After the state attorney general's office made a case Thursday to allow Arkansas utilities to essentially pay less for electricity generated by customers with solar power systems, citing language in a 2015 law, the law's sponsor begged to differ.
State Rep. Stephen Meeks spoke at a crucial public hearing before the Public Service Commission, which is considering changing the state's rules on net metering, the billing process that gives credits to solar households and businesses that create more power they can use and put the excess amount back onto the electrical grid.
Assistant Attorney General Shawn McMurray told the three-member commission, which has been studying the issue for a year and a half, that Act 827 of 2015 requires that rates charged to net-metering customers must "recover the entire cost" utilities face in serving them. He sided with the state's power companies, including Entergy Arkansas and the 17 rural power cooperatives, in supporting a "two-channel" billing system that would credit solar customers perhaps half the retail rate for the excess electricity they put onto the grid. The rules now credit customers at the same rate as retail.
But Meeks, a Republican from Greenbrier, told the commissioners and a packed house of solar advocates that the utility argument is wrong. "Let me be clear that the intent of the language is not two-channel billing; there should be no two-channel billing whatsoever interpreted in this language."
Heather Nelson of Seal Energy Solutions, an energy efficiency and solar installation company based in North Little Rock, called it a "mic-drop moment."
The attorney general's office and the PSC staff were members of one of two study groups that presented competing net-metering proposals to the commission, which is expected make a ruling in the coming weeks or months. Sub-Group 2, as it is called, also included power companies and a group of industrial power users arguing that if net-meter customers get credit at the retail rate, costs would necessarily be passed on to ratepayers without solar generation systems.
McMurray said that the state does not oppose "renewable energy sources in general or solar energy in particular," and he insisted the PSC rulemaking should not be a "referendum" on solar.
But industry experts say the ruling could indeed shape the future of solar power at Arkansas homes and businesses for decades to come. "The state of Nevada tried [a two-channel billing system]; it devastated their solar industry," Meeks testified. "I encourage the commission to not make the mistake of going to two-channel billing here."
Jason Keyes, an attorney for Scenic Hill Solar of Little Rock, which is led by former Lt. Gov. Bill Halter, said the two-channel system would confuse potential solar customers and cripple a growing installation industry. Although Arkansas ranks high in sun exposure, it has fewer solar-generating customers than almost all other states, less than a thousand, according to Thursday's testimony. The proposal from the utilities is "not a minor inconvenience," he said but rather an "intractable barrier to customers' ability to determine whether solar is a good deal or not."
Most of the comments from the public on Thursday were overwhelmingly in favor of keeping the one-to-one ratio for retail power consumed and excess power returned to the grid. Environmental groups have also sided with solar advocates in Sub-Group 1, the side opposing two-channel billing, arguing that utilities are not factoring in the benefits they receive from distributed generation, or the on-site creation of electricity. Those benefits include reduced peak demand and the eventual need to replace fewer multimillion-dollar generation plants, Keyes said.
But Sandra Byrd of the Arkansas Electric Cooperative Corp. told Arkansas Business that customers interested in solar power should install a system that closely matches their needs, because even under the utility plan, they can fully offset their own electric bill; they just cannot sell excess power back to the utility at the same rate they're charged for retail usage.
"The customer who puts a system behind the meter would still be able to offset 100 percent of their energy usage with solar, and our proposal would pay them cost of the energy, plus a little extra, for the excess power," she said. The energy cost is less than the retail cost "because a lot of factors and costs go into delivering electricity," she said. "It's not just generation, but infrastructure, the lines, the poles, the people who work on them, services."
Byrd said it only makes sense to acknowledge the cost burden of the power grid infrastructure.
While Meeks' testimony was a dramatic moment, solar businesspeople like Nelson of Seal Energy Solutions are uncertain which direction will be taken by the commission, made up of Chairman Ted Thomas and members Kimberly O'Guinn and Elana C. Wills.
"I'm holding out a solid opinion on their temperature," she said, noting that testimony was to continue Friday morning.