S.F. 2030 Section 1. NEW SECTION . 476.49 Solar interconnection 1 agreements —— alternative tariff rate. 2 1. An electric public utility may enter into 3 interconnection agreements with customers operating distributed 4 generation solar photovoltaic devices. A utility entering 5 into such an agreement may apply to the board for approval 6 of an alternative tariff rate that compensates customers 7 through a billing credit mechanism for the value to the 8 utility, its customers, and society for operating such devices 9 interconnected to the utility system and operated by customers 10 primarily for meeting their own energy needs. If approved, 11 the alternative rate shall apply in lieu of the rate otherwise 12 applicable to alternate energy production facilities pursuant 13 to section 476.43. 14 2. An application for an alternative tariff rate submitted 15 by a utility pursuant to this section shall demonstrate that 16 the proposed rate conforms with the following: 17 a. Appropriately applies the methodology established by the 18 board pursuant to subsection 3. 19 b. Includes a mechanism to allow recovery of the cost to 20 serve customers receiving the alternative tariff rate. 21 c. Charges the customer for all electricity consumed by the 22 customer at an applicable rate schedule for sales to that class 23 of customer. 24 d. Credits the customer for all electricity generated by the 25 solar photovoltaic device. 26 e. Applies charges and credits to a monthly billing that 27 includes a provision so that the unused portion of the credit 28 in any month or billing period shall be carried forward and 29 credited against all charges. In the event that the customer 30 has a positive balance after the twelve-month cycle ending on 31 the last day in February, that balance shall be eliminated and 32 the credit cycle shall restart the following billing period 33 beginning on March 1. 34 3. The board shall establish a solar value methodology 35 -1- LSB 5386XS (3) 86 rn/nh 1/ 3

S.F. 2030 for utilization by utilities in developing and applying for 1 an alternative tariff rate pursuant to this section. The 2 methodology shall, at a minimum, account for the value of 3 energy and its delivery, generation capacity, transmission 4 capacity, transmission and distribution line losses, and 5 environmental value. The board may, based on known and 6 measurable evidence of the cost or benefit of solar operation 7 to the utility, incorporate other values into the methodology, 8 including credits for locally manufactured or assembled 9 energy systems, systems installed at high-value locations on 10 the distribution grid, or other factors. In developing the 11 methodology pursuant to this subsection, the board may consult 12 stakeholders with experience and expertise in power systems, 13 solar energy, and electric utility ratemaking regarding the 14 proposed methodology, underlying assumptions, and preliminary 15 data. 16 4. Applications shall be subject to the approval provisions 17 of section 476.6. A utility shall recalculate the alternative 18 tariff rate annually, and shall file the recalculated 19 alternative rate with the board for approval. The board shall 20 not authorize a utility to charge an alternative tariff rate 21 that is lower than the utility’s applicable retail rate until 22 three years after the board originally approved the alternative 23 tariff rate. 24 5. A utility shall enter into an interconnection agreement 25 with an owner of a solar photovoltaic device receiving an 26 alternative tariff rate as provided in this section for a term 27 of at least twenty years, unless a shorter term is agreed to by 28 the parties. The board shall develop standard interconnection 29 agreement forms for utilization by the utility and the owner. 30 An owner must be paid the same rate per kilowatt-hour generated 31 each year for the duration of the interconnection agreement. 32 6. A utility must provide to the customer the meter and 33 any other equipment needed to provide service pursuant to the 34 interconnection agreement. 35 -2- LSB 5386XS (3) 86 rn/nh 2/ 3

S.F. 2030 EXPLANATION 1 The inclusion of this explanation does not constitute agreement with 2 the explanation’s substance by the members of the general assembly. 3 This bill relates to solar interconnection agreements and 4 alternative tariff rates applicable to such agreements. The 5 bill provides that a public utility entering into a solar 6 energy interconnection agreement may apply to the utilities 7 board within the utilities division of the department of 8 commerce for approval of an alternative tariff rate that 9 compensates customers through a billing credit mechanism 10 for the value to the utility, its customers, and society 11 for operating such devices interconnected to the utility 12 system and operated by customers primarily for meeting their 13 own energy needs. The bill specifies criteria to which an 14 alternative tariff rate is required to conform, and creates a 15 solar value methodology for utilization by public utilities in 16 developing and applying for the alternative tariff rate. The 17 bill provides that applications for an alternative rate shall 18 be subject to the rate approval provisions of Code section 19 476.6, and that the utility shall enter into an interconnection 20 agreement with an owner of a solar photovoltaic device 21 receiving the alternative rate for a term of at least 20 years, 22 unless a shorter term is agreed to by the parties. The board is 23 directed to develop standard interconnection agreement forms 24 for utilization by the utility and the owner. The bill further 25 provides that the utility must provide the customer with 26 the meter and any other equipment needed to provide service 27 pursuant to the interconnection agreement. 28 -3- LSB 5386XS (3) 86 rn/nh 3/ 3