Iowa revamps net metering; seeks more renewable development

After an extensive review, the Iowa Utilities Board (IUB) has issued an order directing Iowa’s two largest investor-owned utilities to file new net metering/distributed generation tariffs that will help the board establish policies to expand renewable energy.

The July 19 order states the proposed tariffs, which are to be filed on or before Aug. 15, MidAmerican Energy Co. (MEC) and Interstate Power and Light (IPL) will implement temporary, yet specific changes, and become effective for a three-year period once they are approved by the IUB. IPL is part of Alliant Energy (NYSE:LNT).

Under current procedures, net metering is a single meter monitoring only the net amount of electricity sold or purchased between a utility and a customer where the customer draws electricity from the utility and provides power back to the utility.

Under the current setup, the customer’s generation offsets the customer’s energy purchases from the utility. The customer may carry forward any electricity generated that exceeds the customer’s usage indefinitely. The net excess generation (or excess credit) is available for the customer to use in future months when the customer’s usage exceeds the customer’s generation.

Under the recent order, the Iowa tariffs will:

  • Increase the net metering cap from 500 kilowatts (kW) to 1 MW up to 100% of a customer’s load
  • Allow all customer classes to net meter, but specify that each customer’s generation will only offset the energy (kilowatt hour-kWh) charges and will not offset the customer charge or demand charge
  • Provide an annual cash-out of excess credits at the utility’s tariffed avoided cost rate. There will be an annual cash-out to take place during the first billing cycle of the calendar year. Funds from the cash-out will be divided evenly between the customer and the utilities’ with the funds to provide assistance to customers in need. Customers will have the option of directing up to 100% of the cash-out to go to the utility’s customer assistance fund

The board noted the tariff changes are consistent with Iowa Code (section 476.41) by encouraging renewable energy development, and that the IUB believes the impacts of the changes will assist in determining whether current interconnection rules are sufficient to ensure reliability of each utility’s system with the cap increase to 1 MW.

In addition, the board encourages continued collaboration by MEC and IPL with participants on the preliminary implementation plans for proposed pilot projects to gain valuable information and experience to develop policies to address distributed generation issues.

The July 19 order states the new tariffs:

  • Will be effective for all customers who file interconnection applications after the Board approves the tariffs
  • Allow customers on current net metering tariffs the option to take service under the new tariff and participate in the study. If an existing customer chooses to take service under new net metering tariffs, the customer cannot return to the existing tariff. Customers who do not participate in the study will remain on their current net metering tariff
  • Will include a sunset provision and expire three years from date of Board approval.
  • Prior to end of the sunset period, the Board will determine if changes are needed on a permanent basis along with revisions to the current net metering rule — 199 IAC 15.11(5)
  • If the Board determines these tariff changes should not be made permanent, customers who participated in the study will be allowed to remain on that tariff for the life of their interconnection equipment
  • IPL and MEC are to provide distributed generation and net metering data to the Board prior to implementation of the tariffs to establish a baseline and also provide annual data so the Board can monitor impacts of specific tariff changes
  • Data reported will be outlined in a subsequent Board order that approves the new tariffs.

The Iowa Utilities Board issued an order in October 2015 encouraging the two utilities to pursue net metering pilot projects.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.