To amend the Federal Power Act to promote energy independence and self-sufficiency 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) Encourage private investment in renewable and alternate 
        energy resources.
            (3) Stimulate the economic growth.
            (4) Enhance the continued diversification section of energy 
        resources used in the United States.
            (5) Remove regulatory barriers for net metering.

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 uses as its energy 
                source either solar, wind, or biomass.
                    ``(B) The unit has a generating capacity of not 
                more than 100 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 intended primarily to offset part 
                or all of the customer-generator's requirements for 
                electric energy.
            ``(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.
    ``(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. Whenever a customer-generator with a net 
metering system uses any energy generation system entitled to credits 
under a Federal minimum renewable energy generation requirement, the 
total amount of energy generated by that system shall be treated as 
generated by the retail electric supplier for purposes of such 
requirement.
    ``(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 electricity supplied by the retail electric 
        supplier exceeds the electricity generated by the customer-
        generator during the billing period, the customer-generator 
        shall be billed for the net electricity supplied by the retail 
        electric supplier in accordance with normal metering practices.
            ``(3) If electricity generated by the customer-generator 
        exceeds the electricity supplied by the retail electric 
        supplier, the customer-generator--
                    ``(A) shall be billed for the appropriate customer 
                charges for that billing period;
                    ``(B) shall be credited for the excess electric 
                energy generated during the billing period, with this 
                credit appearing on the bill for the following billing 
                period (except for a billing period that ends in the 
                next calendar year); and
                    ``(C) shall not be charged for transmission losses.
        If the customer-generator is using a meter that reflects the 
        time of generation (a `real time meter'), the credit shall be 
        based on the retail rates for sale by the retail electric 
        supplier at the time of such generation. At the beginning of 
        each calendar year, any remaining unused kilowatt-hour credit 
        accumulated by a customer-generator during the previous year 
        may be sold by the customer-generator to any electric supplier 
        that agrees to purchase such credit. In the absence of any such 
        purchase, the credit shall be assigned (at no cost) to the 
        retail electric supplier that supplied electric energy to such 
        customer-generator at the end of the previous year.
    ``(d) Percent Limitations.--
            ``(1) Two 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 
        2 percent of the capacity necessary to meet the company's 
        average forecasted aggregate customer peak demand for that 
        calendar year.
            ``(2) One 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 1 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 one year 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 2 years 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 2 years 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 resposible 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 - Amends the Federal Power Act to mandate that: (1) each retail electric supplier make available an electric energy meter capable of net metering to certain retail customers that have installed an energy generation unit intended for net metering. And (2) rates, charges, and contract terms for electric energy sales to customer-generators be the same as those that would be applicable if the customer-generator did not own or operate a qualified generation unit and use a net metering system. Prescribes the manner in which such retail electric suppliers shall calculate the net energy measurement and billing for a customer using a net metering system. Subjects qualified generation units and net metering systems to specified safety, performance, and reliability standards. Authorizes the Federal Energy Regulatory Commission (FERC) to: (1) adopt additional control and testing requirements for customer-generators necessary to protect public safety and system reliability. And (2) prohibit additional charges by electric suppliers and local distribution systems for equipment or services for safety or performance additional to those necessary to meet such standards. Sets a deadline for FERC to promulgate: (1) model standards for the physical connection between local distribution systems and qualified generation units and other specified electric generation units. And (2) regulations ensuring simplified contracts will be used for the interconnection of electric energy by electric energy transmission or distribution systems and generating facilities with a power production capacity of 250 kilowatts or less.