KS
Kansas House Bill HB2227

Kansas 2023-2024 Regular Session

Kansas House Bill HB2227 Compare Versions

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11 Session of 2023
22 HOUSE BILL No. 2227
33 By Committee on Energy, Utilities and Telecommunications
44 1-30
55 AN ACT concerning energy; relating to electric public utilities;
66 authorizing certain sales of electricity pursuant to power purchase
77 agreements; exempting such sales from the retail electric suppliers act
88 and certain renewable energy suppliers from public utility regulation;
99 requiring utilities to enter into parallel generation contracts with certain
1010 customers of the utility; amending K.S.A. 66-1,170, 66-1,184 and 66-
1111 1264 and K.S.A. 2022 Supp. 66-104 and repealing the existing
1212 sections.
1313 Be it enacted by the Legislature of the State of Kansas:
1414 New Section 1. (a) A renewable energy supplier shall be permitted to
1515 sell the electricity generated by an eligible generation facility exclusively
1616 to the host customer-generator pursuant to a power purchase agreement.
1717 The eligible generation facility shall be subject to any interconnection and
1818 other requirements imposed on customer-generators pursuant to K.S.A.
1919 66-1,184 or 66-1263 et seq., and amendments thereto.
2020 (b) As used in this section:
2121 (1) "Eligible generation facility" means an electric generation facility
2222 that:
2323 (A) Uses solar photovoltaic cells and panels or a wind turbine to
2424 generate electricity;
2525 (B) is located on premises owned, operated, leased or otherwise
2626 controlled by a host customer-generator;
2727 (C) is designed to offset part or all of the host customer-generator's
2828 electrical energy requirements; and
2929 (D) is installed, owned and operated pursuant to the terms and
3030 conditions of a power purchase agreement.
3131 (2) "Host customer-generator" means any retail electric customer of a
3232 utility and any successor or assign of a retail electric customer who is a
3333 party to a power purchase agreement with a renewable energy supplier.
3434 (3) "Power purchase agreement" means a contractual agreement
3535 between a renewable energy supplier and a host customer-generator that
3636 sets forth the terms and conditions in which the renewable energy supplier
3737 agrees to install, own and operate an eligible generation facility on
3838 premises owned, operated, leased or otherwise controlled by the host
3939 customer-generator, and the host customer-generator agrees to purchase
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7676 the electricity produced by such facility from the renewable energy
7777 supplier for a defined period of time.
7878 (4) "Renewable energy supplier" means any person, firm, partnership,
7979 corporation or any other entity that transacts business in the state for the
8080 purpose of installing, owning and operating an eligible generation facility
8181 pursuant to a power purchase agreement.
8282 (5) "Utility" means an electric public utility as defined in K.S.A. 66-
8383 101a, and amendments thereto, any cooperative as defined in K.S.A. 17-
8484 4603, and amendments thereto, or a municipally owned or operated
8585 electric utility that provides retail electric service.
8686 Sec. 2. K.S.A. 66-104 is hereby amended to read as follows: 66-104.
8787 (a) The term "public utility," as used in this act, shall be construed to mean
8888 every corporation, company, individual, association of persons, their
8989 trustees, lessees or receivers, that now or hereafter may own, control,
9090 operate or manage, except for private use, any equipment, plant or
9191 generating machinery, or any part thereof, for the transmission of
9292 telephone messages or for the transmission of telegraph messages in or
9393 through any part of the state, or the conveyance of oil and gas through
9494 pipelines in or through any part of the state, except pipelines less than 15
9595 miles in length and not operated in connection with or for the general
9696 commercial supply of gas or oil, and all companies for the production,
9797 transmission, delivery or furnishing of heat, light, water or power. No
9898 cooperative, cooperative society, nonprofit or mutual corporation or
9999 association which that is engaged solely in furnishing telephone service to
100100 subscribers from one telephone line without owning or operating its own
101101 separate central office facilities, shall be subject to the jurisdiction and
102102 control of the commission as provided herein, except that it shall not
103103 construct or extend its facilities across or beyond the territorial boundaries
104104 of any telephone company or cooperative without first obtaining approval
105105 of the commission. As used herein, The term "transmission of telephone
106106 messages" shall include the transmission by wire or other means of any
107107 voice, data, signals or facsimile communications, including all such
108108 communications now in existence or as may be developed in the future.
109109 (b) The term "public utility" shall also include that portion of every
110110 municipally owned or operated electric or gas utility located in an area
111111 outside of and more than three miles from the corporate limits of such
112112 municipality, but regulation of the rates, charges and terms and conditions
113113 of service of such utility within such area shall be subject to commission
114114 regulation only as provided in K.S.A. 66-104f, and amendments thereto.
