Dive Brief:

• A working group convened by the Arkansas Public Service Commission to examine the costs and benefits of net metering has split along ideological lines and submitted two sets of recommendations instead of a unified position.
• Earlier this year, state regulators voted to grandfather existing solar customers into retail net metering rates for the next 20 years, but the commission is also undertaking a more in-depth study of the program at the behest of the Legislature. 
• Sub-Group 1 of the working group, made up of conservation and advanced energy groups, supported no changes to Arkansas net metering until a full study can be completed. Sub-Group 2, made up of utility interests, advocated an embedded cost of service approach to determining the costs and benefits associated with net-metering.

Dive Insight:

A lengthy report filed last week with the Arkansas PSC brings the state's net metering debate only marginally closer to resolution. Solar advocates and utility interests split on how they believe the state should handle net metering, with environmental groups advocating maintaining the status quo.

The proceeding, split into two phases, already concluded the first one to grandfather in existing customers into the original rates. Now stakeholders are debating the future of the policy in the second phase. 

The Sierra Club commissioned a report from Crossborder Energy studying net metering within Entergy Arkansas' service territory, which it filed along with the work group's report. The report concluded that net metering is good for all classes of ratepayers. Gary Moody, public affairs manager for Audubon Arkansas, said in a statement that net metering "makes economic and environmental sense.  We cannot afford any policy shift that short-changes Arkansas ratepayers who make clean-energy upgrades on their personal property.”

But the second sub-group, of which Entergy was a part, concluded "the current net-metering policy that credits excess generation at the full retail rate must be changed for new net-metering customers."

That subgroup argued that crediting net-metering customers for costs that are not avoided "means that the electric utility does not recover its entire cost of providing service to each net-metering customer, net of quantifiable benefits."

Arkansas has a relatively nascent solar market, and advocates worry changes to net metering policy could slow the market's growth if regulators make too deep a cut to remuneration rates. The state's comprehensive look at the policy echoes similar efforts in Arizona and Maine, to name some recent examples. A decision is expected by the end of the year.