Iowa’s Net Metering Saga Continues

Remember March, before the world turned upside down? It was actually a remarkable month for clean energy in Iowa. The Legislature unanimously passed SF 583, which codified net metering for Iowa’s investor owned utilities until about 2027. 

By the time the Governor signed the bill, most attention was elsewhere. We wrote about the new law with excitement, and also cautioned that the devil may be in the implementation details. Sure enough, the process is getting rocky. 

Your Energy District is working to protect and promote locally owned solar prosperity and stewardship every step of the way. Here’s what you need to know now.

To review, SF 583 included the following key components (for more details, see our March article). 

  1. Iowa’s investor-owned utilities were to file new “net billing” (based on kWh credits) or “inflow-outflow” (based on cash credits) tariffs with the Iowa Utilities Board by July 1, 2020
  2. Solar customers are allowed use their generation to meet needs behind the meter first
  3. Either tariff must ensure the customer is receiving the full retail value for energy fed to the grid, though monthly fixed or demand charges are not covered (which is normal in net metering)
  4. Systems must be sized to produce no more than 110% of a customer’s annual usage, must be under one megawatt, and annual surplus is either forfeit or receives minimal value
  5. New customers receive the tariff for a 20-year contract, which is transferable to new owners
  6. When statewide distributed generation penetration reaches 5% (or after July 2027), a Value of Solar process will be initiated by the Board to establish the next generation tariff

After years of MidAmerican and Alliant attempting to entirely undo net metering, this sounds great, right? Yes, but, when Alliant and MidAmerican filed their tariffs, unfortunately they were not without mischief. 

This mischief prompted Winneshiek Energy District to submit a 14-page objection to the Alliant tariff with the Utilities Board. Two other objections were also filed that covered similar issues, though in less detail. We are now hoping the Board will either directly ensure the tariffs conform to the letter and spirit of the law prior to approving them, or docket the Alliant tariff as a contested case for further investigation and testimony.

We objected to three principle aspects of Alliant’s proposed Inflow-Outflow tariff:

  1. Alliant is trying to claim the environmental attributes, or RECs, of customer’s net-metered solar production, without compensation
  2. Alliant’s definition of their net-metering cap will artificially limit many customers’ ability to net-meter their annual usage, especially new accounts and new construction
  3. Language regarding electric vehicle charging restrictions could prevent businesses with solar from offering vehicle charging to their customers or employees. 

First, Alliant is claiming ownership of the renewable energy certificates (RECs) for all “outflow” energy. Outflow energy is a solar customer’s surplus generation not utilized behind the meter, but rather fed to the grid in exchange for bill credits. As we stated in our objection (p6),

RECs represent the full suite of “environmental attributes” of solar power generation, and as such, the full stewardship benefit/value for the solar owner. The creation of a commodity (REC) to represent these attributes can be confusing to some, but the concept is straightforward: if the utility were to claim the RECs on a portion of the energy produced by a solar owner, that energy can no longer be considered solar or renewable energy by the owner. This attempt to strip away the stewardship value of the solar energy produced by solar owners is both disrespectful of the values of those choosing to invest in solar, and also a clear disincentive to potential solar owners and to the growth of the solar industry and locally owned solar prosperity in Iowa.

The attempt by Alliant (as well as MidAmerican in their newly proposed solar rules) to confiscate the RECs for a portion of every solar owner’s production runs directly counter to 36 years of Iowa precedent assigning REC ownership to the solar owner. It runs counter to SF 583, which specifically defined a Value of Solar methodology to analyze the value of RECs and other solar benefits at a later date, not now. And it is a deliberate attack on the stewardship motivations of Iowan households, farms, and businesses that want to own solar for BOTH economic AND stewardship reasons.

The second part of Alliant’s tariff that we found very troubling was the establishment of an artificially low system size cap for some customers within the Inflow-Outflow tariff. 

The SF 583 law said clearly that customers had a right to net meter a system sized to supply up to 110% of their annual energy usage. IPL’s tariff proposes to calculate this based on either three years of usage data or, for customers with less than 12 months of data, the customer class average usage. As we wrote in our testimony,

Unfortunately, this approach both creates an artificially low cap for customers without at least 12 months of history, and fails to create a mechanism for customers to increase system size if desired as their usage grows. The latter is of relevance to all future tariff participants, and the former is of relevance to a very significant percentage, given the fact that it applies both to new residents of existing housing and business stock, as well as the growing importance of residential new construction, which is increasingly larger, all-electric, and/or built with integrated solar.

We presented extensive data demonstrating that larger, rural, newer, and all-electric homes all use significantly more electricity than Alliant’s customer class average, and would be seriously discriminated against by their tariff. The same scenario holds for most newer business, and we also presented data on pork operations (hog barns) to drive home the point. 

The last issue we discussed related to Electric Vehicle (EV) charging. We argued that the tariff should be clear that participants (mainly businesses) are not precluded from offering EV charging to customers or employees simply because they own solar systems. 

Alliant inserted language into their tariff prohibiting the resale of delivered electricity. Yet this language directly contradicts a recent Board rulemaking in docket RMU-2018-0100, which explicitly states 

Electric energy sold for the purpose of electric vehicle charging at a commercial or public electric vehicle charging station constitutes neither the furnishing of electricity to the public nor the resale of electric service. If the electricity used for electric vehicle charging is obtained from a rate-regulated public utility, the terms and conditions of the service to the electric vehicle charging station shall be governed by and subject to the utility’s filed tariff. A rate-regulated public utility shall not, through its filed tariff, prohibit electric vehicle charging or restrict the method of sale of electric vehicle charging at a commercial or public electric vehicle charging station.

It appears that Alliant is doing their best to muddy the waters around EV charging, and to suggest that customers cannot offer EV charging if they also own solar and utilize the Inflow-Outflow tariff. We asked the Board to ensure with clarity that EV charging services are fully compatible with the tariff.

At the end of the day, we’re very fortunate to have maintained net metering in Iowa for decades, and now to have SF 583 in place. We will continue to do all we can to ensure the new tariffs meet the full letter and spirit of the law, and to enable locally-owned solar prosperity and stewardship for many years to come.

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