It was some Ted talk.
Arkansas Business reported last week that Public Service Commission Chairman Ted Thomas would be speaking to the state Legislature’s Joint Energy Committee at the Capitol (see Co-ops Blocking The Sun, PSC Told), but did you know he said some utilities’ resistance to pro-solar policies had risen to the level of defiance?
Lawmakers convened the hearing March 3 to discuss global energy crisis pricing and what solar project developers see as a pattern of foot-dragging on projects grandfathered in under Arkansas’ net metering rules. Those give customers with solar generators a good price for the power they put back onto the electrical grid.
The rate, nearly 10 cents per kilowatt-hour, was the object of a five-year case the PSC and Thomas finally decided in June 2020, but it is guaranteed only through the end of the year. Solar installers and customers have reported that a few electric cooperatives are putting up hurdles like insurance and inspection requirements, even application fees, to suppress solar adoption.
“What we have right now is somewhere between 80 and 120 solar facilities built, constructed, sitting out in the sun, in an era of high natural gas prices, generating nothing,” Thomas said with obvious incredulity. “They stand as a warning to the person that made the risk to do that [put up solar panels], and to their neighbor: Don’t go down this road: You will be punished, you will be fee’d, you will be litigated.”
The cooperatives deny they are stonewalling, arguing that solar systems and net metering present novel challenges, and that adding too much solar capacity too fast can overwhelm planning. As member-owned cooperatives, they have no profit motive, they point out.
But Thomas said current rules do not require a state-employed inspector to verify the safety of solar interconnections, as some co-ops are requiring, only a qualified inspector. He also called new insurance requirements for up to $5 million in liability coverage an unauthorized increase in costs for solar customers under the state’s Solar Access Act.
‘Resistance to the Law’
“What we have is resistance to the law, resistance to regulation,” said Thomas, an attorney by training who was appointed by Gov. Asa Hutchinson to the PSC in 2015.
He said none of the utilities had filed for a grid fee, the mechanism regulators have established to address issues like cost shifting to non-solar customers.
“In spite of the success of this policy [in promoting solar power and economic development], there has been and remains fierce resistance, even to the extent of defiance,” Thomas said. “Most of the argument is about the cost shift, but in the net metering order we said specifically bring us your cost shift [argument] in data form … and we’ll set a grid fee.
“We have yet to see a single grid fee filed,” Thomas continued. “Instead, what we get is massive, consistent resistance in some quarters.” He noted that only a small minority of the state’s 17 distribution cooperatives have resisted solar interconnections. “Most have not had any problem.”
Solar Won the Steel Mill
Thomas said one rationale for the Legislature’s laws promoting renewable energy was to “play some offense” in economic development. “We’ve seen the largest economic development project in this state’s history with the U.S. Steel deal,” he said, describing the Pittsburgh industrial giant’s plans for a new $3 billion steel mill in Osceola.
“The U.S. Steel press release, if you look at it, uses the word ‘sustainability’ seven times. We won on sustainability. … Now, some will point out that the U.S. Steel deal is built on utility-scale solar, not net metering. This is true, but it misses the key point. The purpose of the policy is to give customers options.”
Rob Roedel, a spokesman for the state’s electric cooperatives, noted that wholesale power is far less expensive than what utilities pay for returned power from net metering customers. It’s understandable, he said, that certain utility executives chafe at having to buy that power when cheaper energy is available.
“We strongly believe that the concept of net-metered solar energy being credited at full retail rates vs. avoided wholesale costs is still a valid issue and the crux of the cost-shifting concern at hand,” Roedel said in an email.
“We are not against solar or any form of power generation,” he continued. “We strongly believe that a balance of power that includes baseload and supplemental resources are needed to ensure the level of reliability and affordability Arkansans expect is available 24/7/365.”