Stricken language would be deleted from and underlined language would be added to present law.
*CRH048* 02-27-2023 10:55:55 CRH048
State of Arkansas As Engrossed: H2/20/23 H2/21/23 H2/27/23 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 declaratio ns. 36 As Engrossed: H2/20/23 H2/21/23 H2/27/23 HB1370
2 02-27-2023 10:55:55 CRH048
(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 laws 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 fuels 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 production, 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 electric 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 technologie s in the Arkansas 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 fr om 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 H2/27/23 HB1370
3 02-27-2023 10:55:55 CRH048
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 definition 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 co nsolidated 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 H2/27/23 HB1370
4 02-27-2023 10:55:55 CRH048
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 H2/27/23 HB1370
5 02-27-2023 10:55:55 CRH048
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 H2/27/23 HB1370
6 02-27-2023 10:55:55 CRH048
metering customer for any net-metering facilities serving multiple meter 1
locations under common ownership of any net -metering customer, within a 2
single utility's allocated service territory, shall be less than or equal to 3
the lesser of five thousand kilowatts (5,000 kW) alternating current or one 4
hundred percent (100%) of the net -metering customer's highest monthly usage 5
in the previous twelve (12) months, unless: 6
(1) A commission approved a greater 7
amount for an individual net -metering customer before December 31, 2022 ; 8
(2) An individual net -metering customer 9
has executed a contract with a net -metering facility developer by February 10
22, 2023, to purchase a net -metering facility with a nameplate capacity not 11
to exceed twenty thousand kilowatts (20,000 kW) and has filed that contract 12
with a commission under a protective order by March 31, 2023; or 13
(3) An individual net -metering customer 14
has filed an application with a commission for approval of a net -metering 15
facility with a nameplate generating capacity not to exceed twenty thousand 16
kilowatts (20,000 kW) before December 31, 2022. 17
(b)(1) A net-metering 18
facility serving multiple meter locations under common ownership shall be 19
located on a separate property from any other net -metering facility or o nly 20
co-locate on a property with one (1) other net -metering facility within a 21
single utility's allocated service territory. 22
(2) For a net-metering facility under 23
subdivision (10)(B)(ii)(b)(1) of this section, the nameplate generating 24
capacity under this subdivision (10)(B)(ii) includes the total kilowatt 25
nameplate-generating capacity of all net -metering facilities serving mult iple 26
meter locations under common ownership within a single electric utility's 27
allocated service territory owned by, leased by, or providing electric energy 28
under one (1) or more qualifying service contracts to a net -metering 29
customer, including without li mitation any net-metering facilities serving 30
multiple meter locations under common ownership; 31
(C) Is located in Arkansas; 32
(D) Can operate in parallel with an electric utility's 33
existing transmission and distribution facilities existing distributio n 34
facilities or, if permitted by the electric utility, an electric utility's 35
transmission facilities ; 36 As Engrossed: H2/20/23 H2/21/23 H2/27/23 HB1370
7 02-27-2023 10:55:55 CRH048
(E) Is intended primarily to offset part or all of the an 1
individual net-metering customer customer's requirements for electricity; and 2
(F)(i) May include an energy storage device that is 3
configured to receive electric energy solely from a net -metering facility. 4
(ii) The capacity of an energy storage device shall 5
not be used to calculate the capacity limits listed in subdivision 6
(8)(B)(10)(B) of this section if the energy storage device is configured to 7
receive electric energy solely from a net -metering facility; 8
(9) “Quantifiable benefits” means the: 9
(A) Reasonably demonstrated costs that: 10
(i) Are related to the provision of electri c service 11
and based on the utility's most recent cost -of-service study filed with the 12
commission; and 13
(ii) Will be avoided by the utility by the use of 14
net metering; 15
(B) Monetary value provided to a utility by the use of net 16
metering as specified by a market mechanism, if any, of the regional 17
transmission organization of which the electric utility is a member; and 18
(C) Monetary value provided to a utility by the use of net 19
metering as specified by a market mechanism, if any, that measures utilit y 20
distribution system benefits; and 21
(10)(11) “Renewable energy credit” means the environmental, 22
economic, and social attributes of a unit of electricity, such as a megawatt 23
