2023 -- S 0506 ======== LC002316 ======== S TATE OF RHODE IS LAND IN GENERAL ASSEMBLY JANUARY SESSION, A.D. 2023 ____________ A N A C T RELATING TO PUBLIC UTILITIES AND CARRIERS -- NET METERING Introduced By: Senators Valverde, DiMario, Murray, Miller, DiPalma, Pearson, Euer, Tikoian, Ujifusa, and Gallo Date Introduced: March 07, 2023 Referred To: Senate Environment & Agriculture It is enacted by the General Assembly as follows: SECTION 1. Section 39-26.4-2 of the General Laws in Chapter 39-26.4 entitled "Net 1 Metering" is hereby amended to read as follows: 2 39-26.4-2. Definitions. 3 Terms not defined in this section herein shall have the same meaning as contained in 4 chapter 26 of this title. When used in this chapter: 5 (1) “Community remote net-metering system” means a facility generating electricity using 6 an eligible net-metering resource that allocates net-metering credits to a minimum of one account 7 for a system associated with low- or moderate-income housing eligible credit recipients, or three 8 (3) eligible credit-recipient customer accounts, provided that no more than fifty percent (50%) of 9 the credits produced by the system are allocated to one eligible credit recipient, and provided further 10 at least fifty percent (50%) of the credits produced by the system are allocated to the remaining 11 eligible credit recipients in an amount not to exceed that which is produced annually by twenty-12 five kilowatt (25 KW) AC capacity. The community remote net-metering system may transfer 13 credits to eligible credit recipients in an amount that is equal to or less than the sum of the usage of 14 the eligible credit recipient accounts measured by the three-year (3) average annual consumption 15 of energy over the previous three (3) years. A projected annual consumption of energy may be used 16 until the actual three-year (3) average annual consumption of energy over the previous three (3) 17 years at the eligible credit recipient accounts becomes available for use in determining eligibility 18 of the generating system. The community remote net-metering system may be owned by the same 19 LC002316 - Page 2 of 8 entity that is the customer of record on the net-metered account or may be owned by a third party. 1 (2) “Electric distribution company” shall have the same meaning as § 39-1-2, but shall not 2 include Block Island Power Company or Pascoag Utility District, each of whom shall be required 3 to offer net metering to customers through a tariff approved by the public utilities commission after 4 a public hearing. Any tariff or policy on file with the public utilities commission on the date of 5 passage of this chapter shall remain in effect until the commission approves a new tariff. 6 (3) “Eligible credit recipient” means one of the following eligible recipients in the electric 7 distribution company’s service territory whose electric service account or accounts may receive 8 net-metering credits from a community remote net-metering system. Eligible credit recipients 9 include the following definitions: 10 (i) Residential accounts in good standing. 11 (ii) “Low- or moderate-income housing eligible credit recipient” means an electric service 12 account or accounts in good standing associated with any housing development or developments 13 owned or operated by a public agency, nonprofit organization, limited-equity housing cooperative, 14 or private developer that receives assistance under any federal, state, or municipal government 15 program to assist the construction or rehabilitation of housing affordable to low- or moderate-16 income households, as defined in the applicable federal or state statute, or local ordinance, 17 encumbered by a deed restriction or other covenant recorded in the land records of the municipality 18 in which the housing is located, that: 19 (A) Restricts occupancy of no less than fifty percent (50%) of the housing to households 20 with a gross, annual income that does not exceed eighty percent (80%) of the area median income 21 as defined annually by the United States Department of Housing and Urban Development (HUD); 22 (B) Restricts the monthly rent, including a utility allowance, that may be charged to 23 residents, to an amount that does not exceed thirty percent (30%) of the gross, monthly income of 24 a household earning eighty percent (80%) of the area median income as defined annually by HUD; 25 (C) Has an original term of not less than thirty (30) years from initial occupancy. 26 Electric service account or accounts in good standing associated with housing 27 developments that are under common ownership or control may be considered a single low- or 28 moderate-income housing eligible credit recipient for purposes of this section. The value of the 29 credits shall be used to provide benefits to tenants. 