Court reverses IURC decision on CenterPoint rate for net metering replacement

January 31, 2022

An Indiana appeals court ordered the agency that regulates utilities in Indiana to reverse a decision that approved an energy company’s plan to credit residential solar energy owners 80% lower than they did with the state’s net metering program.

The Indiana Utility Regulatory Commission must reverse its 2020 approval of the “excess distributed generation” tariff proposed by Vectren South, now part of CenterPoint Energy Inc., that allowed it to phase out more generous net metering rates.

Net metering, the billing mechanism that allowed Hoosiers and businesses with solar energy systems to sell energy they produced and did not use back to the utilities, was established in the state by the IURC in 2005 to encourage the adoption of renewable energy.

Utility companies successfully lobbied lawmakers to pass Senate Enrolled Act 309, which set a July 1, 2022 date to phase out net metering and replace it with a much more utility-friendly excess distributed generation tariff, a rate defined by the law as the difference between the energy delivered by the customer to the grid and the energy delivered from the grid to the customer.

The law also allowed utility companies to phase out net metering sooner if the total amount of net-metered capacity reached 1.5% of the utility’s peak load. CenterPoint reported reaching that threshold and petitioned the commission to let it move on from net metering with a new tariff, the Rider EDG.

Instead of finding the difference between inflow and outflow as written in SEA 390, CenterPoint’s proposed tariff would charge customers the retail rate for every kilowatt hour of electricity delivered by CenterPoint and credit customers with 125% of a lower wholesale rate for energy produced by the customers.

Solar companies said the new rate would compensate solar system owners between 70% and 80% lower than what they received for net metering and would drastically slow down the adoption of rooftop solar systems in the state, if approved.

The IURC approved the tariff in 2021, and a coalition of renewable energy companies and environmental and consumer advocacy groups appealed soon after.

On Jan. 28, the Court of Appeals of Indiana ordered the IURC to reverse its decision, saying that CenterPoint’s EDG was “contrary to law” because it only assigned a monetary credit to the energy delivered by the customer to the grid.

“This is a very good win for Indiana consumers investing in the clean energy transition,” said Brad Klein, senior attorney with the Environmental Law & Policy Center. “It will guide the development of EDG tariffs for the rest of Indiana’s electric utilities and will create needed stability and certainty for the rooftop solar industry and Indiana consumers.”

A pair of bills seeking to extend the life of net metering in Indiana, Senate Bill 314 and House Bill 1136, were killed in committee.

The IURC recently approved EDG plans from Indiana & Michigan Power Co. and AES Indiana. It’s unclear what, if any, effect the court's decision will have on those decisions.

Court reverses IURC decision on CenterPoint rate for net metering replacement