Against All Reason, Indiana Dismantles Rooftop Solar — Episode 193 of Local Energy Rules

Date: 27 Sep 2023 | posted in: Energy, Energy Self Reliant States | 0 Facebooktwitterredditmail

When it comes to distributed solar policy, Indiana took one step back before ever taking two steps forward.

For this episode of the Local Energy Rules Podcast, host John Farrell is joined by Ben Inskeep, Program Director at Citizens Action Coalition of Indiana. The Citizens Action Coalition is a non-profit consumer advocacy organization working broadly across energy and environmental issues. Farrell and Inskeep discuss Indiana’s backward solar policy, why local solar is a threat to utilities, and how to go up against the powerful entrenched interests of monopolies.

Listen to the full episode and explore more resources below — including a transcript and summary of the conversation.

Ben Inskeep: It’s important to note before I launch into some of those details that there was never any study done to look at what are the costs and benefits of net metering? Are there cost shifts? If so, what is the magnitude of that? What is the value of solar and what’s a responsible way to compensate people? There was never any sort of study like that or even utilities proposing in a docket making those kind of claims with any kind of quantifiable verifiable data. Nevertheless, the utilities saw where the trend was going. Even though we were very small solar market, they saw that as a threat to their monopoly business, and so they pushed through this bill.
John Farrell: When he goes to work fighting for affordable clean energy in Indiana, Ben Inskeep has to walk uphill both ways through snow drifts up to here, or at least that’s what it sounds like to me talking with Ben, program director at the Citizens Action Coalition about their efforts in Indiana. We spoke in August, 2023 about the state’s retrograde local solar policy adopted to replace net metering in 2017. It was a fascinating bookend to my recent discussion with Sachu Constantine of Vote Solar about California’s market. Both states sharply cut compensation for local solar in recent years, but one did so with over a million solar customers on the grid and the other with less than 10,000. Yet interestingly, the utility arguments in favor of blocking local solar were much the same. I’m John Farrell, director of the Energy Democracy Initiative at the Institute for Local Self-Reliance and this is Local Energy Rules, a podcast about monopoly power, energy democracy, and how communities can take charge to transform the energy system. Ben, welcome to Local Energy Rules.
Ben Inskeep: Thank you so much for having me, and the admiration goes both ways, John.
John Farrell: I love to start off and just ask people like what brought them to this work? Why are you focused on issues of climate, energy, consumer advocacy? What motivated you to be a leader at an organization that merges these different issues?
Ben Inskeep: Yeah, I would say I started with maybe a more traditional environmental focus, looking at things like land management policy and how we preserve conserve, protect our public lands, went to graduate school and that’s where I really fell in love with energy and energy policy and really grew an appreciation for how the energy sector impacts climate change and I became really influenced by the desire to work on mitigating climate change and addressing its pernicious impacts. So that naturally led me to working on issues like renewable energy policy around the country. Did that for a number of years and then about a year and a half ago I joined the Citizens Action Coalition and my admiration for them goes back many years.

For a long time it was, a Hoosier by birth, I cared a lot about Indiana policy, but was never very high in anybody’s priorities when talking about state policy, renewable energy because we are a bit of a laggard on a lot of these key things. But whenever I would look at what’s happening in Indiana, I would always see this organization, Citizens Action Coalition popping up. They were always involved in intervening in the dockets even when nobody else was and they were lobbying at the State House for good laws and they were out raising hell, organizing people and standing up to powerful monopoly utilities. And so long story short, when the opportunity arose to join them, I jumped at it and have been thrilled working with them. It’s a great opportunity to work on the front lines of the energy transition.

We are working on everything in the state from cleaning up coal ash to distributed energy policy to rate cases, to working on cutting edge issues like carbon capture and sequestration project proposals, hydrogen hub proposals, these other types of new energy technologies that are coming down the pike.

John Farrell: Thanks for that background. It’s always just fascinating to see the path that people have taken and getting into this work and then also just a wide variety of the things that you’re tackling with the Citizens’ Action Coalition. I want to ask you about one thing in particular, which is around net metering. So most people who are listeners of this podcast are familiar with net metering as this kind of foundational policy to allow local solar to happen. I mean, it’s a sort of an accident of history that the mechanical meters that we had at the time that people started putting solar on rooftops in the seventies and eighties really didn’t have a better way to track how we produced electricity. And so the way that the utility could actually credit people for their electricity production was basically to look at the meter and see it would spin forward when you were using energy. It would spin backward when you were producing energy and they would just take the net effect and that was your bill.

Now in recent years, some places like California or Hawaii have made changes because as local solar grew very substantially, it started to eat into the revenue base of the utility and there were concerns raised about who was paying expenses for the grid and a variety of other things. So I don’t want to get it too far in the weeds yet, but one of the things I think is so interesting is how you have some states like Hawaii or California where the decision was really driven to make changes by the fact that there was a lot of solar. One in four, maybe even one in three households in Hawaii has solar on the rooftop. In California, the distributed solar market is over seven gigawatts. Indiana don’t think has quite as much rooftop solar, but what did they decide to do with the policy and why is this such an important issue for electricity consumers?

