SF 2030 (LSB 5386XS (3) 86)

SENATE FILE 2030

BY  BOLKCOM, DEARDEN, SODDERS, and DVORSKY

A BILL FOR

An Act relating to solar energy by providing for the establishment of solar interconnection agreements and alternative tariff rates.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  476.49  Solar interconnection agreements —— alternative tariff rate.
   1.  An electric public utility may enter into interconnection agreements with customers operating distributed generation solar photovoltaic devices. A utility entering into such an agreement may apply to the board for approval of an alternative tariff rate that compensates customers through a billing credit mechanism for the value to the utility, its customers, and society for operating such devices interconnected to the utility system and operated by customers primarily for meeting their own energy needs. If approved, the alternative rate shall apply in lieu of the rate otherwise applicable to alternate energy production facilities pursuant to section 476.43.
   2.  An application for an alternative tariff rate submitted by a utility pursuant to this section shall demonstrate that the proposed rate conforms with the following:
   a.  Appropriately applies the methodology established by the board pursuant to subsection 3.
   b.  Includes a mechanism to allow recovery of the cost to serve customers receiving the alternative tariff rate.
   c.  Charges the customer for all electricity consumed by the customer at an applicable rate schedule for sales to that class of customer.
   d.  Credits the customer for all electricity generated by the solar photovoltaic device.
   e.  Applies charges and credits to a monthly billing that includes a provision so that the unused portion of the credit in any month or billing period shall be carried forward and credited against all charges. In the event that the customer has a positive balance after the twelve-month cycle ending on the last day in February, that balance shall be eliminated and the credit cycle shall restart the following billing period beginning on March 1.
   3.  The board shall establish a solar value methodology for utilization by utilities in developing and applying for an alternative tariff rate pursuant to this section. The methodology shall, at a minimum, account for the value of energy and its delivery, generation capacity, transmission capacity, transmission and distribution line losses, and environmental value. The board may, based on known and measurable evidence of the cost or benefit of solar operation to the utility, incorporate other values into the methodology, including credits for locally manufactured or assembled energy systems, systems installed at high-value locations on the distribution grid, or other factors. In developing the methodology pursuant to this subsection, the board may consult stakeholders with experience and expertise in power systems, solar energy, and electric utility ratemaking regarding the proposed methodology, underlying assumptions, and preliminary data.
   4.  Applications shall be subject to the approval provisions of section 476.6. A utility shall recalculate the alternative tariff rate annually, and shall file the recalculated alternative rate with the board for approval. The board shall not authorize a utility to charge an alternative tariff rate that is lower than the utility’s applicable retail rate until three years after the board originally approved the alternative tariff rate.
   5.  A utility shall enter into an interconnection agreement with an owner of a solar photovoltaic device receiving an alternative tariff rate as provided in this section for a term of at least twenty years, unless a shorter term is agreed to by the parties. The board shall develop standard interconnection agreement forms for utilization by the utility and the owner. An owner must be paid the same rate per kilowatt-hour generated each year for the duration of the interconnection agreement.
   6.  A utility must provide to the customer the meter and any other equipment needed to provide service pursuant to the interconnection agreement.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   This bill relates to solar interconnection agreements and alternative tariff rates applicable to such agreements. The bill provides that a public utility entering into a solar energy interconnection agreement may apply to the utilities board within the utilities division of the department of commerce for approval of an alternative tariff rate that compensates customers through a billing credit mechanism for the value to the utility, its customers, and society for operating such devices interconnected to the utility system and operated by customers primarily for meeting their own energy needs. The bill specifies criteria to which an alternative tariff rate is required to conform, and creates a solar value methodology for utilization by public utilities in developing and applying for the alternative tariff rate. The bill provides that applications for an alternative rate shall be subject to the rate approval provisions of Code section 476.6, and that the utility shall enter into an interconnection agreement with an owner of a solar photovoltaic device receiving the alternative rate for a term of at least 20 years, unless a shorter term is agreed to by the parties. The board is directed to develop standard interconnection agreement forms for utilization by the utility and the owner. The bill further provides that the utility must provide the customer with the meter and any other equipment needed to provide service pursuant to the interconnection agreement.