20VAC5-315 Regulations Governing Net Energy Metering

REGULATIONS

Vol. 30 Iss. 23 - July 14, 2014

TITLE 20. PUBLIC UTILITIES AND TELECOMMUNICATIONS

STATE CORPORATION COMMISSION

Chapter 315

Final Regulation

REGISTRAR'S NOTICE: The State Corporation Commission is claiming an exemption from the Administrative Process Act in accordance with § 2.2-4002 A 2 of the Code of Virginia, which exempts courts, any agency of the Supreme Court, and any agency that by the Constitution is expressly granted any of the powers of a court of record.

Title of Regulation: 20VAC5-315. Regulations Governing Net Energy Metering (amending 20VAC5-315-10 through 20VAC5-315-70).

Statutory Authority: §§ 12.1-13 and 56-594 of the Code of Virginia.

Effective Date: July 1, 2014.

Agency Contact: Armando J. de Leon, Utilities Engineer, Division of Energy Regulation, State Corporation Commission, P.O. Box 1197, Richmond, VA 23218, telephone [phone], FAX [phone], or email [e-mail].

Summary:

Pursuant to Chapter 268 of the 2013 Acts of Assembly, § 56-594 of the Code of Virginia was amended to expand net energy metering in the Commonwealth to include eligible agricultural customer-generators. Chapter 268 requires the Commission to establish by regulation a program, beginning no later than July 1, 2014, for customers of investor-owned utilities and by July 1, 2015, for customers of electric cooperatives, to afford eligible agricultural customer-generators the opportunity to participate in net energy metering. The amendments to the rules provide a definition of agricultural customer-generators, require electric utilities to permit such customer-generators to aggregate loads served by separate meters, as required by Chapter 268, and establish the parameters for participation in net energy metering by agricultural customer-generators.

Changes from the proposed regulation include (i) revising the definition of "agricultural business" to include a business engaged in the production and sale of products collected from plants and animals, or plant and animal services; (ii) revising the definition of "person" to clarify that such term includes municipalities; (iii) in the definition of "agricultural net metering customer," modifying the phrase "virtually aggregated into one account" to read "aggregated into one account" and changing the phrase "rate schedule" to "tariff," in each case to reflect the language used in Chapter 268; (iv) eliminating the requirement that customer-generators with capacity greater than 25 kilowatts must contact the electric distribution company prior to making financial commitments, thereby maintaining the existing rule that does not place a legal requirement on customers to provide such advanced notice; and (v) making a number of technical modifications to the Interconnection Form to be provided by customer-generators to the electric distribution company.

AT RICHMOND, JUNE 23, 2014

COMMONWEALTH OF VIRGINIA, ex rel.

STATE CORPORATION COMMISSION

CASE NO. PUE-2014-00003

Ex Parte: In the matter of amending regulations
governing net energy metering

ORDER ADOPTING REGULATIONS

The Regulations Governing Net Energy Metering, 20 VAC 5-315-10 et seq. ("Existing Rules"), adopted by the State Corporation Commission ("Commission") pursuant to § 56-594 of the Code of Virginia, establish the requirements for participation by an eligible customer-generator in net energy metering in the Commonwealth of Virginia. The Existing Rules include conditions for interconnection and metering, billing, and contract requirements between net metering customers, electric distribution companies, and energy service providers.

On January 27, 2014, the Commission entered an Order Establishing Proceeding ("Order") to consider revisions to the Existing Rules to reflect statutory changes enacted by Chapter 268 of the 2013 Acts of Assembly ("Chapter 268"), which amended § 56-594 of the Code of Virginia to: (1) provide a definition of eligible agricultural customer-generators; (2) require utilities to permit agricultural customer-generators to aggregate loads served by multiple meters, as specified by Chapter 268; and (3) establish the required parameters for participation by such customer-generators in the net energy metering programs offered by investor-owned utilities and electric cooperatives under the Existing Rules.

The Commission appended to its Order proposed amendments ("Proposed Rules") revising the Existing Rules, which were prepared by the Staff of the Commission to provide for participation by eligible agricultural customer-generators in net metering programs pursuant to the revised statute.

Notice of the proceeding and the Proposed Rules were published in the Virginia Register of Regulations on February 24, 2014. Additionally, each Virginia electric distribution company was directed to serve a copy of the Order upon each of their respective net metering customers. Interested persons were directed to file any comments and requests for hearing on the Proposed Rules on or before March 27, 2014.

Appalachian Power Company ("APCo"), Kentucky Utilities ("KU"), Virginia Electric and Power Company ("Virginia Power"), the Virginia Electric Cooperatives ("Cooperatives"),¹ Virginia Farm Bureau Federation ("Farm Bureau"), Virginia Agribusiness Council ("VAC"), Nandua Oyster Company ("Nandua") and Joy Loving filed comments. No one requested a hearing on the Proposed Rules.

NOW THE COMMISSION, upon consideration of this matter, is of the opinion and finds that the regulations attached hereto as Appendix A ("Revised Rules") should be adopted as final rules. To the extent parties have requested changes to the Proposed Rules that go beyond the scope of such rules, we will not expand the scope of this proceeding to consider issues beyond those required to implement the amendments to § 56-594 of the Code of Virginia.

