HOUSE BILL NO. 4995

September 19, 2019, Introduced by Reps. Hoitenga, Rabhi, Steven Johnson, O'Malley, Maddock, Markkanen, Wozniak, Whitsett, Sowerby, Pohutsky, Koleszar, Yaroch, Hood, Coleman, Reilly, Peterson, Byrd and Hammoud and referred to the Committee on Energy.

"Clean and renewable energy and energy waste reduction act,"

by amending section 61 (MCL 460.1061), as added by 2016 PA 342, and by adding sections 62, 63, 64, 65, 66, and 67.

the people of the state of michigan enact:

Sec. 61. An electric provider shall offer to its customers the opportunity to participate in a voluntary green pricing program under which the customer may specify, from the options made available by the electric provider, the amount of electricity attributable to the customer that will be renewable energy. If the electric provider's rates are regulated by the commission, the program, including the rates paid for renewable energy, must be approved by the commission. The customer is responsible for any additional costs incurred and shall accrue any additional savings realized by the electric provider as a result of the customer's participation in the program. If an electric provider has not yet fully recovered the incremental costs of compliance, both of the following apply:

(a) A customer that receives at least 50% of the customer's average monthly electricity consumption through the program is exempt from paying surcharges for incremental costs of compliance.

(b) Before entering into an agreement to participate in a commission-approved voluntary green pricing program with a customer that will not receive at least 50% of the customer's average monthly electricity consumption through the program, the electric provider shall notify the customer that the customer will be responsible for the full applicable charges for the incremental costs of compliance and for participation in the voluntary renewable energy program as provided under this section.As used in this subpart:

(a) "Community renewable energy program" means a tariff, tariff rider, or other legally binding offer by an electric provider through which both of the following apply to a community renewable energy system:

(i) The owner of the system may obtain a power purchase agreement with the electric provider.

(ii) A subscriber to the system may receive bill credits for the subscriber's proportional interest in the output of the system, as provided for in section 67.

(b) "Community renewable energy system" or "system" means a renewable energy system that generates electricity and that meets all of the following conditions:

(i) The system is connected to the electric distribution grid serving this state.

(ii) The system has generating capacity of 5 megawatts or less as measured at the point of grid interconnection.

(iii) The system has 10 or more subscribers.

(iv) No subscriber holds more than a 40% proportional interest in the output of the system. However, a community renewable energy system owner may hold more than a 40% proportional interest in the community renewable energy system's output as an unsubscribed portion.

(v) The system is located on a single parcel or contiguous parcels of land.

(c) "Community renewable energy system owner" or "owner" means a cooperative subscriber organization or other person that owns a community renewable energy system.

(d) "Cooperative subscriber organization" means a group of subscribers organized under the consumer cooperative act, chapter 11 of the nonprofit organization act, 1982 PA 162, MCL 450.3100 to 450.3192, for the purpose of owning or creating a community renewable energy system.

(e) "Low-income customer" means an individual or family whose income does not exceed the eligibility threshold set by the low-income home energy assistance act of 1981, Public Law 97-35.

(f) "Low-income service organization" means a nonprofit organization or governmental agency providing services to individuals or families whose eligibility for services is contingent on having an income below a certain threshold.

(g) "Subscriber" means a person that is a retail customer of an electric provider and is a party to 1 or more subscriptions.

(h) "Subscription" means a contract between a community renewable energy system owner and a retail electric customer assigning to the customer a proportional interest in the output of a community renewable energy system for the purpose of reducing the customer's retail bill for electricity use at a premises located within the distribution service territory where the system is interconnected.

(i) "Unsubscribed portion" means the output of a community renewable energy system in excess of that assigned to subscribers.

Sec. 62. An electric provider shall offer to its customers the opportunity to participate in a voluntary green pricing program under which the customer may specify, from the options made available by the electric provider, the amount of electricity attributable to the customer that will be renewable energy. If the electric provider's rates are regulated by the commission, the program, including the rates paid for renewable energy, must be approved by the commission. The customer is responsible for any additional costs incurred and shall accrue any additional savings realized by the electric provider as a result of the customer's participation in the program. If an electric provider has not yet fully recovered the incremental costs of compliance, both of the following apply:

(a) A customer that receives at least 50% of the customer's average monthly electricity consumption through the program is exempt from paying surcharges for incremental costs of compliance.

Sec. 63. (1) Within 1 year after the effective date of the amendatory act that added this section, the commission shall review the voluntary green pricing program of each electric provider whose rates are regulated by the commission for compliance with section 62.

(2) Every 2 years after approval of the voluntary green pricing program pursuant to subsection (1), the commission shall review the voluntary green pricing program, including the community renewable energy systems program under sections 64 to 67, of each electric provider whose rates are regulated by the commission.

(3) The commission may conduct a review under subsection (1) or (2) ex parte. However, upon request by an interested person, a review shall be conducted as a contested case pursuant to chapter 4 of the administrative procedures act of 1969, 1969 PA 306, MCL 24.271 to 24.288.

(4) In its review of an electric provider's community renewable energy program, the commission shall assess the program's effectiveness in facilitating, and may make recommendations for promoting, all of the following objectives:

(a) Subscriptions in community renewable energy systems and participation in other forms of distributed generation, to the extent that the commission finds there is customer demand for subscriptions or participation.