Ben Inskeep: Yeah, thank you. This has been a long running saga in the state of Indiana and it goes back many years, but I’m just going to confine our discussion back to 2017. That’s when the law that phased out net metering was passed: Senate enrolled act 309. It’s important to note before I launch into some of those details that there was never any study done to look at what are the costs and benefits of net metering? Are there cost shifts? If so, what is the magnitude of that? What is the value of solar and what’s a responsible way to compensate people? There was never any sort of study like that or even utilities proposing in a docket making those kind of claims with any kind of quantifiable verifiable data. Nevertheless, the utilities saw where the trend was going. Even though we were very small solar market, they saw that as a threat to their monopoly business, and so they pushed through this bill: senate enrolled act 309 and that did three major things that I want to focus on for our conversation.

First, it reduced the compensation rate, so it phased out net metering and replaced it with what we call an excess distributed generation credit rate or EDG tariff. And that compensation rate specified in the statute is you look back at the previous year’s wholesale market prices applicable to the utility. So you look at the LMP prices in MISO, for instance, and you calculate what that average is and then you give that as the compensation rate plus a 25% bonus tacked on kind of waving your hand of, well, we know there’s some other benefits that solar provides above just whatever the wholesale market price is, but we aren’t going to bother to figure out what the right number is, so let’s just tack on 25%. The second thing it did was it created this very unpredictable credit rate. So that rate is not a long-term rate. It changes every single year. Every single year. Utilities look back, what were the wholesale prices last year? They do this calculation. That’s the new rate going forward for one year.

So as somebody who’s maybe wanting to install solar, you really have no idea what the payback period is going to be. You don’t even know what you’re going to get paid next year for any extra energy you put on the grid. And then the most consequential aspects of this law is the third point, and that is excess distributed generation ultimately became determined to be measured on an instantaneous basis, and this was something that wasn’t clear in the statute. It was kind of a vague wording, and so this took going all the way to the Indiana Supreme Court to adjudicate and it had a really profound impact. So the statute says when you’re figuring out what is excess distributed generation, what is the amount that you’re going to be crediting this wholesale rate plus an extra 25%? You need to look at the difference between the kilowatt hours you send to the grid and the kilowatt hours you take off the grid, right? You do this calculation. Sounds an awful lot like net metering, right? It sounds like you’re taking the difference between what you’re giving to the utility and what you’re taking off the grid. And so if you calculate that over a monthly period, that would be very similar to net metering.

Utilities interpreted it as taking the difference not over the monthly period, but rather thousands of times per second. So on an instantaneous basis if you will. So if you’re exporting anything to the grid that’s getting credited this very low credit rate, if you’re taking energy off the grid, they charge you this very high retail rate. So at first the IURC upheld the utilities version. We and a number of other groups took that to court and the appeals court actually agreed with us and overturned the IURCs decision, the Indiana Utility Regulatory Commission, which is our public service commission in the state of Indiana. But then that was challenged at the Supreme Court who ultimately upheld the utilities interpretation.

So long story short is now customers are getting paid a much lower credit rate for any extra energy they generate and share with their neighbors, and that credit rate is extremely unpredictable changes every year. So it’s a pretty decent rate right now because we had super high wholesale prices last year when we had the invasion of Russia into Ukraine and energy markets spiked across the country, but then prices are low now in the wholesale power market, so we’re expecting that credit rate to crater again next year and then move unpredictably year to year after that.

