Net metering for solar power delayed for now in Arkansas

Solar advocates won at least a temporary victory Monday when the Arkansas Public Service Commission issued an order maintaining current rate structures for existing residential and rooftop solar-power users through the end of 2022.

Electric utility providers, however, can seek a grid fee on new commercial and industrial solar projects. That fee is not in place today and would allow the utilities to recover costs that support current operations and future infrastructure development. Regulatory approval would be required for any new grid charges according to a report by the Arkansas Democrat Gazette.

The commission’s 591-page filing maintains 1:1 rate credits for solar systems under 1 megawatt. Residential customers will continue to receive credits of about 10 cents per kilowatt-hour for the power they generate and return to the electric grid. That’s the same amount Entergy charges homeowners for energy consumption, so it amounts to a 1:1 billing credit.

Beginning in 2023, utility providers can seek alternative rate structures for net metering. That request must be “in the public interest and will not result in an unreasonable allocation of, or increase in, costs to other utility customers,” the ruling said.

The commission’s decision also grandfathers in announced solar projects at the current rate structure.

The net-metering docket began in 2016 and grew more complex last year when Arkansas legislators approved Act 464. That legislation introduced third-party financing of solar systems, allowing companies and government agencies to sign agreements to buy solar power from independent operators.

The legislation sparked interest in solar usage from cities, counties, school districts and other public agencies that have established power arrangements with solar companies.

Act 464 also prohibited cost shifting fueled by solar usage. Cost shifting occurs when users leave an electric grid for alternative sources of power. Customers remaining on the grid may have to pay additional costs to maintain and operate the system, making up for the costs not picked up by those who abandoned the grid.

The ruling allows smaller residential solar projects to continue undisturbed while the commission evaluates the potential harm that could be inflicted on customers who remain dependent on the utility-operated electric grid for their power needs, according to PSC Chairman Ted Thomas.

“Act 464 prohibited unreasonable cost shifts,” Thomas said Monday. “There is potential cost shift from bringing on large (solar) projects. We want to measure that cost shift, in terms of dollars per month per customers, and then figure out if we need a grid fee at that point.”

That led to the commission keeping current rate structures in place while evaluating cost shifting as more solar projects are implemented, Thomas said. “We just don’t have that many projects in place right now,” he said. “We do know that some cost-shifting does occur, but we don’t know exactly to what extent.”

Electric providers will have the option of seeking an added grid charge, or fee, for solar facilities that generate more than 1 megawatt of power. “Utility companies can come in today and ask for a grid fee on any project over 1 megawatt,” Thomas said.

Solar supporters were pleased with the ruling. “Today is a solid victory for those who care about fairness and clean energy jobs in Arkansas,” said Glen Hooks, director of the Sierra Club in Arkansas.

“The PSC followed the lead of bipartisan lawmakers who realize the solar industry is good for the Arkansas economy, good for Arkansas consumers, and good for our Arkansas environment,” Hooks said. “This monumental decision puts the solar industry in a position to thrive by providing a regulatory environment that should grow green-collar jobs throughout the state.”

Electric utilities were more tight-lipped, saying they were evaluating the order to fully understand the details.

Source: Arkansas Democrat Gazette