hour, generated from renewable fuels that can be sold or traded separately. 24
25
23-18-604. Commission authority — Definition. 26
(a)(1) An electric utility shall allow net -metering facilities to be 27
interconnected using , at a minimum, a single standard two-channel digital 28
meter capable of registering the flow of electricity in two (2) di rections 29
that separately measures the electric energy in kilowatt hours that is: 30
(A) Supplied by an electric utility to the net -metering 31
customer; and 32
(B) Generated by the net -metering customer's net -metering 33
facility and fed back to an electric utility. 34
(2) An electric utility may impose a charge to recover any cost 35
of the standard two-channel digital meter that is not otherwise included in 36 As Engrossed: H2/20/23 H2/21/23 H2/27/23 HB1370
8 02-27-2023 10:55:55 CRH048
the rates paid by the net -metering customer. 1
(b)(1) Following notice, and opportunity for public comment , and a 2
hearing, a commission shall: 3
(1) Shall establish appropriate rates, terms, and conditions for 4
net metering, including without limitation the adoption or revision of any 5
applicable rules on or before December 31, 2023;. 6
(2) For net-metering customers who receive service under a rate 7
that does not include a demand component, may: 8
(A) Require an electric utility to credit the net -metering 9
customer with any accumulated net excess generation as measured in kilowat t 10
hours or kilowatt hours multiplied by the applicable rate in the next 11
applicable billing period and base the bill of the net -metering customer on 12
the net amount of electricity as measured in kilowatt hours or kilowatt hours 13
multiplied by the applicable r ate that the net-metering customer has received 14
from or fed back to the electric utility during the billing period; 15
(B) Take the following actions if those actions are in the 16
public interest and doing so will not result in an unreasonable allocation of 17
or increase in costs to other utility customers: 18
(i) Separately meter the electric energy, measured 19
in kilowatt hours, supplied by the electric utility to the net -metering 20
customer and the electric energy, measured in kilowatt hours, that is 21
generated by the net-metering customer's net -metering facility that is fed 22
back to the electric utility at any time during the applicable billing 23
period; 24
(ii) Apply the commission -approved retail rate to 25
all kilowatt hours that are supplied by the electric ut ility to a net-26
metering customer by the electric utility during the applicable period 27
determined by a commission; 28
(iii) Apply the avoided cost of the electric utility 29
plus any additional sum determined under subdivision (b)(2)(B)(iv) of this 30
section to all kilowatt hours supplied to the electric utility by a net -31
metering customer, during the period determined by a commission, which shall 32
be credited to the total bill of the net -metering customer in a dollar value; 33
and 34
(iv) The additional sum added to the avoided cost of 35
the electric utility may be applied after the demonstration of quantifiable 36 As Engrossed: H2/20/23 H2/21/23 H2/27/23 HB1370
9 02-27-2023 10:55:55 CRH048
benefits by the net-metering customer and shall not exceed forty percent 1
(40%) of the avoided cost of the electric utility; 2
(C) Authorize an electric ut ility to assess a net -metering 3
customer that is being charged a rate that does not include a demand 4
component a per-kilowatt-hour fee or charge to recover the quantifiable 5
direct demand-related distribution cost of the electric utility for providing 6
electricity to the net-metering customer that is not: 7
(i) Avoided as a result of the generation of 8
electricity by the net -metering facility; and 9
(ii) Offset by quantifiable benefits; or 10
(D) Take other actions that are in the public interest and 11
do not result in an unreasonable allocation of costs to other utility 12
customers; The right to a hearing under this subsection may be waived by the 13
parties. 14
(c) Through its actions under subdivision (b)(1) of this section, a 15
commission shall: 16
(1)(A) Ensure that each net -metering customer pays the costs of 17
an electric utility's facilities and associated expenses required to: 18
(i) Provide service to the net -metering customer; 19
and 20
(ii) Enable the net -metering customer's use of the 21
electric utility's facilities. 22
(B) The costs described under subdivision (c)(1)(A) of 23
this section include without limitation any costs that are: 24
(i) Recovered through rates using the cost -of-25
service study underlying the rates approved by a commissio n in the electric 26
utility's most recent application for a general change or modification of the 27
electric utility's rates under § 23 -4-401 et seq.; 28
(ii) Recovered through riders or surcharges; and 29
(iii) Adjusted for any commission -approved: 30
(a) Formula rate plan adjustments under the 31
Formula Rate Review Act, § 23 -4-1201 et seq.; or 32
