I've been considering a post about what fair electric sale pricing for distributed wind and solar owned by farmers, small business, home owners... you know, we regular folks, might look like. I've put a lot time into advocating for establishing a fair price for these systems. Iowa still hasn't done that. Lately I've been busy documenting the many discrepancies coming from MidAmerican's accounting department when it comes to the utility's tax filings. However, with the introduction of HSB 185 at the state legislature, maybe it's time to throw my 2 cents in on the fair pricing issue once more. This bill deals with net metering, so lets start with with a couple online sources.
The first, is a Midwest Energy News article concerning HSB 185. This piece takes a run at explaining what the bill does. I'd like to point out a passage or 2, however.
the first is a quote from the utility spokesperson.
But, back to net metering. MEC seems to think the solar subsidy issue has been decided in their favor. Many of the other utilities, unions, and business groups supporting this bill evidently think so as well.
The article is correct that where the "solar subsidy" issue has been studied around the country, it generally has been proven that customer owned solar has a benefit to the grid and utility customers who don't own solar.
However, you can safely bet that cost shifting has been studied in Iowa, by the utilities pushing this bill.
I think Josh is also mistaken that the bill would "decimate the future of distributed solar" in Iowa.
The Iowa utilities are simply moving to control solar, distributed or otherwise, like they did with Wind generation years back. And that means that these said utilities clearly like the economics of solar, hence their effort to monopolize it. So... distributed wind and solar owned by farmers, small business, homeowners... or owned by Warren Buffet's utility?
Next up.
Again, the utilities have studied this. They probably have information shared by other utilities around the country, They have information from net metered projects in the state, along with utility owned pilot projects.
A friend shared this a while back. Seems like this might be a good time to discuss it.
Here's a link to a 2013 solar presentation given by the then head of the Iowa municipal utility association, Bob Haug.
Note the "true avoided cost" definition, maybe like there is an avoided cost and a "true avoided cost". Handy hint , The "true" calculations probably (I'm being generous with the "probably") aren't the ones your utility is using on the the avoided cost payment they offer for private owned wind and solar projects. Heck, If they included all the "true avoided costs" below, they probably couldn't keep your solar project from being built, could they?
Bob tells us what that "true avoided cost" value was projected to be in 2016, except for an environmental benefit, which also should be given to customer owned solar.
So, Solar appears to have a net benefit to non solar customers and the grid. Thanks Bob. That makes it pretty easy to evaluate HSB 185, which the muni association supports.
I'll use my solar array as an example here. My REC offers a 5 year agreement that roughly approximates net metering. It will be up for renewal soon. I pay a monthly fee to be connected to the grid. The REC bills me for demand charges and other costs. Remember, large sections of Iowa don't have net metering, which has been around for decades for customers of Iowa investor owned utilities.
Our farm used to have a monthly electric bill in the $200 range. Using Bob's numbers above, My 10 kilowatt solar array gives a monthly benefit to the grid (and REC members who don't own solar) of $600. Even if you subtract my monthly savings in electricity purchases, I'm still giving $400 a month of benefits to the REC and it's members that they are not compensating me for. Since I've spoken up now, it wouldn't surprise me if I receive less favorable terms when it comes time to renew my agreement.
So, Is MidAmerican deliberately misleading elected officials with this bill? It sure looks like that to me. I have posted another example where MEC did the same to state legislators. Will elected officials stand up to MEC this time? I guess we'll find out soon enough.
I'll probably split this fair price for local wind and solar discussion into multiple parts, or this will be a looong post.
Though, as you can see from above, I feel net metering doesn't deliver a fair price to privately owned generation. Legislators shouldn't pass this bill, considering MEC hasn't shared the above information with elected officials. But it's high time that Iowa had this discussion. Paul Gipe has written extensively on this issue, so you might check him out as well.
I believe the state department of revenue wrote concerns a while back, citing the loss of electric sales tax revenue from net metered systems. Hmm, and yet DOR won't look into the numerous MEC tax discrepancies that I've been listing here. But, I haven't located a copy of the DOR net metering letter to confirm that. Please send it my way if you have it.
If you have a farm or small business, when you generate your own electricity on site, you lose the tax deduction that you used to claim for your monthly electric bill , when using net metering.That should be calculated into ROI projections, as a good energy consultant friend used to insist.
A properly constructed tariff using the information above (your utility definitely doesn't want you to have this) for customer generation would serve farms, businesses, and probably residential customers better (while addressing the concerns of DOR) than net meting, a concept from the 1980s .
As Paul Gipe said in 2013, "the utilities want to kill net metering, maybe we should let them if we can get a better policy".
And Hey! Why won't state and local officials look into the MidAmerican tax items that I've been documenting. I'm a reasonable guy. Someone please show me why these issues are occurring...
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