House Bill 1370 would cut net metering rates in the state, severely damaging the value of customer-owned solar.
Another U.S. rooftop residential solar market is under threat as House Bill 1370 has been introduced in Arkansas. The bill proposes to slash the rate utilities pay solar customers for sending excess renewable energy to the grid. It is sponsored by two Republican representatives, Rep. Lanny Fite and Sen. Jonathan Dismang.
The bill “seeks to unwind promises made in 2019 by the passage of Arkansas’s wildly successful Solar Access Act,” said a filing from a coalition of over 90 Arkansas businesses, citizens, school districts, churches, and other organizations that formed to preserve rooftop solar accessibility in the state. The Solar Access Act led to thousands of new Arkansas jobs and helped many achieve lower and more stable power costs. The act legalized “1:1 net-metering,” offering a full retail payment for exporting clean energy to the grid.
The HB 1370 proposes to lower solar net metered payments to the “avoided cost” to the utility, essentially a wholesale rate that is far lower than the retail rate paid by end users. The result is a damaging loss in value for customer-sited solar, working in direct contrast to statewide and nationwide stated goals of supporting distributed clean energy.
A similar rulemaking change occurred in California, which represents 50% of the U.S. rooftop solar market. The net metering rate cuts in California are expected to lower rooftop solar demand by 30%. In 2017, Nevada cut its net metering rates in a similar fashion, subsequently leading to a 90% drop in rooftop solar installations.
“This bill will end the solar industry in Arkansas and will cost us thousands of jobs,” said Barry Hyde, judge of Pulaski County.
The bill is also putting active projects at risk. After four years of development, approval by the Arkansas Public Service Commission (PSC), and expenditures of more than $40 million, the Producers Rice Mill solar project is under threat. The 20 MW solar plus 40 MWh battery storage microgrid project was evaluated by the PSC to reduce rates for all Entergy Arkansas ratepayers and stabilize the grid when under stress. The bill would “gut this investment being made by over 2,200 farm family members of the Producers Rice Mill cooperative.”
Investor-owned utility Entergy supports the bill. It has repeatedly made claims that solar customers are cross-subsidized by non-solar customers, and that the utility is not fairly compensated for maintaining its transmission infrastructure. It has repeatedly failed to make a convincing case to the Arkansas PSC of the negative effects of net metering.
The PSC rejected a past attempt to cut rates, finding “net energy metering encourages the use of renewable energy resources and renewable energy technologies by reducing utility interconnection and administrative costs for small consumers of electricity” and that “net-metering would help to . . . attract energy-technology manufacturers, to provide a foothold for these technologies in the Arkansas economy, and to make it easier for customer access to these technologies.”
The coalition of opposition to the bill included local school districts.
“Passing HB 1370 will have a direct and immediate negative impact on Batesville Schools with higher electricity bills that could impact teacher pay,” said Batesville School District Superintendent Dr. Michael Hester. “The Batesville School District was able to reduce its electricity costs and invest those savings into pay raises for public school teachers. It is very troubling that the legislature is considering reversing all the tax saving revenue for Arkansas’s non-profit organizations in the name of corporate greed.”
Local residents are also signing on in opposition to the bill.
“Our investment in on-farm solar electricity provides my family’s farm with both reduced power costs and power pricing predictability,” said Mark Isbell, a farmer in Lonoke County. “If that goes away, the investment we have made will be undermined and our farm and family will see significant new challenges that jeopardize our future.”
Read the letter of opposition addressed to the Arkansas General Assembly here.
Find updates on the bill here.
