Stricken language would be deleted from and underlined language would be added to present law.
*CRH048* 02-21-2023 09:37:09 CRH048
State of Arkansas As Engrossed: H2/20/23 H2/21/23 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 CR EATE THE 11
CUSTOMER PROTECTIONS FOR NET-METERING CUSTOMER ACT; 12
TO DECLARE AN EMERGE NCY; AND FOR OTHER P URPOSES. 13
14
15
Subtitle 16
TO AMEND THE ARKANSAS RENEWABLE ENERGY 17
DEVELOPMENT ACT OF 2001; TO PREVENT COST -18
SHIFTING AND ENSURE FAIRNESS TO ALL 19
RATEPAYERS; TO CREATE THE CUSTOMER 20
PROTECTIONS FOR NET-METERING CUSTOMERS 21
ACT; AND TO DECLARE AN EMERGENCY. 22
23
24
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 25
26
SECTION 1. Arkansas Code Title 23, Chapter 18, Subchapter 6 is amended 27
to read as follows: 28
Subchapter 6 — Arkansas Renewable Energy Development Cost-Shifting Prevention 29
Act of 2001 2023 30
31
23-18-601. Title. 32
This subchapter shall be known and cited as the “Arkansas Renewable 33
Energy Development Cost-Shifting Prevention Act of 2001 2023”. 34
35
23-18-602. Legislative findings and declarations. 36 As Engrossed: H2/20/23 H2/21/23 HB1370
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(a) Net energy metering encourages the use of renewable energy 1
resources and renewable energy technologies by reducing utility 2
interconnection and administrative costs for small consumers of electricity. 3
More than thirty (30) other states have passed similar l aws or regulations in 4
support of net energy metering programs. Increasing the consumption of 5
renewable resources promotes the wise use of Arkansas's natural energy 6
resources to meet a growing energy demand, increases Arkansas's use of 7
indigenous energy fue ls while reducing dependence on imported fossil fuels, 8
fosters investments in emerging renewable technologies to stimulate economic 9
development and job creation in the state, including the agricultural 10
sectors, reduces environmental stresses from energy pr oduction, and provides 11
greater consumer choices. The General Assembly finds that: 12
(1) Arkansas has an established process for the billing option 13
that enables customer -owned net-metering facilities to offset part or all of 14
a net-metering customer's elect ric consumption; 15
(2) This billing option should continue subject to certain 16
modifications for the benefit and rate protection of all electric utility 17
customers in Arkansas; and 18
(b)(3) Arkansas has actively encouraged the manufacture of new 19
technologies in the state through promotion of the Arkansas Emerging 20
Technology Development Act of 1999, § 15 -4-2101 et seq. [repealed]. Net 21
metering would help to further attract energy technology manufacturers, to 22
provide a foothold for these technologies in the A rkansas economy, and to 23
make it easier for customer access to these technologies. 24
(c) Therefore, the General Assembly finds that it It is in Arkansas's 25
long-term interest to adopt this subchapter the modifications set forth in 26
this subchapter. 27
28
23-18-603. Definitions. 29
As used in this subchapter: 30
(1) “Avoided cost” means: 31
(A) For an electric utility other than a municipal 32
utility, the costs to an electric utility of electric energy or capacity, or 33
both, that, but for the generation from the net -metering facility or 34
facilities, the utility would generate itself or purchase from another 35
source, as determined by a commission consistent with § 23 -3-701 et seq. 36 As Engrossed: H2/20/23 H2/21/23 HB1370
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twelve-month average for the prior calendar year of the applicable Locational 1
Marginal Price associated with the electric utility's load zone in the 2
following applicable Independent System Operator market: 3
(i) The Midcontinent Independent System Operator; or 4
(ii) The Southwest Power Pool ; or 5
(B) For a municipal utility, the defini tion provided by 6
the governing body of the municipal utility; 7
(2) “Commission” means the Arkansas Public Service Commission or 8
other appropriate governing body for an electric utility as defined in 9
subdivision (3) of this section; 10
(3) “Electric utility” means a public or investor -owned utility, 11
an electric cooperative, or any private power supplier or marketer that is 12
engaged in the business of supplying electric energy to the ultimate consumer 13
or any customer classes within the state; 14
(4) "Monthly grid charge" means a charge expressed in dollars 15
per kilowatt applied to the nameplate direct current capacity of the net -16
metering facility; 17
(4)(A)(5)(A) “Municipal utility” means a utility system owned or 18
operated by a municipality that provides electricity. 19
(B) “Municipal utility” includes without limitation a: 20
(i) Utility system managed or operated by a 21
nonprofit corporation under § 14 -199-701 et seq.; and 22
(ii) Utility system owned or operated by a 23
municipality or by a consolidated utility district under the General 24
Consolidated Public Utility System Improvement District Law, § 14 -217-101 et 25
seq.; 26
(5)(6) “Net excess generation” means the amount of electricity 27
as measured in kilowatt hours or kilowatt hours multiplied by the applicable 28
rate that a net-metering customer has fed back to the electric utility that 29
exceeds the amount of electricity as measured in kilowatt hours or kilowatt 30
hours multiplied by the applicable rate used by that customer during the 31
applicable period determined by a commission; 32
(6)(7) “Net metering” means measuring a billing option that 33
measures the difference in amount of electricity as measured in kilowatt 34
hours or kilowatt hours multiplied by the applicable rate supplied by an 35
electric utility to a an individual net-metering customer and separately 36 As Engrossed: H2/20/23 H2/21/23 HB1370
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measuring the electricity as measured in kilowatt hours generated by a net-1
metering customer and an individual net-metering customer's net -metering 2
