August 21, 2007, Introduced by Reps. Opsommer, Horn, Nitz, Nofs, Agema, Moss, Ball, Emmons and Amos and referred to the Committee on Energy and Technology.
A bill to amend 1939 PA 3, entitled
"An act to provide for the regulation and control of public and
certain private utilities and other services affected with a public
interest within this state; to provide for alternative energy
suppliers; to provide for licensing; to include municipally owned
utilities and other providers of energy under certain provisions of
this act; to create a public service commission and to prescribe
and define its powers and duties; to abolish the Michigan public
utilities commission and to confer the powers and duties vested by
law on the public service commission; to provide for the
continuance, transfer, and completion of certain matters and
proceedings; to abolish automatic adjustment clauses; to prohibit
certain rate increases without notice and hearing; to qualify
residential energy conservation programs permitted under state law
for certain federal exemption; to create a fund; to provide for a
restructuring of the manner in which energy is provided in this
state; to encourage the utilization of resource recovery
facilities; to prohibit certain acts and practices of providers of
energy; to allow for the securitization of stranded costs; to
reduce rates; to provide for appeals; to provide appropriations; to
declare the effect and purpose of this act; to prescribe remedies
and penalties; and to repeal acts and parts of acts,"
(MCL 460.1 to 460.10cc) by adding section 10dd.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 10dd. (1) As used in this section:
(a) "Biomass" means agricultural crops and organic waste,
waste to energy, and landfill gas. Biomass fueled systems shall be
allowed to blend up to 25% fossil fuel as needed to ensure safe,
environmentally sound system operation.
(b) "Commission" means the Michigan public service commission.
(c) "Electric utility" means a person, partnership,
corporation, association, or other legal entity whose transmission
or distribution of electricity the commission regulates under 1909
PA 106, MCL 460.551 to 460.559, or 1939 PA 3, MCL 460.1 to
460.10cc. Electric utility also includes a municipal utility.
(d) "Eligible electric generator" means a system for the
generation of electricity that is fueled by a renewable fuel or a
fuel cell. An eligible electric generator shall not exceed 150
kilowatts unless approved by the commission in consultation with
potentially affected electric utilities.
(e) "Renewable fuel" means solar, wind, or biomass.
(2) The commission shall establish a statewide net metering
program no later than January 1, 2008. The program shall apply to
all retail customers in this state, whether the customer is served
by an electric utility or an alternative electric supplier. Except
as otherwise provided for under this section, customers of any
class may apply to interconnect eligible electric generators with
the customer's local electric utility and operate the generators in
parallel with the distribution system provided they meet all
applicable installation and interconnection requirements under
subsection (6). The eligible electric generator system's primary
purpose shall be to serve the energy needs of the customer
installing the system and shall be designed so that its output is
not substantially larger than required by the customer's on-site
annual energy use. The program will allow enrollment for up to 5
years from the effective date of the amendatory act that added this
section and participation in the net metering program for a period
of 15 years after the date of enrollment.
(3) Participants in the net metering program shall be
determined by an application process. With the exception of
municipal utilities, an electric utility or alternative electric
supplier shall not stop accepting applications for net metering
under this program until their total projected generation load in
the net metering program reaches a threshold determined by 2.0% of
their previous 12 month's retail sales. An electric utility or
alternative electric supplier may choose to continue to enroll
additional net metering customers after the threshold is met. A
municipal utility shall have a threshold determined by 1.0% of its
previous 12 months of retail sales. The commission shall establish
a standardized application form and process to be used by all
electric utilities and alternative electric suppliers in this
state. The standard form shall contain the minimum information
requirements, as defined by the commission in collaboration with
the electric utilities and alternative electric suppliers of this
state. Electric utilities and alternative electric suppliers may
modify the standard form to align with their business processes,
provided those modifications do not create undue burdens on
customers. Customers who are served by an alternative electric
supplier shall submit a copy of the application to the electric
utility that distributes electricity in the customer's service
area. Each electric utility and alternative electric supplier shall
maintain records of all applications and up-to-date records of all
eligible electric generators located within their service area,
including information on the type and amount of the generator's
energy production.
