Senate committee approves amendment to SB295, extends net‑metering grandfathering amid sharp testimony from utilities and industries

During a Senate Insurance & Commerce committee meeting, members approved an amendment to Senate Bill 295 that sponsor Senator Desmaine said extends grandfathering for certain net‑metering projects to Sept. 30, 2024 and preserves current treatment for projects under 5 megawatts.

Senator Desmaine, the bill sponsor, told the committee the amendment was the result of an agreement with the Arkansas Advanced Alternative Energy Association (AAAEA). "That pushes the date out to 09/30/24 for grandfathering," he said, and explained that projects under 5 megawatts or projects with a contract or a submission to the Public Service Commission (PSC) as of the prior day would be grandfathered.

The sponsor described SB295 as a consumer‑protection measure aimed at addressing what he characterized as a cost shift tied to 1:1 net‑metering. The bill would end 1:1 net‑metering for new customers, define "avoided cost" as the 12‑month average wholesale purchase price, and give utilities two options for compensating customer generation: a two‑way billing arrangement or a grid charge, the sponsor said. "It is a consumer protection bill for two particular reasons," Desmaine said.

Committee members pressed the sponsor for detail on practical effects such as the bill's expansion of a geographic radius from 5 miles to 100 miles for some arrangements and whether utilities could select the grid charge option. Desmaine said the 100‑mile provision was added at AAAEA's request and that, while two‑way billing pays retail for behind‑the‑meter use and wholesale for excess, a grid charge would be a utility fee structure likely subject to PSC approval.

Witnesses opposing the bill said the change would shift costs to ratepayers and restrict customer options. Tad Bohannon, chief executive officer of Central Arkansas Water (CAW), testified that the bill would prevent CAW from using interruptible‑power tariffs on large pump stations because of the utility's offsite solar facility, and he warned that would raise costs for water customers. "This bill would prohibit Central Arkansas Water from choosing interruptible power as a tariff," Bohannon said, adding that CAW's existing 4.8‑megawatt project in Cabot relies on a PSC order and that certain bill language creates a loophole that could expose grandfathered customers to new charges.

Jordan Tinsley, a regulatory attorney representing Arkansas Electric Energy Consumers Incorporated (AEEC), which counts numerous large industrial and agricultural firms among its members, urged the committee to slow the process and opposed the bill. "This bill is a wish list of power and money grabs by the monopoly utilities in this state," Tinsley said, arguing SB295 would go beyond addressing cost shifting and could raise electricity prices and the cost of goods for Arkansas businesses.

The committee adopted the amendment by voice vote; the sponsor was then invited to present the bill as amended. No final committee vote on the bill itself was recorded in the hearing. The committee recessed and said it would reconvene 15 minutes after the Senate adjourns to continue testimony and questions.

Next steps: the committee will resume consideration after the Senate session to hear additional witnesses and continue debate on SB295.