I 

108TH CONGRESS 

1ST SESSION H. R. 1423

To amend the Internal Revenue Code of 1986 to expand the energy credit 

to include investment in property which produces energy from certain 

renewable sources and expenditures for cool roofing, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 25, 2003

Mr. ENGEL (for himself and Mr. TERRY) introduced the following bill; which 

was referred to the Committee on Ways and Means, and in addition to 

the Committee on Energy and Commerce, for a period to be subsequently 

determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL

To amend the Internal Revenue Code of 1986 to expand 

the energy credit to include investment in property which 

produces energy from certain renewable sources and expenditures for cool roofing, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Preserving Our 

5 World’s Energy and Resources Act of 2003’’. 
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1 SEC. 2. ENERGY CREDIT FOR INVESTMENTS IN CERTAIN 

2 RENEWABLE RESOURCE PROPERTY AND 

3 COOL ROOF PROPERTY. 

4 (a) ENERGY PROPERTY USED IN BUSINESS.—

5 (1) IN GENERAL.—Subparagraph (A) of section 

6 48(a)(3) of the Internal Revenue Code of 1986 (de7 fining energy property) is amended by striking ‘‘or’’ 

8 at the end of clause (i) and by inserting after clause 

9 (ii) the following new clauses: 

10 ‘‘(iii) equipment which uses wind to 

11 generate electricity, or 

12 ‘‘(iv) cool roof property,’’. 

13 (2) ENERGY PERCENTAGE.—Paragraph (2) of 

14 section 48(a) of such Code (relating to energy per15 centage) is amended—

16 (A) in subparagraph (A) by striking ‘‘The’’ 

17 and inserting ‘‘Except as provided in subpara18 graph (B), the’’, and 

19 (B) by redesignating subparagraph (B) as 

20 subparagraph (C) and by inserting after sub21 paragraph (A) the following new subparagraph: 

22 ‘‘(B) EXCEPTION.—The energy percentage 

23 for the following properties is— 

24 ‘‘(i) 25 percent for equipment which 

25 uses solar energy to generate electricity, 
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1 ‘‘(ii) 25 percent for equipment which 

2 uses wind to generate electricity, 

3 ‘‘(iii) 25 percent for equipment which 

4 uses energy derived from geothermal de5 posits and which is described in paragraph 

6 (3)(A)(ii), and 

7 ‘‘(iv) 30 percent for cool roof prop8 erty.’’. 

9 (3) COOL ROOF PROPERTY DEFINED.—Sub10 section (a) of section 48 of such Code (relating to 

11 energy credit) is amended by redesignating para12 graphs (4) and (5) as paragraphs (5) and (6), re13 spectively, and by inserting after paragraph (3) the 

14 following new paragraph: 

15 ‘‘(4) COOL ROOF PROPERTY.—For purposes of 

16 this subsection, the term ‘cool roof property’ means 

17 property which is used as a roof or roof coating and 

18 which has a solar reflectance index (as determined 

19 by the Lawrence Berkeley National Laboratory) of 

20 65 percent or greater.’’. 

21 (4) CREDIT ALLOWABLE AGAINST REGULAR

22 AND MINIMUM TAX.—

23 (A) IN GENERAL.—Section 38(c) of such 

24 Code (relating to limitation based on amount of 

25 tax) is amended by redesignating paragraph (3) 
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1 as paragraph (4) and inserting after paragraph 

2 (2) the following: 

3 ‘‘(3) SPECIAL RULES FOR ENERGY CREDIT RE4 LATING TO EQUIPMENT WHICH USES WIND TO GEN5 ERATE ELECTRICITY AND COOL ROOF PROPERTY.—

6 ‘‘(A) IN GENERAL.—In the case of the por7 tion of the energy credit relating to equipment 

8 which uses wind to generate electricity and cool 

9 roof property—

10 ‘‘(i) this section and section 39 shall 

11 be applied separately with respect to such 

12 portion of the credit, and 

13 ‘‘(ii) in applying paragraph (1) to 

14 such portion of the credit—

15 ‘‘(I) subparagraphs (A) and (B) 

16 thereof shall not apply, and 

17 ‘‘(II) the limitation under para18 graph (1) (as modified by subclause 

19 (I)) shall be reduced by the credit al20 lowed under subsection (a) for the 

21 taxable year (other than such por22 tion). 

