by Arkansas Business editors
We look forward to the day when solar energy — safe, clean and renewable — becomes a major source of power. That day’s not here yet, but as Assistant Editor Kyle Massey’s Page 1 report on net metering shows, it’s coming closer.
Net metering allows utility customers who generate their own electricity using approved devices like solar panels to sell excess electricity to the utility. But utilities and solar power advocates are at odds over what utilities should pay those electricity-generating customers for their excess capacity. This conflict is now playing out in Arkansas. The state Public Service Commission is scheduled to hold a public hearing Nov. 30 on the issue.
Entergy and other Arkansas power companies argue that they should pay less for the power their solar customers return to the power grid than these customers pay for the energy the utilities provide, reasoning that utilities need to recover costs for providing the infrastructure — the grid. As Massey’s report notes, “Entergy calculates that the excess generation credit it proposes — the amount it would pay to net-metering customers for their power — is about 50 to 75 percent of the retail energy rate it charges, depending on the time of year and usage levels.”
Solar power advocates hold that solar customers should receive the same rate for the power they put onto the grid as they pay for electricity they take from it, reasoning that they benefit utilities by decreasing peak power loads and diversifying power sources and benefit society by minimizing pollution. The chief of the Arkansas Advanced Energy Association says the PSC should let the market rule and avoid “unnecessary policy barriers” like more restrictive compensation rules.
We think utilities, which are limited by regulation to the profit they can make, do deserve cost consideration for their infrastructure, though we don’t know how much. We hope the PSC balances such consideration with the very real benefits that the increasing number of solar-generating customers provides.