1.  Definitions.  As used in this section, the following terms have the following meanings.  

2.  Program development.  The program must be designed to obtain and provide available federal funds to support cost-effective distributed solar facilities and energy storage systems. The department shall consult with the commission in developing and administering the program.  

3.  Funding.  In order to support the department's activities in administering the program, the department may request funds from the commission for the department's administrative costs, which may include, but are not limited to, costs associated with hiring consultants and department personnel and contracting for technical analyses. Notwithstanding section 117, if the department requests funding in accordance with this subsection, the commission may provide funding, to the extent available, from the Public Utilities Commission Reimbursement Fund under section 117. If the Public Utilities Commission Reimbursement Fund does not have sufficient funding, notwithstanding section 116, subsection 4, the commission may provide funding from the Public Utilities Commission Regulatory Fund in accordance with this subsection.  

4.  Federal funds.  The department shall apply for available federal funds to fund the program, including, but not limited to, funds from the United States Environmental Protection Agency's greenhouse gas reduction fund under 42 United States Code, Section 7434. Nothing in this subsection limits other uses of federal funds received by the department consistent with applicable federal requirements.  

5.  Ratepayer funds.  Except as provided in subsections 3 and 6, ratepayer funds may not be used to implement the program or to provide funding under the program to distributed solar facilities or energy storage systems.  

6.  Energy procurement.  The department may procure energy, capacity or renewable energy credits in accordance with section 10313, subsection 2 from distributed solar facilities or combined projects that receive federal funding pursuant to the program. The commission may not direct a transmission and distribution utility to enter into a long-term contract for energy, capacity or renewable energy credits from a distributed solar facility or a combined project unless the commission finds that the contract will benefit ratepayers and the procurement is in accordance with section 10313.