23 ‘‘(B) PORTION OF ENERGY CREDIT RELAT24 ING TO EQUIPMENT WHICH USES WIND TO GEN25 ERATE ELECTRICITY AND COOL ROOF PROP-
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1 ERTY.—For purposes of this subsection, the 

2 portion of energy credit relating to equipment 

3 which uses wind to generate electricity and cool 

4 roof property means the credit allowable under 

5 subsection (a) by reason of clauses (iii) and (iv) 

6 of section 48(a)(3)(A).’’. 

7 (B) CONFORMING AMENDMENT.—Sub8 clause (II) of section 38(c)(2)(A)(ii) of such 

9 Code is amended by inserting ‘‘or the portion of 

10 energy credit relating to equipment which uses 

11 wind to generate electricity and cool roof prop12 erty’’ after ‘‘employment credit’’. 

13 (b) RENEWABLE RESOURCE AND COOL ROOF PROP14 ERTY.—

15 (1) IN GENERAL.—Subpart A of part IV of sub16 chapter A of chapter 1 of such Code (relating to 

17 nonrefundable personal credits) is amended by in18 serting after section 25B the following new section: 

19 ‘‘SEC. 25C. CERTAIN RENEWABLE RESOURCE AND COOL 

20 ROOF PROPERTY. 

21 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in22 dividual, there shall be allowed as a credit against the tax 

23 imposed by this chapter for the taxable year an amount 

24 equal to the amount paid or incurred by the taxpayer for
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1 qualified renewable resource property and qualified cool 

2 roof property installed during such taxable year.

3 ‘‘(b) LIMITATION.—

4 ‘‘(1) LIMITATION BASED ON AMOUNT OF

5 TAX.—The credit allowed under subsection (a) for 

6 any taxable year shall not exceed the excess of—

7 ‘‘(A) the sum of the regular tax liability 

8 (as defined in section 26(b)) plus the tax im9 posed by section 55, over 

10 ‘‘(B) the sum of the credits allowable 

11 under this subpart (other than this section) and 

12 section 27 for the taxable year. 

13 ‘‘(2) CARRYFORWARD OF UNUSED CREDIT.—If 

14 the credit allowable under subsection (a) exceeds the 

15 limitation imposed by paragraph (1) for such taxable 

16 year, such excess shall be carried to the succeeding 

17 taxable year and added to the credit allowable under 

18 subsection (a) for such taxable year. 

19 ‘‘(c) DEFINITIONS.—For purposes of this section— 

20 ‘‘(1) QUALIFIED RENEWABLE RESOURCE PROP21 ERTY.—The term ‘qualified renewable resource prop22 erty’ means—

23 ‘‘(A) equipment which uses solar energy to 

24 generate electricity, 
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1 ‘‘(B) equipment which uses wind to gen2 erate electricity, and 

3 ‘‘(C) equipment which uses energy derived 

4 from geothermal deposits to generate electricity 

5 and which is described in section 

6 48(a)(3)(A)(ii). 

7 ‘‘(2) COOL ROOF PROPERTY.—The term ‘cool 

8 roof property’ means property which is used as a 

9 roof or roof coating and which has a solar reflec10 tance index (as determined by the Lawrence Berke11 ley National Laboratory) of 65 percent or greater. 

12 ‘‘(3) LABOR COSTS.—Expenditures for labor 

13 costs properly allocable to the onsite preparation, as14 sembly, or original installation of the property de15 scribed in paragraph (1) or (2) and for wiring to 

16 interconnect such property to the dwelling unit shall 

17 be taken into account for purposes of this section. 