30 (iii) “Educational institutions” means public and private schools at the primary, secondary, 31 and postsecondary levels. 32 (4) “Eligible net-metering resource” means eligible renewable energy resource, as defined 33 in § 39-26-5 including biogas created as a result of anaerobic digestion, but, specifically excluding 34 LC002316 - Page 3 of 8 all other listed eligible biomass fuels. 1 (5) “Eligible net-metering system” means a facility generating electricity using an eligible 2 net-metering resource that is reasonably designed and sized to annually produce electricity in an 3 amount that is equal to, or less than, the renewable self-generator’s usage at the eligible net-4 metering system site. No utility shall limit the eligibility of a net metering site based on prior 5 consumption. Any excess of energy not consumed under a net metering system within a calendar 6 year shall be credited to the consumer at the wholesale electricity rate measured by the three-year 7 (3) average annual consumption of energy over the previous three (3) years at the electric 8 distribution account(s) located at the eligible net-metering system site A projected annual 9 consumption of energy may be used until the actual three-year (3) average annual consumption of 10 energy over the previous three (3) years at the electric distribution account(s) located at the eligible 11 net-metering system site becomes available for use in determining eligibility of the generating 12 system. The eligible net-metering system may be owned by the same entity that is the customer of 13 record on the net-metered accounts or may be owned by a third party that is not the customer of 14 record at the eligible net-metering system site and which may offer a third-party, net-metering 15 financing arrangement or net-metering financing arrangement, as applicable. Notwithstanding any 16 other provisions of this chapter, any eligible net-metering resource: (i) Owned by a public entity, 17 educational institution, hospital, nonprofit, or multi-municipal collaborative or (ii) Owned and 18 operated by a renewable-generation developer on behalf of a public entity, educational institution, 19 hospital, nonprofit, or multi-municipal collaborative through a net-metering financing arrangement 20 shall be treated as an eligible net-metering system and all accounts designated by the public entity, 21 educational institution, hospital, nonprofit, or multi-municipal collaborative for net metering shall 22 be treated as accounts eligible for net metering within an eligible net-metering system site. 23 (6) “Eligible net-metering system site” means the site where the eligible net-metering 24 system or community remote net-metering system is located or is part of the same campus or 25 complex of sites contiguous to one another and the site where the eligible net-metering system or 26 community remote net-metering system is located or a farm in which the eligible net-metering 27 system or community remote net-metering system is located. Except for an eligible net-metering 28 system owned by or operated on behalf of a public entity, educational institution, hospital, 29 nonprofit, or multi-municipal collaborative through a net-metering financing arrangement, the 30 purpose of this definition is to reasonably assure that energy generated by the eligible net-metering 31 system is consumed by net-metered electric service account(s) that are actually located in the same 32 geographical location as the eligible net-metering system. All energy generated from any eligible 33 net-metering system is, and will be considered, consumed at the meter where the renewable energy 34 LC002316 - Page 4 of 8 resource is interconnected for valuation purposes. Except for an eligible net-metering system 1 owned by, or operated on behalf of, a public entity, educational institution, hospital, nonprofit, or 2 multi-municipal collaborative through a net-metering financing arrangement, or except for a 3 community remote net-metering system, all of the net-metered accounts at the eligible net-metering 4 system site must be the accounts of the same customer of record and customers are not permitted 5 to enter into agreements or arrangements to change the name on accounts for the purpose of 6 artificially expanding the eligible net-metering system site to contiguous sites in an attempt to avoid 7 this restriction. However, a property owner may change the nature of the metered service at the 8 accounts at the site to be master metered in the owner’s name, or become the customer of record 9 for each of the accounts, provided that the owner becoming the customer of record actually owns 10 the property at which the account is located. As long