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        PRIOR PRINTER'S NO. 1666                      PRINTER'S NO. 1989

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 1201 Session of 2007


        INTRODUCED BY GEORGE, DePASQUALE, GERBER, DeWEESE, CONKLIN,
           HARHAI, HARKINS, JAMES, JOSEPHS, KORTZ, MAHONEY, MANDERINO,
           McGEEHAN, MUNDY, M. O'BRIEN, PRESTON, SANTONI, SHIMKUS,
           STABACK, SURRA, TANGRETTI, THOMAS, VITALI, WALKO, YUDICHAK,
           CURRY, FREEMAN, McCALL, BENNINGTON, GOODMAN, K. SMITH,
           M. SMITH, PETRONE, LENTZ, GRUCELA, FABRIZIO, PASHINSKI AND
           CALTAGIRONE, MAY 24, 2007

        AS REPORTED FROM COMMITTEE ON CONSUMER AFFAIRS, HOUSE OF
           REPRESENTATIVES, AS AMENDED, JUNE 19, 2007

                                     AN ACT

     1  Amending Title 66 (Public Utilities) of the Pennsylvania
     2     Consolidated Statutes, further providing for the definition
     3     of "public utility"; adding a definition of "micro-grid";
     4     further providing for duties of electric distribution
     5     companies; and providing for micro-grids.

     6     The General Assembly of the Commonwealth of Pennsylvania
     7  hereby enacts as follows:
     8     Section 1.  The definition of "public utility" in section 102
     9  of Title 66 of the Pennsylvania Consolidated Statutes is amended
    10  to read:
    11  § 102.  Definitions.
    12     Subject to additional definitions contained in subsequent
    13  provisions of this part which are applicable to specific
    14  provisions of this part, the following words and phrases when
    15  used in this part shall have, unless the context clearly
    16  indicates otherwise, the meanings given to them in this section:


     1     * * *
     2     "Public utility."
     3         (1)  Any person or [corporations] corporation now or
     4     hereafter owning or operating in this Commonwealth equipment
     5     or facilities for:
     6             (i)  Producing, generating, transmitting,
     7         distributing or furnishing natural or artificial gas,
     8         electricity, or steam for the production of light, heat,
     9         or power to or for the public for compensation.
    10             (ii)  Diverting, developing, pumping, impounding,
    11         distributing, or furnishing water to or for the public
    12         for compensation.
    13             (iii)  Transporting passengers or property as a
    14         common carrier.
    15             (iv)  Use as a canal, turnpike, tunnel, bridge,
    16         wharf, and the like for the public for compensation.
    17             (v)  Transporting or conveying natural or artificial
    18         gas, crude oil, gasoline, or petroleum products,
    19         materials for refrigeration, or oxygen or nitrogen, or
    20         other fluid substance, by pipeline or conduit, for the
    21         public for compensation.
    22             (vi)  Conveying or transmitting messages or
    23         communications, except as set forth in paragraph (2)(iv),
    24         by telephone or telegraph or domestic public land mobile
    25         radio service including, but not limited to, point-to-
    26         point microwave radio service for the public for
    27         compensation.
    28             (vii)  Sewage collection, treatment, or disposal for
    29         the public for compensation.
    30             (viii)  Providing limousine service in a county of
    20070H1201B1989                  - 2 -     