facility and fed back to the electric utility over the applicable period 3
determined by a commission ; 4
(8) "Net-metering surplus" means the dollar value resulting from 5
multiplying the avoided cost of the electric utility to all kilowatt hours 6
supplied to the electric utility by a net -metering customer during the 7
applicable billing period under § 23 -18-604(c)(4); 8
(7)(9)(A) “Net-metering customer” means a an individual customer 9
of an electric utility that: 10
(A)(i) Is an owner of a net -metering facility; 11
(B)(ii) Leases a net-metering facility subject to the 12
following limitations: 13
(i)(a) A lease shall not permit the sale of electric 14
energy measured in kilowatt hours or electric c apacity measured in kilowatts 15
between the lessor and lessee; and 16
(ii)(b) A lease shall not include any charge per 17
kilowatt hour or any charge per kilowatt; or 18
(C)(iii)(a) Is a government entity or other entity that is 19
exempt from state and federal income tax, and that, for the sole purpose of 20
this subchapter, obtains electric energy from a net -metering facility under a 21
service contract qualifying for safe -harbor protection as provided under 26 22
U.S.C. § 7701(e)(3)(A), as in effect on July 24, 2019; August 16, 2022. 23
(b) Revenues collected under contracts for 24
obtaining electric energy from a net -metering facility under a service 25
contract qualifying for safe -harbor protection as provided under 26 U.S.C. § 26
7701(e)(3)(A), as in effect on August 16, 2022, are exempt from state and 27
local sales taxes. 28
(B) "Net-metering customer" does not mean a customer that 29
is an interruptible customer of the electric utility and takes service under 30
an electric utility's rate schedule for interruptible service, unless a 31
commission has: 32
(i) Considered an application and issued an order, before 33
December 31, 2022, addressing an individual net -metering customer's 34
application for approval of a net -metering facility with a name plate 35
generating capacity in excess of ten thousand kilowatts (10,000 kW) where an 36 As Engrossed: H2/20/23 H2/21/23 HB1370
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individual net-metering customer also takes service under an electric 1
utility's rate schedule for interruptible service; and 2
(ii) Concluded that it is in the public interest for that 3
individual interruptible customer to be a net -metering customer; 4
(8)(10) “Net-metering facility” means a facility for the 5
production of electric energy to meet all or part of a net -metering 6
customer's need for electric energy within a single utility's allocated 7
service territory that: 8
(A) Uses solar, wind, hydroelectric, geothermal, or 9
biomass resources to generate electricity, including, but not limited to, 10
fuel cells and micro turbines that generate electricity if the fuel source is 11
entirely derived from renewable resourc es; 12
(B)(i) Has a nameplate generating capacity of not more 13
than: 14
(i)(a) The greater of twenty -five kilowatts (25 kW) 15
or one For a residential customer for residential use, the lesser of twenty -16
five kilowatts (25 kW) alternating current or one hundred percent (100%) of 17
the net-metering customer's highest monthly usage in the previous twelve (12) 18
months for residential use; 19
(ii)(b) For customers of electric utilities, one 20
thousand kilowatts (1,000 kW) for use other than residential use unless 21
otherwise allowed by a commission under § 23 -18-604 For nonresidential 22
customers of electric utilities for nonresidential use, less than or equal to 23
the lesser of five thousand kilowatts (5,000 kW) alternating current or one 24
hundred percent (100%) of the net -metering customer's highest monthly usage 25
in the previous twelve (12) months within a single utility's allocated 26
service territory where a single net -metering facility is physically located 27
behind a net-metering customer's electric utility meter that repr esents one 28
hundred percent (100%) of the net -metering customer's energy usage served by 29
the net-metering facility; or 30
(iii)(c) For customers of a municipal utility, 31
the limits established by the governing body of the municipal utility under § 32
23-18-605;. 33
(ii)(a) The total nameplate generating capacity of 34
all net-metering facilities owned by, leased by, or providing electric energy 35
under one (1) or more qualifying service contracts of an individual net -36 As Engrossed: H2/20/23 H2/21/23 HB1370
6 02-21-2023 09:37:09 CRH048
metering customer, including without limitation any net -metering facilities 1
serving multiple meter locations under common ownership of any net -metering 2
customer, within a single utility's allocated service territory, shall be 3
less than or equal to the less er of five thousand kilowatts (5,000 kW) 4
alternating current or one hundred percent (100%) of the net -metering 5
customer's highest monthly usage in the previous twelve (12) months, unless a 6
commission approved a greater amount for an individual net -metering customer 7
before December 31, 2022 . 8
(b)(1) A net-metering facility serving 9
multiple meter locations under common ownership shall be located on a 10
separate property from any other net -metering facility or only co -locate on a 11
property with one (1) other net-metering facility within a single utility's 12
allocated service territory. 13
(2) For a net-metering facility under 14
subdivision (10)(B)(ii)(b)(1) of this section, the nameplate generating 15
capacity under this subdivision (10)(B)(ii) includes the total kilowatt 16
nameplate-generating capacity of all net -metering facilities within a single 17
electric utility's allocated service territory owned by, leased by, or 18
providing electric energy under one (1) or more qualifying service contracts 19
to a net-metering customer, including without limitation any net -metering 20
facilities serving multiple meter locations under common ownership; 21
(C) Is located in Arkansas; 22
