,,ii #aadth ,,congress #ast ,session ,s4 #abac ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,may #f1 #bjae ,mr4 ,king introduced the following bill2 which was read twice and referred to the ,committee on ,energy and ,natural ,resources ,a ,,bill ,to amend the ,public ,utility ,regulatory ,policies ,act of #aigh and the ,federal ,power ,act to facilitate the free market for distributed energy resources4 #a4 ,short title ,this ,act may be cited as the ,free ,market ,energy ,act of #bjae4 #b4 ,findings ,congress finds that it is in the public interest-- 7#a7 to enhance personal freedom and national security by reinforcing the right to sovereignty over personal energy choices2 and 7#b7 to enhance the diversity of the electricity supply and energy independence of the ,united ,states by ensuring that there is a free market for distributed energy resources by providing for the nondiscriminatory interconnection of distributed energy resources4 #c4 ,definition of distributed energy resource ,section #c of the ,federal ,power ,act 7#af ,u4,s4,c4 #gif7 is amended by adding at the end the following3 7#cj7 ,distributed energy resource ,the term distributed energy resource is a resource on the electricity distribution system that includes-- 7,a7 distributed fossil generation2 7,b7 renewable generation 7including biomass1 solar photovoltaics1 geothermal1 and hydropower72 7,c7 fuel cells2 7,d7 combined heat and power systems2 7,e7 energy storage2 7,f7 demand response2 7,g7 efficiency resources2 7,h7 microgrids2 and 7,i7 any combination of the resources described in this paragraph4 4 #d4 ,general right to neutrality of interconnection ,the ,public ,utility ,regulatory ,policies ,act of #aigh is amended by inserting after section #d 7#af ,u4,s4,c4 #bfjc7 the following3 #e4 ,general right to neutrality of interconnection 7a7 ,in general ,distributed energy resources 7as defined in section #c of the ,federal ,power ,act 7#af ,u4,s4,c4 #gif77 shall have a general right of interconnection under this ,act4 7b7 ,rates and fees ,all rates and fees for interconnection of distributed energy resources under this ,act1 regardless of whether the distributed energy resource is a qualifying facility1 shall-- 7#a7 be just and reasonable2 7#b7 provide for the #b-way benefit for the distributed energy resource and the electricity grid2 7#c7 shall not exceed the actual cost of service2 and 7#d7 shall not be punitive4 7c7 ,timeframes ,timeframes for interconnection of distributed energy resources under this ,act1 regardless of whether the distributed energy resource is a qualifying facility1 shall be well-defined1 expeditious1 and not unduly protracted4 4 #e4 ,energy and rate treatments for distributed energy resources ,section #aaa7;d7 of the ,public ,utility ,regulatory ,policies ,act of #aigh 7#af ,u4,s4,c4 #bfba7;d77 is amended by adding at the end the following3 7#bj7 ,distributed energy resources ,each ,state regulatory authority shall consider requiring that distributed energy resources 7as defined in section #c of the ,federal ,power ,act 7#af ,u4,s4,c4 #gif77 be eligible to receive just and reasonable energy and rate treatment for-- 7,a7 time-of-use pricing1 which may account for locational benefit1 to be provided on an unbundled basis1 after accounting for the #b-way valuation of time-of-use rates1 and progressing to real-time pricing1 for-- 7i7 energy sold to an electric utility2 and 7ii7 energy purchased from an electric utility2 7,b7 capacity2 7,c7 energy conservation2 7,d7 demand-side management or demand response2 7,e7 peak monthly demand2 7,f7 the provision of ancillary services2 7,g7 the societal value of distributed energy resources2 and 7,h7 any other benefits that the ,state regulatory authority considers to be appropriate4 4 #f4 ,qualifying facility2 improved interconnection standards for distributed energy resources 7a7 ,definition of qualifying facilities ,section #c of the ,federal ,power ,act 7#af ,u4,s4,c4 #gif7 is amended-- 7#a7 in paragraph 7#ag77;,c7-- 7,a7 by indenting appropriately2 and 7,b7 by inserting 7including a distributed