75th OREGON LEGISLATIVE ASSEMBLY--2009 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 3567
A-Engrossed
House Bill 3039
Ordered by the House April 27
Including House Amendments dated April 27
Sponsored by COMMITTEE ON SUSTAINABILITY AND ECONOMIC DEVELOPMENT
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
{ - Requires Public Utility Commission to study qualifying
renewable energy projects. - }
{ - Sunsets January 2, 2012. - }
{ + Requires each electric company to maintain specified
generating capacity from qualifying solar photovoltaic energy
systems on or before January 1, 2020. Specifies qualifications
for systems.
Allows electric companies to set rates to recover reasonable
return on investment in systems.
Allows electric companies to use systems to comply with
renewable portfolio standard established by statute. Sunsets
provision on January 2, 2014.
Directs Public Utility Commission to establish pilot program
for each electric company to demonstrate use and effectiveness of
systems. Directs commission to report on implementation of
systems to Legislative Assembly on or before January 1, 2011.
Declares emergency, effective on passage. + }
A BILL FOR AN ACT
Relating to qualifying renewable energy projects; creating new
provisions; amending ORS 757.642; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Definitions. As used in sections 1 to 8 of this
2009 Act:
(1) 'Electric company' has the meaning given that term in ORS
757.600.
(2) 'Nameplate capacity' means the maximum rated output of a
generator or other electric power production equipment under
specific conditions designated by the manufacturer.
(3) 'Qualifying system' means a solar photovoltaic energy
system that meets the requirements of section 3 of this 2009 Act.
A qualifying system may be either customer-side, as described in
section 4 of this 2009 Act, or company-side, as described in
section 5 of this 2009 Act.
(4) 'Resource value' means the estimated value to an electric
company of the electricity delivered from a solar photovoltaic
energy system associated with:
(a) The avoided cost of energy, including avoided fuel price
volatility, minus the costs of firming and shaping the
electricity generated from the facility;
(b) Avoided distribution and transmission cost; and
(c) The renewable energy certificates established under ORS
469A.130.
(5) 'Retail electricity consumer' has the meaning given that
term in ORS 757.600.
(6) 'Solar energy contractor' means a person that is not an
electric company or a customer, that owns a solar photovoltaic
energy system and produces electricity for sale to a customer or
an electric company.
(7) 'Solar photovoltaic energy system' means equipment and
devices that have the primary purpose of collecting solar energy
and generating electricity by photovoltaic effect. + }
SECTION 2. { + Statewide solar photovoltaic capacity
standard. (1) On or before January 1, 2020, the total solar
photovoltaic nameplate generating capacity, from qualifying
systems generating at least 500 kilowatts, of all electric
companies in this state must be at least 20 megawatts alternating
current with no single project greater than five megawatts
alternating current.
(2) For the purpose of complying with the solar photovoltaic
generating capacity standard established by this section, on or
before January 1, 2020, each electric company is required to
maintain a minimum generating capacity from qualifying systems.
The minimum capacity for each electric company is determined by
multiplying 20 megawatts by a percentage equal to the electric
company's share of all retail electricity sales made in this
state in 2008 by all electric companies.
(3) For the purposes of sections 1 to 8 of this 2009 Act,
capacity of a solar photovoltaic energy system is measured on the
alternating current side of the system's inverter using the
measurement standards set forth in 15 U.S.C. 223, as in effect on
the effective date of this 2009 Act. If the system does not use
an inverter, the measurement shall be made at the direct current
level.
(4) An electric company may satisfy the solar photovoltaic
generating capacity requirements established by this section with
solar photovoltaic energy systems owned by the company or with
contracts for the purchase of electricity from qualifying
systems.
(5) The Public Utility Commission shall have the authority to
adopt rules implementing and enforcing this section. + }
SECTION 3. { + Qualifying systems generally. An electric
company may use a solar photovoltaic energy system to comply with
the solar photovoltaic generating capacity standard established
by section 2 (2) of this 2009 Act if the system:
(1) Meets the electric company's utility customer load service
obligation as its primary purpose;
(2) Directly connects to an electric company's electrical
system within this state or indirectly connects through the
system of an electric company's customer or the electric system
of a third party that is not an electric company's customer but
whose system is located within this state;
(3) Has meters or other devices in place to monitor and measure
the quantity of energy generated by the solar photovoltaic energy
system; and
(4) Meets any other siting, design, installation and electric
output standards required by the laws of this state. + }
SECTION 4. { + Customer-side qualifying systems. (1) An
electric company may install a customer-side qualifying system on
premises owned or controlled by a customer of the company. Either
the customer or the electric company may retain ownership or
operation of the customer-side qualifying system.
(2) A customer may:
(a) Own a customer-side qualifying system that the customer
installs, operates and maintains; or
(b) Contract for installation of a customer-side qualifying
system by an electric company or a solar energy contractor that
is owned, operated and maintained by the company or contractor.
