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HOUSE BILL NO. 5927
A bill to amend 2008 PA 295, entitled
"Clean and renewable energy and energy waste reduction act,"
by amending section 173 (MCL 460.1173), as amended by 2023 PA 235,
and by adding section 173a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 173. (1) The commission shall establish a distributed 1
generation program by order issued by July 19, 2017. The commission 2
may promulgate rules the commission considers necessary to 3
implement this program. Any rules adopted regarding time limits for 4
approval of parallel operation must recognize grid reliability and 5
April 30, 2026, Introduced by Reps. Miller, McFall, Byrnes, McKinney and Dievendorf and
referred to Committee on Energy.
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safety complications including those arising from equipment 1
saturation, use of multiple technologies, and proximity to 2
synchronous motor loads. The program must apply to all electric 3
utilities whose rates are regulated by the commission and 4
alternative electric suppliers in this state. Beginning 90 days 5
after the effective date of the amendatory act that added section 6
173a, the distributed generation program does not apply to an 7
eligible rooftop solar generator and any energy produced through 8
the rooftop solar generator that participates in the rooftop solar 9
net metering program established in section 173a. Not later than 10
180 days after the effective date of the amendatory act that added 11
section 173a, the commission shall issue an order and promulgate 12
rules, as necessary, to update the distributed generation program 13
to comply with the requirements of this subsection and section 14
173a. 15
(2) Except as otherwise provided under this part, an electric 16
customer of any class is eligible to interconnect an eligible 17
electric generator with the customer's local electric utility and 18
operate the eligible electric generator in parallel with the 19
distribution system. The program must limit each customer to 20
generation capacity designed to meet up to 110% of the customer's 21
electricity consumption for the previous 12 months. The commission 22
may waive the application, interconnection, and installation 23
requirements of this part for customers participating in the net 24
metering program under the commission's March 29, 2005 order in 25
case no. U-14346. 26
(3) An electric utility or alternative electric supplier is 27
not required to allow for a distributed generation program that is 28
greater than 10% of its average in-state peak load for the 29
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preceding 5 calendar years. The electric utility or alternative 1
electric supplier shall notify the commission if its distributed 2
generation program reaches the 10% limit under this subsection. The 3
10% limit under this subsection shall must be allocated as follows: 4
(a) Not less than 50% for customers with an eligible electric 5
generator capable of generating 20 kilowatts or less. 6
(b) Not more than 50% for customers with an eligible electric 7
generator capable of generating more than 20 kilowatts but not more 8
than 550 kilowatts. 9
(4) Selection of customers for participation in the 10
distributed generation program must be based on the order in which 11
the applications for participation in the program are received by 12
the electric utility or alternative electric supplier. 13
(5) An electric utility or alternative electric supplier shall 14
not discontinue or refuse to provide electric service to a customer 15
solely because the customer participates in the distributed 16
generation program. An electric utility or alternative electric 17
supplier shall not limit the rate schedule under which a customer 18
is served solely because the customer participates in the 19
distributed generation program. 20
(6) The distributed generation program created under 21
subsection (1) must include all of the following: 22
(a) Statewide uniform interconnection requirements for all 23
eligible electric generators. The interconnection requirements must 24
be designed to protect electric utility workers and equipment and 25
the general public. 26
(b) Distributed generation equipment and its installation 27
shall must meet all current local and state electric and 28
construction code requirements. Distributed generation equipment 29
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does not include rooftop solar equipment that is installed as part 1
of an eligible rooftop solar generator that participates in the 2
rooftop solar net metering program under section 173a. Any 3
equipment that is certified by a nationally recognized testing 4
laboratory to IEEE 1547.1-2020 testing standards and in compliance 5
with UL 1741 scope 1.1A and installed in compliance with this part 6
is considered to be compliant. The commission may adopt successor 7
requirements by promulgating rules under the administrative 8
procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328, if the 9
commission determines the successor requirements are reasonable and 10
consistent with the purposes of this subdivision. Within the time 11
provided by the commission in rules promulgated under subsection 12
(1) and consistent with good utility practice, and the protection 13
of electric utility workers, electric utility equipment, and the 14
general public, an electric utility may study, confirm, and ensure 15
that an eligible electric generator installation at the customer's 16
site meets the IEEE 1547.1-2020 requirements or any applicable 17
successor requirements adopted by the commission. If necessary to 18
promote grid reliability or safety, the commission may promulgate 19
rules that require the use of inverters that perform specific 20
automated grid-balancing functions to integrate distributed 21
