Stricken language would be deleted from and underlined language would be added to present law.
*CRH048* 2/8/2023 8:44:14 AM CRH048
State of Arkansas 1
94th General Assembly A Bill 2
Regular Session, 2023 HOUSE BILL 1370 3
4
By: Representative L. Fite 5
By: Senator J. Dismang 6
7
For An Act To Be Entitled 8
AN ACT TO AMEND THE ARKANSAS RENEWABLE E NERGY 9
DEVELOPMENT ACT OF 2 001; TO PREVENT COST -SHIFTING AND 10
ENSURE FAIRNESS TO A LL RATEPAYERS; TO DE CLARE AN 11
EMERGENCY; AND FOR O THER PURPOSES. 12
13
14
Subtitle 15
TO AMEND THE ARKANSAS RENEWABLE ENERGY 16
DEVELOPMENT ACT OF 2001; TO PREVENT COST -17
SHIFTING AND ENSURE FAIRNESS TO ALL 18
RATEPAYERS; AND TO DECLARE AN EMERGENCY. 19
20
21
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 22
23
SECTION 1. Arkansas Code Title 23, Chapter 18, Subchapter 6 is amended 24
to read as follows: 25
Subchapter 6 — Arkansas Renewable Energy Development Cost-Shifting Prevention 26
Act of 2001 2023 27
28
23-18-601. Title. 29
This subchapter shall be known and cited as the “Arkansas Renewable 30
Energy Development Cost-Shifting Prevention Act of 2001 2023”. 31
32
23-18-602. Legislative findings and declarations. 33
(a) Net energy metering encourages the use of renewable energy 34
resources and renewable energy technologies by reducing utility 35
interconnection and administrative costs for small co nsumers of electricity. 36 HB1370
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More than thirty (30) other states have passed similar laws or regulations in 1
support of net energy metering programs. Increasing the consumption of 2
renewable resources promotes the wise use of Arkansas's natural energy 3
resources to meet a growing energy demand, increases Arkansas's use of 4
indigenous energy fuels while reducing dependence on imported fossil fuels, 5
fosters investments in emerging renewable technologies to stimulate economic 6
development and job creation in the state, i ncluding the agricultural 7
sectors, reduces environmental stresses from energy production, and provides 8
greater consumer choices. The General Assembly finds that: 9
(1) Arkansas has an established process for the billing option 10
that enables customer -owned net-metering facilities to offset part or all of 11
a net-metering customer's electric consumption; 12
(2) This billing option should continue subject to certain 13
modifications for the benefit and rate protection of all electric utility 14
customers in Arkansas; and 15
(b)(3) Arkansas has actively encouraged the manufacture of new 16
technologies in the state through promotion of the Arkansas Emerging 17
Technology Development Act of 1999, § 15 -4-2101 et seq. [repealed]. Net 18
metering would help to further attract energy technology manufacturers, to 19
provide a foothold for these technologies in the Arkansas economy, and to 20
make it easier for customer access to these technologies. 21
(c) Therefore, the General Assembly finds that it It is in Arkansas's 22
long-term interest to adopt this subchapter the modifications set forth in 23
this subchapter. 24
25
23-18-603. Definitions. 26
As used in this subchapter: 27
(1) “Avoided cost” means: 28
(A) For an electric utility other than a municipal 29
utility, the costs to an electric utility of electric energy or capacity, or 30
both, that, but for the generation from the net -metering facility or 31
facilities, the utility would generate itself or purchase from another 32
source, as determined by a commission consi stent with § 23-3-701 et seq. 33
twelve-month average for the prior calendar year of the applicable Locational 34
Marginal Price associated with the electric utility's load zone in the 35
following applicable Independent System Operator market: 36 HB1370
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(i) The Midcontinent Independent System Operator; or 1
(ii) The Southwest Power Pool ; or 2
(B) For a municipal utility, the definition provided by 3
the governing body of the municipal utility; 4
(2) “Commission” means the Arkansas Public Service Commission or 5
other appropriate governing body for an electric utility as defined in 6
subdivision (3) of this section; 7
(3) “Electric utility” means a public or investor -owned utility, 8
an electric cooperative, or any private power supplier or marketer that is 9
engaged in the business of supplying electric energy to the ultimate consumer 10
or any customer classes within the state; 11
(4) "Monthly grid charge" means a charge expressed in dollars 12
per kilowatt applied to the nameplate direct current capacity of the net -13
metering facility; 14
(4)(A)(5)(A) “Municipal utility” means a utility system owned or 15
operated by a municipality that provides electricity. 16
(B) “Municipal utility” includes without limitation a: 17
(i) Utility system managed or operated by a 18
nonprofit corporatio n under § 14-199-701 et seq.; and 19
(ii) Utility system owned or operated by a 20
municipality or by a consolidated utility district under the General 21
Consolidated Public Utility System Improvement District Law, § 14 -217-101 et 22
seq.; 23
(5)(6) “Net excess generation” means the amount of electricity 24
as measured in kilowatt hours or kilowatt hours multiplied by the applicable 25
