ELECTRIC UTILITY BASICS Indiana Electric Utility Basics 5 - - PowerPoint PPT Presentation

ELECTRIC UTILITY BASICS

Indiana

Electric Utility Basics

• 5 Investor-Owned Utilities (IOU) which serve

approximately 80% of Indiana electric customers

–Duke Energy (812,430 customers) –Indianapolis Power & Light (486,336 customers ) –NIPSCO (463,637 customers) –Indiana Michigan Power (461,141 customers) –Vectren or “SIGECO” (148,270 customers )

Indiana

Electric Utility Basics

• The remaining customers are served by:

–40 Rural Electric Cooperatives (REMC or Co-Op)

• Largest is South Central REMC w/approx. 33,000 customers

–72 Municipal Utilities (MUNI)

• Largest is Anderson with approx. 30,000 customers
• The 5 investor-owned utilities are subject to the jurisdiction
• f the Indiana Utility Regulatory Commission (IURC)

Indiana

Electric Utility Basics

• None of the REMCs are subject to the jurisdiction of the IURC. They are

controlled by the board of directors, which is elected by the customers,

• r members, of each REMC
• Only 9 of the 72 municipal utilities are subject to the jurisdiction of the

IURC regarding basic rates & charges. Elected Officials and, in most cases, a Utility Services Board or Office, make the decisions regarding the municipal utilities

• Utilities Subject to IURC jurisdiction:

https://secure.in.gov/iurc/files/Electric_Regulated_Utilities_7-8-13.pdf

NET METERING

What is it?

Net metering

• Net metering is a billing arrangement that credits owners of

renewable energy systems for the electricity they add to the grid.

• When the system is generating more electricity than a customer

is using, the energy is added to the grid and the customer is credited at the retail rate…or the same rate that they pay for the energy they consume from the grid. An even swap.

What is it?

Interconnection of Solar Panels

Net metering

• Net Billing

–Similar physical arrangement as net metering, primary difference is the amount credited for excess energy added to the grid

• Buy All/Sell All

–All energy generated by renewable energy system is added to the grid. All energy used by customer comes from the grid. Customer does not use the energy from their system to offset their own household energy use

Versus other arrangements

Net metering

• Generally, the amount credited for energy added to

the grid under net billing and/or “buy-all sell-all” is at the utilities “avoided cost.”

• Those arrangements are unlike net metering where

the utilities’ retail rate is used to credit customers for excess energy

Versus other arrangements

Net metering

• Retail Rate

–The rate that customers pay for the energy used from the grid. –For residential customers, the average retail rate in June 2016 was 11.1 cents per kWh in Indiana according to the Energy Information Administration (EIA)

• Avoided Cost

–The price a utility would pay if it had to produce the power itself or buy the power

• n the wholesale market

–Avoided costs are generally set once a year, and can vary greatly from approx. 3-6 cents per kWh

• Note:

– Each utility has their own retail rates & avoided cost rates, which are sometimes called power purchase rates. Check with your local utility to learn what their rates are.

Retail Rate versus Avoided Cost

The Many Categories of Net Metering & Meter Aggregation

INDIANA NET METERING HISTORY

Indiana’s First

• IURC Administrative Rule, Not State Law
• Rule adopted in March 2005, and Became Effective in May 2005
• Limitations

–Applicable to Investor-owned utilities only –System Size limited to 10 kW –Only Residential Customers and K-12 Schools eligible –Total Capacity Limited to 0.1% of utilities’ annual peak load

Net Metering Rule

Net Metering

• 2004-2009, multiple legislative hearings, no success
• 2010 Legislative Session, we were close!
• HB1094 (Rep. Ryan Dvorak, D-South Bend) passed House 78-21
• SB313 (Sen. Jim Merritt, R-Indianapolis) passed Senate 49-0. passed

House 68-31, died in conference committee

• There were significant areas of disagreement, beyond partisan politics

at the #INLegis 2004-2010

Net Metering at the #INLegis

• Eligible size of the renewable energy system, 100kW to 5MW
• Total amount of aggregate capacity that would be allowed to net

meter, 0.1% to 5% of utility peak load

• Costs to connect to the grid, also known as interconnection costs
• Aggregation, or grouping, of meters
• Carry-over of bill credits

Areas of Disagreement

Over at the IURC

• March 2010: Sen. Jim Merritt (R, Indianapolis) writes letter asking Gov.