generation onto the electric grid. Inverters that interconnect 22
distributed generation resources may be owned and operated by 23
electric utilities. Both of the following must be completed before 24
the equipment is operated in parallel with the distribution system 25
of the utility: 26
(i) Utility testing and approval of the interconnection, 27
including all metering. 28
(ii) Execution of a parallel operating agreement. 29
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(c) A uniform application form and process to be used by all 1
electric utilities and alternative electric suppliers in this 2
state. Customers who that are served by an alternative electric 3
supplier shall submit a copy of the application to the electric 4
utility for the customer's service area. 5
(d) Distributed generation customers shall pay the retail 6
rates for electricity inflow under the rate schedule under which 7
the customer is served. 8
(7) Distributed generation customers shall receive a monthly 9
bill credit for outflow as determined by the commission. Credits 10
for outflow must reflect cost of service. 11
(8) Each electric utility and alternative electric supplier 12
shall maintain records of all applications and up-to-date records 13
of all active eligible electric generators located within their 14
service area. 15
(9) As used in this section, "rooftop solar equipment" means 16
photovoltaic modules, mounting or racking systems, wiring, 17
inverters, meters, and associated equipment that meet the following 18
requirements: 19
(a) Are located on a customer's premises. 20
(b) Are interconnected on the customer side of a meter. 21
(c) Are primarily intended to offset all or part of the 22
customer's on-site electric load, including equipment installed on 23
a roof, canopy, parking structure, or other on-site structure or 24
improvement. 25
Sec. 173a. (1) The purpose and goals of this section are to 26
establish minimum, uniform statewide consumer protections for 27
rooftop solar net metering. 28
(2) Not later than 180 days after the effective date of the 29
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amendatory act that added this section, the commission shall 1
establish by order a rooftop solar net metering program that 2
applies to electric utilities and alternative electric suppliers. 3
(3) The commission shall not approve a tariff, rule, or 4
rooftop solar net metering program provision that is inconsistent 5
with this section. The rooftop solar net metering program must 6
include all of the following: 7
(a) Monthly netting. For each billing period, an electric 8
utility and alternative electric supplier shall calculate net 9
metering by subtracting total kilowatt hours supplied to the 10
eligible customer from total kilowatt hours generated by the 11
eligible rooftop solar generator and exported to the distribution 12
system. 13
(b) Full retail credit for exports. For each kilowatt-hour 14
exported to the distribution system by an eligible rooftop solar 15
generator, the eligible customer must receive a bill credit at the 16
full retail rate applicable to that customer for that billing 17
period. The full retail rate must include all per-kilowatt-hour 18
charges, riders, and factors, including power supply cost recovery 19
factors, transmission, and distribution charges, but does not 20
include taxes. 21
(c) Carryforward and annual payout. Net excess generation 22
credits must carry forward for not less than 12 consecutive billing 23
periods. At the end of the twelfth billing period after a net 24
excess generation credit is first earned, the remaining net excess 25
generation credits must be paid to the eligible customer at the 26
full retail rate applicable to that customer for the billing period 27
in which the annual true-up occurs. 28
(d) No punitive charges. An electric utility shall not impose 29
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a standby charge, demand charge, minimum bill, additional fixed 1
charge, interconnection fee, insurance requirement, or other charge 2
on an eligible customer solely because the customer participates in 3
the rooftop solar net metering program, except for a reasonable, 4
cost-based, 1-time interconnection application fee approved by the 5
commission. An interconnection application fee must be uniformly 6
applied to all applications and must not discourage participation. 7
(e) System sizing. The commission shall allow an eligible 8
customer to install an eligible rooftop solar generator sized to 9
meet up to 120% of the customer's electricity consumption for the 10
previous 12 months, measured in kilowatt hours. For a customer 11
without 12 months of usage history, the commission shall establish 12
reasonable default methods based on expected usage. 13
(f) Interconnection and approval timelines. The rooftop solar 14
net metering program must provide statewide uniform interconnection 15
requirements for eligible rooftop solar generators and must include 16
all of the following: 17
(i) A uniform application and process used by all electric 18
utilities and alternative electric suppliers. 19
(ii) A uniform timeline for application approval that must 20
include the following: 21
(A) For an application for an eligible rooftop solar generator 22
with a nameplate capacity of 25 kilowatts alternating current or 23
less, the electric utility shall approve or deny a complete 24
application not later than 10 business days after the application 25
is received. 26
(B) For an application for an eligible rooftop solar generator 27
with a nameplate capacity greater than 25 kilowatts alternating 28
current, the electric utility shall approve or deny a complete 29
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application not later than 20 business days after the application 1
is received. 2