     1         the second class pursuant to Subchapter B of Chapter 11
     2         (relating to limousine service in counties of the second
     3         class).
     4         (2)  The term does not include:
     5             (i)  Any person or corporation, not otherwise a
     6         public utility, who or which furnishes service only to
     7         himself or itself.
     8             (ii)  Any bona fide cooperative association which
     9         furnishes service only to its stockholders or members on
    10         a nonprofit basis.
    11             (iii)  Any producer of natural gas not engaged in
    12         distributing such gas directly to the public for
    13         compensation.
    14             (iv)  Any person or corporation, not otherwise a
    15         public utility, who or which furnishes mobile domestic
    16         cellular radio telecommunications service.
    17             (v)  Any building or facility owner/operators who
    18         hold ownership over and manage the internal distribution
    19         system serving such building or facility and who supply
    20         electric power and other related electric power services
    21         to occupants of the building or facility.
    22             (vi)  Electric generation supplier companies, except
    23         for the limited purposes as described in sections 2809
    24         (relating to requirements for electric generation
    25         suppliers) and 2810 (relating to revenue-neutral
    26         reconciliation).
    27             (vii)  Any person or corporation who or which
    28         furnishes DISTRIBUTES natural gas produced from            <--
    29         alternative sources, including, but not limited to,
    30         landfill gas, coal-mine methane or coal-bed methane and
    20070H1201B1989                  - 3 -     

     1         synthetic natural gas produced from the gasification of
     2         coal or other feedstocks directly to no more than four
     3         customers. A person or corporation who or which wishes to
     4         furnish DISTRIBUTE natural gas produced from alternative   <--
     5         sources to more than four customers and be excluded from
     6         this definition must request approval from the
     7         commission. The commission shall approve the request if
     8         the person or corporation provides a private rather than
     9         a public service.
    10             (viii)  Micro-grids, as that term is defined by
    11         section 2803 (relating to definitions).
    12         (3)  For the purposes of sections 2702 (relating to
    13     construction, relocation, suspension and abolition of
    14     crossings), 2703 (relating to ejectment in crossing cases)
    15     and 2704 (relating to compensation for damages occasioned by
    16     construction, relocation or abolition of crossings) and those
    17     portions of sections 1501 (relating to character of service
    18     and facilities), 1505 (relating to proper service and
    19     facilities established on complaint; authority to order
    20     conservation and load management programs) and 1508 (relating
    21     to reports of accidents), as those sections or portions
    22     thereof relate to safety only, a municipal authority or
    23     transportation authority organized under the laws of this
    24     Commonwealth shall be considered a public utility when it
    25     owns or operates, for the carriage of passengers or goods by
    26     rail, a line of railroad composed of lines formerly owned or
    27     operated by the Pennsylvania Railroad, the Penn-Central
    28     Transportation Company, the Reading Company or the
    29     Consolidated Rail Corporation.
    30     * * *
    20070H1201B1989                  - 4 -     

     1     Section 2.  Section 2803 of Title 66 is amended by adding a
     2  definition to read:
     3  § 2803.  Definitions.
     4     The following words and phrases when used in this chapter
     5  shall have the meanings given to them in this section unless the
     6  context clearly indicates otherwise:
     7     * * *
     8     "Micro-grid."  A small power generation and distribution
     9  network directly serving multiple consumers with the electric
    10  generating facility located near or on the same site as the
    11  consumers, that may be interconnected to the transmission and
    12  distribution system and, if so, operates BUT CAPABLE OF           <--
    13  OPERATING independently from it.
    14     * * *
    15     Section 3.  Section 2807(e) of Title 66 is amended and the
    16  section is amended by adding a subsection to read:
    17  § 2807.  Duties of electric distribution companies.
    18     * * *
    19     (e)  Obligation to serve.--An electric distribution company's
    20  obligation to provide electric service following implementation
    21  of restructuring and the choice of alternative generation by a
    22  customer is revised as follows:
    23         (1)  While an electric distribution company collects
    24     either a competitive transition charge or an intangible
    25     transition charge or until 100% of its customers have choice,
    26     whichever is longer, the electric distribution company shall
    27     continue to have the full obligation to serve, including the
    28     connection of customers, the delivery of electric energy and
    29     the production or acquisition of electric energy for
    30     customers.
    20070H1201B1989                  - 5 -     