as the net-metered accounts meet the 11 requirements set forth in this definition, there is no limit on the number of accounts that may be net 12 metered within the eligible net-metering system site. 13 (7) “Excess renewable net-metering credit” means a credit that applies to an eligible net-14 metering system or community remote net-metering system for that portion of the production of 15 electrical energy beyond one hundred percent (100%) and no greater than one hundred twenty-five 16 percent (125%) of the renewable self-generator’s own consumption at the eligible net-metering 17 system site or the sum of the usage of the eligible credit recipient accounts associated with the 18 community remote net-metering system during the applicable billing period. Such excess 19 renewable net-metering credit shall be equal to the electric distribution company’s avoided cost 20 rate wholesale electricity rate, which is hereby declared to be the average ISO-NE clearing price at 21 the time of sale electric distribution company’s standard-offer service kilowatt hour (KWh) charge 22 for the rate class and time-of-use billing period (if applicable) applicable to the customer of record 23 for the eligible net-metering system or applicable to the customer of record for the community 24 remote net-metering system. The commission shall have the authority to make determinations as 25 to the applicability of this credit to specific generation facilities to the extent there is any uncertainty 26 or disagreement. 27 (8) “Farm” shall be defined in accordance with § 44-27-2, except that all buildings 28 associated with the farm shall be eligible for net-metering credits as long as: (i) The buildings are 29 owned by the same entity operating the farm or persons associated with operating the farm; and (ii) 30 The buildings are on the same farmland as the project on either a tract of land contiguous with, or 31 reasonably proximate to, such farmland or across a public way from such farmland. 32 (9) “Hospital” means and shall be defined and established as set forth in chapter 17 of title 33 23. 34 LC002316 - Page 5 of 8 (10) “Multi-municipal collaborative” means a group of towns and/or cities that enter into 1 an agreement for the purpose of co-owning a renewable-generation facility or entering into a 2 financing arrangement pursuant to subsection (14). 3 (11) “Municipality” means any Rhode Island town or city, including any agency or 4 instrumentality thereof, with the powers set forth in title 45. 5 (12) “Net metering” means using electrical energy generated by an eligible net-metering 6 system for the purpose of self-supplying electrical energy and power at the eligible net-metering 7 system site, or with respect to a community remote net-metering system, for the purpose of 8 generating net-metering credits to be applied to the electric bills of the eligible credit recipients 9 associated with the community net-metering system. The amount so generated will thereby offset 10 consumption at the eligible net-metering system site through the netting process established in this 11 chapter, or with respect to a community remote net-metering system, the amounts generated in 12 excess of that amount will result in credits being applied to the eligible credit-recipient accounts 13 associated with the community remote net-metering system. 14 (13) “Net-metering customer” means a customer of the electric distribution company 15 receiving and being billed for distribution service whose distribution account(s) are being net 16 metered. 17 (14) “Net-metering financing arrangement” means arrangements entered into by a public 18 entity, educational institution, hospital, nonprofit, or multi-municipal collaborative with a private 19 entity to facilitate the financing and operation of a net-metering resource, in which the private entity 20 owns and operates an eligible net-metering resource on behalf of a public entity, educational 21 institution, hospital, nonprofit, or multi-municipal collaborative, where: (i) The eligible net-22 metering resource is located on property owned or controlled by the public entity, educational 23 institution, hospital, or one of the municipalities, as applicable; and (ii) The production from the 24 eligible net-metering resource and primary compensation paid by the public entity, educational 25 institution, hospital, nonprofit, or multi-municipal collaborative to the private entity for such 26 production is directly tied to the consumption of electricity occurring at the designated net-metered 27 accounts. 28 (15) “Nonprofit” means a nonprofit corporation as defined and established through chapter 29 6 of title 7, and shall include religious organizations that are tax exempt pursuant to 26 U.S.C. § 30 501(d). 