Morton Solar fighting for Indiana net-metering law

(Originally submitted to IURC on April 20th, 2020)

Once again, Morton Solar is fighting for the future of the entire solar industry in Indiana. And, we are fighting to keep electricity rates low for all Hoosiers. We've already had many major victories over the years, and we have a very strong case. The outcome of this case will have huge implications on the future of energy in Indiana. But, we need your support. Please read our letter and testimony:

Dear Ms. Becerra,

Please accept this letter as an objection and testimony for Vectren’s pending, 30-day

rate filings #50331 and #50332 pertaining to the valuation of solar energy produced by

residential, business and government customers (all customer classes) in Vectren service

territory in SW Indiana. The EDG rate that Vectren has requested is much too low and does

not represent the true value of solar energy from many different aspects. We are requesting

an unbiased study and analysis of this value based upon several different factors which I will

outline in this testimony.

Background – Morton Solar is one of the oldest solar energy contractors in Indiana and

installed some of the first solar energy systems in the state. We are located in Evansville,

Indiana, which is the heart of Indiana’s coal industry. We are a member/owner of Amicus

Solar Cooperative and one of the first Certified B Corporations in Indiana. Our mission has

always been to lower the cost of renewable energy to make it accessible to all and use our

business as a force for good.

One of our first project’s in 2008 was to install a small residential scale wind turbine at

the Haubstadt Community School in Gibson County. The project was concepted by a 3rd grade

class taught by Donya Bengert and funds were raised by students collecting pennies from

donations across local area businesses. A grant was also obtained by the Toyota Motor

Foundation. Even though the state net-metering law at the time required investor-owned

utilities to net-meter with schools and residential customers, the application was denied by

Vectren on the basis that the school had 3-phase service. Upon review of the Indiana

Administrative Code and Indiana’s Net-Metering law, the type of service should not have been

a condition to deny a net-metering application. Morton Solar’s only recourse was to file a

complaint with the Indiana Utility Regulatory Commission, which we did, and fortunately the

IURC ruled in our favor (see attached letter as Exhibit A from Dr. Bradley Borum, Director of

Electricity IURC). As a result of this ruling, Vectren was forced to re-write their tariff to include

3-phase services for net-metering, and this project was permitted to move forward.

As a result of this case, Morton Solar was granted an award from Senator Lugar’s office

called the Senator Lugar Energy Patriot. This award gave us a strong conservative voice and

platform for renewable energy in Indiana. We used that voice to get the attention of Dr. Sue

Ellspermann who worked in the marketing department at University of Southern Indiana.

With her help, we were able to get a library project near Rockport, Indiana documented as the

1st net-zero solar powered library in the United States, at a time when a majority of Hoosiers

didn’t believe Indiana was suitable for solar energy. Later, Dr. Ellspermann was able to get the

attention of Lt. Governor Becky Skillman with this project and it was given The Partner in

Progress Award from Governor Daniels office.

With this solar project, located only five miles where a new coal-to-gas plant was to be

built in Rockport, Indiana, Morton Solar was able to open a channel of communication to the

Governor’s office. Our message was:

“Gov. Daniels, if you want to build another coal plant in our region and you are for an

‘all-of-the-above’ energy policy, you should also expand Indiana’s net-metering law

to allow more use of solar energy. Net-metering will provide a tiny bit of competition

in an energy market dominated by monopolies, which have no place in free-market

capitalistic systems. Competition is a fundamental requirement in capitalism. Where

monopolies exist, capitalism fails.”

In July of 2011, Gov. Daniels issued an executive order to the IURC to expand this netmetering

law to allow ALL customer classes of Investor-Owned Utilities the ability to net-meter

with solar energy systems sized up to 1MW. Now looking back almost 10 years, we can see the

tremendous success of this executive order, which built the foundation for an entire solar

industry in Indiana. With over a thousand jobs and several businesses created, this policy may

have been the most successful of Governor Daniel’s career and he deserves credit and

recognition for this.

It can be argued that another successful outcome of this net-metering law was the

stabilization of electricity rates in SW Indiana. From the IURC’s own Residential Rate Survey’s,

you can see that Vectren’s rates increased 109% from 2001-2011 (See attached 2011

Residential Rate Survey as Exhibit B). However, from 2010-2019, Vectren’s rate increase was

only 15% (See attached 2019 Residential Rate Survey as Exhibit C). Is this just a coincidence, or

is free-market capitalism with competition helping keep Vectren’s rates in check? The case is

too strong to deny that the threat of Vectren’s customers being able to install solar energy

systems on the load side of their meter is NOT an incentive for them to keep their rates lower.

