What changed in SF 583

2 passages reworded, 49 added and 19 removed; 1 of 71 unchanged.

Removed AddedIntroduced textText as passedAmendments

Section 1.

NEW SECTION. 476.49 Private generation rates —— infrastructure support options Billing methods for distributed generation customers.

1. Definitions. For purposes of this section, unless the context otherwise requires:

a. “Alternate energy production facility” means the same as defined in section 476.42.

b. “Distributed generation customer” means a person other than a public utility that interconnects an eligible distributed generation facility to an electric distribution system.

c. “Distributed generation facility” means the same as defined in section 476.58, subsection 1, paragraph “b”, subparagraph (2) or (3).

d. “Electric utility” means a public utility that furnishes electricity to the public for compensation that is required to be rate-regulated under this chapter.

e. “Eligible distributed generation facility” means a distributed generation facility that elects a billing method pursuant to subsection 3, and to which all of the following apply:

(1) The facility is located behind a customer’s electricity meter.

(2) The facility is interconnected to the electric utility distribution system.

(3) The facility has an aggregate nameplate capacity less than or equal to one megawatt alternating current.

(4) The facility has a capability to produce no more than one hundred ten percent of the customer’s annual electricity usage.

(5) The facility’s generating capacity and associated energy is intended to serve only the on-site electric requirements of the customer.

f. “Inflow-outflow billing” means a billing method for an eligible distributed generation facility whereby the net metering interval is measured hourly or subhourly, and a distributed generation customer makes payment and is credited as provided in subsection 3, paragraph “b”.

g. “Net billing” means a billing method for an eligible distributed generation facility whereby the net metering interval is equal to a monthly billing period, and a distributed generation customer makes payment and is credited as provided in subsection 3, paragraph “a”.

h. “Net metering” means a single meter monitoring only the net amount of electricity delivered to and exported by an eligible distributed generation facility, which electricity offsets electricity that would otherwise be purchased by a distributed generation customer from the electric utility.

i. “Statewide distributed generation penetration” means the aggregate nameplate capacity of all eligible distributed generation facilities of electric utilities as a percentage of the aggregate peak demand of all electric utilities.

2. Publication of data. The board shall collect data on the nameplate capacity of eligible distributed generation facilities, calculate the statewide distributed generation penetration percentage, and publish the data and penetration rate on an annual basis on the board’s internet site.

3. Billing methods. An electric utility shall file either a net billing or an inflow-outflow billing tariff with the board to govern the billing and crediting of eligible distributed generation facilities interconnected with the electric distribution system of an electric utility as follows:

a.

(1) An electric utility choosing to utilize the net billing method shall file a tariff with the board whereby a distributed generation customer pays all applicable charges, including applicable rider charges approved by the board and applied to non-net metering customers, for the electricity delivered to the customer over the net metering interval. A distributed generation customer shall be credited in kilowatt-hours for energy exported to the electric utility over the net metering interval. A distributed generation customer may use the kilowatt-hour credits to offset kilowatt-hours in future billing periods. The offset shall include any applicable volumetric rider charges approved by the board and applied to non-net metering customers.

(2) Any excess kilowatt-hours remaining at the end of a twelve-month period shall be cashed out at the electric utility’s avoided cost rate with the funds from the cash out divided evenly between the customer and the electric utility’s low-income home energy assistance program. The distributed generation customer shall choose either a January or April cash out date at the time of interconnection.

(3) Net billing shall not be limited in any way based on a customer’s peak demand.

(4) Net billing shall not include any fees or charges that are not charged to customers in the same rate class that are not net billing customers.

b.

(1) An electric utility choosing to utilize the inflow-outflow billing method shall file a tariff with the board whereby a distributed generation customer pays all applicable charges, including applicable rider charges approved by the board and applied to non-net metering customers, for the electricity delivered by the electric utility over the net metering interval. The distributed generation customer is credited in dollars at the outflow purchase rate for energy exported to the utility over the net metering interval. The distributed generation customer may use the dollar credits to offset any applicable volumetric charges, including applicable rider charges, billed on a kilowatt-hour basis.

(2) The electric utility shall select an hourly or subhourly metering interval that balances the benefits of accurately measuring power flows in each direction with the cost of collecting, storing, and processing meter data.

(3) Inflow-outflow billing shall not be limited in any way based on a customer’s peak demand.

(4) Inflow-outflow billing shall not include any fees or charges that are not charged to customers in the same rate class that are not inflow-outflow customers.

(5) Prior to the board’s approval of a value of solar methodology and rate, the outflow purchase rate for an eligible distributed generation facility shall be the applicable retail volumetric rate, including applicable rider charges approved by the board and applied to non-net metered customers. The outflow purchase rate for any distributed generation facility will continue to be the applicable retail volumetric rate for a term of twenty years. Any change in ownership of such eligible facility, or adoption and use by the electric utility of a value-of-solar rate pursuant to subsection 4, shall not impact the outflow purchase rate for the distributed generation facility during the twenty-year term.

