The Arkansas Public Service Commission (APSC) is taking public comments until Oct. 4 on proposed new rules governing electric utility net metering customers, primarily homeowners who have installed solar power systems that feed power back into the grid when their energy production is in excess of usage.
The Arkansas Legislature passed Act 827 in 2015 that asks the commission to revise its net metering rules. This follows a trend in other states that have adopted net metering rules favoring utilities that see rooftop solar power as a disruption to their business model.
“New legislation requires that rates paid by net metering customers are based on the difference between the cost to utilities of providing service to these customers and the value of the benefits these customers provide to the utilities,” Pat Costner, an intervener in the case before the APSC, said. “The goal of this law is not in dispute. However, before that goal can be reached, some very contentious issues must be resolved: utilities’ costs, the benefits of net metering, and their value. Whether or not these issues are resolved equitably, their resolution will determine the future of rooftop solar in Arkansas.”
Proponents of alternative energy generation have concerns that the way the Arkansas PSC staff is proposing to implement the rules could result in making alternative energy, such as solar, less affordable.
“While there are quite a few studies that show net metering has more benefits than costs for utilities, there are countervailing studies,” Costner said. “Probably this will be debated for years to come. The devil is in the details, as is the case in issues related to electric power. It is clear looking at the proposed revisions to the net metering rule that under the new rates, which will be coming out in a year or so, people who are installing a net metering system will have to pay more upfront costs than those of us who are existing net metering customers. And how the charges are imposed will be different for each of the four investor-owned electric utilities and 17 rural electrics cooperatives.”
There is concern the new rules will discourage solar power in Arkansas at a time when it has become apparent climate change due to greenhouse gas emissions from fossil fuels and other sources is escalating dramatically.
“The sooner we move way from fossil fuel sources for electricity, the greater chance we have of avoiding catastrophe for our children and grandchildren,” Costner said. “The U.S. intelligence community warns that climate change is already destabilizing communities worldwide. It is my hope this process of revising the net metering rules will raise this awareness of climate change within utilities taking part in these proceedings and among commission members and staff.”
Costner said people considering adding solar power generation to their homes or businesses might want to do it soon before the new rates charges are established.
Northwest Arkansas is a hot bed for solar power. Part of that is attributed to the awareness raised by the campaign to stop the SWEPCO high voltage transmission line. Of electric cooperatives in the state, Carroll Electric Cooperative Corp. (CECC) has the highest ratio of net metering customers to total customers of any of the rural electric coops. Ozark Electric Cooperative is second.
Carroll Electric presently partners with 102 net metering customers in Arkansas which is 0.11 percent of total accounts, said Nancy Plagge, director of corporate communications for CECC.
“The numbers we have seen indicate Entergy has the largest amount of net metering installations in Arkansas and Carroll ranks second,” Plagge said. “Carroll Electric’s primary concern in this docket is that existing net metering accounts be grandfathered. These individuals have made significant investments and, if the rates for these consumers were significantly altered, the recovery of their investment would also be impacted.”
Plagge said the new rate design for net metering customers is still uncertain.
Michael and Faith Shah have installed a large number of solar panels at their home near Eureka Springs. Michael Shah said he is disheartened that the APSC appears to be moving towards discouraging alternative energy when “time is running out to address climate change. This heating climate in the past two years can’t be denied by any intelligent person. We are in the midst of a crisis that affects our children and grandchildren. If we are not thinking that way, we are not doing them any favors.”
Shah said the APSC and electric power companies should be doing everything possible to have encourage more solar installations being connected to the grid.
“In terms of net metering, they should be glad to take our power,” Shah said. “They should be glad to give us a credit. They should be selling and installing solar panels. But they are not. Instead, we see things like SWEPCO investing $450 million to retrofit the Turk Coal Plant when there was no reason not to know burning coal is a problem. Why are we even thinking of digging up the oil sand tars and transporting them across the U.S. on pipelines like the one being opposed at Standing Rock Indian Reservation when we have better options today for generating power?”
The Shahs have 48 solar panels on a net metering arrangement with CECC. They give CECC all their excess energy generation at no cost.
“Our 48 solar panels have produced 40.6 megawatts of electricity in two years,” Shah said in written comments to the PSC. “This production has offset 28 tons of carbon and had the beneficial effects of two acres of trees. In our local area, over 600 solar panels have been installed which could mean that together we could have saved our planet 12,857 tons of carbon with a possible product of 8,867 megawatts of electricity.”
Shah urged the APSC not to go backwards and “join other stupid states that penalize people who are fighting climate change in the most positive way.”
APSC Commission Executive Director John Bethel said the rules and rate structure are being considered separately.
“The rule changes that are being considered don’t address the rate issues at this time,” Bethel said. “The parties requested the commission separate rate issues from modifications to the rule. The rate issues will be addressed on a separate schedule over the next twelve months or so. So there will be a working group. The parties will work together to address rate-making issues. That will be a matter of determining what modifications to the current rate structure may be necessary to comply with requirements of Act 827. There is not any recommendation on those issues currently before the commission.”
Bethel said for existing net metering customers, rates would not change at this time. Whether existing systems will be grandfathered at the current rate is a question yet to be determined.
“In the proceedings, several parties have recommended that the commission grandfather or allow existing customer to continue to served under the current rate structure,” Bethel said. “Some had offered legal support for why that can be done under the statute as modified by Act 827. Others have argued it cannot legally be done.”
A public hearing is scheduled 9:30 a.m. Oct. 4, in Little Rock at PSC commission office, 1000 Center Street. Citizens can speak at the hearing, or mail in comments to Arkansas Public Service Commission, 1000 Center St, Little Rock, AR 72201. To make a public comments online, go to www.arkansas.gov/PSC, click on the public comments tab on the right, select docket number 16-027-R.
“The commission always appreciates it when individuals take time to offer those comments,” Bethel said.