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Appeals Court Ruling Backs Solar Development

3 min read

The Arkansas Court of Appeals ruled in favor of solar power Wednesday, generally backing net-metering decisions and favoring solar developers.

It was another shot in a bitter battle among solar companies, utilities including the Arkansas Electric Cooperative Corp. and Petit Jean Electric Cooperative of Clinton, and the Arkansas Public Service Commission.

The opinion, in brief:

  • Upheld Arkansas “net metering” rate structure, the means by which solar energy customers receive the full retail rate for excess energy they return to the electric grid
  • Reversed the authority of utilities to impose a “grid charge” to net metering customers
  • Clarified net metering requirements in a way that made it easier to both approve small solar systems and to aggregate smaller solar systems.

The appeal had challenged the PSC’s approval of a 1-to-1 rate for power solar customers put back onto the grid, equal to the rate utilities charge for delivering power to retail customers.

The appeals court decision, a majority ruling written by Judge Phillip T. Whiteaker, upheld the higher rate for solar customers and rejected an argument by the Petit Jean cooperative that communications between PSC Chairman Ted Thomas and a Petit Jean consultant amounted to injudicious interference that should have disqualified him from ruling.

The PSC handed down the net metering ruling in June 2020, deciding a four-year case over what utilities should pay for the power that private solar panels put onto the grid. It decided against lowering compensation, which had been set to match the retail price.

That ruling led to the appeal; Thomas had been accused of bias in 2019.

Thomas has generally been regarded as a solar power supporter, and in fact was named the Arkansas Advanced Energy Association’s Ron Bell Advanced Energy Leadership Award winner for his contributions to renewable power.

More: Read the appeals ruling here.

The appeals ruling found that Thomas’ “misplaced effort to urge Petit Jean’s compliance with the Commission’s orders in the tariff docket” did not amount to a conversation on matters “outside the official record” and did not require him to recuse himself from the net metering docket.

The appeals ruling also favored Scenic Hill Solar of Little Rock, led by former Lt. Gov. Bill Halter, on allowable sizes for solar generating facilities. The PSC was beyond its statutory authority in regulating solar fields generating less than 1,000 kilowatts, and in setting specific standards for arrays between 1,000 and 5,000 kilowatts.

“Scenic Hill Solar won all of our points and the co-ops lost all of theirs,” Halter told Arkansas Business in a text message. He said the ruling dismissed broad arguments that the net metering order was wrongly decided and that Thomas should have been removed from the order-making.

John T. Elkins, general counsel of Seal Solar in North Little Rock, said in a summary to company executives that “the industry won every single issue that was on appeal.” While the ruling did reverse the PSC on three issues, “all those reversals favored the industry.” Those had to do with standards on net metering system sizes, and a ruling that the commission “cannot consider cost-shifting for facilities between 1,000 kilowatts and 5,000 kilowatts.” The ruling, in Petit Jean Electric Cooperative v. Arkansas Public Service Commission also found that the commission erred in establishing a zero-dollar grid charge for net metering customers.

Environmentalists praised the ruling, including Glen Hooks, Arkansas Policy Manager for Audubon Delta, who called it “great news for Arkansas ratepayers and clean energy businesses.”

Hooks said the court confirmed that the state’s net metering rate structure is “fair and well-reasoned while also making it easier for more kinds of solar systems to be approved. “ Ultimately, he said, “this ruling means better air quality, lower electric bills, and more clean energy jobs in Arkansas.”

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