(3) In addition to the requirements of section 3 of this 2009
Act, any customer-side qualifying system located in this state
must:
(a) Have a warranty of not less than 10 years to protect
against defects and undue degradation of electrical generation
output;
(b) Be new or not have been previously placed in service in any
other location or for any other application;
(c) Be installed in conformance with the manufacturer's
specifications and in compliance with all applicable electrical
and building code standards;
(d) Connect to the electric company's electrical system
pursuant to an interconnection agreement whose form is approved
by the Public Utility Commission or the Federal Energy Regulatory
Commission;
(e) Connect to the electric company's electrical system within
this state; and
(f) Not disrupt or interfere with the electric company's
electric system or the electric system of other customers.
(4) A customer-side qualifying system established under this
section must be installed on the premises owned or controlled by
a customer receiving retail-level electric service from an
electric company in this state.
(5) Electricity generated by a solar photovoltaic energy system
under this section must be used first to satisfy the energy
requirements of the customer. Net metering as that term is
defined in ORS 757.300 is allowed for electricity generated by a
solar photovoltaic energy system under this section.
(6) A single customer served by more than one solar
photovoltaic energy system may request a waiver from the Public
Utility Commission regarding aggregating the systems under a net
metering agreement. + }
SECTION 5. { + Company-side qualifying systems. (1) An
electric company may develop a company-side qualifying system on
either:
(a) Premises owned or controlled by the electric company; or
(b) Premises owned or controlled by a customer of the company.
(2) Electricity generated by a company-side qualifying system
under this section must be fed into an electric system in this
state or into an electric system that is connected directly or
indirectly to an electric company's system. The connection must
meet the requirements of the applicable state or federal
interconnection standard.
(3) A solar energy contractor may own a company-side qualifying
system described in this section. + }
SECTION 6. { + Cost recovery. (1) Consistent with ORS
469A.120, an electric company may recover all prudently incurred
costs for installing, operating and maintaining a qualifying
system and may recover a reasonable return on investment through
recovery in rates, including but not limited to the following:
(a) 100 percent of all noncapital costs incurred for any
qualifying systems and 100 percent of capital costs based on the
electric company's most recent commission-approved cost of
capital;
(b) Costs related to, and loans made for, the installation,
interconnection, controls, operation and maintenance of the
qualifying system or demonstration project;
(c) Costs associated with using physical or financial assets to
integrate, firm or shape solar energy sources to meet retail
electricity needs, and other costs associated with transmission
and delivery of solar electricity to retail electricity
customers;
(d) Operating costs associated with a qualified system located
on property owned or controlled by a customer; and
(e) Reduced revenues resulting from customer-side qualifying
systems, excluding the value of renewable energy certificates.
(2) Costs associated with compliance with the solar
photovoltaic generating capacity standard established by section
2 (2) of this 2009 Act are not an above-market cost for purposes
of ORS 757.600 to 757.689.
(3) Costs incurred by an electric company that are related to a
qualifying system, along with associated electricity transmission
costs, are eligible for an automatic adjustment clause
established by the Public Utility Commission under ORS 469A.120.
(4) Multijurisdictional electric companies may recover all
prudently incurred costs for a qualifying system from its
customers in this state.
(5) An electric company shall provide complete and transparent
reporting of all actions taken under sections 1 to 8 of this 2009
Act as directed by the commission.
(6) The commission shall advise and assist the owners and
operators of qualifying systems in identifying and using grants,
incentive moneys, federal funding and other sources of
noninvestment financial support for the construction and
operation of qualifying systems. + }
SECTION 7. { + Application to renewable portfolio standard.
(1) Any electricity produced from a company-side or customer-side
qualifying system under sections 1 to 8 of this 2009 Act that is
physically located in this state may be used by an electric
company to comply with the renewable portfolio standard
established under ORS 469A.005 to 469A.210.
(2)(a) For each kilowatt-hour of electricity produced from a
qualifying system generating at least 500 kilowatts, an electric
company will be credited with two kilowatt-hours of qualifying
energy toward the electric company's compliance with the
renewable portfolio standard under ORS 469A.005 to 469A.210 up to
a maximum of 20 megawatts of capacity.
(b) The Public Utility Commission may adjust the 20 megawatt
capacity maximum set in paragraph (a) of this subsection by any
amount up to a maximum of 100 megawatts of capacity based upon
the impact of such a change on the amount electricity generated
by qualifying systems, the achievement of renewable portfolio
standards, the cost to ratepayers and other relevant factors. + }
SECTION 8. { + Payment Program. (1) The Public Utility
Commission shall establish a pilot program for each electric
company to demonstrate the use and effectiveness of volumetric
incentive rates and payments for electricity delivered from solar
photovoltaic energy systems permanently installed in this state
by retail electricity consumers located in this state and served
by an electric company with qualifying systems that first become
operational after the program begins. The cumulative nameplate
capacity of the qualifying systems enrolled in all of the pilot
programs may not exceed 25 megawatts alternating current.
(2) The commission by rule shall adopt requirements for the
pilot programs described in subsection (1) of this section. Each
electric company shall file for commission approval rate
schedules for the pilot programs that conform to the
requirements.
(3) The commission may establish incentive rates for the pilot
programs to enable the development of the most efficient solar
photovoltaic energy systems.
