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Iowa Utilities Board requires utilities to propose new net metering tariffs

TheIowa Utilities Board ordered the state's two investor-owned utilities to revisetheir net metering tariffs for the first time in decades, recognizing that theutilities now have hundreds of customers served by small renewable energysources.

Theboard, in a July 19 order,gave the utilities, AlliantEnergy Corp. subsidiary InterstatePower & Light Co. and BerkshireHathaway Energy subsidiary MidAmericanEnergy Co., until Aug. 15 to propose new tariffs. If approved, thenew tariffs would be in effect for three years.

"Thisis the first major change in Iowa's net metering rules in several decades,"Alliant Energy spokesman Justin Foss said in an interview. More than five yearsago, the company had a handful of net-metered customers in Iowa, but as of July1 of this year, it had 1,300 customers in Iowa who net-meter for solar, Fosssaid. The count excludes customers who arrange power purchase agreements forsolar, he added.

Net-meteringcredits serve as incentives for solar customers by allowing them to deduct fromtheir monthly bills the amount of energy they produce and send back to thegrid. Distributed generation resources tend to refer to small generatingresources including rooftop solar, wind, biomass and combined heat and powerresources.

Thenew tariffs would permit the utilities' customers to install net-meteredsystems up to 1 MW in size, up from the previous system size limit of 500 kW.But the system's cap is also limited by a customer's load. For example, if acustomer's load is only 750 kW, then the customer can install a net-meteredsystem up to 750 kW, Foss said.

MidAmericanEnergy found some of the board's order lacking.

"TheIowa Utilities Board's order does not fully address the issue of customerpricing for solar and the shifting of costs from private solar customers ontothe majority of customers who don't own private solar," the company saidin a statement. "While some aspects of the order are a stepin the right direction, we believe it's important to balance the needs of allcustomers. When priced in a fair and balanced manner, private solar credits canencourage and support the sustainable growth of renewable energy, whichMidAmerican Energy strongly supports."

Thoughthe order does not fully address the pricing of solar, it is partially intendedto help the board collect data to figure out how to adjust the state's netmetering rules, it said. The revised tariffs would help collect data on thepenetration of distributed generation resources and the treatment of netmetering credits. Another area of study is whether the state's interconnectionrules need revising to account for more distributed distribution and the highercap on system sizes.

Thenew tariffs would value excess credits at the utility's avoided cost rate forenergy, the board said in the order. Historically, customers who produce moresolar energy than they use can accumulate credits that can roll forwardindefinitely, which means they can be applied to future electric bills.

"Thenew tariffs will roll forward the extra generation to the next month. The extrageneration can be used in the next month (or future months) until the beginningof the calendar year when any extra generation will be cashed out," IowaUtilities Board spokesman Don Tormey said by email.

"Thetimeline for approval of the tariffs by the Board will depend on whether there[are] intervenors who file comments and the extent of those comments,"Tormey said.

Newutility customers who apply for net metering after the board approves thetariffs would be charged under the new rates. "There is no immediatechange to existing net metered customers," Foss said.

Theboard said in a news release that currently net-metered customers could stayunder the existing tariffs or switch to the new tariffs, but once they switch,they cannot go back.