Stricken language would be deleted from and underlined language would be added to present law.
Act 278 of the Regular Session
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State of Arkansas As Engrossed: S2/22/23 S2/27/23 S3/6/23 1
94th General Assembly A Bill 2
Regular Session, 2023 SENATE BILL 295 3
4
By: Senator J. Dismang 5
By: Representative L. Fite 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 CUSTOMERS A CT; 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: S2/22/23 S2/27/23 S3/6/23 SB295
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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 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 technologies 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 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: S2/22/23 S2/27/23 S3/6/23 SB295
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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 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 alternating current capacity of the 16
net-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 lim itation 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 Utili ty 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: S2/22/23 S2/27/23 S3/6/23 SB295
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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 t he sale of electric 14
energy measured in kilowatt hours or electric capacity 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 provid ed 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 und er 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: S2/22/23 S2/27/23 S3/6/23 SB295
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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 elec tricity if the fuel source is 11
entirely derived from renewable resources; 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 le sser 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 unless an individual net -metering customer's net -19
metering facility with a greater amount is included in a standard 20
interconnection agreement executed before December 31, 2022 ; 21
(ii)(b) For customers of electric utilities, one 22
thousand kilowatts (1,000 kW) for use other than residential use unless 23
otherwise allowed by a commission under § 23 -18-604 For nonresidential 24
customers of electric utilities for nonresidential use, less than or equal to 25
the lesser of five thousand kilowatts (5,000 kW) alternating current or one 26
hundred percent (100%) of the net -metering customer's highest monthly usage 27
in the previous twelve (12) months within a single utility's allocated 28
service territory where a single net -metering facility is physically located 29
behind a net-metering customer's electric utility meter that represents one 30
hundred percent (100%) of the net -metering customer's energy usage served by 31
the net-metering facility; or 32
(iii)(c) For customers of a municipal utility, 33
the limits established by the governing body of the municipal utility under § 34
23-18-605;. 35
(ii)(a) The total nameplate generating capacity of 36 As Engrossed: S2/22/23 S2/27/23 S3/6/23 SB295
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all net-metering facilities owned by, leased by, or providing electric energy 1
under one (1) or more qualifying service contracts of an individual net -2
metering customer serving multiple meter locations unde r common ownership of 3
any net-metering customer, within a single utility's allocated service 4
territory, shall be less than or equal to the lesser of five thousand 5
kilowatts (5,000 kW) alternating current or one hundred percent (100%) of the 6
net-metering customer's highest monthly usage in the previous twelve (12) 7
months, unless: 8
(1) A commission approved a greater 9
amount for an individual net -metering customer before December 31, 2022; 10
(2) An individual net -metering customer 11
has executed a contract with a net-metering facility developer by February 12
22, 2023, to purchase a net -metering facility with a nameplate capacity not 13
to exceed twenty thousand kilowatts (20,000 kW) and has filed the contract 14
with a commission under a protective order by March 31, 2023; or 15
(3) An individual net -metering customer 16
filed an application with a commission for approval of a net -metering 17
facility with a nameplate generating capacity not to exceed twenty thousand 18
kilowatts (20,000 kW) before December 31, 2 022. 19
(b)(1) A net-metering facility serving 20
multiple meter locations under common ownership shall be located on a 21
separate property from any other net -metering facility or only co -locate on a 22
property with one (1) other net -metering facility within a single utility's 23
allocated service territory. 24
(2) For a net-metering facility under 25
subdivision (10)(B)(ii)(b)(1) of this section, the nameplate generating 26
capacity under this subdivision (10)(B)(ii) includes the total kilowatt 27
nameplate-generating capacity of all net -metering facilities serving multiple 28
meter locations under common ownership within a single electric utility's 29
allocated service territory owned by, leased by, or providing electric energy 30
under one (1) or more qualifying service cont racts to a net-metering 31
customer, including without limitation any net -metering facilities serving 32