     1         (2)  At the end of the transition period, the commission
     2     shall promulgate regulations to define the electric
     3     distribution company's obligation to connect and deliver and
     4     acquire electricity under paragraph (3) that will exist at
     5     the end of the phase-in period.
     6         (3)  [If a customer contracts for electric energy and it
     7     is not delivered or if a customer does not choose an
     8     alternative electric generation supplier, the]
     9             (i)  The electric distribution company or commission-
    10         approved alternative supplier shall acquire [electric
    11         energy at prevailing market prices to serve that customer
    12         and shall recover fully all reasonable costs.] a
    13         portfolio of resources through one or more competitive
    14         procurement processes approved by the commission to serve
    15         customers who contract for electric energy and do not
    16         receive it or to customers who do not choose an
    17         alternative electric generation supplier, and shall
    18         recover fully all reasonable costs. The competitive
    19         procurement process or processes to secure electricity
    20         shall be conducted by customer rate class as determined    <--
    21         and approved by the commission. The generation rates
    22         procured by the competitive procurement process or
    23         processes may not allow the cross-subsidization of one
    24         customer rate class by another.                            <--
    25             (ii)  In addition to complying with the requirements   <--
    26         of the act of November 30, 2004 (P.L.1672, No.213), known
    27         as the Alternative Energy Portfolio Standards Act, the
    28             (II)  (A)  FOR THE PURPOSES OF THIS PARAGRAPH,         <--
    29             COMPETITIVE PROCUREMENT PROCESSES MAY INCLUDE ONE OR
    30             MORE OF THE FOLLOWING:
    20070H1201B1989                  - 6 -     

     1                     (I)  AUCTIONS.
     2                     (II)  REQUESTS FOR PROPOSALS.
     3                 (B)  THE COMMISSION SHALL NOT MODIFY CONTRACTS
     4             ENTERED INTO PURSUANT TO AN APPROVED COMPETITIVE
     5             PROCUREMENT PROCESS UNLESS THE COMMISSION DETERMINES
     6             THAT THE CONTRACT DOES NOT COMPLY WITH THE APPROVED
     7             COMPETITIVE PROCUREMENT PROCESS.
     8             (III)  THE resource portfolio acquired pursuant to
     9         this paragraph shall be designed to produce the lowest
    10         reasonable rates on a long-term basis and shall reflect a
    11         diversity of supply-side and demand-side resources, a
    12         diversity of fuel types and a prudent mix of long-term,    <--
    13         short-term and spot-market purchases. A long-term          <--
    14         contract shall be permitted only for newly constructed or
    15         proposed to be constructed alternative energy sources, as
    16         that term is defined in section 2 of the Alternative
    17         Energy Portfolio Standards Act, and new generation
    18         resources determined by the commission to be required for
    19         reliability as set forth in subparagraph (v). SPOT-MARKET  <--
    20         PURCHASES. LONG-TERM CONTRACTS SHALL BE PERMITTED TO
    21         ACQUIRE ELECTRICITY GENERATION RESOURCES, DEMAND SIDE
    22         MANAGEMENT RESOURCES OR ALTERNATIVE ENERGY CREDITS AS
    23         THOSE TERMS ARE DEFINED IN SECTION 2 OF THE ACT OF
    24         NOVEMBER 30, 2004 (P.L.1672, NO.213), KNOWN AS THE
    25         ALTERNATIVE ENERGY PORTFOLIO STANDARDS ACT.
    26             (iii) (IV)  An electric distribution company or        <--
    27         commission-approved alternative supplier may enter into a
    28         long-term contract directly with a Tier I alternative
    29         energy source, as that term is defined in section 2 of
    30         the Alternative Energy Portfolio Standards Act, for
    20070H1201B1989                  - 7 -     