John Farrell: It’s really sad to hear not only that they cut the compensation, but that they did it on such a short time. I mean, you have sort of two short timeframes, right? Not only how short the timeframe is for measurement and then also in terms of the unpredictability. One of the things that we’ve seen at ILSR in our research on net metering or any kind of solar compensation policy is that that certainty over time is how you can make things work, right? It’s the ability to predict and for any business really, I mean if you think about it, you’re like a little business person when you put solar on your roof, you’re trying to go out and maybe take out a loan and you need to know whether or not you can pay back that loan, but without any kind of certainty, it’s hard to imagine how you’re going to pay that back.
Ben Inskeep: That’s the really absurdity of it. When utilities, when planning their generation, they don’t do this. They don’t just take whatever the wholesale market price is. No, they’re going out and contracting with a developer. They’re purchasing the project at a known price, they’re passing on the full cost plus a markup to consumers and they know they’re going to profit off it for 30 years into the future. So it’s kind of particularly ridiculous because you see utilities now getting approval for large utility scale solar projects at a price that’s higher than the credit rate than for DG customers today. So even though distributed generation provides a whole host of benefits, number one, you don’t even need to use the transmission systems to deliver the power, but now you have this kind of insult to injury where the utilities are pushing through higher price projects and they’re getting complete certainty on their rate of return, whereas consumers are left in the dark.
John Farrell: Just out of curiosity, what is the rate of return that Indiana utilities are getting on those utility scale projects?
Ben Inskeep: Well, the return on equity for our utilities, it ranges from about 9.7 to 10.4%. So when we’re looking at their weighted average cost of capital, we’re talking six, seven, 8% for sure. When we’re looking at large amounts of solar or wind, it’s not uncommon to see utility show in their work papers that this suite of projects is going to give us an extra billion in profit over the next 30 years, whereas consumers are struggling to figure out if it’s even going to pencil out over the next 30 years to go solar.
John Farrell: I recently did an interview with Sachu Constantine from Vote Solar about California’s net metering decision, and one of the things he said that he felt was that other states really have no business making changes to net metering that have so much less solar because the arguments that come up about costs and benefits are largely moot because of the industry size. Could you just give us a sense, I think I mentioned earlier on California has over seven gigawatts, 7,000 megawatts of rooftop solar projects on homes and businesses. How much customer sited solar does Indiana have?
Ben Inskeep: Yeah, we’re very different than California, as you might expect under our net metering program that has now ended as of 2022, we had less than 200 megawatts come onto the grid from that. Almost all of that is solar, but there was a little bit of wind and biomass that was net metered, fewer than 10,000 net metering customers as compared to California that has well over 1 million DG customers. So very small market comparatively. We don’t have the major rooftop solar companies that operate across many states. They have not moved into Indiana, for instance. We don’t have the supportive policies in Indiana that would provide incentives or other benefits of rooftop solar that states like California have had for many years. So very different situation here. We have almost 7 million people and less than 10,000 net metering customers. So relatively small market compared to a state like California or Hawaii or some of these other states.
John Farrell: I was wondering if you could expand a little bit on what you said earlier about why this decision was made. You kind of alluded to the fact that there wasn’t a lot of evidence provided really no evidence about a need for a change in terms of cost to consumers or anything like that. It sounds like the utilities wanted it. Why do they want it? What is so important to them about curtailing rooftop solar even when it was such a small fraction of the power that was being provided in Indiana?
Ben Inskeep: Yeah, great question and I will answer it very shortly, but I do want to also mention one problem with this new policy is that we don’t even know how many people are going solar anymore. There’s no reporting requirement for utilities, so we don’t even know how many customers are enrolling under this new excess distributed generation tariff because utilities aren’t even reporting that information consistently or in any public document for the most part. There’s one or two exceptions. But getting to your question about, so why did Indiana change its policy? I think the answer is very clear and very obvious probably to a lot of your listeners, but it goes to who wields a lot of power when it comes to passing our laws in the state, and namely I’m talking about our electric utilities and particularly our investor owned electric utilities. Indiana has five of those electric investor-owned utilities including Duke Energy, AES, Nipsco, INM, and CenterPoint.

And so these utilities were really the architects behind this law changing, and they wield tremendous power in our state. Some of these utilities have been operating in a state for over a hundred years. They have very close connections to lawmakers, to power brokers. They give a lot of money in terms of campaign donations and they force rate payers to pay for their trade association dues and a lot of other influence. Campaign costs, if you will, ostensibly, their direct lobbying costs are removed from rates, but I think we all know that there’s a lot of costs that still wind their way into rates one way or another that are designed to influence lawmakers, regulators, people in power, the general public’s perception of utilities and so forth.

So really the driving force behind Senate enrolled Act 309 that passed in 2017 that phased out net metering were the electric utilities and were the arguments made. They made all the traditional arguments to lawmakers that you’ve probably heard a million times about cost shifts and about this is technology for the rich and so on and so forth. It’s important to note that when this law passed, we’re talking about a solar market that is about the fifth of the size that net metering grew into over the subsequent five years while it was slowly being phased out, so very, very small amount. We’re talking like 40 megawatts of total distributed solar on the grid when that law was enacted. So you can really tell this wasn’t a meaningful impact. It wasn’t really harming customers and utilities didn’t really have any evidence about why the policy needed to change, yet they were still successful in getting this law enacted.

John Farrell: We are going to take a short break. When we come back, I ask Ben about the burgeoning interest in antitrust and how it might apply to investor-owned utilities, whether there’s a meaningful path to overturn Indiana’s bad local solar policy, and what advice he has for other advocates working in conservative dominated states. You’re listening to a Local Energy Rules podcast with Ben Inskeep, program director at the Citizens Action Coalition.