(D) Can operate in parallel with an electric utility's 23
existing transmission and distrib ution facilities existing distribution 24
facilities or, if permitted by the electric utility, an electric utility's 25
transmission facilities ; 26
(E) Is intended primarily to offset part or all of the an 27
individual net-metering customer customer's requirements for electricity; and 28
(F)(i) May include an energy storage device that is 29
configured to receive electric energy solely from a net -metering facility. 30
(ii) The capacity of an energy storage device shall 31
not be used to calculate the capa city limits listed in subdivision 32
(8)(B)(10)(B) of this section if the energy storage device is configured to 33
receive electric energy solely from a net -metering facility; 34
(9) “Quantifiable benefits” means the: 35
(A) Reasonably demonstrated costs that: 36 As Engrossed: H2/20/23 H2/21/23 HB1370
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(i) Are related to the provision of electric service 1
and based on the utility's most recent cost -of-service study filed with the 2
commission; and 3
(ii) Will be avoided by the utility by the use of 4
net metering; 5
(B) Monetary value provided to a utility by the use of net 6
metering as specified by a market mechanism, if any, of the regional 7
transmission organization of which the electric utility is a member; and 8
(C) Monetary value provided to a utility by the use of net 9
metering as specified by a market mechanism, if any, that measures utility 10
distribution system benefits; and 11
(10)(11) “Renewable energy credit” means the environmental, 12
economic, and social attributes of a unit of electricity, such as a megawatt 13
hour, generated from renewable fuels that can be sold or traded separately. 14
15
23-18-604. Commission authority — Definition. 16
(a)(1) An electric utility shall allow net -metering facilities to be 17
interconnected using , at a minimum, a single standard two-channel digital 18
meter capable of registering the flow of electricity in two (2) directions 19
that separately measures the electric energy in kilowatt hours that is: 20
(A) Supplied by an electric utility to the net -metering 21
customer; and 22
(B) Generated by the net -metering customer's n et-metering 23
facility and fed back to an electric utility . 24
(2) An electric utility may impose a charge to recover any cost 25
of the standard two-channel digital meter that is not otherwise included in 26
the rates paid by the net -metering customer. 27
(b)(1) Following notice, and opportunity for public comment , and a 28
hearing, a commission shall: 29
(1) Shall establish appropriate rates, terms, and conditions for 30
net metering, including without limitation the adoption or revision of any 31
applicable rules on or be fore June 30, 2023;. 32
(2) For net-metering customers who receive service under a rate 33
that does not include a demand component, may: 34
(A) Require an electric utility to credit the net -metering 35
customer with any accumulated net excess generation as mea sured in kilowatt 36 As Engrossed: H2/20/23 H2/21/23 HB1370
8 02-21-2023 09:37:09 CRH048
hours or kilowatt hours multiplied by the applicable rate in the next 1
applicable billing period and base the bill of the net -metering customer on 2
the net amount of electricity as measured in kilowatt hours or kilowatt hours 3
multiplied by the applicable rate that the net -metering customer has received 4
from or fed back to the electric utility during the billing period; 5
(B) Take the following actions if those actions are in the 6
public interest and doing so will not result in an unreasonable allocation of 7
or increase in costs to other utility customers: 8
(i) Separately meter the electric energy, measured 9
in kilowatt hours, supplied by the electric utility to the net -metering 10
customer and the electric energy, measured in kilowa tt hours, that is 11
generated by the net -metering customer's net -metering facility that is fed 12
back to the electric utility at any time during the applicable billing 13
period; 14
(ii) Apply the commission -approved retail rate to 15
all kilowatt hours that are s upplied by the electric utility to a net -16
metering customer by the electric utility during the applicable period 17
determined by a commission; 18
(iii) Apply the avoided cost of the electric utility 19
plus any additional sum determined under subdivision (b)(2 )(B)(iv) of this 20
section to all kilowatt hours supplied to the electric utility by a net -21
metering customer, during the period determined by a commission, which shall 22
be credited to the total bill of the net -metering customer in a dollar value; 23
and 24
(iv) The additional sum added to the avoided cost of 25
the electric utility may be applied after the demonstration of quantifiable 26
benefits by the net-metering customer and shall not exceed forty percent 27
(40%) of the avoided cost of the electric utility; 28
(C) Authorize an electric utility to assess a net -metering 29
customer that is being charged a rate that does not include a demand 30
component a per-kilowatt-hour fee or charge to recover the quantifiable 31
direct demand-related distribution cost of the electric ut ility for providing 32
electricity to the net -metering customer that is not: 33
(i) Avoided as a result of the generation of 34
electricity by the net -metering facility; and 35
(ii) Offset by quantifiable benefits; or 36 As Engrossed: H2/20/23 H2/21/23 HB1370
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(D) Take other actions that are in t he public interest and 1
do not result in an unreasonable allocation of costs to other utility 2
customers; The right to a hearing under this subsection may be waived by the 3
parties. 4
(c) Through its actions under subdivision (b)(1) of this section, a 5
commission shall: 6
(1)(A) Ensure that each net -metering customer pays the costs of 7
an electric utility's facilities and associated expenses required to: 8
(i) Provide service to the net -metering customer; 9