energy resource in any ,state in which a ,state regulatory authority or nonregulated electric utility determines not to establish standards in accordance with paragraph 7#bj7 of section #aaa7;d7 of the ,public ,utility ,regulatory ,policies ,act of #aigh 7#af ,u4,s4,c4 #bfba7;d777 before that the ,commission determines2 and 7#b7 in paragraph 7#ah77;,b7-- 7,a7 by indenting appropriately2 and 7,b7 by inserting 7including a distributed energy resource in any ,state in which a ,state regulatory authority or nonregulated electric utility determines not to establish standards in accordance with paragraph 7#bj7 of section #aaa7;d7 of the ,public ,utility ,regulatory ,policies ,act of #aigh 7#af ,u4,s4,c4 #bfba7;d777 before that the ,commission determines4 7b7 ,improved interconnection standards for distributed energy resources ,section #aaa7;d7 of the ,public ,utility ,regulatory ,policies ,act of #aigh 7#af ,u4,s4,c4 #bfba7;d77 7as amended by section #e7 is amended by adding at the end the following3 7#ba7 ,improved interconnections standards for distributed energy resources ,each ,state regulatory authority or nonregulated electric utility1 acting under ,state authority in a ,state that has determined not to establish standards under paragraph 7#bj71 shall consider-- 7,a7 setting rates that exceed the incremental cost of alternative electric energy for purchases from any distributed energy resource 7as defined in section #c of the ,federal ,power ,act 7#af ,u4,s4,c4 #gif77 that is a qualifying facility for electricity generated1 demand reduced1 or service provided by the qualifying facility interconnected under this ,act1 with-- 7i7 the rates to be established at the full retail rate2 and 7ii7 fixed monthly charges for residential electricity bills to be established at a charge of not more than #aj dollars per month1 with optional reevaluations of the amount of charge to be considered on a periodic basis2 7,b7 making any distributed energy resource project exempt from filing requirements with the ,commission2 7,c7 ensuring that any requirements considered under this paragraph would not affect the purchase obligation under section #baj for distributed energy resource facilities2 and 7,d7 requiring that all rates and fees for interconnection of distributed generation facilities-- 7i7 shall be just and reasonable2 7ii7 shall provide for the benefit of the distributed energy resource to the electricity grid and benefit of the electricity grid to the distributed energy resource2 and 7iii7 not exceed the actual cost of service4 4 #g4 ,designation of smart grid coordinator or distribution system operator ,section #aaa7;d7 of the ,public ,utility ,regulatory ,policies ,act of #aigh 7#af ,u4,s4,c4 #bfba7;d77 7as amended by section #f7;b77 is amended by adding at the end the following3 7#bb7 ,designation of smart grid coordinator or distribution system operator ,each ,state regulatory authority shall consider designating1 through a competitive process1 a regulated utility1 other party1 or a combination of regulated utilities and other parties to be a smart grid coordinator or distribution system operator for the ,state4 4 #h4 ,consideration of nontransmission alternatives ,section #aaa7;d7 of the ,public ,utility ,regulatory ,policies ,act of #aigh 7#af ,u4,s4,c4 #bfba7;d77 7as amended by section #g7 is amended by adding at the end the following3 7#bc7 ,nontransmission alternatives 7,a7 ,in general ,each ,state regulatory authority shall consider nontransmission alternatives in instances in which a regulated utility proposes transmission projects4 7,b7 ,cost ,to reduce the cost to the ratepayer of a potential transmission upgrade1 a nontransmission alternative considered under subparagraph 7,a71 shall receive the avoided cost of the transmission upgrade1 minus a reasonable discount1 as determined by the ,state regulatory authority4 7,c7 ,recovery ,if a nontransmission alternative proposed under subparagraph 7,a7 obviates the need for a reliability-based transmission upgrade1 the cost of the nontransmission alternative shall be recovered from the ratebase