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John Farrell: I’ve been looking at net metering and interconnection and some of these other key policies that impact the ability of communities to advance clean energy for a long time. ILSR has an annual scorecard where we actually rate states on the basis of whether or not they have policies that are supportive of city level or even individual level energy progress. One of the things that’s been really interesting about that and ILSR sort of broadly has been looking at corporate power in the economy and sort of the revival of antitrust, which is the anti-monopoly laws that we’ve had on the books for many years, and often unenforced. So generally speaking, these investor-owned utilities, because they’re public monopolies, are exempt from antitrust regulation under the theory that utility regulators like the Indiana Utility Regulation Commission is overseeing what those utilities are doing and making sure that it’s protecting the public interest.

But one of the things I thought it was interesting in his essay is he looked at that from an anti-monopoly antitrust perspective and he said, you know what? Regulators don’t typically think about competition and think about the actual market when they are making those kinds of decisions. They more often than not, are only looking at this issue of is this rate well-designed? Is it prudent and reasonable? Some of those key terms that pop up in utility regulation. And his argument was if in a utility docket where they’re talking about interconnection policy or net metering compensation, that the commission is not actually scrutinizing potential impacts on market participants like those independent solar companies, or for example, in a lot of states now we’re having conversations about EV charging and it being provided by non-utility companies, that if commissions don’t think about this and it’s not part of the public record, this issue of competition, they could actually expose utilities to antitrust scrutiny. And I’m just kind of curious what you think of that and if you think it would be welcome for us to have more antitrust scrutiny of utilities given the experience you’ve had with net metering policy in Indiana?

Ben Inskeep: Well, we definitely need more antitrust scrutiny, especially when it comes to our utilities. I think that there’s a tremendous amount of evidence showing the systemic way they’ve undermined democracy, they’ve wielded their power in ways that are undermining the public interest. I do find the arguments that Michael War kind of put forth to be interesting academically to consider. When I look at it, it’s practical impacts or ability to kind of effectuate it, in the state of Indiana, I do see a number of challenges that maybe would limit its possibility specific to Indiana and maybe some other similarly situated states. I think probably the biggest drawback or biggest issue is that our general assembly can just pass a law that kind of negates these kind of arguments. So for instance, this as senate enrolled Act 309 was passed by our general assembly, it spelled out very clearly what that compensation rate is and how it was to be calculated.

There was a dispute over how you measure excess distributed generation that was taken all the way to Supreme Court, but the actual compensation rate is spelled out in the statute: 1.25 times last year’s wholesale price, essentially. I think that’s the major problem is that our utility commission does not just kind of end net metering or institute a policy on its own accord. It was actually the general assembly that passed this law. So when I look in Indiana, three of the kind of challenges that I see are one, legal standing. We have unfortunately some bad precedent in Indiana that can make it really difficult for a public interest organization like the Citizens Action Coalition to challenge a policy in court. It’s not impossible, but there are some pretty big barriers, if you will, that can limit your opportunities there.

Second is I would say we don’t have some of these really big distributed solar companies in the state. The folks that might have the capacity, the resources, the budgets to litigate this kind of a case. So when we’re just talking about mostly we have a lot of local or in a few regional rooftop solar companies, much easier path for them is just to go next door, go to the state next door and operate there as opposed to waging a multi-year, maybe hundreds of thousands, maybe millions of dollars legal battle.

And then last, I would say that even if that pathway was successful, the courts agreed that there was some antitrust issue and they slapped the utility on the wrist, I think the utilities would then likely go to the general assembly and get the law changed, which we have unfortunately seen a number of times in the past in Indiana where we get a favorable ruling in court, the very next legislative session, the utility is working behind the scenes and getting a law passed to essentially negate the court ruling. And that unfortunately happens multiple times in the last decade. And so you also have to think through that aspect as well. So even if you go through the time, the expense, the trouble and you’re victorious, that victory could be very short-lived.

John Farrell: I agree with you right now that this is maybe an academic exercise in most places. One of the things that I’ve noticed is even among the energy attorneys I’ve talked to, they’ve often said, well, if I was going to litigate, I’d probably pick an easier law to win on because there’s such a poor history of antitrust enforcement. One of the things I’ve heard of though that’s interesting is some states, attorneys general, which may also be not a good venue for you in Indiana, have been getting interested in this, but also to the degree that these antitrust laws are federal, those decisions might not rest with a state legislature. They could pass a law to do something, but if it is preempted by federal antitrust law as the Federal Trade Commission seems to be reinvigorating, there might also be some opportunities there. So I don’t know, I remain optimistic in the long run, but I think you lay out a lot of good reasons why we shouldn’t be optimistic in the short run that antitrust is going to give us any kind of opening to contend around some of these issues of net metering.
Ben Inskeep: Yeah, no, I think it’s a compelling argument just from the standpoint of how we’re framing our public policy and how we want to change that public policy going forward. We do need to figure out new strategies to undermine the power that our utilities have and the wielding across many states in this country. So definitely open-minded to all that. There are some pretty tricky challenges. How do you sort out whether a utility is doing a specific action for anti-competitive reasons versus we’ve seen utilities make a lot of arguments just on the cost shift issue, and so I feel like a utility could maybe push that kind of an argument in bad faith even though there’s maybe weak evidence for it or for whatever reason, I think they would be able to come up with a public facing explanation for the change, even if behind the scenes their real motivation, the underlying motivation is to snuff out competition.
John Farrell: Oh, I think we can count on them to come up with some good arguments and bad faith around this. You didn’t mention it, but I always think about reliability as sort of the last refuge of the utility scoundrel in any kind of public policy dispute. That something about reliability will come up and they will be asking everybody to defer to them as managers of the grid and what constitutes something that is safe and reliable.