Virginia Power, the Farm Bureau, and VAC each proposed revisions to the definition of "agricultural business" set forth in the Proposed Rules. The Proposed Rules defined agricultural business as "any sole proprietorship, corporation, partnership, electing small business (Subchapter S) corporation, or limited liability company engaged primarily in the production and sale of plants and animals useful to the public." We agree that additional clarity in this definition is appropriate and will adopt the language proposed by the Farm Bureau, which defines agricultural business as "any sole proprietorship, corporation, partnership, electing small business (Subchapter S) corporation, or limited liability company engaged primarily in the production and sale of plants and animals, products collected from plants and animals, or plant and animal services useful to the public."

APCo and Virginia Power each proposed that the provision that utilities "may charge the customer for optional metering equipment capable of being read off-site" be changed to provide that utilities "shall" charge customers for such equipment. The utilities claim that this revision would eliminate confusion. We find that such change is unnecessary. The word may has been used since the inception of the net metering rules, and the Commission continues to believe that the word may gives utilities flexibility in assessing this charge.

APCo recommends that utilities have at least 120 days from the effective date of the Revised Rules to develop procedures and to file new tariff schedules that incorporate agricultural net metering customers. APCo claims that this would permit each utility to coordinate the filing of these new tariff schedules simultaneously with any others that are to be filed at about the same time. We continue to find, however, that requiring new tariff schedules to be filed 60 days after the effective date of the Revised Rules is reasonable.

KU proposed two revisions to the Proposed Rules. First, KU recommended that the Commission omit any language stating that non-agricultural net metering customers may install multiple generating units. KU reasons that because the statute uses the word "aggregated" in its definition of eligible agricultural customer-generator, but does not do so in its definition of a non-agricultural customer-generator, it follows that only agricultural customers are permitted to own more than one generating unit. The statute, however, has never prohibited customer-generators from owning more than one generating unit. We find that the statute's use of the word "aggregated" reflects that multiple meters may be involved in agricultural net metering and that the total generating capacity behind all of those meters is subject to the limit of 500 kW.

KU also recommends that, because the revised statute refers to an "eligible agricultural customer-generator" as "a customer that operates a renewable energy generating facility as part of an agricultural business . . .," an agricultural net metering customer must be the operator of its facility and cannot contract with others to perform that operation. KU notes that the revised statute states that a non-agricultural net metering customer is "a customer that owns and operates, or contracts with another to own, operate, or both, an electrical generating facility . . .," but that the revised statute does not make an identical provision for agricultural net metering customers. Under the statute, an agricultural customer-generator must be part of a larger agricultural business enterprise. The statute, however, does not expressly prohibit these agricultural businesses from entering into a contract with another to effectuate this specific part of its business, just as it could for other facets of the business. Based on this record, we find that no such prohibition is necessary in the Revised Rules.

Virginia Power recommends that the Proposed Rules specifically state that an agricultural net metering customer is subject to the same excess facilities charges associated with account aggregation as is any customer that aggregates metered accounts. Excess facilities charges, however, are already covered by the general provision of Rule 50 of the Existing Rules, which states that "[e]ach contract or tariff governing the relationship between a customer, electric distribution company or energy service supplier shall be identical, with respect to the rate structure, all retail rate components, and monthly charges, to the contract or tariff under which the same customer would be served if such customer were not net metering with the exceptions that a residential net metering customer or an agricultural net metering customer whose generating facility has a capacity that exceeds 10 kilowatts shall pay any applicable tariffed monthly standby charges to the supplier, and that time-of-use metering under an electricity supply service tariff having no demand charges is not permitted." Thus, we find that additional language directed toward agricultural net metering is unnecessary.

Virginia Power recommends, at various points in the Proposed Rules, insertion of the phrases agricultural, non-agricultural, net metering, or prospective to clarify the meaning of the applicable rule. We find that certain clarifications in this regard are reasonable and have revised the Proposed Rules to clarify whether the applicable rule applies to agricultural customer-generators, non-agricultural customer-generators, prospective customer-generators, or some combination of these categories.

Virginia Power and the Cooperatives propose that the Proposed Rules be revised to accommodate language contained in the Terms and Conditions applicable to customers. For example, Virginia Power requests that the word "controlled" be changed to "leased" in the definition of "eligible agricultural customer-generator" in Rule 20 of the Proposed Rules in order to match the language in the Company's Terms and Conditions, which states that an applicant for electric service must be a bona fide owner or lessee. Similarly, Virginia Power and the Cooperatives recommend that the proposed definition of "contiguous sites" be pre-empted by the definition that appears in the Terms and Conditions of the utility. Virginia Power asserts that having a different definition of contiguity for agricultural net metering customers than for all of its other customers could create inconsistency, cause confusion, and be unworkable. The Cooperatives contend that the Commission should provide utilities the flexibility to define contiguity according to their own policies and practices.

We will not revise the Proposed Rules as requested by Virginia Power and the Cooperatives. The revised statute uses the word controlled, not leased. In addition, we find that it is reasonable to develop a uniform definition of contiguity to be applied to eligible agricultural net metering customers under this statute.

The Proposed Rules define "person" as "any individual, sole proprietorship, corporation, limited liability company, partnership, association, company, business, trust, joint venture, or other private legal entity, the Commonwealth, or any municipality." Virginia Power recommends that this definition be revised to match the definition contained in the Commission's Rules Governing Retail Access to Competitive Energy Services, 20 VAC 5-312-10, by changing the word "municipality" to "city, county, town, authority, or other political subdivision of the Commonwealth." We find that such change is reasonable and have revised the Proposed Rules accordingly.

