The Commission shall adopt regulations that establish:

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1.  The capacity goals for the Program, which must provide that not less than 1 megawatt of capacity be set aside for the installation of waterpower energy systems with a nameplate capacity of 100 kilowatts or less.

2.  A system of incentives for waterpower energy systems with a nameplate capacity of not more than 500 kilowatts.

3.  A system of incentives that are based on rebates that decline as the capacity goals for the Program are met. The rebates must be based on predicted energy savings.

4.  The procedure for claiming incentives, including, without limitation, the form and content of the incentive claim form.