LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 6933 NOTE PREPARED: Dec 31, 2021
BILL NUMBER: SB 314 BILL AMENDED:
SUBJECT: Net Metering for Electricity Generation.
FIRST AUTHOR: Sen. Yoder BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED: GENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: The bill amends the statute concerning distributed electricity generation as
follows:
(1) It repeals provisions requiring an electricity supplier's net metering tariff to remain available to customers
until the earlier of:
(A) January 1 of the first calendar year after the calendar year in which the aggregate amount of net
metering facility nameplate capacity under the electricity supplier's net metering tariff equals at least
1.5% of the electricity supplier's most recent summer peak load; or
(B) July 1, 2022.
(2) It repeals provisions requiring an electricity supplier to:
(A) petition the Indiana Utility Regulatory Commission (IURC) for a rate for the procurement of
excess distributed generation produced by customers owning a distributed generation facility; and
(B) credit, at the approved rate, customers for excess distributed generation supplied to the electricity
supplier.
(3) The bill provides that an electricity supplier's net metering tariff must be made and remain available to
customers at least until January 1 of the first calendar year after the calendar year in which the aggregate
amount of net metering facility nameplate capacity under the electricity supplier's net metering tariff equals
at least 5% (versus 1.5% under current law) of the electricity supplier's most recent summer peak load.
(4) The bill requires an electricity supplier to petition, before July 1, 2022, the IURC for approval of a new
or amended net metering tariff that does the following:
SB 314 1 (A) Provides that the aggregate amount of net metering facility nameplate capacity made available
for participation by customers under the net metering tariff is at least 5% of the electricity supplier's
most recent summer peak load.
(B) Provides that the minimum net metering facility nameplate capacity made available is subject
to the reservation of: (i) 30% (versus 40% under current law) for participation by residential
customers; and (ii) not more than 5% (versus 15% under current law) for participation by customers
that install a net metering facility that uses organic waste biomass.
(5) It provides that before July 1, 2022, the IURC shall make similar amendments to its net metering rules.
(6) The bill also provides that a customer that installs a net metering facility on the customer's premises
before the net metering tariff of the customer's electricity supplier terminates under the bill's provisions shall
continue to be served under the net metering tariff until the customer removes from the customer's premises
or replaces the net metering facility. (Current law requires the customer to continue to be served under the
net metering tariff until: (A) the customer removes or replaces the net metering facility; or (B) either July
1, 2032, or July 1, 2047, depending on the date of installation; whichever is earlier.)
It specifies that any repairs, updates, or upgrades to portions of a net metering facility that do not increase
the nameplate capacity of the net metering facility are not considered a replacement of the net metering
facility for purposes of these provisions.
(7) It makes conforming changes in other provisions of the statute.
The bill adds a noncode provision to address electricity suppliers that have applied for approval, or received
approval, for an excess distributed generation rate or tariff from the IURC under current law, and to require:
(1) the IURC to: (A) close any pending proceeding for an electricity supplier that has not yet
received approval for an excess distributed generation rate or tariff; and (B) direct the electricity
supplier to file a petition with the IURC for approval of a new or amended net metering tariff, as
required under the bill; and
(2) an electricity supplier that has been granted approval by the IURC of an excess distributed
generation rate and tariff to file with the IURC, not later than 30 days after the enactment of the bill,
a petition for approval of a new or amended net metering tariff, as required under the bill.
Effective Date: Upon passage.
Explanation of State Expenditures: Indiana Utility Regulatory Commission (IURC): The bill provides that
the IURC shall amend 170 IAC 4-4.2-4 before FY 2023 to implement the bill’s provisions. It also requires
that each electricity supplier petition the IURC before the start of FY 2023 for approval of an amended or
new net metering tariff that meets new nameplate capacity and reservation capacity requirements outlined
in the bill. Within 30 days of receiving a petition, the IURC must review it and determine if it complies with
the new net metering tariff requirements. If the IURC determines the petition is not in compliance, the IURC
shall notify the electricity supplier and require the supplier to correct any defects within a given time frame.