Virginia Power and the Cooperatives both propose that language be added to the Proposed Rules to state that all prospective net metering customers must contact the electric distribution company prior to making any financial commitments. In addition, the Proposed Rules suggested similar language that would require above‑25 kW customers to contact the electric distribution company prior to making financial commitments. Upon consideration of this matter, we find it is reasonable for the Revised Rules to continue to reflect the Existing Rules in this regard, which do not place a legal requirement on customers to provide such advanced notice.

Virginia Power recommends that an agricultural net metering customer not be permitted to interconnect generation in fewer than ninety days after submission of the required interconnection form in order to permit the utility to have time to "administer aggregation." Virginia Power's recommendation, however, could add between thirty and sixty days (depending on the size of the generator) of idle time before the facility could begin operation. Based on this record, we do not find that the existing requirements provide an inadequate amount of time for the utility to administer the interconnection request.

Virginia Power recommends adding language stating that a final electrical inspection by the applicable building authority can serve in place of the currently required certification by a licensed electrician when installations are not done by an electrician, but rather by the customer or a licensed Virginia Class A or Class B general contractor. Virginia Power states that the final electrical inspection reasonably substitutes for an electrician certification. We find that such change is reasonable and have revised the Interconnection Form to reflect this revision.

Virginia Power also proposed a number of additional clarifications to the Interconnection Form and the Proposed Rules. Upon consideration thereof, we find that it is reasonable to implement Virginia Power's proposed revisions to the Interconnection Form and to insert the word "and" to Subdivision A 7 of Rule 50.

The Cooperatives recommend that the word "virtually" be removed from the phrase "virtually aggregated into one account" where it appears in Rule 20 of the Proposed Rules in the definition of "agricultural net metering customer." The Cooperatives assert that this phrase adds ambiguity, given that the word "virtually" is not used in the statute. We find that such suggestion is reasonable and adopt the Cooperatives' proposed modification.

The proposed definition of "agricultural net metering customer" provides that any such account shall be served under the applicable rate schedule. The Cooperatives recommend that this language be revised to match the statute, which uses the word "tariff," rather than "rate schedule." We find that such suggestion is reasonable and adopt the Cooperatives' proposed modification.

The Cooperatives also recommend amending the Proposed Rules to assure that the capacity of an agricultural net metering customer's generating facility has a reasonable relationship to the size of the customer's metered load. We do not find that such proposed revision is necessary. Rather, we conclude that the Existing Rules sufficiently require that a facility must be used primarily to provide energy to the associated net metered accounts.

Nandua filed comments expressing concern that existing net metering customers would be forced to become agricultural net metering customers. Nandua did not request changes to the Proposed Rules. In response to Nandua's comments, the Commission clarifies that nothing in the Proposed Rules requires an existing customer-generator to become an agricultural customer-generator, so long as such customer's interconnection remains through a single meter.

Finally, Joy Loving requested changes to the contiguity requirement, utility deadlines, and threshold for imposing standby charges. Upon consideration of these requests, we conclude that changes in this regard are unnecessary and that the Revised Rules adequately address such issues pursuant to the statute.

Accordingly, IT IS ORDERED THAT:

(1) The Revised Rules, as shown in Appendix A to this Order, are hereby adopted and are effective for customers of investor-owned electric utilities as of July 1, 2014.

(2) The Revised Rules, as shown in Appendix A to this Order, are hereby adopted and are effective for customers of electric cooperatives as of July 1, 2015.

(3) A copy of this Order with Appendix A, including the Revised Rules, shall be forwarded to the Registrar of Regulations for publication in the Virginia Register of Regulations.

(4) On or before September 1, 2014, each investor-owned electric utility in the Commonwealth subject to Chapter 10 (§ 56-232 et seq.) of Title 56 of the Code of Virginia shall file with the Clerk of the Commission, in this docket, one (1) original document containing any revised tariff provisions necessary to implement the regulations adopted herein and shall also file a copy of the document containing the revised tariff provisions with the Commission's Division of Energy Regulation. The Clerk of the Commission need not distribute copies but shall make such filings available for public inspection in the Clerk's Office and post them on the Commission's website at: http://www.scc.virginia.gov/case.

(5) On or before September 1, 2015, each electric cooperative in the Commonwealth subject to Chapter 10 (§ 56-232 et seq.) of Title 56 of the Code of Virginia shall file with the Clerk of the Commission, in this docket, one (1) original document containing any revised tariff provisions necessary to implement the regulations adopted herein and shall also file a copy of the document containing the revised tariff provisions with the Commission's Division of Energy Regulation. The Clerk of the Commission need not distribute copies but shall make such filings available for public inspection in the Clerk's Office and post them on the Commission's website at: http://www.scc.virginia.gov/case.

(6) This docket shall remain open to receive the filings from electric utilities pursuant to Ordering Paragraphs (4) and (5).

AN ATTESTED COPY hereof shall be sent by the Clerk of the Commission to all electric distribution companies licensed in Virginia as shown on Appendix B, hereto; and a copy shall be sent to the Commission's Office of General Counsel and Division of Energy Regulation.

