OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
S.B. 275 Bill Analysis
135th General Assembly
Click here for S.B. 275’s Fiscal Note
Version: As Introduced
Primary Sponsor: Sen. Dolan
Effective date:
Reid J. Fleeson, Attorney
SUMMARY
 Establishes requirements for virtual net metering (VNM) including (1) extensive
standards VNM systems must satisfy and (2) provisions governing VNM customers.
 Requires an electric utility to develop a standard contract or tariff providing for VNM
that is identical in rate structure, all retail rate components, and any monthly charges
as what the customer would be assigned if not for being a VNM customer.
 Specifies how the measurement of net electricity supplied or generated for VNM must
be calculated.
 Requires the electric utility to communicate with and assist a VNM customer or person
interested in becoming a VNM customer in calculating their electricity requirements,
and upon request provide the three-year average electricity supplied to the customer
or a reasonable estimate.
 Allows a VNM customer to aggregate any or all of the customer’s electric meters that
are in the same electric utility certified territory as a VNM system where the electricity
generated by the system is attributable to the customer.
 Allows multiple VNM systems to be located on the same site.
 Prohibits an electric utility from requiring a VNM system to take certain actions, such
as, for example, purchasing additional liability insurance, if the system meets specified
safety and performance standards.
 Requires the Public Utilities Commission to adopt rules to administer VNM and meter
aggregation.
June 10, 2024
Office of Research and Drafting LSC Legislative Budget Office
DETAILED ANALYSIS
Virtual net metering
The bill requires electric utilities to develop a standard contract or tariff to provide for
virtual net metering (VNM). Under the bill, “VNM” means measuring the difference in an
applicable billing period between the electricity supplied by an electric utility and the electricity
from a VNM system attributed to a VNM customer that is fed to the electric utility. A “VNM
customer” is a person, including a hospital, who contracts for or otherwise acquires electricity
generated by a VNM system. A “VNM system” is a facility that satisfies all the requirements
described below (see “VNM systems”).1
Continuing law defines an “electric utility” as an electric light company that has a
certified territory (meaning an electric supplier territory established under law) and is engaged
on a for-profit basis either in the business of supplying a noncompetitive retail electric service
or both a noncompetitive and a competitive retail electric service. Also under current law,
“hospital” is defined to include various types of hospitals, related facilities such as laboratories
and other care facilities, and education and training facilities for health professionals.2
VNM differs from net metering permitted under existing law because net metering must
be provided by a system located on the customer’s premises, while VNM does not have such a
requirement. Existing net metering law is unchanged by the bill.3
VNM contract or tariff
The bill requires the contract or tariff to be identical in rate structure, all retail rate
components, and any monthly charges to the contract or tariff to which the same customer
would be assigned if that customer was not a VNM customer.4
Measuring net electricity for VNM
The bill specifies that the measurement of net electricity supplied or generated for VNM
be calculated as follows:
 The electric utility must measure the net electricity produced or consumed during the
billing period, in accordance with normal metering practices.
 If the electricity supplied by the utility exceeds the electricity generated by the VNM
system attributed to the VNM customer and fed to the utility during the billing period,
1 R.C. 4928.675 and 4928.679(A).
2 R.C. 3701.01(C) and 4928.01(A)(3) and (11), not in the bill.
3R.C. 4928.01(A)(31) and 4928.67, not in the bill; for more information on net metering in Ohio, see the
Public Utilities Commission (PUCO) net metering information page, which is available on PUCO’s
website: https://puco.ohio.gov/home.
4 R.C. 4928.679(A).
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As Introduced
Office of Research and Drafting LSC Legislative Budget Office
then the VNM customer must be billed for the net electricity supplied by the utility in
accordance with normal metering practices.
 If the utility receives more electricity from the VNM customer than the utility supplied
to the customer during the billing period, the excess electricity must be converted to a
monetary credit at the energy component of the utility’s standard service offer and
continuously carried forward as a monetary credit on the customer’s future bills. The
utility cannot be required to pay the monetary credit, other than to credit it to future
bills, and the credit may be lost if a VNM customer does not use the credit or stops
taking service from the electric utility.5
Calculating customer electricity requirements
Under the bill, the electric utility must communicate with and assist a VNM customer or
person interested in becoming a VNM customer in calculating their requirements for electricity
based on the average amount of electricity supplied by the utility to the customer annually over
the previous three years. Upon request from any VNM customer or person interested in
becoming a VNM customer, the utility must provide or make available either the average
electricity supplied over the previous three years or a reasonable consumption estimate. If any
of the following apply, the utility is required to establish an appropriate consumption estimate
using any available consumption data or measures:
 The utility cannot provide the data without divulging confidential or proprietary
information;
 The utility does not have the data or cannot calculate the average annual electricity
supplied to the VNM customer or person interested in becoming a VNM customer
over the previous three years due to new construction, vacant properties, facility
expansions, or other unique circumstances.6
Meter aggregation
The bill allows a VNM customer to aggregate any or all of the customer’s electric meters
that are in the same electric utility certified territory as a VNM system where the electricity
generated by the system is attributable to the customer.7
VNM systems
Requirements
To be a VNM system, the bill requires it to satisfy all of the following:
 Be a facility for the production of electrical energy.