rate that a net-metering customer has fed back to the electric utility that 26
exceeds the amount of electricity as measured in kilowatt h ours or kilowatt 27
hours multiplied by the applicable rate used by that customer during the 28
applicable period determined by a commission; 29
(6)(7) “Net metering” means measuring a billing option that 30
measures the difference in amount of electricity as measu red in kilowatt 31
hours or kilowatt hours multiplied by the applicable rate supplied by an 32
electric utility to a an individual net-metering customer and separately 33
measuring the electricity as measured in kilowatt hours generated by a net-34
metering customer and an individual net-metering customer's net -metering 35
facility and fed back to the electric utility over the applicable period 36 HB1370
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determined by a commission ; 1
(8) "Net-metering surplus" means the dollar value resulting from 2
multiplying the avoided cost of the electric utility to all kilowatt hours 3
supplied to the electric utility by a net -metering customer during the 4
applicable billing period under § 23 -18-604(c)(4); 5
(7)(9)(A) “Net-metering customer” means a an individual customer 6
of an electric utility that: 7
(A)(i) Is an owner of a net -metering facility; 8
(B)(ii) Leases a net-metering facility subject to the 9
following limitations: 10
(i)(a) A lease shall not permit the sale of electric 11
energy measured in kilowatt hours or electric capacity measu red in kilowatts 12
between the lessor and lessee; and 13
(ii)(b) A lease shall not include any charge per 14
kilowatt hour or any charge per kilowatt; or 15
(C)(iii)(a) Is a government entity or other entity that is 16
exempt from state and federal income tax, and that, for the sole purpose of 17
this subchapter, obtains electric energy from a net -metering facility under a 18
service contract qualifying for safe -harbor protection as provided under 26 19
U.S.C. § 7701(e)(3)(A), as in effect on July 24, 2019; August 16, 2022. 20
(b) Revenues collected under contracts for 21
obtaining electric energy from a net -metering facility under a service 22
contract qualifying for safe -harbor protection as provided under 26 U.S.C. § 23
7701(e)(3)(A), as in effect on August 16, 2022, are exe mpt from state and 24
local sales taxes. 25
(B) "Net-metering customer" does not mean a customer that 26
is an interruptible customer of the electric utility and takes service under 27
an electric utility's rate schedule for interruptible service; 28
(8)(10) “Net-metering facility” means a facility for the 29
production of electric energy to meet all or part of a net -metering 30
customer's need for electric energy within a single utility's allocated 31
service territory that: 32
(A) Uses solar, wind, hydroelectric, geother mal, or 33
biomass resources to generate electricity, including, but not limited to, 34
fuel cells and micro turbines that generate electricity if the fuel source is 35
entirely derived from renewable resources; 36 HB1370
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(B)(i)(a) Has a nameplate generating capacity of not more 1
than: 2
(i)(1) The greater of twenty -five kilowatts (25 kW) 3
or one For a residential customer for residential use, the lesser of twenty -4
five (25) kilowatts alternating current or one hundred percent (100%) of the 5
net-metering customer's highest monthly usage in the previous twelve (12) 6
months for residential use; 7
(ii)(2) For customers of electric utilities, one 8
thousand kilowatts (1,000 kW) for use other than residential use unless 9
otherwise allowed by a commission under § 23 -18-604 For nonresidential 10
customers of electric utilities for nonresidential use less than or equal to 11
the lesser of one thousand kilowatts (1,000 kW) alternative current or one 12
hundred percent (100%) of the net -metering customer's highest monthly usage 13
in the previous twelve (12) months within a single utility's allocated 14
service territory, when the net -metering facility is located on a separate 15
property from any other net -metering facility or only co -locates on a 16
property with one (1) other net -metering facility wit hin a single utility's 17
allocated service territory ; or 18
(iii)(3) For customers of a municipal utility, 19
the limits established by the governing body of the municipal utility under § 20
23-18-605;. 21
(b) The total nameplate generating capacity of 22
all net-metering facilities owned by, leased by, or providing electric energy 23
under one (1) or more qualifying service contracts of an individual net -24
metering customer, including without limitation any net -metering facilities 25
serving any net-metering customer, within a single utility's allocated 26
service territory, shall be less than or equal to the lesser of one thousand 27
kilowatts (1,000 kW) alternative current or one hundred percent (100%) of the 28
net-metering customer's highest monthly usage in the previous twe lve (12) 29
months. 30
(ii) The nameplate generating capacity under 31
subdivisions (10)(B)(i)(a)(1) and (2) of this section includes the total 32
