                                 CODE OF VIRGINIA

NET ENERGY METERING PROVISIONS FOR ELECTRIC COOPERATIVE SERVICE TERRITORIES (§
56-594.01)

A. The Commission shall establish by regulation a program that affords eligible
customer-generators the opportunity to participate in net energy metering in the
service territory of each electric cooperative, which program shall commence on
the later of July 1, 2019, or the effective date of such regulations. Such
regulations shall be similar to existing regulations promulgated pursuant to
&#xA7; 56-594. In lieu of adopting new regulations, the Commission may amend
such existing regulations to apply to electric cooperatives with such revisions
as are required to comply with the provisions of this section. The regulations
may include requirements applicable to (i) retail sellers, (ii) owners or
operators of distribution or transmission facilities, (iii) providers of default
service, (iv) eligible customer-generators, or (v) any combination of the
foregoing, as the Commission determines will facilitate the provision of net
energy metering, provided that the Commission determines that such requirements
do not adversely affect the public interest.

B. As used in this section:
			&#8220;Eligible customer-generator&#8221; means a customer that owns and
operates, or contracts with other persons to own, operate, or both, an
electrical generating facility that (i) has a capacity of not more than 20
kilowatts for residential customers and not more than one megawatt for
nonresidential customers on an electrical generating facility placed in service
after July 1, 2015; (ii) uses as its total source of fuel renewable energy as
defined in &#xA7; 56-576; (iii) is located on the customer&#8217;s premises and
is connected to the customer&#8217;s wiring on the customer&#8217;s side of its
interconnection with the distributor; (iv) is interconnected and operated in
parallel with an electric company&#8217;s transmission and distribution
facilities; and (v) is intended primarily to offset all or part of the
customer&#8217;s own electricity requirements. In addition to the electrical
generating facility size limitations in clause (i), the capacity of any
generating facility installed under this section after July 1, 2015, shall not
exceed the expected annual energy consumption based on the previous 12 months of
billing history or an annualized calculation of billing history if 12 months of
billing history is not available.
			&#8220;Net energy metering&#8221; means measuring the difference, over the
net metering period, between (i) electricity supplied to an eligible
customer-generator from the electric grid and (ii) the electricity generated and
fed back to the electric grid by the eligible customer-generator.
			&#8220;Net metering period&#8221; means the 12-month period following the
date of final interconnection of the eligible customer-generator&#8217;s system
with an electric service provider, and each 12-month period thereafter.

C. The Commission&#8217;s regulations shall ensure that (i) the metering
equipment installed for net metering shall be capable of measuring the flow of
electricity in two directions and (ii) any eligible customer-generator seeking
to participate in net energy metering shall notify its supplier and receive
approval to interconnect prior to installation of an electrical generating
facility. The Commission shall publish a form for such prior notice and such
notice shall be processed promptly by the supplier prior to any construction
activity taking place. After construction, inspection and documentation thereof
shall be required prior to interconnection. The electric distribution company
shall have 30 days from the date of each notification for residential
facilities, and 60 days from the date of each notification for nonresidential
facilities, to determine whether the interconnection requirements have been met.
Such regulations shall allocate fairly the cost of such equipment and any
necessary interconnection. An eligible customer-generator&#8217;s electrical
generating system shall meet all applicable safety and performance standards
established by the National Electrical Code, the Institute of Electrical and
Electronics Engineers, and accredited testing laboratories such as Underwriters
Laboratories. In addition to the requirements set forth in this section and to
ensure public safety, power quality, and reliability of the supplier&#8217;s
electric distribution system, an eligible customer-generator whose electrical
generating system meets those standards and rules shall bear all reasonable
costs of equipment required for the interconnection to the supplier&#8217;s
electric distribution system, including costs, if any, to (a) install additional
controls, (b) perform or pay for additional tests, and (c) purchase additional
liability insurance. An electric cooperative may publish and use its own forms,
including an electronic form, for purposes of implementing the regulations
described herein so long as the information collected on the Commission&#8217;s
form is also collected by the cooperative and submitted to the Commission.

