Bill Text: MI HB5700 | 2009-2010 | 95th Legislature | Introduced

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Bill Title: Energy; alternative sources; net metering; increase energy generation limits. Amends secs. 5, 7, 173, 175 & 177 of 2008 PA 295 (MCL 460.1005 et seq.).

Spectrum: Moderate Partisan Bill (Democrat 5-1)

Status: (Introduced - Dead) 2009-12-16 - Printed Bill Filed 12/15/2009 [HB5700 Detail]

Download: Michigan-2009-HB5700-Introduced.html

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HOUSE BILL No. 5700

December 15, 2009, Introduced by Reps. Scripps, Meekhof, Byrnes, Griffin, Robert Jones and Warren and referred to the Committee on Energy and Technology.

 

     A bill to amend 2008 PA 295, entitled

 

"Clean, renewable, and efficient energy act,"

 

by amending sections 5, 7, 173, 175, and 177 (MCL 460.1005,

 

460.1007, 460.1173, 460.1175, and 460.1177).

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 5. As used in this act:

 

     (a) "Electric provider", subject to sections 21(1), 23(1), and

 

25(1), means any of the following:

 

     (i) Any person or entity that is regulated by the commission

 

for the purpose of selling electricity to retail customers in this

 

state.

 

     (ii) A municipally-owned electric utility in this state.

 

     (iii) A cooperative electric utility in this state.

 

     (iv) Except as used in subpart B of part 2, an alternative

 

electric supplier licensed under section 10a of 1939 PA 3, MCL

 

460.10a.

 

     (b) "Eligible electric generator" means that a methane

 

digester or renewable energy system with a generation capacity

 

limited to the customer's electric need and that does not exceed

 

the following:

 

     (i) For a renewable energy system, 150 kilowatts Except as

 

provided in subparagraph (ii), 2 megawatts of aggregate generation

 

at a single site or the customer's electric need, whichever is

 

less.

 

     (ii) For a methane digester, 550 kilowatts of aggregate

 

generation at a single site renewable energy system located on a

 

farm, 2 megawatts.

 

     (c) "Energy conservation" means the reduction of customer

 

energy use through the installation of measures or changes in

 

energy usage behavior. Energy conservation does not include the use

 

of advanced cleaner energy systems.

 

     (d) "Energy efficiency" means a decrease in customer

 

consumption of electricity or natural gas achieved through measures

 

or programs that target customer behavior, equipment, devices, or

 

materials without reducing the quality of energy services.

 

     (e) "Energy optimization", subject to subdivision (f), means

 

all of the following:

 

     (i) Energy efficiency.

 

     (ii) Load management, to the extent that the load management

 

reduces overall energy usage.

 

     (iii) Energy conservation, but only to the extent that the

 

decreases in the consumption of electricity produced by energy

 

conservation are objectively measurable and attributable to an

 

energy optimization plan.

 

     (f) Energy optimization does not include electric provider

 

infrastructure projects that are approved for cost recovery by the

 

commission other than as provided in this act.

 

     (g) "Energy optimization credit" means a credit certified

 

pursuant to section 87 that represents achieved energy

 

optimization.

 

     (h) "Energy optimization plan" or "EO plan" means a plan

 

approved under section 71 73.

 

     (i) "Energy optimization standard" means the minimum energy

 

savings required to be achieved under section 77.

 

     (j) "Energy star" means the voluntary partnership among the

 

United States department of energy, the United States environmental

 

protection agency, product manufacturers, local utilities, and

 

retailers to help promote energy efficient products by labeling

 

with the energy star logo, to educate consumers about the benefits

 

of energy efficiency, and to help promote energy efficiency in

 

buildings by benchmarking and rating energy performance.

 

     (k) "Federal approval" means approval by the applicable

 

regional transmission organization or other federal energy

 

regulatory commission approved transmission planning process of a

 

transmission project that includes the transmission line. Federal

 

approval may be evidenced in any of the following manners:

 

     (i) The proposed transmission line is part of a transmission

 

project included in the applicable regional transmission

 

organization's board-approved transmission expansion plan.

 

     (ii) The applicable regional transmission organization has

 

informed the electric utility, affiliated transmission company, or

 

independent transmission company that a transmission project

 

submitted for an out-of-cycle project review has been approved by

 

the applicable regional transmission organization, and the approved

 

transmission project includes the proposed transmission line.