and 10
(ii) Enable the net -metering customer's use of the 11
electric utility's facilities. 12
(B) The costs described under subdivision (c)(1)(A) of 13
this section include without limitation any costs that are: 14
(i) Recovered through rates using the cost -of-15
service study underlying the rates app roved by a commission in the electric 16
utility's most recent application for a general change or modification of the 17
electric utility's rates under § 23 -4-401 et seq.; 18
(ii) Recovered through riders or surcharges; and 19
(iii) Adjusted for any commiss ion-approved: 20
(a) Formula rate plan adjustments under the 21
Formula Rate Review Act, § 23 -4-1201 et seq.; or 22
(b) Adjustments under § 23 -4-901 et seq. 23
(C) By June 30, 2023, a commission shall approve 24
modifications to each electric utility's r ate schedules applicable to net -25
metering customers to ensure that all existing and prospective net -metering 26
customers pay all applicable riders and surcharges; 27
(2) Allow an electric utility to modify the rates, terms, and 28
conditions, including without l imitation the rate structure and any 29
individual rate components for net -metering customers, subject to approval by 30
the commission, without filing an application for a general change or 31
modification of the electric utility's rates under § 23 -4-401 et seq.; 32
(3) Not adjust the costs of an electric utility's facilities and 33
associated expenses required to provide service to a net -metering customer 34
and to enable the net -metering customer's use of the electric utility's 35
facilities as specified in subdivision (c )(1)(A) of this section with any 36 As Engrossed: H2/20/23 H2/21/23 HB1370
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amounts that are not quantified in the cost -of-service study underlying the 1
retail rates approved by a commission in the electric utility's most recent 2
application for a general change or modification in rates under § 23 -4-401 et 3
seq., including without limitation any commission -approved: 4
(A) Formula rate plan adjustments under the Formula Rate 5
Review Act, § 23-4-1201 et seq.; or 6
(B) Adjustments under § 23 -4-901 et seq.; 7
(4) Establish rates for a net -metering customer using one (1) of 8
the rate structures under § 23 -18-606; 9
(5) Separately meter the electric energy, measured in kilowatt 10
hours, supplied by the electric utility to the net -metering customer and the 11
electric energy, measured in kilowatt hours, tha t is fed back to the electric 12
utility from the net -metering customer's net -metering facility at any time 13
during the applicable billing period; 14
(6) Apply the commission -approved customer charge, demand 15
charge, or minimum bill provision and other applicab le commission-approved 16
charges addressed in subdivision (c)(1)(A) of this section; 17
(7) Apply the commission -approved charges addressed in 18
subdivision (c)(1)(A) of this section to the applicable net -metering 19
customers, including without limitation any ra tes, riders, and surcharges 20
that are applied based on the volume of kilowatt hours of electricity 21
supplied by an electric utility, to all kilowatt hours that are supplied by 22
the electric utility to a net -metering customer by the electric utility 23
during the applicable billing period; 24
(8) Authorize an electric utility to recover any net -metering 25
surplus or the dollar value of any net excess generation applied to the bills 26
of net-metering customers in the same manner that the electric utility 27
recovers the cost of fuel and purchased energy; 28
(3) Shall require that net -metering equipment be installed to 29
accurately measure the electricity: 30
(A) Supplied by the electric utility to each net -metering 31
customer; and 32
(B) Generated by each net -metering customer that is fed 33
back to the electric utility over the applicable billing period; 34
(4) May authorize (9)(A) Authorize an electric utility to 35
assess a net-metering customer a greater fee or charge of any type, if the 36 As Engrossed: H2/20/23 H2/21/23 HB1370
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electric utility's direct costs of inte rconnection and administration of net 1
metering outweigh the distribution system, environmental, and public policy 2
benefits of allocating the costs among the electric utility's entire customer 3
base standard one-time fee, to be approved by the commission, to recover 4
administrative and related interconnection review costs. 5
(B) Any costs incurred by the electric utility for an 6
interconnection study are the sole responsibility of the net -metering 7
customer and shall be paid in advance of any work's being unde rtaken by the 8
electric utility to: 9
(i) Enable the interconnection; and 10
(ii) Recover the electric utility's direct costs of 11
interconnection and any grid upgrades required to connect the net -metering 12
customer's net-metering facility; 13
(10)(A) Require that a net-metering customer retains any 14
renewable energy credit created as a result of the electricity supplied by a 15
net-metering customer that generated the renewable energy credit. 16
(B) The renewable energy credit may be retained, retired, 17
or sold for the sole benefit of the net -metering customer; and 18
(5) For net-metering customers who receive service under a rate 19
that does not include a demand component, shall require an electric utility 20
to credit a net-metering customer with the amount of any accumulated net 21
excess generation as measured in kilowatt hours or kilowatt hours multiplied 22
by the applicable rate in the next applicable billing period; 23
(6) Except as provided in subdivision (b)(9) of this section, 24
for net-metering customers who r eceive service under a rate that includes a 25
demand component, shall require an electric utility to credit the net -26
metering customer with any accumulated net excess generation in the next 27
applicable billing period and base the bill of the net -metering customer on 28
