Tag Archives: utilities

Speaking Of The Legislature…

Indiana’s legislature is in session, demonstrating that it isn’t only Republicans in Washington who are more interested in protecting favored industries (aka donors)than the public or the environment. (I know, you’re shocked!)

Hoosiers and regular readers of this blog may remember the 2017 bill that made it much less advantageous for homeowners in Indiana to install solar.

Homeowners selling excess power generated by their solar panels back to the utility lost most of the benefit of doing so under Senate Bill 309. Prior to its passage, if you had rooftop solar, “net metering” allowed you to send any excess energy you generated back into the grid, with the utility crediting you for that excess at the same rate that you pay the utility for power when you aren’t generating enough to cover your needs.

Even if it was an even swap, however, you still had to pay the utility an amount sufficient to cover its overhead costs–billing, meter reading, etc. Fair enough.

After passage of SB 309, you were forced to sell all the electricity you generated to the utility at a much lower price than the utility charged you, and then buy back what you need at their substantially higher “retail” price.

Solar energy may be good for the environment, and good for consumers’ pocketbooks, but it had begun to cut into the profit margins of the big electrical utilities. Friends at the legislature to the rescue!

This year, the legislature is showing its solicitude for coal.

Credit where credit is due; the Indianapolis Star, which rarely covers government these days, had the story:

Hoosiers’ electricity bills could rise and several state utilities may face obstacles in their plans to phase out coal-based power generation in the coming years under politically charged legislation that would help a struggling Indiana industry.

House Bill 1414, filed last week by state Rep. Ed Soliday, R-Valparaiso, would require Indiana utilities to prove that any plans to shut down a power plant are either required by a federal mandate or otherwise in the public interest.

But not just any plants. Though the word “coal” does not appear once in the language of the bill, advocates and analysts say the legislation specifically targets coal-burning plants.

Utilities in the United States have been responding to market forces and (to a lesser extent) environmental concerns, and have been transitioning from the use of coal as an energy source in favor of natural gas and various renewables. In the past few weeks, at least two utilities in Indiana have announced their intention to shut down coal generating plants.

One state utility–northern Indiana’s NIPSCO– predicts that the shift could save customers billions of dollars in coming decades. NIPSCO is one of the Indiana utilities that has announced its intent to significantly diminish its use of coal and substitute renewable resources.

Typically, utilities have made their own decisions about their energy use, but Soliday’s House Bill 1414 allows the state to override those decisions. (I thought Republicans wanted government to “get out of the way” of business–silly me!)

Keeping coal plants running comes with a huge cost, according to Citizens Action Coalition’s Kermit Olson.

If coal plants are not able to be retired and if they have to be maintained — as another part of the bill suggests — then those costs will be passed down to customers.

“The idea that we are trying to, as a state, to undo a utility like NIPSCO’s current business plan, which is based on economics and least costs of service to customers is just absurd if not downright unethical,” Olson said.

He is referring to NIPSCO’s planning process in the last few years that determined accelerating the closure of all its coal plants and a transition to renewable energy sources, particularly wind, would save its customers nearly $4 billion over a few decades.

The utilities oppose this bill. Environmentalists oppose this bill. Consumers get screwed by this bill. But yesterday, it emerged from committee.

Coal companies– unable to compete in the marketplace– are lobbying hard, hoping their friends in Indiana’s General Assembly will put a very heavy thumb on the policy scale….

 

Another Step Backward for Indiana

Well, they did it. The House passed Senate Bill 309–an assault on clean energy, specifically solar energy. It will next go to the Governor, who is unlikely to veto it.

Here is how I have previously described this bill.

If Senate Bill 309 passes, you will no longer be able to use the electricity from your rooftop solar panels and sell any excess back to the utility. Instead, you would be forced to sell all the electricity you generate to the utility at a much lower price than the utility charges you, and then buy back what you need at their substantially higher “retail” price. (The utilities will have to pay you at something called the “avoided cost” rate–which is somewhere between 2.5 and 4.5 cents per kilowatt hour.–You’ll have to buy it back at retail rates between 11 and 16 cents per kilowatt hour.)

Nice work if you can get it!

If SB 309 passes, it will price rooftop solar and small-scale wind generation out of the market.

During just the last five years, over a million Americans have installed solar, and the costs of both solar and wind generated energy have dropped dramatically. That’s good for the environment, and good for consumers’ pocketbooks, but it has cut into the profit margins of the big electrical utilities.

Fortunately for them, those big monopolies have good friends like Senator Hershman in the Indiana General Assembly.

I am hardly the only critic of this gift to Indiana’s utility companies.

The Republic, the Columbus, Indiana newspaper, was equally unimpressed with the legislation.

Indiana Senate Bill 309, introduced by Sen. Brandt Herschman, proposes to fundamentally change Indiana’s solar energy policy. The proposed modifications to the state’s net energy metering program are based on a lack of evidence and faulty logic, and would severely undermine the future of solar power in the state. Indiana legislators should oppose this bill.