18 ‘‘(4) ENERGY STORAGE MEDIUM.—Expendi19 tures which are properly allocable to a swimming 

20 pool, hot tub, or any other energy storage medium 

21 which has a function other than the function of such 

22 storage shall not be taken into account for purposes 

23 of this section. 

24 ‘‘(d) SPECIAL RULES.—For purposes of this sec25 tion—
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1 ‘‘(1) PROPERTY MUST BE INSTALLED ON PRIN2 CIPAL RESIDENCE.—Property shall not be treated as 

3 described in subsection (c) unless—

4 ‘‘(A) such property is installed in or on a 

5 dwelling—

6 ‘‘(i) located in the United States, and 

7 ‘‘(ii) owned and used by the taxpayer 

8 as the taxpayer’s principal residence (with9 in the meaning of section 121), 

10 ‘‘(B) the original use of such property 

11 commences with the taxpayer, and 

12 ‘‘(C) such property reasonably can be ex13 pected to remain in use for at least 5 years. 

14 ‘‘(2) DOLLAR AMOUNTS IN CASE OF JOINT OC15 CUPANCY.—In the case of any dwelling unit which is 

16 jointly occupied and used during any calendar year 

17 as a residence by 2 or more individuals the following 

18 shall apply: 

19 ‘‘(A) The amount of the credit allowable 

20 under subsection (a) by reason of expenditures 

21 for qualified renewable resource property and 

22 qualified cool roof property made during such 

23 calendar year by any of such individuals with 

24 respect to such dwelling unit shall be deter25 mined by treating all of such individuals as 1
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1 taxpayer whose taxable year is such calendar 

2 year. 

3 ‘‘(B) There shall be allowable with respect 

4 to such expenditures to each of such individ5 uals, a credit under subsection (a) for the tax6 able year in which such calendar year ends in 

7 an amount which bears the same ratio to the 

8 amount determined under subparagraph (A) as 

9 the amount of such expenditures made by such 

10 individual during such calendar year bears to 

11 the aggregate of such expenditures made by all 

12 of such individuals during such calendar year. 

13 ‘‘(3) TENANT-STOCKHOLDER IN COOPERATIVE

14 HOUSING CORPORATION.—In the case of an indi15 vidual who is a tenant-stockholder (as defined in sec16 tion 216) in a cooperative housing corporation (as 

17 defined in such section), such individual shall be 

18 treated as having paid his tenant-stockholder’s pro19 portionate share (as defined in section 216(b)(3)) of 

20 the cost of qualified renewable resource property and 

21 qualified cool roof property made by such corpora22 tion. 

23 ‘‘(4) CONDOMINIUMS.—

24 ‘‘(A) IN GENERAL.—In the case of an indi25 vidual who is a member of a condominium man-
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1 agement association with respect to a condo2 minium which he owns, such individual shall be 

3 treated as having paid his proportionate share 

4 of the cost of qualified renewable resource prop5 erty and qualified cool roof property made by 

6 such association. 

7 ‘‘(B) CONDOMINIUM MANAGEMENT ASSO8 CIATION.—For purposes of this paragraph, the 

9 term ‘condominium management association’ 

10 means an organization which meets the require11 ments of paragraph (1) of section 528(c) (other 

12 than subparagraph (E) thereof) with respect to 

13 a condominium project substantially all of the 

14 units of which are used as residences. 

15 ‘‘(5) MANUFACTURED HOMES INCLUDED.—For 

16 purposes of this section, the term ‘dwelling’ includes 

17 a manufactured home which conforms to Federal 

18 Manufactured Home Construction and Safety Stand19 ards (24 C.F.R. 3280). 

20 ‘‘(6) JOINT OWNERSHIP OF ITEMS OF SOLAR OR

21 WIND ENERGY PROPERTY.—

22 ‘‘(A) IN GENERAL.—Any expenditure oth23 erwise qualifying as an expenditure described in 

24 paragraph (1) or (2) of subsection (c) shall not 

25 be treated as failing to so qualify merely be-
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1 cause such expenditure was made with respect 

2 to 2 or more dwelling units. 