_______________________________________________

¹ The filing entitled "Comments of the Virginia Electric Cooperatives" was submitted jointly on behalf of: A&N Electric Cooperative, BARC Electric Cooperative, Central Virginia Electric Cooperative, Community Electric Cooperative, Craig-Botetourt Electric Cooperative, Mecklenburg Electric Cooperative, Northern Neck Electric Cooperative, Northern Virginia Electric Cooperative, Powell Valley Electric Cooperative, Prince George Electric Cooperative, Rappahannock Electric Cooperative, Shenandoah Valley Electric Cooperative, and Southside Electric Cooperative, as well as the Virginia, Maryland & Delaware Association of Electric Cooperatives.

20VAC5-315-10. Applicability and scope.

These regulations are promulgated pursuant to the provisions of § 56-594 of the Virginia Electric Utility Regulation Act (§ 56-576 et seq. of the Code of Virginia). They establish requirements intended to facilitate net energy metering for customers owning and operating, or contracting with persons to own or operate, or both, an electrical generator generators that uses use specific types of renewable energy, as defined by § 56-576 of the Code of Virginia as its the total fuel source. These regulations will standardize the interconnection requirements for such facilities and will govern the metering, billing, payment and contract requirements between net metering customers, electric distribution companies and energy service providers. Agricultural net metering customers are subject to the same provisions as nonagricultural net metering customers unless otherwise specified.

The amendments regarding agricultural net metering apply to customers of investor-owned electric utilities on July 1, 2014, and apply to customers of electric cooperatives on July 1, 2015, as provided in the State Corporation Commission's Order Adopting Regulations, Case No. PUE-2014-00003, dated June 23, 2014, and published in the Virginia Register of Regulations, Volume 30, Issue 23, July14, 2014.

20VAC5-315-20. Definitions.

The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:

"Agricultural business" means any sole proprietorship, corporation, partnership, electing small business (Subchapter S) corporation, or limited liability company engaged primarily in the production and sale of plants and animals [ , products collected from plants and animals, or plant and animal services that are ] useful to the public.

"Agricultural net metering customer" means a customer that operates an electrical generating facility consisting of one or more agricultural renewable fuel generators having an aggregate generation capacity of not more than 500 kilowatts as part of an agricultural business under a net metering service arrangement. An agricultural net metering customer may be served by multiple meters of one utility that are located at separate but contiguous sites and that may be [ virtually ] aggregated into one account. This account shall be served under the appropriate [ rate schedule tariff ].

"Agricultural renewable fuel generator" [ or "agricultural renewable fuel generating facility" ] means [ an one or more ] electrical [ generator generators ] that:

1. [ Uses Use ] as [ its their ] sole energy source solar power, wind power, or aerobic or anaerobic digester gas;

2. The agricultural [ net metering ] customer owns and operates, or has contracted with other persons to own or operate, or both;

3. [ Is Are ] located on land owned or controlled by the agricultural business;

4. [ Is Are ] connected to the [ agricultural net metering ] customer's wiring on the [ agricultural net metering ] customer's side of [ its the agricultural net metering customer's ] interconnection with the distributor;

5. [ Is Are ] interconnected and operated in parallel with an electric company's distribution facilities; and

6. [ Is Are ] used primarily to provide energy to metered accounts of the agricultural business.

"Billing period" means, as to a particular [ agricultural net metering customer or a net metering ] customer, the time period between the two meter readings upon which the electric distribution company and the energy service provider calculate [ the a agricultural net metering customer's or net metering ] customer's bills.

"Billing period credit" means, for a nontime-of-use [ agricultural net metering customer or a nontime-of-use ] net metering customer, the quantity of electricity generated and fed back into the electric grid by the [ agricultural net metering ] customer's renewable fuel [ agricultural renewable fuel generator or generators or by the net metering customer's renewable fuel ] generator or generators in excess of the electricity supplied to the customer over the billing period. For time-of-use [ agricultural net metering customers or time-of-use ] net metering customers, billing period credits are determined separately for each time-of-use tier.

"Contiguous sites" means a group of land parcels in which each parcel shares at least one boundary point with at least one other parcel in the group. Property whose surface is divided only by public right-of-way is considered contiguous.

"Customer" means a net metering customer or an agricultural net metering customer.

"Demand charge-based time-of-use tariff" means a retail tariff for electric supply service that has two or more time-of-use tiers for energy-based charges and an electricity supply demand (kilowatt) charge.

"Electric distribution company" means the entity that owns and/or operates the distribution facilities delivering electricity to the net metering [ a customer's the ] premises [ of an agricultural net metering customer or a net metering customer ].

"Energy service provider (supplier)" means the entity providing electricity supply service [ , either tariffed or competitive service, ] to [ an agricultural net metering customer or ] a net metering customer [ either as tariffed or competitive service ].

"Excess generation" means the amount of [ electricity generated by ] the renewable fuel generator [ a customer's electrical generating facility consisting of one or more generators electrical energy generated ] in excess of the [ electricity electrical energy ] consumed by the [ agricultural net metering customer or net metering ] customer over the course of the net metering period. For time-of-use [ agricultural net metering customers or net metering ] customers, excess generation is determined separately for each time-of-use tier.

"Generator" [ or "generating facility" ] means [ a an electrical generating facility consisting of one or more ] renewable fuel [ generator generators ] or [ an one or more ] agricultural renewable fuel [ generator generators that meet the criteria under the definition of "net metering customer" and "agricultural net metering customer," respectively ].