115115 Nothing in this act shall apply to a municipally owned or operated utility,
116116 or portion thereof, located within the corporate limits of such municipality
117117 or located outside of such corporate limits but within three miles thereof
118118 except as provided in K.S.A. 66-131a, and amendments thereto.
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162162 (c) Except as herein provided, the power and authority to control and
163163 regulate all public utilities and common carriers situated and operated
164164 wholly or principally within any city, or principally operated for the
165165 benefit of such city or its people, shall be vested exclusively in such city,
166166 subject only to the right to apply for relief to the corporation commission
167167 as provided in K.S.A. 66-133, and amendments thereto, and to the
168168 provisions of K.S.A. 66-104e, and amendments thereto. A transit system
169169 principally engaged in rendering local transportation service in and
170170 between contiguous cities in this and another state by means of street
171171 railway, trolley bus and motor bus lines, or any combination thereof, shall
172172 be deemed to be a public utility as that term is used in this act and, as such,
173173 shall be subject to the jurisdiction of the commission.
174174 (d) The term "public utility" shall not include:
175175 (1) Any activity of an otherwise jurisdictional corporation, company,
176176 individual, association of persons, their trustees, lessees or receivers as to
177177 the marketing or sale of compressed natural gas for end use as motor
178178 vehicle fuel; or
179179 (2) the activity of a renewable energy supplier with respect to the
180180 supplier's association with an eligible generation facility pursuant to
181181 section 1, and amendments thereto.
182182 (e) At the option of an otherwise jurisdictional entity, the term "public
183183 utility" shall not include any activity or facility of such entity as to the
184184 generation, marketing and sale of electricity generated by an electric
185185 generation facility or addition to an electric generation facility which that:
186186 (1) Is newly constructed and placed in service on or after January 1,
187187 2001; and
188188 (2) is not in the rate base of:
189189 (A) An electric public utility that is subject to rate regulation by the
190190 state corporation commission;
191191 (B) any cooperative, as defined by K.S.A. 17-4603, and amendments
192192 thereto, or any nonstock member-owned cooperative corporation
193193 incorporated in this state; or
194194 (C) a municipally owned or operated electric utility.
195195 (f) Additional generating capacity achieved through efficiency gains
196196 by refurbishing or replacing existing equipment at generating facilities
197197 placed in service before January 1, 2001, shall not qualify under
198198 subsection (e).
199199 (g) For purposes of the authority to appropriate property through
200200 eminent domain, the term "public utility" shall not include any activity for
201201 the siting or placement of wind powered electrical generators or turbines,
202202 including the towers.
203203 Sec. 3. K.S.A. 66-1,170 is hereby amended to read as follows: 66-
204204 1,170. As used in this act:
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248248 (a) "Distribution line" means an electric line used to furnish retail
249249 electric service, including any line from a distribution substation to an
250250 electric consuming facility; but such term, except that "distribution line"
251251 does not include a transmission facility used for the bulk transfer of energy
252252 even if such energy is reduced in voltage and used as station power.
253253 (b) "Electric consuming facility" means any entity which that utilizes
254254 electric energy from a central station service.
255255 (c) "Commission" means the state corporation commission of the
256256 state of Kansas.
257257 (d) "Retail electric supplier" means any person, firm, corporation,
258258 municipality, association or cooperative corporation engaged in the
259259 furnishing of retail electric service, except that "retail electric supplier"
260260 does not include the activity of a renewable energy supplier with respect to
261261 such supplier's association with an eligible generation facility pursuant to
262262 section 1, and amendments thereto.
263263 (e) "Certified territory" means an electric service territory certified to
264264 a retail electric supplier pursuant to this act.
265265 (f) "Existing distribution line" means a distribution line which that is
266266 in existence on the effective date of this act, and which is being or has
267267 been used as such.
268268 (g) "Single certified service territory" means that service area in
269269 which where only one retail electric supplier has been granted a service
270270 certificate by the commission.
271271 (h) "Dual certified service territory" means that service area where
272272 more than one retail electric supplier has been granted a service certificate
273273 by the commission.
274274 (i) "Station power" means electric energy used for operating
275275 equipment necessary for the process of generating electricity at any
276276 generating plant owned by a utility or a generating plant specified in
277277 subsection (e) of K.S.A. 66-104(e), and amendments thereto, and placed in
278278 use on or after January 1, 2002, whether such electrical energy is generated
279279 at such generating plant or provided through the adjacent transformation
280280 and transmission interconnect, but except that "station power" does not
281281 include electric energy used for heating, lighting, air conditioning and
282282 office needs of the buildings at a generating plant site.