3 ‘‘(B) LIMITS APPLIED SEPARATELY.—In 

4 the case of any expenditure described in sub5 paragraph (A), the amount of the credit allow6 able under subsection (a) shall (subject to para7 graph (1)) be computed separately with respect 

8 to the amount of the expenditure made for each 

9 dwelling unit. 

10 ‘‘(7) ALLOCATION IN CERTAIN CASES.—If less 

11 than 80 percent of the use of an item is for nonbusi12 ness residential purposes, only that portion of the 

13 expenditures for such item which is properly allo14 cable to use for nonbusiness residential purposes 

15 shall be taken into account. For purposes of this 

16 paragraph, use for a swimming pool shall be treated 

17 as use which is not for residential purposes. 

18 ‘‘(8) WHEN EXPENDITURE MADE; AMOUNT OF

19 EXPENDITURE.—

20 ‘‘(A) IN GENERAL.—Except as provided in 

21 subparagraph (B), an expenditure with respect 

22 to an item shall be treated as made when the 

23 original installation of the item is completed. 

24 ‘‘(B) EXPENDITURES PART OF BUILDING

25 CONSTRUCTION.—In the case of an expenditure
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1 in connection with the construction or recon2 struction of a structure, such expenditure shall 

3 be treated as made when the original use of the 

4 constructed or reconstructed structure by the 

5 taxpayer begins. 

6 ‘‘(C) AMOUNT.—The amount of any ex7 penditure shall be the cost thereof. 

8 ‘‘(9) REDUCTION OF CREDIT FOR GRANTS, TAX9 EXEMPT BONDS, AND SUBSIDIZED ENERGY FINANC10 ING.—The rules of section 29(b)(3) shall apply for 

11 purposes of this section. 

12 ‘‘(e) BASIS ADJUSTMENT.—For purposes of this sub13 title, if a credit is allowed under this section for any ex14 penditure with respect to any property, the increase in the 

15 basis of such property which would (but for this sub16 section) result from such expenditure shall be reduced by 

17 the amount of the credit so allowed.’’. 

18 (c) CONFORMING AMENDMENTS.—

19 (1) Subsection (c) of section 23 of such Code 

20 is amended by striking ‘‘sections 24’’ and inserting 

21 ‘‘sections 24, 25C,’’. 

22 (2) Subparagraph (C) of section 25(e)(1) of 

23 such Code is amended by inserting ‘‘25C’’ after 

24 ‘‘25B,’’. 
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1 (3) Paragraph (1) of section 26(a) of such Code 

2 is amended by striking ‘‘and 25B’’ and inserting 

3 ‘‘25B, and 25C’’. 

4 (4) Section 904(h) of such Code is amended by 

5 striking ‘‘and 25B’’ and inserting ‘‘25B, and 25C’’. 

6 (5) Subsection (d) of section 1400C of such 

7 Code is amended by striking ‘‘and 25B’’ and insert8 ing ‘‘25B, and 25C’’. 

9 (6) Subsection (a) of section 1016 of such Code 

10 is amended by striking ‘‘and’’ at the end of para11 graph (27), by striking the period at the end of 

12 paragraph (28) and inserting ‘‘; and’’, and by add13 ing at the end the following: 

14 ‘‘(29) to the extent provided in section 25C(e), 

15 in the case of amounts with respect to which a credit 

16 has been allowed under section 25C.’’. 

17 (7) The table of sections for subpart A of part 

18 IV of subchapter A of chapter 1 of such Code is 

19 amended by inserting after the item relating to sec20 tion 25B the following new item:

‘‘Sec. 25C. Certain renewable resource and cool roof property.’’.

21 (d) EFFECTIVE DATE.—The amendments made by 

22 this section shall apply to taxable years ending on or after 

23 the date of the enactment of this Act.
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1 SEC. 3. NET METERING. 

