Hearing Finds AAEA United With Other Non-Utility Parties For Rule Change
LITTLE ROCK: The Arkansas Public Service Commission’s (APSC or Commission) proposed rule on net meter aggregation in Arkansas is a positive step for renewable energy in the state and should amount to a basic accounting issue for the state’s utilities and rural electric cooperatives, according to AAEA Lead Counsel Nate Coulter who testified at the Commission’s first public hearing on the topic.
“The way we interpret the Commission’s proposed rule is that customers should be allowed to install multiple renewable energy generating facilities and credit their excess generation against consumption at some or all of the customers’ other electric meters,” Coulter said.
Under current net metering rules in Arkansas, customers are allowed to credit excess generation of a solar panel, wind turbine or other renewable energy facility only against the consumption that occurs at the same meter where the generating facility is located.
AAEA participated along with other parties in the APSC’s public hearing on its proposed rule in Docket 12-060-R, Amendments to the Commission’s Rules Concerning Net Meter Aggregation and Combined Billing for Net-Metering Customers, on Friday, June 21.
In the Commission’s Order 4 issued on May 15, 2013, the AAEA won a critical regulatory fight when the APSC issued a draft ruling that will allow the aggregation of additional meters for measuring electric load; will permit additional meters from different rate classes to be aggregated to the same net metering facility (NMF) such as a wind turbine or an array of solar panels; and finally will provide for meters from separate, non-contiguous properties to be connected to a NMF.
AAEA and non-utility parties in Docket 12-060-R including the Attorney General, General PSC Staff, and State Agencies found common ground before the Commission. These parties agreed that that the APSC has legal authority to aggregate meters to a NMF. The utilities questioned that authority believing that only the Legislature could make that determination.
In the utilities’ testimony on Friday, lead counsel for Entergy Arkansas, the Electric Cooperatives of Arkansas, SWEPCO, and large industrial electric consumers argued that allowing aggregation of net meters would amount to a “subsidization” of net metering customers at the expense of non-net metering customers. They also cited excessive costs that would be incurred in order to overhaul current billing procedures.
Both Coulter and another witness, Bill Ball, owner of Stellar Sun and a member of AAEA, raised the prospect that subsidization of non-net metering customers could also occur when a customer exclusively pays the costs of installing a renewable energy facility and generates more electricity than he or she consumes.
Diana Brenske, Director of the Electric Section at APSC, told Commissioners that the Commission staff interprets the enabling statute, Arkansas Renewable Energy Development Act of 2001 (AREDA) to require that costs of policies encouraging development of renewable energy resources “should be shared by all ratepayers.” This would render moot any debate about cross-subsidization, she said.
The APSC’s interpretation of state law in the proposed rule would support the case study submitted by AAEA of the Rockmoore Public Water Authority in Independence County. Rockmoore officials have studied the economics of installing an NMF, but current net metering rules prevented any investment. Under the new rule, Rockmoore could aggregate two or more NMFs of 300kw each for a total of 600+ kws as well as its 11 separate meters. The APSC also clarified that a net metering customer is the owner of a net metering facility, not a third party.
The proposed rule would also allow the City of Burdette to utilize a 50KW wind turbine that was installed in 2010 to provide electric power to the city’s 129 residents. Mayor James Sullivan told Commissioners on Friday: “I find it difficult to believe that such a situation can be so complicated. We’ve had a wind turbine in place for three years but we haven’t gotten a single credit off of it. I implore you to look at the economy of the state and realize what we are missing here.”
Both the Rockmoore Water Authority and the City of Burdette examples highlight the fallacy in today’s Arkansas net metering rules that do not allow aggregation. Too often, the best location for a wind or solar generating facility is not the location where a net metering customer consumes the most energy.
Greenway Wind, the John Deere subsidiary that installed the Burdette wind turbine, has since left the state and established operations in North Carolina, where a Renewable Portfolio Standard encourages renewable energy generation. A spokesman for the company, William Borman, testified to the Commission Friday that their original business plan for Arkansas was undermined by the state’s net metering rules that prohibit aggregation.
“I have to wonder why there is so much animosity among the Arkansas utilities toward renewable energy,” Borman said.
At last Friday’s hearing, all three Commissioners asked several questions and appeared prepared to issue a final rule on net meter aggregation in the near future. With only less than 220 net metering facilities installed in Arkansas generating a total of about 1.3MW of electricity, the new rule will remove at least one major barrier to future renewable energy development in Arkansas.