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Net metering lets energy consumers give back April 25, 2010

Posted by Laura Arnold in Indiana Utility Regulatory Commission (IURC), Net Metering, Uncategorized.
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This article can be found at: http://www.indystar.com/apps/pbcs.dll/article?AID=20104230341

It is a little strange because much of this article originally ran in the Louisville Courier-Journal  over a month ago on March 16, 2010. The original story can be found at https://indianadg.wordpress.com/2010/03/17/kentucky-indiana-customers-feed-electricity-to-grid/. Note: Additional links have been added to assist readers.

By Grace Schneider / Louisville (Ky.) Courier-Journal
Posted: Friday, April 23, 2010 in the Indianapolis Star
When the wintry clouds cleared over Janice and David Isaacs’ home last month, their new solar panels soaked up the sun’s rays and converted the energy to electricity.
The power is reducing the utility bills at the couple’s home in Georgetown, Ind. — and better yet, they say, helping the environment by trimming the amount of coal burned to heat and cool it.

“The other day I got home from work and saw the meter running backwards,” David Isaacs said. “That’s just a neat feeling.”

The Isaacs 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. They are conserving energy — and saving money — because they’re credited for the excess energy they send back to the utility.

The process is known as net metering, in which homeowners who produce more electricity than they consume — often during daytime hours when they’re away — have electric meters that spin in reverse.

At night, when a family is home with lights and appliances running, electricity flows into the home, spinning the meter forward to record the consumption. The meter registers the net amount of energy produced or consumed during the billing period.

But the Isaacses are among a small number of Hoosiers who take part in net metering.

Indiana enacted a net-metering program in 2005, joining 42 other states with similar initiatives. But the administrative code adopted by the Indiana Utility Regulatory Commission is among the weakest in the nation, earning an “F” in a state-by-state report card on net-metering practices by the Network for New Energy Choices, while neighboring states — Illinois, Kentucky, Michigan and Ohio — earned a “B.”

The failing grade is because Indiana’s program is limited to 10 kilowatts for homes and K-12 educational facilities. Indiana also is the lone state not to require utilities to offer net metering to businesses.

Danielle McGrath, a spokeswoman for the commission, said 134 customers at Indiana’s five investor-owned utilities participate in net metering: 103 residences, 15 schools, 14 businesses and two libraries.

Legislation to expand Indiana’s program to include all classes of property and to increase the amount of kilowatts allowed, died in the 2009 and 2010 legislative sessions, despite bipartisan support.

Disagreement over how much capacity to allow eventually scuttled the bills.

Sen. James Merritt, the Indianapolis Republican who spearheaded the issue in the Senate, wanted to limit it to 200 kilowatts, saying that is enough capacity for every homeowner and most businesses in Indiana.

Rep. Ryan Dvorak, D-South Bend, wanted to let businesses and homes generate as many kilowatts as they needed to cover their energy usage. Limiting it to 200 kilowatts, he said, was not enough for the state’s largest industries. But, he said, utilities opposed the more sweeping House bill because they were concerned about losing customers and about customers essentially turning into competitors, selling power back to the grid.
Dvorak called such concerns unfounded.

“There’s nothing in net metering that allows anybody to benefit from generating excess power. Net metering only allows you to roll your meter back to zero each month.”

Now, Dvorak and Merritt are hoping the commission will do on its own what the legislature failed to do.

Merritt sent letters to Gov. Mitch Daniels and David Lott Hardy, chairman of the commission, encouraging the state to broaden net metering through the rule-making process.

McGrath said the commission has been reviewing “the effectiveness of the existing rules.”

But, she added, “we have not been ordered to initiate the rule-making yet, and we are not bound by any type of deadline.”

Dvorak was pessimistic that the commission would act boldly enough in expanding net metering.

“It will probably be just as crummy as they did in 2005. We’ll be nowhere near the front of the pack,” he said, adding he’ll continue to push in the legislature for a net-metering program that will make it cost-effective for industries to participate.

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 90 percent of Kentucky’s electricity comes from burning coal, he and his wife think finding another way to power their home makes sense.

Advocates of renewable energy 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 — bio-gas and windmills, for instance.

Indiana supporters also want 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 think a uniform policy that applies to all utilities is best, said Laura Arnold, a lobbyist for Indiana Distributed Energy Advocates.

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 he said the payback on his $12,000 turbine is secondary.

His epiphany about alternative energy came a few years ago while 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 Lear jet. 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,’ ” he 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 Energy 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 thinks 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.

Contact Courier-Journal reporter Grace Schneider at gschneider@courier-journal.com

Star reporter Mary Beth Schneider contributed to this story.

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