Joe Bowling, supervisor for the Englewood Solar Project, looks over solar panels Jan. 23, 2015, on the top of the Englewood Christian Church, 57 N. Rural St., Indianapolis. (Photo: Mike Fender / The Star)
Under current Indiana energy policy, the average Hoosier electric customer can pay as much as seven times more to maintain the electric system when compared to a customer who generates a portion of his or her own electricity using systems such as solar panels and smaller wind generators. As energy options grow, we believe it is time to update Indiana's energy policy to ensure that all residential and small business customers pay a fair add up to both maintain the electric system and in addition receive fair compensation for the electricity they generate. New legislation recently introduced in the Indiana House of Representatives supports that goal.
Currently, consumers who install solar panels, wind turbines or other customer-owned generation may be compensated through a policy called "net metering. " This policy requires our state's utilities to credit these customers at the retail rate for any electricity produced, which is the same price clients pay to buy electricity from a utility. However , that retail rate includes not only the cost of the electricity it self, but also the cost of delivering it to customers through the electric grid. As a result of the current net metering policy, those with customer-owned generation do not pay most of the costs of the utility infrastructure needed to serve them. Meaning traditional electric customers who get all their power from one of the state's electric utilities must get the extra cost. Obviously, that is unfair.
Indiana House Bill 1320 will correct inequities, ensure the viability and growth of clean energy options — including customer-owned solar and wind systems — and protect the reliability of the electric grid that connects people (whether it is sunny or cloudy, windy or calm. ) The legislation also clears the way for Hoosiers to lease expensive rooftop solar systems, where today only customers who own these self-generation systems qualify for net metering. The leasing provisions, which include important consumer protections, will make rooftop solar systems more widely available and far more affordable.
More Hoosiers are going to move to solar and other customer-owned generation systems — it's a fact, and Indiana's electric utilities welcome this growth. But unless policy is changed, customers who do not have their own generation will get even more of the cost to support the electric grid, which connects both users and generators of electricity.
The good news is the current unfair system could be fixed in a way that is fair and in addition ensures renewable energy continues to be a viable option for all Hoosiers. HB 1320 creates a regulatory model in which consumers with their own generation capabilities pay for their use of the electric system by setting rates to ensure fixed costs are paid by the customer who creates the price.
It's only fair, as well, that customers who installed their own generation equipment and signed their interconnection agreement with their utility on or prior to Dec. 31, 2014, will soon be "grandfathered" from future rate design changes that result directly out of this legislation, should it pass.
More info about this issue can be found at www.electricfairness.com.
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