31 (16) “Person” means an individual, firm, corporation, association, partnership, farm, town 32 or city of the state of Rhode Island, multi-municipal collaborative, or the state of Rhode Island or 33 any department of the state government, governmental agency, or public instrumentality of the 34 LC002316 - Page 6 of 8 state. 1 (17) “Project” means a distinct installation of an eligible net-metering system or a 2 community remote net-metering system. An installation will be considered distinct if it is installed 3 in a different location, or at a different time, or involves a different type of renewable energy. 4 (18) “Public entity” means the federal government, the state of Rhode Island, 5 municipalities, wastewater treatment facilities, public transit agencies, or any water distributing 6 plant or system employed for the distribution of water to the consuming public within this state 7 including the water supply board of the city of Providence. 8 (19) “Renewable net-metering credit” means a credit that applies to an eligible net-9 metering system or a community remote net-metering system up to one hundred percent (100%) of 10 either the renewable self-generator’s usage at the eligible net-metering system site or the sum of 11 the usage of the eligible credit-recipient accounts associated with the community remote net-12 metering system over the applicable billing period. This credit shall be equal to the total kilowatt 13 hours of electrical energy generated up to the amount consumed on-site, and/or generated up to the 14 sum of the eligible credit-recipient account usage during the billing period multiplied by the sum 15 of the distribution company’s: 16 (i) Standard-offer service kilowatt-hour charge for the rate class applicable to the net-17 metering customer, except that for remote public entity and multi-municipality collaborative net-18 metering systems that submit an application for an interconnection study on or after July 1, 2017, 19 and community remote net-metering systems, the standard-offer service kilowatt-hour charge shall 20 be net of the renewable energy standard charge or credit; 21 (ii) Distribution kilowatt-hour charge; 22 (iii) Transmission kilowatt-hour charge; and 23 (iv) Transition kilowatt-hour charge. 24 Notwithstanding the foregoing, except for systems that have requested an interconnection 25 study for which payment has been received by the distribution company, or if an interconnection 26 study is not required, a completed and paid interconnection application, by December 31, 2018, the 27 renewable net-metering credit for all remote public entity and multi-municipal collaborative net-28 metering systems shall not include the distribution kilowatt-hour charge commencing on January 29 1, 2050. 30 (20) “Renewable self-generator” means an electric distribution service customer of record 31 for the eligible net-metering system or community remote net-metering system at the eligible net-32 metering system site which system is primarily designed to produce electrical energy for 33 consumption by that same customer at its distribution service account(s), and/or, with respect to 34 LC002316 - Page 7 of 8 community remote net-metering systems, electrical energy which generates net-metering credits to 1 be applied to offset the eligible credit-recipient account usage. 2 (21) “Third party” means and includes any person or entity, other than the renewable self-3 generator, who or that owns or operates the eligible net-metering system or community remote net-4 metering system on the eligible net-metering system site for the benefit of the renewable self-5 generator. 6 (22) “Third-party, net-metering financing arrangement” means the financing of eligible 7 net-metering systems or community remote net-metering systems through lease arrangements or 8 power/credit purchase agreements between a third party and renewable self-generator, except for 9 those entities under a public entity net-metering financing arrangement. A third party engaged in 10 providing financing arrangements related to such net-metering systems with a public or private 11 entity is not a public utility as defined in § 39-1-2. 12 SECTION 2. This act shall take effect upon passage. 13 ======== LC002316 ======== LC002316 - Page 8 of 8 EXPLANATION BY THE LEGISLATIVE COUNCIL OF A N A C T RELATING TO PUBLIC UTILITIES AND CARRIERS -- NET METERING *** This act would prohibit utility companies from limiting the eligibility of a net metering site 1 based on prior consumption and require excess energy not consumed under the net metering system 2 to be credited to the consumer. It would also amend the definition of excess renewable net-metering 3 credit. 4 This act would take effect upon passage. 5 ======== LC002316 ========