The Arkansas Public Service Commission today issued its long-awaited decision on “net metering,” or the rate solar power generators are reimbursed for excess power they put into the utility grid.
Entergy wanted a reduction in the 1:1 rate (10 cents for every kilowatt-hour, the same amount Entergy charges its residential customers). The growing solar power industry said the aim of power companies — which are getting into solar power, too — was to cripple their business and preserve power monopolies. The power companies argue the solar generators were getting a free ride on the grid they maintain and build into their customers’ rate base.
The decision seems something of a compromise, with some future variations possible for some solar power users. But the Sierra Club was quick to claim a victory for solar power.
In a victory for Arkansas clean energy consumers, today the Public Service Commission (PSC) ruled that solar power generated by users and returned to the grid shall be credited by utilities at a fair price that encourages the growth of the solar industry in our state. A 2019 bipartisan solar law required the PSC to determine how to credit residential customers for the value of solar energy generated by home solar systems that flows back to the electric grid.
Under net metering, which solar advocates support, there is even compensation, meaning the excess power sent to the utility’s grid would be credited at the same price the utility sells electricity to its customers. Utilities only wanted to pay thirty percent for the solar power it purchases under net metering compared to the cost of electricity it sells to customaers. Sierra Club intervened at the PSC in support of the decision today.
Glen Hooks, Director of the Sierra Club’s Arkansas Chapter: “Today is a solid victory for those who care about fairness and clean energy jobs 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. 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.”
Here’s how the PSC put the decision in its summary:
First, the Commission adopts and defines the rate structure for NetMetering Customers. For Residential and Non-residential Customers without a demand component, the Commission finds that the current 1:1 full retail credit for net excess generation should be retained for now as the default Net-Metering rate structure. However, after December 31, 2022, a utility may request approval of an alternative NetMetering rate structure that is in the public interest and will not result in an unreasonable allocation of, or increase in, costs to other utility customers.
For Non-residential Customers up to 1 MW with a demand component, the Commission finds that continuation of 1:1 full retail credit for net excess generation is required.
For demand-component customers installing Net-Metering Facilities with generation capacity from over 1 MW to 20 MW, the Commission finds that there is some evidence of potential cost-shifting which justifies a change in the Net-Metering rate structure to 1:1 full retail credit for net excess generation plus the adoption of a grid charge. The grid charge will initially be set at zero. Once the Net-Metering Rules become effective, a utility may request approval of a revised grid charge rate based upon evidence that an unreasonable cost shift to non-Net-Metering Customers is occurring or has already occurred on a cumulative basis, rather than on the basis of an individual Net-Metering Customer’s proposed facility(ies).
All Net-Metering Facilities remain subject to any other changes or modification in rates, terms, and conditions.
Kyle Massey at Arkansas Business, who’s covered the story, has good analysis here.