Last week, Entergy Arkansas filed a petition for the rehearing of a landmark decision made by the Arkansas Public Service Commission regarding net metering, a huge issue in the state’s developing solar power industry.
On Wednesday (June 30), Entergy Arkansas outlined its objections to the commission’s June 1 ruling, known as Order No. 28, which allows residents to continue to receive a 1:1 retail credit for the unused electricity their renewable energy systems send to the grid until at least 2023.
The new rules established rates, terms and conditions for net metering in Arkansas and implemented the provisions of Act 464, which went in effect in July 2019. The law allows third-party financing for those looking to use solar energy and increased the allowed generating capacity for commercial solar systems from 300 kilowatts to 1 megawatt.
The new net-metering rules also allow existing agreements between net-metering customers and utilities to remain in place, or grandfathered, for 20 years.
Starting in 2023, a utility can request an alternate net-metering 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,” according to the new rule.
Another change in the net-metering rules regards commercial systems with a generating capacity of between more than 1 megawatt and 20 megawatts. For customers with these systems, they will receive a 1:1 retail credit for net electricity generation but will face a utility grid charge. The charge will initially be set at zero, but utilities may request to change the charge.
Entergy Arkansas is raising a number of objections in its request for rehearing.
The state’s largest electric utility, which has also advanced some of the state’s largest solar projects, said the PSC’s order falls short of achieving a balance between public and private interests.
“The Commission’s order falls short of achieving that needed balance and fails to establish the protections intended under the legislation. Thus, Entergy Arkansas is requesting rehearing of the Commission’s order to ensure that many of our customers are not paying for some other customers to invest in private solar facilities. Specifically, Entergy Arkansas is seeking rehearing on a variety of issues in Order No. 28 that are unlawful and not aligned with the General Assembly’s intentions on net-metering. As currently written, Order No. 28 extends the subsidies to private solar developers like the 1:1 full retail credit and provides for the continuation of those subsidies far into the future through the provisions on grandfathering,” Entergy said in a statement provided to Talk Business & Politics.
Other objections include:
- That Act 464 has not been implemented in the manner envisioned by the General Assembly when it was enacted because customers with private solar facilities will not pay their fair share of the grid they use and all other customers will have to pick up those costs.
- Order No. 28 authorizes facilities that may not even meet the statutory definition of net-metering facilities.
- The only evidence which could have served as a basis for the commission’s order was a study, which exaggerated the benefits of net-metering by relying on old data and other incorrect assumptions.
- By allowing individual retail customers to procure their electric utility service from a generator not on their premises and to use the utility’s grid to move that power to the customer’s various retail accounts, the Commission has unlawfully implemented a form of deregulation but without the safeguards required as part of any such effort to ensure due process.
- The Commission rejected two-channel billing with very little explanation and refused to implement a grid charge immediately to offset the shifting of costs to other customers.
- The General Assembly was clear about the narrow class of facilities that could qualify for grandfathering, such as those that have submitted a standard interconnection agreement. The statute also does not permit the Commission to grandfather entire classes of net-metering facilities, which is the result achieved under Order No. 28.
Other groups also filed to rehear, stay or seek clarification of the PSC’s order including Arkansas Attorney General Leslie Rutledge, the Arkansas Electric Energy Consumers Corp., the Arkansas Electric Cooperative Corp., and Scenic Hill Solar LLC.
Editor’s note: Jeff Della Rosa and Roby Brock contributed to this report.