IURC holds meeting to help clarify net metering rules

By Zach Schalk on April 15, 2019

As Indiana’s utilities and customers prepare for the next implementation phase of SEA 309, the 2017 law that drastically redefined Indiana’s net metering program, ambiguous wording in key sections and a lack of transparency have confused all impacted parties. To address this, the Indiana Utility Regulatory Commission (IURC) held a public meeting on Wednesday, April 10. They sought to gather information and feedback from utilities and consumer advocates and to help clarify the road ahead as net metering in Indiana moves into uncharted territory. You can read the written comments submitted by electric utilities and consumer advocates (Solar United Neighbors of Indiana joined comments submitted by our partners at Citizens Action Coalition and IndianaDG) on this page.

While the meeting was focused on information gathering instead of decision making, it was a productive first step for Indiana’s solar supporters looking for clarity on the future of net metering.

What is net metering?

Net metering is a policy that allows solar energy system owners to get a credit on their electric bill for the energy their system produces. Customers of the state’s five investor-owned utilities (IOUs), including Duke, NIPSCO, IPL, I&M, and Vectren, are currently credited on their bill for each kilowatt produced by their system in a one-for-one swap. These customers are then billed for the number of kilowatt-hours they consume minus the number of kilowatt-hours their system generates. This formula allows utilities to measure a homeowner’s net energy consumption—hence, net metering.

If the generation exceeds the usage for a given month, the homeowner receives a credit for each excess kilowatt-hour at the full retail rate. These credits can roll over indefinitely until the they’re applied when that customer consumes more energy than they generate. You can learn more here.

How did we get here?

In 2017, SEA 309 changed Indiana’s net metering rules for systems installed after January 1, 2018. The law says that full retail-rate net metering will be available for new solar customers in every IOU service area until the potential generating capacity of net-metered systems (like rooftop solar) reaches 1.5% of the summer peak load of a specific utility territory, or until July 1, 2022, whichever comes first. That statutory 1.5% capacity limit, also known as a net metering cap, is sub-divided to reserve 40% for residential customers, 15% for net metered biomass generation, and the remaining 45% for non-reserved capacity for all other customers—like schools, nonprofits, or industrial customers. As customers near the 1.5% limit, the utility must file a petition with the IURC to determine a yet-to-be determined tariff for excess electricity sent back to the grid by solar energy systems. This rate will eventually apply to all net-metered customers.

As several utilities approach the non-reserved portion of their 1.5% cap, there have been inconsistencies in how they have interpreted their responsibilities for filing for that new tariff from the IURC. Also of concern is the lack of transparency in tracking the reserved capacity available for potential customers interested in solar, wind, or other customer generation. Currently, the IURC publishes annual reports tracking net-metered capacity in each utility territory. But as the utilities inch closer to reaching the cap laid out in SEA 309, the annual report doesn’t provide enough insight into the available capacity for new solar projects.

Finally, there are fundamental issues regarding the interpretation of the law. It is critical to have a uniform understanding between utilities, customers, and activists, but there’s a lot that needs clarification. Is the 1.5% limit a hard cap or a threshold? Is the obligation to file a petition for the new distributed generation tariff triggered each time a reserved sub-category is met, or is it when the overall 1.5% limit is met? Do the reserved sub-categories each carry the same weight as the overall 1.5% aggregate limit? When should a project count towards the 1.5% capacity limit? Does the inverter capacity count towards the cap, or is it the actual installed capacity of the project? The recent IURC meeting sought to address these very questions, but much remains unclear.

April 10 meeting provides some clarity, but uncertainty remains

During the meeting, the IURC indicated that it is looking to issue a General Administrative Order (GAO) to provide clarity and guidance for utilities on the implementation of administrative issues related to SEA 309, such as consistent tracking and reporting. This order should help add clarity and transparency to the process of tracking the reserved sub-category capacities and providing accurate information to the public, ratepayers, and installers. However, despite some clear positive steps for Indiana solar supporters looking for transparency and fairness, several big questions remain unresolved after the meeting.

There was unanimous support among the five IOUs for increasing the reporting on available net-metered capacity from annual to quarterly, and to potentially make the reports monthly as they near the reserved sub-category limits. In another move towards transparency and fairness, the utilities also indicated that they could make the list of planned projects, or a project queue, public as the available capacity of a given sub-category approaches its statutory limit. Several utilities also indicated that they would make the contact information for a human point of contact readily available on their website where interested customers can call to get real time information on the project queue. A consensus seemed to develop around the idea of triggering the obligation to publicly report the queue when one of the sub-categories is 90% subscribed or with just 1MW capacity remained available, whichever is greater.

There is still much left unresolved. The IURC indicated a plan to follow-up with stakeholders to request further input regarding definitions that are currently up for interpretation and to further clarify reporting guidelines to inform the planned GAO. And, in a small victory for any potential solar customer that has ever been confused by the information on a utility website, the utilities acknowledged that they need to improve the quality of their online presence explaining net metering—though specifics for what that improvement might entail have yet to be determined.

After the meeting, at least one thing is clear. Despite the progress made so far, the road ahead remains uncertain for Indiana solar supporters following the implementation of SEA 309.