2 Part II of the Federal Power Act is amended by add3 ing the following new section at the end thereof: 

4 ‘‘SEC. 215. NET METERING. 

5 ‘‘(a) DEFINITIONS.—As used in this section: 

6 ‘‘(1) The term ‘customer-generator’ means the 

7 owner or operator of an electric generation unit 

8 qualified for net metering under this section. 

9 ‘‘(2) The term ‘net metering’ means measuring 

10 the difference between the electricity supplied to a 

11 customer-generator and the electricity generated by 

12 a customer-generator that is delivered to a local dis13 tribution section system at the same point of inter14 connection during an applicable billing period. 

15 ‘‘(3) The terms ‘electric generation unit quali16 fied for net metering’ and ‘qualified generation unit’ 

17 mean an electric energy generation unit that meets 

18 the requirements of paragraph (5) and each of the 

19 following requirements: 

20 ‘‘(A) The unit is a fuel cell or uses as its 

21 energy source either solar, wind, or biomass. 

22 ‘‘(B) The unit has a generating capacity of 

23 not more than 100 kilowatts. 

24 ‘‘(C) The unit is located on premises that 

25 are owned, operated, leased, or otherwise con26 trolled by the customer-generator. 
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1 ‘‘(D) The unit operates in parallel with the 

2 retail electric supplier. 

3 ‘‘(E) The unit is intended primarily to off4 set part or all of the customer-generator’s re5 quirements for electric energy. 

6 ‘‘(4) The term ‘retail electric supplier’ means 

7 any person that sells electric energy to the ultimate 

8 consumer thereof. 

9 ‘‘(5) The term ‘local distribution system’ means 

10 any system for the distribution section of electric en11 ergy to the ultimate consumer thereof, whether or 

12 not the owner or operator of such system is also a 

13 retail electric supplier. 

14 ‘‘(b) ADOPTION.—Not later than one year after the 

15 enactment of this section, each retail electric supplier shall 

16 comply with each of the following requirements and notify 

17 all of its retail customers of such requirements not less 

18 frequently than quarterly: 

19 ‘‘(1) The supplier shall offer to arrange (either 

20 directly or through a local distribution company or 

21 other third party) to make available, on a first-come22 first-served basis, to each of its retail customers that 

23 has installed an energy generation unit that is in24 tended for net metering and that notifies the sup25 plier of its generating capacity an electric energy 
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1 meter that is capable of net metering if the cus2 tomer-generator’s existing electrical meter cannot 

3 perform that function. 

4 ‘‘(2) Rates and charges and contract terms and 

5 conditions for the sale of electric energy to cus6 tomer-generators shall be the same as the rates and 

7 charges and contract terms and conditions that 

8 would be applicable if the customer-generator did 

9 not own or operate a qualified generation unit and 

10 use a net metering system. 

11 Any retail electric supplier or local distribution company 

12 may, at its own expense, install one or more additional 

13 electric energy meters to monitor the flow of electricity 

14 in either direction or to reflect the time of generation or 

15 both. Whenever a customer-generator with a net metering 

16 system uses any energy generation system entitled to cred17 its under a Federal minimum renewable energy generation 

18 requirement, the total amount of energy generated by that 

19 system shall be treated as generated by the retail electric 

20 supplier for purposes of such requirement. 

21 ‘‘(c) NET ENERGY MEASUREMENT AND BILLING.—

22 Each retail electric supplier subject to subsection (b) shall 

23 calculate the net energy measurement for a customer 

24 using a net metering system in the following manner:
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1 ‘‘(1) The retail electric supplier shall measure 

2 the net electricity produced or consumed during the 

3 billing period using the metering referred to in para4 graph (1) or (2) of subsection (b). 

5 ‘‘(2) If the electricity supplied by the retail elec6 tric supplier exceeds the electricity generated by the 

7 customer-generator during the billing period, the 

8 customer-generator shall be billed for the net elec9 tricity supplied by the retail electric supplier in ac10 cordance with normal metering practices.

