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 *).