SUMMARY OF CURRENT NEGOTIATIONS

CONFIDENTIAL

DRAFT

April 8, 2014

1. Net Metering and other things related to payment for electricity
   1. Net Metering (this is what we’ve been referring to as “behind-the-meter,” and we would not like to only use to refer to behind-the-meter systems; abbreviated “NEM”).
      1. This continues as we know it today, unchanged
      2. Undecided : eligible customers are those that are interconnected behind a meter with sufficient load to consume at least 67% of the annual production of the system on site.  For generation in excess of what is used in the annual cycle, bill credits can be transferred to any other account via the Schedule Z.  Utilities do not agree to 67% test, at believe it should be 100%, but are inviting an alternative proposal.
   2. Virtual Metering (Please note terminology change – it is important to SEIA that we not confuse the term “net metering” when we’re talking about only a partial credit; abbreviated “VM”).
      1. VM continues to be available for at least some categories of customers (public, campus, low-income, community).  Projects can accumulate bill credits and transfer them to eligible VM customers via the Schedule Z, just as is the case today.
      2. The VM credit rate remains an area of disagreement, with two options on the table for resolution,:
         1. A DPU process is used to determine the VM credit rate (or bill components) for projects that are not within the incentive term as discussed below.  Language for this was circulated by SEIA on 4/6.
         2. The rate components that apply to today’s private Class 3 net metering facilities could apply to all VM projects – within the incentive term, thereafter, and for projects that are never in the incentive program.
2. Minimum Bill and Rate Design issues
   1. There is agreement that the legislation will instruct the DPU to implement a minimum bill to ensure that customers who are not net users of electricity in a given month nevertheless pay some amount for distribution services.
3. Incentive
   1. There is broad agreement that the incentive program should transition to a fixed, tariff-based payment.  For clarity, this would function as a payment for the SREC stream.  Those SRECs are used to satisfy the SRPS obligation.
   2. The group is leaning towards using an administratively set declining-block structure to set the incentive and deliver it to projects – this is SEIA’s preference, and utilities are amendable. 
4. Transition and Cap
   1. No other change to the current framework for the duration of a transition period.
   2. For clarity, all systems are treated the same as if there were no legislative change after they are built.  All systems installed through the transition period are grandfathered and receive the current treatment throughout their lives.
   3. undecided: Net metering caps removed immediately.  Utilities acknowledge that this is fundamental for SEIA, but have expressed that this is only something to which they can agree after other issues are resolved.
   4. Undecided: Utilities want final implementation of the transition described by this legislation by 1/1/16.  SEIA believes that the transition will take a little longer, and continues to propose 12/31/16.