(b) Subscriptions by residential customers, including low-income customers, agricultural producers, and low-income service organizations that are retail customers, to the extent the commission finds that there is demand for those subscriptions.

(c) Ownership of community renewable energy systems by cooperative subscriber organizations, low-income service organizations, and nonprofit entities.

(d) Development of community renewable energy systems with attributes that the commission finds result in lower overall costs for the electric provider's customers.

(e) Creation, financing, and operation of community renewable energy systems owned by cooperative subscriber organizations.

(f) Affordability of subscriptions for retail customers, including those receiving energy assistance through the Michigan low income home energy assistance program.

(g) Development of mechanisms, incentives, and financing options for low-income communities to benefit economically from community renewable energy systems, including, but not limited to, siting community renewable energy systems in low-income communities, creating employment programs to build and administer systems, fostering the ownership of systems by institutions and cooperative subscriber organizations located in low-income communities, and coordinating with appropriate government agencies, community interests, and low-income service organizations.

(h) Development and operation of community renewable energy systems with capacity exceeding 1% of each electric provider's annual peak demand by 2026.

Sec. 64. An electric provider shall offer to its customers within its voluntary green pricing program the opportunity to participate in a community renewable energy systems program.

Sec. 65. (1) A subscription shall be sized to represent at least 500 watts of the community renewable energy system's generating capacity and to annually supply not more than 120% of the annual average delivery of electricity from the electricity provider to the subscriber at the premises to which the subscription is attributed.

(2) A subscription may be transferred or assigned as specified in the subscription contract to a cooperative subscriber organization or to any other person that qualifies to be a subscriber.

(3) A community renewable energy system owner may buy back a subscription from a subscriber as specified in the subscription. The proportional interest in the beneficial use of the renewable energy produced by the community renewable energy system becomes part of the unsubscribed portion when it is sold back to the owner.

Sec. 66. (1) An owner may contract with another person to administer or operate the community renewable energy system.

(2) The owner, operator, and subscribers of a community renewable energy system are not public utilities subject to regulation by the commission solely as a result of their interest in the community renewable energy system. Prices paid for subscriptions in community renewable energy systems are not subject to regulation by the commission unless the owner or operator is an electric provider whose rates are regulated by the commission.

Sec. 67. (1) The owner of a community renewable energy system shall do all of the following:

(a) Sell the electrical output from the system only to an electric provider offering service to retail customers within the distribution service territory where the community renewable energy system is located. The amount of electricity and renewable energy credits generated by each community renewable energy system shall be determined by a production meter installed by the electric provider and paid for by the owner of the community renewable energy system.

(b) Provide real-time generation data to the electric provider to facilitate incorporation of the community renewable energy system into the electric provider's operations and to facilitate the provision of credits to subscribers.

(c) Notify the electric provider of the current proportional interest of each subscriber for use in determining the credit owed to each subscriber. The information shall be provided in an electronic format approved by the commission. The information shall be provided on a monthly basis, or more frequently if required by the commission, and within a reasonable period of time set by the commission so that subscriber bills can be credited as provided in subsection (2).

(2) An electric provider offering service to retail customers within the distribution service territory where the community renewable energy system is located shall do all of the following:

(a) Purchase the subscribed portion of the output of a community renewable energy system by applying a credit to each subscriber's bill for the premises designated in the subscriber's subscription contract. The credit shall be calculated by multiplying the subscriber's share of the electricity production from the community renewable energy system by the difference between the electric provider's full retail rate and a reasonable delivery charge, and subtracting from the product a reasonable charge for administering the community renewable energy system contract and subscriber credits. A reasonable delivery charge shall not result in a subscriber credit less than the power supply rate applicable to the customer at the time the electricity is generated by the community renewable energy system. If the community renewable energy system is built on, or electrically integrated directly to a building on, the premises designated in the subscriber's subscription contract, there shall be no delivery charge. For an electric provider whose rates are regulated by the commission, the administrative charge and delivery charge rate shall be determined by the commission in a general rate case.

(b) Purchase the unsubscribed portion of the output of a community renewable energy system from the community renewable energy system owner at the rate determined under section 6v of 1939 PA 3, MCL 460.6v, and section 210 of title II of the public utility regulatory policies act of 1978, 16 USC 824a-3.

(c) Credit each subscriber's bill for the billing cycle immediately following the cycle during which the energy was generated by the community renewable energy system. The electric provider shall add, remove, or otherwise update the proportional interest of a subscriber in the electric provider's database within 10 business days after receiving notice of the charge from the community renewable energy system owner. The subscriber's bill for the month following the month in which the electric provider is required to update the database shall reflect the updated information. If, and to the extent that, a subscriber's community renewable energy system credit exceeds the subscriber's electric bill in a billing period, the credit shall be carried forward and applied against future bills.

(3) If a subscriber terminates service from the electric provider, the electric provider shall pay the subscriber any outstanding bill credits on the subscriber's account. If the community renewable energy system owner directs the electric provider to credit the bill for a subscriber at premises for which the subscriber is no longer billed, the electric provider shall promptly notify the owner and shall either pay the owner for the resulting increase in the unsubscribed portion or credit another subscriber as directed by the owner.