The bill also requires the IURC to close any pending proceeding for an electricity supplier seeking approval
for an excess distributed generation rate or tariff and to direct an electricity supplier that has already been
granted approval for an excess distributed generation rate or tariff to file with the IURC within 30 days for
SB 314 2 approval of a new or amended net metering tariff that complies with the provisions of the bill.
The bill’s requirements represent an additional workload and expenditures on the IURC outside of the
agency’s routine administrative functions, and existing staffing and resource levels, if currently being used
to capacity, may be insufficient for full implementation. The additional funds and resources required could
be supplied through existing staff and resources currently being used in another program or with new
appropriations. Ultimately, the source of funds and resources required to satisfy the requirements of this bill
will depend on legislative and administrative actions.
Additional Information - The operating budget of the IURC is funded by regulated utilities operating in
Indiana. The IURC determines the rate at which to bill the utilities based on the agency’s budget, less
reversions, divided by the total amount of gross intrastate operating revenue received by the regulated
utilities for the previous fiscal year. Based on this formula, utilities are currently billed approximately 0.12%
of their gross intrastate operating revenues to fund the IURC.
Explanation of State Revenues:
Explanation of Local Expenditures: The bill extends the expiration of an electric provider’s net metering
tariff for customers installing net metering facilities after December 31, 2017, until a customer’s net metering
facility nameplate capacity under the tariff equals at least 5%. It also provides that at least 30% of the
capacity must be reserved for participation by residential customers and not more than 5% for renewable
energy resources. Additionally, the bill requires each electricity supplier to amend or create a new net
metering tariff that meets the extended nameplate capacity and reservation capacity requirements before FY
2023. As a result, the bill could result in additional customer participation (including local government units)
in electricity supplier net metering tariffs.
This could also potentially impact energy cost expenditures for local units or school corporations
participating in a net metering tariff. Excess electricity that is generated would be credited at the retail rate
(approximately 12 cents per kilowatt-hour on average currently) instead of being credited at the wholesale
rate (approximately 3 cents per kilowatt-hour currently) plus 25%.
The bill also provides that if an electricity supplier has applied or received approval from the IURC under
current law to implement a rate for the procurement of excess distribution generation, that rate must be stayed
until the supplier’s net metering tariff meets the new expiration requirements created by this bill. To the
extent that electricity suppliers petitioning for a rate for the procurement of excess generation do not meet
the new tariff expiration requirements, this would extend the time at which they are credited at the retail rate
instead of the wholesale rate. This provision expires at the start of CY 2026.
Additional Information - Net metering provides the opportunity for consumers to offset the cost of electricity
they buy from a utility by selling renewable electric power generated at their homes or businesses back to
the utility. The customer is charged only for the net amount of power used. According to the 2021 IURC
Annual Report, there were about 4,800 customers participating in net metering statewide by the end of 2020
with over 132 megawatts of total capacity.
According to the IURC Net Metering Reporting Summary, 665 commercial entities and 109 schools (K-12
and higher educational institutions) were participating in net metering as customers of investor-owned
utilities in 2020. The school customers produced a nameplate capacity of 36,724 kilowatts, and the
commercial customers produced a nameplate capacity of 58,046 kilowatts, which was the most for any
SB 314 3 customer class.
Current law provides that customers who installed net metering facilities before December 31, 2017, remain
a net metering customer until July 1, 2047 (30 years), and customers who installed facilities between January
1, 2018, and June 30, 2022, or until the utility reaches 1.5 % of its summer peak load (whichever is earlier)
remain a net metering customer until July 1, 2032.
Explanation of Local Revenues:
State Agencies Affected: Indiana Utility Regulatory Commission.
Local Agencies Affected: Local units participating in net metering tariffs or excess distributed generation
tariffs.
Information Sources: 2021 Annual Report, Indiana Utility Regulatory Commission; 2020 Year End Net
Metering Reporting Summary, Indiana Utility Regulatory Commission.
Fiscal Analyst: Olivia Smith, 317-232-9869.
SB 314 4