D. The Commission shall establish minimum requirements for contracts to be
entered into by the parties to net metering arrangements. Such requirements
shall protect the eligible customer-generator against discrimination by virtue
of its status as an eligible customer-generator and permit customers that are
served on time-of-use tariffs that have electricity supply demand charges
contained within the electricity supply portion of the time-of-use tariffs to
participate as an eligible customer-generator. Notwithstanding the cost
allocation provisions of subsection C, eligible customer-generators served on
demand charge-based time-of-use tariffs shall bear the incremental metering
costs required to net meter such customers.

E. If electricity generated by an eligible customer-generator over the net
metering period exceeds the electricity consumed by the eligible
customer-generator, the customer-generator shall be compensated for the excess
electricity if the entity contracting to receive such electric energy and the
eligible customer-generator enter into a power purchase agreement for such
excess electricity. Upon the written request of the eligible customer-generator,
the supplier that serves the eligible customer-generator shall enter into a
power purchase agreement with the requesting eligible customer-generator that is
consistent with the minimum requirements for contracts established by the
Commission pursuant to subsection D. The power purchase agreement shall obligate
the supplier to purchase such excess electricity at the rate that is provided
for such purchases in a net metering standard contract or tariff approved by the
Commission, unless the parties agree to a higher rate. The eligible
customer-generator owns any renewable energy certificates associated with its
electrical generating facility; however, at the time that the eligible
customer-generator enters into a power purchase agreement with its supplier, the
eligible customer-generator shall have a one-time option to sell the renewable
energy certificates associated with such electrical generating facility to its
supplier and be compensated at an amount that is established by the Commission
to reflect the value of such renewable energy certificates. Nothing in this
section shall prevent the eligible customer-generator and the supplier from
voluntarily entering into an agreement for the sale and purchase of excess
electricity or renewable energy certificates at mutually agreed upon prices if
the eligible customer-generator does not exercise its option to sell its
renewable energy certificates to its supplier at Commission-approved prices at
the time that the eligible customer-generator enters into a power purchase
agreement with its supplier. All costs incurred by the supplier to purchase
excess electricity and renewable energy certificates from eligible
customer-generators shall be recoverable through its fuel adjustment clause. For
purposes of this section, &#8220;all costs&#8221; shall be defined as the rates
paid to the eligible customer-generator for the purchase of excess electricity
and renewable energy certificates and any administrative costs incurred to
manage the eligible customer-generator&#8217;s power purchase arrangements. The
net metering standard contract or tariff shall be available to eligible
customer-generators on a first-come, first-served basis, subject to the
provisions of subsection F, and shall require the supplier to pay the eligible
customer-generator for such excess electricity in a timely manner at a rate to
be established by the Commission.

F. Net energy metering shall be open to customers on a first-come, first-served
basis until such time as the total capacity of the generation facilities,
expressed in alternating current nameplate, reaches two percent of system peak
for residential customers, two percent of system peak for not-for-profit and
nonjurisdictional customers, and one percent of system peak for other
nonresidential customers, which are herein referred to as the electric
cooperative&#8217;s caps. As used in this subsection, &#8220;percent of system
peak&#8221; refers to a percentage of the electric cooperative&#8217;s highest
total system peak, based on the noncoincident peak of the electric cooperative
or the coincident peak of all of the electric cooperative&#8217;s customers,
within the past three years as listed in Part O, Line 20 of Form 7 filed with
the Rural Utilities Service or its equivalent, less any portion of the
cooperative&#8217;s total load that is served by a competitive service provider
or by a market-based rate. Such caps shall not decrease but may increase if the
system peak in any year exceeds the previous year&#8217;s system peak. Nothing
in this subsection shall amend or confer new rights upon any existing
nonjurisdictional contract or arrangement or work to submit any
nonjurisdictional customer, contract, or arrangement to the jurisdiction of the
Commission. For purposes of calculating the caps established in this subsection,
all net energy metering shall be counted, whenever interconnected, and shall
include net energy metering interconnected pursuant to &#xA7; 56-594,
agricultural net energy metering, and any net energy metering entered into with
a third-party provider registered pursuant to subsection K. Net energy metering
with nonjurisdictional customers entered into prior to July 1, 2019, may be
counted toward the caps, in the discretion of the cooperative, as net energy
metering if the nonjurisdictional customer takes service pursuant to a
cooperative&#8217;s net energy metering rider. Net energy metering with
nonjurisdictional customers entered into on or after July 1, 2019, shall be
counted toward the caps by default unless the cooperative has reason to exclude
such net energy metering as subject to a separate contract or arrangement. Each
electric cooperative governed by this section shall publish information
regarding the calculation and status of its caps pursuant to this subsection, or
the electric cooperative&#8217;s systemwide cap established in &#xA7; 56-585.4
if applicable, on the electric cooperative&#8217;s website.