(b) Adjustments under § 23 -4-901 et seq. 33
(C) By December 31, 2023, a commission shall approve 34
modifications to each electric utility's rate schedules ap plicable to net-35
metering customers pursuant to the rate structure the electric utility elects 36 As Engrossed: H2/20/23 H2/21/23 H2/27/23 HB1370
10 02-27-2023 10:55:55 CRH048
under § 23-18-606(a); 1
(2) Allow an electric utility to modify the rates, terms, and 2
conditions, including without limitation the rate structure and any 3
individual rate components for net -metering customers, subject to approval by 4
the commission, without filing an application for a general change or 5
modification of the electric utility's rates under § 23 -4-401 et seq.; 6
(3) Not adjust the costs of an electric u tility's facilities and 7
associated expenses required to provide service to a net -metering customer 8
and to enable the net -metering customer's use of the electric utility's 9
facilities as specified in subdivision (c)(1)(A) of this section with any 10
amounts that are not quantified in the cost -of-service study underlying the 11
retail rates approved by a commission in the electric utility's most recent 12
application for a general change or modification in rates under § 23 -4-401 et 13
seq., including without limitation an y commission-approved: 14
(A) Formula rate plan adjustments under the Formula Rate 15
Review Act, § 23-4-1201 et seq.; or 16
(B) Adjustments under § 23 -4-901 et seq.; 17
(4) Establish rates for a net -metering customer using one (1) of 18
the rate structures un der § 23-18-606; 19
(5) Separately meter the electric energy, measured in kilowatt 20
hours, supplied by the electric utility to the net -metering customer and the 21
electric energy, measured in kilowatt hours, that is fed back to the electric 22
utility from the net-metering customer's net -metering facility at any time 23
during the applicable billing period; 24
(6) Apply the commission -approved customer charge, demand 25
charge, or minimum bill provision and other applicable commission -approved 26
charges addressed in subd ivision (c)(1)(A) of this section; 27
(7) Apply the commission -approved charges addressed in 28
subdivision (c)(1)(A) of this section to the applicable net -metering 29
customers, including without limitation any rates, riders, and surcharges 30
that are applied bas ed on the volume of kilowatt hours of electricity 31
supplied by an electric utility, to all kilowatt hours that are supplied by 32
the electric utility to a net -metering customer by the electric utility 33
during the applicable billing period; 34
(8) Authorize an electric utility to recover any net -metering 35
surplus or the dollar value of any net excess generation applied to the bills 36 As Engrossed: H2/20/23 H2/21/23 H2/27/23 HB1370
11 02-27-2023 10:55:55 CRH048
of net-metering customers in the same manner that the electric utility 1
recovers the cost of fuel and purchased energy; 2
(3) Shall require that net-metering equipment be installed to 3
accurately measure the electricity: 4
(A) Supplied by the electric utility to each net -metering 5
customer; and 6
(B) Generated by each net -metering customer that is fed 7
back to the electric utility over the applicable billing period; 8
(4) May authorize (9)(A) Authorize an electric utility to 9
assess a net-metering customer a greater fee or charge of any type, if the 10
electric utility's direct costs of interconnection and administration of net 11
metering outweigh the distribution system, environmental, and public policy 12
benefits of allocating the costs among the electric utility's entire customer 13
base standard one-time fee, to be approved by the commission, to recover 14
administrative and related interconnect ion review costs. 15
(B) Any costs incurred by the electric utility for an 16
interconnection study are the sole responsibility of the net -metering 17
customer and shall be paid in advance of any work's being undertaken by the 18
electric utility to: 19
(i) Enable the interconnection; and 20
(ii) Recover the electric utility's direct costs of 21
interconnection and any grid upgrades required to connect the net -metering 22
customer's net-metering facility; 23
(10)(A) Require that a net -metering customer retains any 24
renewable energy credit created as a result of the electricity supplied by a 25
net-metering customer that generated the renewable energy credit. 26
(B) The renewable energy credit may be retained, retired, 27
or sold for the sole benefit of the net -metering customer; and 28
(5) For net-metering customers who receive service under a rate 29
that does not include a demand component, shall require an electric utility 30
to credit a net-metering customer with the amount of any accumulated net 31
excess generation as measure d in kilowatt hours or kilowatt hours multiplied 32
by the applicable rate in the next applicable billing period; 33
(6) Except as provided in subdivision (b)(9) of this section, 34
