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107TH CONGRESS

1ST SESSION H. R. 954

To amend the Federal Power Act to promote energy independence and selfsufficiency by providing for the use of net metering by certain small

electric energy generation systems, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 8, 2001

Mr. INSLEE (for himself, Mr. BARTLETT of Maryland, Mr. EHLERS, Mrs.

MINK of Hawaii, Ms. SLAUGHTER, Mr. BAIRD, Mr. UDALL of Colorado,

Mr. TIERNEY, Mr. KUCINICH, Mr. LEACH, Mr. GUTIERREZ, Mr. HINCHEY, Mr. MCDERMOTT, Mr. LEWIS of Georgia, and Ms. BALDWIN) introduced the following bill; which was referred to the Committee on Energy and Commerce

A BILL

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.

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 ‘‘Home Energy Genera5 tion Act’’.
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1 SEC. 2. FINDINGS.

2 The Congress finds that it is in the public interest

3 to:

4 (1) Enable small businesses, residences, schools,

5 churches, farms with small electric generation units,

6 and other retail electric customers who generate

7 electric energy to return or sell surplus electric en8 ergy on the open market.

9 (2) Encourage private investment in renewable

10 and alternate energy resources.

11 (3) Stimulate the economic growth.

12 (4) Enhance the continued diversification sec13 tion of energy resources used in the United States.

14 (5) Remove regulatory barriers for net meter15 ing.

16 SEC. 3. NET METERING.

17 Part II of the Federal Power Act is amended by add18 ing the following new section at the end thereof:

19 ‘‘SEC. 215. NET METERING.

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

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

22 owner or operator of an electric generation unit

23 qualified for net metering under this section.

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

25 the difference between the electricity supplied to a

26 customer-generator and the electricity generated by
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1 a customer-generator that is delivered to a local dis2 tribution section system at the same point of inter3 connection during an applicable billing period.

4 ‘‘(3) The terms ‘electric generation unit quali5 fied for net metering’ and ‘qualified generation unit’

6 mean an electric energy generation unit that meets

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

8 following requirements:

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

10 energy source either solar, wind, or biomass.

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

12 not more than 100 kilowatts.

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

14 are owned, operated, leased, or otherwise con15 trolled by the customer-generator.

16 ‘‘(D) The unit operates in parallel with the

17 retail electric supplier.

18 ‘‘(E) The unit is intended primarily to off19 set part or all of the customer-generator’s re20 quirements for electric energy.

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

22 any person that sells electric energy to the ultimate

23 consumer thereof.

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

25 any system for the distribution section of electric en-
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1 ergy to the ultimate consumer thereof, whether or

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

3 retail electric supplier.

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

5 enactment of this section, each retail electric supplier shall

6 comply with each of the following requirements and notify

7 all of its retail customers of such requirements not less

8 frequently than quarterly:

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

10 directly or through a local distribution company or

11 other third party) to make available, on a first-come12 first-served basis, to each of its retail customers that

13 has installed an energy generation unit that is in14 tended for net metering and that notifies the sup15 plier of its generating capacity an electric energy

16 meter that is capable of net metering if the cus17 tomer-generator’s existing electrical meter cannot

18 perform that function.

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

20 conditions for the sale of electric energy to cus21 tomer-generators shall be the same as the rates and

22 charges and contract terms and conditions that

23 would be applicable if the customer-generator did

24 not own or operate a qualified generation unit and

25 use a net metering system.
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1 Any retail electric supplier or local distribution company

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

3 electric energy meters to monitor the flow of electricity

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

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

6 system uses any energy generation system entitled to cred7 its under a Federal minimum renewable energy generation

8 requirement, the total amount of energy generated by that

9 system shall be treated as generated by the retail electric

10 supplier for purposes of such requirement.

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

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

13 calculate the net energy measurement for a customer

14 using a net metering system in the following manner:

15 ‘‘(1) The retail electric supplier shall measure

16 the net electricity produced or consumed during the

17 billing period using the metering referred to in para18 graph (1) or (2) of subsection (b).

19 ‘‘(2) If the electricity supplied by the retail elec20 tric supplier exceeds the electricity generated by the

21 customer-generator during the billing period, the

22 customer-generator shall be billed for the net elec23 tricity supplied by the retail electric supplier in ac24 cordance with normal metering practices.
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1 ‘‘(3) If electricity generated by the customer2 generator exceeds the electricity supplied by the re3 tail electric supplier, the customer-generator—

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

5 customer charges for that billing period;

6 ‘‘(B) shall be credited for the excess elec7 tric energy generated during the billing period,

8 with this credit appearing on the bill for the fol9 lowing billing period (except for a billing period

10 that ends in the next calendar year); and

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

12 losses.

13 If the customer-generator is using a meter that re14 flects the time of generation (a ‘real time meter’),

15 the credit shall be based on the retail rates for sale

16 by the retail electric supplier at the time of such

17 generation. At the beginning of each calendar year,

18 any remaining unused kilowatt-hour credit accumu19 lated by a customer-generator during the previous

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

21 electric supplier that agrees to purchase such credit.

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

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

24 that supplied electric energy to such customer-gener25 ator at the end of the previous year.
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1 ‘‘(d) PERCENT LIMITATIONS.—

2 ‘‘(1) TWO PERCENT LIMITATION.—A local dis3 tribution company retail electric supplier shall not be

4 required to provide local distribution service with re5 spect to additional customer-generators after the

6 date during any calendar year on which the total

7 generating capacity of all customer-generators with

8 qualified generation facilities and net metering sys9 tems served by that local distribution company is

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

11 necessary to meet the company’s average forecasted

12 aggregate customer peak demand for that calendar

13 year.

