HB 5863 Summary

• Creates net metering eligibility for distributed generation customers with generators under 500 kilowatts, compensating them at their retail rate or time-of-use retail rate for electricity delivered to the utility system.

• Establishes an alternative rate framework allowing electric providers to apply for commission approval of compensation rates based on distributed generation value methodology analyzing costs and benefits over at least 20 years.

• Requires the Public Service Commission to develop a distributed generation value methodology within one year, consulting stakeholders in power systems, renewable energy, and utility ratemaking.

• Mandates 20-year minimum contracts between electric providers and distributed generation device owners at fixed annual rates per kilowatt-hour, with provider recalculation every 2 years subject to commission approval.

• Prohibits alternative rates lower than applicable retail rates for 3 years after initial commission approval and clarifies that renewable energy credits belong to customers for self-utilized electricity and to electric providers for electricity delivered to the distribution system.