multiple meter locations under common ownership; 33
(C) Is located in Arkansas; 34
(D) Can operate in parallel with an electric utility's 35
existing transmission and distribution facilities existing distribution 36 As Engrossed: S2/22/23 S2/27/23 S3/6/23 SB295
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facilities or, if permitted by the electric utility, an electric utility's 1
transmission facilities ; 2
(E) Is intended primarily to offset part or all of the an 3
individual net-metering customer customer's requirements for electricity; and 4
(F)(i) May include an energy storage device that is 5
configured to receive electric energy solely from a net -metering facility. 6
(ii) The capacity of an energy storage device shall 7
not be used to calculate the capacity limits listed in subdivision 8
(8)(B)(10)(B) of this section if the energy storage device is configured to 9
receive electric energy solely from a net -metering facility; 10
(9) “Quantifiable benefits” means the: 11
(A) Reasonably demonstrated costs that: 12
(i) Are related to the provision of electric service 13
and based on the utility's most recent cost -of-service study filed with the 14
commission; and 15
(ii) Will be avoided by the utility by the use of 16
net metering; 17
(B) Monetary value provided to a utility by the use of net 18
metering as specified by a market mechanism, if any, of the regional 19
transmission organization of which the electric utility is a member; and 20
(C) Monetary value provided to a utility by the use of net 21
metering as specified by a market mechanism, if any, that measures utility 22
distribution system benefits; and 23
(10)(11) “Renewable energy credit” means the environmental, 24
economic, and social attributes of a unit of electricity, such as a megawatt 25
hour, generated from renew able fuels that can be sold or traded separately. 26
27
23-18-604. Commission authority — Definition. 28
(a)(1) An electric utility shall allow net -metering facilities to be 29
interconnected using , at a minimum, a single standard two-channel digital 30
meter capable of registering the flow of electricity in two (2) directions 31
that separately measures the electric energy in kilowatt hours that is: 32
(A) Supplied by an electric utility to the net -metering 33
customer; and 34
(B) Generated by the net -metering customer's net-metering 35
facility and fed back to an electric utility . 36 As Engrossed: S2/22/23 S2/27/23 S3/6/23 SB295
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(2) An electric utility may impose a charge to recover any cost 1
of the standard two-channel digital meter that is not otherwise included in 2
the rates paid by the net -metering customer. 3
(b)(1) Following notice, and opportunity for public comment , and a 4
hearing, a commission shall: 5
(1) Shall establish appropriate rates, terms, and conditions for 6
net metering, including without limitation the adoption or revision of any 7
applicable rules on or before December 31, 2023;. 8
(2) For net-metering customers who receive service under a rate 9
that does not include a demand component, may: 10
(A) Require an electric u tility to credit the net -metering 11
customer with any accumulated net excess generation as measured in kilowatt 12
hours or kilowatt hours multiplied by the applicable rate in the next 13
applicable billing period and base the bill of the net -metering customer on 14
the net amount of electricity as measured in kilowatt hours or kilowatt hours 15
multiplied by the applicable rate that the net -metering customer has received 16
from or fed back to the electric utility during the billing period; 17
(B) Take the following actio ns if those actions are in the 18
public interest and doing so will not result in an unreasonable allocation of 19
or increase in costs to other utility customers: 20
(i) Separately meter the electric energy, measured 21
in kilowatt hours, supplied by the electric utility to the net -metering 22
customer and the electric energy, measured in kilowatt hours, that is 23
generated by the net -metering customer's net -metering facility that is fed 24
back to the electric utility at any time during the applicable billing 25
period; 26
(ii) Apply the commission -approved retail rate to 27
all kilowatt hours that are supplied by the electric utility to a net -28
metering customer by the electric utility during the applicable period 29
determined by a commission; 30
(iii) Apply the avoide d cost of the electric utility 31
plus any additional sum determined under subdivision (b)(2)(B)(iv) of this 32
section to all kilowatt hours supplied to the electric utility by a net -33
metering customer, during the period determined by a commission, which shall 34
be credited to the total bill of the net -metering customer in a dollar value; 35
and 36 As Engrossed: S2/22/23 S2/27/23 S3/6/23 SB295
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(iv) The additional sum added to the avoided cost of 1
the electric utility may be applied after the demonstration of quantifiable 2
benefits by the net-metering customer and shall not exceed forty percent 3
(40%) of the avoided cost of the electric utility; 4
(C) Authorize an electric utility to assess a net -metering 5
customer that is being charged a rate that does not include a demand 6