"Net metering customer (customer)" means a customer owning and operating, or contracting with other persons to own or operate, or both, a an electrical generating facility consisting of one or more renewable fuel generator generators having an aggregate generation capacity of not more than 20 kilowatts for residential customers and not more than 500 kilowatts for nonresidential customers unless the electric distribution company has chosen a higher capacity limit for nonresidential customers in its net metering tariff. [ This The generating ] facility shall be operated under a net metering service arrangement.

"Net metering period" means each successive 12-month period beginning with the first meter reading date following the date of final interconnection of the renewable fuel generator [ a an agricultural net metering customer or a net metering ] customer's [ electrical ] generating facility consisting of one or more [ agricultural renewable fuel ] generators [ or one or more renewable fuel generators, respectively, ] with the electric [ distribution ] company's distribution facilities.

"Net metering service" means providing retail electric service to [ a an agricultural net metering ] customer operating [ a ] renewable fuel [ generator or generators an agricultural renewable fuel generating facility or a net metering customer operating a renewable fuel generating facility ] and measuring the difference, over the net metering period, between the electricity supplied to the customer from the electric grid and the electricity generated and fed back to the electric grid by the customer.

"Person" means any individual, sole proprietorship, corporation, limited liability company, partnership, association, company, business, trust, joint venture, or other private legal entity and, the Commonwealth, or any [ municipality city, county, town, authority, or other political subdivision of the Commonwealth ].

"Renewable Energy Certificate (REC)" or "REC" represents the renewable energy attributes associated with the production of one megawatt-hour (MWh) of electrical energy generated by a renewable fuel generator.

"Renewable fuel generator" [ or "renewable fuel generating facility" ] means [ an one or more ] electrical generating facility [ generator generators ] that:

1. Has an alternating current capacity of not more than 20 kilowatts for residential customers and not more than 500 kilowatts for nonresidential customers unless the electric distribution company has chosen a higher capacity limit for nonresidential customers in its net metering tariff;

2. 1. [ Uses Use ] renewable energy, as defined by § 56-576 of the Code of Virginia, as [ its their ] total fuel source;

3. 2. The net metering customer owns and operates, or has contracted with other persons to own or operate, or both;

4. 3. [ Is Are ] located on the [ net metering ] customer's premises and [ is ] connected to the [ net metering ] customer's wiring on the [ net metering ] customer's side of its interconnection with the distributor;

5. 4. [ Is Are ] interconnected pursuant to a net metering arrangement and operated in parallel with the electric [ distribution ] company's distribution facilities; and

6. 5. [ Is Are ] intended primarily to offset all or part of the net metering customer's own electricity requirements.

"Time-of-use net metering customer (time-of-use customer)" means [ a ] net metering [ an agricultural net metering customer or net metering ] customer receiving retail electricity supply service under a demand charge-based time-of-use tariff.

"Time-of-use period" means an interval of time over which the energy (kilowatt-hour) rate charged to a time-of-use customer does not change.

"Time-of-use tier (tier)" or "tier" means all time-of-use periods given the same name (e.g., on-peak, off-peak, critical peak, etc.) for the purpose of time-differentiating energy (kilowatt-hour)-based charges. The rates associated with a particular tier may vary by day and by season.

20VAC5-315-30. Company notification.

A. The A prospective [ agricultural ] net metering customer or a prospective [ agricultural ] net metering customer [ (hereinafter referred to as "customer") ] shall submit a completed commission-approved notification form to the electric distribution company and, if different from the electric distribution company, to the energy service provider, according to the time limits in this subsection. If the [ prospective ] net metering customer has contracted with another person to own or operate, or both, the renewable fuel generator or generators, then the notice will include detailed, current, and accurate contract information for the owner or operator, or both, including without limitation, the name and title of one or more individuals responsible for the interconnection and operation of the generator or generators, a telephone number, a physical street address other than a post office box, a fax number, and an email address for each such person or persons.

1. For a renewable fuel generator A [ prospective ] customer proposing to install an electrical generating facility with an alternating current capacity of 25 kilowatts or less, the notification form shall be submitted submit the notification form at least 30 days prior to the date the [ prospective ] customer intends to interconnect his renewable fuel generator the [ facility's generator or generators generating facility ] to the electric [ distribution ] company's distribution facilities. Such net metering customer shall have all All equipment necessary to complete the grid interconnection [ of the generating facility ] shall have been installed prior to [ such submitting the ] notification [ form ]. The electric distribution company shall have 30 days from the date of notification to determine whether the requirements contained in 20VAC5-315-40 have been met. The date of notification shall be considered to be the third day following the mailing of such the notification form by the [ prospective ] net metering customer.

2. For a renewable fuel generator [ The A prospective ] customer proposing to install an electrical generating facility with an alternating current capacity greater than 25 kilowatts, shall submit the notification form shall be submitted at least 60 days prior to the date the [ prospective ] customer intends to interconnect his renewable fuel generator the [ facility's generator or generators generating facility ] to the electric [ distribution ] company's distribution facilities. Such net metering [ The customer shall have contacted the electric distribution company prior to making financial commitments and shall have installed all All ] equipment necessary to complete the grid interconnection installed of the [ facility's generator or generators generating facility shall have been installed ] prior to such submitting the notification form. [ The prospective customer should contact its electric distribution company prior to making financial commitments. ] Such net metering customer should contact his electric distribution company prior to making financial commitments. The electric distribution company shall have 60 days from the date of notification to determine whether the requirements contained in 20VAC5-315-40 have been met. The date of notification shall be considered to be the third day following the mailing of such the notification form by the [ prospective ] net metering customer.