(4) Selection of customers for participation in the net
metering program shall be based upon the division of customers into
2 classes, residential and nonresidential, and then in the order in
which the applications for participation in the net metering
program are received by the electric utility or alternative
electric supplier for each class. The commission shall establish
standards by which applicants who have applied to the program but
have not requested inspection or interconnection in a timely manner
are moved to the bottom of the priority list.
(5) An electric utility or alternative electric supplier shall
not discontinue or refuse to provide electric service to a customer
solely or in part because the customer participates or has applied
to participate in the net metering program. An electric utility or
alternative electric supplier shall not charge customers with
higher power supply costs than similar nongenerating customers
solely or in part because the customer participates or has applied
to participate in the net metering program.
(6) Customers who have applied to the net metering program
shall meet both of the following requirements in order to enter the
program:
(a) Statewide interconnection requirements for all eligible
electric generators, as determined by the commission. The
interconnection requirements shall be designed to protect electric
utility workers and equipment, the electric utility distribution
system, the electric utility's other customers, and the general
public, and shall require all eligible generators, alternative
electric suppliers, and electric utilities to comply with all
applicable federal and state laws, rules, or regulations and any
national standards.
(b) Net metering equipment installation must meet all current
local and state electric and construction code requirements. The
commission may set additional installation requirements and
standards for net metering projects in this state in collaboration
with industry groups and electric utilities and alternative
electric suppliers in this state.
(7) Each electric utility or alternative electric supplier may
charge a net metering program application fee not to exceed $25.00
to be used for identifying interested parties and initiating the
program process. An electric utility or alternative electric
supplier shall notify customers if they are no longer accepting
applications and refund any application fees. The commission may
allow customers already enrolled under a previous net metering
program to reenroll under the new program. Those customers are not
subject to costs under subsections (8) and (9), and any kilowatt
hour credits shall carry over to the new program.
(8) Upon setting up an agreed to appointment time with the
customer, an electric utility shall perform or observe the
inspection of a potential eligible electric generator as necessary
to determine whether the system meets the requirements established
under subsection (6). An electric utility may charge a testing and
inspection fee, up to $50.00 for residential customers and up to
$100.00 for nonresidential customers for each visit. An electric
utility may test the system as part of the inspection at no
additional charge. An electric utility may charge for only 1 more
additional inspection visit, and only after a full inspection,
including all necessary testing, has been previously conducted and
additional corrective action was needed for the generator to meet
the requirements established under subsection (6). The costs of
meeting all specific requirements established under subsection (6)
are the responsibility of the customer. The fee under this
subsection is nonrefundable and shall be added to the customer's
utility bill. After 6 months, the commission may alter these fees
or establish additional inspection fee standards over the course of
the program.
(9) An electric utility may charge a 1-time interconnection
fee to install meters and grant parallel operation for generating
systems that meet the requirements of subsection (6). The fee for
this service will be based on actual utility costs for connection
at the customer's physical site and shall be limited to those fees
charged other customers of the electric utility for comparable
services. The fee shall not include any transmission costs,
distribution costs, or other costs and shall not exceed $200.00 in
total for residential customers and $700.00 in total for all other
customers. The costs shall be spread out over the course of 6
billing months, and the commission may adjust these fees for
inflation once every 5 years. After the initial interconnection,
all future interconnection, routine maintenance, or upgrades are
solely the financial responsibility of the utilities. After 6
months, the commission may alter these fees or establish additional
interconnection fee standards over the course of the program.
(10) An electric utility shall ensure its customers
participating in the net metering program have a meter or meters
capable of measuring the flow of energy in both directions. If such
a meter or meters are not already present, the electric utility
shall provide that meter to the customer and the utility shall only
charge the incremental cost greater than that for meters provided
by the electric utility to similarly situated nongenerating
customers to the customer.
