HB 5143 Summary

• Expands Michigan's distributed generation program to allow customers to generate electricity using eligible electric generators interconnected with local utilities and operating in parallel with the distribution system.

• Replaces capacity limits (150 kW for renewable systems, 550 kW for methane digesters) with a requirement that generation capacity be consistent with interconnection safety and reliability requirements.

• Requires the Michigan Public Service Commission to establish a statewide uniform methodology for fair value tariffs within 1 year, which must credit customers for net excess generation at rates considering 20-year cost and benefit analysis including avoided line losses, capacity, and avoided infrastructure investments.

• Establishes three compensation options for distributed generation: net metering (required for all utilities), fair value tariffs (approved by commission after contested case hearing), and standard-offer contracts (20+ year fixed-price agreements for generators exceeding 500 kW).

• Clarifies that customers own renewable energy credits for electricity they utilize on-site, while electric providers own credits for excess electricity delivered to the distribution system.