HOUSE BILL NO. 4590
A bill to amend 2008 PA 295, entitled
"Clean and renewable energy and energy waste reduction act,"
by amending section 5 (MCL 460.1005), as amended by 2023 PA 235, and by adding part 9.
the people of the state of michigan enact:
(a) "Efficient electrification measure" means an electric appliance or equipment installed in an existing building to electrify, in whole or in part, space heating, water heating, cooling, drying, cooking, industrial processes, or another building or industrial end use that would otherwise be served by combustion of fossil fuel on the premises and that meets best-practice standards for cost-effective energy efficiency as determined by the commission. Efficient electrification measure includes, but is not limited to, any of the following:
(i) A cold-climate air-source heat pump.
(ii) An electric clothes dryer.
(iii) A ground-source heat pump.
(iv) High-efficiency electric cooking equipment.
(v) A heat pump or high-efficiency electric water heater.
(b) "Efficient electrification measures plan" means a plan to offer and promote efficient electrification measures.
(c) "Efficient electrification measures program" means a program to implement an efficient electrification measures plan.
(d) "Electric provider" means any of the following:
(i) Any person or entity that is regulated by the commission for the purpose of selling electricity to retail customers in this state.
(ii) A Except as used in part 9, a municipally owned electric utility in this state.
(iii) A Except as used in part 9, a cooperative electric utility in this state.
(iv) Except as used in subpart C of part 2 and in part 9, an alternative electric supplier licensed under section 10a of 1939 PA 3, MCL 460.10a.
(e) "Eligible electric generator" means a methane digester or renewable energy system with a generation capacity limited to 110% of the customer's electricity consumption for the previous 12 months.
(f) "Energy conservation" means the reduction of customer energy use through the installation of measures or changes in energy usage behavior.
(g) "Energy efficiency" means a decrease in customer consumption of electricity or natural gas achieved through measures or programs that target customer behavior, equipment, devices, or materials without reducing the quality of energy services.
(h) "Energy star" means the voluntary partnership among the United States Department of Energy, the United States Environmental Protection Agency, product manufacturers, local utilities, and retailers to help promote energy efficient products by labeling with the energy star logo, educate consumers about the benefits of energy efficiency, and help promote energy efficiency in buildings by benchmarking and rating energy performance.
(i) "Energy storage system" means any technology that is capable of absorbing energy, storing the energy for a period of time, and redelivering the energy. Energy storage system does not include either of the following:
(i) Fossil fuel storage.
(ii) Power-to-gas storage that directly uses fossil fuel inputs.
(j) "Energy waste reduction", subject to subdivision (k), means all of the following:
(i) Energy efficiency.
(ii) Load management, to the extent that the load management reduces provider costs.
(iii) Energy conservation, but only to the extent that the decreases in the consumption of electricity produced by energy conservation are objectively measurable and attributable to an energy waste reduction plan.
(k) Energy waste reduction does not include electric provider infrastructure projects that are approved for cost recovery by the commission other than as provided in this act.
(l) "Energy waste reduction credit" means a credit certified pursuant to section 87. that represents achieved energy waste reduction.
(m) "Energy waste reduction plan" means a plan under section 71.
(n) "Energy waste reduction standard" means the minimum energy savings required to be achieved under section 77.
(o) "Federal approval" means approval by the applicable regional transmission organization or other Federal Energy Regulatory Commission-approved transmission planning process of a transmission project that includes the transmission line. Federal approval may be evidenced in any of the following manners:
(i) The proposed transmission line is part of a transmission project included in the applicable regional transmission organization's board-approved transmission expansion plan.
(ii) The applicable regional transmission organization has informed the electric utility, affiliated transmission company, or independent transmission company that a transmission project submitted for an out-of-cycle project review has been approved by the applicable regional transmission organization, and the approved transmission project includes the proposed transmission line.
(iii) If, after October 6, 2008, the applicable regional transmission organization utilizes develops another approval process for transmission projects proposed by an electric utility, affiliated transmission company, or independent transmission company, the proposed transmission line is included in a transmission project approved by the applicable regional transmission organization through the approval process developed after October 6, 2008.
(iv) Any other Federal Energy Regulatory Commission-approved transmission planning process for a transmission project.
PART 9.
