Highlights of Commission Activities

1. Highlights of Commission Activities Little Rock ASHRAE Monthly Meeting October 12, 2011 Presented By: John P. Bethel

2. Topics Addressed • Description of the Commission and utilities • Energy Efficiency Programs • Self Direct Option • Net Metering

3. Three Commissioners • Colette Honorable, Chairman; Butch Reeves, Commissioner; Elana Wills, Commissioner • Appointed by Governor to six-year terms

4. Regulated Utilities

5. Regulated Utilities • 4 Investor Owned Electric Utilities • 17 Electric Distribution Cooperatives • 1 Electric Generation & Transmission Cooperative • 1 Electric Regional Transmission Organization • 3 Investor Owned Natural Gas Distribution Companies • 3 Water Utilities • 22 Natural Gas Operators (PSO Regulation) • 158 Master Meter Gas Operators (PSO Regulation) • Approximately 300 Telecommunications Utilities

6. Energy Efficiency Programs

7. Energy Conservation Endorsement Act • Ark Code Ann. §23-3-401 et seq. • Authorizes Commission to approve conservation and energy efficiency programs and measures • Commission adopted rules and approved initial utility administered and ratepayer funded programs in 2007 • Commission recognizes energy efficiency programs and measures as a resource Comprehensive programs approved effective July 1, 2011

8. Energy Efficiency Programs Overall Cost • Approximately $31.2 million for 2011; $57.5 million for 2012; and $77.4 million in 2013 • Recovered through a monthly charge on customer bills • Total cost of the energy efficiency and conservation programs is approximately $0.83 to $1.75 per month for an average residential customer

9. Goals for Energy Efficiency Programs • Electric Utilities: 2011 – 0.25%; 2012 – 0.50%; 2013 – 0.75% • Natural Gas Utilities: 2011 – 0.20%; 2012 – 0.30%; 2013 – 0.40%

10. Energy Efficiency Programs • Energy Efficiency Arkansas • Arkansas Weatherization Program • Energy Audits • HVAC Tune Up • Compact Fluorescent Light Bulbs • Appliance Replacements • Custom Programs for Commercial & Industrial Customers • Various Rate Schedules

11. Energy Efficiency Programs • Self Direct Option for Large Customers • Evaluation, Measurement & Verification • Lost Contribution to Fixed Costs • Energy Efficiency Incentives

12. Self Direct Option

13. Self Direct Option • Energy efficiency is a resource • Large commercial & industrial customers have opportunities & incentive to implement measures

14. Self Direct Option • Eligible large commercial & industrial customers can self direct or opt out of utility EE programs • Implement an EE measure that produces energy savings equal to or greater than Commission goals • Can obtain certificate of exemption for duration of utility’s EE program plan

15. Self Direct Option • Eligibility Requirements • Single Metered Location • 1 MW Peak Electric Demand • 70,000 mmBtu annual natural gas consumption

16. Self Direct Option • Eligibility Requirements • Aggregated Locations • 1 MW Peak Electric Demand from multiple locations with a peak electric demand of 200 kW each • 70,000 mmBtu annual natural gas consumption from multiple locations with annual natural gas consumption of 14,000 mmBtu each

17. Self Direct Option • New investment in EE measure • Investment in EE measure within ten years of request for certificate • Investment to be made during the duration of utility’s currently approved EE program

18. Self Direct Option • File request by Sept 15 of any year • Show that it has implemented or will implement a measure that will produce savings that meet or exceed Commission’s goals • Show that it has exhausted all opportunities • If participating in utility EE programs from 2012 forward, cannot request certificate for 5 years

19. Section 11 • Commission may schedule hearing • Commission must issue its decision by December 15 unless waived by customer • If approved, certificate effective January 1 of the following year • No longer charged EECR rate • Certificate good for duration of utility EE program plan • Up to three years

20. Net Metering

21. “Normal” Metering v. Net Metering

22. Electric Utility System

23. “Normal” Metering • Meter at residence or business • Measures electricity delivered to customer • Meter reading forms basis for billing

24. Electric Meters

25. Net Metering • Customer owns generating source • Generating source supplies all or part of customer’s need • Excess generation delivered back to utility • Meter runs backward to “measure” generation delivered back to utility

26. Net Metering Example

27. Overview of Arkansas’ Net Metering Law

28. Net Metering Law • Arkansas Renewable Energy Development Act of 2001 • Act 1781 of 2001 • Act 1026 of 2007 amended law • Arkansas Code Annotated §23-18-601 et seq.

29. Net Metering Law • Must be a renewable resource • Solar, wind, hydroelectric, geothermal, biomass, etc.

30. Net Metering Law • Maximum size 25 kW for residential customers and 300 kW for any others • Located in Arkansas

31. Net Metering Law • Offset all or part of the net metering customer’s requirements for electricity

32. Net Metering Law • Customer retains any renewable energy credit associated with generating facility

33. Net Metering Law • Electric utilities required offer net metering • Commission establishes rates, terms, and conditions • Utilities may assess fees for additional costs

34. Net Metering Law • Any generation from the customer’s facility is credited against usage at the retail rate • Customer may carry any excess generation for up to one year

35. Overview of Commission’s Net Metering Rules

36. Net Metering Rules • Net excess generation defined as the amount of electricity that a net metering customer has fed back to the electric utility that exceeds the amount of electricity used by that customer during the applicable period

37. Net Metering Rules • kWhs provided by customer serve to offset kWhs provided by the utility and serve to reduce any kWh charges on the bill • Distribution Rate • Energy Cost Recovery Rate

38. Net Metering Rules • Standard Interconnection Agreement • Facility must operate in parallel with utility • Prevent any back-feeding • Manual disconnect switch accessible to utility • National Electric Code • National Electric Safety Code • ICEEE & Underwriters Labs

39. Net Metering Rules • Standard Rate Schedule • Each utility has comparable tariff • Availability • Monthly Billing

40. Net Metering Rules • Reporting Requirements • Annual Reports by March 15 • Currently 141 net metering facilities • 120 Solar • 21 Wind • 138 Residential • 3 Commercial

41. Net Metering Rules • 102 Under 5 kW • 37 @ 5 kW or greater • 1 @ 20 kW • 1 @ 30 kW • 1 @ 50 kW • 1 @ 100 kW

42. Cost of Net Metering Facilities

43. Cost of Net Metering Facilities • Very rough information from Internet research (do not rely upon me) • Tax credits of up to 30 % • Solar facilities $4,000 to $12,000 per kW • Wind facilities $3,000 to $10,000 per kW • AWEA $350,000 for 100 kW

44. The End • Questions?