for net-metering customers who receive service under a rate that includes a 35
demand component, shall require an electric utility to credit the net -36 As Engrossed: H2/20/23 H2/21/23 H2/27/23 HB1370
12 02-27-2023 10:55:55 CRH048
metering customer with any accumulated net excess generation in the next 1
applicable billing period and base the bill of the net -metering customer on 2
the net amount of electricity that the ne t-metering customer has received 3
from or fed back to the electric utility during the billing period; 4
(7) May expand the scope of net metering to include additional 5
facilities that do not use a renewable energy resource for a fuel if so doing 6
results in distribution system, environmental, or public policy benefits; 7
(8) Shall provide that: 8
(A)(i) The amount of the net excess generation credit as 9
measured in kilowatt hours or kilowatt hours multiplied by the applicable 10
rate remaining in a net -metering customer's account at the close of a billing 11
cycle shall not expire and shall be carried forward to subsequent billing 12
cycles indefinitely. 13
(ii) However, for net excess generation credits 14
older than twenty-four (24) months, a net -metering customer may elect to have 15
the electric utility purchase the net excess generation credits in the net -16
metering customer's account at the electric utility's avoided cost, plus any 17
additional sum determined under this section, if the sum to be paid to the 18
net-metering customer is at least one hundred dollars ($100). 19
(iii) An electric utility shall purchase at the 20
electric utility's avoided cost, plus any additional sum determined under 21
this section, any net excess generation credit remaining in a net -metering 22
customer's account when the net -metering customer: 23
(a) Ceases to be a customer of the electric 24
utility; 25
(b) Ceases to operate the net -metering 26
facility; or 27
(c) Transfers the net -metering facility to 28
another person; and 29
(B) A renewable energy credit created as the result of 30
electricity supplied by a net -metering customer is the property of the net -31
metering customer that generated the renewable energy credit; and 32
(9) May allow a net -metering facility with a generating capacity 33
that exceeds the limits provided under § 23 -18-603(8)(B)(ii) or § 23 -18-34
603(8)(B)(iii) of up to twenty thousand kilowatts (20,000 kW) if: 35
(A) For any net-metering facility with a generating 36 As Engrossed: H2/20/23 H2/21/23 H2/27/23 HB1370
13 02-27-2023 10:55:55 CRH048
capacity of less than five thousand kilowatts (5,000 kW): 1
(i) The net-metering facility is not for residential 2
use; 3
(ii) Increasing the generating capacity limits for 4
individual net-metering facilities results in distribution system, 5
environmental, or public policy benefits or allowing an increased generating 6
capacity for the net-metering facility would increase the state's ability to 7
attract businesses to Arkansas; and 8
(iii) Allowing an increased generating capacity for 9
the net-metering facility is in the public interest; or 10
(B) For any net-metering facility with a generating 11
capacity of greater than five thousand kilowatts (5,000 kW): 12
(i) The net-metering facility is not for residential 13
use; 14
(ii) Increasing the generating capacity limits for 15
individual net-metering facilities results in distributi on system, 16
environmental, or public policy benefits or allowing an increased generating 17
capacity for the net -metering facility would increase the ability of the 18
state to attract business to Arkansas; 19
(iii) Allowing an increased generating capacity for 20
the net-metering facility does not result in an unreasonable allocation of 21
costs to other utility customers; and 22
(iv) Allowing an increased generating capacity for 23
the net-metering facility is in the public interest; and 24
(10)(A) Shall allow the ne t-metering facility of a net -metering 25
customer who has submitted a standard interconnection agreement, as referred 26
to in the rules of the Arkansas Public Service Commission, to the electric 27
utility after July 24, 2019, but before December 31, 2022, to rema in under 28
the rate structure in effect when the net -metering contract was signed, for a 29
period not to exceed twenty (20) years, subject to approval by a commission. 30
(B) A net-metering facility under subdivision (b)(10)(A) 31
of this section remains subject to any other change or modification in rates, 32
terms, and conditions (11)(A) Allow a net -metering customer to remain under 33
the rate structure in effect before December 31, 2022, as set forth in § 23 -34
18-606(a)(2)(A)-(G), until June 1, 2040, if the net -metering customer has: 35
(i) Submitted a standard interconnection agreement 36 As Engrossed: H2/20/23 H2/21/23 H2/27/23 HB1370
14 02-27-2023 10:55:55 CRH048
to the electric utility before September 30, 2024; 1
(ii) Submitted a facilities agreement or equivalent 2
document to establish an account with an electric utility and paid all costs 3