Daniels “to do what lawmakers ultimately could not during the recently concluded legislative session - push for progress on the issue of net metering.”

• June 2010: IURC begins review process

–Three Field hearings held –Formal comments filed at IURC

• May 2011: final net metering rule adopted

Regulatory discussions

Indiana’s Updated

• Eligibility expanded to include all customers
• Eligible system size increased from 10kW to 1MW
• Increased total system capacity from 0.1% to 1% of the utilities

peak load (to address “subsidy” issue)

• Prohibition on additional fees for Level 1 interconnections,

systems under 10 kW

• Indefinite carry-over of bill credits

Net Metering Rule

SO WHERE DOES INDIANA STAND?

IURC 2015 Net Metering Report

Freeing the Grid, Best Practices in State’s Net Metering Policies

Less than 1/10th of the 1% cap of net metering capacity

Limitations of Updated

• Silent on meter aggregation (not prohibited, utilities could allow)
• Limited to system size of 1 MW
• Not a Statewide Rule applicable to all utilities, limited to

customers of investor owned utilities only

• Silent on ownership of Renewable Energy Credits (RECs)

Net Metering Rule

WHY ARE WE HERE?

Here come the monopolies

JANUARY 2013

• MAR. 7, 2015
• OCT. 20, 2015
• JAN. 3, 2015

Disruptive Challenges: Financial Implications and Strategic Responses to a Changing Retail Electric Business “Utilities wage campaign against rooftop solar” “As Conservation Cuts Electricity Use, Utilities Turn to Fees” “Utilities fight for revenue lost to solar power”

Why Are We Here?

The Utilities Approach

• Raise “fairness” as an issue
• Raise “class” issue, those without solar (low-income) are subsidizing

those with solar (rich suburbanites)

• Challenge net metering as a “subsidy”
• Propose monthly solar fees
• Change rate design, increase monthly fixed costs on everyone

Obstruct Customer-Owned Solar

The assault on solar

• HB1320 in the 2015 session of the Indiana legislature

–Allow utilities to add a monthly charge –Allow utilities to add onerous and unnecessary fees and rules for interconnection to grid –Change from retail rate to avoided cost rate –Bill died on House floor, Speaker Bosma removed it from further consideration, saying it had become a “little weighty”

Comes to Indiana

WHERE DO WE GO FROM HERE?

Sustainable Energy Policy

• Limitations under current net metering rule
• No Renewable Energy Mandate (RES)
• No Energy Efficiency Resource Standard (EERS)
• No State Tax Credits for Sustainable Energy
• Few administrative or legislative “champions”

Barriers in Indiana

What can you do

• Protect what we’ve got – current net metering rule
• Advocate for Statewide net metering law/rule to include REMCs and MUNIs, policy from

Indiana Legislature

• Advocate for meter aggregation -- community-owned solar, school corporations,

municipalities and local government, renters

• Advocate for state tax credits, grant programs, incentives -- especially for emerging

technologies like energy storage

• Ask your elected officials to be “champions”, form a sustainable energy or energy freedom

caucus

• Work with your local utility, they’re a monopoly and make the rules, they can do more
• Advocate for increasing customer control over energy bills and energy usage

for solar in Indiana?

Above all else, we need

• Assessment and analysis – state conditions, sound data
• Collaboration – open, transparent, all stakeholders at the table
• Data-driven – identify data needed, collect and report data, use data for decision
• Testing – pilot projects before wide-scale adoption
• Special attention to low income/vulnerable population impact
• Consumer education

Good Process

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