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Presentation on 9/18/13 to the Regulatory Flexibility Committee by Laura Ann Arnold, President Indiana Distributed Energy Alliance (Presentation available.

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Presentation on theme: "Presentation on 9/18/13 to the Regulatory Flexibility Committee by Laura Ann Arnold, President Indiana Distributed Energy Alliance (Presentation available."— Presentation transcript:

1 Presentation on 9/18/13 to the Regulatory Flexibility Committee by Laura Ann Arnold, President Indiana Distributed Energy Alliance (Presentation available at IndianaDG.net)

2 To be the voice of the renewable energy (RE) and distributed generation (DG) business, educational and public sectors in Indiana to advocate public policies and to foster economic growth which fosters this business sector, creates jobs, promotes national security, provides stabilized energy resources and improves the quality of the environment.

3 Renewable energy and distributed generation (RE&DG) developers both located in Indiana doing projects here and elsewhere across the country, as well as developers located outside the state either doing business or wanting to do business in Indiana Manufacturers of RE systems Supporting non-profits and individuals wanting to develop a project

4 The key element of a feed-in tariff is to set a price that reflects the cost of generating the energy, including a reasonable rate of return that is fair and equitable to both investors and ratepayers. set a price that reflects the cost of generating the energy A Properly Designed Feed-in Tariff Can Lower the Cost of Capital and Keep Electric Rates Down A Properly Designed Feed-in Tariff Can Lower the Cost of Capital and Keep Electric Rates Down

5 Properly designed FIT pricing is generally designed the same way that regulators set electricity rates, by looking at a utilitys costs – including investments in new generation – and setting rates at a level to recover those costs plus a reasonable rate of return to their investors.

6 The rate of return is critical, because there is evidence that the necessary rate of return under a feed-in tariff program can be lower than the typical rate of return that utilities require. This means that renewable energy is cheaper with a feed-in tariff than without a feed-in tariff.

7 Golden Rule: Do onto others as you would have them do unto you. VFIT Golden Rule: Treat VFITs like electric utilities treat themselves, i.e. VFIT contracts should reflect the cost of generation including a reasonable rate of return that is fair and equitable to both investors and ratepayers.

8 Collaborative process to establish terms and conditions as well as rates Broad range of renewable energy and distributed generation technologies Contract length of years for solar PV Allows third party financing Does not limit project to customer usage Transparent selection process Reasonable milestones

9 Tariffs based on cost of generation Differentiation by technology, project size, application and density For example, solar PV tariff could depend on: Solar PV integrated into building design; Solar PV panels installed on the roof; or Solar PV ground mounted.

10 FIT programs of US municipalities include: Gainsville Regional Utilities (FL) Sacramento Municipal Utility District (SMUD) Long Island Power Authority (LIPA) Los Angeles Department of Water and Power (LADWP) Palo Alto (CA) Municipal Utility

11 Utility2013 Rates2013 Capacity2012 Rates2012 Capacity IPL peak$0.0299$7.42$0.0282$7.30 IPL off-peak$0.0257$ Duke$ $7.05$ $9.85 I&M TOD peak$0.0234$8.56$0.0274$8.70 I&M off-peak$0.0223$ NIPSCO peak $ $5.49 NIPSCO off- peak Vectren peak$ $4.81$ $5.03 Vectren off- peak $ $

12 170 IAC Filing of rate dataannually 170 IAC Obligation to purchase and sell 170 IAC Rates for energy purchase 170 IAC Rates for capacity purchase

13 Indianapolis Power and Light (IPL) Rate REP & Northern Indiana Public Service Company (NIPSCO) Experimental Rate 665 Renewable FIT

14 Cause No Petition filed 12/29/08 Order issued 2/10/10 Cause No Petition filed 10/13/10 Motion to temporarily suspend Rate REP 2/7/11 Order issued 11/22/11

15 Cause No Petition filed 4/11/11 Order issued 03/07/2012 Tariff expired 3/30/2013 All projects with IURC approved contracts must be commissioned by ???

16 Cause No filed 7/16/10 Technical conference held 10/04/10 Settlement Agreement filed 4/18/11 IURC order issued: 7/11/2011 Two stakeholder annual meetings held in Goshen on 7/18/ 12; and Munster on 8/1/13 NIPSCO VFIT 1.0 expires 12/31/13

17 NIPSCO filed petition with IURC 9/11/13 in Cause No to explore another VFIT Prehearing conference TBA Technical conference TBA IndianaDG filed petition to intervene 9/15/13

18 Duke Energy Indiana (DEI) enters into Settlement Agreement on Edwardsport air permit on 8/28/13 requiring DEI to either: Implement a feed-in tariff for Solar PV modeled on the current NIPSCO FIT; or Construct/install, and/or execute a long term contract with one or more independent producers for energy and capacity from wind and/or solar with a combined nameplate capacity of no less than 15 MWs (minimum shall be 5 MW solar).

19 Duke Energy Indiana (DEI) VFIT: Implemented in DEI service territory; Total program cap no fewer than 30 MW; No fewer than 5 MW to be reserved for small systems (no larger than 10 kW in size); and Be requested in a filing not later than 6/1/14. Settlement not to preclude DEI and Petitioners from collaborating on other or additional VFITs.

20 IPL RATE REP Wind KW: $0.14/kWh Wind 100 kW-1 MW: $0.105 Wind > I MW:$0.075/kWh Solar kW: $0.24/kWh Solar >100 kW: $0.20/kWh Biomass 50 kW- 1 MW: $.085 NIPSCO RATE 665 Wind 100kW: $0.17/kWh Wind 101kW-2MW: $0.10/kWh Solar 10kW: $0.30/kWh Solar 11kW-2MW: $0.26/kWh Biomass 5MW: $0.106/kWh New Hydro 1MW: $0.12/kWh

21 What steps or actions can be taken to encourage more electric utilities to offer VFITs in Indiana? What happens at the end of current 15 year VFIT contracts? To give VFIT customers option to net meter, net metering rule needs to be revised to: Allow net metering > 1 MW; and Allow third party net metering.

22 Provided upon request

23 Laura Ann Arnold, President Indiana Distributed Energy Alliance 545 E. Eleventh Street Indianapolis, IN (317) (317) cell or

24 Subscribe to website Follow IndianaDG on Twitter Like our Facebook Page Join IndianaDG LinkedIn Group


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