SB309 Passed on False Information – now that the IURC has been tasked with

determining the value of solar energy due to Indiana’s legislature passing SB309. Let us look at

the false information that was distributed to the politicians and public about the use of solar

energy. The utility lobbyists claimed that solar energy producers shift costs to non-solar energy

consumers. You, the IURC, should know that this claim is categorically false, as you have never

approved of any rate structure or tariff that would allow this to happen. You, the IURC,

oversees and approves of each and every rate structure put in place by every Investor-Owned

Utility in the state. And you, the IURC, knows that there is NO rate structure that would allow

cost shifting. This is categorically false information based on that fact alone. The main

objective of SB309 was maintaining monopoly status and eventually, be able to monopolize

solar. The goal of SB309 was to eliminate ALL competition so that there is no other choice but

to purchase solar energy from one source only, and that is the utility company. They will be

able to increase their rates to whatever profit margin they see fit without the threat of

customer generated solar energy systems. In reality, distributed solar generation benefits the

power grid by lowering excessive loads on transformers and power lines resulting is less line

loss. This is an inherent financial benefit to utility companies that has not been taken into

consideration during the debate of SB309.

As an example of desire of utilities to achieve and maintain monopoly status, please

reference IURC Cause #44344 as Exhibit D in your own records for this example.

Morton’s proposal for calculation of value of distributed solar energy generation or EDG:

EDG ($/kwh) = Avoided Cost to Utility (ACU) + (Avoided Cost of Line Losses (ACLL) x Climate

Change Factor (CCF) x Free Market Factor (FMF))

EDG = ACU + (ACLL x CCF x FMF)

The definitions are as follows:

Avoided Cost to Utility (ACU) – marginal cost calculated by Vectren to be $0.03631 per kwh

Avoided Cost of Line Losses (ACLL) – this is the benefit of on-site, point of use, distributed

generation systems in which energy produced is consumed almost instantaneously without

the need to transport electricity over several hundreds of miles of electrical lines. This result is

a much higher efficiency of power generated vs. power consumed versus electricity generated

from a centralized location. As a rule of thumb, electricity losses from a coal fired power plant

can be as much as 50% from the time the energy reaches the point of use. Therefore, we

calculate the value for ACLL to be 1.5.

Climate Change Factor (CCF) – the dire situation that our planet is currently encountering from

the burning of fossil fuels cannot be denied. The science that exists to prove that the lifesupporting

ability of our planet is being destroyed is beyond argument. Yet, the fossil fuel and

utility industries continue to fund propaganda campaigns to sow doubt and confuse the public.

Although there is no price or dollar amount that could ever be paid for our planet, for the

purposes of this formula, we are estimating this value to be 5.

Free Market Factor (FMF) – since Indiana’s economy claims to be in a free-market capitalistic

state, the requirement for a competitive business environment is mandatory. Without

competition, you cannot have capitalism. Therefore, we estimate this value to be 2.

Therefore, our proposed value to Solar EDG to be as follows:

Solar EDG = ACU + (ACLL x CCF x FMF)

Solar EDG = 0.03631 + (1.5 x 5 x 2)

Solar EDG = $.18631 per KWH

Maximum system capacity = 20% of peak summer load of the electricity provider

Conclusion – The EDG rate that Vectren has proposed has not taken into consideration

all the benefits of solar energy, from both economic and environmental perspectives. The

production of solar energy benefits ALL of us, not just the individual customer that chooses to

install a system on their home. That individual system offsets the burning of coal to the

benefit of all of mankind. As our planet rapidly heats beyond temperatures that even coalfired

power plants will be able to operate in, the proliferated deployment and use of solar

energy systems to run our air conditioners may provide a few extra years of life for humanity

to find a solution for long-term survival. Right now, there is no solution other than to find

another planet.

The economic benefits of our proposed EDG to our ‘free-market’ economy are

abundant. More jobs in the solar industry will be created vs. Vectren’s proposed EDG resulting

in job losses at a time in history when we can least afford to lose jobs due to a pandemic, and

Vectren will continue to make a healthy profit regardless of whatever EDG is approved.

As the final authority over utilities in Indiana, it is the IURC’s duty to protect the citizens

of Indiana. It is only the IURC that can do this, and it is your responsibility, as mandated by

Indiana State Law. As a Certified B Corporation, Morton Solar has always used our business as

a force for good and will continue to do so. We hope you and your organization will make the

same choice.

Thank you,

Brad D. Morton

President of Morton Solar

Senator Lugar Energy Patriot

Founding Board Member of Indiana Renewable Energy Association