kilowatt nameplate generating capacity of all net -metering facilities within 33
a single electric utility's alloca ted service territory owned by, leased by, 34
or providing electric energy under one (1) or more qualifying service 35
contracts to a net-metering customer, including without limitation any net -36 HB1370
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metering facilities serving multiple meter locations under common ow nership; 1
(C) Is located in Arkansas; 2
(D) Is located physically behind a net -metering customer's 3
electric utility meter that represents at least fifty percent (50%) of the 4
net-metering customer's total annual energy usage for all of the net-metering 5
customer's accounts within a single utility service area served by the net -6
metering facility; 7
(D)(E) Can operate in parallel with an electric utility's 8
existing transmission and distribution facilities; 9
(E)(F) Is intended primarily to offset part or all of the 10
an individual net-metering customer customer's requirements for electricity; 11
and 12
(F)(i)(G)(i) May include an energy storage device that is 13
configured to receive electric energy solely from a net -metering facility. 14
(ii) The capacity of an energy storage device shall 15
not be used to calculate the capacity limits listed in subdivision 16
(8)(B)(10)(B) of this section if the energy storage device is configured to 17
receive electric energy solely from a net -metering facility; 18
(9) “Quantifiable benefits” means the: 19
(A) Reasonably demonstrated costs that: 20
(i) Are related to the provision of electric service 21
and based on the utility's most recent cost -of-service study filed with the 22
commission; and 23
(ii) Will be avoided by the utility by the use of 24
net metering; 25
(B) Monetary value provided to a utility by the use of net 26
metering as specified by a market mechanism, if any, of the regional 27
transmission organization of which the electric utility is a member; and 28
(C) Monetary value provided to a utility by the use of net 29
metering as specified by a market mechanism, if any, that measures utility 30
distribution system benefits; and 31
(10)(11) “Renewable energy credit” means the environmental, 32
economic, and social attribut es of a unit of electricity, such as a megawatt 33
hour, generated from renewable fuels that can be sold or traded separately. 34
35
23-18-604. Commission authority — Definition. 36 HB1370
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(a)(1) An electric utility shall allow net -metering facilities to be 1
interconnected using, at a minimum, a standard two-channel digital meter 2
capable of registering the flow of electricity in two (2) directions that 3
separately measures the electric energy in kilowatt hours that is: 4
(A) Supplied by an electric utility to the net -metering 5
customer; and 6
(B) Generated by the net -metering customer's net -metering 7
facility and fed back to an electric utility . 8
(2) An electric utility may impose a charge to recover any cost 9
of the standard two-channel digital meter that is not other wise included in 10
the rates paid by the net -metering customer. 11
(b)(1) Following notice, and opportunity for public comment , and a 12
hearing, a commission shall: 13
(1) Shall establish appropriate rates, terms, and conditions for 14
net metering, including without limitation the adoption or revision of any 15
applicable rules on or before June 30, 2023 ;. 16
(2) For net-metering customers who receive service under a rate 17
that does not include a demand component, may: 18
(A) Require an electric utility to credit the net-metering 19
customer with any accumulated net excess generation as measured in kilowatt 20
hours or kilowatt hours multiplied by the applicable rate in the next 21
applicable billing period and base the bill of the net -metering customer on 22
the net amount of el ectricity as measured in kilowatt hours or kilowatt hours 23
multiplied by the applicable rate that the net -metering customer has received 24
from or fed back to the electric utility during the billing period; 25
(B) Take the following actions if those actions are in the 26
public interest and doing so will not result in an unreasonable allocation of 27
or increase in costs to other utility customers: 28
(i) Separately meter the electric energy, measured 29
in kilowatt hours, supplied by the electric utility to the net -metering 30
customer and the electric energy, measured in kilowatt hours, that is 31
generated by the net -metering customer's net -metering facility that is fed 32
back to the electric utility at any time during the applicable billing 33
period; 34
(ii) Apply the commission-approved retail rate to 35
all kilowatt hours that are supplied by the electric utility to a net -36 HB1370
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metering customer by the electric utility during the applicable period 1
determined by a commission; 2
(iii) Apply the avoided cost of the electric util ity 3
plus any additional sum determined under subdivision (b)(2)(B)(iv) of this 4
section to all kilowatt hours supplied to the electric utility by a net -5
metering customer, during the period determined by a commission, which shall 6
