Iowa co-op’s new net metering policy may undercut fledgling solar effort

Correction appended

An electric co-op serving a few counties in northeast Iowa intends to revamp its net-metering policy in a few weeks in a way that appears likely to undermine a fledgling effort to increase rooftop solar there.

As of Jan. 1, the Allamakee Clayton Electric Cooperative will change its policy regarding when and how frequently net-metered customers will “true up” their power generation and usage. Presently, the utility’s 62 net metering customers start the clock ticking on their electric consumption and generation once a year, on the date of their choosing. That gives them much of the year to use up credit for excess power.

Any customers that begin generating power as of Jan. 1 will have their meters reset every month. That will mean that, for example, the excess power typically produced in the summer could not be used to offset bills in the autumn and winter, when production typically dwindles.

The policy change promises to run headlong into efforts to foster more distributed generation in Clayton and a couple of neighboring counties that are served by the same power co-op.

“That changes everything for us,” said Joleen Jansen. “We won’t get our banked kilowatt hours back. It makes it cost-prohibitive to invest in solar panels.” Jansen is one of the leaders of a group attempting to create an “energy district” to serve Clayton County. Their ultimate mission, she said, is 100 percent clean and locally-produced energy by 2050.

The nearby Winnishiek Energy District, which has provided clean-energy services and expertise since 2010, received a grant from the Northeast Iowa Funders Network in January to foster the development of energy districts in Clayton and four other nearby counties. Director Andy Johnson is holding a conference Dec. 8-9 in Decorah, Iowa to spread the word about energy districts.

M.J. Smith, the director of affiliate foundations at the Community Foundation of Greater Dubuque, said one of the foundation’s missions is shoring up rural communities by keeping resources there.

“We see energy districts and local energy as a means to local wealth retention,” she said. Money not spent on energy bills might go towards a membership in a local swimming pool, she said, or to a local charity.

Using the utility as a ‘storage battery’

The co-op’s announced policy change will immediately disadvantage any customers who start generating electricity after Jan. 1. Customers who currently generate their own power will be exempted from the new rule for five years.

Moreover, it comes at a time when it could complicate the effort to develop an energy district.

The Clayton County group has created a corporation and a board of directors. Jansen is working on a social media presence. Also, they’ve applied for – and appear likely to receive – a small grant from a regional foundation to pay someone to work a few hours a week to help develop the district.

Paul Foxwell, executive vice-president and general manager of the co-op, said he has taken note of robust interest in solar in Clayton County, and is aware of efforts to create an energy district there aimed at reducing energy use and shifting from fossil-fueled generation to more renewable – and local – energy production.

He conceded that “certainly that’s been a part” of the co-op’s decision to change its net metering policy. He expressed the concern, shared by many utilities, that solar-generating customers will pay less for service, yet continue to rely on the co-op to provide backup service.

“People need to understand that as long as they rely on the utility to act as a storage battery, there is a cost-recovery issue,” he said.

There is a second change coming at the co-op, likely to further upset the economics of distributed generation. Foxwell said the utility intends to institute a demand charge for customers that use at least 40,000 kilowatt hours per year. That would include a lot of agricultural operations.

Although a demand fee would be targeted at customers with highly-variable electricity needs, demand fees in general tend to make the economics of solar power much less attractive. That’s because typically, only the cost of the energy purchased – not the demand fee – can be offset by the on-site generation of electricity.

Growing interest in energy districts

The agricultural community is a focus of the energy districts, both the established one in Winneshiek County and the district just getting underway in Clayton County. Jansen said she and her partners are composing a letter they plan to send to Clayton County’s pork producers to “create some awareness as to the options they have to be more energy efficient and (about) clean energy solutions for generating more power locally.

“This letter will go out to all of them, and they will make contact with an energy planner for the Winneshiek district who will do audits for them and connect them with government programs that can help facilitate more efficiency and locally-generated clean energy solutions.”

Solar workshops have been held in the five counties targeted by the grant. Turnout was robust in a couple of the counties, Smith said. She is encouraged that the active group in Clayton County has incorporated and has created a board of directors.

Johnson, of the Winnishiek district, hopes to find a legislator to introduce a bill to create a standard template for the creation of energy districts across the state. He envisions them as “quasi-government” entities with a relationship to state government, along the lines of soil and water conservation districts.

He credits the Winnishiek district at least in part with the growth of solar installations there. He estimates that the district has provided technical assistance and energy planning to about 1,000 households out of approximately 7,000 countywide. The energy district there provides free audits and directs interested property-owners to tax subsidies, contractors and sources of financing that can facilitate installation of solar panels. Johnson said the county is well-endowed with clean energy experts, largely due to a training partnership between the energy district and the local community college.

Regardless of what happens in the coming legislative session, Clayton County and other fledgling energy districts will have to deal with coming policy changes at their local electric co-op that are almost certain to put a lead weight on their efforts.

Jansen pointed out, however, that co-ops are member-owned, and that members could work to institute policies that support renewable energy. Although she said the co-op’s board of directors currently includes no advocates of clean energy, she suggested that that is subject to change.

CORRECTION: An earlier version of this story incorrectly stated that 1,000 households in Winneshiek County have solar panels. The story has been updated.

2 thoughts on “Iowa co-op’s new net metering policy may undercut fledgling solar effort

  1. Thank you to Karen and MEN for the story and to be clear: YOU’RE INVITED to the first Iowa-Midwest Energy District Conference, come joint the conversation on creating a “universal local” clean energy movement: http://energydistrict.org/projects/iowa-midwest-energy-district-conference-2016/

    While we appreciate the coverage of Energy Districts in Midwest Energy News, we feel it is unfortunate this story pits the Energy Districts against Rural Electric Co-ops.

    We have worked closely with both RECs in our corner of NE Iowa, and we share a deep commitment to the health and resilience of our communities and region. Though we don’t always agree (including, yes, on the proposed solar policy changes), we DO believe that RECs – as consumer owned utilities (COUs) – are fundamentally different than investor-owned utilities (IOUs). While most energy dollars of IOU customers flow out of local communities, most dollars for COUs stay local, which is a goal we all share.

    We should note an error in the story regarding number of solar customers. Winneshiek Energy District has served well over 1,000 customers with technical assistance and energy planning, but there are not that many solar arrays in the county! There IS a great deal, however, and as of the last data we saw (end 2015), our little county seat of Decorah (population 8,000) had more consumer-owned solar than our state capital of Des Moines, and our rural county (population 21,000, including Decorah), more consumer-owned solar than Minneapolis, MN.

    On On with locally-led, locally-owned clean energy!
    Andy Johnson, Director
    Winneshiek Energy District

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