IUB Approval of Net Metering Tariffs Provides Certainty

Governor Reynolds signed SF 583 on March 12, 2020, putting net metering into Iowa law for the first time, and creating a new inflow-outflow billing system for customer-owned generation like solar. The new law took effect on July 1, 2020, and MidAmerican and Alliant – Iowa’s two largest utilities – made initial tariff filings at the Iowa Utilities Board (IUB) to implement the law on June 29, 2020 and July 1, 2020 respectively. The MidAmerican tariff was approved by the IUB and became effective November 24, 2020, and the Alliant tariff on December 30, 2020.

Under the inflow-outflow billing method created by the new law, any kWh delivered to the customer from the utilities (inflow) will be billed to the customer at the retail rate. Any kWh exported to the utilities’ electric systems (outflow) will be credited at the outflow rate which will be set at the retail rate initially. The credits will appear as dollar amounts on the customer’s bill and used to offset energy charges but cannot offset fixed charges like the monthly meter charge. The outflow rate that any given customer receives will be locked in for 20 years, providing certainty when they install a system. For the customer, the inflow-outflow billing method will be very similar to the previous net metering policy in terms of payback on a solar system. 

As part of the inflow-outflow billing method, the utilities will own and have title to the renewable energy attributes, renewable energy credits, and greenhouse gas emission credits related to all outflow purchases. However, the credits associated with the kWh generated and consumed onsite will be owned by the customer. Customers can negotiate with the utility to purchase the credits if they are using them to meet renewable energy or sustainability goals.

The Iowa Environmental Council and the Environmental Law and Policy Center (ELPC) provided comments on the proposed tariffs, advocating the position that customers with electric vehicle (EV) charging stations should be eligible for inflow-outflow net metering. We were successful in convincing the IUB that as long as the EV charging stations are incidental to the business, the associated electric load is a part of the customer’s load, and the customer is eligible to participate in the inflow-outflow net metering. Therefore, if a grocery store or other business has a charging station, it can still have net metered solar.

Also, as part of the IUB Orders, MidAmerican and Alliant are required to annually file by May 1 the total nameplate capacity and the penetration percentage of eligible distributed generation facilities within their service territories. This filing will be used to determine when the statewide distributed generation penetration rate is equal to 5 percent which would trigger a value of solar study. The law states that if a utility does not reach the 5 percent penetration level, then the value of solar proceeding can be initiated in 2027.

MidAmerican and Alliant customers can now participate in the inflow-outflow billing method. The Iowa net metering law, and the utility tariffs, guarantee that customers with their own generation are fairly compensated for the value they provide to the grid. This means the economics of solar make sense for both the solar owner and all other customers and lays a foundation upon which customer-owned distributed generation can expand. Building on this foundation, we are excited about the long-term potential for solar in Iowa.

1. clean energy
2. electric vehicles
3. net metering
4. renewable energy
5. sf 583
6. solar power
7. value of solar