H.F. 475 Section 1. Section 476.1, Code 2015, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 5A. A community solar garden project 3 established pursuant to section 476.49 shall not be regarded as 4 a public utility for purposes of this chapter. 5 Sec. 2. Section 476.25, Code 2015, is amended by adding the 6 following new unnumbered paragraph: 7 NEW UNNUMBERED PARAGRAPH . The furnishing of electricity 8 pursuant to a community solar garden project under section 9 476.49 shall not be considered an unnecessary duplication 10 of electric utility facilities and shall not constitute a 11 violation of this section. 12 Sec. 3. NEW SECTION . 476.49 Community solar garden 13 projects. 14 1. Definitions. For purposes of this section, unless the 15 context otherwise requires: 16 a. “Community solar garden project” means an electric 17 generating facility with a nameplate generating capacity of 18 two megawatts or less that generates electricity by means of a 19 ground-mounted or roof-mounted solar photovoltaic device and 20 that is comprised of a minimum of five subscribers who jointly 21 share the beneficial use of the electricity generated by the 22 project. 23 b. “Subscriber” means a retail customer of an electric 24 utility subject to this division who owns a subscription and 25 who has identified one or more physical locations to which the 26 subscription shall be attributed or attached. 27 c. “Subscription” means a proportional interest in a 28 community solar garden project, together with a proportional 29 interest in any state or federal tax credits for which the 30 facility associated with the project may be eligible. 31 2. Program established. 32 a. A community solar garden project may be established 33 to encourage and enhance the ability of electric utility 34 customers to participate in and derive benefit from solar 35 -1- LSB 1455YH (2) 86 rn/nh 1/ 5

H.F. 475 energy projects. 1 b. A community solar garden project established pursuant to 2 this section shall be subject to the following requirements and 3 specifications: 4 (1) A project may be established by an electric utility 5 or any other for-profit or nonprofit entity or organization, 6 including a subscriber organization whose sole purpose shall be 7 beneficially owning and operating the project. Additionally, 8 a project may be constructed, owned, and operated by a third 9 party under contract with a subscriber organization and 10 pursuant to a lease, sale-leaseback transaction, operating 11 agreement, or other third-party ownership arrangement. 12 (2) Physical locations to which subscriptions are 13 attributed or attached shall be located within the same county 14 or municipality and within the same electric utility service 15 area. Each subscription shall represent at least one kilowatt 16 of the community solar garden project’s generating capacity and 17 shall supply no more than one hundred twenty percent of the 18 average annual consumption of electricity by each subscriber 19 at the premises to which the subscription is attributed or 20 attached. Subscriptions may be transferred or assigned to a 21 subscriber organization or to any person or entity otherwise 22 qualifying as a subscriber pursuant to this section, and may 23 be continued following relocation of a subscriber to another 24 location within the same county or municipality and electric 25 utility service area otherwise meeting the requirements of this 26 section. A subscription following relocation may be subject 27 to adjustment to reflect any differences between the new and 28 previous premises’ electricity usage rate. The board shall 29 determine transfer, assignment, and relocation criteria by 30 rule. 31 (3) Electricity generated pursuant to the project shall 32 be aggregated and then proportionately allocated to each 33 subscriber. Excess electricity generated by the project not 34 utilized at the premises to which a subscription is attributed 35 -2- LSB 1455YH (2) 86 rn/nh 2/ 5

H.F. 475 or attached may be sold pursuant to a power purchase agreement 1 entered into with the electric utility at the same rates 2 applicable to alternate energy production facilities pursuant 3 to section 476.43. 4 (4) Notwithstanding the maximum purchase and ownership 5 restrictions contained in section 476.44, an electric utility 6 subject to this division shall enter into one or more power 7 purchase agreements with one or more projects to purchase a 8 minimum of five hundred kilowatts of electricity annually. The 9 board may by rule adjust this requirement on or after July 1, 10 2018. 11 (5) Federal or state tax credits for which the community 12 solar garden facility associated with the project qualifies 13 shall be proportionately allocated to each subscriber. 14 3. Rules. The board shall adopt rules governing the 15 establishment of community solar garden projects pursuant to 16 this section. 17 EXPLANATION 18 The inclusion of this explanation does not constitute agreement with 19 the explanation’s substance by the members of the general assembly. 20 This bill allows the establishment of community solar garden 21 projects. 22 The bill defines a “community solar garden project” to 23 mean a facility with a nameplate generating capacity of two 24 megawatts or less that generates electricity by means of a 25 ground-mounted or roof-mounted solar photovoltaic device and 26 that is comprised of a minimum of five subscribers who jointly 27 share the beneficial use of the electricity generated by the 28 project. The bill defines a “subscriber” to mean a retail 29 customer of an electric utility who owns a subscription and 30 who has identified one or more physical locations to which the 31 subscription shall be attributed or attached. The bill defines 32 a “subscription” to mean a proportional interest in a community 33 solar garden project, together with a proportional interest 34 in any tax credits for which the facility associated with the 35 -3- LSB 1455YH (2) 86 rn/nh 3/ 5

H.F. 475 project may be eligible. 1 The bill states that the objective of a project shall be to 2 encourage and enhance the ability of public utility customers 3 to participate in and derive benefit from solar energy 4 projects. 5 Regarding project ownership, the bill provides that 6 a project may be established by an electric or any other 7 for-profit or nonprofit entity or organization, including a 8 subscriber organization whose sole purpose is to beneficially 9 own and operate the project. A project can also be 10 constructed, owned, and operated by a third party under 11 contract with a subscriber organization and pursuant to a 12 lease, sale-leaseback transaction, operating agreement, or 13 other third-party ownership arrangement. 14 The bill provides that physical locations to which 15 subscriptions are attributed or attached must be located within 16 the same county or municipality and within the same electric 17 utility service area. The bill states that each subscription 18 shall represent at least one kilowatt of a project’s generating 19 capacity and shall supply no more than 120 percent of the 20 average annual consumption of electricity by each subscriber 21 at the premises to which the subscription is attributed or 22 attached. The bill authorizes the transfer, assignment, or 23 relocation of subscriptions, under conditions to be determined 24 by the board by rule. 25 The bill states that electricity generated pursuant to 26 a project shall be aggregated and then proportionately 27 allocated to each subscriber, and that excess electricity 28 generated by the project not utilized at the premises to which 29 a subscription is attributed may be sold pursuant to a power 30 purchase agreement entered into with the electric utility 31 at the same rates applicable to alternate energy production 32 facilities pursuant to Code section 476.43. 33 The bill imposes purchase requirements on electric 34 utilities. The bill states that an electric utility shall 35 -4- LSB 1455YH (2) 86 rn/nh 4/ 5

H.F. 475 enter into one or more power purchase agreements with one 1 or more projects to purchase a minimum of 500 kilowatts of 2 electricity annually. The bill provides that the board may by 3 rule adjust this requirement on or after July 1, 2018, and that 4 subscribers shall qualify for the federal and state tax credits 5 for which the community solar garden facility qualifies on a 6 proportionate basis. 7 The bill provides that a community solar garden project 8 shall not be considered a public utility subject to the 9 regulatory provisions of Code chapter 476, and that such a 10 project does not violate provisions contained in Code chapter 11 476 prohibiting the unnecessary duplication of electric utility 12 facilities. 13 -5- LSB 1455YH (2) 86 rn/nh 5/ 5