5 R.C. 4928.679(B).
6 R.C. 4928.678.
7 R.C. 4928.6710.
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As Introduced
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 Use as its fuel either solar, wind, biomass, landfill gas, or hydropower, or use a
microturbine, natural gas-fired generator, battery-storage system, or fuel cell, subject
to both of the following:
 If the system uses either a battery-storage system or natural gas-fired generator,
then the system or generator cannot be sized so as to exceed the size of any
co-located facility using solar, wind, biomass, landfill gas, or hydropower as its fuel.
 If both a battery-storage system and natural gas-fired generator are used, then the
combined nameplate capacity of the system and the generator cannot be sized so as
to exceed the size of any co-located facility using solar, wind, biomass, landfill gas, or
hydropower as its fuel.
 Not be a net metering system. “Net metering system” is defined in current law as a
facility for the production of electrical energy that can be fed back to the electric
service provider and that meets certain requirements, including, for example, being
located on the user’s premises.
 Not be located on agricultural land. “Agricultural land” is defined in current law as
land that is composed of tracts, lots, or parcels totaling not less than ten acres
devoted to agricultural production or totaling less than ten acres devoted to
agricultural production if the land produces an average yearly gross income of at least
$2,500 from agricultural production.
 Be located on one of the following:
 Property affected by subsidence from mining, including property adversely affected
by past coal mining, described in the current coal surface mining law. The referenced
coal surface mining law describes abandoned strip mines, coal processing areas, and
coal refuse disposal areas, to name a few.
 A brownfield. A “brownfield” is defined in current law as an abandoned, idled, or
under-used industrial, commercial, or institutional property where expansion or
redevelopment is complicated by known or potential releases of hazardous
substances or petroleum.
 A site, location, tract of land, installation, or building for incineration, composting,
sanitary landfilling, or other approved methods of disposal of solid wastes. “Solid
wastes” is defined under current law as such unwanted residual solid or semisolid
material as results from industrial, commercial, agricultural, and community
operations, excluding various materials such as nontoxic fly ash, and including
certain materials like scrap tires.
 Property owned by a county land reutilization corporation, which is a corporation
organized for certain purposes, such as, for example, efficiently holding and
managing vacant, abandoned, or tax-foreclosed real property pending its
reclamation, rehabilitation, and reutilization.
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As Introduced
Office of Research and Drafting LSC Legislative Budget Office
 A disposal system, defined in current law as a system for disposing of sewage,
sludge, sludge materials, industrial waste, or other wastes and includes sewage
systems and treatment works.
 The roof of a facility that meets both of the following:
 The facility is used exclusively for commercial or industrial purposes;
 The facility is at least 80,000 square feet.
 Be in the certified territory of the electric utility that provides electric service to all
electric meters that the VNM customer intends to attribute electricity to or aggregate
with under the bill.
 Operate in parallel with the electric utility’s transmission and distribution facilities.
 Be sized so as to not exceed 120% of the customer’s electricity requirements at the
time of interconnection, as determined through the process outlined in the bill (see
“Calculating customer electricity requirements” above), regardless of
whether the customer intends to take service through an electric utility or a
competitive retail electric service provider.
 The VNM customer maintains an electric meter where the VNM system is located.
 Serve exactly one VNM customer.8
Multiple VNM systems allowed on one site
A VNM system may be located on the same site as one or more other VNM systems.9
Safety and performance standards
A VNM system must meet all applicable safety and performance standards established
by the National Electrical Code, the Institute of Electrical and Electronics Engineers, and
Underwriters Laboratories. An electric utility is prohibited from requiring a VNM customer or
other person who owns a VNM system that meets all of the standards described above and the
standards and requirements provided for under rules by the PUCO (see “Rules” below) to do
any of the following:
 Comply with additional safety or performance standards.
 Perform or pay for additional tests.
 Purchase additional liability insurance.10
8 R.C. 4928.676; R.C. 122.6511, 901.61, 1513.37(A)(1), 1724.01, 3734.01, 4928.01, and 6111.01, not in
the bill.
9 R.C. 4928.677.
10 R.C. 4928.679(C) and (D).
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As Introduced
Office of Research and Drafting LSC Legislative Budget Office
Rules
The PUCO is required to adopt rules to administer VNM and meter aggregation. The
rules must include additional control and testing requirements for VNM systems that the PUCO
determines are necessary to protect public and worker safety and system reliability.11
HISTORY
Action Date
Introduced 05-22-24
ANSB0275IN-135/ts
11 R.C. 4928.6711.
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As Introduced