11 ‘‘(3) If electricity generated by the customer12 generator exceeds the electricity supplied by the re13 tail electric supplier, the customer-generator—

14 ‘‘(A) shall be billed for the appropriate 

15 customer charges for that billing period; 

16 ‘‘(B) shall be credited for the excess elec17 tric energy generated during the billing period, 

18 with this credit appearing on the bill for the fol19 lowing billing period (except for a billing period 

20 that ends in the next calendar year); and 

21 ‘‘(C) shall not be charged for transmission 

22 losses. 

23 If the customer-generator is using a meter that re24 flects the time of generation (a ‘real time meter’), 

25 the credit shall be based on the retail rates for sale 
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1 by the retail electric supplier at the time of such 

2 generation. At the beginning of each calendar year, 

3 any remaining unused kilowatt-hour credit accumu4 lated by a customer-generator during the previous 

5 year may be sold by the customer-generator to any 

6 electric supplier that agrees to purchase such credit. 

7 In the absence of any such purchase, the credit shall 

8 be assigned (at no cost) to the retail electric supplier 

9 that supplied electric energy to such customer-gener10 ator at the end of the previous year. 

11 ‘‘(d) PERCENT LIMITATIONS.—

12 ‘‘(1) TWO PERCENT LIMITATION.—A local dis13 tribution company retail electric supplier shall not be 

14 required to provide local distribution service with re15 spect to additional customer-generators after the 

16 date during any calendar year on which the total 

17 generating capacity of all customer-generators with 

18 qualified generation facilities and net metering sys19 tems served by that local distribution company is 

20 equal to or in excess of 2 percent of the capacity 

21 necessary to meet the company’s average forecasted 

22 aggregate customer peak demand for that calendar 

23 year. 

24 ‘‘(2) ONE PERCENT LIMITATION.—A local dis25 tribution company retail electric supplier shall not be
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1 required to provide local distribution service with re2 spect to additional customer-generators using a sin3 gle type of qualified energy generation system after 

4 the date during any calendar year on which the total 

5 generating capacity of all customer-generators with 

6 qualified generation facilities of that type and net 

7 metering systems served by that local distribution 

8 company is equal to or in excess of 1 percent of the 

9 capacity necessary to meet the company’s average 

10 forecasted aggregate customer peak demand for that 

11 calendar year. 

12 ‘‘(3) RECORDS AND NOTICE.—Each retail elec13 tric supplier shall maintain, and make available to 

14 the public, records of the total generating capacity 

15 of customer-generators of such system that are 

16 using net metering, the type of generating systems 

17 and energy source used by the electric generating 

18 systems used by such customer-generators. Each 

19 such retail electric supplier shall notify the Commis20 sion when the total generating capacity of such cus21 tomer-generators is equal to or in excess of 2 per22 cent of the capacity necessary to meet the supplier’s 

23 aggregate customer peak demand during the pre24 vious calendar year and when the total generating 

25 capacity of such customer-generators using a single 
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1 type of qualified generation is equal to or in excess 

2 of 1 percent of such capacity. 

3 ‘‘(e) SAFETY AND PERFORMANCE STANDARDS.—(1) 

4 A qualified generation unit and net metering system used 

5 by a customer-generator shall meet all applicable safety 

6 and performance and reliability standards established by 

7 the national electrical code, the Institute of Electrical and 

8 Electronics Engineers, Underwriters Laboratories, or the 

9 American National Standards Institute. 

10 ‘‘(2) The Commission, after consultation with State 

11 regulatory authorities and nonregulated local distribution 

12 systems and after notice and opportunity for comment, 

13 may adopt by regulation additional control and testing re14 quirements for customer-generators that the Commission 

15 determines are necessary to protect public safety and sys16 tem reliability. 

