(a) An electric utility shall allow net-metering facilities to be interconnected using a standard meter capable of registering the flow of electricity in two (2) directions.

(b) Following notice and opportunity for public comment, a commission:

(1) Shall establish appropriate rates, terms, and conditions for net-metering contracts, including:

(A)

(i) A requirement that the rates charged to each net-metering customer recover the electric utility's entire cost of providing service to each net-metering customer within each of the electric utility's class of customers.

(ii) The electric utility's entire cost of providing service to each net-metering customer within each of the electric utility's class of customers under subdivision (b)(1)(A)(i) of this section:

(a) Includes without limitation any quantifiable additional cost associated with the net-metering customer's use of the electric utility's capacity, distribution system, or transmission system and any effect on the electric utility's reliability; and

(b) Is net of any quantifiable benefits associated with the interconnection with and providing service to the net-metering customer, including without limitation benefits to the electric utility's capacity, reliability, distribution system, or transmission system; and

(B) A requirement that net-metering equipment be installed to accurately measure the electricity:

(i) Supplied by the electric utility to each net-metering customer; and

(ii) Generated by each net-metering customer that is fed back to the electric utility over the applicable billing period;

(2) May authorize an electric utility to assess a net-metering customer a greater fee or charge of any type, if the electric utility's direct costs of interconnection and administration of net metering outweigh the distribution system, environmental, and public policy benefits of allocating the costs among the electric utility's entire customer base;

(3) Shall require electric utilities to credit a net-metering customer with any accumulated net excess generation in the next applicable billing period;

(4) May expand the scope of net metering to include additional facilities that do not use a renewable energy resource for a fuel if so doing results in distribution system, environmental, or public policy benefits;

(5) May increase the generating capacity limits for individual net-metering facilities if doing so results in distribution system, environmental, or public policy benefits;

(6) Shall provide that:

(A)

(i) The net excess generation credit remaining in a net-metering customer's account at the close of a billing cycle shall not expire and shall be carried forward to subsequent billing cycles indefinitely.

(ii) However, for net excess generation credits older than twenty-four (24) months, a net-metering customer may elect to have the electric utility purchase the net excess generation credits in the net-metering customer's account at the electric utility's estimated annual average avoided cost rate for wholesale energy if the sum to be paid to the net-metering customer is at least one hundred dollars ($100).

(iii) An electric utility shall purchase at the electric utility's estimated annual average avoided cost rate for wholesale energy any net excess generation credit remaining in a net-metering customer's account when the net-metering customer:

(a) Ceases to be a customer of the electric utility;

(b) Ceases to operate the net-metering facility; or

(c) Transfers the net-metering facility to another person; and

(B) A renewable energy credit created as the result of electricity supplied by a net-metering customer is the property of the net-metering customer that generated the renewable energy credit; and

(7) May allow a net-metering facility with a generating capacity that exceeds three hundred kilowatts (300 kW) if:

(A) The net-metering facility is not for residential use; and

(B) Allowing an increased generating capacity for the net-metering facility would increase the state's ability to attract businesses to Arkansas.

(c) (1) As used in this section, "avoided costs":

(A) For the Arkansas Public Service Commission, means the same as defined in § 23-3-702; and

(B) For a municipal utility, is defined by the governing body of the municipal utility.

(2) Avoided costs shall be determined under § 23-3-704.

(d)

(1) Except as provided in subdivision (d)(2) of this section, an electric utility shall separately meter, bill, and credit each net-metering facility even if one (1) or more net-metering facilities are under common ownership.

(2)

(A) At the net-metering customer's discretion, an electric utility may apply net-metering credits from a net-metering facility to the bill for another meter location if the net-metering facility and the separate meter location are under common ownership within a single electric utility's service area.

(B) Net excess generation shall be credited first to the net-metering customer's meter to which the net-metering facility is physically attached.

(C) After applying net excess generation under subdivision (d)(2)(B) of this section and upon request of the net-metering customer under subdivision (d)(2)(A) of this section, any remaining net excess generation shall be credited to one (1) or more of the net-metering customer's meters in the rank order provided by the net-metering customer.