Iowa Senate approves new solar fees

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A bill that one local senator described as ‘hogwash’ has passed in the Iowa Senate. Senate File 583, which allows utilities to impose additional monthly charges on solar users, has passed after a mostly partisan vote. with all but three Republicans voting in its favor and one lone Democrat joining the Republican majority. 

Interestingly enough, other renewable energy producers, specifically biofuel plants, are exempt from the proposed bill. Noting that, Democrats in the Senate attempted to add an amendment to the bill which would exclude farmers who chose to add solar to their farms from the charge, but that was ultimately shot down.

Outside of the job loss that this bill could very well lead to, that farming amendment could prove to be critical. The farming and solar industries have established quite a symbiotic relationship. Farmland has become an ideal location for large-scale ground-mounted solar, as farmers profit off of the leases signed on their previously-unused land, as well as helping with the maintenance of the project by having their cattle graze the brush surrounding the panels. On the small scale, solar has been helpful in helping farmers reduce their monthly electricity bills as, as you can guess, farms are large users of energy, and being able to generate one’s own energy can provide considerable bill relief.

And, to quickly go back to that job loss mention, SEIA reports that there are only 844 solar jobs in the state of Iowa, meaning that any action which compromises these jobs could well be incredibly detrimental to the state’s solar industry.

The bill does not establish one ultimate method for the fee to be enacted, but instead gives outlines for three different billing options. These include:

  • A minimum infrastructure charge rate structure whereby the private generation customer pays a minimum amount each month, or the private generation customer’s applicable standard electric service bill, whichever is higher; 
  • A multi-part rate structure whereby rates applicable to the customer include, at a minimum, a fixed basic service charge, an energy charge designed to recover variable costs, and a monthly demand charge designed to ensure that the private generation customer pays for fixed electric utility infrastructure costs; 
  • A buy-all and sell-all rate structure whereby the private generation facility’s output is measured separately from the private generation customer’s consumption. All electricity consumed shall be purchased from the electric utility and all electricity generated shall be sold to the electric utility on a monthly basis.

This bill is based on the “cost shift” myth that utilities have pushed for years. This myth claims that solar users are essentially leeching on current electric utility infrastructure. Under this assumption, houses that generate their own electricity and trade excess back to the utility are placing an unfair burden on those who do not by not paying a “fair share” of the cost to maintain utility infrastructure.

This claim has been roundly debunked in state after state, with studies commissioned by legislatures and regulators repeatedly finding that rooftop solar under net metering is a net benefit to other ratepayers (these state-level studies were captured in a Brookings Institute meta-study). This is due to solar’s ability to “shave” peak load, to reduce the amount of capacity needed on the system, and also to minimize use of power lines.

But to assume that all, or even most laws are passed with every aspect of contribution and consequence reviewed and considered is naïve.