Indiana’s high court takes on solar power case

By: - September 19, 2022 6:30 am

A man installs solar panels on a residence. (Getty Images)

The Indiana Supreme Court heard oral argument last week in a utilities case that could reshape the future of solar power in the Hoosier state.

CenterPoint Energy subsidiary Vectren Energy Delivery and Indiana’s utility regulator say a new subsidy scheme follows a 2017 state law, while utility consumer advocates say the methodology isn’t legal, and shortchanges Hoosiers with productive solar panels.

Customers who installed solar panels before net metering expired are grandfathered into the system for at least another decade, but those who’ve gone solar since would see changes.

The case’s complexity is hampering its trip through the legal system, as attorneys and justices alike indicated confusion on some technical details.

“Perhaps I’m over-reflecting my own confusion as I try to get my own head around this,” said Peter Rusthoven, a Barnes & Thornburg attorney representing Vectren. “In all of these things, we’re using imagery to explain things that are going on at a very, very tiny level of physics.”

Flashback to 2017

Gov. Eric Holcomb signed Senate Bill 309 in May 2017. It cut the rate at which customers with solar panels are reimbursed for excess energy from a 1-to-1 retail rate to a significantly lower wholesale rate, and set a timeline for utilities to phase out the compensation, known as “net metering,” entirely.

At the time, utilities and lawmakers said they didn’t want all customers subsidizing solar-generating customers. Meanwhile, utility consumer advocates and renewable energy supporters argued the legislation would mean only the wealthiest Hoosiers could afford to install solar panels, thus crippling an emerging industry in Indiana.

Vectren in May 2020 asked the Indiana Utility Regulatory Commission to approve a new tariff rate rider incorporating what the utility calls “instantaneous netting.” The Commission approved it, but the Court of Appeals overturned it in a January decision.

Under instantaneous netting, instead of tallying energy production versus consumption every monthly billing period, a meter would log, every fraction of a second, the power leaving and entering the home. And instead of a one-to-one swap, solar-generating customers would continue paying retail rates on the electricity consumed (such as overnight, or when it’s overcast) and earn just a wholesale rate back on the extra electricity produced when the sun is out.

The arguments

The Office of the Utility Consumer Counselor, which represents Hoosier ratepayers, and several utility consumer advocate organizations, say that Vectren’s methodology doesn’t follow state law. They argue that because the meter takes only snapshots in time, when electricity is flowing either one way or another, it doesn’t calculate the difference between the amount of power a utility sells a customer, and the amount a customer sells back.

Vectren and the Commission, meanwhile, argue the new methodology does fit the law, because in determining whether electricity outflow or inflow is stronger at a given point in time, it makes the calculation at the meter itself.

If you do what the other side is asking you to do, [that] does involve saying, ‘The IURC doesn’t understand how net metering works. It doesn’t really understand what it’s really doing. We do. They don’t,’ Rusthoven said.

“But if you do what they’re saying, this new wholesale rate pretty much disappears!” he added. “… That is simply not a credible interpretation of what the Legislature intended.”

The four justices — Justice Derek R. Molter recused himself — asked questions to clarify the facts of the case and each side’s arguments, even as they acknowledged the technical demands of the case.

“Your answer presupposes that the instantaneous metering technology doesn’t contemplate that [calculation],” Justice Geoffrey G. Slaughter told Rompala. “I have no idea whether it does or not. But the IURC seems to say that it does. Who are we to second-guess that?”

A decision will be released in the coming months.


Correction: An earlier version of this article included an attorney’s incorrect estimate of customers immediately impacted. A decision will not impact those grandfathered into net metering.

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Leslie Bonilla Muñiz
Leslie Bonilla Muñiz

Leslie joins the Indiana Capital Chronicle after covering city government and urban affairs for the Indianapolis Business Journal for more than a year. She graduated from Northwestern University in March 2021, and has reported for the Chicago Tribune, Voice of America and student publications in Evanston, Illinois, Washington, D.C., and Doha, Qatar.