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Jan 9, 2023

From the Manager’s Desk: Your electric bill is impacted by private solar compensation

At Petit Jean Electric Cooperative, our mission is clear. It’s to provide you — our member/owners — with Reliable, Affordable and Responsible energy. We take our mission very seriously and want you to be aware of a state energy policy, Act 464, that impacts your electric bill. When private solar installations produce more energy than needed, the excess energy is put on the electric grid to be available for other members and the solar array owner is compensated through a process called net metering.

Currently, homeowners and businesses that install private solar panels are credited for energy they produce at a rate more than twice the price that we can buy energy from the wholesale power markets and/or our member-owned generation resources. A ruling by the Arkansas Public Service Commission requires Petit Jean Electric Cooperative to pay this price. This unfairly impacts our member/owners because this higher cost of energy is ultimately passed on to you.

The market value of wholesale energy varies over time and is currently approximately 5 cents per kilowatt hour. However, the average rate to deliver electricity in Arkansas is, on average 12 cents per kilowatt hour, which is what private solar owners receive in compensation, making it the highest price that utilities pay for energy. It’s a huge windfall, and a clear subsidy, to those who can afford to install solar panels — at great expense to you, our member/ owners. Petit Jean Electric Cooperative is not against private solar installations; we simply don’t agree with the current Arkansas Public Service Commission rules regarding net metering rates. We believe that a 2-Channel Billing platform, where energy generated from private solar installations is priced at “avoided cost” i.e., wholesale market price, is a fair and equitable way to compensate members with solar arrays without shifting undue costs on members who do not utilize solar systems.
Net metering enables solar owners to receive the equivalent amount of energy as they produced in excess back from the utility at zero cost, which shifts the financial burden on non-solar members for infrastructure, maintenance and operational costs which raises fixed costs and our basic availability costs. Again, this is no fault of private solar owners, but an issue with state net metering policy implemented by the Arkansas Public Service Commission. Petit Jean Electric will be working with other cooperatives and our valued state legislators to correct this issue in the upcoming legislative session. Our goal is to bring FAIRNESS down the lines to all members of the cooperative and to avoid giving preference to those who choose to utilize solar arrays as a part of their private energy source.

Combined, the Electric Cooperatives of Arkansas have the state’s largest share of net metering accounts. Cooperatives across the state have invested in utility-scale solar generation; it’s an integral part of our Balance of Power generation portfolio. In fact, Petit Jean Electric has been preparing for a 1-megawatt solar array that will benefit ALL of our members. However, we don’t think it’s fair for you, or us, to pay more than the market rate for excess energy produced by private solar installations. We believe that 2-Channel Billing at avoided cost keeps things Fair Down the Lines for all members of Petit Jean Electric.

Arkansas legislators passed a good, innovative law that provided utilities flexibility to serve their members and customers in a manner that is fair to both those who privately participate in solar (such as rooftop solar) and those who do not. It’s time for our legislators to end a rule that allowed the Arkansas Public Service Commission to force utilities to pay retail prices for electricity sold into our grid from private solar installations, punishing you, our member/owners with higher rates.

Reach out to your local legislators, and let them know that you, as a member of an electric cooperative, want to keep things Fair Down the Lines when it comes to adding renewable resources like solar to YOUR cooperative’s distribution system.

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