Both major investor-owned utility companies in Iowa now accept a policy that will make solar installations more affordable. Alliant Energy made the shift last summer. MidAmerican Energy finally came around two weeks ago.
Third-party purchasing agreements are a common way to reduce the up-front costs of installing solar panels. But Alliant Energy and MidAmerican Energy, which serve more than 1.1 million electricity customers in Iowa, long opposed such business arrangements as a threat to their monopoly in their respective service areas. After a 2014 Iowa Supreme Court decision allowed third-party purchase agreements, Alliant and MidAmerican used another tactic to derail large solar arrays: refusing to allow net metering for solar projects involving a third-party purchase agreement.
Net metering makes switching to a renewable system more feasible because customers only pay for their net electricity use over a period of time. They gain credit for excess electricity produced on windy or sunny days and can draw down that balance when they are using more electricity than the wind turbine or solar panels generate.
Alliant and MidAmerican contended that they were not required to offer net metering if the owner of the solar panels was different from the customer being billed for electricity, as is standard for third-party purchase agreements. Their stance forced customers including the city of Asbury (Dubuque County) and Johnson County to scale back planned solar installations.
Last summer, Alliant reversed its net metering policy shortly after a solar developer filed a complaint with the Iowa Utilities Board. However, MidAmerican stuck to its position that solar generation systems owned by third parties would not be able to sell excess electricity back to the utility at the retail rate, which applies in net metering arrangements. Instead, those customers would be able to sell back electricity at a much lower rate, equivalent to MidAmerican’s cost of producing electricity. The policy reduced the financial viability of large solar arrays.
This July, the Iowa Utilities Board issued an order that protected net metering for renewable projects often known as “distributed generation,” because “electricity is generated […] near the point of use instead of centralized generation sources from power plants.” The order also made clear that investor-owned utilities must allow net metering for solar projects financed through third parties.
On August 31, MidAmerican filed documents with the Iowa Utilities Board adjusting its tariffs to bring them in line with the July order. Among other things, the cover letter noted, “Modified language from the Rate NB tariff that required the customer and facility owner to be the same. MidAmerican is removing this requirement from the Rate PG Pilot tariff.” According to Josh Mandelbaum of the Environmental Law & Policy Center, MidAmerican had relied on the previous language to deny net metering when the customer did not own the solar power system from which it draws electricity.
The new tariff will make it possible for large energy users, such as schools and municipal buildings, to pursue ambitious solar projects in MidAmerican’s service area, which includes thirteen of Iowa’s fifteen largest cities: Des Moines, Cedar Rapids, Iowa City, Davenport, Sioux City, Waterloo, Council Bluffs, West Des Moines, Ankeny, Urbandale, Cedar Falls, Marion, and Bettendorf.
The Iowa Environmental Council and the Environmental Law & Policy Center welcomed the news in a joint statement I enclose below. Note: I am an active supporter of both environmental organizations, but I do not determine their legal strategy or help write their press materials.
Any relevant comments are welcome in this thread.
UPDATE: Johnson County Supervisor Mike Carberry, a longtime advocate for renewable energy in Iowa, commented by telephone,
I thank MidAmerican for finally allowing net metering on third-party purchase projects. I wish they had done it a year ago, when Johnson County had to cut a solar project in half because we weren’t offered net metering. It’s too late for us to go back and resize that solar array [on the Johnson County secondary roads building].
With net metering, we might be able to do a solar farm in the future at Johnson County’s historic poor farm. We look forward to using more solar power as we move into a clean energy future.
September 1 press release:
Utility Proposals Filed in Iowa Solar Energy Case
Environmental Groups Renew Call for Strong Net Metering Standards
On July 19, 2016, the Iowa Utilities Board issued a strong order preserving the existing net metering framework. The order also requires utilities to file pilot net metering tariffs designed to encourage renewable energy development. On Wednesday, MidAmerican Energy and Interstate Power and Light Company filed proposals with the Board.
The Iowa Environmental Council and Environmental Law & Policy Center are reviewing the utilities’ proposals. We look forward to receiving input from solar developers, customers, and other stakeholders, and continuing to work with the utilities to effectively implement the Board’s order to preserve and expand net metering and encourage more renewable energy in Iowa. In addition, we think the intent of the Board was to allow customers to net meter up to 100 percent of their annual energy usage. We are concerned that the requirement to have the cash out in January limits this. We look forward to working with all stakeholders and the Board to address this issue moving forward.
“We commend MidAmerican for proactively working with stakeholders to address concerns about the definition of 100 percent of load and allowing third party financed systems to net meter in its initial filing,” said Josh Mandelbaum, staff attorney with the Environmental Law & Policy Center. “We are disappointed that IPL did not address concerns that we shared in developing this filing, but we are hopeful that they will make improvements going forward.”
“Iowa has the potential to be a leader in solar, just as we are for wind, and growing solar energy benefits our economy and environment,” said Nathaniel Baer, energy program director at the Iowa Environmental Council. “Net metering is one of the key policies to encourage more solar, which the Board order recognizes, and we expect the utilities to implement the pilots to achieve this goal.”
Top image: ground mount solar system on a farm near Templeton, Iowa. Used with permission of the Environmental Law & Policy Center.