So tossing aside antitrust, I was interested in sort of asking you about that academically, but there have been cases of net metering decisions curtailing local solar that have been overturned before by state regulators, legislators, even ballot measures. Do you have any kind of prospect for reversing this decision in Indiana? Do you feel like it would be in the best interests of Indiana electricity consumers? But also feel free, you’re I think, very well placed to know is this a fight you would want to pick? So I guess I’m curious, number one, is there any hope for picking this fight and winning? And if not, what are the fights that you are trying to pick that can advance clean energy in a way that’s good for Indiana consumers?

Ben Inskeep: Absolutely. We support the repeal of Senate enrolled bill 309, the return to net metering or reopening of this issue and having a thoughtful discussion about creating a policy that works going forward. So we’d very much love to see the general assembly reconsider the current law and find a way to make a viable pathway forward for folks to be able to go solar. Currently we see that as a pretty challenging pathway with the current general assembly. There’s a lot of challenges there in getting that law changed. One of the things we are focusing a lot more on right now is community solar and working with a broad coalition of groups in Indiana. We just formed the Hoosiers for Community Solar Group earlier this year, and we are all working together to try and get third party independent community solar passed in Indiana so we can have more distributed solar. We can have solar available to folks that can’t put it on the roofs. And so we see that as a mechanism for at least trying to advance that conversation in the short term, even if in the long term, we are very much interested in finding better pathways to rooftop solar and fixing our current policy there. So I think the most promising pathway would be general assembly fixing the law because this was a general assembly law that created this issue in the first place.

But there is one other pathway may be worth mentioning, and that is utilities do have authority under current law to propose alternative tariffs if they wanted to, or if for instance, as a result of a settlement agreement in a case they were required to as part of that settlement, they could put forth an alternative solar tariff that could provide a better structure, a better compensation rate, a better measurement of distributed generation and how you’re compensated. So that’s a potential possibility as well as you can imagine, utilities have not been forthcoming with such a proposal to date. So we are continuing to work all potential pathways.

Another way we’re trying to work to just to get more clean energy in the state of Indiana is putting a lot of resources behind our involvement and integrated resource planning and looking for viable pathways to have a more holistic consideration of distributed generation as a resource that could be selected within an integrated resource plan, as well as make sure that resources like solar, wind, battery storage are all fairly being considered in integrated resource planning, and that’s been very successful. To date, I would say a surprising success story in the state of Indiana, we’ve had four out of our five investor-owned utilities commit to closing all of the coal plants that they own by the end of this decade. So we are a very traditionally coal heavy state. We were 90% coal just a decade or two ago. We’re now down to about 50% coal in terms of our electricity grid, and we’re going to see that continue to shrink, and we’re building lots of solar and wind in the meantime, and we’re pushing to make sure it’s not just the utility scale stuff, but also the tremendous benefits that come from local distributed energy as well.

