Positive Aspects of SB 309 Overshadowed by Confusion Over Solar Energy Production

Three amendments were recently offered to SB 309 and approved during last week’s hearing – two by Rep. David Ober (R-Albion) and one by Rep. Ryan Hatfield (D-Evansville). One amendment clarified who qualified as an applicant for a CPCN, one for the study of self-generation by schools and one changes the deadline of installation to receive the 30-year grandfathered rate to December 31, 2017.

The Indiana Chamber testified in support of the bill and tried to clarify some of the confusion over net metering (no one is trying to kill the solar industry). We also expressed some of the concerns that some members have over co-generation (that they would like more flexibility). We emphasized that we do not want the bill to fail because it is truly a compromise of long-standing issues that industrial users and businesses, as well as residential ratepayers, have had with Indiana’s investor-owned utilities. It will not fix all concerns our members have expressed, but is a first step in helping businesses control costs and building a statewide energy plan. It will serve as a building block of the Chamber’s efforts to maintain Indiana’s competitive edge when looking at energy costs that have risen over the past decade.

On March 22, the House Utilities, Energy and Telecommunications Committee heard nearly a day of testimony on this bill in a full House chamber from many groups and individuals, both in support and against the bill. No vote will be taken until Wednesday.

A summary of SB 309: Requires the Indiana Utility Regulatory Commission (IURC) to post a summary of the results of the IURC’s most recent periodic review of the basic rates and charges of an electricity supplier on its web site and the electricity supplier subject to the review to provide a link on its web site to the IURC’s summary. It requires the IURC to: (1) review the rates charged by electric utilities for backup power to eligible facilities and for purchases of power from eligible facilities; (2) identify the extent to which the rates meet specified criteria; and (3) report the IURC’s findings to the Interim Study Committee on Energy, Utilities and Telecommunications; not later than November 1, 2018. Also amends the definition of a “private generation project” to include facilities that are located on the same site or are contiguous to the host operation and are integrated with the host operation. Eligible projects include organic waste biomass facilities within the definition of an “alternative energy production facility”. It specifies that an electric utility or a steam utility is not required to distribute, transmit, deliver or wheel electricity from a private generation project. Provides that before granting a certificate of public convenience and necessity (CPCN) for the construction of an electric facility with a generating capacity of more than 80 megawatts, the IURC must find that the applicant allowed or will allow third parties to submit firm and binding bids for the construction of the proposed facility. Bill also provides that a public utility that installs a wind, a solar or an organic waste biomass project and meets certain criteria through a competitive procurement process is not required to obtain a certificate of public convenience and necessity for the project from the IURC. Provides that a net metering tariff of an electricity supplier (other than a municipally-owned utility or a rural electric membership corporation) must remain available to the electricity supplier’s customers until: (1) the aggregate amount of net metering facility nameplate capacity under the tariff equals at least 1.5% of the electricity supplier’s most recent summer peak load; or (2) July 1, 2022; whichever occurs earlier. It also grandfathers customers that are currently net-metering at the existing rate for 30 years and those that install in the next five years are grandfathered for 15 years. Once the 1.5% cap is reached, the utility must petition the IURC for a distributed generation (net-metering) rate for new customers.