(C) For a complete application that is not approved or denied 3
within the time periods described in sub-subparagraph (A) or (B), 4
the application is considered approved, and the electric utility 5
shall proceed to meter installation and permission to operate. 6
(g) System impact study, if applicable. If an electric utility 7
determines that a system impact study is necessary, the electric 8
utility shall provide a written justification and a cost estimate. 9
The commission shall ensure that the system impact study costs and 10
any required distribution upgrades are allocated consistent with 11
cost causation and shall prohibit the allocation of system-wide 12
upgrades to the eligible customer unless the upgrade is uniquely 13
and directly caused by the interconnection of that customer's 14
eligible rooftop solar generator. 15
(h) Minimum program availability. The commission shall ensure 16
that each electric utility offers rooftop solar net metering to 17
eligible customers until the aggregate enrolled capacity of 18
eligible rooftop solar generators in that electric utility's 19
service territory reaches at least 20% of the electric utility's 20
average in-state peak load for the preceding 5 calendar years. The 21
commission shall not authorize the suspension of enrollment, 22
including through a tariff, order, or rate case, before the 20% 23
threshold is met. 24
(i) Grandfathering and nonrollback protections. The commission 25
shall require that the crediting method and rate applicable to an 26
eligible customer under subdivision (a) are fixed for a period of 27
20 years beginning on the date the electric utility grants 28
permission to operate for that eligible customer's eligible rooftop 29
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solar generator. A subsequent commission order, rule, tariff, or 1
rate case does not reduce or impair those credits during the 20-2
year period. 3
(j) Transparency and reporting. The rooftop solar net metering 4
program must include both of the following: 5
(i) Each electric utility shall maintain a publicly accessible 6
online dashboard that, at a minimum, reports the number of 7
applications received, applications approved, applications denied 8
with stated reasons, average processing time, and total enrolled 9
rooftop solar capacity. The dashboard must be updated at least 10
monthly. 11
(ii) Not later than March 1 each year, the commission shall 12
submit a report to the standing committees of the senate and house 13
of representatives with primary jurisdiction over energy policy 14
describing program participation, interconnection timelines, costs 15
and benefits, and any recommended statutory changes. 16
(k) Benefit-cost accounting. The commission shall require that 17
any evaluation of costs and benefits of rooftop solar net metering 18
include, at a minimum, avoided energy costs, avoided capacity 19
costs, avoided transmission and distribution investments, reduced 20
line losses, resiliency and reliability benefits, and environmental 21
compliance benefits. The commission shall not approve a methodology 22
that double counts fixed costs or assigns fixed costs to rooftop 23
solar net metering program participants in a manner that would 24
result in program participants paying for the same cost more than 25
once. 26
(4) The commission shall promulgate rules in accordance with 27
the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 28
to 24.328, to implement this section. The rules must include, but 29
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are not limited to, the following: 1
(a) Coordination with alternative electric suppliers to ensure 2
that customers served by alternative electric suppliers are able to 3
participate in rooftop solar net metering and receive the credits 4
required under subsection (3)(a). The rules promulgated under this 5
subdivision must include rules for billing and credit 6
reconciliation between the alternative electric supplier and the 7
electric utility that serves the distribution system. 8
(b) Consumer protections that require clear, plain-language 9
disclosures to customers regarding interconnection timelines, 10
billing credits, and complaint processes, and establish an 11
expedited complaint process for disputes under this section. 12
(5) An electric utility or alternative electric supplier that 13
does not meet the interconnection and approval timelines provided 14
for under subsection (3)(f) is subject to a civil fine of not more 15
than $1,000.00 per day per violation. Each day that the violation 16
continues constitutes a separate violation. The prosecutor of the 17
county in which the violation occurred or the attorney general may 18
bring an action to collect the fine. 19
(6) As used in this section: 20
(a) "Eligible customer" means a customer of any class that 21
receives retail electric service from an electric utility or 22
alternative electric supplier in this state. 23
(b) "Eligible rooftop solar generator" means a solar 24
photovoltaic electric generation facility and associated rooftop 25
solar equipment that is located on an eligible customer's premises, 26
interconnected on the customer side of the meter, and designed 27
primarily to offset on-site electric load. 28
(c) "Net metering" means measuring the difference, in kilowatt 29
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hours, between the electricity supplied to an eligible customer by 1
the electric utility and the electricity generated by an eligible 2
rooftop solar generator and delivered to the electric utility's 3
distribution system. 4
(d) "Net excess generation" means, during a billing period, 5
the number of kilowatt hours exported to the distribution system by 6
an eligible rooftop solar generator that exceeds the number of 7
kilowatt hours supplied to the eligible customer during that 8
billing period. 9