(4) A retail electricity consumer participating in a pilot
program may receive payments based on the actual electricity
generated from solar photovoltaic energy system output for 15
years from the consumer's date of enrollment in the program, at
rates in a rate schedule established at the time of enrollment.
(5) The commission may adjust the rate schedule as needed for
new pilot program participants for the purpose of meeting the
goal established in subsection (1) of this section. Once a retail
electricity consumer is enrolled in a program, the rates or rate
formula may not be modified.
(6) The commission shall establish pilot programs designed to
attain a goal of 75 percent of the energy under each program to
be generated by small-scale qualifying systems. The commission by
rule shall define the size of a small-scale qualifying system and
may adjust the definition of size for small-scale qualifying
systems based upon the costs of the energy generated, the
feasibility of attaining the goal and other factors. The
commission may also adjust the maximum percentage goal of energy
generated by small-scale qualifying systems based upon the same
factors.
(7) The commission may establish total generator nameplate
capacity limits for an electric company so that the rate impact
of the pilot program for any customer class does not exceed 0.25
percent of the electric company's revenue requirement in any
year.
(8) Ownership of renewable energy certificates established
under ORS 469A.130 that are associated with renewable energy
generation that is sold to an electric company under the pilot
programs must be transferred to the electric company and may be
used to comply with the renewable portfolio standard described in
ORS 469A.052 or 469A.055.
(9) To the extent that incentive rates paid for electricity
delivered to each electric company under a pilot program exceed
the resource value, qualifying systems eligible under the pilot
programs are not eligible for expenditures under ORS 757.612
(3)(b)(B) or tax credits under ORS 469.160 to 469.180 or 469.185
to 469.225.
(10) Electric companies may claim tax credits under ORS 469.160
to 469.180 or 469.185 to 469.225 on incentive payments made to
retail electricity consumers under the pilot programs that exceed
the resource value.
(11) All prudently incurred costs associated with compliance
with this section are recoverable in the rates of an electric
company. The costs associated with the resource value are
recoverable in the rates of all retail electricity consumers.
Prudently incurred costs in addition to the resource value are
recoverable from customer classes eligible for the pilot programs
described in subsection (1) of this section.
(12) The pilot programs described in subsection (1) of this
section close to new participants on March 31, 2015, or when 25
megawatts of solar photovoltaic energy systems have been
permanently installed by retail electricity consumers under the
pilot programs, whichever is earlier.
(13) The commission shall submit a report to the Legislative
Assembly by January 1 of each odd-numbered year beginning in
2013. The report must evaluate the effectiveness of paying
incentive rates under the pilot programs described in subsection
(1) of this section compared to incentive rates described in
subsection (9) of this section for promoting the use of solar
photovoltaic energy systems and reducing system costs. The report
must also evaluate the estimated cost of the program to retail
electricity consumers. + }
SECTION 9. { + The Public Utility Commission shall report to
the Legislative Assembly prior to January 1, 2011, on any
recommended legislative changes to better implement the
provisions of sections 1 to 8 of this 2009 Act and any
adjustments the commission has made by rule as authorized by
sections 1 to 8 of this 2009 Act. + }
SECTION 10. ORS 757.642 is amended to read:
757.642. (1) Not later than March 1, 2002, an electric company
shall unbundle the costs of electricity services into power
generation, transmission, distribution and retail services.
(2) Every electric company shall maintain separate accounting
records for each component of electricity service provided by the
electric company to retail electricity consumers. Accounts shall
be maintained according to regulations issued by the Federal
Energy Regulatory Commission.
(3) Unless required to provide a different accounting under
federal requirements, each electric company shall, to a
reasonable level of detail, separately identify and account for
its costs of:
(a) Generation;
(b) Transmission services;
(c) Distribution services;
(d) Ancillary services;
(e) Consumer service charges levied on retail electricity
consumers, including but not limited to metering and billing;
(f) Investment in public purposes; and
(g) State and local taxes paid by retail electricity consumers.
(4) An electric company shall separately identify and account
for the costs of any additional components as the Public Utility
Commission may require.
{ + (5) The unbundling requirement of this section does not
apply to service provided by an electric company through a
qualifying system under sections 1 to 8 of this 2009 Act. + }
SECTION 11. { + (1) Except as provided in subsection (2) of
this section, sections 1 to 8 of this 2009 Act and the amendments
to ORS 757.642 by section 10 of this 2009 Act become operative on
April 1, 2010.
(2) An electric company may make filings with the Public
Utility Commission before the operative date specified in
subsection (1) of this section for the purpose of allowing
implementation of sections 1 to 8 on the operative date specified
in subsection (1) of this section, and the commission may process
those filings and take all other actions necessary before the
operative date specified in subsection (1) of this section to
allow implementation of sections 1 to 8 of this 2009 Act on the
operative date specified in subsection (1) of this section. + }
SECTION 12. { + Section 7 of this 2009 Act is repealed on
January 2, 2014. + }
SECTION 13. { + The section captions used in this 2009 Act are
provided only for the convenience of the reader and do not become
part of the statutory law of this state or express any
legislative intent in the enactment of this 2009 Act. + }
SECTION 14. { + This 2009 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2009 Act takes effect on
its passage. + }
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