Sustainability Law 101: Net Metering in Arkansas

Net metering is the scheme under which power generated privately and using renewable energy sources is transfered back to the grid. The Arkansas legislature required utilities to offer net metering in 2001. The program is overseen by the Arkansas Public Service Commission.

The defining characteristic of net metering in Arkansas, as with many net metering schemes, is that private energy generators do not receive any actual cash for pushing power back into the grid. Instead, private generators receive “credits” toward future electricity bills. These credits last for 12 months; at the end of the 12 month period, excess generation is given to the customer’s utility.

Here are the basic elements of net metering in Arkansas:

• Solar power and systems generating power from wind, hydroelectric, geothermal, biomass and microturbines are eligible for net metering;
• Residential renewable electric generation systems up to 25 kW are eligible to enroll in net metering.
• Non-residential renewable energy systems up to 300 kW are eligible to enroll in net metering.
• Any utility under the jurisdiction of the PSC must allow eligible customers to net meter. However, municipal utilities are not covered by the net metering law.
• To participate, private energy generators must sign an interconnection agreement with their utility.
• Customers are responsible for the costs associated with interconnecting their system to the grid, including the cost of additional metering equipment needed to net meter. Utilities may also charge the private energy generators a tariff.
• There is no limit for the aggregate capacity of all net-metered systems.

As noted above, Arkansas’s net metering scheme does not allow private energy generators to actually “sell” power back to the grid. Instead, “net excess generation,” known counter intuitively as “NEG,” created by the private energy generator’s system is fed back into the electric grid, earning the private energy generator credits toward future energy use. These credits are known as renewable energy credits, or, for those of you who like acronyms, “RECs.” NEG is carried over to the customer’s 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. Customers, however, do own their RECs, and RECs can be bought and sold.

There are at least 37 net metering systems in Arkansas: 30 solar systems with a total of 97 kW installed capacity, and 7 wind systems with a total of 128 kW installed capacity.