4. Value of solar methodology. If the board is petitioned by an electric utility after July 1, 2027, or when the statewide distributed generation penetration rate is equal to five percent, whichever is earlier, the board shall initiate a proceeding to develop a value of solar methodology and rate for eligible distributed generation facilities. The value of solar rate shall be determined through the use of a methodology that calculates the benefits and costs an eligible distributed generation facility provides to, or imposes on, the electric system. The value of solar methodology shall be applied independently to each electric utility. When the board determines the value of solar methodology, it shall determine if there is a need for separate methodologies for other distributed generation technologies or if it can account for the values of other technologies with modifications to the value of solar methodology.

a. In establishing the methodology, the board shall initiate a formal proceeding. The value of solar methodology shall be determined through a study conducted by an independent third party and overseen by the board. Interested parties shall have the opportunity to comment and offer testimony on any proposed value of solar methodology before it is adopted by the board.

1. The general assembly recognizes the importance of electric utility infrastructure, including electric generation, transmission, and distribution systems, to provide electric service to all customers in this state, whether electricity is generated by a public utility, by a customer, or on behalf of a customer. The general assembly also recognizes that tariffs for electric service are traditionally designed for the provision of full electric service to customers, not taking into account the private generation of electricity. It is the intent of the general assembly to require customers who utilize private generation to pay their share of costs of electric utility infrastructure, thereby eliminating cross-subsidization. It is also the intent of the general assembly to provide private generation customers with options to pay their share of costs.

b. The benefits and costs in a value of solar methodology shall include all of the following factors as appropriate and supported by known and measurable evidence:

2. For purposes of this section, unless the context otherwise requires:

(1) The cost of energy and fuel.

a. “Avoided cost” means the energy rate paid by an electric utility for energy purchases from a private generation customer established in the electric utility’s board-approved tariff for cogeneration facilities and small power production facilities and in accordance with section 476.43.

(2) Generation capacity and reserves.

b. “Private generation customer” means an electric utility customer who utilizes a private generation facility.

(3) Transmission capacity and charges.

c.

(4) Distribution capacity.

(1) “Private generation facility” means an alternate energy production facility, as defined in section 476.42, that is owned, leased, operated by, or operated on behalf of a private generation customer and whose production of electricity is used to offset a portion or all of the customer’s electricity bill or usage that would otherwise be purchased from an electric utility.

(5) Transmission and distribution line losses.

(2) “Private generation facility” does not include any of the following:

(6) Fixed and variable costs associated with plant operations and maintenance.

(a) A cogeneration facility as defined in 18 C.F.R.

(7) Environmental compliance costs.

pt. 292, subpt. B, including without limitation combined heat and power facilities.

(8) Integration costs.

(b) A facility that produces renewable fuel as defined in section 214A.1, which is registered with the United States environmental protection agency as a manufacturer, in accordance with the requirements set forth in 40 C.F.R. §79.4.

(9) Grid support services.

(c) A facility that utilizes a de minimus amount of biomass in its operations. For purposes of this subparagraph division, “de minimus” means less than ten percent of all fuel utilized in the generation processes.

(10) Other factors, based on known and measurable evidence of the cost or benefit of solar operations to the electric utility’s electric system.

(d) A private generation facility with a nameplate generating capacity greater than one megawatt.

c. Upon approval of the value of solar methodology, the outflow purchase rate shall be limited to either a five percent increase or decrease from the previous outflow purchase rate. The value of solar rate shall be recomputed annually and reflected in the outflow purchase rate, limited to a five percent increase or decrease from the previous outflow purchase rate. If the utility switches from a net billing method to an inflow-outflow billing method after the value of solar methodology is approved, then the previous purchase rate shall be the applicable retail volumetric rate including all applicable rider charges approved by the board.

3. A rate-regulated electric utility may file tariffs with the board applicable to any private generation customer who utilizes a private generation facility installed on or after the date a tariff is approved pursuant to subsection 5. All tariff rates charged to a private generation customer for electric service shall recover the electric utility’s actual cost of providing electric service to the applicable customer class, as determined by the board in the electric utility’s most recently approved rate proceeding. Tariffs filed pursuant to this section shall be designed to ensure that a private generation customer pays for electric utility infrastructure costs. Tariffs filed pursuant to this section shall require a private generation customer to choose one of the following rate structures for the provision of electric service:

d. The board shall consider, review, and update as appropriate the value of solar methodology at least every three years after completion of the initial methodology.