John Farrell: It’s so interesting to hear you talk about the distributed energy as a resource. We worked with some folks in Minnesota, a couple of resource planning and proceedings here, and it could come up with kind of a model for solar adoption in different states that could help kind of give an illustration of, well, here’s how much solar might happen if you do this, and at what price. Vote Solar in particular has been doing a really nice job I think of articulating that. So I wish you good luck with that.
Ben Inskeep: Yeah, kudos to you. Kudos to Vote solar. Kudos also to our partners at Solar United Neighbors. We are looking at that very model that you all put together and that you all have been pushing and we’re looking for ways to do the same here in Indiana. Really appreciate the work that you’ve done on leading this issue and really grateful for these great partners we have that are helping us push this issue here in Indiana.
John Farrell: Well, I just should at least say a tip of the hat to Will Kenworthy with Vote Solar. We did, we did the modeling work at ILSR feeding off of a different project. We were just curious how much local solar could you get and how would that inform how much capacity the utility should ask for? But it was really Will who came up with this idea of, but what if we model it as a resource and actually plug it in as like, how should the utility pay for these distributed resources and acknowledge their values? So a good meeting of the minds and certainly he and Vote Solar have done much more to actually take advantage and use that model than anyone else. So anyway, it was nice to spend a little time talking about it. If there’s other folks listening who are thinking about ways to get their state to move on distributed solar, it’s been an intriguing way to talk about distributed generation, not just as a net metering and things that happen outside of the commission and the rate case and the resource planning process, but as things that can be included in it.
Ben Inskeep: Yeah, and these integrated resource planning stakeholder sessions are outside of docketed proceedings in Indiana. It really is a great forum for having a meeting of the minds with folks at utilities, with other stakeholders, opportunities to collaborate on thinking through things. So we’ve been really grateful that we’ve had a lot of productive meetings, stakeholder sessions, opportunities to improve with each cycle with each IRP cycle. We’ve seen measurable improvements with how things are done, and we think this is kind of an exciting way to continue that improvement to have a more holistic and better way of considering DG and how it can provide a lot of benefits to rate payers now and into the future.
John Farrell: So given the struggles that you’ve had with advancing distributed generation, with making sure that utilities are doing things in a way that’s in the public interest, if you had a magic wand that you could wave to fix the worst problems of the electricity system in Indiana or elsewhere, where would you point it? Where do you see as the worst problems of the system and really the root causes of the struggles that you have trying to advance clean energy and affordability?
Ben Inskeep: Yeah, I mean, big picture, I think our investor-owned monopoly utility business model needs to change, and that’s at the root of a lot of our problems. We need to get back to the focus of the public interest and having essential electricity service really be focused on serving the public interest. Now, in terms of immediate problems facing our consumers in Indiana, I would go broader than just thinking about solar, distributed generation, climate change. I would say we are facing kind of an affordability crisis in the state, and that’s one reason we support distributed generation, energy efficiency, these other technologies, just because we think in the long run that they help lower costs, they help consumers reduce their bill impact. But when it comes to a lot of folks who are struggling financially right now, we’re seeing an epidemic of people being disconnected from the grid. So priority number one for me, if I had my way, would be to address our current disconnection crisis where we have our investor owned utilities disconnecting customers from essential lifesaving electricity service, from water service, from other utilities because they can’t afford these never ending rate increases that we’re seeing.

Electricity service is, your listeners probably are very acutely aware. It’s an essential service. You need it to participate in society. People need it just to stay alive If they have medications that are refrigerated or they use medical equipment that relies on electricity. And so we really do need to kind of end this model where if a for-profit company that’s controlling the grid that’s brokering or laws, if they can just shut off your power because you’re no longer helping them profit and you can’t pay your bill, that’s a crisis. So if I had my way thinking very big picture could possibly be done would be some sort of government run program that goes to folks that are struggling to pay their bills, that they go into low income communities and they help these communities and the people living in them through first retrofitting their houses, making sure there’s no health and safety issues, closing up the house envelope, doing weatherization, energy efficiency, giving people rooftop solar right on their roofs, free of charge, that kind of a program funded through a tax on the top 1% earners in America, for instance, could have untold benefits in terms of helping people stay in their homes, not be homeless, reducing their financial concerns and immediate issues. It could help reduce their inability to pay, and it would also be helping address our climate crisis while creating tons of local jobs.

So there are creative solutions out there. I know that’s pie in the sky thinking to a lot of folks and might go counter to a lot of folks is where their thinking policy is achievable. But that’s where my thoughts are is that we really do need to help the most vulnerable people. We need to help those who are struggling. And it’s a bummer that rooftop solar is less affordable in Indiana, for instance. But when it comes to immediate crisis, number one to me is making sure people are connected to electricity service. You have to address that issue before you then address, okay, how can we clean up the sources of energy? How can we make sure distributed generation is equitably distributed across incomes, across other demographic factors? Make sure it’s not just benefiting the most fortunate among us.

So that might not be exactly where you’re taking that question, but I think it’s important to emphasize this point because I think it’s something I didn’t really realize or place as much emphasis on until I got into my current role as more of a consumer advocate, and I educated myself more and I learned more about what was happening, and I saw the connections between making sure folks have stable, reliable, affordable electricity and how that’s going to then influence our ability to meaningfully put more solar on the grid, clean up our grid and lead to a prosperous future for all of us.