The Republic article pointed out the importance of the net metering policy for Indiana, “since the state lacks other common policy measures to encourage solar energy development.” I’m shocked to discover that Indiana is not on the cutting age of energy innovation….

Opponents of the bill argued that lowering the amount of the credit will all but eliminate the incentive to invest in solar energy in the future. (I can attest to that; my husband and I were thinking of installing rooftop solar, and had been pricing our options. When this bill passed, we changed our minds.)

Representative Carey Hamilton–one of the most environmentally knowledgable members of the Indiana legislature–argued that the task of determining rates should be left to the IURC, rather than the legislature. During the committee hearing, when Hershman admitted that he had “come up with” the rate in the bill himself, she said

“A random decision by one of our colleagues for a rate is not how we should be making important decisions.” …

Rep. Matt Pierce, D-Bloomington, who opposed the bill, pointed out that it creates uncertainty for small businesses and Hoosiers investing in the solar industry.

“We had six hours of testimony, and the only people who were in favor of it were the utilities,” Pierce said. “All of the other four and a half, five hours of testimony were people saying, ‘Why are you doing this to me?’”

Why are Indiana’s legislators doing this?

Because they can.

Safe seats, courtesy of the gerrymandering that Senator Hershman denies we have (despite being one of its top beneficiaries), allow our legislators to ignore their constituents’ opinions and interests, confident that they will face no repercussions at the polls.

Hoosiers live in a state where the legislators choose their voters, rather than the other way around. It is a system that positively guarantees bad public policies.

UPDATE: It appears that there is one more Senate vote required–the Senate must approve the bill with the changes made by the House. As I understand it, that vote takes place today. Call your State Senator and ask him/her to vote NO.

There Goes the Sun…(apologies to the Beatles)

A recent article from The Republic, the Columbus, Indiana newspaper, sums up Indiana Senate Bill 309 admirably, in the very first paragraph.

Indiana Senate Bill 309, introduced by Sen. Brandt Herschman, proposes to fundamentally change Indiana’s solar energy policy. The proposed modifications to the state’s net energy metering program are based on a lack of evidence and faulty logic, and would severely undermine the future of solar power in the state. Indiana legislators should oppose this bill.

I have previously blogged about this bill, which is being mischaracterized by its sponsor.

Following the Senate committee hearing at which the measure was approved and sent to the House, the Indiana Distributed Energy Alliance (IDEA), accused the bill’s sponsor, Sen. Brandt Hershman, of making statements that were “simply not true” in order to obscure his real intent. In a letter to the committee chair, the IDEA wrote

In fact, some of [Hershman’s] misstatements are so egregious we think they may have unfairly influenced Thursday’s committee vote,” the letter read. “For this reason, we strongly urge the committee not to move forward on its report on SB 309 until these errors can be rectified. We also believe committee members should have a chance to change their vote after they receive the correct information.”

The Republic article states what the bill would actually do.

This change would reduce people’s economic incentives to install solar. The bill also proposes to cap the net metering program to 1 percent of an electricity supplier’s most recent summer peak load, and eliminate net metering altogether in 2027. Collectively, these changes would unnecessarily stunt the development of this clean energy source.

Among the misstatements IDEA accuses Hershman of making are that net-metering goes away when utilities hit 1% of their baseload generation under current Indiana Utility Regulatory Commission rules. IDEA also says Hershman lied when he said that if the 1% net metering caps were met the utilities could go to a “buy all, sell all” mechanism under existing law.

As pv magazine reported last month, SB 309 is a fascinating Trojan Horse of a bill, which purports to support solar while enacting policies that would damage the state’s rooftop solar industry – particularly the residential sector – immediately.

The article in the Columbus Republic summarized the issues involved:

Solar power also offers many additional benefits, particularly for a state like Indiana that relies disproportionately on a single source of fossil fuel energy for electricity generation; about 75% of electricity in Indiana is generated from coal-fired power plants. Solar power is a clean, renewable source that does not result in emissions of pollutants that threaten human health. In addition, studies have shown that net metering programs create thousands of jobs. According to one recent estimate from the Solar Foundation, more than 200,000 people (nearly 1,600 in Indiana) currently work in the solar industry. The net metering policy is especially important for Indiana, since the state lacks other common policy measures to encourage solar energy development.

Over the past several years, the majority of states have conducted solar valuation studies. These studies tend to include direct measures of costs and benefits associated with residential solar. Out of 16 recent solar valuation studies recently written or commissioned by utilities, utility commissions, or independent analysts, all found net positive benefits, and 12 of the 16 found net benefits that exceeded the retail rate of electricity.

Indiana is on a slower path than most other states toward developing cleaner sources of energy. The General Assembly should be looking for ways to hasten the development of solar, wind and other sources of renewable energy, rather than considering policies that impede the state’s transition to a cleaner energy future. Indiana Senate Bill 309 is clearly a step in the wrong direction.

Calling Senate Bill 309 a “Trojan Horse” is an apt description. It’s an effort to disguise the utility-owned  “army” with an innocent-seeming and distracting facade. Its passage would be yet another example of a special interest working with a compliant legislator to protect its bottom line at the expense of the public interest.