What is Distributed Generation (commonly referred to as “DG”)?
Distributed generation (DG) is generation of electricity from rooftop solar panels and other small-scale, on-site power sources owned by the user and installed on their premises.
Today, those who can afford it can put a solar installation on their home or business, use the electricity from it when the sun is shining and reduce the amount of power used from their utility. That, of course, can happen with other renewable resources, too. Solar is mentioned mainly because the cost of solar is dropping and more and more installers are showing up and selling those units.
The issue is that those customers still need the established electric generation, transmission and distribution system when their solar units are not producing. In short, because of the way our electric rates are established today, those customers are paying a declining share of the costs of supporting the established electric grid system (power plants, transmission and distribution systems). What happens is those costs are passed on to other customers who either do not want a solar facility or can’t afford the capital outlay for a unit. This will especially impact lower-income customers with potentially higher rates.
Therefore, our industry’s position is that it is only fair that everyone who uses the grid and benefits from its services should help pay to support it and keep it operating at all times. This is a big issue before our nation’s utility regulators. Iowa’s utility commission in January 2014 issued a directive to begin a thorough review of this issue. Utilities must meet customer service expectations and provide a safe, reliable, robust and cost-effective electric grid. Electric rates should be fair and affordable for all customers.
Here’s an overview of DG and Net Metering Policies from Edison Electric Institute (source:eei.org/issuesandpolicy/generation/NetMetering/Pages/default.aspx):
“Across the country, there is growing interest in using rooftop solar panels and other small-scale, on-site power sources known as distributed generation (DG). To encourage the introduction of these systems when they first came to market years ago, many states approved a billing system called net metering.
“While net metering policies vary by state, generally customers with rooftop solar or other DG systems are credited for any electricity they sell via the electric power grid. Electric companies are required to buy this power typically at the full retail rate, which includes all of the fixed costs of the poles, wires, meters, advanced technologies, and other infrastructure that makes the grid safe, reliable, and able to accommodate solar panels or other DG systems. Through the credit they receive, net-metered customers effectively are avoiding paying these costs for the grid. As a result, these costs are shifted to those customers without rooftop solar or other DG systems through higher utility bills.
“Net metering policies and rate structures in many states should be updated so that everyone who uses the electric grid helps pay to maintain it and to keep it operating reliably at all times. This will ensure that all customers have safe and reliable electricity and that electric rates are fair and affordable for all customers.”
Edison Electric Institute (EEI) maintains a number of online resources on distributed generation. Make sure to check them out! MidAmerican Energy provides online information on distributed generation (Environmental Efforts: Distributed Generation & distributed generation FAQs (pdf)). Alliant Energy provides valuable online information on customer-owned generation in Iowa.
Recent Activity in Iowa Regarding Distributed Generation
IOWA UTILITIES BOARD NOI ON DISTRIBUTED GENERATION
Including Net Metering, Interconnection of DG & Including Reports, and IUB’s Fall Workshop for DG Checklist
The Iowa Utilities Board (IUB) on January 8, 2014 issued an Order Initiating Docket No. NOI-2014-0001 to gather information related to policy and technical issues associated with distributed generation. The Board sought public comments, which were submitted via and may be viewed on the Board’s electronic filing system. View the Board’s news release for more information, and subsequent, related orders below:
APRIL 30, 2015
IUB ISSUES ORDER SOLICITING ADDITIONAL COMMENTS ON NET METERING POLICY
Iowa Utilities Board (IUB) issues Order Soliciting Additional Comments on net metering policy (related to Docket Title: Distributed Generation; Docket No. NOI-2014-0001). Also issued is a Gold Memo Regarding Recommendation to Solicit Additional Responses for Net Metering.
MARCH 12, 2015
IUB ISSUES ORDER SOLICITING REPLY COMMENTS ON PROPOSED RULE CHANGES REGARDING CERTAIN INTERCONNECTION ISSUES
Iowa Utilities Board (IUB) issues Order Soliciting Reply Comments on Proposed Rule Changes Regarding Certain Interconnection Issues related to Docket Title: Distributed Generation; Docket No. NOI-2014-0001. Also issued is a Gold Memo Regarding Recommendation Regarding Interconnection of Distributed Generation.
