COLORADO -

Colorado has become the second U.S. state to adopt net-metering rules for renewable-energy systems up to two megawatts (MW) in capacity. Colorado's rules, issued by the Colorado Public Utilities Commission (PUC) December 15, 2005, were required by Amendment 37, a ballot initiative approved by state voters in November 2004. Furthermore, the PUC also adopted interconnection standards that closely track the standards developed by the Federal Energy Regulatory Commission (FERC) in Order 2006, issued in May 2005.

Colorado's net-metering rules apply to systems that generate electricity from solar, wind, geothermal, biomass, hydropower and fuel cells using hydrogen derived from any of these resources. All investor-owned utilities, and municipal utilities and rural electric cooperatives that serve more than 40,000 customers and that have not voted to exempt themselves from the provisions of Amendment 37, must file net-metering tariffs with the PUC by January 14, 2006.

At its own expense, the utility must install a single, bi-directional electric revenue meter at the customer's facility. A utility may not require more than one meter per customer. For solar-energy systems more than 10 kilowatts (kW) in capacity, the utility must install a second meter to measure the output for the purpose of counting solar renewable-energy credits (SO-RECs).

Net excess generation (NEG) is carried forward monthly. Within 60 days of the end of each calendar year, or within 60 days of when a customer terminates retail service, the utility must compensate the customer for NEG at the utility's average hourly incremental cost of electricity supply over the most recent calendar year.

Currently, New Jersey is the only other state with net-metering rules for systems up to 2 MW in capacity. New Jersey's rules, considered by many distributed-generation supporters to be the best in the United States, were issued in September 2004.

Colorado's new interconnection standards, based on FERC's standards for small generators, include Small Generator Interconnection Procedures (SGIP) for three levels of renewable-energy systems and other forms of distributed generation (DG):
 

 
• Level 1 interconnection applies to certified inverter-based systems no larger than 10 kW in capacity;
   
• Level 2 interconnection applies to systems no larger than 2 MW in capacity; and
   
• Level 3 interconnection applies to systems larger than 2 MW but no larger than 10 MW in capacity that do not pass the Level 1 or Level 2 process.