the net amount of electricity that the net -metering customer has received 29
from or fed back to the electric utility during the billing period; 30
(7) May expand the scope of net metering to include additional 31
facilities that do not use a renewable en ergy resource for a fuel if so doing 32
results in distribution system, environmental, or public policy benefits; 33
(8) Shall provide that: 34
(A)(i) The amount of the net excess generation credit as 35
measured in kilowatt hours or kilowatt hours multiplied by the applicable 36 As Engrossed: H2/20/23 H2/21/23 HB1370
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rate remaining in a net -metering customer's account at the close of a billing 1
cycle shall not expire and shall be carried forward to subsequent billing 2
cycles indefinitely. 3
(ii) However, for net excess generation credits 4
older than twenty-four (24) months, a net -metering customer may elect to have 5
the electric utility purchase the net excess generation credits in the net -6
metering customer's account at the electric utility's avoided cost, plus any 7
additional sum determined under this section, if the sum to be paid to the 8
net-metering customer is at least one hundred dollars ($100). 9
(iii) An electric utility shall purchase at the 10
electric utility's avoided cost, plus any additional sum determined under 11
this section, any net excess generation credit remaining in a net -metering 12
customer's account when the net -metering customer: 13
(a) Ceases to be a customer of the electric 14
utility; 15
(b) Ceases to operate the net -metering 16
facility; or 17
(c) Transfers the net -metering facility to 18
another person; and 19
(B) A renewable energy credit created as the result of 20
electricity supplied by a net -metering customer is the property of the net -21
metering customer that generated the renewable energy credit; and 22
(9) May allow a net -metering facility with a generating capacity 23
that exceeds the limits provided under § 23 -18-603(8)(B)(ii) or § 23 -18-24
603(8)(B)(iii) of up to twenty thousand kilowatts (20,000 kW) if: 25
(A) For any net-metering facility with a generating 26
capacity of less than f ive thousand kilowatts (5,000 kW): 27
(i) The net-metering facility is not for residential 28
use; 29
(ii) Increasing the generating capacity limits for 30
individual net-metering facilities results in distribution system, 31
environmental, or public policy ben efits or allowing an increased generating 32
capacity for the net -metering facility would increase the state's ability to 33
attract businesses to Arkansas; and 34
(iii) Allowing an increased generating capacity for 35
the net-metering facility is in the public i nterest; or 36 As Engrossed: H2/20/23 H2/21/23 HB1370
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(B) For any net-metering facility with a generating 1
capacity of greater than five thousand kilowatts (5,000 kW): 2
(i) The net-metering facility is not for residential 3
use; 4
(ii) Increasing the generating capacity limits for 5
individual net-metering facilities results in distribution system, 6
environmental, or public policy benefits or allowing an increased generating 7
capacity for the net -metering facility would increase the ability of the 8
state to attract business to Arkansas; 9
(iii) Allowing an increased generating capacity for 10
the net-metering facility does not result in an unreasonable allocation of 11
costs to other utility customers; and 12
(iv) Allowing an increased generating capacity for 13
the net-metering facility is in the pu blic interest; and 14
(10)(A) Shall allow the net -metering facility of a net -metering 15
customer who has submitted a standard interconnection agreement, as referred 16
to in the rules of the Arkansas Public Service Commission, to the electric 17
utility after July 24, 2019, but before December 31, 2022, to remain under 18
the rate structure in effect when the net -metering contract was signed, for a 19
period not to exceed twenty (20) years, subject to approval by a commission. 20
(B) A net-metering facility under subdiv ision (b)(10)(A) 21
of this section remains subject to any other change or modification in rates, 22
terms, and conditions (11)(A) Allow a net -metering customer that submitted a 23
standard interconnection agreement to the electric utility before December 24
31, 2023, or has submitted a facilities agreement or equivalent document to 25
establish an account with an electric utility and paid all costs of 26
constructing the electric utility facilities necessary to interconnect the 27
net-metering facility before December 31, 202 3, to remain under the rate 28
structure in effect before December 31, 2022, as set forth in § 23 -18-29
606(a)(2)(A)-(G), until June 1, 2040 . 30
(B) A net-metering customer that does not meet the 31
requirements of subdivision (c)(11)(A) of this section shall be b illed using 32
one (1) of the rate structures established in § 23 -18-606. 33
(C) A net-metering facility billed using the rate 34
structures described in subdivisions (c)(11)(A) and (B) of this section 35
remains subject to any other change or modification in rates, terms, and 36 As Engrossed: H2/20/23 H2/21/23 HB1370
14 02-21-2023 09:37:09 CRH048
conditions. 1
(c)(1)(d)(1) Except as provided in subdivision (c)(2)(d)(2) of this 2
section, an electric utility shall separately meter, bill, and credit each 3
net-metering facility even if one (1) or more net -metering facilities are 4
under common ownership. 5
(2)(A)(i) At the an individual net-metering customer's 6
discretion, an electric utility may shall apply net-metering credits the net-7
metering surplus from a an individual net-metering customer's net-metering 8
facility to the bill for another meter location of the individual net -9
metering customer if the net-metering facility and the separate meter 10
location are under common ownership of the same individual net -metering 11
customer within a single electric utility's allocated service area territory 12
and: 13