of constructing the electric utility facilities necessary to interconnect the 4
net-metering facility before September 30, 2024; or 5
(iii) Filed a complaint with a commission addressing 6
a disputed facilities agreement or equivalent document to est ablish an 7
account with an electric utility and paid all costs of constructing the 8
electric utility facilities necessary to interconnect the net -metering 9
facility before September 30, 2024 . 10
(B) A net-metering customer that does not meet the 11
requirements of subdivision (c)(11)(A) of this section shall be billed using 12
one (1) of the rate structures established in § 23 -18-606. 13
(C) A net-metering facility billed using the rate 14
structures described in subdivisions (c)(11)(A) and (B) of 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 for 23
customers who are billed under § 23 -18-606(a)(2)(A)-(G) or the net-metering 24
surplus for all other customers from a an individual net-metering customer's 25
net-metering facility to the bill for another meter location of the 26
individual net-metering customer if the net-metering facility and the 27
separate meter location are under common ownership of the same individual 28
net-metering customer within a single electric utility's allocated service 29
area territory and: 30
(a) Are located within a one hundred (100) 31
miles radius of the individual net -metering customer's net-metering facility, 32
unless: 33
(1) A commission approved a greater 34
distance for an individual net -metering customer before December 31, 2022; 35
(2) An individual net -metering customer 36 As Engrossed: H2/20/23 H2/21/23 H2/27/23 HB1370
15 02-27-2023 10:55:55 CRH048
has executed a contract with a net -metering facility developer by February 1
22, 2023, to purchase a net -metering facility with a nameplate capacity not 2
to exceed twenty thousand kilowatts (20,000 kW) with a greater distance and 3
has filed that contract with a commission under a protective order by March 4
31, 2023; or 5
(3) An individual net -metering customer 6
has filed an application with a commission for approval of a net -metering 7
facility with a nameplate generating capacity not to exceed twenty thousand 8
kilowatts (20,000 kW) with a greater distance before December 31, 2022; or 9
(b) For a net-metering facility that did not 10
require approval by a commission, are constructed at a greater distance and 11
included in an executed standard interconnection agreement submitted before 12
December 31, 2023. 13
(ii) Subdivision (c)(2)(A)(i) of this section does 14
not apply if more than two (2) customers that are governmental entities or 15
other entities that are exempt from state and federal income tax defined 16
under § 23-18-603(7)(C) co-locate at a site hosting the net -metering facility 17
A separate meter location under subdivision (d)(2)(A)(i) of this section 18
shall be credited only with net -metering surplus from one (1) net -metering 19
facility owned by the same net -metering customer, with all accounts being 20
under common ownership for the same individual net -metering customer. 21
(B) Net excess generation Net-metering surplus shall be 22
credited first to the an individual net-metering customer's bill for the 23
meter to which the net -metering facility is physically attached. 24
(C) After applying net excess generation net-metering 25
surplus under subdivision (c)(2)(B)(d)(2)(B) of this section and upon request 26
of the net-metering customer under subdivision (c)(2)(A)(d)(2)(A) of this 27
section, any remaining net excess generation net-metering surplus shall be 28
credited to one (1) or more of the individual net-metering customer's bills 29
for the individual net -metering customer's meters in the rank order provided 30
by the individual net-metering customer. 31
(d)(e) A person who that acts as a lessor or service provider as 32
described in § 23-18-603(7)(B) § 23-18-603(9)(B) or § 23-18-603(7)(C) § 23-33
18-603(9)(C) shall not be considered a public utility as defined in § 23 -1-34
101. 35
(f) An electric utility shall not be obligated to: 36 As Engrossed: H2/20/23 H2/21/23 H2/27/23 HB1370
16 02-27-2023 10:55:55 CRH048
(1) Accept or release any portion of its or another electric 1
utility's allocated service territory to accommodate the development, 2
construction, or operation of a net -metering facility; or 3
(2) Publish, provide, or release any information regarding its 4
electric utility facilities or system to aid in the location of the net -5
metering facilities beyond its established site review process. 6
7
23-18-605. Municipal utilities. 8
(a) A municipal utility shall allow net -metering facilities to be 9
interconnected accordin g to the ordinances, rules, or regulations established 10
by the governing body of the municipal utility. 11
(b) The governing body of a municipal utility may elect to follow 12
procedures under § 23 -18-604, § 23-18-606, or § 23-18-607 or may adopt 13
ordinances, rules, or regulations establishing the rates, terms, and 14
conditions allowing the interconnection of net -metering facilities, including 15