     1         electricity, alternative energy credits, or both, without
     2         engaging in a commission-approved competitive procurement
     3         process. The costs associated with the contract must be    <--
     4         consistent with the average cost of Tier I alternative
     5         energy credits in other jurisdictions of the PJM
     6         Interconnection, L.L.C., regional transmission
     7         organization or its successor, accounting for the effect
     8         that public subsidies have on the price of the
     9         alternative energy credit. The commission shall determine
    10         when there is significant competition among Tier I
    11         alternative energy sources that the acts authorized by
    12         this subpart are no longer necessary. PROCESS FOR A        <--
    13         PERIOD OF THREE YEARS FROM THE EFFECTIVE DATE OF THIS
    14         SUBPARAGRAPH.
    15             (iv) (V)  An electric distribution company or          <--
    16         commission-approved alternative supplier shall enter into
    17         a contract with energy efficiency and other demand-side
    18         resources, instead of electric generation facilities, to
    19         meet any increases in energy usage and peak demand so
    20         long as the cost of energy efficiency and demand-side
    21         resources is less than the cost of electric generation.
    22         To the extent that electric generation is necessary to
    23         meet additional load growth, the electric distribution
    24         company or commission-approved alternative supplier shall
    25         make a good faith effort to procure electricity from
    26         alternative energy sources specified in the Alternative
    27         Energy Portfolio Standards Act.
    28             (v) (VI)  An electric distribution company or          <--
    29         commission-approved alternative supplier may enter into a
    30         contract approved by the commission to enable the
    20070H1201B1989                  - 8 -     

     1         construction of new electric generation resources upon a
     2         determination by the commission that new electric
     3         generation resources are required to ensure reliability.
     4         The commission shall ensure that a contract for new
     5         electric generation resources are the lowest cost option
     6         for ensuring reliability.
     7             (vi)  The portfolio of resources acquired pursuant to  <--
     8         this subsection shall be acquired separately for
     9         residential customers, small business customers and large
    10         customers as those customer classes are defined by the
    11         commission for each electric distribution company or
    12         commission-approved alternative supplier.
    13             (vii)  For the purposes of this paragraph "long-term
    14         contract" shall be defined as a contract length of more    <--
    15         than three years. OF ANY LENGTH AS NEGOTIATED BY THE       <--
    16         PARTIES BUT AT LEAST THREE YEARS IN DURATION. "Short-term
    17         contract" shall be defined as a contract length of three
    18         years or less.
    19         (4)  If a customer that chooses an alternative supplier
    20     and subsequently desires to return to the local distribution
    21     company for generation service, the local distribution
    22     company shall treat that customer exactly as it would any new
    23     applicant for energy service.
    24         (5)  No later than January 1, 2011, an electric
    25     distribution company or commission-approved alternative
    26     supplier shall provide a rate that shall change no more
    27     frequently than on an annual basis as the default option for
    28     residential and small business customers.
    29         (6)  One year from the effective date of this paragraph
    30     or at the end of the applicable generation rate cap period,
    20070H1201B1989                  - 9 -     

     1     whichever is later, an electric distribution company and
     2     commission-approved alternative supplier shall offer a time-
     3     of-use pilot rate to residential and small business customers
     4     voluntarily choosing to be part of the pilot program. An
     5     electric distribution and commission-approved alternative
     6     supplier shall provide to the commission a description of its
     7     time-of-use pilot rate program and shall annually report on
     8     the participation in the pilot program and the efficacy of
     9     the pilot program in affecting energy demand and consumption.
    10         (7)  Within six years of the effective date of this        <--
    11     paragraph, an electric distribution company shall furnish its
    12     customers with technology capable of allowing all customers
    13     to participate in pricing programs that reflect time of use.
    14     The electric distribution company may recover the net costs
    15     associated with technology required to implement time-of-use
    16     rates. Cost recovery shall reflect the operating cost savings
    17     to the electric distribution company from the introduction of
    18     technology to implement time-of-use rates. Customer
    19     participation in time-of-use pricing shall be voluntary.
    20         (8)  By January 1, 2011, or at an electric distribution
    21     company or commission-approved alternative supplier's next
    22     default service offering, whichever is sooner, the electric
    23     distribution company or commission-approved alternative
    24     supplier may offer large customers any rate including, but
    25     not limited to, a cost-based rate for any duration agreed
    26     upon by the electric distribution company or commission-
    27     approved alternative supplier and the large customer.
    28     Contract rates entered into pursuant to this paragraph shall
    29     be subject to review by the commission in order to ensure
    30     that no costs related to the rates are borne by other
    20070H1201B1989                 - 10 -     