G. An electric cooperative may, without Commission approval or the requirement
of any filing other than as provided in this subsection, upon the adoption by
its board of directors of a resolution so providing, raise the caps established
in subsection F, with any increase allocated among residential, not-for-profit
and nonjurisdictional, and other nonresidential customers as the board of
directors may find to be in the interests of the electric cooperative&#8217;s
membership. The electric cooperative shall promptly file a revised net energy
metering compliance filing with the Commission for informational purposes.

H. Any residential eligible customer-generator who owns and operates, or
contracts with other persons to own, operate, or both, an electrical generating
facility with a capacity that exceeds 10 kilowatts shall pay to its supplier, in
addition to any other charges authorized by law, a monthly standby charge. The
amount of the standby charge and the terms and conditions under which it is
assessed shall be in accordance with a methodology developed by the supplier and
approved by the Commission. The Commission shall approve a supplier&#8217;s
proposed standby charge methodology if it finds that the standby charges
collected from all such eligible customer-generators allow the supplier to
recover only the portion of the supplier&#8217;s infrastructure costs that are
properly associated with serving such eligible customer-generators. Such an
eligible customer-generator shall not be liable for a standby charge until the
date specified in an order of the Commission approving its supplier&#8217;s
methodology.

I. Any eligible agricultural customer-generator interconnected in an electric
cooperative service territory prior to July 1, 2019, shall continue to be
governed by &#xA7; 56-594 and the regulations adopted pursuant thereto
throughout the grandfathering period described in subsection A of &#xA7; 56-594.

J. Any eligible customer-generator served by a competitive service provider
pursuant to the provisions of &#xA7; 56-577 shall engage in net energy metering
only with such supplier and pursuant only to tariffs filed by such supplier.
Such an eligible customer-generator shall pay the full portion of its
distribution charges, without offset or netting, to its electric cooperative.

K. After the conclusion of the Commission&#8217;s rulemaking proceeding pursuant
to subsection L, third-party partial requirements power purchase agreements, the
purpose of which is to finance the purchase of renewable generation facilities
by eligible customer-generators through the sale of electricity, shall be
permitted pursuant to the provisions of this section only for those retail
customers and nonjurisdictional customers of the electric cooperative that are
exempt from federal income taxation, unless otherwise permitted by &#xA7;
56-585.4 or subsection M. No person shall offer a third-party partial
requirements power purchase agreement in the service territory of an electric
cooperative without fulfilling the registration requirements set forth in this
section and complying with applicable Commission rules, including those adopted
pursuant to subdivision L 2.

L. After August 1, 2019, but before January 1, 2020, the Commission shall
initiate a rulemaking proceeding to promulgate the regulations necessary to
implement this section as follows:

   1. In conducting such a proceeding, the Commission may require notice to be
   given to current eligible customer-generators and eligible agricultural
   customer-generators but shall not require general publication of the notice.
   An opportunity to request a hearing shall be afforded, but a hearing is not
   required. In the rulemaking proceeding, the electric cooperatives governed by
   this section shall be required to submit compliance filings, but no other
   individual proceedings shall be required or conducted.