LOCALLY DISTRIBUTED SHARED SOLAR FACILITIES
Sec. 241. (1) This part may be cited as the "maximizing American grid affordability (MAGA)" act.
(2) As used in this part:
(a) "Agrivoltaic practice" means a system under which solar energy production and agricultural production, including crop or animal production, occurs in an integrated manner on the same parcel of land through the duration of the LDSS facility.
(b) "Applicable bill credit rate" means the dollar-per-kilowatt-hour rate established by the commission under section 245(2) to calculate a subscriber's bill credit.
(c) "Bill credit" means the monetary value of the electricity in kilowatt-hours generated by the LDSS facility allocated to a subscriber to offset that subscriber's electricity bill.
(d) "Control" means the possession, directly or indirectly, of the power to direct the management and policies of an entity, whether through the ownership of voting securities, by contract, or otherwise. Control exists when affiliates have shared sales or revenue-sharing arrangements or common debt and equity financing arrangements, but control is not limited to such situations.
(e) "Locally distributed shared solar facility" or "LDSS facility" means a facility, which may be located on 1 or more parcels of land, that meets all of the following requirements:
(i) Generates electricity by means of solar photovoltaic devices that are not manufactured in whole or in part in China, North Korea, or Iran.
(ii) Produces for each subscriber a bill credit for the electricity generated in proportion to the size of the subscriber's subscription.
(iii) Is connected to the electric distribution grid serving this state.
(iv) Has at least 3 subscribers.
(v) For the purpose of initial program qualifications, does not have a point of interconnection located within 1 mile of the point of interconnection of a solar facility under the control of the same entity.
(vi) Has no subscriber that holds more than a 40% proportional interest in the output of the system.
(vii) Beginning 1 year after commencing operation, has not less than 60% of its capacity subscribed by subscriptions of 40 kilowatts or less.
(viii) Has a capacity of not greater than 20 megawatts alternating current if located on the roof of a commercial or industrial building or 5 megawatts if not so located.
(f) "Low-income household" means a household that meets any of the following conditions:
(i) Has a household income of not more than 80% of the area median household income, as published by the United States Department of Housing and Urban Development.
(ii) Has a household income of not more than 200% of the poverty line as defined in section 2110 of the Social Security Act, 42 USC 1397jj.
(iii) Is enrolled in a low-income program facilitated by this state or overseen by the electric utility.
(iv) Other low-income criteria as determined by the commission.
(g) "Low-income service organization" means an organization that provides services, assistance, or housing to individuals in low-income households and may include a central tribal government, or a tribally designated housing authority.
(h) "Nonministerial permits" means governmental permits and approvals to construct the project, other than ministerial permits such as a building permit.
(i) "Subscriber" means a retail electric customer of an electric provider that meets all of the following requirements:
(i) The subscriber owns 1 or more subscriptions to an LDSS facility interconnected with and located in the service territory of the electric provider.
(ii) The subscriber's property to the electric bill of which the bill credits are applied is located in the same service territory described in subparagraph (i).
(j) "Subscriber organization" means a for-profit or nonprofit entity that owns or operates 1 or more LDSS facilities.
(k) "Subscription" means a contract between a subscriber and the owner of an LDSS facility under which the estimated bill credits of the subscriber do not exceed the average annual bill for the customer account to which the subscription is attributed.
(l) "Third-party developer" means a developer of an LDSS facility that is not a subscriber to that LDSS facility or an electric provider.
Sec. 243. (1) An electric provider shall apply a bill credit to a subscriber's monthly electric bill for the output of a locally distributed shared solar facility during the immediately preceding month attributable to that subscriber. The value of the bill credit shall be calculated by multiplying the subscriber's portion of the kilowatt-hour electricity production from the LDSS facility by the applicable bill credit rate for the subscriber. Any amount of the bill credit that exceeds the subscriber's monthly bill shall be carried over and applied to the next monthly bill as many times as necessary until the entire credit has been applied.
(2) An electric provider shall provide bill credits to each of an LDSS facility's subscribers for electricity generated by the LDSS facility for not less than 25 years from the date the LDSS facility begins commercial operation. When an electric provider files tariffs with the commission, the electric provider shall include options in the tariffs that allow a subscriber to receive bill credits for the subscriber's electricity bills.