(a) Are located within a five (5) miles radius 14
of the individual net-metering customer's net -metering facility, unless a 15
commission has approved a greater distance for an individual net -metering 16
customer before December 31, 2022; or 17
(b) For a net-metering facility that did not 18
require approval by a commission, are constructed at a greater distance and 19
included in an executed standard interconnection agreement submitted before 20
December 31, 2023. 21
(ii) Subdivision (c)(2)(A)(i) of this section does 22
not apply if more than two (2) customers that are governmental entities or 23
other entities that are exempt from state and federal income tax defined 24
under § 23-18-603(7)(C) co-locate at a site hosting the net -metering facility 25
A separate meter location under subdivision (d)(2)(A)(i) of this section 26
shall be credited only with net -metering surplus from one (1) net -metering 27
facility owned by the same net -metering customer, with all accounts being 28
under common ownership for the same individual net -metering customer. 29
(B) Net excess generation Net-metering surplus shall be 30
credited first to the an individual net-metering customer's bill for the 31
meter to which the net -metering facility is physically attached. 32
(C) After applying net excess generation net-metering 33
surplus under subdivision (c)(2)(B)(d)(2)(B) of this section and upon request 34
of the net-metering customer under subdivision (c)(2)(A)(d)(2)(A) of this 35
section, any remaining net excess generation net-metering surplus shall be 36 As Engrossed: H2/20/23 H2/21/23 HB1370
15 02-21-2023 09:37:09 CRH048
credited to one (1) or more of the individual net-metering customer's bills 1
for the individual net -metering customer's meters in the rank order provided 2
by the individual net-metering customer. 3
(d)(e) A person who that acts as a lessor or service provider as 4
described in § 23-18-603(7)(B) § 23-18-603(9)(B) or § 23-18-603(7)(C) § 23-5
18-603(9)(C) shall not be considered a public utility as defined in § 23 -1-6
101. 7
(f) An electric utility shall not be obligated to: 8
(1) Accept or release any portion of its or another electric 9
utility's allocated service territory to accommodate the development, 10
construction, or operation of a net -metering facility; or 11
(2) Publish, provide, or release any information regarding its 12
electric utility facilities or system to aid in the location of the net -13
metering facilities beyond its established site review process. 14
15
23-18-605. Municipal utilities. 16
(a) A municipal utility shall allow net -metering facilities to be 17
interconnected according to the o rdinances, rules, or regulations established 18
by the governing body of the municipal utility. 19
(b) The governing body of a municipal utility may elect to follow 20
procedures under § 23 -18-604, § 23-18-606, or § 23-18-607 or may adopt 21
ordinances, rules, or re gulations establishing the rates, terms, and 22
conditions allowing the interconnection of net -metering facilities, including 23
generation facilities and energy storage devices, whether owned or leased by 24
a customer or operated by a third party on behalf of a c ustomer. 25
(c) The governing body of a municipal utility may limit the generating 26
capacity of a net-metering facility to less than twenty -five kilowatts (25 27
kW) for residential customers or three hundred kilowatts (300 kW) for 28
nonresidential customers only after the governing body finds that the 29
capacity limit is necessary for reliable utility operations or the public 30
health, safety, or welfare. 31
(d) The governing body of a municipal utility shall not establish a 32
rate or fee that reduces the value of elect ric energy from a net -metering 33
facility to below the avoided cost of the municipal utility. 34
(e) For customers who receive service under a rate that includes a 35
demand component, the governing body of the municipal utility shall require a 36 As Engrossed: H2/20/23 H2/21/23 HB1370
16 02-21-2023 09:37:09 CRH048
municipal utility to credit a net-metering customer with any accumulated net 1
excess generation in the next applicable billing period and base the bill of 2
the customer on the net amount of electricity that the net -metering customer 3
has received from or fed back to the munic ipal utility during the billing 4
period. 5
6
23-18-606. Rate structure determination. 7
(a) At its discretion, an electric utility may elect to use one (1) of 8
the following rate structures to develop rates for net -metering customers: 9
(1) A rate structur e in which the electric utility: 10
(A) Separately meters the electric energy, measured in 11
kilowatt hours: 12
(i) Supplied by the electric utility to the net -13
metering customer; and 14
(ii) Fed back to the electric utility from the net -15
metering customer's net-metering facility at any time during the applicable 16
billing period; 17
(B) Applies the: 18
(i) Commission-approved customer charge, demand 19
charge, minimum bill provision, and other applicable commission -approved 20
charges under § 23-18-604(c)(1)(A); 21
(ii) Commission-approved charges under § 23 -18-22
604(c)(1)(A) to the applicable net -metering customers, including without 23
limitation any rates, riders, and surcharges applied based on the volume of 24
kilowatt hours of electricity supplied by an elec tric utility, to all 25
kilowatt hours that are supplied by the electric utility to a net -metering 26
customer by the electric utility during the applicable billing period; and 27
(iii) Avoided cost of the electric utility to all 28
kilowatt hours supplied to the electric utility by a net -metering customer 29
during the applicable billing period to be credited to the total bill of the 30
net-metering customer in a dollar value, excluding the customer charge and 31
any applicable demand charge or minimum bill provision that the net-metering 32
customer shall pay each month; 33
(C) Credits the net -metering customer with any accumulated 34
