Huntingburg Council: Solar panels on homes could face $50 monthly tariff
As the Indiana Municipal Power Agency, Huntingburg’s wholesale electric supplier, takes steps to create a solar panel park in the city, the organization suggested Huntingburg adopt ordinances regulating homeowners seeking to adopt the technology.
Indiana Municipal Power Agency (IMPA) is a non-profit wholesale electric provider to the City of Huntingburg. The company is building a 1.8-megawatt solar panel park on Phoenix Drive west of Chestnut Street. Doug Buresh, senior vice-president of planning and operations with IMPA, introduced some draft ordinances for the common council to consider in regards to residential customers adding renewable power sources to their homes.
“As the prices [on solar panels] come down, we can see a lot more people having an interest in that,” Buresh said about solar power. “We need to ensure the right safety and tariffs are in place.”
In regards to safety, Buresh told the council he was concerned that electric utility employees responding to a power outage during a storm may consider a line leading from a home as safe to handle due to the outage. If they inadvertantly touch the line and it is being powered by the solar panels or another renewable power source in the residence, it could lead to them being shocked.
The proposed ordinance provides an interconnection agreement to be entered into by the resident if they install a renewable power source on their property. The agreement will provide guidelines for the installation of the renewable power source. It would also allow the city to inspect the installation of the renewable power source.
The ordinance didn’t limit the extent of its reach to solar, it included electricity produced by wind, biomass, hydroelectric and geothermal units.
The ordinance will limit the size of the units to only produce 10 kilowatts. According to Buresh, this is enough to power a 5,000 square foot home.
Additionally, the resident will agree to net-metering; a process by which the excess power produced by the renewable energy unit that reverses the resident’s meter will result in an energy credit with IMPA. The return provided by IMPA was not discussed.
A portion of the ordinance that had some councilmembers concerned was a proposed $50 tariff for residents that add the renewable power source to their home. Buresh told the council the residential customers in Huntingburg pay a $5.18 connection fee in addition to their regular rates to fund the electrical department and the infrastructure that carries the power to their homes and businesses.
“The distribution costs are pretty fixed,” Buresh said. “However, if someone comes in and they put a solar installation in and they essentially don’t use any power, they still have the poles, the service drops, the transformers, and all the things that serve their home but they aren’t really paying their fair share. Your costs are the same so that share of those costs get passed onto the non-solar customers.”
Based on this, he recommended the city consider a $50 tariff be applied to the monthly bill of residents who install solar or another renewable power source in their homes.
Councilman Jeff Bounds said he was concerned about the impact on residents in the community. “I am trying to think it from the consumer’s perspective,” he said. “The motivation to put solar panels on your home is cost savings. Adopting an ordinance to increase the base cost to be connected to the city’s distribution network would serve as a slight deterrant for someone to put in solar at all. It is going to push the break even point further out.”
Bounds said he didn’t want to adopt an ordinance that would stop people from seeking the technology.
Buresh pushed back with the overall cost of the distribution system those customers will take advantage of. “It is never intended to be punitive towards people wanting to put in solar,” he said. “It is unfair for them to use the City of Huntingburg’s system as a big battery.”
He explained those customers would use the lines, transformers and services that exist in the city as well as the city employees that service the system. They would send power out when they had an excess and then use it when they couldn’t produce enough on their own.
The Huntingburg Electric Department is completely funded through the ratepayers’ payments.
Councilman Steve McPherron said he could see why it was a good idea to adopt the tariff. “We can discuss what the charge [tariff] should be but they have done their homework on it and that is their recommended amount,” he said.
Bounds said costumers may attempt to ask for a discount on their regular electrical rates if they pay the $50 tariff.
Buresh explained that there wasn’t a lot of wiggle room on the rate since IMPA was a non-profit and they ate up a lot of the rate paid by Huntingburg ratepayers. About 20 percent of the rates paid go the city and the rest goes to IMPA.
McPherron added the customers that zero out their electric usage would just expect this $50 tariff as their minimum monthly charge.
Under Mayor Denny Spinner’s recommendation, the council decided to table the ordinance to take time to review it. They could potentially take action on it at the next council meeting on April 12.
The council also took the following actions:
-Heidi Reller for the Huntingburg Housing Authority reported they are applying for a loan from the Federal Home Loan Bank of Indianapolis for $450,000. Reller said the loan will be used to refurbish the apartments at Friendship Village and if they remain compliant with the requirements of the loan for 15 years, they won’t have to pay it back. The apartments were built in 1968 and need to be updated. The housing was created for the lowest of the low income individuals in the community; someone with no income is required to pay $50 a month for the housing. At Reller’s request, the council unanimously approved forgiving the payment in lieu of taxes in the amount of $9,180 the housing authority would have paid to the city for 2015. This money will go to assist in securing the loan/grant for the upgrades.
-Consider an amendment to the policy and procedure manual to include part-time employees in the drug testing procedures. The city has tested those part-time employees that work with the transit system. The city would like to ensure that all employees regardless of status are drug-free. This will add reserve and auxiliary police officers, volunteer firefighters, season help. Approved unanimously.
-Approved the renewal of a service contract with Eck Mundy for one year. The new contract included a change in the labor rate. It will increase from $95 per hour to $110 per hour. Regular rates at Eck Mundy is $125 per hour. PC repair and other repairs. Last year sent a little over 33 hours in work. City does not get charged a service fee and the city is billed at 15 minute increments. Labor rate has not increased for the city for four years.
-Approved a recommendation for a tax abatement for the solar panel park. A five year abatement that will shake out to payments in lieu of taxes being abated 100 percent for the first two years, 75 percent the third year, 50 percent the fourth year and 25 percent the fifth year. The abatement is not for property taxes since IMPA is exempt from property taxes. IMPA makes payments in lieu of taxes and those will be abated. Final approval will be considered on April 12 at the next council meeting after a public hearing.
-Councilman Steve McPherron acknowledged the death of utility commission member Tina Dearing’s husband. Vince Dearing passed away last week. McPherron said he and Tina had faced off twice for the council seat but the two were longtime friends. Vince Dearing also served as a Huntingburg police officer.
What’s the rush? Too many issues to address and not enough facts for the time being – let things get up and going, settle out, etc. plus time for more research and discussion. The city should hold off on any premature, knee-jerk decision until it sees more clearly what will be happening with rates and real-scenario issues. I’m sure our electric employees are well-trained enough to beware of any potential hazards that mat be associated with this and act on the side of caution as needed – Lord knows they already do it in other ways for a myriad of circumstances all the time. How do other electric entities handling all these rate and safety issues? Let’s get more info. for discussion and consideration first – not premature $care tactic$ and hyped hyperbole.
Synopsis: Power company writes an ordinance for the Huntingburg city council to discourage and penalize residents for using solar panels.
Councilman Steve McPherron supports penalizing residents by claiming the power company must know best and since the power company recommends this, it must be a good idea.
The attitude of councilman Steve McPherron, and the perception of him being easily led by the power company’s suggestions, cast doubt on his ability to act in the best interests of the community of Huntingburg.
This is ridiculous! We are already charged double on the months that they don’t send out a meter reader, and now we are being discouraged from using solar power in an attempt to escape the overcharges.
*escape the overcharges we are paying.