component a per-kilowatt-hour fee or charge to recover the quantifiable 7
direct demand-related distribution cost of the electric utility for providing 8
electricity to the net -metering customer that is not: 9
(i) Avoided as a result of the generation of 10
electricity by the net -metering facility; a nd 11
(ii) Offset by quantifiable benefits; or 12
(D) Take other actions that are in the public interest and 13
do not result in an unreasonable allocation of costs to other utility 14
customers; The right to a hearing under this subsection may be waived by t he 15
parties. 16
(c) Through its actions under subdivision (b)(1) of this section, a 17
commission shall: 18
(1)(A) Ensure that each net -metering customer pays either the 19
entire costs of an electric utility's facilities and associated expenses or 20
the appropriate portion of the costs and associated expenses as determined 21
under a rate schedule approved by a commission required to: 22
(i) Provide service to the net -metering customer; 23
and 24
(ii) Enable the net -metering customer's use of the 25
electric utility's facilities. 26
(B) The costs described under subdivision (c)(1)(A) of 27
this section include without limitation any costs that are: 28
(i) Recovered through rates using the cost -of-29
service study underlying the rates approved by a commission in the electr ic 30
utility's most recent application for a general change or modification of the 31
electric utility's rates under § 23 -4-401 et seq.; 32
(ii) Recovered through riders or surcharges; and 33
(iii) Adjusted for any commission -approved: 34
(a) Formula rate plan adjustments under the 35
Formula Rate Review Act, § 23 -4-1201 et seq.; or 36 As Engrossed: S2/22/23 S2/27/23 S3/6/23 SB295
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(b) Adjustments under § 23 -4-901 et seq. 1
(C) By December 31, 2023, a commission shall approve 2
modifications to each electric utility's rate schedules applicable to net -3
metering customers pursuant to the rate structure the electric utility elects 4
under § 23-18-606(a); 5
(2) Allow an electric utility to modify the rates, terms, and 6
conditions, including without limitation the rate structure and any 7
individual rate compon ents for net-metering customers, subject to approval by 8
the commission, without filing an application for a general change or 9
modification of the electric utility's rates under § 23 -4-401 et seq.; 10
(3) Not adjust the costs of an electric utility's facili ties and 11
associated expenses required to provide service to a net -metering customer 12
and to enable the net -metering customer's use of the electric utility's 13
facilities as specified in subdivision (c)(1)(A) of this section with any 14
amounts that are not quant ified in the cost-of-service study underlying the 15
retail rates approved by a commission in the electric utility's most recent 16
application for a general change or modification in rates under § 23 -4-401 et 17
seq., including without limitation any commission -approved: 18
(A) Formula rate plan adjustments under the Formula Rate 19
Review Act, § 23-4-1201 et seq.; or 20
(B) Adjustments under § 23 -4-901 et seq.; 21
(4) Establish rates for a net -metering customer using one (1) of 22
the rate structures under § 23 -18-606; 23
(5) Separately meter the electric energy, measured in kilowatt 24
hours, supplied by the electric utility to the net -metering customer and the 25
electric energy, measured in kilowatt hours, that is fed back to the electric 26
utility from the net -metering customer's net-metering facility at any time 27
during the applicable billing period; 28
(6) Apply the commission -approved customer charge, demand 29
charge, or minimum bill provision and other applicable commission -approved 30
charges addressed in subdivision (c)(1)( A) of this section; 31
(7) Apply the commission -approved charges addressed in 32
subdivision (c)(1)(A) of this section to the applicable net -metering 33
customers, including without limitation any rates, riders, and surcharges 34
that are applied based on the volum e of kilowatt hours of electricity 35
supplied by an electric utility, to all kilowatt hours that are supplied by 36 As Engrossed: S2/22/23 S2/27/23 S3/6/23 SB295
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the electric utility to a net -metering customer by the electric utility 1
during the applicable billing period; 2
(8) Authorize an electric utilit y to recover any net -metering 3
surplus or the dollar value of any net excess generation applied to the bills 4
of net-metering customers in the same manner that the electric utility 5
recovers the cost of fuel and purchased energy; 6
(3) Shall require that net-metering equipment be installed to 7
accurately measure the electricity: 8
(A) Supplied by the electric utility to each net -metering 9
customer; and 10
(B) Generated by each net -metering customer that is fed 11
back to the electric utility over the applica ble billing period; 12
(4) May authorize (9)(A) Authorize an electric utility to 13
assess a net-metering customer a greater fee or charge of any type, if the 14
electric utility's direct costs of interconnection and administration of net 15
metering outweigh the distribution system, environmental, and public policy 16
benefits of allocating the costs among the electric utility's entire customer 17
