On Thursday, the Arkansas House of Representatives passed legislation that would cut solar discounts starting in 2025, despite opposition from the state's commercial and industrial electricity customers. Senate Bill 295 was approved by the Senate on Tuesday and will now be submitted to the governor for his signature.
Former Public Service Commissioner Ted Thomas, who led the approval of the current solar energy policy during his nearly seven-year tenure, said the legislation would "destroy the third-party solar industry in Arkansas."
The deputies voted for the adoption of the bill by 73 votes against 14, with 6 abstentions.
The law reduces compensation for solar energy users to the wholesale prices that electric companies pay to other utilities, which is about 5 cents per kilowatt hour. Utilities now pay solar customers retail rates or individual rebates calculated at the same rate that electric utilities charge for delivering electricity to homes and businesses.
The remuneration policy is commonly referred to as net bookkeeping.
According to Entergy Arkansas, the state's largest electric utility, the current retail price is about 11 cents per kilowatt-hour, and the wholesale price is between 4 and 6 cents. Solar energy users are billed for the excess energy they generate and transmit to the grid for use by all Arkansas customers.
SB295 in the House of Representatives, sponsored by Rep. Lenny Veit, R.-Benton, and Senator Jonathan Dismang, R.-Searcy, the bill is titled "Aims to Prevent Cost Sharing and Ensure Equity for All Taxpayers." upper room. Supporters of the bill argue that the change in net metering costs places more of a burden on non-solar consumers to pay for investments that support the government's grid infrastructure.
In the House on Thursday ahead of the vote, Veit said legislation is needed to reverse the cost-sharing supported by solar compensation.
“The more [electricity] that is sold to a retail chain, the more it costs other customers in the state,” Veit said. "That's the main reason for the change in value."
The spending trend hit $18 million in 2021 and will reach $290 million by 2040, Veit said.
The bill was initially opposed by the solar industry and users, but Dismang reached a compromise with the Arkansas Advanced Energy Association, which dropped the objection after changes that extended net metering through 2024 and expanded the radius to allow solar farms. Inside. 100 miles of custom objects. Net metering systems are limited to generating 5 megawatts of electricity. The bills, originally proposed this year, would end net metering fees for new solar energy users and allow solar farms to be located just 5 miles from a user.
Existing solar customers and those approved next year will be connected to grid meters and will continue to be individually rewarded at retail prices until 2040. However, the installation is expected to be completed or resumed by September 2024.
Arkansas Electric Utilities, which has repeatedly tried to abolish net metering through the Public Service Commission and the judiciary over the years, has been content with the legislative efforts they support.
According to Buddy Hasten, President and CEO of Arkansas Electric Cooperatives, approval was key to preventing cost overruns.
“Under this law, the amount transferred to non-net accounting members will not be settled after the overproduction bonus payment deadline in September 2024,” Hasten said on Thursday. "The adoption of SB295 provides equity by allowing members to continue paying for solar if they choose to use the technology, while reducing the amount other members must subsidize for that choice."
Entergy was also free. “We appreciate the leadership that the General Assembly has taken on this issue,” spokeswoman Casey Kirschvink said. "Reaching an agreement with the Arkansas Advanced Energy Association ensures that those who want to install solar panels can continue to do so, and those who don't have to pay anymore."
An agreement with the Arkansas Advanced Energy Association, a trade group primarily representing the solar industry, ended the heated debate over the bill, although opposition remains. Consumers at Arkansas Electric Power Inc., a coalition of industrial and commercial clients, are pushing for restrictions that will limit large solar projects starting in 2025.
Jordan Tinsley, an associate lawyer representing the group, said the law is “only intended to limit the installation of large customer-owned generation assets, although large consumers do not contribute to the expected cost shift as they pay less fixed costs. the lion's share of the inevitable demand fees."
Utilities, according to Tinsley, have made legislative efforts to protect their monopoly status and block the development of solar energy.
“If we give regulated monopolies too much power over the legislative process…then they get the benefits of a monopoly without the disadvantages of regulation,” he said.
Thomas, a former PSC chairman who stepped down last year, also criticized the "political forces" used to push government solar policy.
“For more than two years, our government policy has been that if a utility believes costs have changed, they must provide evidence and offer a system fee to offset the cost change,” Thomas said, referring to possible fees. applies to consumers of solar energy in the event of price changes. “None of the suppliers provided the necessary evidence. Now political forces are being used instead of evidence.”
Legislation should aim to protect the development of solar energy as an economic engine and create tools to measure and prevent cost volatility, Thomas said.
“The bill rejects this approach and removes on-demand solar options for monopoly utilities,” Thomas said Thursday. “The goal of the bill is to kill off-utility solar by setting a tiered rebate on customer-owned solar below the amount of credit the utility receives in regional markets for that solar. Energy-based solar science will destroy the third-party solar industry in Arkansas."
The Public Utilities Commission has approved net metering in 2020 under legislation that came into effect in 2019. The utility's cost-shifting arguments have been dismissed by government regulators and courts.
Federal statistics show that the number of net meter consumers in Arkansas increased from 2,098 in 2019 to 6,562 at the end of 2021. In 2010, there were only 117 net meter customers in Arkansas.
