Testimony was filed 1/21/2014 in the Morton Solar Complaint Against Vectren concerning interconnection agreements and other issues involving renewable energy installations in SW Indiana for customers served by Evansville based investor-owned electric utility Vectren.

Copies of the original complaint filed by solar PV and wind Evansville based installer Morton Solar can be found at:

http://www.indianadg.net/morton-solar-complaint-against-vectren-44344/

Of particular interest and holding broader statewide implications for renewable energy and distributed generation is the testimony filed by Citizens Action Coalition (CAC). Please find below a short excerpt. We encourage IndianaDG Readers to review the other testimony filed in this case and to share their view here on this website.

Excerpt of Direct Testimony of

Sky C. Stanfield, JD

On Behalf of Citizens Action Coalition of Indiana, Inc.

IV. OTHER POTENTIAL INTERCONNECTION AND NET METERING IMPROVEMENTS

14           Q. Are there additional modifications to the interconnection standards and processes

15           that you believe would facilitate greater utilization of renewable energy in Indiana?

16           A. Yes, I believe that there are a number of additional improvements that could be made to

17           the interconnection standards and supporting utility practices that would remove barriers

18           for interconnection and facilitate greater use of net metering. These changes would better

19           align Indiana’s interconnection standards with national best practices, which have

20           evolved substantially since the Commission’s rules were established in 2006. I further

21           believe these changes could result in a more efficient process for the state’s utilities and

22           customers without jeopardizing the safe and reliable operation of the state’s electrical

23           system.

Q.           What additional changes do you recommend?

2             A. The updated federal SGIP provide a good starting point. In November of last year

3             (2013), FERC issued a decision updating SGIP in order to better enable those procedures

4             to meet the changing realities of an energy market where distributed generation is more

common.34

5             Many of the changes adopted by FERC are modeled upon best practices in

6             interconnection that have emerged in recent years from states that have significant

experience interconnecting high volumes of distributed generation.35  SGIP has long

served as a model for state procedures,36 8 and I believe these recent updates suggest that it

9             may be time for Indiana to consider updating its procedures to help facilitate growth in

10           small renewable generation.

11           Additionally, because transmission providers, Independent System Operators (ISOs) and

12           Regional Transmission Organizations (RTOs) must update their federally jurisdictional

procedures this year to comply with the FERC order,37

13           it makes sense to capitalize on this

14           momentum and contemporaneously consider updates to state procedures. Indiana’s

neighboring state of Ohio did exactly that in December when it significantly 1 updated the

state’s interconnection procedures in a manner similar to those outlined by FERC.38

3             Q. What are some of the changes to SGIP that should be considered in Indiana?

4             A. The changes to SGIP focused largely on improvements to the Fast Track and

Supplemental Review processes that apply to generators under 5 MWs.39

5             This focus is

6             appropriate in Indiana as well because the majority of the distributed generation

applications appear to be for small projects.40

7             Some of the key changes adopted in the

8             FERC order that I believe may be relevant in Indiana include:

9             Incorporation of a pre-application report process that enables greater

10           transparency regarding system information to help distributed generation

developers better identify appropriate project locations;41

11

12

13           Updated eligibility limits for Fast Track (or Level 2) review in a manner that

14           takes system information and project location into account in determining the

15           size limits. Instead of utilizing a single threshold across the entire system, the

16           new size limits vary depending upon the generator type, the voltage of the line

17           at the point of interconnection, the thickness of the wire, and the generator’s

distance from the substation;42

18           and

19

20           Changes to the supplemental review process that enable a greater number of

21           projects to interconnect without the need for full study, while also providing

utilities with additional time to verify safety, reliability and power quality.43

22

23

24           Many of the changes adopted by FERC received support from utilities, ISOs and RTOs

Q.           Are there other interconnection improvements the Commission 1 should consider in a

2             separate investigatory or rulemaking docket?

3             A. Yes. In a report I recently co-authored on behalf of the National Renewable Energy

4             Laboratories (NREL), my colleagues and I identified a number of changes that could be

5             relevant in Indiana, where the majority of the projects appear to be in the 25 kW or below

size range.45

6             The report identifies the benefits of ensuring the quick and efficient review

7             of small inverter based systems. Due to their size, these systems rarely pose meaningful

8             impacts to the electrical system and can often be reviewed quickly. There can also be a

9             significant volume of these projects once net metering programs gain their footing and

10           thus it benefits the utilities to have simple and efficient procedures for handling the

11           applications. In the report, we recommend increasing the size limit of Level 1 review

12           from 10 kW to 25 kW, shortening processing timelines, and allowing for online

13           application submittal and electronic signatures. Ohio adopted some of these

14           improvements, including increasing eligibility for their Level 1 review process from 10

kW to 25 kW.46

V.           RECOMMENDED 1 NEXT STEPS

2             Q. You have presented several potential changes to Indiana’s interconnections

3             standards for the Commission’s consideration. Are you recommending that the

4             Commission implement all of these changes in this proceeding?

5             A. No, I am not. While I believe that Morton Solar’s complaint highlights the need for

6             updating or reforming some of the existing procedures and practices with respect to

7             interconnection, I do not believe this is the best proceeding in which to implement all of

8             the changes I recommend. Rather, I recommend that the Commission initiate a separate

9             rulemaking docket in which to explore potential reforms to the interconnection standards,

which is one of the recommendations proffered by Morton Solar in this proceeding.47

10

11           Q. Why should the Commission initiate a proceeding to explore improving

12           interconnections standards?