base standard one-time fee, to be approved by the commission, to recover 18
administrative and related interconnection review costs. 19
(B) Any costs incurred by the electric utility for an 20
interconnection study are the sole responsibility of the net -metering 21
customer and shall be paid in advance of any work's being undertaken by the 22
electric utility to: 23
(i) Enable the interconnection; and 24
(ii) Recover the electric utility's direct costs of 25
interconnection and any grid upgrades required to connect the net -metering 26
customer's net-metering facility; 27
(10)(A) Require that a net -metering customer retains any 28
renewable energy credit created as a result of the electricity supplied by a 29
net-metering customer that generated the renewable energy credit. 30
(B) The renewable energy credit may be retained, retired, 31
or sold for the sole benefit of the net -metering customer; and 32
(5) For net-metering customers who receive service under a rate 33
that does not include a demand component, shall require an electric utility 34
to credit a net-metering customer with the amount of any accumulated net 35
excess generation as measured in kilowat t hours or kilowatt hours multiplied 36 As Engrossed: S2/22/23 S2/27/23 S3/6/23 SB295
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by the applicable rate in the next applicable billing period; 1
(6) Except as provided in subdivision (b)(9) of this section, 2
for net-metering customers who receive service under a rate that includes a 3
demand component, shall require an electric utility to credit the net -4
metering customer with any accumulated net excess generation in the next 5
applicable billing period and base the bill of the net -metering customer on 6
the net amount of electricity that the net -metering customer has received 7
from or fed back to the electric utility during the billing period; 8
(7) May expand the scope of net metering to include additional 9
facilities that do not use a renewable energy resource for a fuel if so doing 10
results in distribution system, environmental, or public policy benefits; 11
(8) Shall provide that: 12
(A)(i) The amount of the net excess generation credit as 13
measured in kilowatt hours or kilowatt hours multiplied by the applicable 14
rate remaining in a net -metering customer's account at the close of a billing 15
cycle shall not expire and shall be carried forward to subsequent billing 16
cycles indefinitely. 17
(ii) However, for net excess generation credits 18
older than twenty-four (24) months, a net -metering customer may elect to have 19
the electric utility purchase the net excess generation credits in the net -20
metering customer's account at the electric utility's avoided cost, plus any 21
additional sum determined under this section, if the sum to be paid to the 22
net-metering customer is at least one hundred dollars ($100). 23
(iii) An electric utility shall purchase at the 24
electric utility's avoided cost, plus any additional sum determined under 25
this section, any net excess generation credit remaining in a net -metering 26
customer's account when the net-metering customer: 27
(a) Ceases to be a customer of the electric 28
utility; 29
(b) Ceases to operate the net -metering 30
facility; or 31
(c) Transfers the net -metering facility to 32
another person; and 33
(B) A renewable energy credit created as the result of 34
electricity supplied by a net -metering customer is the property of the net -35
metering customer that generated the renewable energy credit; and 36 As Engrossed: S2/22/23 S2/27/23 S3/6/23 SB295
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(9) May allow a net -metering facility with a generating capacity 1
that exceeds the limit s provided under § 23 -18-603(8)(B)(ii) or § 23 -18-2
603(8)(B)(iii) of up to twenty thousand kilowatts (20,000 kW) if: 3
(A) For any net-metering facility with a generating 4
capacity of less than five thousand kilowatts (5,000 kW): 5
(i) The net-metering facility is not for residential 6
use; 7
(ii) Increasing the generating capacity limits for 8
individual net-metering facilities results in distribution system, 9
environmental, or public policy benefits or allowing an increased generating 10
capacity for the net-metering facility would increase the state's ability to 11
attract businesses to Arkansas; and 12
(iii) Allowing an increased generating capacity for 13
the net-metering facility is in the public interest; or 14
(B) For any net-metering facility with a gene rating 15
capacity of greater than five thousand kilowatts (5,000 kW): 16
(i) The net-metering facility is not for residential 17
use; 18
(ii) Increasing the generating capacity limits for 19
individual net-metering facilities results in distribution system, 20
environmental, or public policy benefits or allowing an increased generating 21
capacity for the net -metering facility would increase the ability of the 22
state to attract business to Arkansas; 23
(iii) Allowing an increased generating capacity for 24
the net-metering facility does not result in an unreasonable allocation of 25
costs to other utility customers; and 26
(iv) Allowing an increased generating capacity for 27
the net-metering facility is in the public interest; and 28
(10)(A) Shall allow the net -metering facility of a net -metering 29