be credited to the total bil l of the net-metering customer in a dollar value; 7
and 8
(iv) The additional sum added to the avoided cost of 9
the electric utility may be applied after the demonstration of quantifiable 10
benefits by the net-metering customer and shall not exceed forty per cent 11
(40%) of the avoided cost of the electric utility; 12
(C) Authorize an electric utility to assess a net -metering 13
customer that is being charged a rate that does not include a demand 14
component a per-kilowatt-hour fee or charge to recover the quantifia ble 15
direct demand-related distribution cost of the electric utility for providing 16
electricity to the net -metering customer that is not: 17
(i) Avoided as a result of the generation of 18
electricity by the net -metering facility; and 19
(ii) Offset by quantifiable benefits; or 20
(D) Take other actions that are in the public interest and 21
do not result in an unreasonable allocation of costs to other utility 22
customers; The right to a hearing under this subsection may be waived by the 23
parties. 24
(c) Through its actions under subdivision (b)(1) of this section, a 25
commission shall: 26
(1)(A) Ensure that each net -metering customer pays the costs of 27
an electric utility's facilities and associated expenses required to: 28
(i) Provide service to the net -metering customer; 29
and 30
(ii) Enable the net -metering customer's use of the 31
electric utility's facilities. 32
(B) The costs described under subdivision (c)(1)(A) of 33
this section include without limitation any costs that are: 34
(i) Recovered through rat es using the cost-of-35
service study underlying the rates approved by a commission in the electric 36 HB1370
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utility's most recent application for a general change or modification of the 1
electric utility's rates under § 23 -4-401 et seq.; 2
(ii) Recovered through ri ders or surcharges; and 3
(iii) Adjusted for any commission -approved: 4
(a) Formula rate plan adjustments under the 5
Formula Rate Review Act, § 23 -4-1201 et seq.; or 6
(b) Adjustments under § 23 -4-901 et seq. 7
(C) By June 30, 2023, a commissi on shall approve 8
modifications to each electric utility's rate schedules applicable to net -9
metering customers to ensure that all existing and prospective net -metering 10
customers pay all applicable riders and surcharges; 11
(2) Allow an electric utility to m odify the rates, terms, and 12
conditions, including without limitation the rate structure and any 13
individual rate components for net -metering customers, subject to approval by 14
the commission, without filing an application for a general change or 15
modification of the electric utility's rates under § 23 -4-401 et seq.; 16
(3) Not adjust the costs of an electric utility's facilities and 17
associated expenses required to provide service to a net -metering customer 18
and to enable the net -metering customer's use of the e lectric utility's 19
facilities as specified in subdivision (c)(1)(A) of this section with any 20
amounts that are not quantified in the cost -of-service study underlying the 21
retail rates approved by a commission in the electric utility's most recent 22
application for a general change or modification in rates under § 23 -4-401 et 23
seq., including without limitation any commission -approved: 24
(A) Formula rate plan adjustments under the Formula Rate 25
Review Act, § 23-4-1201 et seq.; or 26
(B) Adjustments under § 23 -4-901 et seq.; 27
(4) Establish rates for a net -metering customer using one (1) of 28
the rate structures under § 23 -18-606; 29
(5) Separately meter the electric energy, measured in kilowatt 30
hours, supplied by the electric utility to the net -metering customer and the 31
electric energy, measured in kilowatt hours, that is fed back to the electric 32
utility from the net -metering customer's net -metering facility at any time 33
during the applicable billing period; 34
(6) Apply the commission -approved customer charge, demand 35
charge, or minimum bill provision and other applicable commission -approved 36 HB1370
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charges addressed in subdivision (c)(1)(A) of this section; 1
(7) Apply the commission -approved charges addressed in 2
subdivision (c)(1)(A) of this section to the applicable net -metering 3
customers, including without limitation any rates, riders, and surcharges 4
that are applied based on the volume of kilowatt hours of electricity 5
supplied by an electric utility, to all kilowat t hours that are supplied by 6
the electric utility to a net -metering customer by the electric utility 7
during the applicable billing period; 8
(8) Authorize an electric utility to recover any net -metering 9
surplus or the dollar value of any net excess genera tion applied to the bills 10
of net-metering customers in the same manner that the electric utility 11
recovers the cost of fuel and purchased energy; 12
(3) Shall require that net -metering equipment be installed to 13
accurately measure the electricity: 14
(A) Supplied by the electric utility to each net -metering 15
customer; and 16
(B) Generated by each net -metering customer that is fed 17