B. Thirty-one days after the date of notification for renewable fuel generators [ an electrical a ] generating facility with a rated an alternating current capacity of 25 kilowatts or less, and 61 days after the date of notification for renewable fuel generators a [ generating ] facility with an alternating current capacity greater than 25 kilowatts, a net metering the [ prospective ] customer may interconnect his renewable fuel generator and begin operation of said renewable fuel generator and begin operation of the [ generating ] facility unless the electric distribution company or the energy service provider requests a waiver of this requirement under the provisions of 20VAC5-315-80 prior to said the 31st or 61st day, respectively. In cases where the electric distribution company or energy service provider requests a waiver, a copy of the request for waiver must be mailed simultaneously by the requesting party to the net metering [ prospective ] customer and to the commission's Division of Energy Regulation.

C. The electric distribution company shall file with the commission's Division of Energy Regulation a copy of each completed notification form within 30 days of final interconnection.

20VAC5-315-40. Conditions of interconnection.

A. A prospective [ net metering ] customer [ or prospective agricultural net metering customer ] may begin operation of his renewable fuel generator the [ electrical ] generating facility on an interconnected basis when:

1. The net metering customer has properly notified both the electric distribution company and energy service provider (in accordance with 20VAC5-315-30) of [ his the customer's ] intent to interconnect.

2. If required by the electric distribution company's net metering tariff, the net metering customer has installed a lockable, electric distribution company accessible, load breaking manual disconnect switch at each of the facility's generators.

3. [ A In cases where a licensed electrician installs the customer's generator or generators, the ] licensed electrician has certified, by signing the commission-approved notification form, that any required manual disconnect switch has or switches have been installed properly and that the renewable fuel generator has or generators have been installed in accordance with the manufacturer's specifications as well as all applicable provisions of the National Electrical Code. [ If the customer or licensed Virginia Class A or B general contractor installs the customer's generator or generators, the signed final electrical inspection can be used in lieu of the licensed electrician's certification. ]

4. The vendor has certified, by signing the commission-approved notification form, that the renewable fuel generator or generators being installed is are in compliance with the requirements established by Underwriters Laboratories or other national testing laboratories in accordance with IEEE Standard 1547, Standard for Interconnecting Distributed Resources with Electric Power Systems, July 2003.

5. In the case of static inverter-connected renewable fuel generators with an alternating current capacity in excess of 10 kilowatts, the net metering customer has had the inverter settings inspected by the electric distribution company. The inspecting electric distribution company may impose a fee on the net metering customer of no more than $50 for such inspection each generator that requires this inspection.

6. In the case of nonstatic inverter-connected renewable fuel generators, the net metering customer has interconnected according to the electric distribution company's interconnection guidelines and the electric distribution company has inspected all protective equipment settings. The inspecting electric distribution company may impose a fee on the net metering customer of no more than $50 for such each generator that requires this inspection.

7. In the case of renewable fuel generators with a customer's electrical generating facility having an alternating current capacity greater than 25 kilowatts, the following requirements shall be met before interconnection may occur:

a. Electric distribution facilities and customer impact limitations. A renewable fuel customer's generator shall not be permitted to interconnect to distribution facilities if the interconnection would reasonably lead to damage to any of the electric distribution company's facilities or would reasonably lead to voltage regulation or power quality problems at other customer revenue meters due to the incremental effect of the generator on the performance of the electric distribution system, unless the customer reimburses the electric distribution company for its cost to modify any facilities needed to accommodate the interconnection.

b. Secondary, service, and service entrance limitations. The capacity of the renewable fuel generator generators at any one service location shall be less than the capacity of the electric distribution company-owned secondary, service, and service entrance cable connected to the point of interconnection, unless the customer reimburses the electric distribution company for its cost to modify any facilities needed to accommodate the interconnection.

c. Transformer loading limitations. The renewable fuel A customer's generator shall not have the ability to overload the electric distribution [ company company's ] transformer, or any transformer winding, beyond manufacturer or nameplate ratings, unless the customer reimburses the electric distribution company for its cost to modify any facilities needed to accommodate the interconnection.

d. Integration with electric distribution company facilities grounding. The grounding scheme of the renewable fuel each generator shall comply with IEEE 1547, Standard for Interconnecting Distributed Resources with Electric Power Systems, July 2003, and shall be consistent with the grounding scheme used by the electric distribution company. If requested by a prospective [ net metering ] customer, the electric distribution company shall assist the prospective [ net metering ] customer in selecting a grounding scheme that coordinates with its distribution system.

e. Balance limitation. The renewable fuel generator or generators shall not create a voltage imbalance of more than 3.0% at any other customer's revenue meter if the electric distribution company transformer, with the secondary connected to the point of interconnection, is a three-phase transformer, unless the customer reimburses the electric distribution company for its cost to modify any facilities needed to accommodate the interconnection.

