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2017 SESSION
16105574DBe it enacted by the General Assembly of Virginia:
1. That § 56-594 of the Code of Virginia is amended and reenacted as follows:
§ 56-594. Net energy metering provisions.
A. The Commission shall establish by regulation a program that affords eligible customer-generators the opportunity to participate in net energy metering, and a program, to begin no later than July 1, 2014, for customers of investor-owned utilities and no later than July 1, 2015, for customers of electric cooperatives, to afford eligible agricultural customer-generators the opportunity to participate in net energy metering. The regulations may include, but need not be limited to, requirements for (i) retail sellers; (ii) owners or operators of distribution or transmission facilities; (iii) providers of default service; (iv) eligible customer-generators; (v) eligible agricultural customer-generators; or (vi) any combination of the foregoing, as the Commission determines will facilitate the provision of net energy metering, provided that the Commission determines that such requirements do not adversely affect the public interest.
B. For the purpose of this section:
"Eligible agricultural customer-generator" means a
customer that operates a renewable energy generating facility as part of an
agricultural business, which generating facility (i) uses as its sole energy
source solar power, wind power, or aerobic or anaerobic digester gas, (ii) does
not have an aggregate generation capacity of more than 500 kilowatts
two megawatts, (iii) is located on land owned or controlled by the
agricultural business, (iv) is connected to the customer's wiring on the
customer's side of its interconnection with the distributor; (v) is
interconnected and operated in parallel with an electric company's transmission
and distribution facilities, and (vi) is used primarily to provide energy to
metered accounts of the agricultural business. An eligible agricultural
customer-generator may be served by multiple meters that are located at
separate but contiguous sites on one parcel or on multiple adjacent
parcels, such that the eligible agricultural customer-generator may
aggregate in a single account the electricity consumption and generation
measured by the meters, provided that the same utility serves all such meters.
The aggregated load shall be served under the appropriate tariff.
"Eligible customer-generator" means a customer that
owns and operates, or contracts with other persons to own, operate, or both, an
electrical generating facility that (i) has a capacity of not more than 20
50 kilowatts for residential customers and not more than one megawatt
two megawatts for nonresidential customers on an electrical generating
facility placed in service after July 1, 2015; (ii) uses as its total source of
fuel renewable energy, as defined in § 56-576; (iii) is located on the
customer's premises and is connected to the customer's wiring on the customer's
side of its interconnection with the distributor; (iv) is interconnected and
operated in parallel with an electric company's transmission and distribution
facilities; and (v) is intended primarily to offset all or part of the
customer's own electricity requirements. In addition to the electrical
generating facility size limitations in clause (i), the capacity of any
generating facility installed under this section after July 1, 2015, shall not
exceed the expected annual energy consumption based on the previous 12 months
of billing history or an annualized calculation of billing history if 12 months
of billing history is not available.
"Net energy metering" means measuring the difference, over the net metering period, between (i) electricity supplied to an eligible customer-generator or eligible agricultural customer-generator from the electric grid and (ii) the electricity generated and fed back to the electric grid by the eligible customer-generator or eligible agricultural customer-generator.
"Net metering period" means the 12-month period following the date of final interconnection of the eligible customer-generator's or eligible agricultural customer-generator's system with an electric service provider, and each 12-month period thereafter.
C. The Commission's regulations shall ensure that (i) the metering equipment installed for net metering shall be capable of measuring the flow of electricity in two directions and (ii) any eligible customer-generator seeking to participate in net energy metering shall notify its supplier and receive approval to interconnect prior to installation of an electrical generating facility. The electric distribution company shall have 30 days from the date of notification for residential facilities, and 60 days from the date of notification for nonresidential facilities, to determine whether the interconnection requirements have been met. Such regulations shall allocate fairly the cost of such equipment and any necessary interconnection. An eligible customer-generator's electrical generating system, and each electrical generating system of an eligible agricultural customer-generator, shall meet all applicable safety and performance standards established by the National Electrical Code, the Institute of Electrical and Electronics Engineers, and accredited testing laboratories such as Underwriters Laboratories. Beyond the requirements set forth in this section and to ensure public safety, power quality, and reliability of the supplier's electric distribution system, an eligible customer-generator or eligible agricultural customer-generator whose electrical generating system meets those standards and rules shall bear all reasonable costs of equipment required for the interconnection to the supplier's electric distribution system, including costs, if any, to (a) install additional controls, (b) perform or pay for additional tests, and (c) purchase additional liability insurance.