 

     (iii) If, after the effective date of this act October 6, 2008,

 

the applicable regional transmission organization utilizes another

 

approval process for transmission projects proposed by an electric

 

utility, affiliated transmission company, or independent

 

transmission company, the proposed transmission line is included in

 

a transmission project approved by the applicable regional

 

transmission organization through the approval process developed

 

after the effective date of this act October 6, 2008.

 

     (iv) Any other federal energy regulatory commission approved

 

transmission planning process for a transmission project.

 

     Sec. 7. As used in this act:

 

     (a) "Gasification facility" means a facility located in this

 

state that uses a thermochemical process that does not involve

 

direct combustion, to produce which process produces synthesis gas,

 

composed of carbon monoxide and hydrogen, from carbon-based

 

feedstocks (such as coal, petroleum coke, wood, biomass, hazardous

 

waste, medical waste, industrial waste, and solid waste, including,

 

but not limited to, municipal solid waste, electronic waste, and

 

waste described in section 11514 of the natural resources and

 

environmental protection act, 1994 PA 451, MCL 324.11514) and that

 

uses the synthesis gas or a mixture of the synthesis gas and

 

methane to generate electricity for commercial use. Gasification

 

facility includes the transmission lines, gas transportation lines

 

and facilities, and associated property and equipment specifically

 

attributable to such a facility. Gasification facility includes,

 

but is not limited to, an integrated gasification combined cycle

 

facility and a plasma arc gasification facility.

 

     (b) "Incremental costs of compliance" means the net revenue

 

required by an electric provider to comply with the renewable

 

energy standard, calculated, for an electric provider whose rates

 

are regulated by the commission, as provided under section 47.

 

     (c) "Independent transmission company" means that term as

 

defined in section 2 of the electric transmission line

 

certification act, 1995 PA 30, MCL 460.562.

 

     (d) "Industrial cogeneration facility" means a facility that

 

generates electricity using industrial thermal energy or industrial

 

waste energy.

 

     (e) "Industrial thermal energy" means thermal energy that is a

 

by-product of an industrial or manufacturing process and that would

 

otherwise be wasted. For the purposes of this subdivision,

 

industrial or manufacturing process does not include the generation

 

of electricity.

 

     (f) "Industrial waste energy" means exhaust gas or flue gas

 

that is a by-product of an industrial or manufacturing process and

 

that would otherwise be wasted. For the purposes of this

 

subdivision, industrial or manufacturing process does not include

 

the generation of electricity.

 

     (g) "Integrated gasification combined cycle facility" means a

 

gasification facility that uses a thermochemical process, including

 

high temperatures and controlled amounts of air and oxygen, to

 

break substances down into their molecular structures and that uses

 

exhaust heat to generate electricity.

 

     (h) "LEED" means the leadership in energy and environmental

 

design green building rating system developed by the United States

 

green building council.

 

     (i) "Load management" means measures or programs that target

 

equipment or devices to result in decreased peak electricity demand

 

such as by shifting demand from a peak to an off-peak period.

 

     (j) "Modified net metering" means a utility billing method

 

that applies the power supply component of the full retail rate to

 

the net of the bidirectional flow of kilowatt hours across the

 

customer interconnection with the utility distribution system,

 

during a billing period or time-of-use pricing period. A negative

 

net metered quantity during the billing period or during each time-

 

of-use pricing period within the billing period reflects net excess

 

generation for which the customer is entitled to receive credit

 

under section 177(4). Standby charges for modified net metering

 

customers on an energy rate schedule shall be equal to the retail

 

distribution charge applied to the imputed customer usage during

 

the billing period. The imputed customer usage is calculated as the

 

sum of the metered on-site generation and the net of the

 

bidirectional flow of power across the customer interconnection

 

during the billing period. The commission shall establish standby

 

charges for modified net metering customers on demand-based rate

 

schedules that provide an equivalent contribution to utility system

 

costs.

 

     Sec. 173. (1) The commission shall establish a statewide net

 

metering program by order issued not later than 180 days after the

 

effective date of this act. No later than 180 days after the

 

effective date of this act by April 4, 2009. By April 4, 2009, the

 

commission shall promulgate rules regarding any time limits on the

 

submission of net metering applications or inspections of net

 

metering equipment and any other matters the commission considers

 

necessary to implement this part. Any rules adopted regarding time

 

limits for approval of parallel operation shall recognize

 

reliability and safety complications including those arising from

 

equipment saturation, use of multiple technologies, and proximity

 

to synchronous motor loads. The program shall apply to all electric

 

utilities and alternative electric suppliers in this state. Except

 

as otherwise provided under this part, customers a customer of any

 

class are is eligible to interconnect eligible electric generators

 

with the customer's local electric utility and operate the eligible

 

electric generators in parallel with the distribution system. The

 

program shall be designed for a period of not less than 10 years.