B. A prospective net metering customer shall not be allowed to interconnect a renewable fuel generator if doing so will cause the total rated generating alternating current capacity of all interconnected renewable fuel net metered generators [ , as defined in 20VAC5-315-20, ] within that customer's electric distribution company's Virginia service territory to exceed 1.0% of that company's Virginia peak-load forecast for the previous year. In any case where a prospective net metering customer has submitted a notification form required by 20VAC5-315-30 and that customer's interconnection would cause the total rated generating alternating current capacity of all interconnected renewable fuel net metered generators [ , as defined in 20VAC5-315-20, ] within that electric distribution company's service territory to exceed 1.0% of that company's Virginia peak-load forecast for the previous year, the electric distribution company shall, at the time it becomes aware of the fact, send written notification to such the prospective net metering customer and to the commission's Division of Energy Regulation that the interconnection is not allowed. In addition, upon request from any customer, the electric distribution company shall provide to the customer the amount of capacity still available for interconnection pursuant to § 56-594 D of the Code of Virginia.

C. Neither the electric distribution company nor the energy service provider shall impose any charges upon a net metering customer for any interconnection requirements specified by this chapter, except as provided under subdivisions A 5 [ and, ] 6 [ , and 7 ] of this section, and 20VAC5-315-50 as related to additional metering.

D. The net energy metering A customer shall immediately notify the electric distribution company of any changes in the ownership of, operational responsibility for, or contact information for any of the generator customer's generators.

20VAC5-315-50. Metering, billing, payment and contract or tariff considerations.

Net metered energy shall be measured in accordance with standard metering practices by metering equipment capable of measuring (but not necessarily displaying) power flow in both directions. Each contract or tariff governing the relationship between a net metering customer, electric distribution company or energy service provider shall be identical, with respect to the rate structure, all retail rate components, and monthly charges, to the contract or tariff under which the same customer would be served if such customer was were not a [ an agricultural net metering customer or a ] net metering [ customer ] with the exceptions that a residential customer-generator net metering customer or an agricultural net metering customer whose generating facility has a capacity that exceeds 10 kilowatts shall pay any applicable tariffed monthly standby charges to his the supplier, and that time-of-use metering under an electricity supply service tariff having no demand charges is not permitted. Said contract or tariff shall be applicable to both the electric energy supplied to, and consumed from, the grid by that customer.

In instances where a net metering customer's metering equipment is of a type for which meter readings are made off site and where this equipment has, or will be, installed for the convenience of the electric distribution company, the electric distribution company shall provide the necessary additional metering equipment to enable net metering service at no charge to the net metering customer. In instances where a net metering customer has requested, and where the electric distribution company would not have otherwise installed, metering equipment that is intended to be read off site, the electric distribution company may charge the net metering customer its actual cost of installing any additional equipment necessary to implement net metering service. A time-of-use net metering customer shall bear the incremental metering costs associated with net metering. Any incremental metering costs associated with measuring the total output of the renewable fuel any generator or generators for the purposes of receiving renewable energy certificates shall be installed at the customer's expense unless otherwise negotiated between the customer and the REC purchaser. Agricultural net metering customers may be responsible for the cost of additional metering equipment necessary to accomplish [ virtual account ] aggregation.

A net metering The customer shall receive no compensation for excess generation unless the net metering customer has entered into a power purchase agreement with its supplier.

Upon the written request of the net metering customer, the customer's supplier shall enter into a power purchase agreement for the excess generation for one or more net metering periods, as requested by the net metering customer. The written request of the net metering customer shall be submitted prior to the beginning of the first net metering period covered by the power purchase agreement. The power purchase agreement shall be consistent with this chapter. If the customer's supplier is an investor-owned electric distribution company, the supplier shall be obligated by the power purchase agreement to purchase the excess generation for the requested net metering periods at a price equal to the PJM Interconnection, L.L.C. (PJM) zonal day-ahead annual, simple average LMP (locational marginal price) for the PJM load zone in which the electric distribution company's Virginia retail service territory resides (simple average of hourly LMPs, by tiers, for time-of-use customers), as published by the PJM Market Monitoring Unit, for the most recent calendar year ending on or before the end of each net metering period, unless the electric distribution company and the net metering customer mutually agree to a higher price or unless, after notice and opportunity for hearing, the commission establishes a different price or pricing methodology. If the Virginia retail service territory of the investor-owned electric distribution company does not reside within a PJM load zone, the power purchase agreement shall obligate the electric distribution company to purchase excess generation for the requested net metering periods at a price equal to the systemwide PJM day-ahead annual, simple average LMP (simple average of hourly LMPs, by tiers, for time-of-use customers), as published by the PJM Market Monitoring Unit, for the most recent calendar year ending on or before the end of each net metering period, unless the electric distribution company and the net metering customer mutually agree to a higher price or unless, after notice and opportunity for hearing, the commission establishes a different price or pricing methodology.

If the customer's supplier is a member-owned electric cooperative, the supplier shall be obligated by the power purchase agreement to purchase excess generation for the requested net metering periods at a price equal to the simple average (by tiers for time-of-use customers) of the electric cooperative's hourly avoidable cost of energy, including fuel, based on the energy and energy-related charges of its primary wholesale power supplier for the net metering period, unless the electric distribution company and the net metering customer mutually agree to a higher price or unless, after notice and opportunity for hearing, the commission establishes a different price or pricing methodology.

If the customer's supplier is a competitive supplier, the supplier shall be obligated by the power purchase agreement to purchase the excess generation for the requested net metering periods at a price equal to the systemwide PJM day-ahead annual, simple average LMP (simple average of hourly LMPs, by tiers, for time-of-use customers), as published by the PJM Market Monitoring Unit, for the most recent calendar year ending on or before the end of each net metering period, unless the supplier and the net metering customer mutually agree to a higher price or unless, after notice and opportunity for hearing, the commission establishes a different price or pricing methodology.

