Rhode Island passes net metering and interconnection laws

Rhode Island has been abuzz with legislative activity this summer.

In late June, Rhode Island enacted net metering bill S.B. 457, which became effective in July.  Previously system-size caps were 1.65 megawatts (MW) for privately-owned systems and 3.5 MW for those owned by government agencies.

With the passage of S.B. 457, Rhode Island now allows net metering for systems up to 5 MW in capacity, provided that they are designed to generate no more than 100% of the electricity needs of a customer. The aggregate limit of net-metered systems was also increased from 2% to 3% of a utility’s peak load, and 2 MW is reserved for systems less than 50 kW.

Facilities owned by municipalities or multi-municipal collaboratives or those owned and operated by a developer on behalf of a municipality or collaborative may net meter through a “municipal net metering financing arrangement”.   Meter aggregation is generally allowed, and special provisions exist to accommodate meter aggregation for farm-based systems that serve facilities in close proximity to each other.

Interestingly, an electric distribution company (EDC) may elect to aggregate consumption of a customer’s net metered accounts and establish a monthly billing plan that reflects the expected credits that would be applied to the net metered accounts over a 12-month period. The billing plan would be designed to even out monthly billings, regardless of actual production and usage.  If this option is chosen, an EDC would reconcile payments and credits under the billing plan to actual production and consumption at the end of the annual period and apply any credits or charges to the net metered accounts for any positive or negative difference, as applicable.

The EDC may also elect to issue checks to any net metering customer in lieu of billing credits or carry forward credits or charges to the next billing period. For residential eligible net metering systems 25 kW or smaller, the EDC may administer renewable net metering credits month to month allowing unused credits to carry forward into following billing period. The rate credited for kWh generated that do not exceed the customer’s kWh consumption for that billing period is equal to the utility’s retail rate (minus a very small conservation charge per kWh). Any excess kWh that do not exceed 125% of the customer’s kWh consumption for that billing period are credited at the utility’s avoided cost rate. Excess credit may be carried forward to the next bill or purchased by the utility (at its discretion).

Utilities may not impose any other charges on net-metered customers. Net-metered customers are exempt from back-up or standby rates commensurate with the size of the net-metered system. Utilities my recover through rates any revenue shortfall caused by this exemption.

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Also in late June Rhode Island enacted House Bill 6222, which aims to institute an application process for interconnecting renewable distributed generation resources.  The bill stops short of establishing comprehensive, standardized set of interconnection procedures as it only addresses interconnection timelines and fees.  Additionally, while the bill specifies that it applies to electric distribution companies in Rhode Island, it also mandates that these timeline and fee updates be incorporated into the “Standards for Interconnection of Distributed Generation,” which is the name for National Grid’s interconnection procedures.

The legislation includes two notable deadlines:

•             Upon receipt of a completed application requesting a feasibility study and receipt of the feasibility study fee, the electric distribution company must provide a feasibility study to the applicant within 30 days;

•             Upon receipt of a completed application requesting an impact study and receipt of the applicable impact study fee, the electric distribution company must provide an impact study within 90 days.

The bill also includes the following fee schedule for interconnection applications, which are subject to increase each year at the PUC’s discretion (Feasibility study fees / Impact study fees):

•             Residential applicants of UL 1741.1-approved renewable facilities that are 25 kW or less: $0 / $0

•             Residential applicants of UL 1741.1 approved renewable facilities that are greater than 25 kW: $50 / $100

•             Non-residential applicants of UL 1741.1 approved renewable facilities that are 100 kW or less: $100 / $500

•             Non-residential applicants of UL 1741.1 approved renewable facilities that are 250 kW or less: $300 / $1,500

•             Non-residential applicants of renewable facilities that are 250 kW – 1 MW: $1,000 / $5,000

•             Non-residential applicants of renewable facilities greater than 1 MW: $2,500 / $10,000

Notably, the bill also allows utilities to recover their incurred costs that are over and above the impact study fee established by this legislation and paid by a non-residential customer.  They may recover this amount by billing the customer after the project is online or through offsetting net metering credits.

The bill also authorizes the electric distribution company to add up to two incremental employees to serve Rhode Island net metering and interconnection customers, recoverable through rate increases.

 

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