A bill to amend the Federal Power Act to promote energy independence and diversity 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 ``Home Energy Generation Act''.

SEC. 2. FINDINGS.

    The Congress finds that it is in the public interest to:
            (1) Enable small businesses, residences, schools, churches, 
        farms with small electric generation units, and other retail 
        electric customers who generate electric energy to return or 
        sell surplus electric energy on the open market.
            (2) Promote diversification of energy resources used in the 
        United States to reduce over reliance on any one resource, and 
        to mitigate our nation's dependence on imported fuels.
            (3) Encourage private investment and stimulate economic 
        growth in renewable and alternate energy resources.
            (4) Remove regulatory barriers for net metering.
            (5) Provide uniform, national technical standards for the 
        interconnection of distributed electricity generating 
        facilities.

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. NET METERING.

    ``(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 section system at the 
        same point of interconnection during an applicable 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 paragraph 
        (5) and each of the following requirements:
                    ``(A) The unit is a fuel cell or produces 
                electricity using solar, wind, biomass, or geothermal 
                as its energy source.
                    ``(B) The unit on the site of a residential 
                electric consumer has a generating capacity of not more 
                than 100 kilowatts.
                    ``(C) The unit on the site of a commercial electric 
                consumer has a generating capacity of not more than 250 
                kilowatts.
                    ``(D) The unit is located on premises that are 
                owned, operated, leased, or otherwise controlled by the 
                customer-generator.
                    ``(E) The unit operates in parallel with the retail 
                electric supplier.
            ``(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 section of electric energy to the ultimate 
        consumer thereof, whether or not the owner or operator of such 
        system is also a retail electric supplier.
            ``(6) The term `Commission' means the Federal Energy 
        Regulatory Commission.
    ``(b) Adoption.--Not later than one year after the enactment of 
this section, each retail electric supplier shall comply with each of 
the following requirements and notify all of its retail customers of 
such requirements not less frequently than quarterly:
            ``(1) The supplier shall offer to arrange (either directly 
        or through a local distribution company or other third party) 
        to make available, on a first-come-first-served basis, to each 
        of its retail customers that has installed an energy generation 
        unit that is intended for net metering, and that notifies the 
        supplier of its generating capacity, an electric energy meter 
        that is capable of net metering if the customer-generator's 
        existing electrical meter cannot perform that function.
            ``(2) Rates and charges and contract terms and conditions 
        for the sale of electric energy to customer-generators shall be 
        the same as the rates and charges and contract terms and 
        conditions that would be applicable if the customer-generator 
        did not own or operate a qualified generation unit and use a 
        net metering system.
Any retail electric supplier or local distribution company may, at its 
own expense, install one or more additional electric energy meters to 
monitor the flow of electricity in either direction or to reflect the 
time of generation or both.
    ``(c) Net Energy Measurement and Billing.--Each retail electric 
supplier subject to subsection (b) shall calculate the net energy 
measurement for a customer using a net metering system in the following 
manner:
            ``(1) The retail electric supplier shall measure the net 
        electricity produced or consumed during the billing period 
        using the metering referred to in paragraph (1) or (2) of 
        subsection (b).
            ``(2) If the quantity of electricity supplied by a retail 
        electric suppler during a billing period exceeds the quantity 
        of electricity generated by an on-site generating facility and 
        fed back to the electric distribution system during the billing 
        period, the supplier may bill the owner or operator for the net 
        quantity of electricity supplied by the retail electric 
        supplier, in accordance with normal metering practices.
            ``(3) If the quantity of electricity generated by an on-
        site generating facility during a billing period exceeds the 
        quantity of electricity supplied by the retail electric 
        supplier during the billing period--
                    ``(A) the retail electric supplier may only bill 
                the owner or operator of the on-site generating 
                facility for charges that would be applicable if the 
                customer-generator did not own or operate a qualified 
                generation unit and use a net metering system.
                    ``(B) the owner or operator of the on-site 
                generating facility shall be credited for the excess 
                kilowatt-hours generated during the billing period, 
                with the kilowatt-hour credit appearing on the bill 
                during the following billing period.
        If the customer-generator is using a meter that reflects the 
        time of generation (a `real time meter' or `smart meter'), the 
        credit shall be based on the retail rates for sale by the 
        retail electric supplier at the time of such generation.
After a customer-generator has participated in a net-metering 
arrangement with a retail electric supplier for at least one-
consecutive year, the customer-generator may request that any remaining 
unused kilowatt-hour credits accumulated by a customer-generator during 
the previous year be sold by the customer-generator to any electric 
supplier that agrees to purchase such credit. In the absence of any 
such purchase, the customer-generator may request that the retail 
electric supplier that supplied electric energy to such customer-
generator during the previous year purchase the credit at the avoided 
cost of electricity. If no action is requested by the customer-
generator, any credit earned by the customer-generator will continue to 
accumulate.
    ``(d) Percent Limitations.--
            ``(1) Five percent limitation.--A local distribution 
        company retail electric supplier shall not be required to 
        provide local distribution service with respect to additional 
        customer-generators after the date during any calendar year on 
        which the total generating capacity of all customer-generators 
        with qualified generation facilities and net metering systems 
        served by that local distribution company is equal to or in 
        excess of 5 percent of the capacity necessary to meet the 
        company's average forecasted aggregate customer peak demand for 
        that calendar year.
            ``(2) Two and a half percent limitation.--A local 
        distribution company retail electric supplier shall not be 
        required to provide local distribution service with respect to 
        additional customer-generators using a single type of qualified 
        energy generation system after the date during any calendar 
        year on which the total generating capacity of all customer-