customer who has submitted a standard interconnection agreement, as referred 30
to in the rules of the Arkansas Public Service Commission, to the electric 31
utility after July 24, 2019, but before December 31, 2022, to remain un der 32
the rate structure in effect when the net -metering contract was signed, for a 33
period not to exceed twenty (20) years, subject to approval by a commission. 34
(B) A net-metering facility under subdivision (b)(10)(A) 35
of this section remains subject to a ny other change or modification in rates, 36 As Engrossed: S2/22/23 S2/27/23 S3/6/23 SB295
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terms, and conditions (11)(A) Allow a net-metering facility of an individual 1
net-metering customer to remain under the rate structure, terms, and 2
conditions in effect before December 31, 2022, until June 1, 2040, if the 3
net-metering customer has: 4
(i) Submitted a standard interconnection agreement 5
to the electric utility before September 30, 2024; 6
(ii) Submitted a facilities agreement or equivalent 7
document to establish an account with an electric utilit y and paid all costs 8
of constructing the electric utility facilities necessary to interconnect the 9
net-metering facility before September 30, 2024; or 10
(iii) Filed a complaint with a commission addressing 11
a disputed facilities agreement or equivalent document to establish an 12
account with an electric utility after the presentation by the electric 13
utility to the net-metering customer of the facilities agreement or 14
equivalent document and the required costs of constructing the facilities 15
necessary to interconnect the net -metering facility before September 30, 16
2024. 17
(B) A net-metering facility of an individual net-metering 18
customer that does not meet the requirements of subdivision (c)(11)(A) of 19
this section shall be billed using one (1) of the rate structures established 20
in § 23-18-606. 21
(C) A net-metering facility billed using the rate 22
structures described in subdivisions (c)(11)(A) and (B) of this section 23
remains subject to any other change or modification in rates, terms, and 24
conditions. 25
(c)(1)(d)(1) Except as provided in subdivision (c)(2)(d)(2) of this 26
section, an electric utility shall separately meter, bill, and credit each 27
net-metering facility even if one (1) or more net -metering facilities are 28
under common ownership. 29
(2)(A)(i) At the an individual net-metering customer's 30
discretion, an electric utility may shall apply net-metering credits for 31
customers who are billed under § 23 -18-606(a)(2)(A)-(G) or the net-metering 32
surplus for all other customers from a an individual net-metering customer's 33
net-metering facility to the bill for another meter location of the 34
individual net-metering customer if the net-metering facility and the 35
separate meter location are under common ownership of the same individual 36 As Engrossed: S2/22/23 S2/27/23 S3/6/23 SB295
15 03-06-2023 13:52:42 CRH142
net-metering customer within a single electric utility's allocated service 1
area territory and: 2
(a) Are located within a one hundred (100) 3
miles radius of the individual net -metering customer's net -metering facility, 4
unless: 5
(1) A commission approved a greater 6
distance for an individual net-metering customer before December 31, 2022; 7
(2) An individual net -metering customer 8
has executed a contract with a net -metering facility developer by February 9
22, 2023, to purchase a net -metering facility with a nameplate capacity not 10
to exceed twenty thousand kilowatts (20,000 kW) with a greater distance and 11
has filed that contract with a commission under a protective order by March 12
31, 2023; or 13
(3) An individual net -metering customer 14
has filed an application with a commissi on for approval of a net -metering 15
facility with a nameplate generating capacity not to exceed twenty thousand 16
kilowatts (20,000 kW) with a greater distance 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, leased by, or providing electric service under a 28
qualifying service contract of the same individual net -metering customer, 29
with all accounts being under common ownershi p for the same individual net -30
metering customer. 31
(B) Net excess generation Net-metering surplus shall be 32
credited first to the an individual net-metering customer's bill for the 33
meter to which the net -metering facility is physically attached. 34
(C) After applying net excess generation net-metering 35
surplus under subdivision (c)(2)(B)(d)(2)(B) of this section and upon request 36 As Engrossed: S2/22/23 S2/27/23 S3/6/23 SB295
16 03-06-2023 13:52:42 CRH142
of the net-metering customer under subdivision (c)(2)(A)(d)(2)(A) of this 1
section, any remaining net excess generation net-metering surplus shall be 2
credited to one (1) or more of the individual net-metering customer's bills 3
for the individual net -metering customer's meters in the rank order provided 4
by the individual net-metering customer. 5
(d)(e) A person who that acts as a lessor or service provider as 6
described in § 23-18-603(7)(B) § 23-18-603(9)(B) or § 23-18-603(7)(C) § 23-7
18-603(9)(C) shall not be considered a public utility as defined in § 23 -1-8
101. 9
(f) An electric utility shall not be obligated to: 10
