Stricken language would be deleted from and underlined language would be added to present law.
1 State of Arkansas As Engrossed: H2/20/23 H2/21/23 H2/27/23 H2/28/23
2 94th General Assembly A Bill
3 Regular Session, 2023 HOUSE BILL 1370
4
5 By: Representatives L. Fite, Wardlaw
6 By: Senator J. Dismang
7
8 For An Act To Be Entitled
9 AN ACT TO AMEND THE ARKANSAS RENEWABLE ENERGY
10 DEVELOPMENT ACT OF 2001; TO PREVENT COST-SHIFTING AND
11 ENSURE FAIRNESS TO ALL RATEPAYERS; TO CREATE THE
12 CUSTOMER PROTECTIONS FOR NET-METERING CUSTOMER ACT;
13 TO DECLARE AN EMERGENCY; AND FOR OTHER PURPOSES.
14
15
16 Subtitle
17 TO AMEND THE ARKANSAS RENEWABLE ENERGY
18 DEVELOPMENT ACT OF 2001; TO PREVENT COST-
19 SHIFTING AND ENSURE FAIRNESS TO ALL
20 RATEPAYERS; TO CREATE THE CUSTOMER
21 PROTECTIONS FOR NET-METERING CUSTOMERS
22 ACT; AND TO DECLARE AN EMERGENCY.
23
24
25 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
26
27 SECTION 1. Arkansas Code Title 23, Chapter 18, Subchapter 6 is amended
28 to read as follows:
29 Subchapter 6 — Arkansas Renewable Energy Development Cost-Shifting Prevention
30 Act of 2001 2023
31
32 23-18-601. Title.
33 This subchapter shall be known and cited as the “Arkansas Renewable
34 Energy Development Cost-Shifting Prevention Act of 2001 2023”.
35
36 23-18-602. Legislative findings and declarations.
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1 (a) Net energy metering encourages the use of renewable energy
2 resources and renewable energy technologies by reducing utility
3 interconnection and administrative costs for small consumers of electricity.
4 More than thirty (30) other states have passed similar laws or regulations in
5 support of net energy metering programs. Increasing the consumption of
6 renewable resources promotes the wise use of Arkansas's natural energy
7 resources to meet a growing energy demand, increases Arkansas's use of
8 indigenous energy fuels while reducing dependence on imported fossil fuels,
9 fosters investments in emerging renewable technologies to stimulate economic
10 development and job creation in the state, including the agricultural
11 sectors, reduces environmental stresses from energy production, and provides
12 greater consumer choices. The General Assembly finds that:
13 (1) Arkansas has an established process for the billing option
14 that enables customer-owned net-metering facilities to offset part or all of
15 a net-metering customer's electric consumption;
16 (2) This billing option should continue subject to certain
17 modifications for the benefit and rate protection of all electric utility
18 customers in Arkansas; and
19 (b)(3) Arkansas has actively encouraged the manufacture of new
20 technologies in the state through promotion of the Arkansas Emerging
21 Technology Development Act of 1999, § 15-4-2101 et seq. [repealed]. Net
22 metering would help to further attract energy technology manufacturers, to
23 provide a foothold for these technologies in the Arkansas economy, and to
24 make it easier for customer access to these technologies.
25 (c) Therefore, the General Assembly finds that it It is in Arkansas's
26 long-term interest to adopt this subchapter the modifications set forth in
27 this subchapter.
28
29 23-18-603. Definitions.
30 As used in this subchapter:
31 (1) “Avoided cost” means:
32 (A) For an electric utility other than a municipal
33 utility, the costs to an electric utility of electric energy or capacity, or
34 both, that, but for the generation from the net-metering facility or
35 facilities, the utility would generate itself or purchase from another
36 source, as determined by a commission consistent with § 23-3-701 et seq.
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1 twelve-month average for the prior calendar year of the applicable Locational
2 Marginal Price associated with the electric utility's load zone in the
3 following applicable Independent System Operator market:
4 (i) The Midcontinent Independent System Operator; or
5 (ii) The Southwest Power Pool; or
6 (B) For a municipal utility, the definition provided by
7 the governing body of the municipal utility;
8 (2) “Commission” means the Arkansas Public Service Commission or
9 other appropriate governing body for an electric utility as defined in
10 subdivision (3) of this section;
11 (3) “Electric utility” means a public or investor-owned utility,
12 an electric cooperative, or any private power supplier or marketer that is
13 engaged in the business of supplying electric energy to the ultimate consumer
14 or any customer classes within the state;
15 (4) "Monthly grid charge" means a charge expressed in dollars
16 per kilowatt applied to the nameplate alternating current capacity of the
17 net-metering facility;
18 (4)(A)(5)(A) “Municipal utility” means a utility system owned or
19 operated by a municipality that provides electricity.
