I
106TH CONGRESS
1ST SESSION
H. R. 2947
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.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 24, 1999
Mr. INSLEE (for himself, Mr. BARTLETT of Maryland, Mr. EHLERS, Mr.
BAIRD, Mr. BLUMENAUER, Mr. BOEHLERT, Mr. COOK, Mr. DEFAZIO,
Mr. DICKS, Mr. EVANS, Mr. FARR of California, Mr. FILNER, Mr.
FROST, Mr. GILMAN, Mr. GUTIERREZ, Mr. HINCHEY, Mr. KENNEDY of
Rhode Island, Mr. LEACH, Mr. LEWIS of Georgia, Mr. MCDERMOTT, Mr.
METCALF, Ms. MILLENDER-MCDONALD, Ms. PELOSI, Mr. STRICKLAND,
Mr. UDALL of Colorado, Mr. UDALL of New Mexico, Mr. UNDERWOOD,
and Mr. VENTO) introduced the following bill; which was referred to the
Committee on Commerce
A BILL
To amend the Federal Power Act to promote energy inde-
pendence and self-sufficiency by providing for the use
of net metering by certain small electric energy genera-
tion systems, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Home Energy Genera-
tion 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 en-
ergy on the open market.
(2) Encourage private investment in renewable
and alternate energy resources.
(3) Stimulate the economic growth.
(4) Enhance the continued diversification sec-
tion of energy resources used in the United States.
(5) Remove regulatory barriers for net meter-
ing.
SEC. 3. NET METERING.
Part II of the Federal Power Act is amended by add-
ing 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 dis-
tribution section system at the same point of inter-
connection during an applicable billing period.
‘‘(3) The terms ‘electric generation unit quali-
fied 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 con-
trolled by the customer-generator.
‘‘(D) The unit operates in parallel with the
retail electric supplier.
‘‘(E) The unit is intended primarily to off-
set part or all of the customer-generator’s re-
quirements 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 en-
ergy 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 in-
tended for net metering and that notifies the sup-
plier of its generating capacity an electric energy
meter that is capable of net metering if the cus-
tomer-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 cus-
tomer-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 cred-
its 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 para-
graph (1) or (2) of subsection (b).
‘‘(2) If the electricity supplied by the retail elec-
tric supplier exceeds the electricity generated by the
customer-generator during the billing period, the
customer-generator shall be billed for the net elec-
tricity supplied by the retail electric supplier in ac-
cordance with normal metering practices.
‘‘(3) If electricity generated by the customer-
generator exceeds the electricity supplied by the re-
tail 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 elec-
tric energy generated during the billing period,
with this credit appearing on the bill for the fol-
lowing 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 re-
flects 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 accumu-
lated 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-gener-
ator at the end of the previous year.
‘‘(d) PERCENT LIMITATIONS.—
‘‘(1) TWO PERCENT LIMITATION.—A local dis-
tribution company retail electric supplier shall not be
required to provide local distribution service with re-
spect 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 sys-
tems 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 dis-
tribution company retail electric supplier shall not be
required to provide local distribution service with re-
spect to additional customer-generators using a sin-
gle 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 elec-
tric 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 Commis-
sion when the total generating capacity of such cus-
tomer-generators is equal to or in excess of 2 per-
cent of the capacity necessary to meet the supplier’s
aggregate customer peak demand during the pre-
vious 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 re-
quirements for customer-generators that the Commission
determines are necessary to protect public safety and sys-
tem reliability.
‘‘(3) The Commission shall, after consultation with
State regulatory authorities and nonregulated local dis-
tribution systems and after notice and opportunity for
comment, prohibit by regulation the imposition of addi-
tional charges by electric suppliers and local distribution
systems for equipment or services for safety or perform-
ance 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 addi-
tional 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 Commis-
sion shall publish model standards for the physical connec-
tion between local distribution systems and qualified gen-
eration 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 sec-
tion, 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 Commis-
sion 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 Commis-
sion’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 appro-
priate. Such standards shall be consistent with all applica-
ble 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 ad-
ditional 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 de-
liveries of available energy from the generation unit to the
system when necessary in order to construct, install, main-
tain, 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 pro-
hibit the imposition of additional charges by local distribu-
tion systems for equipment or services for interconnection
that are additional to those necessary to meet such stand-
ards.
‘‘(h) INTERCONNECTION.—At the election of the
owner or operator of the generation unit concerned, con-
nections meeting the standards applicable under sub-
section (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 dis-
tribution 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 connec-
tion, 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 gov-
ernment authority.
‘‘(i) CONSUMER FRIENDLY CONTRACTS.—The Com-
mission shall promulgate regulations insuring that sim-
plified contracts will be used for the interconnection of
electric energy by electric energy transmission or distribu-
tion systems and generating facilities that have a power
production capacity not greater than 250 kilowatts.’’
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