net-metering surplus as measured in dollars during the next applicable 35
billing period; and 36 As Engrossed: H2/20/23 H2/21/23 HB1370
17 02-21-2023 09:37:09 CRH048
(D) Credits the bills of the net -metering customer's other 1
meters with the net-metering surplus measured in dollars under § 23 -18-2
604(d)(2); or 3
(2) A rate structure in which the electric utility: 4
(A) Separately meters the electric energy, measured in 5
kilowatt hours: 6
(i) Supplied by the electric utility to the net -7
metering customer; and 8
(ii) Fed back to the electric utility from the net -9
metering customer's net -metering facility at any time during the applicable 10
billing period; 11
(B) Applies the: 12
(i) Commission-approved customer charge, demand 13
charge, minimum bill provision, and other applicable commission -approved 14
charges under § 23-18-604(c)(1)(A); and 15
(ii) Commission-approved riders or surcharges under 16
§ 23-18-604(c)(1)(A), including without limita tion any rates, riders, and 17
surcharges applied based on the volume of kilowatt hours of electricity 18
supplied by an electric utility, to all kilowatt hours that are supplied by 19
the electric utility to a net -metering customer by the electric utility 20
during the applicable billing period prior to crediting any net excess 21
generation under subdivision (a)(2)(C) of this section; 22
(C) Credits the net -metering customer with any accumulated 23
net excess generation during the next applicable billing period; 24
(D) Calculates the net kilowatt hours of the electric 25
energy supplied by the electric utility to the net -metering customer, less 26
the net excess generation and any net excess generation carried forward from 27
prior billing periods; 28
(E) Applies the commission -approved retail rate, except as 29
provided in subdivision (a)(2)(B) of this section, not to exceed the kilowatt 30
hours supplied to the net -metering customer by the electric utility during 31
the applicable billing period; 32
(F) Carries forward any net excess g eneration that exceeds 33
the kilowatt hours supplied by the electric utility during the applicable 34
billing period to the next billing period; 35
(G) Excludes any net excess generation applied to another 36 As Engrossed: H2/20/23 H2/21/23 HB1370
18 02-21-2023 09:37:09 CRH048
meter location of the net -metering customer under § 2 3-18-604(d); and 1
(H) Applies the monthly grid charge under § 23 -18-607. 2
(b) A commission shall approve the rates established by a rate 3
structure used by an electric utility under subsection (a) of this section. 4
5
23-18-607. Monthly grid charge. 6
(a)(1) If an electric utility follows the rate structure in § 23 -18-7
606(2), the electric utility shall apply a monthly grid charge to: 8
(A) Collect any of the fixed charges that are collected 9
through volumetric charges, including without limitation any riders and 10
surcharges; and 11
(B) Exclude the cost of fuel and purchased energy. 12
(2) The monthly grid charge shall be calculated based upon the: 13
(A) Currently approved rates; and 14
(B) Cost-of-service study underlying the electric 15
utility's currently approved rates adjusted for any commission -approved: 16
(i) Formula rate plan adjustments under the Formula 17
Rate Review Act, § 23 -4-1201 et seq.; or 18
(ii) Adjustments under § 23 -4-901 et seq. 19
(b) The monthly grid charge under this section shall be calculated for 20
each customer class as follows: 21
(1)(A) Calculate the sum of all fixed costs collected through 22
volumetric rates. 23
(B) The fixed costs collected through volumetric rates 24
shall be any demand-related or customer-related costs collected in rates 25
stated in dollars per kilowatt hour; and 26
(2)(A) Convert the fixed costs calculated in subdivision (b)(1) 27
of this section into a rate, expressed in dollars per kilowatt hour, by 28
dividing the total of the fixed costs under subdivision (b)(1 ) of this 29
section for each customer class by the electric utility's sales during the 30
test-year used to develop the retail rates approved by the commission in the 31
electric utility's most recent application for a general change or 32
modification in rates under § 23-4-401 et seq. 33
(B) The monthly grid charge for each customer class shall 34
be determined by multiplying the fixed costs expressed under subdivision 35
(b)(2)(A) of this section by the expected monthly output of a one -kilowatt 36 As Engrossed: H2/20/23 H2/21/23 HB1370
19 02-21-2023 09:37:09 CRH048
direct current solar photo voltaic solar system determined under subsection 1
(c) of this section. 2
(c)(1) The expected monthly output of a one -kilowatt direct current 3
solar photovoltaic solar system shall be: 4
(A) Expressed in kilowatt hours; and 5
(B) Calculated by dividing the expected average annual 6
output for a one-kilowatt direct current solar photovoltaic solar system 7
using the process described in subdivisions (c)(2) and (3) of this section by 8
twelve (12). 9
(2) For a fixed-tilt solar photovoltaic system, the average 10
annual output for a one -kilowatt direct current solar photovoltaic solar 11
system shall be: 12
(A) Expressed in kilowatt hours; and 13
(B) Determined using the National Renewable Energy 14
Laboratory PVWatts Calculator using a direct current to alternating cu rrent 15
(DC/AC) ratio of one and one -tenth (1.1) using a single location central to 16
the electric utility's service territory. 17
(3) For a single-axis tracking solar photovoltaic system, the 18
average annual output for a one -kilowatt direct current solar phot ovoltaic 19
solar 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 three -tenths (1.3) using a single location central 24
to the electric utility's service territory. 25
(d) The monthly grid charge shall not be less than the amount of any 26
electric utility fixed costs that are collected through volumetric charges, 27
including without limitation any riders , and excluding the cost of fuel and 28
purchased energy that the net -metering customer avoids. 29
30
