What are the potential benefits and challenges of renewable DG?

LITTLE ROCK: Lower costs and advancing technologies have helped move solar power into the mainstream across much of America and now the Arkansas Public Service Commission (APSC) wants to explore opportunities for renewable distributed generation (DG) in Arkansas.

The APSC opened two dockets on Friday, April 29 to determine cost and benefits along with the ultimate impact on utilities and their customers if rules were adopted to make it easier for consumers to generate their own energy in the state. 

Arkansas Act 827 of 2015 (an amendment to the Arkansas Renewable Energy Act of 2001) set the stage for the AEPC’s orders in docket 16-027-R by directing the APSC to “establish appropriate rates, terms and conditions for net-metering contracts.”

Under Act 827 the Commission may allow a net metering facility (NMF) to exceed 300 kilowatts (kws) of generating capacity as long as the NMF is not for residential use and would increase the state’s ability to attract business.  The generation capacity for smaller, residential and small business NMFs could be expanded beyond the current limit of 25 kw or less if the customer can  if doing so results in “distribution system, environmental, or public policy benefits.”

The main purpose of Docket 16-027-R will be to establish guidelines for approval of net-metering facilities that exceed the capacity limits for both commercial and residential net metering facilities.

The APSC went beyond the requirements of Act 827 to open the second docket, 16-028-U, which represents an historic attempt by the APSC to more broadly consider the full range of issues in order to “consider whether any change is warranted in the Commission’s policies related to renewable DG, beyond those policy changes contemplated in Docket 16-027-R.”

In its order, the Commissioners note federal research that shows the cost of solar PV modules declining from roughly $4 per Watt ten years ago to less than $1 per Watt today and that installation costs have also declined.  They also cite federal incentives for continued technology improvements along with “significant federal tax incentives” that were extended earlier this year by Congress through 2020.

“These ongoing trends and efforts may present opportunities and/or challenges for public utilities, their ratepayers, and the state as a whole,” the order states.

A public hearing is scheduled for Docket 16-027-R on October 4, 2016, 9:30 AM, at the Commission’s Hearing Room located at the APSC Building at 1000 Center Street, Little Rock. Parties are invited to comment on Docket 16-028-U by August 26.  All electric public utilities are made parties to both dockets.  Petitions to intervene in each docket by any other parties will be accepted through Noon, June 15.

The APSC posed several questions to be addressed in both dockets.  They include:  

  • Does a net metering customer’s use of an electric utility’s infrastructure impose additional costs?  Are net metering costs offset by quantifiable benefits to a utility?
  • What role could net-metered generation have in Clean Power Plan compliance and other environmental regulations?
  • How should the Commission consider economic costs or benefits beyond the electric utilities; i.e., economic development, job creation, other due to renewable DG?
  • What can be learned from recent net metering issues in other states?
  • Do projects that exceed 300 kw present significant opportunities or concerns?
  • Are there engineering, physics, and distribution issues that dictate size limits of NMFs?
  • What are the potential benefits and challenges of renewable DG for utilities and ratepayers?
  • Aside from the net metering issues, are there policies that the Commission should examine or adopt related to renewable DG?