14 ‘‘(2) ONE PERCENT LIMITATION.—A local dis15 tribution company retail electric supplier shall not be

16 required to provide local distribution service with re17 spect to additional customer-generators using a sin18 gle type of qualified energy generation system after

19 the date during any calendar year on which the total

20 generating capacity of all customer-generators with

21 qualified generation facilities of that type and net

22 metering systems served by that local distribution

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

24 capacity necessary to meet the company’s average
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1 forecasted aggregate customer peak demand for that

2 calendar year.

3 ‘‘(3) RECORDS AND NOTICE.—Each retail elec4 tric supplier shall maintain, and make available to

5 the public, records of the total generating capacity

6 of customer-generators of such system that are

7 using net metering, the type of generating systems

8 and energy source used by the electric generating

9 systems used by such customer-generators. Each

10 such retail electric supplier shall notify the Commis11 sion when the total generating capacity of such cus12 tomer-generators is equal to or in excess of 2 per13 cent of the capacity necessary to meet the supplier’s

14 aggregate customer peak demand during the pre15 vious calendar year and when the total generating

16 capacity of such customer-generators using a single

17 type of qualified generation is equal to or in excess

18 of 1 percent of such capacity.

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

20 A qualified generation unit and net metering system used

21 by a customer-generator shall meet all applicable safety

22 and performance and reliability standards established by

23 the national electrical code, the Institute of Electrical and

24 Electronics Engineers, Underwriters Laboratories, or the

25 American National Standards Institute.
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1 ‘‘(2) The Commission, after consultation with State

2 regulatory authorities and nonregulated local distribution

3 systems and after notice and opportunity for comment,

4 may adopt by regulation additional control and testing re5 quirements for customer-generators that the Commission

6 determines are necessary to protect public safety and sys7 tem reliability.

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

9 State regulatory authorities and nonregulated local dis10 tribution systems and after notice and opportunity for

11 comment, prohibit by regulation the imposition of addi12 tional charges by electric suppliers and local distribution

13 systems for equipment or services for safety or perform14 ance that are additional to those necessary to meet the

15 standards referred to in subparagraphs (A) and (B).

16 ‘‘(f) STATE AUTHORITY.—Nothing in this section

17 shall preclude a State from establishing or imposing addi18 tional incentives or requirements to encourage qualified

19 generation and net metering additional to that required

20 under this section.’’.

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

22 one year after the enactment of this section the Commis23 sion shall publish model standards for the physical connec24 tion between local distribution systems and qualified gen25 eration units and electric generation units that would be
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1 qualified generation units but for the fact that the unit

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

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

4 be designed to encourage the use of qualified generation

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

6 and the local distribution systems interconnected with

7 such units. Within 2 years after the enactment of this sec8 tion, each State shall adopt such model standards, with

9 or without modification, and submit such standards to the

10 Commission for approval. The Commission shall approve

11 a modification of the model standards only if the Commis12 sion determines that such modification is consistent with

13 the purpose of such standards and is required by reason

14 of local conditions. If standards have not been approved

15 under this paragraph by the Commission for any State

16 within 2 years after the enactment of this section, the

17 Commission shall, by rule or order, enforce the Commis18 sion’s model standards in such State until such time as

19 State standards are approved by the Commission.

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

21 such measures for the safety and reliability of the affected

22 equipment and local distribution systems as may be appro23 priate. Such standards shall be consistent with all applica24 ble safety and performance standards established by the

25 national electrical code, the Institute of Electrical and
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1 Electronics Engineers, Underwriters Laboratories, or the

2 American National Standards Institute and with such ad3 ditional safety and reliability standards as the Commission

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

5 generation units will automatically isolate themselves from

6 the electrical system in the event of an electrical power

7 outage. Such standards shall permit the owner or operator

8 of the local distribution system to interrupt or reduce de9 liveries of available energy from the generation unit to the

10 system when necessary in order to construct, install, main11 tain, repair, replace, remove, investigate, or inspect any

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

13 that curtailment, interruption, or reduction is necessary

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

15 compliance with prudent electrical practices.

16 ‘‘(3) The model standards under this subsection pro17 hibit the imposition of additional charges by local distribu18 tion systems for equipment or services for interconnection

19 that are additional to those necessary to meet such stand20 ards.

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

22 owner or operator of the generation unit concerned, con23 nections meeting the standards applicable under sub24 section (g) may be made—
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1 ‘‘(1) by such owner or operator at such owner’s

2 or operator’s expense, or

3 ‘‘(2) by the owner or operator of the local dis4 tribution system upon the request of the owner or

5 operator of the generating unit and pursuant to an

6 offer by the owner or operator of the generating unit

7 to reimburse the local distribution system in an

8 amount equal to the minimum cost of such connec9 tion, consistent with the procurement procedures of

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

11 the work on all such connections shall be performed

12 by qualified electrical personnel certified by a

13 resposible body or licensed by a State or local gov14 ernment authority.

15 ‘‘(i) CONSUMER FRIENDLY CONTRACTS.—The Com16 mission shall promulgate regulations insuring that sim17 plified contracts will be used for the interconnection of

18 electric energy by electric energy transmission or distribu19 tion systems and generating facilities that have a power

20 production capacity not greater than 250 kilowatts.’’

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