Todays Discussion Electric Utility Basics Net Metering Basics - - PowerPoint PPT Presentation

Today’s Discussion

–Electric Utility Basics –Net Metering Basics –Indiana Net Metering History, Part 1 –Here comes the Monopolies, the assault on solar –Indiana Net Metering History, Part 2 –Where do we go?

ELECTRIC UTILITY BASICS

Indiana

Electric Utility Basics

• Indiana Utility Regulatory Commission (IURC)

–Primary Function is to act as surrogate to competition –Five Commissioners, four year terms, one Commissioner must be an attorney –Appointed by, and serve at the pleasure of the Governor –No more than three from the same political party

• Office of Utility Consumer Counselor (OUCC)

–Consumer Counselor heads agency, four year term –Must be an attorney –Appointed by, and serves at the pleasure of the Governor –Statutory representative of the public before the IURC

Indiana

Electric Utility Basics

• 5 Investor-Owned Utilities (IOU)

–Duke Energy (830,4270 customers, 724,302 residential) –Indianapolis Power & Light (495,352 customers, 440,693 residential) –NIPSCO (471,891 customers, 412,267 residential) –Indiana Michigan Power (465,774 customers, 406,865 residential) –Vectren, a CenterPoint Energy Company, aka “SIGECO” (142,453 customers, 123,587 residential)

Indiana

Electric Utility Basics

• Investor-Owned Electric Utilities serve 75% of Indiana

customers and account for:

–78% of total electric sales –77% of total revenue collected

• Average Retail Prices:

–Duke: 9.36 cents per kWh, residential 11.53 cents per kWh –IPL: 10.01 cents per kWh, residential 11.03 cents per kWh –NIPSCO: 9.92 cents per kWh, residential 13.99 cents per kWh –I&M:9.25 cents per kWh, residential 12.61 cents per kWh –Vectren: 10.01 cents per kWh, residential 14.68 cents per kWh

Indiana

Electric Utility Basics

• The remaining customers are served by:

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

• None of the REMCs are subject to the jurisdiction of the IURC
• Largest is South Central REMC with approx. 33,000 customers

–72 Municipal Electric Utilities (MUNI)

• 9 of the 72 municipal utilities are subject to the jurisdiction of the

IURC regarding basic rates & charges

• Largest is Anderson with approx. 35,000 customers

Indiana

Electric Utility Basics

• Retail Rate comparison, all customer classes

–Investor Owned Electric Utilities, 9.91 cents per kWh –Rural Cooperative Electric Utilities, 11.53 cents per kWh –Municipal Electric Utilities, 9.31 cents per kWh

• Retail Rate comparison, residential customers

–Investor Owned Electric Utilities, 12.77 cents per kWh –Rural Cooperative Electric Utilities, 13.06 cents per kWh –Municipal Electric Utilities, 10.46 cents per kWh

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, Value of Solar Tariff

–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

• Feed-In-Tariff

–All energy generated by renewable energy system is added to the grid. A fixed price under a long-term contract is paid for the energy delivered 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

• Retail Rate

–The rate that customers pay for the energy used from the grid. –For residential customers, the average retail rate in September 2019 was 12.22 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, PART ONE

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

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

DISRUPTIVE CHALLENGES

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”

A Call to Arms

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

INDIANA NET METERING HISTORY, PART TWO

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

The assault on solar

• SEA309 in the 2017 session of the Indiana legislature

–Phases out net metering by July 1, 2022 –Prohibits IOUs from offering net metering to customers after July 1, 2022 –Customers who installed before January 1, 2018 retain net metering until July 1, 2047 –Customers who install on or after January 1, 2018 retain net metering until July 1, 2032 –Allows “successors in interest” to be served under net metering tariff

Comes to Indiana

The assault on solar

• SEA309 in the 2017 session of the Indiana legislature

–After July 1, 2022, replaces net metering with a monthly credit based

• n “the average locational marginal price” multiplied by 1.25, or

wholesale + 25% –New rate for excess generation updated every 12 months –Allows utilities to add additional fees to DG customers –Allows utilities to recover the credits applied to DG customer bills from all customers

Comes to Indiana

CHANGE IS NEEDED WHERE DO WE GO?

Customer Bill of Rights

• Provide Customers with more choice and control

– Reinstate and expand net metering, “repeal and replace” SEA309 – Reinstate and expand energy efficiency resource standard (EERS), “repeal and replace” SEA340 and SEA412 – Authorize 3rd Party Financing/PPAs and Community Solar

• Repeal other anti-consumer legislation
• Public accountability for regulators
• Direct election of consumer counselor

For Indiana

Voter Bill of Rights

• Make it easier to vote
• Count every vote
• Fair districts and representation, give voters a

choice

• Public financing of elections
• Get money out of politics

For Indiana

Speaking of Money

• 2018 Contributions from energy and natural resource

interests = $2.2 Million

• 2016 Contributions from energy and natural resource

interests = $3.2 Million

• Contributions to all Indiana candidates since 2009 from

energy and natural resource interests = $13.6 Million

In Indiana Politics

What can you do

• Advocate for Statewide net metering law, 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/join 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, talk about

the benefits and value of distributed solar

for solar in Indiana?

Thank You For Lıstenıng

?

Kerwin Olson, Executive Director 1915 W. 18th St, Suite C Indianapolis, IN 46202 www.citact.org kolson@citact.org 317-205-3535