Net Metering

Note: S.B. 295 was signed in March 2023, which includes changes to the net metering rules, such as revising the residential and non-residential capacity to the lesser of 25 kW or 100% of the customer's highest monthly usage in the previous 12 months, and the lesser of 5 MW or 100% of the customer's highest monthly usage in the previous 12 months and net excess generation, respectively; allowance of a monthly grid charge, more specific language indicating RECs may be retained, retired, or sold for the customer's sole benefit; and a 100 feet max distance between a net metering facility and a separate meter owned by the same customer. Revisions also include revising NEG as "net metering surplus", and changing the credit calculation to the avoided cost rate (defined as MISO or Southwest Power Pool's Locational Marginal Price from the previous year's 12-month average that is associated with the utility load zone) multiplied by the kWh supplied to the utility by the customer during the billing period. Existing customers are grandfathered until June 1, 2040. Revisions to the rules must be adopted by the Public Service Commission by the end of 2023. 

In April 2001, Arkansas enacted legislation (H.B. 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. Subsequent legislation enacted in April 2007 (H.B. 2334) expanded the availability of net metering. In 2012, the PSC amended the net metering rules to exempt local, state and federal government entities and agencies from previously required indemnity agreements (Docket 12-001-R Order No. 6). On November 6th, 2013 the PSC approved new net metering tariffs for all utilities under its jurisdiction. In March 2015, legislation (H.B. 1004) revised the net metering rules modifying provisions for excess generation, providing options for increasing the net metering cap for non-residential customers, and opening a docket to determine appropriate fees and terms for net metering customers. In 2019, Act 464 was enacted which did the following: allowed third-party leasing of solar projects; raised the limit for non-residential customer solar systems from 300 kW to 1,000 kW; allowed net-metering customers to send electricity to the grid; added energy storage as an eligible technology, just to name a few. In 2022, the PSC amended the net metering rules by modifying the grandfathering deadline for net metering customers to May 31, 2040 -- before this it was December 31, 2022 (Docket No. 22-062-R Order No. 7).

Eligibility and Availability

Residential renewable energy systems generating capacity cannot be greater than 25 kW in capacity, or 100% of the net-metering customer’s highest monthly usage in the previous 12 months. Non-residential systems can be sized up to 1000kW, however, the Public Service Commission can allow capacity larger than 1000kW. 

Eligible technologies include solar, wind, hydroelectric, energy storage, geothermal and biomass systems, as well as fuel cells and microturbines using renewable fuels. There is no limit specified for the aggregate capacity of all net-metered systems.

Customers that are taking interruptible service are not eligible for net-metering unless they were issued an order by the PSC by the end of 2022 for approval of a net-metering facility with a capacity of more than 10 MW.

Net Excess Generation (NEG)

Customers may carry over any NEG credit remaining at their of their billing cycle indefinitely. For any excess generation credits that are 2 years old, the customer may elect the electric utility to purchase the excess generation credits at the electric utility’s estimated annual average avoided cost rate for wholesale energy. The electric utility must also purchase the excess credits at the avoided cost for wholesale energy if the customer i) ceases to a customer of electric utility, ii) cease to operate net-metering, iii) transfers net metering facility to another person. 

Renewable Energy Credits (RECs)

Customers own the RECs associated with their systems.

Meter Aggregation

The PSC ruled in favor of meter aggregation in September 2013 with Order No. 7 in Docket No. 12-060-R. Any customer with multiple meters within a single utility's service territory may designate multiple meters to be offset by a single net metering system or multiple systems. The net metering customer must give the utility at least 30 days of notice. The additional meter or meters must be identified at the time of the request and must be in the net metering customer's name. The net metering customer must also designate the rank order for the additional meters to which the excess kWhs will be credited.

Interconnection

The PSC is authorized 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."

* Municipal utilities do not fall under the PSC's jurisdiction and are not required to follow the PSC's rules. The PSC regulates investor-owned and cooperative utilities.