(11) Electric utilities may install electric meters in a
manner that will allow the determination, for each billing period,
of the amount of energy produced by the eligible electric
generator, the energy consumed on the customer's site, the energy
supplied by the electric utility or alternative electric supplier,
and the amount of any excess energy the eligible electric generator
delivers to the utility distribution system during the same billing
period, and capable of metering energy on an hourly basis. An
electric utility or the generating customer may require such a
meter to be installed if the utility is reasonably able to install
such a meter in the customer's area. The installation of such
meters is not a requirement for participation in the program. An
electric utility shall only charge the customer the incremental
cost above that for meters provided by the electric utility to
similarly situated nongenerating customers.
(12) If the quantity of electricity generated by an eligible
electric generator during a billing period exceeds the quantity of
the customer's total usage during the billing period, the customer
shall be credited by their supplier of generation service for the
excess kilowatt hours generated during the billing period. The
kilowatt hour credit shall appear on the bill for the following
billing period and be determined by 1 of the following:
(a) For an eligible electric generator with electric meters
incapable of metering energy as described under subsection (11),
for energy delivered to the electric utility distribution system,
credit for the billing period shall be applied based on commission
rate formulas designed to be the average of the midwest independent
system operator's off-peak locational marginal pricing and the top
incremental cost retail pricing.
(b) For an eligible electric generator with electric meters
capable of metering energy use on an hourly basis, for energy
delivered to the electric utility distribution system, credit shall
be applied by commission defined rate formulas that are based
primarily on locational marginal pricing in the midwest independent
system operator, for each hour, for all kilowatt hours delivered
during that hour.
(c) Subject to subdivisions (a) and (b), net excess generation
kilowatt hours shall be accumulated on a rolling basis and applied
on a first-in, first-out basis. The electric utility shall reduce
any portion of a net excess generation balance that has not been
used as an offset at the end of the chosen calendar year by a
commission determined percentage reduction rate and then compensate
the customers minus any outstanding customer debts owed, at a
commission defined rate based on the average off-peak locational
marginal pricing in the midwest independent system operator over
the course of the year. The percentage reduction rate shall be at
least 10% to help pay for program costs, but shall not exceed 30%.
The customer shall pick which months shall serve as the beginning
and corresponding end of their calendar year, and can change this
selection once every 5 years without penalty.
(13) The commission shall establish a monthly fixed service
charge for customers participating in the net metering program
based on the customer's class of service. The service charge shall
be paid by net metering customers as a partial offset for
transmission and distribution costs the utilities incur as a result
of implementing the net metering program after taking the benefits
of the program as a whole for both the utilities and the ratepayers
of the state into consideration. Actual transmission and
distribution costs shall not be charged to the customers.
(14) For customers who purchase generation service from an
alternative electric supplier, the commission shall determine what
portion, if any, of the monthly fixed charges created under
subsection (13) would be kept by the alternative energy supplier
and not passed on to the electric utility.
(15) Energy generated by an eligible electric generator under
this program shall be counted as renewable energy produced by the
electric utilities or alternative electric suppliers, and any
renewable energy credit shall accrue to the electric utility or
alternative electric supplier.
(16) At the request of an applicant or customer enrolled in
the net metering program, the commission shall provide an
independent third-party ombudsman to resolve all substantive issues
and complaints between those parties and the electrical utilities
or alternative electric suppliers.
(17) A customer participating in the net metering program may
cancel at any time for any reason without financial penalty, but
may have to forfeit any unused kilowatt hour credits except as
provided for under subsection (7) or standards developed by the
commission. In cases of transfers of ownership, the new owners may
apply to the program and shall be allowed to participate in the
program for the remaining period of the original enrollment period
without paying for any costs under subsections (8) and (9).
(18) The electric utility and alternative electric supplier
shall be held harmless for any and all types of damages or
liability associated with the installation or operation of the
eligible electric generator. Alternative electric suppliers shall
be held harmless for any and all types of damages or liability
associated with the interconnection of the eligible electric
generator.
(19) Nothing in this section precludes additional net metering
programs from being created during the time period this net
metering program is in effect or has customers enrolled under it.