20 (B) “Municipal utility” includes without limitation a:
21 (i) Utility system managed or operated by a
22 nonprofit corporation under § 14-199-701 et seq.; and
23 (ii) Utility system owned or operated by a
24 municipality or by a consolidated utility district under the General
25 Consolidated Public Utility System Improvement District Law, § 14-217-101 et
26 seq.;
27 (5)(6) “Net excess generation” means the amount of electricity
28 as measured in kilowatt hours or kilowatt hours multiplied by the applicable
29 rate that a net-metering customer has fed back to the electric utility that
30 exceeds the amount of electricity as measured in kilowatt hours or kilowatt
31 hours multiplied by the applicable rate used by that customer during the
32 applicable period determined by a commission;
33 (6)(7) “Net metering” means measuring a billing option that
34 measures the difference in amount of electricity as measured in kilowatt
35 hours or kilowatt hours multiplied by the applicable rate supplied by an
36 electric utility to a an individual net-metering customer and separately
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1 measuring the electricity as measured in kilowatt hours generated by a net-
2 metering customer and an individual net-metering customer's net-metering
3 facility and fed back to the electric utility over the applicable period
4 determined by a commission;
5 (8) "Net-metering surplus" means the dollar value resulting from
6 multiplying the avoided cost of the electric utility to all kilowatt hours
7 supplied to the electric utility by a net-metering customer during the
8 applicable billing period under § 23-18-604(c)(4);
9 (7)(9)(A) “Net-metering customer” means a an individual customer
10 of an electric utility that:
11 (A)(i) Is an owner of a net-metering facility;
12 (B)(ii) Leases a net-metering facility subject to the
13 following limitations:
14 (i)(a) A lease shall not permit the sale of electric
15 energy measured in kilowatt hours or electric capacity measured in kilowatts
16 between the lessor and lessee; and
17 (ii)(b) A lease shall not include any charge per
18 kilowatt hour or any charge per kilowatt; or
19 (C)(iii)(a) Is a government entity or other entity that is
20 exempt from state and federal income tax, and that, for the sole purpose of
21 this subchapter, obtains electric energy from a net-metering facility under a
22 service contract qualifying for safe-harbor protection as provided under 26
23 U.S.C. § 7701(e)(3)(A), as in effect on July 24, 2019; August 16, 2022.
24 (b) Revenues collected under contracts for
25 obtaining electric energy from a net-metering facility under a service
26 contract qualifying for safe-harbor protection as provided under 26 U.S.C. §
27 7701(e)(3)(A), as in effect on August 16, 2022, are exempt from state and
28 local sales taxes.
29 (B) "Net-metering customer" does not mean a customer that
30 is an interruptible customer of the electric utility and takes service under
31 an electric utility's rate schedule for interruptible service, unless a
32 commission has:
33 (i) Considered an application and issued an order, before
34 December 31, 2022, addressing an individual net-metering customer's
35 application for approval of a net-metering facility with a name plate
36 generating capacity in excess of ten thousand kilowatts (10,000 kW) where an
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1 individual net-metering customer also takes service under an electric
2 utility's rate schedule for interruptible service; and
3 (ii) Concluded that it is in the public interest for that
4 individual interruptible customer to be a net-metering customer;
5 (8)(10) “Net-metering facility” means a facility for the
6 production of electric energy to meet all or part of a net-metering
7 customer's need for electric energy within a single utility's allocated
8 service territory that:
9 (A) Uses solar, wind, hydroelectric, geothermal, or
10 biomass resources to generate electricity, including, but not limited to,
11 fuel cells and micro turbines that generate electricity if the fuel source is
12 entirely derived from renewable resources;
13 (B)(i) Has a nameplate generating capacity of not more
14 than:
15 (i)(a) The greater of twenty-five kilowatts (25 kW)
16 or one For a residential customer for residential use, the lesser of twenty-
17 five kilowatts (25 kW) alternating current or one hundred percent (100%) of
18 the net-metering customer's highest monthly usage in the previous twelve (12)
19 months for residential use;
20 (ii)(b) For customers of electric utilities, one
21 thousand kilowatts (1,000 kW) for use other than residential use unless
22 otherwise allowed by a commission under § 23-18-604 For nonresidential
23 customers of electric utilities for nonresidential use, less than or equal to
24 the lesser of five thousand kilowatts (5,000 kW) alternating current or one
25 hundred percent (100%) of the net-metering customer's highest monthly usage
26 in the previous twelve (12) months within a single utility's allocated
27 service territory where a single net-metering facility is physically located
28 behind a net-metering customer's electric utility meter that represents one
29 hundred percent (100%) of the net-metering customer's energy usage served by
30 the net-metering facility; or
31 (iii)(c) For customers of a municipal utility,
32 the limits established by the governing body of the municipal utility under §
33 23-18-605;.