back to the electric utility over the applicable billing period; 18
(4) May authorize (9)(A) Authorize an electric utility to 19
assess a net-metering customer a greater fee or charge of any type, if the 20
electric utility's direct costs of interconnection and administration of net 21
metering outweigh the distribution system, environmental, and public policy 22
benefits of allocating the cost s among the electric utility's entire customer 23
base standard one-time fee, to be approved by the commission, to recover 24
administrative and related interconnection review costs. 25
(B) Any costs incurred by the electric utility for an 26
interconnection study are the sole responsibility of the net -metering 27
customer and shall be paid in advance of any work's being undertaken by the 28
electric utility to: 29
(i) Enable the interconnection; and 30
(ii) Recover the electric utility's direct costs of 31
interconnection and any grid upgrades required to connect the net -metering 32
customer's net-metering facility; 33
(10) Require that a net -metering customer retains any renewable 34
energy credit created as a result of the electricity supplied by a net -35
metering customer that generated the renewable energy credit as long as the 36 HB1370
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net-metering customer continues to be a net -metering customer; and 1
(5) For net-metering customers who receive service under a rate 2
that does not include a demand component, shall require an electric utility 3
to credit a net-metering customer with the amount of any accumulated net 4
excess generation as measured in kilowatt hours or kilowatt hours multiplied 5
by the applicable rate in the next applicable billing period; 6
(6) Except as provid ed in subdivision (b)(9) of this section, 7
for net-metering customers who receive service under a rate that includes a 8
demand component, shall require an electric utility to credit the net -9
metering customer with any accumulated net excess generation in the next 10
applicable billing period and base the bill of the net -metering customer on 11
the net amount of electricity that the net -metering customer has received 12
from or fed back to the electric utility during the billing period; 13
(7) May expand the scope of ne t metering to include additional 14
facilities that do not use a renewable energy resource for a fuel if so doing 15
results in distribution system, environmental, or public policy benefits; 16
(8) Shall provide that: 17
(A)(i) The amount of the net excess gene ration credit as 18
measured in kilowatt hours or kilowatt hours multiplied by the applicable 19
rate remaining in a net -metering customer's account at the close of a billing 20
cycle shall not expire and shall be carried forward to subsequent billing 21
cycles indefinitely. 22
(ii) However, for net excess generation credits 23
older than twenty-four (24) months, a net -metering customer may elect to have 24
the electric utility purchase the net excess generation credits in the net -25
metering customer's account at the electr ic utility's avoided cost, plus any 26
additional sum determined under this section, if the sum to be paid to the 27
net-metering customer is at least one hundred dollars ($100). 28
(iii) An electric utility shall purchase at the 29
electric utility's avoided cos t, plus any additional sum determined under 30
this section, any net excess generation credit remaining in a net -metering 31
customer's account when the net -metering customer: 32
(a) Ceases to be a customer of the electric 33
utility; 34
(b) Ceases to operate the net-metering 35
facility; or 36 HB1370
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(c) Transfers the net -metering facility to 1
another person; and 2
(B) A renewable energy credit created as the result of 3
electricity supplied by a net -metering customer is the property of the net -4
metering customer that generated the renewable energy credit; and 5
(9) May allow a net -metering facility with a generating capacity 6
that exceeds the limits provided under § 23 -18-603(8)(B)(ii) or § 23 -18-7
603(8)(B)(iii) of up to twenty thousand kilowatts (20,000 kW) if: 8
(A) For any net-metering facility with a generating 9
capacity of less than five thousand kilowatts (5,000 kW): 10
(i) The net-metering facility is not for residential 11
use; 12
(ii) Increasing the generating capacity limits for 13
individual net-metering facilities results in distribution system, 14
environmental, or public policy benefits or allowing an increased generating 15
capacity for the net -metering facility would increase the state's ability to 16
attract businesses to Arkansas; and 17
(iii) Allowing an incre ased generating capacity for 18
the net-metering facility is in the public interest; or 19
(B) For any net-metering facility with a generating 20
capacity of greater than five thousand kilowatts (5,000 kW): 21
(i) The net-metering facility is not for resident ial 22
use; 23
(ii) Increasing the generating capacity limits for 24
individual net-metering facilities results in distribution system, 25
environmental, or public policy benefits or allowing an increased generating 26
