(1)  The office of energy resources shall support and facilitate a stakeholder led study of issues pertaining to distributed generations and barriers that impede the implementation of distributed generation and the realization of the societal benefits thereof. This study shall augment, compliment, and be integrated with a study initiated pursuant to an order of the public utilities commission.

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(2)  Said study shall consider the following definitions and the implications thereof for the effective and fair implementation of distributed generation:

(a)  “Backup power rates” means any component of utility tariffs that are charged only to those customers who install on-site generation, self-generation, behind-the-meter generation, or distributed generation. Backup power rates, also called “standby rates”, include, but are not limited to, any rate, tariff, or surcharge billed on the basis of the amount of energy generated by, or demand change related to, or installed capacity size of, any generation unit installed by an end-use customer.

(b)  “Combined heat and power system” means a system that produces, from a single source, both electric power and thermal energy used in any process or for heating that result in an aggregate reduction in energy use. To be considered a combined heat and power system for the purpose of this section, the system must achieve an average annual fuel conversion efficiency of at least fifty-five percent (55%).

(c)  “Net-metering” means billing or charging an end-use customer only for the electricity supply or services which is the net amount of electricity actually delivered to the client by a supplier or service company, less any amount of electricity generated by or on behalf of the end- use customer and either used on the end-use customer’s property or put on to the electric distribution grid within the same transmission interconnect area in which the end-use customers is located.

(3)  Said study shall make findings and recommendations using methods for determining and quantifying system benefits attributable to distributed generation including costs and benefits relating to:

(a)  the electricity distribution system:

(b)  the electricity transmission system;

(c)  the electricity generating system and the cost and availability of capital needed to construct or maintain generation capacity;

(d)  system losses;

(e)  congestion and reliability;

(f)  ancillary services including voltage stability and reactive power;

(g)  fuel availability and pricing, and costs of electricity supply;

(h)  environmental impacts.

(4)  The commissioner of the office of energy resources shall report the findings and recommendations of the stakeholder’s group with regard to any statutory changes necessary to reduce barriers to implementation of distributed generation to the general assembly by February 1, 2007.

(5)  The commission shall by June 1, 2007, issue the report of the stakeholder’s group to the public utilities commission; and the commissioner is hereby authorized to request that the commission initiate proceedings with regard to establishing any appropriate rates and/or regulation necessary to implement the recommendations contained in the report.

(6)  The findings and recommendations of the said stakeholder’s group shall in no way be binding upon either the general assembly or the public utilities commission and may be accepted, accepted in part, rejected or rejected in part by the general assembly or the public utilities commission and until such action by either the general assembly or the public utilities commission, there shall be no further action on said recommendations.