John Farrell: I think it’s wonderful to be thinking about sort of the broad impact there and how many people are simply cut off from this essential service all the time. I mean, I think Covid really brought that home when there was a crisis of people out of work unable to make payments, utilities just steamrolled ahead with their cutoffs for nonpayment. But it really is at the crux of this for so many things, and it’s interesting how many different ways we have to address this problem, and yet how few ways we have implemented. Can I just say too, I mean you were mentioning at the upfront of why it is that electricity is an essential service, right? You might have medication that is refrigerated, you might have medical equipment or whatever, but I think it’s just worth pointing out, I don’t think most people could even imagine trying to live in a house without electricity, period, your refrigerator, electricity. Are you prepared to feed yourself day in and day out without refrigerated food? How many people do that? People must do that, but I can’t even imagine. My refrigerator is stuffed full of stuff. It falls out on me all the time. I don’t get how people could even figure out how to manage things like eating and drinking without refrigeration. And so the idea that we have to somehow justify on some higher level basis of your medication and you could die, it’s like, or you could just have a really hard time feeding yourself because how do you do that without a refrigerator?
Ben Inskeep: Absolutely. And with climate change happening, I think it really highlights more reasons why, for instance, higher temperatures make it literally impossible to live in a house when it’s a hundred plus degrees outside. Your body cannot withstand that heat for long periods of time, particularly vulnerable people. The forest fires up in Canada, I think highlighted for those of us in the Midwest who had not experienced that kind of level of poor air quality to that extent, at least this past summer, just the importance of being able to go inside and have filtered air to breathe, having air conditioning, having air purification, it’s damaging to breathe in high amounts of these particulate matter from forest fires. And if you can’t escape that, then yeah, it’s going to have a really dire impact on health. So yeah, we can go on all day, but I think this summer has really highlighted these other additional issues of just the essential nature of these utility services for me, and I hope it has got a lot of other folks thinking about that too.
John Farrell: I’m kind of curious what advice that you would give. There are many states that are dominated by conservative legislatures that are not motivated by climate change for one thing. And those issues that we just discussed, they’re often more sympathetic to local solar, although clearly, as you’ve illustrated with Indiana, a little bit too sympathetic to the investor owned utility relative to their beliefs, more maybe more libertarian beliefs in local solar. So I guess, what advice do you have for folks who are trying to advance affordability, clean energy, local solar and other states that are dominated by conservatives to help maybe preserve access to local solar, but just to even preserve access to ways to advance clean energy and other solutions that keep electricity affordable?
Ben Inskeep: Well, gosh, if you have the solutions here, let me know because we are trying ourselves to navigate these waters and it’s definitely challenging. So first I want to say if that does describe you, if you are somebody working in one of these states, and I do want to say thank you so much for your work, it’s often thankless work. It’s often not given the attention and people aren’t aware of the sacrifices. All that goes into the frustration of maybe working in an environment that you encounter a lot of failure or it feels like failure because year after year it’s really hard to make the positive change you’re trying to do. So thank you to those folks that aren’t giving up and that are continuing to push on this. Your work is valuable and we really appreciate you. So in terms of what I’ve seen working in Indiana and working in similar context, I think one aspect is focusing on building broad coalitions.

If it’s just the Citizens Action Coalition going up against the five biggest utilities in the state of Indiana, we’re going to lose most of the time. They make billions of dollars a year. They have very sophisticated dozens of lobbyists. They outnumber us, tens of thousands of employees to a dozen of us. So we certainly can’t beat them on our own. And that’s exactly why we see the wisdom of things like joining broad coalitions, for supporting community solar coalitions that include conservative groups, liberal groups, religious groups, public interest organizations, business organizations. I think that’s really how you can take on powerful entrenched interests is by having that kind of a broad coalition that can make the case before lawmakers that can speak to the very different perspectives and ideologies across lawmakers. I think it’s important to emphasize some folks who maybe haven’t spent a lot of time in a conservative state might think all Republican lawmakers are the same or very similar, but we actually see there’s a very broad spectrum of interests, of philosophies, of ideologies just within the Indiana Republican Party, for instance.

So it’s important to get to know those lawmakers, to spend a lot of time working with them to find champions. And there’s very different perspectives among Republican lawmakers when it comes to these issues. So it’s important not to write them off, and it’s important to spend a lot of time and effort on the ground and talking with them, educating them, not speaking down to them, not thinking that they don’t know about the issue. I think that’s where a lot of Democrats often fall into this trap of thinking, Republicans just aren’t educated on the issue. I just need to educate them. And oftentimes that’s not the case. It’s just you have a different political philosophy, a different ideology, and so it’s often finding common ground finding where you might have ideological differences, but you still agree on this narrow issue of solar makes a lot of sense.

Whether I’m motivated for the reasons of climate change or whether you’re motivated for reasons of independence and property rights and local ability to reduce your energy bill as a life, liberty and pursuit of happiness in your district. So I think that’s kind of one other important thing. And then oftentimes we’re fighting and it’s kind of asymmetric warfare, right? You’re kind of the gorilla groups that are working on these issues. You don’t have the power. You have to look for creative ways to fight, to raise this issue in the public, to work with journalists and others who can shine a light on these issues and make sure the public is informed and the public is your best asset, is getting people mobilized and organized. You have to get people organized and out there raising this issue, bringing the salience forward and demanding their lawmakers take action because without them behind you, you’re very easy to ignore.