capacity for the net -metering facility would in crease the ability of the 27
state to attract business to Arkansas; 28
(iii) Allowing an increased generating capacity for 29
the net-metering facility does not result in an unreasonable allocation of 30
costs to other utility customers; and 31
(iv) Allowing an increased generating capacity for 32
the net-metering facility is in the public interest; and 33
(10)(A) Shall allow the net -metering facility of a net -metering 34
customer who has submitted a standard interconnection agreement, as referred 35
to in the rules of t he Arkansas Public Service Commission, to the electric 36 HB1370
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utility after July 24, 2019, but before December 31, 2022, to remain under 1
the rate structure in effect when the net -metering contract was signed, for a 2
period not to exceed twenty (20) years, subject to approval by a commission. 3
(B) A net-metering facility under subdivision (b)(10)(A) 4
of this section remains subject to any other change or modification in rates, 5
terms, and conditions (11)(A) Allow only a net -metering customer that 6
submitted a standard interconnection agreement to the electric utility before 7
December 31, 2022, to remain under the rate structure in effect before 8
December 31, 2022, until June 1, 2040 . 9
(B) A net-metering customer that installs a net -metering 10
facility after December 31, 2022, and that submits a standard interconnection 11
agreement shall be billed using one (1) of the rate structures established in 12
§ 23-18-606. 13
(C) A net-metering facility billed using the rate 14
structures described in subdivisions (c)(11)(A) and (B) o f this section 15
remains subject to any other change or modification in rates, terms, and 16
conditions. 17
(c)(1)(d)(1) Except as provided in subdivision (c)(2)(d)(2) of this 18
section, an electric utility shall separately meter, bill, and credit each 19
net-metering facility even if one (1) or more net -metering facilities are 20
under common ownership. 21
(2)(A)(i) At the an individual net-metering customer's 22
discretion, an electric utility may shall apply net-metering credits the net-23
metering surplus from a an individual net-metering customer's net-metering 24
facility to the bill for another meter location of the individual net -25
metering customer if the net-metering facility and the separate meter 26
location are under common ownership of the same individual net -metering 27
customer within a single electric utility's allocated service area territory 28
and are on contiguous property to the net -metering customer. 29
(ii) Subdivision (c)(2)(A)(i) of this section does 30
not apply if more than two (2) customers that are governmental entities or 31
other entities that are exempt from state and federal income tax defined 32
under § 23-18-603(7)(C) co-locate at a site hosting the net -metering facility 33
A separate meter location under subdivision (d)(2)(A)(i) of this section 34
shall be credited only with net -metering surplus from one (1) net -metering 35
facility owned by the same net -metering customer, with all accounts being 36 HB1370
14 2/8/2023 8:44:14 AM CRH048
under common ownership for the same individual net -metering customer. 1
(B) Net excess generation Net-metering surplus shall be 2
credited first to the an individual net-metering customer's bill for the 3
meter to which the net -metering facility is ph ysically attached. 4
(C) After applying net excess generation net-metering 5
surplus under subdivision (c)(2)(B)(d)(2)(B) of this section and upon request 6
of the net-metering customer under subdivision (c)(2)(A)(d)(2)(A) of this 7
section, any remaining net excess generation net-metering surplus shall be 8
credited to one (1) or more of the individual net-metering customer's bills 9
for the individual net -metering customer's meters in the rank order provided 10
by the individual net-metering customer. 11
(d)(e) A person who that acts as a lessor or service provider as 12
described in § 23-18-603(7)(B) § 23-18-603(9)(B) or § 23-18-603(7)(C) § 23-13
18-603(9)(C) shall not be considered a public utility as defined in § 23 -1-14
101. 15
(f) An electric utility shall not be obligated to: 16
(1) Accept or release any portion of its or another electric 17
utility's allocated service territory to accommodate the development, 18
construction, or operation of a net -metering facility; or 19
(2) Publish, provide, or release any information regardi ng its 20
electric utility facilities or system to aid in the location of the net -21
metering facilities beyond its established site review process. 22
23
23-18-605. Municipal utilities. 24
(a) A municipal utility shall allow net -metering facilities to be 25
interconnected according to the ordinances, rules, or regulations established 26
by the governing body of the municipal utility. 27
(b) The governing body of a municipal utility may elect to follow 28
procedures under § 23 -18-604, § 23-18-606, or § 23-18-607 or may adopt 29
ordinances, rules, or regulations establishing the rates, terms, and 30
conditions allowing the interconnection of net -metering facilities, including 31
generation facilities and energy storage devices, whether owned or leased by 32
