SESSION OF 2024
SUPPLEMENTAL NOTE ON HOUSE BILL NO. 2588
As Amended by Senate Committee on Utilities
Brief*
HB 2588, as amended, would amend the Net Metering
and Easy Connection Act (Act) to further develop regulation
and expand capacity for investor-owned utilities (IOUs) to
connect customers’ renewable energy generation systems,
such as rooftop solar panels systems, to the electric grid. The
bill would amend definitions and establish new definitions
within the Act. Further, it would increase over four years the
total percentage of allowed net metered interconnections for
IOUs to 5.0 percent of peak demand. The bill would establish
the methodology for monthly billing calculation of certain
customer-generators using time-varying rates (different billing
rates for the use of electricity at certain times of the day). The
bill would require that customer-generators be “appropriately
sized,” would codify the formula used to determine the
appropriate size, and would establish requirements on
exporting capacity to the electric grid. The bill also would
make conforming technical changes.
Definitions (Section 1)
The bill would add several defined terms, including
“export” (electricity transmitted from a customer-generator to
the electric grid), “generating capacity” (excess electricity
generated by net metered facilities), “permission to operate”
(the operational date of the customer-generator’s net metered
facility), “supplied” (electricity provided by an IOU to a net
metered electrical system), and “witness test” (an on-site
measurement or verification by a utility representative). It
____________________
*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
http://www.kslegislature.org would revise the definition of “customer-generator” to specify
that the customer-generator will fully deliver remaining energy
output to the utility. Additionally, the bill would amend the
definition of “customer-generator” to add that the installed
mechanism responsible for interrupting electricity flow must
be certified by Underwriter Laboratories, an accredited safety
organization.
Allowable Net Metered Interconnections (Section 2)
The bill would amend eligibility for an IOU net metering
option, requiring a customer-generator to be in good standing
with the utility.
The bill would increase the threshold of generating
capacity produced by all net metered systems from the
current 1.0 percent by 1.0 percent annually until 2027. From
2027 and each following year, the cap would be limited to 5.0
percent of the utility’s historic highest annual peak demand
since 2014. The bill would authorize the Kansas Corporation
Commission (KCC) to increase the 5.0 percent cap after
conducting a hearing authorized by continuing law.
The bill would authorize an IOU to introduce incentive
programs for customer-generators that began operation after
July 1, 2024.
Monthly Variable Time-of-use Billing for Certain
Customer Generators (Section 3)
The bill would establish criteria for billing net metered
facilities for electricity supplied by the IOU and crediting a net
metered facility/system for energy exported to the utility in a
given billing cycle for those net metered facilities that began
operating on or after July 1, 2024, and are participating in an
optional time-varying rate (rate).
2- 2588 The bill would require the utility to measure the net
energy supplied or exported for each time-of-use period
established by the optional rate in the same manner as it
measures supplied energy to other customers in the same
class of service (residential, business, or industrial).
Customer-generators would be billed for net supplied energy
exceeding their exported energy using the same time-of-use
periods, to include all other charges applied to non-customer-
generators in a given customer class. If the energy exported
from the customer-generator exceeds the energy supplied
during a time-of-use period, the IOU would be required to
credit a customer-generator at least 100 percent of the IOU
monthly system average cost of energy per kilowatt (kW)
hour, with any net credit, and net of all other charges applied
to the same customer class. The credit would be applied to
the next billing period.
In essence, a customer-generator consuming more
energy than it produces will be billed for the difference. If the
customer-generator produces more energy than it consumes,
the utility will apply the difference in cost as a credit on the
customer-generator’s next bill.
Appropriate Net Metered System Size (Section 4)
For customer-generators that began to operate after
July 1, 2014, the bill would amend the export limitations to
remove the delineation between classes of service and
increase the amount of electricity subject to net metering to
150 kW for all classes.
The bill also would codify the formula used to calculate
the appropriate size of a customer-generator’s export
capacity in kW-hours using 12 months of historic
consumption. If a customer-generator does not have historic
consumption, the bill would require the export capacity to be
calculated by 7.15 kW-hours per square foot of conditioned
space, which would be rounded up to the nearest standard
size:
3- 2588 ●By 2 kW for facilities with capacity between 2 and
20 kW; and
●By 5 kW for facilities with capacity between 20 and
150 kW.