generation facilities and energy storage devices, whether owned or leased by 16
a customer or operated by a third party on beh alf of a customer. 17
(c) The governing body of a municipal utility may limit the generating 18
capacity of a net-metering facility to less than twenty -five kilowatts (25 19
kW) for residential customers or three hundred kilowatts (300 kW) for 20
nonresidential customers only after the governing body finds that the 21
capacity limit is necessary for reliable utility operations or the public 22
health, safety, or welfare. 23
(d) The governing body of a municipal utility shall not establish a 24
rate or fee that reduces the valu e of electric energy from a net -metering 25
facility to below the avoided cost of the municipal utility. 26
(e) For customers who receive service under a rate that includes a 27
demand component, the governing body of the municipal utility shall require a 28
municipal utility to credit a net -metering customer with any accumulated net 29
excess generation in the next applicable billing period and base the bill of 30
the customer on the net amount of electricity that the net -metering customer 31
has received from or fed back to the municipal utility during the billing 32
period. 33
34
23-18-606. Rate structure determination. 35
(a) At its discretion, an electric utility may elect to use one (1) of 36 As Engrossed: H2/20/23 H2/21/23 H2/27/23 HB1370
17 02-27-2023 10:55:55 CRH048
the following rate structures to develop rates for net -metering customers: 1
(1) A rate structure in which the electric utility: 2
(A) Separately meters the electric energy, measured in 3
kilowatt hours: 4
(i) Supplied by the electric utility to the net -5
metering customer; and 6
(ii) Fed back to the electric utility from the net-7
metering customer's net -metering facility at any time during the applicable 8
billing period; 9
(B) Applies the: 10
(i) Commission-approved customer charge, demand 11
charge, minimum bill provision, and other applicable commission -approved 12
charges under § 23-18-604(c)(1)(A); 13
(ii) Commission-approved charges under § 23 -18-14
604(c)(1)(A) to the applicable net -metering customers, including without 15
limitation any rates, riders, and surcharges applied based on the volume of 16
kilowatt hours of electricity supplied by an electric utility pursuant to the 17
rate structure the electric utility elects under this subsection; and 18
(iii) Avoided cost of the electric utility to all kilowatt hours 19
supplied to the electric utility by a net -metering customer during the 20
applicable billing period to be credited to the total bill of the net -21
metering customer in a dollar value, excluding the customer charge and any 22
applicable demand charge or minimum bill provision that the net -metering 23
customer shall pay each month; 24
(C) Credits the net -metering customer with any accumulated 25
net-metering surplus as measured in dollars during the next appl icable 26
billing period; and 27
(D) Credits the bills of the net -metering customer's other 28
meters with the net-metering surplus measured in dollars under § 23 -18-29
604(d)(2); or 30
(2) A rate structure in which the electric utility: 31
(A) Separately meters the electric energy, measured in 32
kilowatt hours: 33
(i) Supplied by the electric utility to the net -34
metering customer; and 35
(ii) Fed back to the electric utility from the net -36 As Engrossed: H2/20/23 H2/21/23 H2/27/23 HB1370
18 02-27-2023 10:55:55 CRH048
metering customer's net -metering facility at any time during the applicabl e 1
billing period; 2
(B) Applies the: 3
(i) Commission-approved customer charge, demand 4
charge, minimum bill provision, and other applicable commission -approved 5
charges under § 23-18-604(c)(1)(A); and 6
(ii) Commission-approved riders or surcharges under 7
§ 23-18-604(c)(1)(A), including without limitation any rates, riders, and 8
surcharges applied based on the volume of kilowatt hours of electricity 9
supplied by an electric utility pursuant to the rate structure the electric 10
utility elects under this s ubsection; 11
(C) Credits the net -metering customer with any accumulated 12
net excess generation during the next applicable billing period; 13
(D) Calculates the net kilowatt hours of the electric 14
energy supplied by the electric utility to the net -metering customer, less 15
the net excess generation and any net excess generation carried forward from 16
prior billing periods; 17
(E) Applies the commission -approved retail rate, except as 18
provided in subdivision (a)(2)(B) of this section, not to exceed the kilowatt 19
hours supplied to the net -metering customer by the electric utility during 20
the applicable billing period; 21
(F) Carries forward any net excess generation that exceeds 22
the kilowatt hours supplied by the electric utility during the applicable 23
billing period to the next billing period; 24
(G) Excludes any net excess generation applied to another 25
meter location of the net -metering customer under § 23 -18-604(d); and 26
