‘(1) DEFINITIONS- In this subsection and subsection (e):
‘(A) CUSTOMER-GENERATOR- The term ‘customer-generator’ means the owner or operator of a qualified generation unit.
‘(B) ELECTRIC GENERATION UNIT- The term ‘electric generation unit’ means--
‘(i) a qualified generation unit; and
‘(ii) any electric generation unit that qualifies for net metering under a net metering tariff or rule approved by a State.
‘(C) LOCAL DISTRIBUTION SYSTEM- The term ‘local distribution system’ means any system for the distribution of electric energy to the ultimate consumer of the electricity, whether or not the owner or operator of the system is a retail electric supplier.
‘(D) NET METERING- The term ‘net metering’ means the process of--
‘(i) measuring the difference between the electricity supplied to a customer-generator and the electricity generated by the customer-generator that is delivered to a local distribution system at the same point of interconnection during an applicable billing period; and
‘(ii) providing an energy credit to the customer-generator based on the electricity produced by the customer-generator from a qualified generation unit.
‘(E) QUALIFIED GENERATION UNIT- The term ‘qualified generation unit’ means an electric energy generation unit that--
‘(i) is a fuel cell or microturbine or uses as the energy source of the unit solar energy, wind, biomass, geothermal energy, anaerobic digestion, or landfill gas, or a combination of the any of those sources;
‘(ii) has a generating capacity of not more than 10 megawatts;
‘(iii) is located on premises that are owned, operated, leased, or otherwise controlled by the customer-generator; and
‘(iv) is intended to offset all or part of the requirements of the customer-generator for electric energy.
‘(F) RETAIL ELECTRIC SUPPLIER- The term ‘retail electric supplier’ means any electric utility that sells electric energy to the ultimate consumer of the energy.
‘(2) ADOPTION- Not later than 1 year after the date of enactment of this subsection, each State regulatory authority (with respect to each electric utility for which the State regulatory authority has ratemaking authority), and each nonregulated electric utility, shall--
‘(A) provide public notice and conduct a hearing with respect to the standards established under paragraph (3); and
‘(B) on the basis of the hearing, adopt the net metering standard.
‘(3) ESTABLISHMENT OF NET METERING STANDARD-
‘(A) IN GENERAL- Each retail electric supplier shall offer to arrange (either directly or through a local distribution company or other third party) to make net metering available, on a first-come, first-served basis, to each of the retail customers of the retail electric supplier in accordance with the requirements described in subparagraph (B) and other provisions of this subsection.
‘(B) REQUIREMENTS- The requirements referred to in subparagraph (A) are, with respect to a retail electric supplier, that--
‘(i) rates and charges and contract terms and conditions for the sale of electric energy to customer-generators shall be the same as the rates and charges and contract terms and conditions that would be applicable if the customer-generator did not own or operate a qualified generation unit and use a net metering system; and
‘(ii) each retail electric supplier shall notify all of the retail customers of the retail electric supplier of the standard established under this paragraph as soon as practicable after the adoption of the standard.
‘(C) MODIFICATIONS- Nothing in this subsection prevents a retail electric supplier from petitioning the Commission for modifications to a standard established under this subsection to ensure that the equipment, services, and system of the supplier function in a safe and efficient manner.
‘(4) NET ENERGY MEASUREMENT-
‘(A) IN GENERAL- Each retail electric supplier shall arrange to provide to customer-generators who qualify for net metering under subsection (b) an electrical energy meter capable of net metering and measuring, to the maximum extent practicable, the flow of electricity to or from the customer, using a single meter and single register.
‘(B) IMPRACTICABILITY- In a case in which it is not practicable to provide a meter to a customer-generator under subparagraph (A), a retail electric supplier (either directly or through a local distribution company or other third party) shall, at the expense of the retail electric supplier, install 1 or more of those electric energy meters for the customer-generators concerned that accomplishes what the single meter described in subparagraph (A) would accomplish.
‘(5) BILLING-
‘(A) IN GENERAL- Each retail electric supplier subject to subsection (b) shall calculate the electric energy consumption for a customer using a net metering system in accordance with subparagraphs (B) through (D).
‘(B) MEASUREMENT OF ELECTRICITY- The retail electric supplier shall measure the net electricity produced or consumed during the billing period using the metering installed in accordance with paragraph (4).
‘(C) BILLING AND CREDITING-
‘(i) BILLING- If the electricity supplied by the retail electric supplier exceeds the electricity generated by the customer-generator during the billing period, the customer-generator shall be billed for the net electric energy supplied by the retail electric supplier in accordance with normal billing practices.