Additionally, the bill would establish the following
limitation to a net metered facility’s export capacity for those
customer-generators that begin operating a net-metered
facility/system on or after July 1, 2026:
●Export generating capacity shall not exceed 50
percent; and
●Energy storage capacity, including electric vehicles,
and portable storage devices, are not to be
included in the sizing formula unless the device
has the ability to add export capacity.
The bill would require customer-generators that operate
a net-metered facility/system designed to export an amount of
power that differs from the system’s generating capacity to
comply with the following:
●Own and maintain necessary export limiting
devices (which control the power generation of a
generator, such as a solar panel);
●Restrict the export limiting device settings to
qualified individuals;
●Allow the utility to require a witness test of the
export limiting device function prior to operation;
●Seek approval from the utility prior to increasing
the systems export capacity;
●Allow the utility to conduct periodic testing of the
export limiting device; and
4- 2588 ●Cease operation if the export limiting device’s
settings are incorrect or if the device fails to limit
the export of power below the designed capacity
for a period exceeding 15 minutes in a single
event.
The bill would also clarify that a utility cannot restrict the
brand or model of an export limiting device if the device is
approved for use by the system manufacturer or Underwriter
Laboratories.
Technical and Conforming Changes (Throughout)
The bill would make technical and conforming changes
including but not limited to the following:
●Replacing the term “NEG” with “net excess
generation”; and
●Replacing the term “generates” with “exports.”
Background
The bill was introduced by the House Committee on
Energy, Utilities and Telecommunications at the request of a
representative of the Clean Energy Business Council.
House Committee on Energy, Utilities and
Telecommunications
In the House Committee hearing on February 1, 2024,
representatives of King Solar, Evergy, Kansans for Lower
Electric Rates, Kansas Industrial Consumers Group, Good
Energy Solutions, Kansas Sierra Club, and Citizens’ Utility
Ratepayer Board (CURB) provided proponent testimony,
generally stating the legislation was a collaborative effort
between IOUs and stakeholders. They stated the bill would
5- 2588 bring additional clarity to how net metered connection will
function as capacity expands.
Written-only proponent testimony was provided by
representatives of The Nature Conservancy, Kansas Interfaith
Action, Kansas Chamber, and Hutton Energy Services.
Neutral testimony was provided by a representative of
the KCC, noting the need for additional consumer protections
due to a possible increase in unscrupulous installers.
No other testimony was provided.
Senate Committee on Utilities
The Senate Committee heard proponent testimony, on
March 5, 2024, from representatives of the Clean Energy
Business Council, King Solar, Evergy, Kansas Industrial
Consumers Group, Kansans for Lower Electric Rates, Good
Energy Solutions, CURB, and Kansas Sierra Club. The
proponents indicated the enactment of the bill would amend
current net metering law and allow an increase in the 1.0
percent cap currently in place, and would allow an increase in
the size of rooftop solar systems to 150 kW for all customer
classes. They expressed the incremental increase in the cap
gives the utility time, if needed, to analyze and plan for the
impact to the physical grid. The proponents further discussed
that the bill would ensure rooftop solar companies are not
taking advantage of Kansans.
Written-only proponent testimony was provided by
Hutton Energy Services, Cromwell Environmental, and the
Kansas Chamber.
Neutral testimony was provided by representatives of
the Kansas Electric Cooperatives and Kansas Corporation
Commission, who mirrored concerns and thoughts from the
testimony provided during the House Committee hearing.
6- 2588 No other testimony was provided.
The Senate Committee amended the bill to increase the
threshold of generating capacity produced by all net metered
systems from the current 1.0 percent by 1.0 percent annually
until 2027. From 2027 and each following year, the cap would
be limited to 5.0 percent of the utility’s historic highest annual
peak demand since 2014.
Fiscal Information
According to the fiscal note prepared by the Division
of the Budget on the bill, as introduced, the KCC indicates
that enactment of the bill would not have a fiscal effect on
KCC’s revenues or expenditures. CURB indicates the
enactment of the bill, with respect to utility rates in general,
could open a general docket with the KCC, but the
proceedings are not likely to have a fiscal effect on CURB’s
revenues or expenditures.
The Kansas Association of Counties indicates that the
fiscal effect associated with the enactment of the bill cannot
be estimated for county governments. The League of Kansas
Municipalities indicates enactment of the bill would have a
fiscal effect on cities from the retail rate generated from the
excess energy, in addition to the creation of a cross-
subdivision of customers; however, the fiscal effect cannot be
estimated.
Net metering; renewable energy; investor-owned utilities
7- 2588