(H) Applies the monthly grid charge under § 23 -18-607. 27
(b) A commission shall approve the rates established by a rate 28
structure used by an electric utility under subsection (a) of this section. 29
30
23-18-607. Monthly grid charge. 31
(a)(1) If an electric utility follows the rate structure in § 23 -18-32
606(2), the electric utility shall apply a monthly grid charge to: 33
(A) Collect any of the fixed charges that are collected 34
through volumetric charges, including without limitation any riders and 35
surcharges; and 36 As Engrossed: H2/20/23 H2/21/23 H2/27/23 HB1370
19 02-27-2023 10:55:55 CRH048
(B) Exclude the cost of fuel and purchased energy. 1
(2) The monthly grid ch arge shall be calculated based upon the: 2
(A) Currently approved rates; and 3
(B) Cost-of-service study underlying the electric 4
utility's currently approved rates adjusted for any commission -approved: 5
(i) Formula rate plan adjustments under the Formula 6
Rate Review Act, § 23 -4-1201 et seq.; or 7
(ii) Adjustments under § 23 -4-901 et seq. 8
(b) The monthly grid charge under this section shall be calculated for 9
each customer class as follows: 10
(1)(A) Calculate the sum of all fixed costs collected through 11
volumetric rates. 12
(B) The fixed costs collected through volumetric rates 13
shall be any demand-related or customer-related costs collected in rates 14
stated in dollars per kilowatt hour; and 15
(2)(A) Convert the fixed costs calculated in subdivision (b)(1) 16
of this section into a rate, expressed in dollars per kilowatt hour, by 17
dividing the total of the fixed costs under subdivision (b)(1) of this 18
section for each customer class by the electric utility's sales during the 19
test-year used to develop the retail rates approved by the commission in the 20
electric utility's most recent application for a general change or 21
modification in rates under § 23 -4-401 et seq. 22
(B) The monthly grid charge for each customer class shall 23
be determined by mult iplying the fixed costs expressed under subdivision 24
(b)(2)(A) of this section by the expected monthly output of a one -kilowatt 25
direct current solar photovoltaic solar system determined under subsection 26
(c) of this section. 27
(c)(1) The expected monthly out put of a one-kilowatt direct current 28
solar photovoltaic solar system shall be: 29
(A) Expressed in kilowatt hours; and 30
(B) Calculated by dividing the expected average annual 31
output for a one-kilowatt direct current solar photovoltaic solar system 32
using the process described in subdivisions (c)(2) and (3) of this section by 33
twelve (12). 34
(2) For a fixed-tilt solar photovoltaic system, the average 35
annual output for a one -kilowatt direct current solar photovoltaic solar 36 As Engrossed: H2/20/23 H2/21/23 H2/27/23 HB1370
20 02-27-2023 10:55:55 CRH048
system shall be: 1
(A) Expressed in kilowatt hours; and 2
(B) Determined using the National Renewable Energy 3
Laboratory PVWatts Calculator using a direct current to alternating current 4
(DC/AC) ratio of one and one -tenth (1.1) using a single location central to 5
the electric utility's service territory. 6
(3) For a single-axis tracking solar photovoltaic system, the 7
average annual output for a one -kilowatt direct current solar photovoltaic 8
solar system shall be: 9
(A) Expressed in kilowatt hours; and 10
(B) Determined using the N ational Renewable Energy 11
Laboratory PVWatts Calculator using a direct current to alternating current 12
(DC/AC) ratio of one and three -tenths (1.3) using a single location central 13
to the electric utility's service territory. 14
(d) The monthly grid charge shal l not be less than the amount of any 15
electric utility fixed costs that are collected through volumetric charges, 16
including without limitation any riders, and excluding the cost of fuel and 17
purchased energy that the net -metering customer avoids. 18
19
SECTION 2. Arkansas Code Title 4, Chapter 88, is amended to add an 20
additional subchapter to read as follows: 21
Subchapter 11 — Customer Protections for Net -metering Customers Act 22
23
4-88-1101. Title. 24
This subchapter shall be known and may be cited as "Customer 25
Protections for Net-metering Customers Act". 26
27
4-88-1102. Definitions. 28
As used in this subchapter: 29
(1) "Net-metering customer" has the same meaning as defined in 30
the Arkansas Cost-Shifting Prevention Act of 2023, § 23 -18-601 et. seq; and 31
(2) "Net-metering facility" has the same meaning as defined in 32
the Arkansas Cost-Shifting Prevention Act of 2023, § 23 -18-601 et. seq. 33
34
4-88-1103. Net-metering customer protections. 35
The net-metering customer protections shall include without limitation 36 As Engrossed: H2/20/23 H2/21/23 H2/27/23 HB1370
21 02-27-2023 10:55:55 CRH048
the following, a: 1
(1) Requirement that any person who sells or leases a net -2
metering facility or who provides a net -metering service to a net -metering 3
customer under the Arkansas Cost -Shifting Prevention Act of 2023, § 23 -18-601 4