     1     customers or customer classes.
     2         (7)  AN EVALUATION, BY THE COMMISSION, OF THE RESULTS OF   <--
     3     THE PILOT PROGRAM WILL DETERMINE WHETHER, OR TO WHAT EXTENT,
     4     THE BROADER DEPLOYMENT OF TIME-OF-USE METER TECHNOLOGY WOULD
     5     BE COST EFFECTIVE. WHERE TIME-OF-USE METER TECHNOLOGY IS
     6     DETERMINED BY THE COMMISSION TO BE COST EFFECTIVE, ELECTRIC
     7     DISTRIBUTION COMPANIES SHALL FURNISH THE SAME, WITHIN SIX
     8     YEARS OF THE EFFECTIVE DATE OF THIS PARAGRAPH, TO CUSTOMERS
     9     VOLUNTARILY CHOOSING TO PARTICIPATE IN TIME-OF-USE RATES.
    10     DEFAULT SERVICE PROVIDERS SHALL BE ENTITLED TO FULL AND
    11     CURRENT RECOVERY, UNDER SECTION 1307 (RELATING TO SLIDING
    12     SCALE OF RATES; ADJUSTMENTS) AUTOMATIC ADJUSTMENT CLAUSE, OF
    13     NET COSTS INCURRED IN CONNECTION WITH THE DEVELOPMENT,
    14     IMPLEMENTATION AND OPERATION OF A PILOT PROGRAM OR ANY OTHER
    15     DEPLOYMENT OF TIME-OF-USE METER TECHNOLOGY, INCLUDING A
    16     RETURN ON AND OF ITS INVESTMENT IN ANY FACILITIES INSTALLED,
    17     EMPLOYED OR PREMATURELY RETIRED IN CONNECTION WITH THE
    18     DEPLOYMENT OF TIME-OF-USE METER TECHNOLOGY.
    19         (8)  THE DEFAULT SERVICE PROVIDER MAY, IN ITS SOLE
    20     DISCRETION, OFFER CUSTOMERS WITH A MAXIMUM REGISTERED DEMAND
    21     OVER 500 KW A RATE FOR ANY DURATION AGREED UPON BY THE
    22     DEFAULT SERVICE PROVIDER AND THE CUSTOMER WITH A MAXIMUM
    23     REGISTERED DEMAND OVER 500 KW. CONTRACT RATES ENTERED INTO
    24     PURSUANT TO THIS SECTION SHALL BE SUBJECT TO REVIEW BY THE
    25     COMMISSION IN ORDER TO ENSURE THAT ALL COSTS RELATED TO SUCH
    26     RATES ARE BORNE EXCLUSIVELY BY THE CUSTOMER RECEIVING THE
    27     CONTRACT RATE AND THAT NO COSTS RELATED TO SUCH RATES ARE
    28     BORNE BY OTHER CUSTOMERS OR CUSTOMER CLASSES.
    29         (9)  The commission shall require an electric
    30     distribution company to offer customers the choice of
    20070H1201B1989                 - 11 -     