a. A minimum infrastructure charge rate structure whereby the private generation customer pays a minimum amount each month, or the private generation customer’s applicable standard electric service bill, whichever is higher. The private generation customer’s applicable standard electric service bill shall be calculated using the applicable standard retail tariff. This tariff rate structure shall allow the private generation facility to offset the private generation customer’s energy usage, and shall allow excess energy to carry forward in the form of excess energy credits to offset the private generation customer’s energy usage in future billing periods. This tariff rate structure shall also include an annual cash-out of excess energy credits at a rate that does not exceed the electric utility’s avoided cost.

e. After the board has approved a value of solar methodology and rate, the outflow purchase rate shall be set using the value of solar methodology. The outflow purchase rate for such a facility will be fixed for a term of twenty years regardless of any subsequent changes in the electric utility’s outflow purchase rate or changes in ownership of such facility.

b. A multi-part rate structure whereby rates applicable to the customer include, at a minimum, a fixed basic service charge, an energy charge designed to recover variable costs, and a monthly demand charge designed to ensure that the private generation customer pays for fixed electric utility infrastructure costs. This tariff rate structure shall allow the private generation facility to offset the private generation customer’s energy usage, and shall allow excess energy to carry forward in the form of excess energy credits to offset the private generation customer’s energy usage in future billing periods. This tariff rate structure shall also include an annual cash-out of excess energy credits at a rate that does not exceed the electric utility’s avoided cost.

5. Forfeiture of outflow purchase credits. Any outflow purchase credits remaining at the end of an annual period shall be forfeited to the rider used by the electric utility pursuant to subsection 7. The distributed generation customer shall choose either a January or April date at the time of interconnection for the purposes of determining the annual period.

c. A buy all and sell all rate structure whereby the private generation facility’s output is measured separately from the private generation customer’s consumption. All electricity consumed shall be purchased from the electric utility and all electricity generated shall be sold to the electric utility on a monthly basis. Rates applicable to the private generation customer for all electricity purchased from the electric utility shall be the applicable standard retail tariff. Rates applicable for electricity purchased from the private generation customer shall not exceed the electric utility’s avoided cost.

6. Proposal of separate rate classes. An electric utility shall not propose treating distributed generation customers as a separate rate class in a general rate case prior to the board’s approval of a value of solar methodology or prior to July 1, 2027, whichever is earlier. If an electric utility chooses to propose a separate rate class for distributed generation customers in a future proceeding, such a proposal shall be approved or disapproved in accordance with section 476.6 and accompanying rules.

d. A rate structure filed by the electric utility that recovers the electric utility’s cost of providing electric service to the applicable customer class, subject to board approval.

7. Riders. An electric utility shall be allowed to recover the amounts credited to an eligible distributed generation customer for outflow purchases pursuant to a rider. To the extent an electric utility does not have such a rider, the board shall allow an electric utility to establish a rider to recover such amounts. For purposes of this subsection, “rider” includes a fuel or energy adjustment clause.

4. The board shall review a tariff filed pursuant to this section for compliance with this section, and shall approve the tariff as filed or docket the tariff for review in a formal proceeding pursuant to section 476.6, and thereafter either approve the tariff or modify the tariff to meet compliance with this section within six months of the date of docketing. If the board fails to complete a review of the tariff within six months of the date of filing, the tariff shall be deemed approved. A tariff approved pursuant to this subsection shall supersede any previously approved tariffs applicable to private generation customers, except as provided in subsection 5.

5. A private generation 8. Preexisting tariff. Any customer who utilizes a private generation facility pursuant to utilizing a net billing tariff approved by the board on or before the effective date availability of this Act inflow-outflow billing may continue to receive electric service pursuant to the preexisting tariff for the remaining duration of the contract involving the private generation facility, regardless of any subsequent change changes in ownership of such private generation facility. However, if the private generation customer terminates electric service with the electric utility, the preexisting tariff shall no longer apply and the private generation customer shall be required to receive electric service pursuant to a tariff approved pursuant to subsection 4, provided that the electric utility filed such tariff with the board.

9. Use of funds collected through alternate energy purchase programs. An electric utility may use funds collected pursuant to section 476.47 to offset any amounts that would otherwise be recovered through a rider resulting from outflow purchases of excess energy produced by an eligible distributed generation facility.

6. Nothing in this section shall preclude a customer from entering into a contract with an electric utility as an alternate energy production facility, cogeneration and small power production facility, or a standby and supplemental power service customer under the terms of the electric utility’s separate alternate energy production facility, cogeneration and small power production facility, or standby and supplemental power service tariffs filed pursuant to the federal Public Utility Regulatory Policies Act of 1978, 16 U.S.C. §2601 et seq.

10. Reasonableness of net billing and inflow-outflow billing. When the statewide net metering penetration level reaches ten percent, the board shall determine whether the net billing and inflow-outflow billing methods are still reasonable and shall make recommendations to the general assembly. Regardless of the board’s recommendations, existing facilities shall continue to be eligible for the net billing or inflow-outflow billing tariff in place at the time of installation and for twenty years of operation thereafter.