To amend the Federal Power Act to promote energy security, environmental protection, electricity price stability, and electric reliability by providing for the use of net metering by certain small electric energy generation systems, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Renewable and Distributed Energy Net 
Metering Act''.

SEC. 2. FINDINGS.

    The Congress finds that it is in the public interest to:
            (1) Enable small businesses, residences, schools, churches, 
        farms, and other retail electric customers who generate 
        electric energy to reduce their electric bills.
            (2) Encourage private investment in renewable and 
        unconventional energy resources.
            (3) Enhance the diversity of the Nation's electric supply 
        by increasing reliance on a wide range of renewable and other 
        environmentally sound distributed generation technologies.
            (4) Reduce price volatility and enhance reliability by 
        reducing peak load on centrally generated power supplies.
            (5) Protect the environment by promoting clean energy 
        sources.

SEC. 3. NET METERING.

    Part II of the Federal Power Act is amended by adding the following 
new section at the end thereof:

``SEC. 215. STATE NET METERING PROGRAMS.

    ``(a) Definitions.--As used in this section--
            ``(1) The term `customer generator' means the owner or 
        operator of an electric generation unit qualified for net 
        metering under this section.
            ``(2) The term `net metering' means measuring the 
        difference between the electricity supplied to a customer-
        generator and the electricity generated by a customer-generator 
        that is delivered to a local distribution system at the same 
        point of interconnection during an applicable billing period 
        and providing a credit to the customer-generator for the net 
        amount, if any, by which the electricity generated by the 
        customer-generator exceeds the electricity supplied to the 
        customer generator during that billing period.
            ``(3) The terms `electric generation unit qualified for net 
        metering' and `qualified generation unit' mean an electric 
        energy generation unit that meets the requirements of 
        subsection (b)(1) of this section.
            ``(4) The term `retail electric supplier' means any person 
        that sells electric energy to the ultimate consumer thereof.
            ``(5) The term `local distribution system' means any system 
        for the distribution of electric energy to the ultimate 
        consumer thereof, whether or not the owner or operator of such 
        system is also a retail electric supplier.
    ``(b) Net Metering Requirement.--Each State, electric utility not 
regulated by a State, and Federal power marketing agency shall consider 
establishing a net metering program, or modifying an existing program, 
to meet the minimum Federal standards set forth in subsection (c) of 
this section. If the Commission determines that a State, electric 
utility not regulated by a State, or Federal power marketing agency has 
not established a net metering program that meets such minimum 
standards within 2 years after the enactment of this Act, the 
Commission shall establish a program (in such State or in the service 
territory of such electric utility or Federal power marketing agency) 
consistent with such standards.
    ``(c) Minimum Federal Standards for State and Other Net Metering 
Programs.--
            ``(1) Qualified generation unit.--A generation unit that 
        meets the following requirements qualifies for net metering 
        under this section:
                    ``(A) The unit is a fuel cell or uses as its energy 
                source either solar, wind, or biomass.
                    ``(B) The unit has a generating capacity of up to 
                200 kilowatts.
                    ``(C) The unit is located on premises that are 
                owned, operated, leased, or otherwise controlled by the 
                customer-generator.
                    ``(D) The unit operates in parallel with the retail 
                electric supplier.
                    ``(E) The unit is used primarily to offset part or 
                all of the customer-generator's requirements for 
                electric energy.
                    ``(F) The unit is not intended to offset or provide 
                credits for electric consumption at another location of 
                the customer or for any other customer.
            ``(2) Metering and costs.--The retail electric supplier 
        shall make available upon request net metering service to any 
        customer-generator that the supplier serves if the retail 
        customer-generator pays any incremental costs, including those 
        incurred by suppliers and local distribution systems for 
        equipment or services for safety or performance that are 
        necessary to meet the standards referred to in this section. If 
        a State, nonregulated utility, or Federal power marketing 
        agency determines that the use of a real-time net meter or 
        interval net meter will advance the purposes of this section 
        for such units, a customer-generator in that State (or, in the 
        case of a nonregulated utility or Federal power marketing 
        agency, the relevant service territory) may be required to use 
        the appropriate meter and pay the reasonable incremental costs 
        for such meter and its installation.
            ``(3) Rates.--Rates and charges for retail electric service 
        to customer-generators, including the amount of a net metering 
        credit, shall be established by the appropriate State 
        regulatory authority and nonpublic utilities. To the extent 
        that a State regulatory authority, nonregulated utility, or 
        Federal power marketing agency does not establish such rates 
        and charges, such rates and charges shall be established by the 
        Commission. The rates and charges established pursuant to this 
        section shall be just and reasonable.
            ``(4) Safety and performance standards.--A qualified 
        generation unit and net metering system used by a customer-
        generator shall meet all applicable safety and performance and 
        reliability standards established by the national electrical 
        code, the Institute of Electrical and Electronic Engineers, 
        Underwriters Laboratories, or the American National Standards 
        Institute, except that a State may adopt additional or 
        different standards provided that such standard is consistent 
        with the purposes of this section and does not impose an unjust 
        or unreasonable burden on a customer-generator that seeks to 
        participate in the State's net metering program.
            ``(5) State authority to establish additional 
        requirements.--Consistent with the limits of its jurisdiction 
        under this part, nothing in this section shall preclude a State 
        from establishing or imposing--
                    ``(A) requirements or incentives to encourage 
                qualified generation and net metering that are in 
                addition to or in excess of the minimum standards 
                established in this section (including but not limited 
                to additional eligible fuels, higher capacity limits, 
                and credit amounts that vary by fuel or capacity);
                    ``(B) limits on the State-wide aggregate amount of 
                generating capacity of customer-generators with 
                qualified generation facilities and net metering 
                systems, provided that such limits are not unduly 
                discriminatory and are consistent with the purposes of 
                this section; or
                    ``(C) administrative and enforcement procedures and 
                requirements such State deems necessary or appropriate 
                to implement a net metering program under this section, 
                if such procedures and requirements are consistent with 
                the purposes of this section and does not impose an 
                unjust or unreasonable burden on a customer-generator 
                that seeks to participate in the State's net metering 
                program.
            ``(6) Not a wholesale sale.--A net metering credit under a 
        net metering program established under this section shall not 
        be considered a sale for resale for the purposes of Federal or 
        State law.''.

Summary: Renewable and Distributed Energy Net Metering Act - Mandates that each State, electric utility not regulated by a State, and Federal power marketing agency consider establishing a net metering program, or modifying an existing program, to meet certain minimum Federal standards. Instructs the Federal Energy Regulatory Commission to establish such standards for each such entity that has not established a net metering program conforming to such standards within two years after enactment of this Act. Sets forth minimum Federal standards for State and other net metering programs including: (1) metering and costs, (2) rates. And (3) safety and performance criteria. Authorizes States to establish additional requirements. Provides that a net metering credit under the net metering program shall not be considered a wholesale transaction for purposes of Federal or State law.