‘‘(iv) The unit operates in parallel 
with the retail electric supplier. 
‘‘(v) The unit is intended primarily to 
offset part or all of the customer-genera-
tor’s requirements for electric energy. 
‘‘(D) The term ‘retail electric supplier’ 
means any electric utility that sells electric en-
ergy to the ultimate consumer thereof. 
‘‘(E) The term ‘local distribution system’ 
means any system for the distribution section of 
electric energy to the ultimate consumer there-
of, whether or not the owner or operator of 
such system is also a retail electric supplier. 
‘‘(2) ADOPTION.—Not later than one year after 
the enactment of this subsection, each State regu-
latory authority (with respect to each electric utility 
for which it has ratemaking authority), and each 
nonregulated electric utility, shall provide public no-
tice and conduct a hearing respecting the standards 
established by paragraph (3) and, on the basis of 
such hearing, shall adopt such standard. 
‘‘(3) ESTABLISHMENT
OF
NET
METERING 
STANDARD.—Each retail electric supplier shall offer 
to arrange (either directly or through a local dis-
tribution company or other third party) to make net 
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metering available, on a first-come-first-served basis, 
to each of its retail customers in accordance with the 
provisions of this subsection and each of the fol-
lowing requirements: 
‘‘(A) Rates and charges and contract 
terms and conditions for the sale of electric en-
ergy 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 meter-
ing system. 
‘‘(B) Each retail electric supplier shall no-
tify all of its retail customers of the standard 
established under this paragraph upon adoption 
of such standard. 
‘‘(4) NET ENERGY MEASUREMENT.—Each re-
tail electric supplier shall arrange to provide to cus-
tomer-generators who qualify for net metering under 
subsection (b) an electrical energy meter capable of 
net metering and measuring the flow of electricity 
either to or from the customer and using a single 
meter and single register, except where it is not 
practical to do so. Where it is not practical to pro-
vide the meter to the customer-generator, the retail 
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electric supplier (either directly or through a local 
distribution company or other third party) shall, at 
its own expense, install one or more of such electric 
energy meters for the customer-generator concerned. 
‘‘(5) BILLING.—Each retail electric supplier 
subject to subsection (b) shall calculate the electric 
energy consumption for a customer using a net me-
tering system in the following manner: 
‘‘(A) The retail electric supplier shall 
measure the net electricity produced or con-
sumed during the billing period using the me-
tering installed as provided in paragraph (4). 
‘‘(B) If the electricity supplied by the retail 
electric supplier exceeds the electricity gen-
erated by the customer-generator during the 
billing period, the customer-generator shall be 
billed for the net electric energy supplied by the 
retail electric supplier in accordance with nor-
mal billing practices 
‘‘(C)(i) If electric energy generated by the 
customer-generator exceeds the electric energy 
supplied by the retail electric supplier, the cus-
tomer-generator shall be billed for the appro-
priate customer charges for that billing period 
and credited for the excess electric energy gen-
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erated during the billing period, with this credit 
appearing as a kilowatt-hour credit on the bill 
for the following billing period. The kilowatt- 
hour credits shall be applied to customer-gener-
ator electric energy consumption on the fol-
lowing billing period bill (except for a billing pe-
riod that ends in the next calendar year). At 
the beginning of each calendar year, any re-
maining unused kilowatt-hour credits shall be 
extinguished. 
‘‘(ii) Except as provided in this clause, if 
the customer-generator is using a meter and re-
tail billing arrangement that has time differen-
tiated rates, (a ‘time-of-use meter’), the kilo-
watt-hour credit shall be based on the ratio rep-
resenting the difference in retail rates for each 
time of use rate or the credits shall be shown 
on the customer-generator’s bill as a monetary 
credit reflecting retail rates at the time of gen-
eration of the electric energy by the customer- 
generator. Notwithstanding the standard estab-
lished under section 11(d)(14), the supplier 
may require, at the supplier’s option, the cus-
tomer-generator with net metering to take elec-
tric service under a non-time differentiated en-
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ergy rate tariff or service that it offers to cus-
tomers in the same rate class as the customer- 
generator. 
‘‘(6) PERCENT LIMITATIONS.— 
‘‘(A) TWO
PERCENT
LIMITATION.—The 
standard established under this subsection shall 
not apply for a calendar year in the case of a 
customer-generator served by a local distribu-
tion company when the total generating capac-
ity of all customer-generators with net metering 
systems served by that local distribution com-
pany in that calendar year is equal to or in ex-
cess of 2 percent of the capacity necessary to 
meet the local distribution company’s average 
forecasted aggregate customer peak demand for 
that calendar year. 
‘‘(B) ONE
PERCENT
LIMITATION.—The 
standard established under this subsection shall 
not apply for a calendar year in the case of a 
customer-generator served by a local distribu-
tion company when the total generating capac-
ity of all customer-generators with net metering 
systems served by that local distribution com-
pany in that calendar year using a single type 
of qualified generation units (as listed in para-
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graph (1)(C)(i)) is equal to or in excess of 1 
percent of the capacity necessary to meet the 
company’s average forecasted aggregate cus-
tomer peak demand for that calendar year. 
‘‘(C) RECORDS AND NOTICE.—- Each re-
tail electric supplier shall maintain, and make 
available to the public, records of the total gen-
erating 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 State regulatory au-
thority and the Federal Energy Regulatory 
Commission when the total generating capacity 
of such customer-generators is equal to or in 
excess of the limitations set forth in subpara-
graph (B). 
‘‘(7) OWNERSHIP OF CREDITS.—For purposes 
of Federal and State laws providing renewable en-
ergy credits or greenhouse gas credits, the customer- 
generator with a qualified generating unit and net 
metering shall be treated as owning and having title 
to the renewable energy attributes, renewable energy 
credits and greenhouse gas emission credits related 
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