 

and limit each customer to generation capacity designed to meet

 

only the customer's electric needs. The commission may waive the

 

application, interconnection, and installation requirements of this

 

part for customers participating in the net metering program under

 

the commission's March 29, 2005 order in case no. U-14346.

 

     (2) An electric utility or alternative electric supplier is

 

not required to allow for net metering that is greater than 1% 2%

 

of its in-state peak load for the preceding calendar year. The An

 

electric utility or alternative electric supplier shall notify the

 

commission if its net metering program reaches the 1% requirement

 

2% limit under this subsection. The 1% 2% limit under this

 

subsection shall be allocated as follows:

 

     (a) No more than 0.5% for customers with a system capable of

 

generating 20 kilowatts or less.

 

     (b) No more than 0.25% 0.75% for customers with a system

 

capable of generating more than 20 kilowatts but not more than 150

 

kilowatts 1 megawatt.

 

     (c) No more than 0.25% 0.75% for customers with a system

 

capable of generating more than 150 kilowatts 1 megawatt.

 

     (3) Selection of customers for participation in the net

 

metering program shall be based on the order in which the

 

applications for participation in the net metering program are

 

received by the electric utility or alternative electric supplier.

 

     (4) An electric utility or alternative electric supplier shall

 

not refuse to provide or discontinue electric service to a customer

 

solely for the reason that because the customer participates in the

 

net metering program.

 

     (5) The program created under subsection (1) shall include all

 

of the following:

 

     (a) Statewide uniform interconnection requirements for all

 

eligible electric generators. The interconnection requirements

 

shall be designed to protect electric utility workers and equipment

 

and the general public.

 

     (b) Net metering equipment and its installation must meet all

 

current local and state electric and construction code

 

requirements. Any equipment that is certified by a nationally

 

recognized testing laboratory to IEEE 1547.1 testing standards and

 

in compliance with UL 1741 scope 1.1A, effective May 7, 2007, and

 

installed in compliance with this part is considered to be eligible

 

equipment. Within the time provided by the commission in rules

 

promulgated under subsection (1) and consistent with good utility

 

practice , and the protection of electric utility workers,

 

protection of electric utility equipment, and protection of the

 

general public, an electric utility may study, confirm, and ensure

 

that an eligible electric generator installation at the customer's

 

site meets the IEEE 1547 anti-islanding requirements. Utility

 

testing and approval of the interconnection and execution of a

 

parallel operating agreement must be completed prior to the

 

equipment operating An eligible electric generator shall not be

 

operated in parallel with the distribution system of the utility.

 

an electric utility unless both of the following requirements have

 

been met:

 

     (i) The electric utility has tested and approved the

 

interconnection.

 

     (ii) The electric utility and customer have executed a parallel

 

operating agreement.

 

     (c) A uniform application form and process to be used by all

 

electric utilities and alternative electric suppliers in this

 

state. Customers who are served by an alternative electric supplier

 

shall submit a copy of the application to the electric utility for

 

the customer's service area.

 

     (d) Net metering customers with a system an eligible electric

 

generator capable of generating 20 kilowatts or less qualify for

 

true net metering.

 

     (e) Net metering customers with a system an eligible electric

 

generator capable of generating more than 20 kilowatts qualify for

 

modified net metering.

 

     (6) Each electric utility and alternative electric supplier

 

shall maintain records of all applications and up-to-date records

 

of all active eligible electric generators located within their

 

service area.

 

     Sec. 175. (1) An electric utility or alternative electric

 

supplier may charge a fee not to exceed $100.00 to process an

 

application for net metering. A net metering customer with a system

 

capable of generating more than 20 kilowatts shall pay all

 

interconnection costs . A customer with a system capable of

 

generating more than 150 kilowatts shall pay for the eligible

 

electric generator as determined based on the commission's

 

interconnection rules but is not liable for power supply or

 

delivery standby costs. The commission shall recognize the

 

reasonable cost for each electric utility and alternative electric

 

supplier to operate a net metering program. For an electric utility

 

with 1,000,000 or more retail customers in this state, the

 

commission shall include in that electric utility's nonfuel base

 

rates all costs of meeting all program requirements except that all

 

energy costs of the program shall be recovered through the

 

utility's power supply cost recovery mechanism under sections

 

section 6j and 6k of 1939 PA 3, MCL 460.6j. and 460.6k. For an

 

electric utility with less than 1,000,000 base distribution

 

customers in this state, the commission shall allow that utility to

 

recover all energy costs of the program through the power supply

 

cost recovery mechanism under sections section 6j and 6k of 1939 PA

 

