Northwestern concerned about Senate energy bill

KOKOMO - A bill in the Indiana Senate could change the way schools look at renewable energy.

Senate Bill 309, titled Distributed Generation, would change how people and organizations sell energy back to energy companies. For schools that have already invested in solar panels and wind turbines, the bill could lead to lower paybacks.

The Northwestern School Corporation installed a wind turbine in 2012 after the Indiana Utilities Regulatory Commission approved net metering, allowing individuals and organizations, including businesses and school corporations, to be credited at the retail price of electricity.

“When they passed net metering, that made it financially attractive for us to go ahead and proceed (with the turbine),” said Ryan Snoddy, Northwestern superintendent.

Snoddy estimates that the school would lose 5 to 7 cents per kilowatt of electricity produced by the turbine if net metering is removed, which could add up to more than $40,000 a year, he said. The turbine produces just under 1 megawatt of energy a year.

Earlier this month, an amendment was added to the bill that would allow certain qualifying entities, such as Northwestern and other schools, to continue net metering for the next 30 years. An earlier version of the bill would have extended net metering for these entities for the next 15 years.

Snoddy said the extension, which would mean the school would be able to continue net metering until 2047, improves the bill, but it still doesn’t make it appealing. The school will eventually have to consider replacing the top of the turbine, but only if the investment in alternative energy is still worth it, he said.

“I’d like to see schools and cities exempt,” he said.

The school has considered adding solar panels as well, but Snoddy said the return on that investment would be smaller than on the turbine. They still could add wind turbines in the future, he said.

“The benefits to us for doing solar would be a hedge against inflation and utilities cost, and the fact that we could demonstrate green energy,” he said.

The bill’s author, Brandt Hershmann, said the bill doesn’t discourage alternative energy, but it will protect other energy rate payers.

“The wholesale price of energy is somewhere between 3 and 4 cents, but retail is between 11 and 12 cents,” Hershmann said. “If you have a solar panel on your roof, you can generate energy for your own use, and anything you put back, you’re credited for at full retail rates. The cost pressure of that, it amounts to a significant subsidy.”

Hershmann said people can still receive that subsidy until net metering is no longer allowed, and he said that’s fair given the declining cost of alternative energy technology.

“As we see the cost of alternative generation going down because of improvements in technology, it is becoming more and more competitive with traditional means of generation,” he said. “We think it will be able to compete very well on its own without a subsidy.”

The Kokomo School Corporation is planning to add solar panels to Pettit Park Elementary, but Kokomo Superintendent Jeff Hauswald said the panels would not create enough energy to make a financial difference for the school. However, he said the bill appears to look backward for Indiana.

"Alternative energy is a reality for many people," Hauswald said. "The market will drive change, and anytime we pass legislation that can negatively create a roadblock to progress, it doesn't make sense."