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Ruling Tells Cooperatives To Cease Solar Practices

3 min read

Electric cooperative members are now free from burdensome constraints to solar power net metering since a judge’s ruling in May, Arkansas Advanced Energy Association Director Lauren Waldrip says.

Ten cooperatives were hitting home and business solar customers with improper application fees and unapproved insurance and inspection requirements, Administrative Law Judge Connie C. Griffin ruled on May 23.

Lauren Waldrip

She ordered the utilities to halt those requirements, and ruled that Craighead Electric Cooperative had to cease denying interconnection to solar customers in areas it deemed “saturated” with net-metering systems.

The utilities — Clay County Electric, Petit Jean Electric, Woodruff County Electric, Rich Mountain Electric, Arkansas Valley Electric, South Central Arkansas Electric, North Arkansas Electric, Ashley-Chicot Electric and Southwest Arkansas Electric — were ordered to stop charging fees or applying “special conditions or terms” that haven’t cleared a tariff review by the Arkansas Public Service Commission.

The cooperatives have until July 23 to file an application for a rehearing. Failing that, they could also turn to the Arkansas Court of Appeals.

The AAEA initiated the case in July of last year, accusing the cooperatives of trying to slow solar power proliferation. On existing net-metering systems and those built in the next year, utilities will be bound until 2040 to credit customers the same rate for the power they put onto the grid as they bill retail electricity.

Systems completed after next year will command about half the current credit.

“For nearly a year now, the PSC has been investigating unauthorized practices of some electric cooperatives,” Waldrip told Arkansas Business. “Unattainable inspections, nonexistent insurance policies, undefined ‘saturation’ limits and arbitrary application fees have caused an undue and unfair burden to ratepayers who want to produce their own power.”

Griffin ordered the cooperatives that collected net-metering fees to refund the members they had charged. The ruling acknowledged that application fees and insurance requirements might be allowed, but they must be included in rate structures, known as tariffs, previously approved by the PSC, which regulates public utilities in Arkansas.

“All cooperatives having such requirements must immediately cease and desist requiring” them “until and unless such time as said cooperative has a tariff approved by this commission on file allowing such rates, terms or conditions.”

“This cease and desist is significant because it protects consumers in these cooperative territories and re-establishes the accountability ratepayers deserve,” Waldrip said.

A request for comment on the docket ruling to the Electric Cooperatives of Arkansas drew no response last week. But on the same issue last year, Rob Roedel, director of corporate communications at Arkansas Electric Cooperative Corp., spoke for the distribution cooperatives but said they are controlled by their own boards.

AECC, of Little Rock, provides wholesale power and transmission services to the 17 distribution cooperatives. It had annual operating revenue of $1.2 billion in 2022.

Roedel said all cooperative procedures are based on state and federal regulations. “For instance, electric cooperatives that are RUS borrowers are required to require insurance for all vendors that attach to their distribution system, such as solar.” RUS is the Rural Utilities Service, an arm of the U.S. Department of Agriculture that makes loans and provides loan guarantees to utilities serving rural America.

But Griffin’s ruling said that if cooperatives feel the need to impose insurance requirements, their rules must first be part of a PSC-approved tariff.

“I had a farmer from northeast Arkansas call me last week, saying it was time to re-up his insurance policy,” Waldrip said. “I said, well, you don’t need to do that anymore [after the judge’s ruling]. That’s one of the reasons I’m trying to get the word out.”

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