The customer's supplier shall make full payment annually to the net metering customer within 30 days following the latter of the end of the net metering period or, if applicable, the date of the PJM Market Monitoring Unit's publication of the previous calendar-year's applicable zonal or systemwide PJM day-ahead annual, simple average LMP, or hourly LMP, as appropriate. The supplier may offer the net metering customer the choice of an account credit in lieu of a direct payment. The option of a net metering customer to request payment from its supplier for excess generation and the price or pricing formula shall be clearly delineated in the net metering tariff of the electric distribution company or timely provided by the customer's competitive supplier, as applicable. A copy of such tariff, or an Internet link to such tariff, at the option of the customer, shall be provided to each [ prospective ] customer requesting interconnection of [ a ] renewable fuel generator [ an electrical ] generating facility. A competitive supplier shall provide in its contract with the net metering customer the price or pricing formula for excess generation.

For a nontime-of-use net metering customer, in any billing period in which there is a billing period credit, the customer shall be required to pay only the nonusage sensitive charges, including any applicable standby charges, for that billing period. For a time-of-use net metering customer, in any billing period for which there are billing period credits in all tiers, the customer shall be required to pay only the demand charge or charges, nonusage sensitive charges, and any applicable standby charges, for that billing period. Any billing period credits shall be accumulated, carried forward, and applied at the first opportunity to any billing periods having positive net consumptions (by tiers, in the case of time-of-use customers). However, any accumulated billing period credits remaining unused at the end of a net metering period shall be carried forward into the next net metering period only to the extent that such accumulated billing period credits carried forward do not exceed the net metering customer's billed consumption for the current net metering period, adjusted to exclude accumulated billing period credits carried forward and applied from the previous net metering period (recognizing tiers for time-of-use customers).

A net metering customer owns any renewable energy certificates associated with the total output of its renewable fuel generator [ electrical ] generating facility. A supplier is only obligated to purchase a net metering customer's RECs if the net metering customer has exercised its one-time option at the time of signing a power purchase agreement with its supplier to include a provision requiring the purchase by the supplier of all generated RECs over the duration of the power purchase agreement.

Payment for all whole RECs purchased by the supplier during a net metering period in accordance with the purchase power purchase agreement shall be made at the same time as the payment for any excess generation. The supplier will post a credit to the customer's account, or the customer may elect a direct payment. Any fractional REC remaining shall not receive immediate payment, but may be carried forward to subsequent net metering periods for the duration of the power purchase agreement.

The rate of the payment by the supplier for a customer's RECs shall be the daily unweighted average of the "CR" component of Virginia Electric and Power Company's Virginia jurisdiction Rider G tariff in effect over the period for which the rate of payment for the excess generation is determined, unless the customer's supplier is not Virginia Electric and Power Company, and that supplier has an applicable Virginia retail renewable energy tariff containing a comparable REC commodity price component, in which case that price component shall be the basis of the rate of payment. The commission may, with notice and opportunity for hearing, set another rate of payment or methodology for setting the rate of payment for RECs.

To the extent that RECs are not sold to the net metering customer's supplier, they may be sold to any willing buyer at any time at a mutually agreeable price.

20VAC5-315-60. Liability insurance.

A net metering customer with a renewable fuel generator operating [ an electrical a ] generating facility with a rated an alternating current capacity not exceeding 10 kilowatts shall maintain homeowners, commercial, or other insurance providing coverage in the amount of at least $100,000 for the liability of the insured against loss arising out of the use operation of a renewable fuel generator the facility, and for a renewable fuel generator [ generating ] facility with a rated an alternating current capacity exceeding 10 kilowatts such coverage shall be in the amount of at least $300,000. Net metering customers Customers shall not be required to obtain liability insurance with limits higher than that which is stated in this section; nor shall such customers be required to purchase additional liability insurance where the customer's existing insurance policy provides coverage against loss arising out of the use operation of a renewable fuel generator an electrical generating facility by virtue of not explicitly excluding coverage for such loss.

20VAC5-315-70. Additional controls and tests.

Except as provided in 20VAC5-315-40 A 5 and 6 and 20VAC5-315-50 as related to additional metering, no net metering customer shall be required to pay for additional metering, testing or controls in order to interconnect with the electric distribution company or energy service provider. However, this chapter shall not preclude a net metering customer, an electric distribution company or an energy service provider from installing additional controls or meters, or from conducting additional tests. The expenses associated with these additional meters, tests or equipment shall be borne by the party desiring the additional meters, tests or equipment.

NOTICE: The following form used in administering the regulation was filed by the agency. The form is not being published; however, online users of this issue of the Virginia Register of Regulations may click on the name of the form, which has a hyperlink, to access it. The form is also available from the agency contact or may be viewed at the Office of the Registrar of Regulations, General Assembly Building, 2nd Floor, Richmond, Virginia 23219.

FORMS (20VAC5-315)

Net Metering Interconnection Notification, Form NMIN (eff. 9/06).

Net Metering Interconnection Notification, Form NMIN (rev. 7/14)

VA.R. Doc. No. R14-3950; Filed June 23, 2014, 2:31 p.m.