Bills in state legislature would expand concept of 'net metering'

Businesses would be allowed to generate their own electricity from renewable energy sources, and get full credit for it, under two bills that are passing through the Indiana Legislature.

The city of Gary supports the initiative, hoping it will attract wind developers to the job-hungry city and give local businesses a break.

"We had more than one company come to us on wind turbines," said Joel Rodriguez, director of Gary's Department of Energy Efficiency and Conservation.

"A lot of our corporations we have in the city, which includes U.S. Steel, they're looking for alternative uses to save money and bring new technology to create jobs in Gary," he said.

"If we're going to entice companies to come to Indiana, one of them is to create a law that this can happen," he said. "We look at the steel industry, large industry. We have to look outside the box to create jobs. I think this is one for them."

Indiana's current law allows residential customers and K-12 schools to generate their own electricity, and only up to 10 kilowatts. That's nearly 10 times the 735 kilowatt hours an average homeowner uses per month, said Northern Indiana Public Service Co. spokesman Nick Meyer. Businesses are allowed to sell power back to the grid at a reduced rate.

Two so-called "net metering" bills unanimously cleared Indiana House and Senate panels Thursday. They would allow businesses to generate their own energy and sell it back to utility companies for credit -- the amount that utility companies charge.

The Senate bill (Senate Bill 313) would allow people to generate up to 200 kilowatts, but does not allow customers to save up energy credits above that amount from one month to another. The House bill (House Bill 1094) allows people to generate an unlimited amount of energy, but wouldn't allow rollover credits above what one's peak demand is.

Jesse Kharbanda, executive director of the Hoosier Environmental Council, said the House bill would "catapult Indiana to the top of the national policy regime" in terms of laws to encourage investments into wind, solar and other renewable energy. He said a strong bill would boost "green job" creation in Indiana and provide more incentive for businesses and municipalities to invest.

Businesses that could benefit, Kharbanda said, include hog and dairy farms, which could convert their manure into biogas and electricity more cost-effectively. Also, he said, legislation could provide a financial incentive to locate a landfill in Lake or LaPorte counties.

NIPSCO's Meyer said the company supports the Senate net metering bill.

"We certainly support customers who are using smaller amounts of energy, small businesses that are wanting to generate their own power. It allows them to offset their own energy bills and it's positive for the environment. But when you get to larger amounts, then you're starting to talk about having impacts from a financial perspective to those who don't own their own solar and wind power," he said.

He explained that NIPSCO's electricity costs include upkeep of the distribution facilities and the call center. When the utility pays a seller of electricity about the same amount that the utility charges its customers, the utility has to absorb the additional costs.

"Those lost costs would get carried over and eventually could be spread to other customers. Right now it's such a small amount that it has very little impact on customers. Last we checked, there were only four customers" (selling back electricity), Meyer said. "That's why we say 'reasonable levels.' That's why we say striking a balance."

Kharbanda was optimistic about the chances of a bill passing, citing more bipartisan support, statements in support by mayors around Indiana, and involvement from Gov. Mitch Daniels' office.

"I think the biggest enemy for us is time," Kharbanda said.