(1) Accept or release any portion of its or another electric 11
utility's allocated service territory to accommodate the development, 12
construction, or operation of a net -metering facility; or 13
(2) Publish, provide, or release any information regarding its 14
electric utility facilities or system to aid in the location of the net -15
metering facilities beyond its established site review process. 16
17
23-18-605. Municipal utilities. 18
(a) A municipal utility shall allow net -metering facilities to be 19
interconnected according to t he ordinances, rules, or regulations established 20
by the governing body of the municipal utility. 21
(b) The governing body of a municipal utility may elect to follow 22
procedures under § 23 -18-604, § 23-18-606, or § 23-18-607 or may adopt 23
ordinances, rules, o r regulations establishing the rates, terms, and 24
conditions allowing the interconnection of net -metering facilities, including 25
generation facilities and energy storage devices, whether owned or leased by 26
a customer or operated by a third party on behalf of a customer. 27
(c) The governing body of a municipal utility may limit the generating 28
capacity of a net-metering facility to less than twenty -five kilowatts (25 29
kW) for residential customers or three hundred kilowatts (300 kW) for 30
nonresidential customers only after the governing body finds that the 31
capacity limit is necessary for reliable utility operations or the public 32
health, safety, or welfare. 33
(d) The governing body of a municipal utility shall not establish a 34
rate or fee that reduces the value of electric energy from a net -metering 35
facility to below the avoided cost of the municipal utility. 36 As Engrossed: S2/22/23 S2/27/23 S3/6/23 SB295
17 03-06-2023 13:52:42 CRH142
(e) For customers who receive service under a rate that includes a 1
demand component, the governing body of the municipal utility shall require a 2
municipal utility to credit a net -metering customer with any accumulated net 3
excess generation in the next applicable billing period and base the bill of 4
the customer on the net amount of electricity that the net -metering customer 5
has received from or fed back to the municipal utility during the billing 6
period. 7
8
23-18-606. Rate structure determination. 9
(a) At its discretion, an electric utility may elect to use one (1) of 10
the following rate structures to develop rates for net -metering customers: 11
(1) A rate structure in which the electric utility: 12
(A) Separately meters the electric energy, measured in 13
kilowatt hours: 14
(i) Supplied by the electric utility to the net -15
metering customer; and 16
(ii) Fed back to the electric utility from the net -17
metering customer's net-metering facility at any time during the applicable 18
billing period; 19
(B) Applies the: 20
(i) Commission-approved customer charge, demand 21
charge, minimum bill provision, and other applicable commission -approved 22
charges under § 23-18-604(c)(1)(A); 23
(ii) Commission-approved charges under § 23 -18-24
604(c)(1)(A) to the applicable net -metering customers, including without 25
limitation any rates, riders, and surcharges applied based on the volume of 26
kilowatt hours of electricity supplied by an electric utility pursuant to the 27
rate structure the electric utility elects under this subsection; and 28
(iii) Avoided cost of the electric utility to all 29
kilowatt hours supplied to the electric utility by a net -metering customer 30
during the applicable billing period to be credited to the total bill of the 31
net-metering customer in a dollar value, excluding th e customer charge and 32
any applicable demand charge or minimum bill provision that the net -metering 33
customer shall pay each month; 34
(C) Credits the net -metering customer with any accumulated 35
net-metering surplus as measured in dollars during the next app licable 36 As Engrossed: S2/22/23 S2/27/23 S3/6/23 SB295
18 03-06-2023 13:52:42 CRH142
billing period; and 1
(D) Credits the bills of the net -metering customer's other 2
meters with the net-metering surplus measured in dollars under § 23 -18-3
604(d)(2); or 4
(2) A rate structure in which the electric utility: 5
(A) Separately meters the electric energy, measured in 6
kilowatt hours: 7
(i) Supplied by the electric utility to the net -8
metering customer; and 9
(ii) Fed back to the electric utility from the net -10
metering customer's net -metering facility at any time during the applicab le 11
billing period; 12
(B) Applies the: 13
(i) Commission-approved customer charge, demand 14
charge, minimum bill provision, and other applicable commission -approved 15
charges under § 23-18-604(c)(1)(A); and 16
(ii) Commission-approved riders or surcharge s under 17
§ 23-18-604(c)(1)(A), including without limitation any rates, riders, and 18
surcharges applied based on the volume of kilowatt hours of electricity 19
supplied by an electric utility pursuant to the rate structure the electric 20
utility elects under this subsection; 21
(C) Credits the net -metering customer with any accumulated 22
net excess generation during the next applicable billing period; 23
(D) Calculates the net kilowatt hours of the electric 24
energy supplied by the electric utility to the net -metering customer, less 25
the net excess generation and any net excess generation carried forward from 26