   2. In promulgating regulations to govern third-party power purchase agreement
   providers as retail sellers, the Commission shall:
   				a. Direct the staff to administer a registration system for such
   providers;
   				b. Enumerate in its regulations the jurisdiction of the Commission over
   providers, generally limited in scope to the behavior of providers, customer
   complaints, and their compliance with the registration requirements and
   stating clearly that civil contract disputes and claims for damages against
   providers shall not be subject to the jurisdiction of the Commission;
   				c. Enumerate in its regulations the maximum extent of its authority over
   the providers, to be limited to any or all of:

      1. Monetary penalties against registered providers not to exceed $30,000 per
      provider registration;

      2. Orders for providers to cease or desist from a certain practice, act, or
      omission;

      3. Debarment of registered providers;

      4. The issuance of orders to show cause; and

      5. Authority incident to subdivisions (1) through (4);
      					d. Delineate in its regulations two classes of providers, one for
      residential customers and one for nonresidential customers;
      					e. Direct the staff to set up a self-certification system as described
      in this subdivision;
      					f. Establish business practice and consumer protection standards from a
      national renewable energy association whose business is germane to the
      businesses of the providers;
      					g. Require providers to comply with other applicable Commission
      regulations governing interconnection and safety, including utility
      procedures governing the same;
      					h. Require minimum capitalization or other bond or surety that, in the
      judgment of the Commission, is necessary for adequate consumer protection
      and in the public interest;
      					i. Require the payment of a fee of $250 for residential and
      nonresidential provider registration; and
      					j. Provide that no registered provider, by virtue of that status alone,
      shall be considered a public utility or competitive service provider for
      purposes of this title.

   3. The self-certification system described in this subdivision shall require a
   provider to affirm to the staff, under the penalty of revocation of
   registration, (i) that it is licensed to do business in Virginia; (ii) the
   names of the responsible officers of the provider entity; (iii) that its named
   officers have no felony convictions or convictions for crimes of moral
   turpitude; (iv) that it will abide by all applicable Commission regulations
   promulgated under this section or for purposes of interconnections and safety;
   (v) that it will appoint an officer to be a primary liaison to the staff; (vi)
   that it will appoint an employee to be a primary contact for customer
   complaints; (vii) that it will have and disclose to customers a dispute
   resolution procedure; (viii) that it has specified in its registration
   materials in which territories it intends to offer power purchase agreements;
   (ix) that it, and each of its named officers, agree to submit themselves to
   the jurisdiction of the Commission as described in this subdivision; and (x)
   that, once registered, the provider shall report any material changes in its
   registration materials to the staff, as a continuing obligation of
   registration. The staff shall send a copy of the registration materials to
   each cooperative in whose territory the provider intends to offer power
   purchase agreements. The staff, once satisfied that the certifications
   required pursuant to this subdivision are complete, and not more than 30 days
   following the initial and complete submittal of the registration materials,
   shall enter the provider onto the official register of providers. No formal
   Commission proceeding is required for registration but may be initiated if the
   staff (a) has reason to doubt the veracity of the certifications of the
   provider or (b) in any other case, if, in the judgment of the staff,
   extenuating or extraordinary circumstances exist that warrant a proceeding.
   The staff shall not investigate the corporate structure, financing,
   bookkeeping, accounting practices, contracting practices, prices, or terms and
   conditions in a third-party partial requirements power purchase agreement.
   Nothing in this section shall abridge the right of any person, including the
   Office of Attorney General, from proceeding in a cause of action under the
   Virginia Consumer Protection Act, &#xA7; 59.1-196 et seq.

   4. The Commission shall complete such rulemaking procedure within 12 months of
   its initiation.

M. An electric cooperative may, without approval of the Commission or the
requirement of any filing other than as provided in this subsection, and upon
the adoption by its board of directors of a resolution so providing, permit the
use of any third-party partial requirements power purchase agreement, the
purpose of which agreement is to finance the purchase of renewable generation
facilities by eligible customer-generators through the sale of electricity for
residential retail customers, nonresidential retail customers, or both. The
electric cooperative shall promptly file a revised net energy metering
compliance filing with the Commission for informational purposes.

HISTORY: 2019, cc. 742, 763; 2022, cc. 363, 364.