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Should Indiana Implement Virtual Net Metering? Testify 3/11/2011 or Submit Written Comments by 3/24/2011 on IURC’s Net Metering Rule February 25, 2011

Posted by Laura Arnold in Indiana Utility Regulatory Commission (IURC), Net Metering, Uncategorized.
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Editor’s Note: Just when you think the State of Indiana is finally catching up with the rest of the country on renewable energy, something new pops up. This time the truly progressive states and places around the United States continue to adopt new  policies and programs that continue to leave Indiana in the dust when it comes to renewable energy and distributed generation.  One such new policy is virtual net metering.  Another is aggregate net metering and community net metering.

The Interstate Renewable Energy Council (IREC) released the First Model Program Rules for Community Renewables. This includes virtual net metering.

Download IREC’s 2010 Model Program Rules for Community Renewables



Earlier this month, I received this notice from the Indiana Utility Regulatory Commission (IURC).

The  Public Hearing for the net metering rule, previously scheduled for February 28, 2011, has been changed to the following:
 
Friday, March 11, 2011 

10:30 a.m. local time (EST)
 

IURC Conference Center, Judicial Courtroom 224
 

PNC Center, 101 West Washington Street, Indianapolis, Indiana

At that time, you will be able to make oral comments suggesting changes to the rule. In addition, there will be a two-week written comment period that will begin at the start of the public hearing and last through March 24, 2011, with all written comments being due by close of business.  Oral and written comments will receive equal weight.  Please do not send written comments prior to the date of the public hearing; those comments will NOT be considered.  Please let me know if you have any questions regarding the public hearing or need any special accommodations.

DeAnna L. Poon
Assistant General Counsel
Indiana Utility Regulatory Commission
dpoon@urc.in.gov

Visit https://indianadg.wordpress.com/net-metering/iurc-rm-09-10-lsa-10-662/ to download a copy of the proposed net metering rule. 

Please make your views on net metering known to the IURC and please send your thoughts and ideas to IDEA.

Laura Ann Arnold

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Original article http://www.renewableenergyworld.com/rea/news/article/2011/02/financial-trends-virtual-net-metering??cmpid=WNL-Friday-February25-2011

By Andy Wickless Associate Director, Energy Practice, Navigant   |   February 24, 2011   

California, USA — Historically, if someone wanted to install a grid-tied solar system but lacked a suitable site, they were left with few, if any, options. Electric customers such as apartment building tenants or homeowners with shaded roofs were not eligible or apt for net metering tariffs, which otherwise would have allowed them to offset their normal electricity usage with the output of a solar system.

Net metering has served as an important incentive for consumer investment in solar. However, until recently, to capture net metering credits, there needed to be a one-to-one relationship between the solar generation system’s meter and the meter associated with the offsetting electricity load. Moreover, the two needed to be co-located and tied to the same electric service account. These restrictions are beginning to subside with the advent of virtual net metering (VNM). VNM is an electric tariff that allows for the net-metering credits from a single solar generating system to be distributed among multiple electric service accounts.

Net metering has been around since the 1980s. Now, 43 states as well as the District of Columbia allow net metering. However, VNM is a relatively new concept. Massachusetts, for example, has implemented a “neighborhood net metering” program, which allows groups of at least 10 “neighbors” to spread the net metering credits from a single PV system across the electric accounts of the participating neighbors. Rhode Island offers VNM for certain customer classes such as local and state governments. Neither, however, has implemented VNM across all customer classes. California has taken a similar approach, piloting the concept with a select group of customers, namely the multifamily low-income segment.

California began its experiment with VNM as part of the California Solar Initiative (CSI). In 2005 and 2006, the California Public Utilities Commission (CPUC) and the California Energy Commission (CEC) established the $2.17 billion CSI program. As part of the program, the CPUC required that at least 10 percent of all CSI funds be reserved for low income residential housing. The CPUC decided to split the low income solar incentives budget equally between single family and multifamily homes.

The Multifamily Affordable Solar Housing (MASH) program provided the CPUC with the opportunity to pilot the concept of VNM. In Decision 08-10-036, the CPUC acknowledged the economic and technical challenges to installing a solar energy system in a multifamily affordable housing complex and said VNM can overcome the challenge of allocating benefits from a single solar energy system to housing whose units are individually metered. The Commission said VNM allows bill credits for the output of a single solar installation to be shared with tenants in multifamily housing, without physical master metering or site-specific infrastructure upgrades.

In the same decision, the CPUC instructed the state’s investor-owned utilities to file VNM tariff proposals. The primary difference between these tariffs and the typical single-meter net metering tariffs is the allocation of benefits across VNM participants. The utilities’ VNM tariffs would need to allow the building owner or manager to divide the solar energy credits between the common area and the tenant area. This allocation percentage would remain fixed for at least five years. In addition, the VNM tariffs would need to allow for the allocation of net energy metering benefits from a single PV system to all meters on a multi-tenant property, based on the size of each tenant’s unit.

If VNM sounds like a benefit for utility customers interested in solar and you wonder why all states have not adopted VNM policies, it would be helpful to identify its potential costs. In California, the CPUC noted that there likely would be costs “for each utility to modify its billing system to accommodate VNM.” The CPUC added that additional work would be required by utilities particularly in allocating credits to individual tenant bills.

Other questions include, what happens when a tenant moves out? What happens if VNM were expanded to commercial rate classes and a shopping mall tenant expanded its space? For the low-income multifamily program, the CPUC allowed utilities to recover from the CSI general administrative budget “reasonable” costs associated with VNM implementation. If VNM were expanded in California, however, the costs needed to administer VNM and their recovery are not clear.

Besides the complexity of net-metering credit allocation, utilities have cited the issue of “free wheeling” on their distribution networks. California utilities expressed concern over customers paying nothing to use the distribution system to transport, or wheel, power from the location where the energy is produced to where the energy is consumed. “Free wheeling” is not an issue in the MASH program as a solar system must be located on the same property as the offsetting load to be eligible for VNM. Consequently, net metering credits received by MASH participants are valued at the full bundled retail rate.

In Massachusetts’ “neighborhood net metering” program, however, participants could potentially be across town from the solar system and net metering credits do not include the distribution component of the applicable retail rate.

While VNM is currently limited in California to MASH participants, the CPUC is considering expanding it to multi-tenant properties beyond the MASH program. As the CPUC and other regulators evaluate VNM’s relative benefits, as well as other forms of community renewables such as meter aggregation, joint billing and shared ownership, they will need to weigh the relative costs. As with the proliferation of non-utility solar PPAs, virtual net metering will likely evolve the roles customers and utilities play in procuring and managing energy.

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