a customer or operated by a third party on behalf of a customer. 33
(c) The governing body of a municipal utility may limit the generating 34
capacity of a net-metering facility to less than twenty -five kilowatts (25 35
kW) for residential customers or three hundred kilowatts (300 kW) for 36 HB1370
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nonresidential customers only after the governing body finds that the 1
capacity limit is necessary for reliable utility operations or the public 2
health, safety, or welfare. 3
(d) The governing body of a municipal utility shall not establish a 4
rate or fee that redu ces the value of electric energy from a net -metering 5
facility to below the avoided cost of the municipal utility. 6
(e) For customers who receive service under a rate that includes a 7
demand component, the governing body of the municipal utility shall requi re a 8
municipal utility to credit a net -metering customer with any accumulated net 9
excess generation in the next applicable billing period and base the bill of 10
the customer on the net amount of electricity that the net -metering customer 11
has received from or fed back to the municipal utility during the billing 12
period. 13
14
23-18-606. Rate structure determination. 15
(a) At its discretion, an electric utility may elect to use one (1) of 16
the following rate structures to develop rates for net -metering customers: 17
(1) A rate structure in which the electric utility: 18
(A) Separately meters the electric energy, measured in 19
kilowatt hours: 20
(i) Supplied by the electric utility to the net -21
metering customer; and 22
(ii) Fed back to the electric utility from t he net-23
metering customer's net -metering facility at any time during the applicable 24
billing period; 25
(B) Applies the: 26
(i) Commission-approved customer charge, demand 27
charge, minimum bill provision, and other applicable commission -approved 28
charges under § 23-18-604(c)(1)(A); 29
(ii) Commission-approved charges under § 23 -18-30
604(c)(1)(A) to the applicable net -metering customers, including without 31
limitation any rates, riders, and surcharges applied based on the volume of 32
kilowatt hours of electrici ty supplied by an electric utility, to all 33
kilowatt hours that are supplied by the electric utility to a net -metering 34
customer by the electric utility during the applicable billing period; and 35
(iii) Avoided cost of the electric utility to all 36 HB1370
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kilowatt hours supplied to the electric utility by a net -metering customer 1
during the applicable billing period to be credited to the total bill of the 2
net-metering customer in a dollar value, excluding the customer charge and 3
any applicable demand charge or minim um bill provision that the net -metering 4
customer shall pay each month; 5
(C) Credits the net -metering customer with any accumulated 6
net-metering surplus as measured in dollars during the next applicable 7
billing period; and 8
(D) Credits the bills of the net-metering customer's other 9
meters with the net-metering surplus measured in dollars under § 23 -18-10
604(d)(2); or 11
(2) A rate structure in which the electric utility: 12
(A) Separately meters the electric energy, measured in 13
kilowatt hours: 14
(i) Supplied by the electric utility to the net -15
metering customer; and 16
(ii) Fed back to the electric utility from the net -17
metering customer's net -metering facility at any time during the applicable 18
billing period; 19
(B) Applies the: 20
(i) Commission-approved customer charge, demand 21
charge, minimum bill provision, and other applicable commission -approved 22
charges under § 23-18-604(c)(1)(A); and 23
(ii) Commission-approved riders or surcharges under 24
§ 23-18-604(c)(1)(A), including without limitation a ny rates, riders, and 25
surcharges applied based on the volume of kilowatt hours of electricity 26
supplied by an electric utility, to all kilowatt hours that are supplied by 27
the electric utility to a net -metering customer by the electric utility 28
during the applicable billing period prior to crediting any net excess 29
generation under subdivision (a)(2)(C) of this section; 30
(C) Credits the net -metering customer with any accumulated 31
net excess generation during the next applicable billing period; 32
(D) Calculates the net kilowatt hours of the electric 33
energy supplied by the electric utility to the net -metering customer, less 34
the net excess generation and any net excess generation carried forward from 35
prior billing periods; 36 HB1370
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(E) Applies the commission -approved retail rate, except as 1
provided in subdivision (a)(2)(B) of this section, not to exceed the kilowatt 2
hours supplied to the net -metering customer by the electric utility during 3
the applicable billing period; 4
(F) Carries forward any net excess generat ion that exceeds 5
the kilowatt hours supplied by the electric utility during the applicable 6
billing period to the next billing period; 7
(G) Excludes any net excess generation applied to another 8
meter location of the net -metering customer under § 23 -18-604(d); and 9