et. seq shall: 5
(A)(i) Provide a pr ospective or existing net -metering 6
customer a minimum of five (5) business days to evaluate a proposal to 7
construct a net-metering facility to provide all or part of the prospective 8
or existing net-metering customer's needs for electric energy within a sin gle 9
electric utility's allocated service territory. 10
(ii) The proposal to the prospective or existing 11
net-metering customer shall include: 12
(a) A description of the system and the 13
system's placement on the net -metering customer's premises or other location 14
consistent with the requirements of this subchapter; 15
(b) A description of the nameplate generating 16
capacity and expected monthly and annual output of the net -metering facility 17
in kilowatt hours; 18
(c) The estimated annual degradation to the 19
net-metering facility; 20
(d) An estimated timeline for the installation 21
of the net-metering facility; 22
(e) The total cost of the net -metering 23
facility; 24
(f) The amounts due at the signing for and at 25
the completion of the installation; 26
(g) The payment schedule; 27
(h) The payback period; 28
(i) The forecasted savings monthly and annual 29
bill savings provided by the proposed net -metering facility in dollars based 30
on the rate structure as defined in § 23 -18-606; 31
(j) A description of any warranties; 32
(k) The length of the term of any warranties; 33
and 34
(l) Notice that the prospective or existing 35
net-metering customer may file a complaint with the Attorney General; 36 As Engrossed: H2/20/23 H2/21/23 H2/27/23 HB1370
22 02-27-2023 10:55:55 CRH048
(B) Perform an energy efficiency audit on the poten tial or 1
existing net-metering customer's premises and any customer meter locations to 2
be served by the proposed net -metering facility as part of the proposal to 3
sell or lease a net-metering facility or provide a net -metering service to a 4
net-metering customer under the Arkansas Cost -Shifting Prevention Act of 5
2023, § 23-18-601 et. seq, or inform the prospective or existing net -metering 6
customer of how to obtain an energy efficiency audit; and 7
(C) Inform the prospective or existing net -metering 8
customer of the available energy efficiency measures to address the results 9
of the audit as part of the proposal to sell or lease a net -metering facility 10
or provide a net-metering service to a net -metering customer under the 11
Arkansas Cost-Shifting Prevention Act of 2023, § 23-18-601 et. seq; 12
(2) Demonstration to the prospective or existing net -metering 13
customer that the proposed net -metering facility meets all applicable safety 14
requirements and standards; and 15
(3) Demonstration to the prospective or existing n et-metering 16
customer that the person who sells or leases a net -metering facility or who 17
provides a net metering service to a net metering customer holds: 18
(A) All required permits to install, construct, or operate 19
a net-metering facility in the state, a nd, if the governing county, city, or 20
local authority does not require an electrical inspection, an executed 21
certification that no electrical inspection or permit is required; and 22
(B) A bond or other acceptable financial security to 23
ensure proper maintenance of the net -metering facility and decommissioning of 24
the net-metering facility. 25
26
4-88-1104. Enforcement. 27
Any violation of this subchapter may be enforced under the powers of 28
the office of the Attorney General under the Arkansas Deceptive Trad e 29
Practices Act, § 4-88-101 et seq., including without limitation all 30
enforcement powers. 31
32
SECTION 3. DO NOT CODIFY. TEMPORARY LANGUAGE. Rules. 33
(a) The Arkansas Public Service Commission, after notice and hearing, 34
shall: 35
(1) Modify the commission rules to conform to this act; and 36 As Engrossed: H2/20/23 H2/21/23 H2/27/23 HB1370
23 02-27-2023 10:55:55 CRH048
(2) Submit the commission rules to the Legislative Council by 1
December 31, 2023. 2
(b) The commission shall approve modifications to the electric 3
utilities' rate schedules applicable to net -metering to conform to this act 4
by December 31, 2023. 5
6
SECTION 4. EMERGENCY CLAUSE. It is found and determined by the 7
General Assembly of the State of Arkansas that delay in the enactment of this 8
act may result in unjust, unreasonable, and unduly discrim inatory rates; and 9
that this act is immediately necessary for the protection of Arkansas 10
ratepayers. Therefore, an emergency is declared to exist, and this act being 11
immediately necessary for the preservation of the public peace, health, and 12
safety shall become effective on: 13
(1) The date of its approval by the Governor; 14
(2) If the bill is neither approved nor vetoed by the Governor, 15
the expiration of the period of time during which the Governor may veto the 16
bill; or 17
(3) If the bill is vetoed by t he Governor and the veto is 18
overridden, the date the last house overrides the veto. 19
20
21
/s/L. Fite 22
23
24
25
26
27
28
29
30
31
32
33
34
35
36