Section 8.05 - Terms and Conditions for Sales of Electricity by Qualifying Facilities and On-site Generating Facilities to Distribution Companies(1) Eligibility. All Qualifying Facilities, regardless of size, are eligible to receive Short-run Rates.(2) Standard Terms of Purchase. (a) Qualifying Facilities that have a design capacity of one MW or greater shall have their output metered and purchased at rates equal to the payments received by the Distribution Company from the ISO power exchange for' such output for the hours in which the Qualifying Facility generated electricity in excess of its requirements.(b) Qualifying Facilities with a design capacity greater than 60 KW but less than one MW shall have their output metered and purchased at rates equal to the arithmetic average of the Short-run Energy rate in the prior calendar month for the KWH which the Qualifying Facility generated electricity in excess of its requirements(c) Qualifying Facilities with a design capacity of 60 KW or less shall have the option to have their output metered and purchased at rates equal to the arithmetic average of the Short-run Energy rate in the prior calendar month for the KWH which the Qualifying Facility generated electricity in excess of its requirements. Qualifying Facilities with a design capacity of 60 KW or less shall have the option to run their meters backward and may choose to receive a credit from the Distribution Company equal to the arithmetic average of the Short-run Energyrte in the prior calendar month for any month during which there was a positive net difference between KWH generated and consumed. Such credit shall appear on the following month's bill. Distribution Companies shall be prohibited from imposing special fees on these customers, such as backup charges and demand charges, or additional controls, or liability insurance, as long as the facility meets the Interconnection Standard and all relevant safety and power quality standards. These customers must still pay the minimum charge for Distribution Service (as shown in an appropriate rate schedule on file with the Department) and all other charges for each net KWH delivered by the Distribution Company in each billing period.(3) Net Metering. Certain On-site Generating Facilities may elect net metering consistent with 220 CMR 18.00.(4) Standard Contracts. Each Distribution Company must offer a Standard Contract providing for payment at the Short-run Rate to any Qualifying Facility making a request for such a contract.(5) Effective Date for Short-run Energy and Capacity Rates. Payment of ISO power exchange Short-run energy and capacity rates shall take effect on the first day of the month immediately following the effective date of 220 CMR 8.00. For the period prior to such effective date, Distribution Companies shall pay Qualifying Facility rates currently approved by the Department.(6) Line Loss Factors. Energy for purchases shall be adjusted to reflect the costs or savings in line losses that result from purchases from the Qualifying Facility. Each Distribution Company shall file with the Department its line loss factors. Line loss factors shall be in accordance with the NEPOOL Market Rules and Procedures.(7) Short-run Capacity or Reserves Payments. A Distribution Company shall make payments to a Qualifying Facility for capacity and/or reserves-related products if the sale is recognized by NEPOOL as a capacity and/or reserves-related product sale. The Distribution Company shall pay rates equal to the payments received for the sale of any capacity and/or reserves-related products associated with such Qualifying Facility output to the ISO power exchange.