DECEMBER 29, 2014
IUB ORDER SCHEDULING CONFERENCE CALL REGARDING DG DATA AND REQUIRING FILING
The Iowa Utilities Board issued an “Order Scheduling Conference Call Regarding Distributed Generation Data and Requiring Filing.” Also: “Gold Memo Regarding Scheduling Conference Call to Discuss Distributed Generation Data.”
DECEMBER 22, 2014
IUB ORDER ORDER SOLICITING PROPOSED RULE CHANGES REGARDING CERTAIN INTERCONNECTION ISSUES
The Iowa Utilities Board issued an “Order Soliciting Proposed Rule Changes Regarding Certain Interconnection Issues.”
DECEMBER 3, 2014
IUB ORDER SOLICITING FINAL COMMENTS REGARDING ON-SITE GENERATION GUIDE
The Iowa Utilities Board issued an “Order Soliciting Final Comments Regarding On-Site Generation Guide.” This order follows approximately 30 inquiry participants who attended a scheduled workshop (as set forth in a September 19 IUB order) to discuss the draft generation checklist for use by utility customers who were considering on-site generation and there were numerous suggestions for improving the checklist. In particular, several participants suggested that the draft checklist was too long and complicated, which could potentially overwhelm customers considering DG. However, there were others who wanted the checklist as comprehensive as possible to make sure customers were aware of the various issues associated with installing DG. The draft checklist has been revised to incorporate many of the suggestions from the workshop. The checklist, which is found at the end of the December 3 order, has been renamed “The Informational Guide for On-Site Generation” and includes five sections. Also issued was a “Gold Memo Regarding Informational Guide for On-Site Generation.”
SEPTEMBER 19, 2014
IUB ORDER SOLICITING ADDITIONAL COMMENTS AND SCHEDULING WORKSHOP ON DISTRIBUTED GENERATION, SETS FALL WORKSHOP DATE
The Iowa Utilities Board issued a third order, an “Order Soliciting Additional Comments and Scheduling Workshop,” regarding its Notice of Inquiry on Distributed Generation (DG), NOI-2014-0001. In the order, the Board encourages reply comments by October 24, 2014.
Also issued was a “Gold Memo Regarding Recommendation to Solicit Additional Responses Regarding Net Metering and Interconnection of Distributed Generation and Schedule a Workshop for Distributed Generation Checklist.”
IUB states the workshop will “allow participants an opportunity to develop a DG checklist that will assist customers in understanding the process and responsibilities associated with installing DG.” The IUB attached a draft checklist, developed by Board staff: “The draft checklist will be useful to participants in preparing for the workshop.”
The order addressed other topics in the broad DG inquiry such as net metering and the issue of feed-in-tariffs (FITs).
MAY 12, 2014
IUB ORDER SOLICITING ADDITIONAL COMMENTS ON DISTRIBUTED GENERATION, NET METERING & INTERCONNECTION and INCLUDING REPORTS
The IUB issued an Order Soliciting Additional Comments on Distributed Generation, Net Metering, & Interconnection and Including Reports. This second order is a follow-up to the Board’s January 8 Order Initiating Docket No. NOI-2014-0001 to gather information related to policy and technical issues associated with distributed generation. The same day, the Board also posted on its website a Gold Memo Regarding Recommendation to Solicit Responses Regarding Net Metering, and Interconnection of Distributed Generation.NOTE: On page 2 of the NOI, the Iowa Utilities Board defines distributed generation, or DG, using the following words: “In order to facilitate dialog in this inquiry, the Board and participants should have a common understanding of DG. For purposes of this inquiry, DG is generation fueled by renewable or fossil-fuel sources that is built in order to serve load located at or near the generator and capable of delivering power to a utility’s distribution system.”
JANUARY 8, 2014
IOWA UTILITIES BOARD ISSUES NOTICE OF INQUIRY ON DISTRIBUTED GENERATION
The Iowa Utilities Board (IUB) on January 8, 2014 issued an Order Initiating Docket No. NOI-2014-0001 to gather information related to policy and technical issues associated with distributed generation. The Board sought public comments, which were submitted via and may be viewed on the Board’s electronic filing system. View the Board’s news release for more information.