John Farrell: Well, Ben, thank you so much for joining this episode of Local Energy Rules and talking about the struggle of our local solar and many other issues around clean energy in Indiana. And thank you for your work and that uphill fight, those of us who have had the opportunity to work in places where it’s not quite so hard, really appreciate those of you who are struggling through the most challenging places.
Ben Inskeep: Well, thank you so much, John, and we’re very grateful to have so many great partners like yourself across all the states that are fighting with us in solidarity. So keep up the good work.
John Farrell: Thank you so much for listening to this episode of Local Energy Rules with Ben Inskeep, program director at the Citizens Action Coalition of Indiana, about the state’s backward local solar policy and the struggle to advance affordable clean energy in a state dominated by five investor-owned utilities and a conservative legislature. On the show page, look for links to the Citizens Action Coalition website where you can learn about their efforts to protect affordable electricity access for Indiana residents and to advance clean energy and community solar. Also, look for a link to my recent interview with Sachu Constantine about net metering changes in California made on the basis of remarkably similar arguments for a state with an utterly different solar market. On the website of the Institute for Local Self-Reliance, look for our 2023 Community Power Scorecard to see where Indiana measures up compared to other states in its policies to support local clean energy. By now, I imagine you have a good guess, but in the scorecard, you can also learn about your own state’s environment as well as see how states can earn a top score for energy democracy. Local Energy Rules is produced by myself and Maria McCoy with editing provided by audio engineer Drew Birschbach. Tune back into Local Energy Rules every two weeks to hear how we can take on concentrated power to transform the energy system. Until next time, keep your energy local and thanks for listening.

Utilities Are Threatened by Customer-Owned Solar

When they make a case to curtail distributed solar, utilities draw from the same bag of tricks: claiming that costs are shifting to non-solar customers and/or solar is a threat to reliability. What they don’t say, however, is that customer-owned generation threatens utility profits (though one utility expert witness recently admitted as much during a rate case proceeding).

Utilities then use their resources (collected from captive customers) to convince policymakers, regulators, and the public that what’s best for the utility is best for everyone.

In 2022, utilities used their misleading cost-shift argument to roll back net metering in California — but net metering attacks are not limited to states with robust solar markets. Although there are less than 10,000 net metered customers in Indiana and the utilities did not provide any evidence of adverse solar impacts, the Indiana legislature dismantled net metering years before California would do the same.

Indiana ranked 34th by ILSR’s measure of distributed solar saturation, or amount of distributed solar generation capacity per capita.

Indiana Rolls Back Net Metering

2017’s Senate Enrolled Act 309 reduced the compensation rate for rooftop solar exports to an “excess distributed generation credit rate,” also called the EDG tariff. The credit is 125 percent of the previous year’s wholesale market prices, so it will be as unpredictable as the broader energy market. It will be very difficult for prospective solar customers to estimate their payback period, or if the solar installation will even pay off at all, explains Inskeep.

Even though distributed generation provides a whole host of benefits… You have this  insult to injury where the utilities are pushing through higher price projects and they’re getting complete certainty on their rate of return, whereas consumers are left in the dark.

Importantly, the utilities and the Indiana Utility Regulatory Commission interpreted the tariff as applying to exported energy that is netted instantaneously — customers will receive the reduced export rate for any electricity they do not use the instant it is generated. Inskeep explains how they overturned the instantaneous rule in a court of appeals, but the Indiana Supreme Court later upheld the interpretation of the utilities.

Advancing Clean Energy in a Conservative State

Inskeep hopes that solar energy advocates can repeal Senate Enrolled Act 309. Beyond that, he and the Citizens Action Coalition have joined a group that is advocating for community solar in Indiana. Despite the recent loss, Inskeep has hope that he can find common ground with conservative legislators and push electricity service toward the public interest. His advice to others is to build broad coalitions.

The public is your best asset… You have to get people organized and out there raising this issue, bringing the salience forward and demanding their lawmakers take action because without them behind you, you’re very easy to ignore.

Episode Notes

See these resources for more behind the story:

For concrete examples of how towns and cities can take action toward gaining more control over their clean energy future, explore ILSR’s Community Power Toolkit.

Explore local and state policies and programs that help advance clean energy goals across the country, using ILSR’s interactive Community Power Map.

This is the 193rd episode of Local Energy Rules, an ILSR podcast with Energy Democracy Director John Farrell, which shares stories of communities taking on concentrated power to transform the energy system.

Local Energy Rules is Produced by ILSR’s John Farrell and Maria McCoy. Audio engineering by Drew Birschbach.

This article originally posted at For timely updates, follow John Farrell on Twitter, our energy work on Facebook, or sign up to get the Energy Democracy weekly update

Featured Photo Credit: Montgomery County Planning Commission via Flickr (CC BY-SA 2.0)

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Maria McCoy

Maria McCoy is a Researcher with the Energy Democracy Initiative. In this role, she contributes to blog posts, podcasts, video content, and interactive features.