Free Market Energy Act of 2015

This bill amends the Federal Power Act to identify the elements of a distributed energy resource, including fuel cells, microgrids, and combined heat and power systems.

Distributed energy resources shall have a general right of interconnection under the Public Utility Regulatory Policies Act of 1978 (PURPA), and all rates and fees for interconnection shall provide for the two-way benefit for the distributed energy resource and the electricity grid.

Each state regulatory authority shall consider requiring that distributed energy resources be eligible to receive just and reasonable energy and rate treatment for time-of-use pricing and other specified features and values.

A state regulatory authority or nonregulated electric utility acting under state authority must consider specified interconnections standards that include:

• setting rates that exceed the incremental cost of alternative electric energy for purchases from any distributed energy resource that is a qualifying facility for electricity generated, demand reduced, or service provided by the qualifying facility interconnected under this Act; and
• making any distributed energy resource project exempt from filing requirements with the Federal Energy Regulatory Commission (FERC).

A state regulatory authority must also consider:

• designation, through a competitive process, of a regulated utility, other party, or a combination of regulated utilities and other parties to be a smart grid coordinator or distribution system operator for the state; and
• nontransmission alternatives when a regulated utility proposes transmission projects.