prior billing periods; 27
(E) Applies the commission -approved retail rate, except as 28
provided in subdivision (a)(2)(B) of this section, not to exceed the kilowat t 29
hours supplied to the net -metering customer by the electric utility during 30
the applicable billing period; 31
(F) Carries forward any net excess generation that exceeds 32
the kilowatt hours supplied by the electric utility during the applicable 33
billing period to the next billing period; 34
(G) Excludes any net excess generation applied to another 35
meter location of the net -metering customer under § 23 -18-604(d); and 36 As Engrossed: S2/22/23 S2/27/23 S3/6/23 SB295
19 03-06-2023 13:52:42 CRH142
(H) Applies the monthly grid charge under § 23 -18-607. 1
(b) A commission shall approve the rates established by a rate 2
structure used by an electric utility under subsection (a) of this section. 3
4
23-18-607. Monthly grid charge. 5
(a)(1) If an electric utility follows the rate structure in § 23 -18-6
606(2), the electric utility shall apply a monthly grid charge to: 7
(A) Collect any of the fixed charges that are collected 8
through volumetric charges, including without limitation any riders and 9
surcharges; and 10
(B) Exclude the cost of fuel and purchased energy. 11
(2) The monthly grid charge shall be calculated based upon the: 12
(A) Currently approved rates; and 13
(B) Cost-of-service study underlying the electric 14
utility's currently approved rates adjusted for any commission -approved: 15
(i) Formula rate plan adjustments und er the Formula 16
Rate Review Act, § 23 -4-1201 et seq.; or 17
(ii) Adjustments under § 23 -4-901 et seq. 18
(b) The monthly grid charge under this section shall be calculated for 19
each customer class as follows: 20
(1)(A) Calculate the sum of all fixed costs collected through 21
volumetric rates. 22
(B) The fixed costs collected through volumetric rates 23
shall be any demand-related or customer-related costs collected in rates 24
stated in dollars per kilowatt hour; and 25
(2)(A) Convert the fixed costs calculated in subdivision (b)(1) 26
of this section into a rate, expressed in dollars per kilowatt hour, by 27
dividing the total of the fixed costs under subdivision (b)(1) of this 28
section for each customer class by the electric utility's sales during the 29
test-year used to develop the retail rates approved by the commission in the 30
electric utility's most recent application for a general change or 31
modification in rates under § 23 -4-401 et seq. 32
(B) The monthly grid charge for each customer class shall 33
be determined by mult iplying the fixed costs expressed under subdivision 34
(b)(2)(A) of this section by the expected monthly output of a one -kilowatt 35
alternating current solar photovoltaic solar system determined under 36 As Engrossed: S2/22/23 S2/27/23 S3/6/23 SB295
20 03-06-2023 13:52:42 CRH142
subsection (c) of this section. 1
(c)(1) The expected monthl y output of a one-kilowatt alternating 2
current solar photovoltaic solar system shall be: 3
(A) Expressed in kilowatt hours; and 4
(B) Calculated by dividing the expected average annual 5
output for a one-kilowatt alternating current solar photovoltaic solar system 6
using the process described in subdivisions (c)(2) and (3) of this section by 7
twelve (12). 8
(2) For a fixed-tilt solar photovoltaic system, the average 9
annual output for a one -kilowatt alternating current solar photovoltaic solar 10
system shall be: 11
(A) Expressed in kilowatt hours; and 12
(B) Determined using the National Renewable Energy 13
Laboratory PVWatts Calculator using a direct current to alternating current 14
(DC/AC) ratio of one and one -tenth (1.1) using a single location central to 15
the electric utility's service territory. 16
(3) For a single-axis tracking solar photovoltaic system, the 17
average annual output for a one -kilowatt alternating current solar 18
photovoltaic solar system shall be: 19
(A) Expressed in kilowatt hours; and 20
(B) Determined using the National Renewable Energy 21
Laboratory PVWatts Calculator using a direct current to alternating current 22
(DC/AC) ratio of one and three -tenths (1.3) using a single location central 23
to the electric utility's service territory. 24
(d) The monthly grid charge shall not be less than the amount of any 25
electric utility fixed costs that are collected through volumetric charges, 26
including without limitation any riders, and excluding the cost of fuel and 27
purchased energy that the net-metering customer avoids. 28
29
SECTION 2. Arkansas Code Title 4, Chapter 88, is amended to add an 30
additional subchapter to read as follows: 31
Subchapter 11 — Customer Protections for Net -metering Customers Act 32
33
4-88-1101. Title. 34
This subchapter shall be known and may be cited as "Customer 35
Protections for Net-metering Customers Act". 36 As Engrossed: S2/22/23 S2/27/23 S3/6/23 SB295
21 03-06-2023 13:52:42 CRH142
1
4-88-1102. Definitions. 2
As used in this subchapter: 3
(1) "Net-metering customer" has the same meaning as defined in 4
the Arkansas Cost-Shifting Prevention Act of 2023, § 23 -18-601 et. seq; and 5
(2) "Net-metering facility" has the same meaning as defined in 6
the Arkansas Cost-Shifting Prevention Act of 2023, § 23 -18-601 et. seq. 7
8
4-88-1103. Net-metering customer protections. 9
