CHAPTER 196 HOUSE BILL No. 2245 An  Act concerning electric generation; relating to certain parallel generation services; pro-
viding for issuance of bonds for certain purposes; amending K.S.A. 66-1,184 and re-
pealing the existing section.
Be it enacted by the Legislature of the State of Kansas:

      Section  1. K.S.A. 66-1,184 is hereby amended to read as follows: 66-
1,184. (a) Except as provided in subsection (b), every public utility which
provides retail electric services in this state shall enter into a contract for
parallel generation service with any person who is a customer of such
utility, upon request of such customer, whereby such customer may attach
or connect to the utility's delivery and metering system an apparatus or
device for the purpose of feeding excess electrical power which is gen-
erated by such customer's energy producing system into the utility's sys-
tem. No such apparatus or device shall either cause damage to the public
utility's system or equipment or present an undue hazard to utility per-
sonnel. Every such contract shall include, but need not be limited to,
provisions relating to fair and equitable compensation on such customer's
monthly bill for energy supplied to the utility by such customer, and.

      (b)  (1) For purposes of this subsection, ``utility'' means an electric
public utility, as defined by K.S.A. 66-101a, and amendments thereto, any
cooperative, as defined by K.S.A. 17-4603, and amendments thereto, or a
nonstock member-owned electric cooperative corporation incorporated in
this state, or a municipally owned or operated electric utility.

      (2) Every utility which provides retail electric services in this state
shall enter into a contract for parallel generation service with any person
who is a customer of such utility, if such customer is a residential customer
of the utility and owns a renewable generator with a capacity of 25 kil-
owatts or less, or is a commercial customer of the utility and owns a
renewable generator with a capacity of 100 kilowatts or less. Such cus-
tomer may attach or connect to the utility's delivery and metering system
an apparatus or device for the purpose of feeding excess electrical power
which is generated by such customer's energy producing system into the
utility's system. No such apparatus or device shall either cause damage
to the utility's system or equipment or present an undue hazard to utility
personnel. Every such contract shall include, but need not be limited to,
provisions relating to fair and equitable compensation for energy supplied
to the utility by such customer. Such compensation shall be not less than
150% of the utility's monthly system average cost of energy per kilowatt
hour. A utility may credit such compensation to the customer's account
or pay such compensation to the customer at least annually or when the
total compensation due equals $25 or more.

      (c) The following terms and conditions shall apply to contracts en-
tered into under subsection (a) or (b): (a)

      (1) The utility will supply, own, and maintain all necessary meters
and associated equipment utilized for billing. In addition, and for the
purposes of monitoring customer generation and load, the utility may
install at its expense, load research metering. The customer shall supply,
at no expense to the utility, a suitable location for meters and associated
equipment used for billing and for load research; (b)

      (2) for the purposes of insuring the safety and quality of utility system
power, the utility shall have the right to require the customer, at certain
times and as electrical operating conditions warrant, to limit the produc-
tion of electrical energy from the generating facility to an amount no
greater than the load at the customer's facility of which the generating
facility is a part; (c)

      (3) the customer shall furnish, install, operate, and maintain in good
order and repair and without cost to the utility, such relays, locks and
seals, breakers, automatic synchronizer, and other control and protective
apparatus as shall be designated by the utility as being required as suitable
for the operation of the generator in parallel with the utility's system. In
any case where the customer and the utility cannot agree to terms and
conditions of any such contract, the state corporation commission shall
establish the terms and conditions for such contract. In addition, the
utility may install, own, and maintain a disconnecting device located near
the electric meter or meters. Interconnection facilities between the cus-
tomer's and the utility's equipment shall be accessible at all reasonable
times to utility personnel. The customer may be required to reimburse
the utility for any equipment or facilities required as a result of the in-
stallation by the customer of generation in parallel with the utility's serv-
ice. The customer shall notify the utility prior to the initial energizing and
start-up testing of the customer-owned generator, and the utility shall
have the right to have a representative present at such test; and (d)

      (4) the utility may require a special agreement for conditions related
to technical and safety aspects of parallel generation.

      (d) Service under any such contract entered into under subsection (a)
or (b) shall be subject to the utility's rules and regulations on file with the
state corporation commission.

      New Sec.  2. (a) For the purpose of financing the construction, ren-
ovation or repair of one or more facilities which generate electricity solely
by use of hydropower and which each have a capacity of more than two
but less than 25 megawatts, the Kansas development finance authority is
hereby authorized to issue revenue bonds in amounts sufficient to pay
the costs of such construction, renovation or repair, including any re-
quired interest on the bonds during construction, renovation or repair,
plus all amounts required for costs of the bond issuance and for any
required reserves on the bonds. The bonds, and interest thereon, issued
pursuant to this section shall be payable from revenues derived from sales
of electricity generated by the generation facility or facilities.

      (b) The provisions of subsection (a) of K.S.A. 74-8905, and amend-
ments thereto, shall not prohibit the issuance of bonds by the Kansas
development finance authority for the purposes of this section and any
such issuance of bonds is exempt from the provisions of subsection (a) of
K.S.A. 74-8905 and amendments thereto, which would operate to pre-
clude such issuance.

      (c) Revenue bonds, including refunding revenue bonds, issued here-
under shall not constitute an indebtedness of the state of Kansas, nor
shall they constitute indebtedness within the meaning of any constitu-
tional or statutory provision limiting the incurring of indebtedness.

      (d) Revenue bonds, including refunding revenue bonds, issued here-
under and the income derived therefrom are and shall be exempt from
all state, county and municipal taxation in the state of Kansas, except
Kansas estate taxes.

      Sec.  3. K.S.A. 66-1,184 is hereby repealed.

      Sec.  4. This act shall take effect and be in force from and after its
publication in the statute book.

Approved May 22, 2001.
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