17 ‘‘(3) The Commission shall, after consultation with 

18 State regulatory authorities and nonregulated local dis19 tribution systems and after notice and opportunity for 

20 comment, prohibit by regulation the imposition of addi21 tional charges by electric suppliers and local distribution 

22 systems for equipment or services for safety or perform23 ance that are additional to those necessary to meet the 

24 standards referred to in subparagraphs (A) and (B). 
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1 ‘‘(f) STATE AUTHORITY.—Nothing in this section 

2 shall preclude a State from establishing or imposing addi3 tional incentives or requirements to encourage qualified 

4 generation and net metering additional to that required 

5 under this section.’’. 

6 ‘‘(g) INTERCONNECTION STANDARDS.—(1) Within 

7 one year after the enactment of this section the Commis8 sion shall publish model standards for the physical connec9 tion between local distribution systems and qualified gen10 eration units and electric generation units that would be 

11 qualified generation units but for the fact that the unit 

12 has a generating capacity of more than 100 kilowatts (but 

13 not more than 250 kilowatts). Such model standards shall 

14 be designed to encourage the use of qualified generation 

15 units and to insure the safety and reliability of such units 

16 and the local distribution systems interconnected with 

17 such units. Within 2 years after the enactment of this sec18 tion, each State shall adopt such model standards, with 

19 or without modification, and submit such standards to the 

20 Commission for approval. The Commission shall approve 

21 a modification of the model standards only if the Commis22 sion determines that such modification is consistent with 

23 the purpose of such standards and is required by reason 

24 of local conditions. If standards have not been approved 

25 under this paragraph by the Commission for any State
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1 within 2 years after the enactment of this section, the 

2 Commission shall, by rule or order, enforce the Commis3 sion’s model standards in such State until such time as 

4 State standards are approved by the Commission. 

5 ‘‘(2) The standards under this section shall establish 

6 such measures for the safety and reliability of the affected 

7 equipment and local distribution systems as may be appro8 priate. Such standards shall be consistent with all applica9 ble safety and performance standards established by the 

10 national electrical code, the Institute of Electrical and 

11 Electronics Engineers, Underwriters Laboratories, or the 

12 American National Standards Institute and with such ad13 ditional safety and reliability standards as the Commission 

14 shall, by rule, prescribe. Such standards shall ensure that 

15 generation units will automatically isolate themselves from 

16 the electrical system in the event of an electrical power 

17 outage. Such standards shall permit the owner or operator 

18 of the local distribution system to interrupt or reduce de19 liveries of available energy from the generation unit to the 

20 system when necessary in order to construct, install, main21 tain, repair, replace, remove, investigate, or inspect any 

22 of its equipment or part of its system; or if it determines 

23 that curtailment, interruption, or reduction is necessary 

24 because of emergencies, forced outages, force majeure, or 

25 compliance with prudent electrical practices. 
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1 ‘‘(3) The model standards under this subsection pro2 hibit the imposition of additional charges by local distribu3 tion systems for equipment or services for interconnection 

4 that are additional to those necessary to meet such stand5 ards. 

6 ‘‘(h) INTERCONNECTION.—At the election of the 

7 owner or operator of the generation unit concerned, con8 nections meeting the standards applicable under sub9 section (g) may be made—

10 ‘‘(1) by such owner or operator at such owner’s 

11 or operator’s expense, or 

12 ‘‘(2) by the owner or operator of the local dis13 tribution system upon the request of the owner or 

14 operator of the generating unit and pursuant to an 

15 offer by the owner or operator of the generating unit 

16 to reimburse the local distribution system in an 

17 amount equal to the minimum cost of such connec18 tion, consistent with the procurement procedures of 

19 the State in which the unit is located, except that 

20 the work on all such connections shall be performed 

21 by qualified electrical personnel certified by a re22 sponsible body or licensed by a State or local govern23 ment authority. 

24 ‘‘(i) CONSUMER FRIENDLY CONTRACTS.—The Com25 mission shall promulgate regulations insuring that sim-
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1 plified contracts will be used for the interconnection of 

2 electric energy by electric energy transmission or distribu3 tion systems and generating facilities that have a power 

4 production capacity not greater than 250 kilowatts.’’

Æ