MidAmerican Energy Company has announced its support for legislation that advances renewable energy policy by supporting customer fairness.
The policy eliminates the shifting of electric grid costs from those who can afford private solar to all other customers and gives customers more options for connecting solar to the electric grid.
House Study Bill 185 is also known as the “Solar Options Lead to Affordable Renewables (SOLAR) Act,” because of its focus on advancing solar as Iowa’s next renewable energy resource.
“Growth is possible when policies allow all customers to benefit from renewable energy. If this legislation can fix the cost-shift, then solar energy can have an even brighter future in Iowa, just like wind has experienced in the past decade,” Adam Wright, MidAmerican Energy president and CEO, said.
“Common sense legislation focused on keeping costs low and affordable for everyone provides the best opportunity to grow solar in Iowa,” Wright added. “The Solar Act makes fair changes that ensure customers who don’t want or can’t afford a rooftop system don’t pay for another customer’s decision.”
The Iowa Energy Plan, established in 2016 after an extensive process of stakeholder engagement, is the foundation and roadmap to realising Iowa’s economic potential, building on the past energy successes and laying the ground work necessary to reaffirm Iowa’s energy leadership into the future.
This proposed policy change is consistent with the Iowa Energy Plan, which positions Iowa to continue to lead in renewable energy, while offering nationally competitive electric rates that help drive Iowa’s economy.
Current disparity in customer grid costs
Currently, the costs of building, operating and maintaining the electric grid are recovered through a monthly energy charge. Customers who own solar and generate their own energy don’t pay as much – or any – energy charge.
This means they don’t pay for their use of the electric grid. Instead, other customers who don’t have their own solar pay for these costs.
The average MidAmerican Energy residential customer without solar generating equipment currently pays an average of $328 per year for use of the grid. Private solar generators avoid paying some or all of their grid costs, depending on their solar installation and energy use. The solar energy industry foresees continued growth of private solar in Iowa, increasing the amount of costs shifted between customers and likely resulting in future increased grid costs for non-solar customers.
The current solar policy is even more imbalanced when you consider private solar owners use the electric grid in more ways than those without solar – but avoid paying for it. That’s because while most customers simply draw energy from the grid, private solar owners require grid access that’s akin to a two-way street – their energy moves in both directions. When they overproduce energy they ship it out to the grid, and vice versa.
“We ensure the electric grid has reliable service 24/7 for all of our customers, including private generation customers who are super-users because they both receive and send energy through the grid,” Wright said. “We embrace and value our solar customers, but we must not allow the cost-shift that exists to negatively impact our other customers. Private solar customers use the grid for all but about 40 seconds of an average day because they’re almost always either receiving or sending energy. This means they are not off the grid, and it’s reasonable to expect all customers to equitably share the costs of it – whether they receive energy, send it, or both.”
Wright noted that the proposed legislation would not affect federal, state or local tax subsidies that solar customers currently receive, which cover at least half of the cost of a typical residential solar installation.
Wright also noted that the bill does not eliminate net metering. With net metering, a customer that owns private solar can “bank” excess energy and use it to offset their bill when their energy needs are greater than the energy they produce. Under the proposed legislation, net metering is still one of a menu of billing options solar customers could choose. Also, HSB 185 would grandfather current solar energy customers to maintain the pricing and payment structure they currently have.