D. The Commission shall establish minimum requirements for contracts to be entered into by the parties to net metering arrangements. Such requirements shall protect the eligible customer-generator or eligible agricultural customer-generator against discrimination by virtue of its status as an eligible customer-generator or eligible agricultural customer-generator, and permit customers that are served on time-of-use tariffs that have electricity supply demand charges contained within the electricity supply portion of the time-of-use tariffs to participate as an eligible customer-generator or eligible agricultural customer-generator. The Commission shall also establish such rules and regulations as it finds necessary and reasonable to allow any eligible customer-generator or eligible agricultural customer-generator to enter into a contract to sell any net-metering eligible energy that exceeds the eligible customer-generator's or eligible agricultural customer-generator's own energy demand for any monthly period to any other retail customer within the same service territory of the incumbent utility. Notwithstanding the cost allocation provisions of subsection C, eligible customer-generators or eligible agricultural customer-generators served on demand charge-based time-of-use tariffs shall bear the incremental metering costs required to net meter such customers.
E. If electricity generated by an eligible customer-generator
or eligible agricultural customer-generator over the net metering period
exceeds the electricity consumed by the eligible customer-generator or eligible
agricultural customer-generator and is not sold to another customer under
subsection D, the customer-generator or eligible agricultural
customer-generator shall be compensated for the excess electricity if the
entity contracting to receive such electric energy and the eligible
customer-generator or eligible agricultural customer-generator enter into a
power purchase agreement for such excess electricity. Upon the written request
of the eligible customer-generator or eligible agricultural customer-generator,
the supplier that serves the eligible customer-generator or eligible
agricultural customer-generator shall enter into a power purchase agreement
with the requesting eligible customer-generator or eligible agricultural
customer-generator that is consistent with the minimum requirements for
contracts established by the Commission pursuant to subsection D. The power
purchase agreement shall obligate the supplier to purchase such excess
electricity at the a rate that is provided for such purchases
in a net metering standard contract or tariff approved by the Commission
equal to the supplier's approved customer rate schedule applicable to the
eligible customer-generator's or eligible agricultural customer-generator's
particular customer class, plus all riders applicable under the eligible
customer-generator's or eligible agricultural customer-generator's rate
schedule, unless the parties agree to a higher rate. The power purchase
agreement shall not release the eligible customer-generator or eligible
agricultural customer-generator from any standby charge imposed under
subsection F unless the standby charge is specifically contemplated within the
power purchase agreement. The eligible customer-generator or eligible
agricultural customer-generator owns any renewable energy certificates
associated with its electrical generating facility; however, at the time that
the eligible customer-generator or eligible agricultural customer-generator
enters into a power purchase agreement with its supplier, the eligible
customer-generator or eligible agricultural customer-generator shall have a
one-time option to sell the renewable energy certificates associated with such
electrical generating facility to its supplier and be compensated at an amount
that is established by the Commission to reflect the value of such renewable
energy certificates. Nothing in this section shall prevent the eligible
customer-generator or eligible agricultural customer-generator and the supplier
from voluntarily entering into an agreement for the sale and purchase of
excess electricity or renewable energy certificates at mutually-agreed upon
prices if the eligible customer-generator or eligible agricultural
customer-generator does not exercise its option to sell its renewable energy
certificates to its supplier at Commission-approved prices at the time that the
eligible customer-generator or eligible agricultural customer-generator enters
into a power purchase agreement with its supplier. All costs incurred by the
supplier to purchase excess electricity and renewable energy certificates from
eligible customer-generators or eligible agricultural customer-generators shall
be recoverable through its Renewable Energy Portfolio Standard (RPS) rate
adjustment clause, if the supplier has a Commission-approved RPS plan. If not,
then all costs shall be recoverable through the supplier's fuel adjustment
clause. For purposes of this section, "all costs" shall be defined as
the rates paid to the eligible customer-generator or eligible agricultural
customer-generator for the purchase of excess electricity and renewable energy
certificates and any administrative costs incurred to manage the eligible
customer-generator's or eligible agricultural customer-generator's power
purchase arrangements. The net metering standard contract or tariff shall be
available to eligible customer-generators or eligible agricultural
customer-generators on a first-come, first-served basis in each electric
distribution company's Virginia service area until the rated generating
capacity owned and operated by eligible customer-generators or eligible agricultural
customer-generators in the state reaches one percent of each electric
distribution company's adjusted Virginia peak-load forecast for the previous
year, and shall require the supplier to pay the eligible customer-generator or
eligible agricultural customer-generator for such excess electricity in a
timely manner at a rate to be established by the Commission.
F. Any residential eligible customer-generator or eligible agricultural customer-generator who owns and operates, or contracts with other persons to own, operate, or both, an electrical generating facility with a capacity that exceeds 10 kilowatts shall pay to its supplier, in addition to any other charges authorized by law, a monthly standby charge. The amount of the standby charge and the terms and conditions under which it is assessed shall be in accordance with a methodology developed by the supplier and approved by the Commission. The Commission shall approve a supplier's proposed standby charge methodology if it finds that the standby charges collected from all such eligible customer-generators and eligible agricultural customer-generators allow the supplier to recover only the portion of the supplier's infrastructure costs that are properly associated with serving such eligible customer-generators or eligible agricultural customer-generators. Such an eligible customer-generator or eligible agricultural customer-generator shall not be liable for a standby charge until the date specified in an order of the Commission approving its supplier's methodology.