Energy Resources

In February 2003, the General Assembly passed Act 204 of 2003, The Electric Utility Regulatory Reform Act,that repeals Chapter 19 of Title 23 (Act 1556 of 1999 and Act 324 of 2001). With the passage of Act 204, the PSC has "determined that Arkansas’ electric ratepayers would be unlikely to benefit from, and could be harmed by, retail electric competition for the foreseeable future."

The original legislation, Act 1556 of 1999, would have implemented retail choice as early as January 1, 2002 but no later than June 30, 2003.

In February 2001, the state Public Service Commission (PSC) published the "Progress Report to the General Assembly on the Development of Competition in Electric Markets and the Impact on Retail Customers," and determined that Arkansas would not be ready to implement deregulation by the original start date. As a result, the state legislature passed Act 324, which delayed the start until at least October 1, 2003, but no later than October 1, 2005.

In December 2001, the PSC recommended that the General Assembly either repeal the current statute or suspend the statute until 2010 or 2012. The recommendations, contained in the Commission’s "Report to the General Assembly Pursuant to Act 324 on the Development of a Competitive Electric Market and Possible Impact on Customers," were based on a cost-benefit analysis that showed net price benefits would not occur for ratepayers before 2012 and that an operating regional transmission organization did not exist.

In April 2001, Arkansas enacted legislation (HB 2325) directing the Arkansas Public Service Commission (PSC) to establish net-metering rules for certain renewable-energy systems. The PSC approved final rules for net metering in July 2002. Legislation enacted in April 2007 (HB 2334) bolstered the existing statute by increasing the availability of net metering, improving the law's provision for the carryover of net excess generation (NEG), and clarifying the ownership of "renewable-energy credits" (RECs).

Residential renewable-energy systems up to 25 kilowatts (kW) in capacity and nonresidential systems up to 300 kW in capacity are eligible for net metering. Eligible technologies include solar, wind, hydroelectric, geothermal and biomass systems, as well as fuel cells and microturbines using renewable fuels. There is no limit on the aggregate capacity of all net-metered systems.

The 2007 amendments allow net-metered customers to carry over any NEG to their following monthly bill at the utility's retail rate. Any NEG remaining at the end of an annual billing cycle is granted to the utility. (Previously, NEG was granted to the utility monthly.) In addition, the 2007 amendments clarified that net-metered customers own RECs. (RECs and REC ownership were not addressed prior to the 2007 amendments.)

Arkansas's net-metering law authorizes the PSC to allow utilities to assess net-metered customers "a greater fee or charge of any type, if the electric utility's direct costs of interconnection and administration of net metering outweigh the distribution system, environmental, and public policy benefits of allocating the costs among the electric utility's entire customer base."