‘(ii) CREDITING-
‘(I) IN GENERAL- If electric energy generated by the customer-generator exceeds the electric energy supplied by the retail electric supplier during the billing period, the customer-generator shall be billed for the appropriate customer charges for that billing period and credited for the excess electric energy generated during the billing period, with the credit appearing as a kilowatt-hour credit on the bill for the following billing period.
‘(II) APPLICATION OF CREDITS- Any kilowatt-hour credits provided to a customer-generator under this clause shall be applied to customer-generator electric energy consumption on the following billing period bill (except for a billing period that ends in the next calendar year).
‘(III) CARRYOVER OF UNUSED CREDITS- Not later than 180 days after the date of enactment of this subsection, the Commission shall promulgate a rule establishing procedures for carrying over unused credits from the preceding year.
‘(D) USE OF TIME-DIFFERENTIATED RATES-
‘(i) IN GENERAL- Except as provided in clause (ii), if a customer-generator is using a meter and retail billing arrangement that has time-differentiated rates--
‘(I) the kilowatt-hour credit shall be based on the ratio representing the difference in retail rates for each time-of-use rate; or
‘(II) the credits shall be reflected on the bill of the customer-generator as a monetary credit reflecting retail rates at the time of generation of the electric energy by the customer-generator.
‘(ii) DIFFERENT TARIFFS OR SERVICES- A retail electric supplier shall offer a customer-generator the choice of a time-differentiated energy tariff rate or a nontime-differentiated energy tariff rate, if the retail electric supplier offers the choice to customers in the same rate class as the customer-generator.
‘(6) PERCENT LIMITATION-
‘(A) IN GENERAL- The standard established under this subsection shall not apply for a calendar year in the case of a customer-generator served by a local distribution company if the total generating capacity of all customer-generators with net metering systems served by the local distribution company in the calendar year is equal to or more than 4 percent of the capacity necessary to meet the average forecasted aggregate customer peak demand of the company for the calendar year.
‘(B) RECORDS AND NOTICE-
‘(i) RECORDS- Each retail electric supplier shall maintain, and make available to the public, records of--
‘(I) the total generating capacity of customer-generators of the system of the retail electric supplier that are using net metering; and
‘(II) the type of generating systems and energy source used by the electric generating systems used by the customer-generators.
‘(ii) NOTICE- Each such retail electric supplier shall notify the State regulatory authority and the Commission at each time at which the total generating capacity of the customer-generators of the retail electric supplier reaches a level that equals or exceeds--
‘(I) 75 percent of the limitation specified in subparagraph (A); or
‘(II) the limitation specified in subparagraph (A).
‘(7) OWNERSHIP OF CREDITS-
‘(A) IN GENERAL- For purposes of Federal and State laws providing renewable energy credits or greenhouse gas credits, a customer-generator with a qualified generation unit and net metering shall be treated as owning and having title to the renewable energy attributes, renewable energy credits and greenhouse gas emission credits relating to any electricity produced by the qualified generation unit.
‘(B) RETAIL ELECTRIC SUPPLIERS- No retail electric supplier shall claim title to or ownership of any renewable energy attributes, renewable energy credits, or greenhouse gas emission credits of a customer-generator as a result of interconnecting the customer-generator or providing or offering the customer-generator net metering.
‘(8) SAFETY AND PERFORMANCE STANDARDS-
‘(A) IN GENERAL- A qualified generation unit and net metering system used by a customer-generator shall meet all applicable safety and performance and reliability standards established under the interconnection standards required under subsection (e).
‘(B) ADDITIONAL CHARGES- After consultation with State regulatory authorities and nonregulated local distribution systems and notice and opportunity for comment, the Commission shall prohibit by regulation the imposition of additional charges by retail electric suppliers and local distribution systems for equipment or services for safety or performance that are in addition to the charges required under subsection (e).
‘(9) DETERMINATION OF COMPLIANCE-
‘(A) IN GENERAL- Any State regulatory authority (with respect to each electric utility for which the authority has ratemaking authority), and each nonregulated electric utility, may apply to the Commission for a determination that any State net metering requirement or regulations complies with this subsection.
‘(B) ORDERS- In the absence of a determination under subparagraph (A), the Commission, on the motion of the Commission or pursuant to the petition of any interested person, may, after notice and opportunity for a hearing on the record, issue an order requiring against any retail electric supplier or local distribution company to require compliance with this subsection.