        generators with qualified generation facilities of that type 
        and net metering systems served by that local distribution 
        company is equal to or in excess of 2.5 percent of the capacity 
        necessary to meet the company's average forecasted aggregate 
        customer peak demand for that calendar year.
            ``(3) Records and notice.--Each retail electric supplier 
        shall maintain, and make available to the public, records of 
        the total generating capacity of customer-generators of such 
        system that are using net metering, the type of generating 
        systems and energy source used by the electric generating 
        systems used by such customer-generators. Each such retail 
        electric supplier shall notify the Commission when the total 
        generating capacity of such customer-generators is equal to or 
        in excess of 2 percent of the capacity necessary to meet the 
        supplier's aggregate customer peak demand during the previous 
        calendar year and when the total generating capacity of such 
        customer-generators using a single type of qualified generation 
        is equal to or in excess of 1 percent of such capacity.
    ``(e) Safety and Performance Standards.--
            ``(1) 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 
        Electronics Engineers, Underwriters Laboratories, or the 
        American National Standards Institute.
            ``(2) The Commission, after consultation with State 
        regulatory authorities and nonregulated local distribution 
        systems and after notice and opportunity for comment, may adopt 
        by regulation additional control and testing requirements for 
        customer-generators that the Commission determines are 
        necessary to protect public safety and system reliability.
            ``(3) The Commission shall, after consultation with State 
        regulatory authorities and nonregulated local distribution 
        systems and after notice and opportunity for comment, prohibit 
        by regulation the imposition of additional charges by electric 
        suppliers and local distribution systems for equipment or 
        services for safety or performance that are additional to those 
        necessary to meet the standards referred to in subparagraphs 
        (A) and (B).
    ``(f) State Authority.--Nothing in this section shall preclude a 
State from establishing or imposing additional incentives or 
requirements to encourage qualified generation and net metering 
additional to that required under this section.
    ``(g) Interconnection Standards.--
            ``(1) Within 6 months after the enactment of this section 
        the Commission shall publish model standards for the physical 
        connection between local distribution systems and qualified 
        generation units and electric generation units that would be 
        qualified generation units but for the fact that the unit has a 
        generating capacity of more than 100 kilowatts (but not more 
        than 250 kilowatts). Such model standards shall be designed to 
        encourage the use of qualified generation units and to insure 
        the safety and reliability of such units and the local 
        distribution systems interconnected with such units. Within 1 
        year after the enactment of this section, each State shall 
        adopt such model standards, with or without modification, and 
        submit such standards to the Commission for approval. The 
        Commission shall approve a modification of the model standards 
        only if the Commission determines that such modification is 
        consistent with the purpose of such standards and is required 
        by reason of local conditions. If standards have not been 
        approved under this paragraph by the Commission for any State 
        within 1 year after the enactment of this section, the 
        Commission shall, by rule or order, enforce the Commission's 
        model standards in such State until such time as State 
        standards are approved by the Commission.
            ``(2) The standards under this section shall establish such 
        measures for the safety and reliability of the affected 
        equipment and local distribution systems as may be appropriate. 
        Such standards shall be consistent with all applicable safety 
        and performance standards established by the national 
        electrical code, the Institute of Electrical and Electronics 
        Engineers, Underwriters Laboratories, or the American National 
        Standards Institute and with such additional safety and 
        reliability standards as the Commission shall, by rule, 
        prescribe. Such standards shall ensure that generation units 
        will automatically isolate themselves from the electrical 
        system in the event of an electrical power outage. Such 
        standards shall permit the owner or operator of the local 
        distribution system to interrupt or reduce deliveries of 
        available energy from the generation unit to the system when 
        necessary in order to construct, install, maintain, repair, 
        replace, remove, investigate, or inspect any of its equipment 
        or part of its system; or if it determines that curtailment, 
        interruption, or reduction is necessary because of emergencies, 
        forced outages, force majeure, or compliance with prudent 
        electrical practices.
            ``(3) The model standards under this subsection prohibit 
        the imposition of additional charges by local distribution 
        systems for equipment or services for interconnection that are 
        additional to those necessary to meet such standards.
    ``(h) Interconnection.--At the election of the owner or operator of 
the generation unit concerned, connections meeting the standards 
applicable under subsection (g) may be made--
            ``(1) by such owner or operator at such owner's or 
        operator's expense, or
            ``(2) by the owner or operator of the local distribution 
        system upon the request of the owner or operator of the 
        generating unit and pursuant to an offer by the owner or 
        operator of the generating unit to reimburse the local 
        distribution system in an amount equal to the minimum cost of 
        such connection, consistent with the procurement procedures of 
        the State in which the unit is located, except that the work on 
        all such connections shall be performed by qualified electrical 
        personnel certified by a responsible body or licensed by a 
        State or local government authority.
    ``(i) Consumer Friendly Contracts.--The Commission shall promulgate 
regulations insuring that simplified contracts will be used for the 
interconnection of electric energy by electric energy transmission or 
distribution systems and generating facilities that have a power 
production capacity not greater than 250 kilowatts.''.

Summary: Home Energy Generation Act - Mandates that retail electric suppliers offer to make an electric energy meter capable of net metering available to retail customers that have installed energy generation units intended for net metering if the customer-generator's existing electrical meter cannot perform that function. Prescribes guidelines for: (1) net energy measurement and billing, (2) safety and performance standards. (3) limitations upon the maximum local distribution services to additional customer-generators. And (4) interconnection standards. Directs the Federal Energy Regulatory Commission to promulgate regulations ensuring that simplified contracts will be used for the interconnection of electric energy by electric energy transmission or distribution systems and generating facilities that have a power production capacity not greater than 250 kilowatts.