13           A. Under the Commission’s leadership, Indiana’s net metering rules were greatly improved

14           in 2011 by, among other things, expanding the program to all customers and increasing

15           the aggregate sales level under each utility’s net metering tariff. Indiana’s

16           interconnection standards would similarly benefit from a reevaluation and update to

17           reflect some or all of the changes I have discussed above. As in the case of the net

18           metering rules, an interconnection proceeding could examine potential improvements to

19           make it easier for consumers to take advantage of the renewable energy generated at their

20           homes and businesses to lower utility bills, and stimulate growth within Indiana’s

21           economy. This would also further Indiana’s policy of developing a robust and diverse

energy portfolio, including the use of renewable energy resources.48

Q.           Should the Commission also explore other ways to improve 1 the net metering

2             process?

3             A. Yes. According to the IURC’s 2012 Net Metering Required Reporting Summary, there

were 388 participants statewide, including just 35 in Vectren’s service territory.49

4             The

5             interconnection improvements I discussed earlier will help minimize some of the barriers

6             to net metering. However, there are other changes the Commission could consider. For

7             example, the definition of “net metering customer” in the current net metering rule limits

the participation to one that “owns and operates” the system.50

8             However, many

9             customers who would like to use distributed generation at their homes or businesses lack

10           the upfront capital to do so, or do not wish to operate and maintain the actual system.

11           Third party power purchase agreements would allow a developer to build and own the

12           system, and then sell the power back to the customer, alleviating the need for initial costs

and responsibilities for operations and maintenance.51

13

14           Allowing for aggregate net metering is another possible change to the net metering rule

15           that could increase participation. Since many local governments, school systems, and

16           other entities typically have multiple accounts and meters, they may not be able to fully

17           take advantage of net metering in Indiana. Aggregate net metering would allow the

18           customer to apply net excess generation over multiple meters on contiguous parcels

19           owned or controlled by the customer, such as allowing a school system or group of

20           municipal buildings to share a wind turbine. Similarly, community net metering would

allow different customers with their own meters but contiguous

1             properties in a

2             neighborhood to apply net excess generation amongst several customers. Finally, virtual

3             net metering would allow net metering amongst non-contiguous properties of the same

4             customer, such as a chain of restaurants or gas stations. The Commission could explore

5             these options to increase net metering participation, in addition to investigating

6             interconnection improvements to remove barriers to net metering in the state.

7

VI. CONCLUSION

9             Q. Please summarize your conclusions and recommendations

10           A. The complaint, answer, testimony, exhibits, and discovery documents filed or produced

11           in this proceeding demonstrate that the Indiana interconnection standards, and Vectren’s

12           processes for implementing those standards, should be improved to facilitate the efficient

13           interconnection of small generators. As it stands, the interconnection process could act as

14           a deterrent to significant customer utilization of Indiana’s net metering program.

15           Specifically, the standards and supporting practices should be updated to simplify the

16           manner in which interconnection agreements are exchanged and executed. The Indiana

17           interconnection standards should also prohibit utilities from requiring disconnect

18           switches for small inverter-based generators because such a requirement is not necessary

19           to protect the safety of utility workers or the safe and reliable functioning of the grid, and

20           raises the cost of interconnection. The Commission should consider adopting additional

21           changes along the lines of the reforms outlined in the IREC Model Rules and the recent

22           FERC SGIP update. Taken together, these improvements could help ensure that the

23           interconnection process facilitates, rather than hinders, net metering. Finally, increased

flexibility within the net metering rule could allow for greater net metering

1             participation

2             within Indiana. It is my opinion that these changes would be best considered and

3             addressed through the opening of a separate rulemaking focused specifically on

4             interconnection and net metering.

5             Q. Does this conclude your testimony?

6             A. Yes, it does.

Next Action:

The Indiana Utility Regulatory Commission will conduct a public Evidentiary Hearing in Cause No. 44344 in the lURC Conference Center, Suite 220, Judicial Courtroom 224 of the PNC Center, 101 W. Washington Street, Indianapolis, Indiana, commencing at 9:30 AM, local time, on Wednesday, March 26, 2014. This hearing is open to the public.