Facing a new legal challenge, Iowa's second-largest power company has abandoned a business practice that critics say improperly slowed the adoption of solar energy across the state.
Over the last year, Alliant Energy had told schools and municipalities that it wouldn't allow net metering for rooftop power-generating systems financed by third-party solar companies. That meant customers would not be credited on their bills for excess energy they generate during peak sun times and return to the grid, making many of the projects economically unfeasible. In response, customers delayed, downsized and shelved solar projects meant to reduce their energy costs and impact on the environment.
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But in a surprise reversal, Alliant said in a legal filing last week it will allow net metering for many such projects. Alliant spokesman Justin Foss said the company "revised our stance" after receiving the first formal applications for interconnection from customers entering into such arrangements.
"Since this is a relatively new issue, we adjusted to find the most customer-focused solution," Foss said.
Joshua Mandelbaum, an attorney with the Environmental Law and Policy Center in Des Moines, called that explanation disingenuous, noting Alliant hadn't received other applications because customers were told earlier in the process that net metering wouldn't be allowed.
He said the change was positive and would allow "a number of customers who are interested in pursuing solar to be able to finance their systems."
"I'm still puzzled why it took so long for Alliant to come around to this position. Nothing has changed on the ground in the last year," he said. "It only served to delay customers' ability to take advantage of this option and create unnecessary tension and bad feelings with customers."
The reversal came days after Mandelbaum, on behalf of a coalition of solar advocates, told the Iowa Utilities Board that Alliant's position violated the state's net metering rule and was thwarting renewable energy projects proposed by nonprofits and government agencies. Such entities, which don't pay taxes, often enter into agreements to purchase power directly from solar companies that install generating systems on their buildings. The arrangements allow them to benefit from federal tax breaks designed to promote solar energy.
The Iowa Supreme Court ruled last year that the so-called power purchase agreements were legal, rejecting a challenge by Alliant.
After the ruling, Alliant argued that net metering for those projects wasn't allowed because the solar companies were reselling power within its service territory, which was barred by its state operating agreements. That position has now been dropped.
Alliant notified the Iowa Falls Community School District — which dropped a proposal to install solar arrays on four school buildings — and other customers of its reversal in recent days.
"I was shocked," said Cresco city councilor Amy Bouska, who learned the news from Alliant last week. Bouska said her city's exploration of solar came "to a screeching halt" last spring when Alliant said net metering wouldn't be allowed. She praised Alliant's change but noted the utility still won't allow net metering at buildings classified as large industrial users, such as the city's fitness center and wastewater treatment plant.
Eagle Point Solar, a Dubuque-based company which had prevailed in last year's Iowa Supreme Court case, filed a complaint with the utilities board in June alleging Alliant's policy was illegal and forced it to scale back a plan to install solar arrays on buildings for the city of Asbury. Company President Barry Shear said he was surprised by Alliant's "amazing rollover."
"This change in policy from Alliant is going to have significant impact on the feasibility of projects that fall into the general service rate category," he said.