     1     phasing-in over a period of up to three years any generation
     2     rate increases resulting from the end of existing generation
     3     rate caps which are approved by the commission.
     4     (f)  Retail electricity surcharge.--
     5         (1)  Each electric distribution company shall apply and
     6     collect a charge of $0.0005 per kWh for each kWh of retail
     7     electricity sold in this Commonwealth and shall pay that
     8     charge to the State Treasurer through the Department of
     9     Revenue on a quarterly basis within 30 days after the close
    10     of the quarter in which collected.
    11         (2)  Notwithstanding the provisions in paragraph (1), in   <--
    12     no event shall the annual payment from any single customer
    13     exceed $10,000.
    14         (2)  NOTWITHSTANDING THE PROVISIONS IN PARAGRAPH (1), IN   <--
    15     NO EVENT SHALL THE ANNUAL PAYMENT FROM ANY SINGLE LEGAL
    16     ENTITY EXCEED $10,000. FOR PURPOSES OF THIS PARAGRAPH, EACH
    17     INDIVIDUAL FEDERAL AGENCY AND EACH INDIVIDUAL COMMONWEALTH
    18     EXECUTIVE AGENCY, INDEPENDENT AGENCY OR STATE-AFFILIATED
    19     AGENCY SHALL CONSTITUTE A DISTINCT LEGAL ENTITY. THE
    20     COMMISSION SHALL ADOPT GUIDELINES WITHIN SIX MONTHS OF THE
    21     EFFECTIVE DATE OF THIS SUBSECTION FOR AVOIDING PAYMENTS IN
    22     EXCESS OF $10,000 OR FOR REFUNDING OR CREDITING PAYMENTS IN
    23     EXCESS OF $10,000.
    24         (3)  The State Treasurer shall transfer all funds
    25     received pursuant to this subsection to the Energy
    26     Development Fund within 30 days of receipt of the funds.
    27         (4)  The charge shall appear as a separate charge on the
    28     distribution bill of each retail electricity customer. The
    29     charge shall be applied beginning 90 days after the effective
    30     date of this subsection and shall expire on the 30th
    20070H1201B1989                 - 12 -     

     1     anniversary of the date it was first applied.
     2         (5)  Funds collected under this subsection shall be used
     3     TO PAY THE PRINCIPLE AND INTEREST ON BONDS ISSUED by the       <--
     4     Pennsylvania Energy Development Authority IN ACCORDANCE WITH   <--
     5     THE PROVISION OF ARTICLE XXVIII-C OF THE ACT OF APRIL 9, 1929
     6     (P.L.177, NO.175), KNOWN AS THE ADMINISTRATIVE CODE OF 1929.
     7     PROCEEDS OF THE BONDS SHALL BE PROVIDED TO, AND USED BY, THE
     8     PENNSYLVANIA ENERGY DEVELOPMENT AUTHORITY, THE Redevelopment
     9     Capital Assistance Program and the Ben Franklin Technology
    10     Development Authority for the following purposes:
    11             (i)  To fulfill the obligations of a bond for
    12         alternative energy projects, including:
    13                 (A)  Funding for alternative and renewable energy
    14             projects, including alternative and renewable
    15             transportation fuels.
    16                 (B)  Funding for the purchase of tradable
    17             instruments, including, but not limited to,
    18             alternative and renewable energy credits.
    19                 (C)  Funding for demand-side management measures
    20             for all customer classes, including, but not limited
    21             to, energy efficiency building construction,
    22             equipment and renovation.
    23                 (D)  Rebates or grants for solar photovoltaic,
    24             other solar electric or solar thermal installations.
    25             THE PENNSYLVANIA ENERGY DEVELOPMENT AUTHORITY SHALL    <--
    26             ESTABLISH REBATE AND GRANT LEVELS FOR RESIDENTIAL AND
    27             NONRESIDENTIAL SOLAR PHOTOVOLTAIC ENERGY SYSTEMS
    28             BETWEEN 1KW AND 2MW AND FOR SOLAR THERMAL
    29             APPLICATIONS AND TECHNOLOGIES. REBATE LEVELS MAY BE
    30             ADJUSTED PERIODICALLY. APPLICATIONS FOR REBATES MAY
    20070H1201B1989                 - 13 -     