(H) Applies the monthly grid charge under § 23 -18-607. 10
(b) A commission shall approve the rates established by a rate 11
structure used by an electric utility under subsection (a) of this section. 12
13
23-18-607. Monthly grid charge. 14
(a)(1) If an electric utility follows the rate structure in § 23 -18-15
606(2), the electric utility shall apply a monthly grid charge to: 16
(A) Collect any of the fixed charges that are collected 17
through volumetric charges, including without limitation any riders and 18
surcharges; and 19
(B) Exclude the cost of fuel and purchased energy. 20
(2) The monthly grid charge shall be calculated based upon the: 21
(A) Currently approved rates; and 22
(B) Cost-of-service study underlying the electric 23
utility's currently approved rates adjusted for any commission -approved: 24
(i) Formula rate plan adjustments under the Formula 25
Rate Review Act, § 23 -4-1201 et seq.; or 26
(ii) Adjustments under § 23 -4-901 et seq. 27
(b) The monthly grid charge under this section shall be calculated for 28
each customer class as follows: 29
(1)(A) Calculate the sum of all fixed costs collected through 30
volumetric rates. 31
(B) The fixed costs collected through volumetric rates 32
shall be any demand-related or customer-related costs collected in rates 33
stated in dollars per kilowatt hour; and 34
(2)(A) Convert the fixed costs calculated in subdivision (b)(1) 35
of this section into a rate, expressed in dollars per kilowatt hour, by 36 HB1370
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dividing the total of the fixed costs under subdivision (b)(1) of this 1
section for each customer class by the electric utility's sales during the 2
test-year used to develop the retail rates approved by the commission in the 3
electric utility's most recent application for a general change or 4
modification in rates under § 23 -4-401 et seq. 5
(B) The monthly grid charge for each customer class shall 6
be determined by multiplying the fixed costs expressed under subdivision 7
(b)(2)(A) of this section by the expected monthly output of a one -kilowatt 8
direct current solar photovolta ic solar system determined under subsection 9
(c) of this section. 10
(c)(1) The expected monthly output of a one -kilowatt direct current 11
solar photovoltaic solar system shall be: 12
(A) Expressed in kilowatt hours; and 13
(B) Calculated by dividing the ex pected average annual 14
output for a one-kilowatt direct current solar photovoltaic solar system 15
using the process described in subdivisions (c)(2) and (3) of this section by 16
twelve (12). 17
(2) For a fixed-tilt solar photovoltaic system, the average 18
annual output for a one-kilowatt direct current solar photovoltaic solar 19
system shall be: 20
(A) Expressed in kilowatt hours; and 21
(B) Determined using the National Renewable Energy 22
Laboratory PVWatts Calculator using a direct current to alternating current 23
(DC/AC) ratio of one and one -tenth (1.1) using a single location central to 24
the electric utility's service territory. 25
(3) For a single-axis tracking solar photovoltaic system, the 26
average annual output for a one -kilowatt direct current solar photovolta ic 27
solar system shall be: 28
(A) Expressed in kilowatt hours; and 29
(B) Determined using the National Renewable Energy 30
Laboratory PVWatts Calculator using a direct current to alternating current 31
(DC/AC) ratio of one and three -tenths (1.3) using a singl e location central 32
to the electric utility's service territory. 33
(d) The monthly grid charge shall not be less than the amount of any 34
electric utility fixed costs that are collected through volumetric charges, 35
including without limitation any riders, and excluding the cost of fuel and 36 HB1370
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purchased energy that the net -metering customer avoids. 1
2
SECTION 2. DO NOT CODIFY. TEMPORARY LANGUAGE. Rules. 3
(a) The Arkansas Public Service Commission, after notice and hearing, 4
shall: 5
(1) Modify the commission ru les to conform to this act; and 6
(2) Submit the commission rules to the Legislative Council by 7
June 30, 2023. 8
(b) The commission shall approve modifications to the electric 9
utilities' rate schedules applicable to net -metering to conform to this act 10
by June 30, 2023. 11
12
SECTION 3. EMERGENCY CLAUSE. It is found and determined by the 13
General Assembly of the State of Arkansas that delay in the enactment of this 14
act may result in unjust, unreasonable, and unduly discriminatory rates; and 15
that this act is immediately necessary for the protection of Arkansas 16
ratepayers. Therefore, an emergency is declared to exist, and this act being 17
immediately necessary for the preservation of the public peace, health, and 18
safety shall become effective on: 19
(1) The date of its approval by the Governor; 20
(2) If the bill is neither approved nor vetoed by the Governor, 21
the expiration of the period of time during which the Governor may veto the 22
bill; or 23
(3) If the bill is vetoed by the Governor and the veto is 24
overridden, the date the last house overrides the veto. 25
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