The Iowa Utilities Board will allow the state’s two largest utilities to implement temporary changes to their net metering rules.
The board’s order was issued Tuesday for Alliant Energy and MidAmerican Energy.
But while utility representatives say the changes mark a step forward for Iowa renewable energy, at least one solar energy stakeholder isn’t convinced.
Businesses and homeowners who generate their own electricity — most commonly through wind or solar — can apply the energy they produce back to their utility provider through net metering to offset their monthly bill.
With net metering, customers are billed only for their net energy use.
“Basically you’re rewinding the meter for the excess energy going back into the grid,” explained Barry Shear, president of Dubuque’s Eagle Point Solar.
The utilities board in early 2014 began seeking input from stakeholders on possible updates to state rules for distributed generation — that is, energy produced at or near the location it is used. The discussion soon centered on net metering, which is the focus of three changes listed in the Tuesday order.
Alliant and MidAmerican have until Aug. 15 to file specific language for how they will adopt these changes, with the Iowa Utilities Board having final approval.
“This is a good thing for the state, this is moving it forward, and I think everyone is happy with that,” Alliant Energy spokesman Justin Foss said.
Those changes will include:
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• Increasing the net metering “cap” from 500 kilowatts to 1 megawatt. This will expand the number of systems eligible for net metering.
Foss said Alliant had more than 1,300 customers who net meter as of July 1, and the utility receives between 30 and 40 new applications a month. MidAmerican Energy has 332 net metering customers.
• Specifying that when customers take energy back from the grid, they will be subject to service fees, such as administration and infrastructure costs.
• Requiring customers to cash-out any excess credits at the close of the year. According to the board’s order, cash-out funds would be split evenly between the customer and the utility, with the utility’s share going into its customer assistance programs.
In addition, cash-outs would be valued at the utility’s “avoided cost” rate.
The average price of one kilowatt-hour (kWh) in 2014 was about 11 cents, according to the U.S. Energy Information Administration. Eagle Point Solar’s Shear said the avoided cost for most general service customers — that is, customers producing less than 20,000 kWh a month — falls between one and three cents per kilowatt-hour.
Therefore, Shear said, a mandatory cash-out not only eliminates the possibility of using credits accumulated during peak production summer months to offset winter energy costs, but those cash-outs will be a fraction of their original value.
“At the end of the year, if you have an 11-cent kWh left over, they’ll give you two cents, and half of that two cents is going to go to the customer assistance fund,” Shear said. “So solar customers are effectively subsidizing other energy customers that cannot afford to pay their utility bills.”
The charges will include a sunset clause after three years. The utilities board then will decide if changes should be permanent, according to the order document.
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Customers on the current net metering plan will have the option of participating in new the rules. Customers who choose to take part under new net metering rules cannot switch back during the three-year period.
New customers who seek net metering services while new rules are in effect must take part in the new rules.