283283 Sec. 4. K.S.A. 66-1,184 is hereby amended to read as follows: 66-
284284 1,184. (a) Except as provided in subsection (b), every public utility which
285285 that provides retail electric services in this state shall enter into a contract
286286 for parallel generation service with any person who is a customer of such
287287 utility, upon request of such customer, whereby such customer may attach
288288 or connect to the utility's delivery and metering system an apparatus or
289289 device for the purpose of feeding excess electrical power which that is
290290 generated by such customer's energy producing system into the utility's
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334334 system. No such apparatus or device shall either cause damage to the
335335 public utility's system or equipment or present an undue hazard to utility
336336 personnel. Every such contract shall include, but need not be limited to,
337337 provisions relating to fair and equitable compensation on such customer's
338338 monthly bill for energy supplied to the utility by such customer.
339339 (b) (1) For purposes of this subsection:
340340 (A) "Hospital" means the same as defined in K.S.A. 65-425, and
341341 amendments thereto.
342342 (B) "Military installation" means any base, camp, post, station, yard,
343343 center, homeport facility for any ship or other facility under the
344344 jurisdiction of the department of defense, including any leased facility,
345345 located in Kansas.
346346 (C) "Religious organization" means any organization, church, body
347347 of communicants or group, or a society of individuals united for religious
348348 purposes, gathered in common membership for mutual edification in piety,
349349 worship and religious observances at a definite place.
350350 (D) "School" means any school of a school district, accredited private
351351 primary or secondary school, postsecondary educational institution,
352352 community college, technical college, municipal university or accredited
353353 independent institution of postsecondary education.
354354 (E) "Utility" means an electric public utility, as defined by K.S.A. 66-
355355 101a, and amendments thereto, any cooperative, as defined by K.S.A. 17-
356356 4603, and amendments thereto, or a nonstock member-owned electric
357357 cooperative corporation incorporated in this state, or a municipally owned
358358 or operated electric utility;.
359359 (B) "School" means Cloud county community college and Dodge
360360 City community college.
361361 (2) (A) Every utility which that provides retail electric services in this
362362 state shall enter into a contract for parallel generation service with any
363363 person who is a customer of such utility, if such customer is a:
364364 (i) Residential customer of the utility and owns with a renewable
365365 generator with having a capacity of 25 kilowatts or less, or is a;
366366 (ii) commercial customer of the utility and owns with a renewable
367367 generator with having a capacity of 200 kilowatts or less or is a;
368368 (iii) school and owns, religious organization or hospital with a
369369 renewable generator with having a capacity of 1.5 megawatts or less; or
370370 (iv) a United States military installation.
371371 (B) Such generator shall be appropriately sized for such customer's
372372 anticipated electric load.
373373 (C) A commercial customer who uses the operation of a renewable
374374 generator in connection with irrigation pumps shall not request more than
375375 10 irrigation pumps connected to renewable generators to be attached or
376376 connected to the utility's system.
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420420 (D) At the customer's delivery point on the customer's side of the
421421 retail meter, such customer may attach or connect to the utility's delivery
422422 and metering system an apparatus or device for the purpose of feeding
423423 excess electrical power which is generated by such customer's energy
424424 producing system into the utility's system. No such apparatus or device
425425 shall either cause damage to the utility's system or equipment or present an
426426 undue hazard to utility personnel. Every such contract shall include, but
427427 need not be limited to, provisions relating to fair and equitable
428428 compensation for energy supplied to the utility by such customer. Such
429429 compensation shall be not less than 100% of the utility's monthly system
430430 average cost of energy per kilowatt hour, except that in the case of
431431 renewable generators with a capacity of 200 kilowatts or less, such
432432 compensation shall be not less than 150% of the utility's monthly system
433433 average cost of energy per kilowatt hour. A utility may credit such
434434 compensation to the customer's account or pay such compensation to the
435435 customer at least annually or when the total compensation due equals $25
436436 or more.
437437 (3) A customer-generator of any investor owned utility shall have the
438438 option of entering into a contract pursuant to this subsection (b) or
439439 utilizing the net metering and easy connection act. The customer-generator
440440 shall exercise the option in writing, filed with the utility.
