Indiana Supreme Court Sides with monopoly Utilities in EDG case

By Zach Shalk on January 19, 2023

The new year greeted solar supporters with a disappointing opinion from the Indiana Supreme Court. The decision will allow an investor-owned monopoly utility to continue providing unfair compensation to solar owners for the electricity they generate but don’t consume themselves. While the case only directly impacts CenterPoint customers in southwest Indiana, this outcome has statewide implications

In short, this opinion points Indiana in the wrong direction. It puts Hoosiers at a disadvantage in the local renewable energy revolution that’s sweeping the nation with the help of smart federal policies, market innovation, and customer demand. And it puts the power of solar energy out of reach for too many Hoosiers, especially low- and moderate-income families. Simply put, Hoosiers deserve better.

An unfair net metering replacement

Net metering is no longer available for new solar customers served by Indiana’s five largest electric utilities—investor-owned utilities Duke, NIPSCO, I&M, AES Indiana, and CenterPoint. Net metering is a fair and simple way to compensate solar owners for the electricity they generate. With net metering, you earn full retail rate credit on your electric bill for the electricity you produce and send to your neighbors during the monthly billing cycle. That means the electricity you send out receives the same value as electricity you purchase from the grid — an even swap.

The replacement now available to most new solar customers in Indiana is called “Excess Distributed Generation” or EDG. In addition to creating a new lower rate for solar energy, the program also changes how utilities count the solar credits in a way that disadvantages solar customers. The utilities call this system “instantaneous netting,” but it really provides no netting at all. EDG with no netting allows utilities to credit solar customers at an unfairly low rate for any electricity they generate but don’t use themselves. 

You can learn more about the EDG program that has replaced net metering at Indiana’s five largest utilities on SUN’s website

What this court opinion means

The decision upholds the existing options for current and prospective Indiana solar owners. 

This case only directly impacts CenterPoint customers. There are other cases currently before the Indiana Court of Appeals that address EDG programs offered by Duke, NIPSCO, AES, and I&M. SUN and the other parties in those appeals are still considering all available options, and we will keep our supporters updated going forward. (UPDATE: The appeals against similar EDG programs offered by Duke, NIPSCO, AES, and I&M were dismissed in February 2023.)

Finally, this case also doesn’t impact anyone who currently has net metering in the near term. If your solar panels were installed while net metering was still offered by your utility, you will continue receiving full retail rate net metering until 2032 or 2047, depending on when your panels were installed. 

How we got here

When the Indiana General Assembly first addressed compensation for solar owners back in 2017, they told Hoosiers they wanted to ensure fairness for all involved. But that’s not what’s happened.

Later that year, the Indiana legislature voted to end net metering. It did so after intense lobbying from the state’s five monopoly utilities. The bill gave the utilities the power to propose a new crediting system to the Indiana Utilities Regulatory Commission (IURC). The 2017 bill—known as SEA 309—allowed utilities to end net metering once a certain percentage of their customers used the system or by no later than July 1, 2022. While Indiana’s four other investor-owned utilities waited until the 2022 deadline to end net metering, CenterPoint reached the percentage threshold earliest and became the first utility to seek an end to net metering in 2020.

In April 2021, the IURC approved CenterPoint’s proposal to replace net metering with the state’s first EDG program. 

Solar supporters fight back & win in Court of Appeals

Solar United Neighbors and several partners joined the Indiana Office of Utility Consumer Counselor (OUCC) to appeal the IURC’s order. In January 2022, the Indiana Court of Appeals agreed with us, a rousing victory for Indiana’s solar movement! 

The Court of Appeals opinion said that CenterPoint’s no-netting EDG was against the law. It determined that traditional monthly netting was the appropriate way to calculate compensation for solar owners. 

However, the utility and IURC appealed that decision last year. The OUCC and other parties made their case with oral arguments before the Indiana Supreme Court in September 2022. But ultimately the Indiana Supreme Court issued their opinion overturning the Court of Appeals on January 4. 

Continuing the fight to keep Indiana’s solar future bright

But the sun is still shining over Indiana. And we’re still dedicated to working with you and your neighbors to build a clean, equitable, and affordable energy system with rooftop solar as the cornerstone. 

This court opinion is a step in the wrong direction. Still, by working together, we can keep Indiana’s solar future bright. Here are three action steps you can take to keep Indiana’s solar movement growing:

  1. Join SUN and our partners at the 5th annual Renewable Energy Day at the Indiana Statehouse on January 26!
  2. Join SUN’s Solar Action Team to stay up to date on rooftop solar issues and build skills needed to be an effective grassroots solar advocate!
  3. Are you a solar owner? Share your solar story with us!