The third-ranking Republican in the Indiana Senate incorrectly said that a financial incentive for installing solar panels would likely disappear unless lawmakers supported his bill to revamp the benefit.
At least one lawmaker said that inaccurate testimony by Sen. Brandt Hershman during a recent Statehouse hearing led him to back the proposal. The bill would sharply curtail the benefit that homeowners, churches, businesses and schools now reap by harnessing the sun's energy.
Hershman, of Lafayette, painted a dire picture when he promoted the bill. He inaccurately stated that without changes included in his measure, everyone who currently benefits from a state "net metering" program would be kicked off once a cap was met.
"Gone. No grandfathering. No guarantee. Nothing," he said during a Feb. 16 hearing. "People ask for a reason for the bill—this is part of it."
If that were true, roughly 1,000 utility customers in Indiana who get credit on their bill for feeding—or "net metering"—surplus power back into the grid would face the possibility of a major financial loss on their investment in alternative energy generation.
The measure, which is expected to come up for a vote before the full Senate this week, was ultimately approved by the committee on an 8-2 vote.
Hershman backed down from his comments in a written statement Friday, though he insisted that his testimony was "accurate" and declared it "a non-issue."
"This is a manufactured controversy from a liberal special interest group seeking to perpetuate a program that, as it grows, will hurt consumers while financially benefiting the group's clients," Hershman said.
Indiana law currently mandates that solar panel owners are allowed to feed excess energy they generate back into the power grid, which they must be compensated for.
But utility companies say the current rate of compensation offered through net metering is more than it costs the utilities to produce the same amount of energy. Hershman hopes to reduce that rate through his bill. Solar energy proponents say the current rate is needed in order to break even during the useful life of a solar panel system.
State law requires utilities to allow new customers to join net metering programs until about 1 percent of the utility's energy comes from an alternative energy source, such as solar.
Once the cap is met, utilities are still required to offer the benefit to existing participants, though they may turn away additional people who want to net meter, according to the Indiana Utility Regulatory Commission.
But that's not what Hershman told fellow lawmakers. And opponents suggest that his false statements were intended to drum up support for his bill.
The Indiana Distributive Energy Alliance, an alternative energy advocacy group, said in a letter to lawmakers that "misstatements" by Hershman about Indiana's net metering rules "simply are not true" and were "so egregious we think they may have unfairly influenced (the) committee vote."
On Friday, Hershman said he wanted to clarify his comments, and he acknowledged that "existing customers would be grandfathered" under the current rule.
Sen. Lonnie Randolph, D-East Chicago, said he initially planned to vote against the bill, but was persuaded during the hearing.
"Knowing what I know now, I would not vote for the bill," said Randolph.
Growth in the solar energy market could eventually eat away at the business of the big utilities—in Indiana Duke Energy, Vectren and Indiana Michigan Power—which have a powerful voice and support Hershman's bill to curb the solar power benefit.
Hershman said worries about his proposed decrease in the rate of compensation for solar panel owners could be rendered moot as the cost and efficiency of solar technology improves. The bill, he said, is an attempt to balance the interests of utilities, while still supporting alternative energy sources.