‘(1) MODEL STANDARDS-
‘(A) IN GENERAL- Not later than 1 year after the date of enactment of this subsection, the Commission shall publish model standards for the physical connection between local distribution systems and qualified generation units and electric generation units that are--
‘(i) qualified generation units (as defined in subsection (d)(1)(E) (other than clause (ii) of subsection (d)(1)(E))); or
‘(ii) combined heat and power facilities.
‘(B) PURPOSES- The model standards shall be designed to--
‘(i) encourage the use of qualified generation units and combined heat and power facilities; and
‘(ii) ensure the safety and reliability of the qualified generation units and the local distribution systems interconnected with the qualified generation units.
‘(C) EXPEDITED PROCEDURES-
‘(i) IN GENERAL- The model standards shall have separate expedited procedures, including--
‘(I) a standard for interconnecting qualified generation units, and combined heat and power facilities, of not more than 15 kilowatts;
‘(II) a separate standard that expedites interconnection for qualified generation units, and combined heat and power facilities, of more than 15 kilowatts but not more than 10 megawatts; and
‘(III) a separate standard that expedites interconnection for qualified generation units, and combined heat and power facilities, of more than 15 kilowatts but not more than 10 megawatts that do not export energy past the point of interconnection.
‘(ii) BEST PRACTICES- The expedited procedures shall be based on the best practices that have been used in States that have adopted interconnection standards.
‘(iii) MODEL RULE-
‘(I) IN GENERAL- In designing the expedited procedures, the Commission shall consider Interstate Renewable Energy Council Model Rule MR-I2005.
‘(II) OTHER GENERATORS- Nothing in this subsection precludes the Commission from adopting or enforcing interconnection requirements for generators that are not qualified generation units.
‘(D) ADOPTION OF STANDARDS-
‘(i) IN GENERAL- Not later than 2 years after the date of enactment of this subsection, each State shall--
‘(I) adopt the model standards established under this paragraph, with or without modification; and
‘(II) submit the standards to the Commission for approval.
‘(ii) APPROVAL OF MODIFICATION- The Commission shall approve a modification of the model standards only if the Commission determines that the modification is--
‘(I) consistent with or superior to the purpose of the standards; and
‘(II) required by reason of local conditions.
‘(E) NONAPPROVAL OF STANDARDS FOR A STATE- If standards have not been approved under this paragraph by the Commission for any State during the 2-year period beginning on the date of enactment of this subsection, the Commission shall, by rule or order, enforce the model standards of the Commission in the State until such time as State standards are approved by the Commission.
‘(F) UPDATES-
‘(i) IN GENERAL- Not later than 2 years after the date of enactment of this subsection and after notice and opportunity for comment, the Commission shall publish an update of the model standards, after considering changes in the underlying standards and technologies.
‘(ii) AVAILABILITY- The updates shall be made available to State regulatory authorities for the consideration of the authorities.
‘(2) SAFETY, RELIABILITY, PERFORMANCE, AND COST-
‘(A) IN GENERAL- The standards under this subsection shall establish such measures for the safety and reliability of the affected equipment and local distribution systems as are appropriate.
‘(B) ADMINISTRATION- The standards shall--
‘(i) be consistent with all applicable safety and performance standards established by--
‘(I) the national electrical code;
‘(II) the Institute of Electrical and Electronics Engineers;
‘(III) Underwriters Laboratories; and
‘(IV) the American National Standards Institute; and
‘(ii) impose not more than such minimum cost and technical burdens to the interconnecting customer generator as the Commission determines, by rule, are practicable.
‘(3) ADDITIONAL CHARGES- The model standards under this subsection shall prohibit the imposition of additional charges by local distribution systems for equipment or services for interconnection that are in excess of--
‘(A) the charges necessary to meet the standards; and
‘(B) the charges and equipment requirements identified in the best practices of States with interconnection standards.
‘(4) RELATIONSHIP TO EXISTING LAW REGARDING INTERCONNECTION- Nothing in this subsection affects the application of section 111(d)(15) relating to interconnection.
‘(5) CONSUMER-FRIENDLY CONTRACTS-
‘(A) IN GENERAL- The Commission shall--
‘(i) promulgate regulations that ensure that simplified contracts will be used for the interconnection of electric energy by electric energy transmission or local distribution systems and generating facilities that have a power production capacity of not greater than 10 megawatts; and
‘(ii) consider the best practices for consumer-friendly contracts that are used by States or national associations of State regulators.
‘(B) LIABILITY OR INSURANCE- The contracts shall not require liability or other insurance in excess of the liability or insurance that is typically carried by customer-generators for general liability.’.