SECTION 2. Arkansas Code Title 4, Chapter 88, is amended to add an 31
additional subchapter to read as follows: 32
Subchapter 11 — Customer Protections for Net-metering Customers Act 33
34
4-88-1101. Title. 35
This subchapter shall be known and may be cited as "Customer 36 As Engrossed: H2/20/23 H2/21/23 HB1370
20 02-21-2023 09:37:09 CRH048
Protections for Net-metering Customers Act". 1
2
4-88-1102. Definitions. 3
As used in this subchapter: 4
(1) "Net-metering customer" has the same m eaning as defined in 5
the Arkansas Cost-Shifting Prevention Act of 2023, § 23 -18-601 et. seq; and 6
(2) "Net-metering facility" has the same meaning as defined in 7
the Arkansas Cost-Shifting Prevention Act of 2023, § 23 -18-601 et. seq. 8
9
4-88-1103. Net-metering customer protections. 10
The net-metering customer protections shall include without limitation 11
the following, a: 12
(1) Requirement that any person who sells or leases a net -13
metering facility or who provides a net -metering service to a net -metering 14
customer under the Arkansas Cost -Shifting Prevention Act of 2023, § 23 -18-601 15
et. seq shall: 16
(A)(i) Provide a prospective or existing net -metering 17
customer a minimum of five (5) business days to evaluate a proposal to 18
construct a net-metering facility to provide all or part of the prospective 19
or existing net-metering customer's needs for electric energy within a single 20
electric utility's allocated service territory. 21
(ii) The proposal to the prospective or existing 22
net-metering customer shall include: 23
(a) A description of the system and the 24
system's placement on the net -metering customer's premises or other location 25
consistent with the requirements of this subchapter; 26
(b) A description of the nameplate generating 27
capacity and expected month ly and annual output of the net -metering facility 28
in kilowatt hours; 29
(c) The estimated annual degradation to the 30
net-metering facility; 31
(d) An estimated timeline for the installation 32
of the net-metering facility; 33
(e) The total cost of the net-metering 34
facility; 35
(f) The amounts due at the signing for and at 36 As Engrossed: H2/20/23 H2/21/23 HB1370
21 02-21-2023 09:37:09 CRH048
the completion of the installation; 1
(g) The payment schedule; 2
(h) The payback period; 3
(i) The forecasted savings monthly and annual 4
bill savings provided by the p roposed net-metering facility in dollars based 5
on the rate structure as defined in § 23 -18-606; 6
(j) A description of any warranties; 7
(k) The length of the term of any warranties; 8
and 9
(l) Notice that the prospective or existing 10
net-metering customer may file a complaint with the Attorney General; 11
(B) Perform an energy efficiency audit on the potential or 12
existing net-metering customer's premises and any customer meter locations to 13
be served by the proposed net -metering facility as part of the proposal to 14
sell or lease a net-metering facility or provide a net -metering service to a 15
net-metering customer under the Arkansas Cost -Shifting Prevention Act of 16
2023, § 23-18-601 et. seq, or inform the prospective or existing net -metering 17
customer of how to obtain an energy efficiency audit; and 18
(C) Inform the prospective or existing net -metering 19
customer of the available energy efficiency measures to address the results 20
of the audit as part of the proposal to sell or lease a net -metering facility 21
or provide a net-metering service to a net -metering customer under the 22
Arkansas Cost-Shifting Prevention Act of 2023, § 23 -18-601 et. seq; 23
(2) Demonstration to the prospective or existing net -metering 24
customer that the proposed net -metering facility meets all applicable safety 25
requirements and standards; and 26
(3) Demonstration to the prospective or existing net -metering 27
customer that the person who sells or leases a net -metering facility or who 28
provides a net metering service to a net metering cust omer holds: 29
(A) All required permits to install, construct, or operate 30
a net-metering facility in the state, and, if the governing county, city, or 31
local authority does not require an electrical inspection, an executed 32
certification that no electrical inspection or permit is required; and 33
(B) A bond or other acceptable financial security to 34
ensure proper maintenance of the net -metering facility and decommissioning of 35
the net-metering facility. 36 As Engrossed: H2/20/23 H2/21/23 HB1370
22 02-21-2023 09:37:09 CRH048
1
4-88-1104. Enforcement. 2
Any violation of this subch apter may be enforced under the powers of 3
the office of the Attorney General under the Arkansas Deceptive Trade 4
Practices Act, § 4-88-101 et seq., including without limitation all 5
enforcement powers. 6
7
SECTION 3. DO NOT CODIFY. TEMPORARY LANGUAGE. Rules. 8
(a) The Arkansas Public Service Commission, after notice and hearing, 9
shall: 10
(1) Modify the commission rules to conform to this act; and 11
(2) Submit the commission rules to the Legislative Council by 12
June 30, 2023. 13
(b) The commission shall ap prove modifications to the electric 14
utilities' rate schedules applicable to net -metering to conform to this act 15
by June 30, 2023. 16
17
SECTION 4. EMERGENCY CLAUSE. It is found and determined by the 18
General Assembly of the State of Arkansas that delay in the enactment of this 19
act may result in unjust, unreasonable, and unduly discriminatory rates; and 20
that this act is immediately necessary for the protection of Arkansas 21
ratepayers. Therefore, an emergency is declared to exist, and this act being 22
immediately necessary for the preservation of the public peace, health, and 23
safety shall become effective on: 24
(1) The date of its approval by the Governor; 25
(2) If the bill is neither approved nor vetoed by the Governor, 26
the expiration of the period of time duri ng which the Governor may veto the 27
bill; or 28
(3) If the bill is vetoed by the Governor and the veto is 29
overridden, the date the last house overrides the veto. 30
31
32
/s/L. Fite 33
34
35
36