34 (ii)(a) The total nameplate generating capacity of
35 all net-metering facilities owned by, leased by, or providing electric energy
36 under one (1) or more qualifying service contracts of an individual net-
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1 metering customer serving multiple meter locations under common ownership of
2 any net-metering customer, within a single utility's allocated service
3 territory, shall be less than or equal to the lesser of five thousand
4 kilowatts (5,000 kW) alternating current or one hundred percent (100%) of the
5 net-metering customer's highest monthly usage in the previous twelve (12)
6 months, unless:
7 (1) A commission approved a greater
8 amount for an individual net-metering customer before December 31, 2022;
9 (2) An individual net-metering customer
10 has executed a contract with a net-metering facility developer by February
11 22, 2023, to purchase a net-metering facility with a nameplate capacity not
12 to exceed twenty thousand kilowatts (20,000 kW) and has filed that contract
13 with a commission under a protective order by March 31, 2023; or
14 (3) An individual net-metering customer
15 has filed an application with a commission for approval of a net-metering
16 facility with a nameplate generating capacity not to exceed twenty thousand
17 kilowatts (20,000 kW) before December 31, 2022.
18 (b)(1) A net-metering
19 facility serving multiple meter locations under common ownership shall be
20 located on a separate property from any other net-metering facility or only
21 co-locate on a property with one (1) other net-metering facility within a
22 single utility's allocated service territory.
23 (2) For a net-metering facility under
24 subdivision (10)(B)(ii)(b)(1) of this section, the nameplate generating
25 capacity under this subdivision (10)(B)(ii) includes the total kilowatt
26 nameplate-generating capacity of all net-metering facilities serving multiple
27 meter locations under common ownership within a single electric utility's
28 allocated service territory owned by, leased by, or providing electric energy
29 under one (1) or more qualifying service contracts to a net-metering
30 customer, including without limitation any net-metering facilities serving
31 multiple meter locations under common ownership;
32 (C) Is located in Arkansas;
33 (D) Can operate in parallel with an electric utility's
34 existing transmission and distribution facilities existing distribution
35 facilities or, if permitted by the electric utility, an electric utility's
36 transmission facilities;
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1 (E) Is intended primarily to offset part or all of the an
2 individual net-metering customer customer's requirements for electricity; and
3 (F)(i) May include an energy storage device that is
4 configured to receive electric energy solely from a net-metering facility.
5 (ii) The capacity of an energy storage device shall
6 not be used to calculate the capacity limits listed in subdivision
7 (8)(B)(10)(B) of this section if the energy storage device is configured to
8 receive electric energy solely from a net-metering facility;
9 (9) “Quantifiable benefits” means the:
10 (A) Reasonably demonstrated costs that:
11 (i) Are related to the provision of electric service
12 and based on the utility's most recent cost-of-service study filed with the
13 commission; and
14 (ii) Will be avoided by the utility by the use of
15 net metering;
16 (B) Monetary value provided to a utility by the use of net
17 metering as specified by a market mechanism, if any, of the regional
18 transmission organization of which the electric utility is a member; and
19 (C) Monetary value provided to a utility by the use of net
20 metering as specified by a market mechanism, if any, that measures utility
21 distribution system benefits; and
22 (10)(11) “Renewable energy credit” means the environmental,
23 economic, and social attributes of a unit of electricity, such as a megawatt
24 hour, generated from renewable fuels that can be sold or traded separately.
25
26 23-18-604. Commission authority — Definition.
27 (a)(1) An electric utility shall allow net-metering facilities to be
28 interconnected using, at a minimum, a single standard two-channel digital
29 meter capable of registering the flow of electricity in two (2) directions
30 that separately measures the electric energy in kilowatt hours that is:
31 (A) Supplied by an electric utility to the net-metering
32 customer; and
33 (B) Generated by the net-metering customer's net-metering
34 facility and fed back to an electric utility.
35 (2) An electric utility may impose a charge to recover any cost
36 of the standard two-channel digital meter that is not otherwise includ