(3) A subscriber organization shall provide a subscriber list to the electric provider in whose service territory the subscriber organization's LDSS facility is located. The subscriber list shall be in a standardized electronic format and specify the percentage of the LDSS facility's generation attributable to each subscriber. The subscriber organization shall update the subscriber list by removing subscribers that cancel their subscriptions and adding new subscribers.
(4) An electric provider shall, on a monthly basis and in a standardized electronic format, provide to a subscriber organization that has an LDSS facility within the electric provider's service territory a report that specifies both of the following:
(a) The total value of bill credits generated by the subscriber organization's LDSS facility in the prior month.
(b) The amount of the bill credit applied under subsection (1) to each subscriber.
(5) A subscriber organization may accumulate bill credits if all of the electricity generated by an LDSS facility is not allocated to subscribers in a given month. On an annual basis, the subscriber organization shall provide to the electric provider whose service territory includes the location of the subscriber organization's LDSS facility instructions for distributing excess bill credits to subscribers.
(6) Any renewable energy credits for electricity generated by an LDSS facility are the property of the subscriber organization that owns or operates the LDSS facility. The subscriber organization may sell, accumulate, retire, or distribute to subscribers the subscriber organization's renewable energy credits.
Sec. 245. (1) By 1 year after the effective date of the amendatory act that added this section, the commission shall promulgate rules to do all of the following:
(a) Allow for the creation and financing of LDSS facilities and for subscribers to receive bill credits.
(b) Ensure that all customer classes have opportunities to participate as subscribers to an LDSS facility.
(c) Require that subscriptions be offered to low-income households and low-income service organizations.
(d) Prohibit an electric provider from removing a customer from the customer's applicable customer class because the customer subscribes to an LDSS facility.
(e) Provide for the transferability and portability of subscriptions, including a subscriber's retention of a subscription to an LDSS facility if the subscriber moves within the same electric provider's service territory.
(f) Provide for consumer protection in compliance with existing laws.
(g) Allow an electric provider to recover costs of administering bill credits.
(h) Modify existing interconnection standards, fees, and processes as needed to do both of the following:
(i) Facilitate the efficient and cost-effective interconnection of LDSS facilities.
(ii) Allow an electric provider to recover reasonable interconnection costs for each LDSS facility.
(i) Require that electric providers efficiently connect LDSS facilities to the electrical distribution grid and not discriminate against LDSS facilities.
(j) Require electric providers to offer consolidated billing to subscribers of LDSS projects billing that consolidates on the same billing statement the subscriber's normal electric utility charges and the credits or charges for the subscription.
(k) Ensure that prospective subscriber organizations have received interconnection agreements, have legal control of their sites, and have received all necessary nonministerial permits before applying for the program under this part.
(l) Otherwise implement this part.
(m) Ensure that not more than 20% of all electricity generated in this state by sources connected to the electric grid is solar energy.
(a) Result in access to subscriptions for all customer classes.
(b) Equal the electric provider's full retail rate on a per-customer-class basis.
(3) In addition to the bill credit rates established under subsection (2), the commission shall establish an additional financial incentive for LDSS facilities that incorporate agrivoltaic practices.
Sec. 247. A subscriber organization is not considered to be an electric provider as a result of its ownership or operation of an LDSS facility.
Sec. 249. (1) An LDSS facility shall comply with an applicable local zoning ordinance.
(2) Prevailing wage or other labor requirements shall not apply to LDSS facilities unless otherwise required by law.
(3) An LDSS facility shall not be located on a site where clear-cutting of densely forested public land has occurred for the purpose of solar development.
Sec. 251. (1) A third-party developer shall not develop, own, or operate an LDSS facility unless the developer owns and operates at least 25 megawatts of solar generation capacity in other states.
(2) A third-party developer shall ensure that subscriptions provide a minimum bill savings of 10% to the customer, based on the applicable retail rate.
(3) A third-party developer shall allow a customer to terminate the customer's subscription at any time without a financial penalty.
(4) An electric provider shall cooperate with third-party LDSS developers to identify suitable interconnection opportunities for community energy projects.
(5) An electric provider shall support the efforts of third-party LDSS developers to acquire customers for participation in LDSS projects.