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. 
Title II of the Public Utility Regulatory Policies Act 
of 1978 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 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 
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, subject to subsection (d), each 
retail electric supplier shall comply with each of the fol-
lowing 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 sub-
section (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 retail elec-
tric supplier shall not be required to provide local 
distribution service with respect to additional cus-
tomer-generators after the date during any calendar 
year on which the total generating capacity of all 
customer-generators with qualified generation facili-
ties and net metering systems served by that sup-
plier is equal to or in excess of 2 percent of the ca-
pacity necessary to meet the supplier’s average fore-
casted aggregate customer peak demand for that 
calendar year. 
‘‘(2) ONE PERCENT LIMITATION.—A retail elec-
tric supplier shall not be required to provide local 
distribution service with respect to additional cus-
tomer-generators using a single type of qualified en-
ergy 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 supplier is equal to or in excess of 1
percent of the capacity necessary to meet the sup-
plier’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 re-
sponsible body or licensed by a State or local govern-
ment 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. 
‘‘(j) ENFORCEMENT.—Any person who violates any 
requirement of this section shall be subject to civil pen-
alties in the amount of $10,000 for each day that such
violation continues. Such penalties may be assessed by the 
Commission, after notice and opportunity for hearing, in 
the same manner as penalties are assessed under section 
31(d) of the Federal Power Act.’’.
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