     1             BE MADE AT ANY TIME.
     2                 (E)  Production grants or rebates to solar
     3             equipment manufacturers.
     4                 (F)  Funding for weatherization and other usage
     5             reduction measures for low-income electricity and
     6             natural gas customers.
     7                 (G)  To acquire, through purchase or otherwise,
     8             hold, sell, transfer and redistribute electric power,
     9             natural gas, liquid fuel, transportation fuel and any
    10             other energy commodity.
    11                 (H)  FIFTEEN MILLION DOLLARS FOR REBATES OR        <--
    12             GRANTS FOR SOLAR PHOTOVOLTAIC, OTHER SOLAR ELECTRIC
    13             OR SOLAR THERMAL INSTALLATIONS.
    14                 (I)  TEN MILLION DOLLARS FOR FUNDING FOR
    15             WEATHERIZATION AND OTHER USAGE REDUCTION MEASURES FOR
    16             LOW-INCOME ELECTRICITY AND NATURAL GAS CUSTOMERS.
    17                 (J)  TEN MILLION DOLLARS FOR THE HAZARDOUS SITES
    18             CLEANUP FUND ESTABLISHED IN SECTION 602.3 OF THE ACT
    19             OF MARCH 4, 1971 (P.L.6, NO.2), KNOWN AS THE TAX
    20             REFORM CODE OF 1971.
    21                 (K)  TEN MILLION DOLLARS FOR THE LOW-INCOME HOME
    22             ENERGY ASSISTANCE ACT OF 1981 (PUBLIC LAW 97-35, 42
    23             U.S.C. § 8626A).
    24             (II)  REASONABLE ADMINISTRATIVE COSTS ASSOCIATED WITH
    25         UTILIZING THE FUNDS.
    26         (2)  Reasonable administrative costs associated with       <--
    27     utilizing the funds.
    28         (6)  THE COMMONWEALTH DOES HEREBY PLEDGE AND AGREE TO ANY  <--
    29     HOLDER OF BONDS AND ANY RELATED CONTRACTUAL OBLIGEE TO BE
    30     PAID WITH OR SECURED BY THE FUNDS COLLECTED UNDER THIS
    20070H1201B1989                 - 14 -     

     1     SECTION THAT THE COMMONWEALTH WILL NOT IMPAIR, REDUCE OR
     2     ELIMINATE THE CHARGE IMPOSED BY THIS SECTION OR ANY OTHER
     3     SECURITY PLEDGED TO THE REPAYMENT OF SUCH BONDS OR THE
     4     PAYMENT OF THE RELATED CONTRACTUAL OBLIGATION UNTIL ALL SUCH
     5     BONDS THEN ISSUED, TOGETHER WITH THE INTEREST THEREON, ARE
     6     FULLY PAID OR DEFEASED AND ALL SUCH CONTRACTUAL PAYMENT
     7     OBLIGATIONS ARE SATISFIED.
     8         (7)  ONLY THE ENTITIES SPECIFIED IN THIS SUBSECTION SHALL
     9     HAVE THE AUTHORITY TO ADMINISTER OR ENFORCE THE PROVISIONS OF
    10     THIS SUBSECTION.
    11     Section 4.  Title 66 is amended by adding a section to read:
    12  § 2813.  Micro-grids.
    13     Customers may have their electricity supplied by micro-grids
    14  subject to the following:
    15         (1)  A micro-grid shall be limited to four customers.
    16     Micro-grids seeking to supply electricity to more than four
    17     customers may be approved by the commission on a case-by-case
    18     basis. The commission shall approve such requests if the
    19     micro-grid, while serving more than four customers, provides
    20     a private rather than a public service.
    21         (2)  The commission shall promulgate regulations on the
    22     fees related to micro-grid interconnection, standby power and
    23     other services related to the reliable and safe functioning
    24     of micro-grids. Fees associated with this section shall be
    25     the lowest cost necessary to ensure adequate system
    26     reliability and safety.
    27         (3)  Micro-grids may sell power, EITHER THROUGH NET        <--
    28     METERING, IF CONSISTENT WITH THE COMMISSION'S NET METERING
    29     REQUIREMENTS, OR TO THE ELECTRIC TRANSMISSION SYSTEM back to
    30     the electric transmission and distribution system at the spot
    20070H1201B1989                 - 15 -     

     1     or hourly wholesale price of electricity at the nearest
     2     appropriate node that is part of the regional transmission
     3     organization.
     4     Section 5.  This act shall take effect immediately.


















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