Arkansas PSC hears testimony on state’s net-metering policy; subgroups split on state policy

Arkansas utility regulators heard more than seven hours of testimony on Thursday (Nov. 30) before an overflow crowd at the downtown headquarters of the state Public Service Commission (PSC) to determine appropriate rates and terms for net metering contracts for rooftop solar installations and other distributed renewable energy systems.

The all-day hearing in the standing-room only PSC meeting room began with opening testimony by the two opposing “working groups” that were convened nearly two years ago to study the costs and benefits of net metering under PSC docket 16-027-R by state utility regulators under Act 827 of 2015.

The biggest surprise from the Thursday’s hearing was an appearance by Act 827 sponsor Rep. Stephen Meeks, R-Greenbrier, who testified during the public comment period that he was encouraged by the robust debate on the legislation that he pushed through the General Assembly two years ago.

“My purpose in (sponsoring) this legislation is that I wanted to find to way to encourage the growth of distributed energy in Arkansas and do it in a fair, free market manner,” said the Faulkner County lawmaker. Meeks also told the commissioners he was attending the PSC hearing to clarify the legislative intent of Act 827.

“There has been some question about what the legislative intent was – especially regarding the concept of a two-channel billing system,” Meeks said to a hushed room. “Let me very clear that the intent of the language is no two-channel billing. There should be no two-channel billing whatsoever interpreted in this language.”

In March, the three-person regulatory panel, which includes PSC Chair Ted Thomas and fellow Commissioners Elana Wills and Kim O’Guinn, voted to grandfather existing solar customers into retail net metering rates for the next 20 years. The Commission also moved to take a more in-depth study of the program at the behest of the Legislature.

However, the two subgroups formed to make recommendations to the PSC on the future of net metering split into separate sides. Members of Sub-Group 1, which included state conservation, environmental and renewable energy groups, argued that state utility regulators should hold fast with current policy until further study can be completed.

Sub-Group 2, which includes Entergy Arkansas, Pulaski County, Arkansas Electric Cooperatives, the PSC staff, a group of industrial power users, and the Attorney General’s office, has supported an embedded cost of service approach to determining the costs and benefits associated with net-metering. Those arguments continued Thursday when William Ball, owner of Stellar Sun in Little Rock, told the commissioners that the economic benefits of net metering should be balanced along with the utility’s costs of distributing power over the electric grid system.

“While we may agree that these stipulations cover the essence of Act 827, there has definitely been almost no consensus regarding the costs benefits for our net metering policy,” Ball said, who argued on behalf of Sub-Group 1.

Ball also read a letter from Little Rock Port Authority Director Brian Day that referenced a situation where Little Rock site consultants lost a “significant industrial prospect” because the city’s river port did not have access to renewable energy.

“Had a solar facility been in existence during those negotiations, it may have been the asset that would have set us apart,” Ball said, reading from Day’s letter.

Later, Ball argued that the intent of Act 827 was to expand net metering, not stifle it as the Sub-Group 2 proposal would do. He said he fears Arkansas utilities are seeking to weaken the state’s fledgling net-metering policy by imposing unreasonable fees.

“I am not attempting to introduce here say, only to express my belief that Act 827 is intended to improved support for renewable energy here in Arkansas,” he said.

After Ball’s testimony, several other groups spokes in support of the PSC’s ongoing net-metering policy. Sierra Club attorney Casey Roberts asked the Commission to consider a 45-report by California-based Crossborder Energy that quantifies both the costs incurred and the benefits provided by Entergy Arkansas’ net-metering customers.

That study had the support and input of a broad range of solar advocates and businesses, Roberts said, adding that analysis from the report was not establishing a new complex rate design.

“We are here merely to illustrate to the Commission that net-metering is a good deal for the utilities and ratepayers,” said Roberts, who also spoke on behalf of the Arkansas Audubon Society, Scenic Hill Solar, Seal Energy Solutions and Arkansas Advance Energy Association (AAEA).

But Assistant Attorney General Shawn McMurray, speaking in support of Sub-Group 2, told state regulatory officials that the net-metering docket should not be a referendum on renewable energy or solar power.

“The issue in this proceeding is a limited one. To determine the level of the bill credit that net metering customers should receive per tariff for their excess generation which is put back into the electric system under the provisions of the Arkansas Renewable Energy Development (AREDA) Act of 2001,” McMurray said of the state’s first net-metering legislation.

McMurray later argued that other ratepayers would end up paying higher rates if the PSC continues to give net metering adopters a credit on their bill for excess energy they put back into the grid. Dawn Kelliher, general counsel for the PSC general staff, also spoke in support Sub-Group 2’s “two-channel” approach that would allow Entergy Arkansas and other utilities to fully recover its costs associated with bringing excess energy from net metering customers into the energy grid.

Following opening testimony from the two opposing groups, PSC Chair Thomas opened the hearing up to public comment. The overwhelming majority of the more than two dozen people who offered testimony to the Commission spoke in support of the Sub-Group 1 and the state’s current net-metering policy, including Meeks.

One couple, Faith and Michael Shah of Eureka Springs, said they had paid several thousand dollars to install a 48-panel rooftop solar panel system on their home and would lose all their investment. The couple said they installed the system to limit their carbon footprint, and believe renewable energy development will continue to grow in Arkansas despite some reticence at the legislative level.

In the afternoon session, the PSC Commissioners heard nearly four hours of testimony from R. Thomas Beach, author of the Crossborder Energy report, and Karl Rábago, executive director of the Energy and Climate Center in White Plains, N.Y. Beach spoke in support of solar advocates and businesses, while Rábago is serving as a technical expert for Audubon Arkansas and Arkansas Advanced Energy Association.

Former Lt. Gov. Bill Halter, CEO of Scenic Hill Solar, also engaged in a 30-minute back-and-forth with PSC Chair Thomas that included several humorous exchanges during the lengthy meeting. Commissioners Wills and O’Guinn, who was appointed to her post by Gov. Asa Hutchinson a year ago, also peppered the expert witnesses with several questions during the afternoon portion of the hearing.

The Commission will continue the evidentiary proceedings on Friday at 9:30 a.m. A decision on the docket will likely come before the end of the year.