HB 6540 Summary

• Removes capacity limits (150 kW for renewable systems, 550 kW for methane digesters) and replaces them with generation capacity consistent with safety and reliability requirements of customer interconnection.

• Establishes fair value tariffs and standard-offer contracts for distributed generation customers, with fair value tariffs requiring credits for excess generation based on full retail rate minus delivery charge, considering 20-year cost-benefit analysis.

• Expands net metering availability to all eligible customers without capacity restrictions, allowing electric utilities and alternative suppliers to suspend new net metering applications only when offering approved fair value tariffs or standard-offer contracts for that generation type.

• Eliminates 1% distributed generation program capacity caps previously allocated by generator size and changes customer selection from first-come, first-served to qualification based solely on meeting interconnection and equipment requirements.

• Extends distributed generation program duration from 10 years to 20 years and repeals Section 183 of the 2008 Clean and Renewable Energy Act; divides renewable energy credit ownership between customer (for self-use) and electric provider (for excess generation delivered to distribution system).