in the same manner as the transmission upgrade would have been4 4 #i4 ,compliance 7a7 ,time limitations ,section #aab7;b7 of the ,public ,utility ,regulatory ,policies ,act of #aigh 7#af ,u4,s4,c4 #bfbb7;b77 is amended by adding at the end the following3 7#g7 7,a7 ,not later than #a year after the date of enactment of this paragraph1 each ,state regulatory authority 7with respect to each electric utility for which the authority has ratemaking authority7 and each nonregulated utility shall1 with respect to the standards established by paragraphs 7#bj71 7#bb71 and 7#bc7 of section #aaa7;d7-- 7i7 commence the consideration required under those paragraphs2 or 7ii7 set a hearing date for the consideration4 7,b7 ,not later than #b years after the date of enactment of this paragraph1 each ,state regulatory authority 7with respect to each electric utility for which the authority has ratemaking authority7 and each nonregulated electric utility1 shall1 with respect to the standards established by paragraphs 7#bj71 7#bb71 and 7#bc7 of section #aaa7;d7-- 7i7 complete the consideration under subparagraph 7,a72 and 7ii7 make the determination referred to in section #aaa with respect to the standards established by those paragraphs4 7#h7 7,a7 ,not later than #b years after the date of enactment of this paragraph1 each ,state regulatory authority 7with respect to each electric utility for which the authority has ratemaking authority7 and each nonregulated utility shall1 with respect to the standards established by section #aaa7;d77#ba7-- 7i7 commence the consideration required under that paragraph2 or 7ii7 set a hearing date for the consideration4 7,b7 ,not later than #c years after the date of enactment of this paragraph1 each ,state regulatory authority 7with respect to each electric utility for which the authority has ratemaking authority7 and each nonregulated electric utility1 shall1 with respect to the standards established by section #aaa7;d77#ba7-- 7i7 complete the consideration required under that paragraph2 and 7ii7 make the determination referred to in section #aaa with respect to the standards established by section #aaa7;d77#ba74 4 7b7 ,failure ,to comply ,section #aab7;c7 of the ,public ,utility ,regulatory ,policies ,act of #aigh 7#af ,u4,s4,c4 #bfbb7;c77 is amended by adding at the end the following3 7#a7 ,in the case of the standards established by paragraphs 7#bj7 through 7#bc7 of section #aaa7;d71 the reference contained in this subsection to the date of enactment of this ,act shall be deemed to be a reference to the date of enactment of those paragraphs4 4 7c7 ,prior state actions 7#a7 ,in general ,section #aab of the ,public ,utility ,regulatory ,policies ,act of #aigh 7#af ,u4,s4,c4 #bfbb7 is amended by adding at the end the following3 7g7 ,prior state actions ,subsections 7b7 and 7c7 shall not apply to a standard established under paragraphs 7#bj7 through 7#bc7 of section #aaa7;d7 in the case of any electric utility in a ,state if1 before the date of enactment of this subsection-- 7#a7 the ,state has implemented for the electric utility the standard 7or a comparable standard72 7#b7 the ,state regulatory authority for the ,state1 or the relevant nonregulated electric utility1 has conducted a proceeding to consider implementation of the standard 7or a comparable standard7 for the electric utility2 or 7#c7 the ,state legislature has voted on the implementation of the standard 7or a comparable standard7 for the electric utility4 4 7#b7 ,cross-reference ,section #abd of the ,public ,utility ,regulatory ,policies ,act of #aigh 7#af ,u4,s4,c4 #bfcd7 is amended by adding at the end the following3 ,in the case of each standard established under paragraphs 7#bj7 through 7#bc7 of section #aaa7;d71 the reference contained in this subsection to the date of enactment of this ,act shall be deemed to be a reference to the date of enactment of those paragraphs44 #aj4 ,effect of ,act ,nothing in this ,act 7or an amendment made by this ,act7 shall apply to distributed energy resource contracts in effect on the date of enactment of this ,act4