Kentucky & Indiana customers feed electricity to grid March 17, 2010Posted by Laura Arnold in Net Metering.
Tags: Indiana Distributed Energy Advocates, Net Metering
Let nature electric bill help pay
When the wintry clouds cleared over Janice and David Isaacs’ home in Georgetown, Ind., this month, their new solar panels soaked up the rays of the sun and converted the energy to electricity.
The power is reducing the utility bills at the couple’s home — and better yet, they say, helping the environment by trimming the amount of coal burned to heat and cool their home.
“The other day I got home from work and saw the meter running backwards,” David Isaacs said. “That’s just a neat feeling.”
The Isaacses have joined a tiny but growing movement among Indiana and Kentucky homeowners, farmers and schools to plug wind and solar panel systems into the power grid — conserving energy, while also saving money, because they’re credited for the excess energy they send back to the utility.
The process is known as net metering, where homeowners who produce more electricity than they consume — often during daytime hours when they’re away — can see their electric meter spin in reverse.
At night, when the family is home with lights and appliances running, electricity flows into the home, spinning the meter forward to record the consumption. Their meter registers the net amount of energy produced or consumed during the billing period.
Some 30 states, including Kentucky, have enacted net metering laws in recent years. Indiana legislators, however, have for the second year in a row failed to pass that state’s first such statute.
State Sen. Jim Merritt, an Indianapolis Republican who authored the Indiana bill, said Tuesday he had asked Gov. Mitch Daniels to request that state regulators begin writing rules to update the state’s net metering regulations.
Legislation allowing residential and commercial energy producers to get credit for what they generate is a step that environmentalists and renewable-energy advocates insist is crucial to spurring solar, wind and other green energy forms that can cut dependence on coal and other fossil fuels.
Without such a benefit, “it’s kind of like encouraging people to get a driver’s license, and making cars cost $1 million,” said Andy McDonald, director of the Kentucky Solar Partnership that promotes increased use of solar power. “Net metering is a way for people to connect in a fair and efficient way” to the grid.
Utility customers with net metering realize savings based on how much power they produce.
At Tim Darst’s home in the Louisville Highlands, for example, he and his wife received credit for 1,335 kilowatt-hours supplied to LG&E last year from their solar panels. They paid the difference between the electricity their home used and what their system sent to the grid, saving about $91.
That annual savings will slowly allow them to repay their $20,000 investment, but the top priority wasn’t money, Darst said. Because nearly 90percent of Kentucky’s electricity comes from burning coal, he and his wife believe finding another way to power their home makes sense.
Doing so would have been even more costly without net metering, which would force them to store the extra power in batteries, Darst said, noting that “not net metering would be a real hurdle.”
The Kentucky Public Service Commission does not track how many customers of the utilities under its jurisdiction produce their own power and use net metering. But E.On, parent of LG&E, has 28 of them, including nine homeowners in the Louisville area, according to Chip Keeling, the utility’s spokesman.
In Indiana, Duke Energy, Indianapolis Power and Light Co. and Vectren have begun allowing more than 100 customers to use net metering, despite the lack of a statewide policy.
The legislation that was considered in Indianapolis would have expanded administrative rules to allow customers of investor-owned utilities to credit excess power that their customers generate from wind, hydroelectric generators, solar and other types of renewable energy systems, something that utilities like Duke already are doing.
“We think it’s important to try and provide customers with a way” to benefit from renewable energy, said Lew Middleton, a spokesman for Duke in Indiana, which had 74 net metering customers last year. They included 47 homes, 14 schools and 13 businesses that generated a combined 279 kilowatts last year, most of it from solar power, according to a Duke report.
Fine-tuning the law
Advocates of renewable energy also are seeking flexibility for farmers and businesses to avoid caps on generating large amounts of power or having to pay excessive charges for multiple meters. They also want customers to be allowed to produce power from multiple sources — biogas and windmills, for instance.
Indiana supporters also wanted to remove any exemption for municipalities and rural membership cooperatives from participation in net metering practices. Solar and wind vendors and other industry advocates oppose such exemptions because they believe a uniform policy that applies to all utilities is best, said Laura Arnold, a lobbyist for Indiana Distributed Energy Advocates.
In Kentucky, the legislature passed a net metering law about six years ago and broadened it in 2008 in a bill widely supported by Gov. Steve Beshear, top legislators and industry groups. The new law expanded the types of electrical power eligible for net metering and doubled limits on alternative power generation. It also extended the use of net-meter credits to the life of a customer’s account.
Earned in ’09; used now
That provision is bound to help lower the bills at Louisville dentist Don Feeney Jr.’s modest home in the Germantown neighborhood. His 10 solar panels supply the home with power to spare, so he racks up credits that can be applied to future bills.
Because of the number of cloudy days in January and February, Feeney said, LG&E dipped into the 300 credits — worth about $60 — that he had accumulated last year. That left him with 175 by late February. Although it may take 10 to 15 years for him to recoup the $18,000 investment in the panels, that wasn’t the point, Feeney said.
“The reason I got them is the little I could do for the environment,” he said.
Jay Shoaf, a farmer from Hope, Ind., who has a wind turbine, figures he saves about 10 percent each month on his electric bill — hardly denting the power needs of his home and a 1,100-head swine operation. But like Feeney, he said the payback on his $12,000 turbine is secondary.
His epiphany about alternative energy came a few years ago while he was watching a Discovery Channel program about a Saudi Arabian prince who had made so much money in oil profits that he bought an Airbus jetliner and customized it to carry his Learjet. It was during a stretch when $4-a-gallon gas prices boosted the diesel bill on Shoaf’s farm from $10,000 to $25,000 a year.
“I thought, ‘That’s my money,’” Shoaf recalled. “It just kind of made me mad. I got on the Internet and started researching.”
Isaacs, a retired science and math teacher, also began researching alternative energy years ago. He said he was pleasantly surprised at how quickly Duke responded to an e-mail asking to hook up his system to the grid and install a meter that could record the energy generated at the home.
Even though it could take 20 to 25 years to recover the $40,000 that he and his wife spent, Isaacs figures they’re positioned to weather future energy price increases. They’re also doing their part for the environment.
“The main thing was lowering our carbon imprint and saving some money,” he said.
Reporter Grace Schneider can be reached at (812) 949-4040.