441441 (c) The following terms and conditions shall apply to contracts
442442 entered into under subsection (a) or (b):
443443 (1) The utility will shall supply, own, and maintain all necessary
444444 meters and associated equipment utilized for billing. In addition, and For
445445 the purposes of monitoring customer generation and load, the utility may
446446 install at its expense, load research metering. The customer shall supply, at
447447 no expense to the utility, a suitable location for meters and associated
448448 equipment used for billing and for load research;
449449 (2) for the purposes of insuring the safety and quality of utility
450450 system power, the utility shall have the right to require the customer, at
451451 certain times and as electrical operating conditions warrant, to limit the
452452 production of electrical energy from the generating facility to an amount
453453 no greater than the load at the customer's facility of which the generating
454454 facility is a part;
455455 (3) the customer shall furnish, install, operate, and maintain in good
456456 order and repair and, without cost to the utility, such relays, locks and
457457 seals, breakers, automatic synchronizer, and other control and protective
458458 apparatus as shall be designated by the utility as being required as suitable
459459 for the operation of the generator in parallel with the utility's system. In
460460 any case where the customer and the utility cannot agree to terms and
461461 conditions of any such contract, the state corporation commission shall
462462 establish the terms and conditions for such contract. In addition, The utility
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506506 may install, own, and maintain a disconnecting device located near the
507507 electric meter or meters. Interconnection facilities between the customer's
508508 and the utility's equipment shall be accessible at all reasonable times to
509509 utility personnel. Upon notification by the customer of the customer's
510510 intent to construct and install parallel generation, the utility shall provide
511511 the customer a written estimate of all costs that will be incurred by the
512512 utility and billed to the customer to accommodate the interconnection. The
513513 customer may be required to reimburse the utility for any equipment or
514514 facilities required as a result of the installation by the customer of
515515 generation in parallel with the utility's service. The customer shall notify
516516 the utility prior to the initial energizing and start-up testing of the
517517 customer-owned generator, and the utility shall have the right to have a
518518 representative present at such test;
519519 (4) the utility may require a special agreement for conditions related
520520 to technical and safety aspects of parallel generation; and
521521 (5) the utility may limit the number and size of renewable generators
522522 to be connected to the utility's system due to the capacity of the
523523 distribution line to which such renewable generator would be connected,
524524 and in no case shall the utility be obligated to purchase an amount greater
525525 than 4% of such utility's peak power requirements.
526526 (d) Service under any contract entered into under subsection (a) or (b)
527527 shall be subject to either the utility's rules and regulations on file with the
528528 state corporation commission, which shall include a standard
529529 interconnection process and requirements for such utility's system, or the
530530 current federal energy regulatory commission interconnection procedures
531531 and regulations.
532532 (e) In any case where the owner of the renewable generator customer
533533 and the utility cannot agree to terms and conditions of any contract
534534 provided for by this section, the state corporation commission shall
535535 establish the terms and conditions for such contract.
536536 (f) The governing body of any school desiring to proceed under this
537537 section shall, prior to taking any action permitted by this section, make a
538538 finding that either:
539539 (1) Net energy cost savings will accrue to the school from such
540540 renewable generation over a 20-year period; or
541541 (2) that such renewable generation is a science project being
542542 conducted for educational purposes and that such project may not recoup
543543 the expenses of the project through energy cost savings. Any school
544544 proceeding under this section may contract or enter into a finance, pledge,
545545 loan or lease-purchase agreement with the Kansas development finance
546546 authority as a means of financing the cost of such renewable generation.
547547 (g) Each kilowatt of nameplate capacity of the parallel generation of
548548 electricity provided for in this section shall count as 1.10 kilowatts toward
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592592 the compliance of the affected utility, as defined in K.S.A. 66-1257, and
593593 amendments thereto, and with whom the customer-generator has
594594 contracted, with the renewable energy standards act in K.S.A. 66-1256
595595 through 66-1262, and amendments thereto.
596596 (h) The provisions of the net metering and easy connection act shall
597597 not preclude the state corporation commission from approving net
598598 metering tariffs upon request of an electric utility for other methods of
599599 renewable generation not prescribed in subsection (b)(1) of K.S.A. 66-
600600 1264(b)(1), and amendments thereto.
601601 Sec. 5. K.S.A. 66-1264 is hereby amended to read as follows: 66-
602602 1264. As used in the net metering and easy connection act:
603603 (a) "Commission" means the state corporation commission.
604604 (b) "Customer-generator" means the owner or, operator or person
605605 that contracts with an owner or operator pursuant to section 1, and
606606 amendments thereto, of a net metered facility which that:
607607 (1) Is powered by a renewable energy resource;
608608 (2) is located on a premises owned, operated, leased or otherwise
609609 controlled by the customer-generator;
610610 (3) is interconnected and operates in parallel phase and
611611 synchronization with an affected utility and is in compliance with the
612612 standards established by the affected utility;
613613 (4) is intended primarily to offset part or all of the customer-
614614 generator's own electrical energy requirements; and
615615 (5) contains a mechanism, approved by the utility, that automatically
616616 disables the unit and interrupts the flow of electricity back onto the
617617 supplier's electricity lines in the event that service to the customer-
618618 generator is interrupted.
619619 (c) "Peak demand" shall have the meaning ascribed thereto in K.S.A.
620620 66-1257, and amendments thereto.
621621 (d) "Renewable energy resources" shall have the meaning ascribed
622622 thereto in K.S.A. 66-1257, and amendments thereto.
623623 (e) "Utility" means investor-owned electric utility.
624624 Sec. 6. K.S.A. 66-1,170, 66-1,184 and 66-1264 and K.S.A. 2022
625625 Supp. 66-104 are hereby repealed.
626626 Sec. 7. This act shall take effect and be in force from and after its
627627 publication in the statute book.
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