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Make net metering, renewable energy an issue

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Indiana Lawyer Focus


Energy is one of the major issues environmentalists and lawyers who work with companies concerned about green technology are keeping an eye on during the 2010 Indiana legislative session.

Those include net metering, the concept that those who create energy can get credits from utility companies when they produce more energy than they consume; and the idea of a renewable energy standard, a certain percent of electricity is generated through renewable sources such as wind power, solar power, and biomass.

These issues were highlighted at Conservation Day at the Indiana Statehouse Jan 26. The Indiana Conservation Alliance, a group of more than 30 organizations that focus on environmental issues, hosted the event.

For a renewable energy standard, the alliance suggested Indiana adopts a goal that by 2021, 20 percent of Indiana's electricity be generated by renewable energy.

So far, every state in the upper Midwest except Indiana has a renewable energy standard. In Illinois and Minnesota, 25 percent of electricity will come from renewable sources by 2025. In Ohio, 12.5 percent of electricity will come from renewable sources by 2025. In Michigan, the goal is for 10 percent of electricity to come from renewable sources by 2015.

These goals are not only obtainable, but important for job growth and to put Indiana on the map as a place that embraces green technology and manufacturing, said Jesse Kharbanda, executive director of the Hoosier Environmental Council, a member organization of the Indiana Conservation Alliance.

Indiana has also been recognized as a good place for manufacturers of green technology to set up shop, he said.

The Indiana Office of Energy Development reported Feb. 10 that 11 Hoosier companies manufacture wind turbine components, employing 1,000 Indiana workers. That number is expected to jump by at least 500 in 2010.

The office also reported the American Wind Energy Association ranked Indiana second in terms of the growth of wind power in 2009; Indiana was the leading state in 2008.

"Indiana has moved from 50th to 13th among wind-producing states; Indiana wind farms now produce 1,036 MW of electricity per year; each MW of electricity can power between 300 and 500 homes," according to the Office of Energy Development's release.

Attorney Anne Gorham of Lexington, Ky.-based firm Stites & Harbison agreed with Kharbanda about the importance of having a renewable energy standard; the firm also has an office in Jeffersonville, Ind. She has done research about renewable energy standards in states around the country and sympathized with Indiana - Kentucky doesn't have a renewable energy standard either.

Among the reasons both states don't yet have a standard, she said, is both are heavily reliant on coal, which is one reason they have less expensive utility costs than other states.

There is also the likelihood there will eventually be federal legislation that would address renewable energy as a way to deal with climate change, not to mention utility companies that don't see the value - at least not in the short term - in the high costs to build the plants, she said.

Some states, such as Illinois and Pennsylvania, that have implemented renewable energy standards are already taking effective measures to generate renewable energy. States that don't yet have standards might ultimately need to purchase energy from other states, Gorham said.

Kharbanda agreed, adding a benefit of state legislation as opposed to waiting for federal legislation would be the possibility to include language that would encourage the renewable energy to come from Indiana, therefore creating Indiana jobs and keeping more money here as opposed to sending it to other states.

Senate Bill 94 addressed this issue and called for 20 percent of electricity to come from renewable sources by 2021, but that bill stalled in the Committee on Utilities & Technology with no movement since early January.

Kharbanda said it's difficult to tell what will happen in the 2011 session. If the governor strongly supported it because of his stance supporting the creation of jobs in green technology, or if federal legislation about climate change has significant movement in 2010, he said Indiana legislators might be more likely to pass a renewable energy standard.

However, in this session the legislature will likely pass a bill regarding net metering, which would also encourage individuals and companies to produce their own renewable energy, Kharbanda said.

To explain net metering, Kharbanda used the example of a homeowner who has a solar panel that generates electricity for his home. If the solar panel generates 1,200 kilowatt hours in August, but the home only uses 1,000 of those kilowatt hours, the homeowner would ideally get a credit of 200 hours from the utility company if there was a statute for net metering.

So when the solar panel generates 500 kilowatt hours in September and the home uses 800 kilowatt hours, the owner will be able to use the 200 kilowatt hours in credit and pay for only 100 kilowatt hours to make up the difference that month, he said.

Ideally, legislation would include all classes of energy users, including homeowners, and small and large businesses, and would allow for a high cap on the amount of energy or credits for energy those users would get from utility companies.

Three bills that address this are House Bill 1094, SB 97, and SB 313.

HB 1094 passed the House 78-21 Feb. 2 and was referred to the Senate Committee on Utilities and Technology Feb. 8. SB 313 passed the Senate 49 to 1 Feb. 2 and was referred to the House Committee on Commerce, Energy, Technology and Utilities Feb. 8. SB 97 was denied a hearing and died in committee.

"We're much more comfortable with HB 1094, which would allow our net metering policy to in some ways converge with many of the country's leading policies. It opens net metering to all customers. Furthermore, it allows net metering to be opened enough to meet all customers' electric load. Even if a company had a load of 5 megawatt hours, this bill, in theory, would allow a company to be credited up to 5 megawatt hours, he said.

"In contrast, in SB 313, limits are significantly lower, at 200 kilowatt hours. The Indiana Utility Regulatory Commission could boost those limits, but that's unlikely because the commission tends to be conservative on those issues," he said.

Either way, he added, "both bills would be an improvement over our current policy. We're one of the worst states in the country on this issue."

Other legislative priorities specifically for the Hoosier Environmental Council in 2010 include industrial livestock operations, forest protection, and sustainable cities. Conservation Day also addressed the reauthorization of the Lakes Management Workgroup and the discussion of creating a study to determine the effects of phosphorus in lawn fertilizers.

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