Brief ⁽¹⁾

HB 2245, as amended, would amend the law authorizing contracts for parallel generation service to include a provision to promote in Kansas the generation of electricity using renewable resources, including energy sources such as wind, solar, and biomass. The current law requires a public utility to enter into a contract with a customer authorizing that customer's generation facility to connect to the utility's delivery and metering system. The customer may sell excess energy produced by the generation facility back to the utility and receive "fair and equitable" compensation for the sale. The current law does not define the terms of the compensation, but compensation is generally determined by the utility at an amount equal to avoided fuel cost. The terms of compensation are included in information filed by the utility with the Kansas Corporation Commission. If the bill is enacted, eligible utility customers would continue to receive fair and equitable compensation. However, an enhanced level of compensation would be provided to customers meeting certain conditions, as discussed below.

The bill would apply parallel generation service requirements to customers of all utilities: investor-owned, all rural electric cooperatives, other cooperatives, and municipally-owned or operated utilities. Under the current law parallel generation requirements appear to be limited to customers of utilities regulated by the Kansas Corporation Commission -- customers of investor-owned utilities, regulated rural electric cooperatives (most are not regulated), and municipal utility customers who live outside of the three-mile city limit.

The bill would make utility compensation to customers for excess energy sales more attractive by requiring that the compensation amount be not less than 150 percent of the utility's monthly system average cost of energy per kilowatt hour. For example, if the utility's average monthly energy cost is $.03 per kilowatt hour, the customer could receive 150 percent of that amount or $.045 per kilowatt hour. (Under the current law, the customer might only receive $.03 per kilowatt hour.) However, this enhanced level of compensation would be offered only to residential customers who own renewable generators with a capacity of 10 kilowatts or less or commercial customers who own renewable generators with a capacity of 100 kilowatts or less. (Under the current law, the lower level of compensation would be offered to all public utility customers who request parallel generation service and who own generation facilities of any size and fueled by any type of energy source.) The bill also would authorize the utility to determine the method of compensation (credit on a customer's account or payment at least annually or when the total compensation due is $25 or more).

Background

The Senate Committee amendments insert the provisions of SB 112, as amended by Senate Committee, into HB 2245 and delete the provisions of the House bill as amended by the House Committee of the Whole.

The Senate Utilities Committee conducted extensive hearings on a net metering proposal contained in a Senate bill.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/fulltext.cgi