation 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, excluding transmission charges, of the full

 

retail rate during the billing period or time-of-use pricing

 

period.

 

     (5) A charge for net metering and distributed generation

 

customers established pursuant to section 6a of 1939 PA 3, MCL

 

460.6a, shall not be reduced by any credit or other ratemaking

 

mechanism for distributed generation under this section.

 

     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 Senate Bill No.____ or House Bill No. 5863 (request no.

 

02681'17) of the 99th Legislature is enacted into law.