article: SECTION 1. RELIABILITY AND DISTRIBUTED RESOURCES. Section 111(d) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by adding at the end the following: ``(20) Consideration of safe and reliable interconnection of distributed resources.-- ``(A) Definitions.--In this paragraph: ``(i) Ancillary service.--The term `ancillary service' includes-- ``(I) reactive supply; ``(II) regulation and frequency response; ``(III) energy imbalance; ``(IV) operating reserves; ``(V) generation imbalance; and ``(VI) flexibility and ramping services. ``(ii) Distributed resource.--The term `distributed resource' means an electric power source connected directly to the distribution network or on the customer side of the meter. ``(B) Requirement for proceedings related to distributed resources.--Each State regulatory authority shall-- ``(i) establish proceedings to examine the degree to which distributed resources contribute ancillary services; and ``(ii) prescribe appropriate measures to ensure adequate ancillary services so that grid interconnection for distributed resources is safe, reliable, and efficient.''. SEC. 2. NET METERING EFFECTS. Section 111(d) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) (as amended by section 1) is amended by adding at the end the following: ``(21) Net metering effects.--Each State regulatory authority shall-- ``(A) establish proceedings to examine the effects of net metering and customer-owned distributed generation on resource planning of each electric utility, including-- ``(i) the effects on resource utilization, fuel diversity, grid security, and shifting of grid costs to customers who do not use net metering or customer-owned distributed generation; and ``(ii) the impact on-- ``(I) the financial health of the entity providing distribution services; and ``(II) the ability of the entity to attract investment in light of net metering and customer-owned distributed generation within the State; and ``(B) establish proceedings to determine whether electricity rates established for net metering service are just and reasonable and not unduly preferential or discriminatory, in accordance with State law.''. SEC. 3. COMPLIANCE. (a) Time Limitations.--Section 112(b) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(b)) is amended by adding at the end the following: ``(7)(A) Not later than 1 year after the date of enactment of this paragraph, each State regulatory authority (with respect to each electric utility for which the authority has ratemaking authority) and each nonregulated electric utility shall, with respect to the standard established by paragraphs (20) and (21) of section 111(d)-- ``(i) commence the consideration required under those paragraphs; or ``(ii) set a hearing date for such consideration, with respect to the standard established by paragraphs (20) and (21) of section 111(d). ``(B) Not later than 2 years after the date of enactment of this paragraph, each State regulatory authority (with respect to each electric utility for which the authority has ratemaking authority) and each nonregulated electric utility shall, with respect to the standards established by paragraphs (20) and (21) of section 111(d)-- ``(i) complete the consideration required under those paragraphs; and ``(ii) make the determination referred to in section 111 with respect to the standards established by those paragraphs.''. (b) Failure To Comply.--Section 112(c) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(c)) is amended by adding at the end the following: ``In the case of the standard established by paragraphs (20) and (21) of section 111(d), 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 paragraphs.''.
summary: This bill amends the Public Utility Regulatory Policies Act of 1978 to define &quot;distributed resource&quot; as an electric power source connected directly to the distribution network or on the customer side of the meter. State regulatory authorities shall by certain deadlines: establish proceedings to examine the degree to which distributed resources contribute specified ancillary services, such as reactive supply, energy imbalance, and flexibility and ramping services, among others; prescribe measures to ensure adequate ancillary services so that grid interconnection for distributed resources is safe, reliable, and efficient; examine the effects of net metering and customer-owned distributed generation on resource planning of each electric utility, and determine whether electricity rates established for net metering service are just and reasonable and not unduly preferential or discriminatory.