The net-metering customer protections shall include without limitation 10
the following, a: 11
(1) Requirement that any person who sells or leases a net -12
metering facility or who provides a net -metering service to a net -metering 13
customer under the Arkansas Cost -Shifting Prevention Act of 2023, § 23-18-601 14
et. seq shall: 15
(A)(i) Provide a prospective or existing net -metering 16
customer a minimum of five (5) business days to evaluate a proposal to 17
construct a net-metering facility to provide all or part of the prospective 18
or existing net-metering customer's needs for electric energy within a single 19
electric utility's allocated service territory. 20
(ii) The proposal to the prospective or existing 21
net-metering customer shall include: 22
(a) A description of the system and the 23
system's placement on the net -metering customer's premises or other location 24
consistent with the requirements of this subchapter; 25
(b) A description of the nameplate generating 26
capacity and expected monthly and annual output of the net -metering facility 27
in kilowatt hours; 28
(c) The estimated annual degradation to the 29
net-metering facility; 30
(d) An estimated timeline for the installation 31
of the net-metering facility; 32
(e) The total cost of the net -metering 33
facility; 34
(f) The amounts due at t he signing for and at 35
the completion of the installation; 36 As Engrossed: S2/22/23 S2/27/23 S3/6/23 SB295
22 03-06-2023 13:52:42 CRH142
(g) The payment schedule; 1
(h) The payback period; 2
(i) The forecasted savings monthly and annual 3
bill savings provided by the proposed net -metering facility in dollars based 4
on the rate structure as defined in § 23 -18-606; 5
(j) A description of any warranties; 6
(k) The length of the term of any warranties; 7
and 8
(l) Notice that the prospective or existing 9
net-metering customer may file a complaint with the Attorney Gene ral; 10
(B) Perform an energy efficiency audit on the potential or 11
existing net-metering customer's premises and any customer meter locations to 12
be served by the proposed net -metering facility as part of the proposal to 13
sell or lease a net-metering facility or provide a net -metering service to a 14
net-metering customer under the Arkansas Cost -Shifting Prevention Act of 15
2023, § 23-18-601 et. seq, or inform the prospective or existing net -metering 16
customer of how to obtain an energy efficiency audit; and 17
(C) Inform the prospective or existing net -metering 18
customer of the available energy efficiency measures to address the results 19
of the audit as part of the proposal to sell or lease a net -metering facility 20
or provide a net-metering service to a net -metering customer under the 21
Arkansas Cost-Shifting Prevention Act of 2023, § 23 -18-601 et. seq; 22
(2) Demonstration to the prospective or existing net -metering 23
customer that the proposed net -metering facility meets all applicable safety 24
requirements and sta ndards; and 25
(3) Demonstration to the prospective or existing net -metering 26
customer that the person who sells or leases a net -metering facility or who 27
provides a net metering service to a net metering customer holds: 28
(A) All required permits to inst all, construct, or operate 29
a net-metering facility in the state, and, if the governing county, city, or 30
local authority does not require an electrical inspection, an executed 31
certification that no electrical inspection or permit is required; and 32
(B) A bond or other acceptable financial security to 33
ensure proper maintenance of the net -metering facility and decommissioning of 34
the net-metering facility. 35
36 As Engrossed: S2/22/23 S2/27/23 S3/6/23 SB295
23 03-06-2023 13:52:42 CRH142
4-88-1104. Enforcement. 1
Any violation of this subchapter may be enforced under the powers of 2
the office of the Attorney General under the Arkansas Deceptive Trade 3
Practices Act, § 4-88-101 et seq., including without limitation all 4
enforcement powers. 5
6
SECTION 3. DO NOT CODIFY. TEMPORARY LANGUAGE. Rules. 7
(a) The Arkansas Public Service Commission, after notice and hearing, 8
shall: 9
(1) Modify the commission rules to conform to this act; and 10
(2) Submit the commission rules to the Legislative Council by 11
December 31, 2023. 12
(b) The commission shall approve modifications to the electric 13
utilities' rate schedules applicable to net -metering to conform to this act 14
by December 31, 2023. 15
16
SECTION 4. EMERGENCY CLAUSE. It is found and determined by the 17
General Assembly of the State of Arkansas that delay in the enactment of this 18
act may result in unj ust, unreasonable, and unduly discriminatory rates; and 19
that this act is immediately necessary for the protection of Arkansas 20
ratepayers. Therefore, an emergency is declared to exist, and this act being 21
immediately necessary for the preservation of the pub lic peace, health, and 22
safety shall become effective on: 23
(1) The date of its approval by the Governor; 24
(2) If the bill is neither approved nor vetoed by the Governor, 25
the expiration of the period of time during which the Governor may veto the 26
bill; or 27
(3) If the bill is vetoed by the Governor and the veto is 28
overridden, the date the last house overrides the veto. 29
30
/s/J. Dismang 31
32
33
APPROVED: 3/13/23 34
35
36