Bill sponsors, stakeholders reach compromise on Arkansas solar legislation

A press release mentioned in this story came from the Arkansas Advanced Energy Association. An editing error in an earlier version of the article gave an incorrect name.

After a testy all-day hearing on an amended bill opponents say would kill Arkansas’ burgeoning solar industry, sponsors of House Bill 1370 reached late-hour agreement that is expected to move the 22-page measure out of committee.

Under a compromise pact fashioned after more than four hours of testimony in the House Insurance and Commerce Committee, Rep. Lanny Fite (R-Benton) and Sen. Jonathan Dismang (R-Searcy) agreed to key amendments to HB 1370 that will likely bring the proposal to the House floor next week.

“I don’t want to mislead everyone in the room,” Dismang told the committee. “This doesn’t mean that everyone is going to be happy with the agreement. And there may be other organizations who have not agreed, but we understand we are talking about those who have been the major players in the discussion.”

HB 1370 is on the committee’s agenda for a meeting Thursday to be held after the House adjourns.

In the original bill filed on Feb. 8, utility customers who fed excess electricity to the big suppliers received 10 cents per kilowatt-hour for their net generation through the last day of 2022. That was based on an Arkansas Public Service Commission (PSC) order promulgated under the Solar Access Act (464) of 2019. The PSC order also allowed existing pacts between net-metering customers and utilities to remain in place or grandfathered through 2040.

Wednesday’s agreement will extend the grandfathering clause’s start date through Sept. 30, 2024. It also changes a much-debated provision in the bill that mandates a net-metering facility and a separate meter owned by the same company be within five miles of the net-metering customer’s account. That section was changed to 100 miles.

A section of the bill limiting the size of nonresidential solar arrays to 5 megawatts was changed after several people testified it would prohibit hospitals, universities, nonprofits and others from developing cost-saving solar projects. That provision was increased to 25 megawatts and grandfathered in with the 2024 date.

When Fite introduced HB 1370 on Wednesday, Entergy Arkansas and Arkansas Electric Cooperative Corp. offered a one-page amendment that extended the beginning of the grandfathering language through Dec. 31.

‘Consumer friendly’

Fite said he had spent the last two weeks since filing the bill speaking with supporters and opponents of his measure and made revisions that he called “more consumer friendly.” 

However, he, Entergy Arkansas and AECC reiterated that current policy unfairly shifts the cost of electricity onto customers who don’t want or can’t afford solar or other renewable energy systems. 

“This is a consumer bill that creates a level playing field for all electric customers in the state of Arkansas. It stops the cost shift of all electricity sold to the grid that is wholesale except what is sold by the solar industry today,” Fite said. “But there is a cost shift, and that’s why we are here today and that cost shift goes to all (electric) customers in Arkansas.”

According to calculations by Entergy Arkansas and AECC, customers without rooftop solar power will be burdened with more than $300 million in additional energy costs because of the current net-metering policies under Act 464.

Fite said the bill would lead to lower bills for consumers but offered no details.

Entergy Arkansas Director of Public Affairs John Bethel testified that regulated utilities would not profit from the change in cost-sharing because by law they are limited to a 9.75% return on equity.

“This bill doesn’t raise the utility’s revenue, it simply makes sure the customers ultimately will pay their fair share for using the system,” Bethel said.

‘I created this policy’

After nearly 40 minutes of back-and-forth from the bill sponsors, utility representatives and the committee, Rep. Jack Ladyman (R-Jonesboro) moved to cut further testimony to five minutes per witness due to the long list of people who had signed up to speak for or against HB 1370.

After approval of the motion, former PSC chief Ted Thomas lambasted the committee for limiting testimony and taking up policy that should be handled by the state’s utility regulators.

“Why are we here when you created the PSC to deal with these issues,” Thomas said, then reminded the panel that he authored and designed Act 464. “God didn’t make Rambo. I did. I created this policy.”  

In combative testimony that challenged the cost-shifting claims of the electric utilities and HB 1370 sponsors, Thomas told the committee that Act 464 was crafted to enhance the state’s fledgling solar industry and spread the risk to all parties in that development.

“It worked,” Thomas reiterated, noting the huge growth in residential, commercial and utility-scale solar projects since 2019. 

“We have all these projects because of this policy. We have to save them. What is great about this policy is that when we argued four years ago, there were no projects” Thomas continued. “There were hopes and dreams of entrepreneurs and risk-takers, and they came through. We ought to protect these projects, and you’re killing the projects you can’t see.”

After several testy exchanges with several lawyers speaking in support of HB 1370, Thomas told the committee the bill “was wrong, and it is not fair to do this in five minutes.”

‘Cost-shift hoax’

For the next three hours, with a break for the House’s full session, the panel heard from more than 20 other speakers, mostly HB 1370 opponents. In a news release prior to the hearing, the Arkansas Advanced Energy Association (AAEA) said that more than 90 organizations, schools, businesses, and municipalities opposed the bill.

“If utilities, cooperatives and their House Bill 1370 sponsors are so concerned about a made-up cost-shift hoax, they should go prove it,” said AAEA Executive Director Lauren Waldrip.  “They don’t need this legislation because there is already existing law set up to solve this problem if it is ever proven.”

At the end of the meeting, House Insurance and Commerce Chair Rep. Ron Maddox, R-Mena, confirmed with the sponsors and AAEA that an agreement indeed was made and expressed his frustration after a long day. “Let’s put this on the record and hopefully not do this again,” he said.

After Fite pulled the bill down and agreed to add the amendment, Maddox said he expects to bring the bill back up later this week in a late afternoon hearing.