3, MCL 460.6j, and 460.6k, and shall develop a cost recovery

 

mechanism for that utility to contemporaneously recover all other

 

costs of meeting the program requirements.

 

     (2) The interconnection requirements of the net metering

 

program shall provide that an electric utility or alternative

 

electric supplier shall, subject to any time requirements imposed

 

by the commission and upon reasonable written notice to the net

 

metering customer, perform testing and inspection of an

 

interconnected eligible electric generator as is necessary to

 

determine that the system complies with all applicable electric

 

safety, power quality, and interconnection requirements. The costs

 

of testing and inspection are considered a cost of operating a net

 

metering program and shall be recovered under subsection (1).

 

     (3) The interconnection requirements shall require all

 

eligible electric generators, alternative electric suppliers, and

 

electric utilities to comply with all applicable federal, state,

 

and local laws, rules, or regulations, and any national standards

 

as determined by the commission.

 

     Sec. 177. (1) Electric In the net metering program under

 

section 173(1), electric meters shall be used to determine the

 

amount of the a customer's energy use in each billing period, net

 

of any excess energy the customer's eligible electric generator

 

delivers to the electric utility distribution system during that

 

same billing period. For a customer with a generation system an

 

eligible electric generator capable of generating more than 20

 

kilowatts, the utility shall install and utilize a generation meter

 

and a meter or meters capable of measuring the flow of energy in

 

both directions. A customer with a system an eligible electric

 

generator capable of generating more than 150 kilowatts 1 megawatt

 

shall pay the costs of installing any new meters.

 

     (2) An electric utility serving over 1,000,000 or more

 

customers in this state may shall provide its customers

 

participating in the net metering program, at no additional charge

 

or for a charge not greater than that allowed under subsection (3),

 

a meter or meters capable of measuring the flow of energy in both

 

directions.

 

     (3) An electric utility serving fewer than 1,000,000 customers

 

in this state shall provide a meter or meters described in

 

subsection (2) capable of measuring the flow of energy in both

 

directions to customers participating in the net metering program,

 

at cost . Only at a charge equal to the incremental cost above that

 

for meters provided by the electric utility to similarly situated

 

nongenerating customers. shall be paid by the eligible customer.

 

     (4) If the quantity of electricity generated and delivered to

 

the electric utility distribution system by an eligible electric

 

generator during a billing period exceeds the quantity of

 

electricity supplied from the electric utility or alternative

 

electric supplier during the billing period, the eligible customer

 

shall be credited by their the supplier of electric generation

 

service for the excess kilowatt hours generated during the billing

 

period. The credit shall appear on the bill for the following

 

billing period and shall be limited to the total power supply

 

charges on that bill. Any excess kilowatt hours not used to offset

 

electric generation charges in the next billing period will be

 

carried forward to subsequent billing periods. However, annually,

 

at the end of a month specified by the net metering customer, the

 

electric utility or alternative electric provider shall pay the

 

customer for any accumulated excess kilowatt hours. Those kilowatt

 

hours shall not subsequently be used to offset electric generation

 

charges. The price paid for the accumulated excess kilowatt hours

 

shall be the annual average real-time marginal price for energy for

 

the midwest independent transmission system operator's Michigan

 

hub. Notwithstanding any law or regulation, net metering customers

 

shall not receive credits for electric utility transmission or

 

distribution charges. The credit per kilowatt hour for kilowatt

 

hours delivered into the utility's electric utility distribution

 

system shall be either of the following:

 

     (a) The monthly average real-time locational marginal price

 

for energy at the commercial pricing node within the electric

 

utility's distribution service territory, or for net metering

 

customers on a time-based rate schedule, the monthly average real-

 

time locational marginal price for energy at the commercial pricing

 

node within the electric utility's distribution service territory

 

during the time-of-use pricing period.

 

     (b) The electric utility's or alternative electric supplier's

 

power supply component of the full retail rate during the billing

 

period or time-of-use pricing period.