PSC gives the city the green light for solar project

Hot Springs is on the verge of becoming the state’s largest city to use entirely renewable energy for community operations, City Manager Bill Burrough recently told Hot Springs’ board of directors.

The Arkansas Public Service Commission recently approved the city’s motion to expand its solar net metering project beyond the current generation of 1 megawatt. Last month’s ruling allows Scenic Hill Solar to build five net metering sites in addition to the 1 MW facility currently operating at the Southwest wastewater treatment facility on Winkler Road.

All five locations qualify for 1: 1 credit, which means Entergy Arkansas will credit the city with the full retail price for every kilowatt hour the five solar panels export to the grid.

According to the order of the PSC, the 8,670 KW at the five locations will cover 78% of the city administration’s electricity needs. The panel granted the city’s request to use generation from the more than 30,000 solar panels to offset the consumption of 29 of the most sought-after meters, including the Ouachita water treatment plant, which treats raw water that comes from the city’s intake at the top Hamilton Lake is collected.

“We received a very positive decision from the Public Service Commission on all of our points regarding our solar project,” Burrough told the board last month. “We may need additional land in order to achieve our total megawatt output. We’ll have a lot to do at three major locations over the next few months. “

Scenic Hill will install, own, and operate the arrays. According to the energy service contract that the city signed with Scenic Hill in 2019, the city pays Scenic Hill 5.90 cents per kWh generated by the plants. The rate is increased by 1% every year and reaches 9.97 cents at the end of the 28-year agreement.

Scenic Hill CEO Bill Halter said cost security will protect the city from volatility in the energy market.

“Now the Hot Springs City Council knows in advance what it will pay for electricity,” he said, noting that the current retail price is about 10 cents per kWh. “If the external market rises, as it is now, Hot Springs City Council counters will be protected from these tariff increases now and in the future.”

The net metering rules published by the PSC forbid two generation meters from billing the same consumption meter. Waiver of the order will allow the city to use the generation from the 3,400 KW AC solar system proposed for the Davidson Drive sewage system to compensate for the system’s consumption and the energy requirements of the water treatment system on Upper Lake Hamilton.

Witnesses the commission heard said land restrictions at the Upper Lake Hamilton site and the cost of connecting a solar array large enough to offset the water system’s consumption made the waiver necessary. The 670 kW AC system proposed for the site is insufficient to serve the average load of 1 MW, which corresponds to 1,000 KW.

The city proposed using 90% of generation from the 3.4 MW array at the Davidson Drive solar power plant to offset the load on the Upper Lake Hamilton site.

“The ground at the site (Upper Lake Hamilton) is hilly and rocky,” said Halter. “The water drops steeply. It was not ideal to build a large enough power plant there. We argued the commission and they agreed with us.”

The waiver was conditional on prohibiting the Upper Lake Hamilton site from crediting excess generation that it would add to the grid.

“With the total consumption (on the upper Hamilton Lake) in relation to the size of the power plant that we are going to build there, this is really not a problem,” says Halter. The solar array won’t be big enough to offset the site’s energy needs, said the commission’s decision to ban the site from feeding net energy into the grid.

If Davidson Drive’s solar array couldn’t be used to offset consumption at the Upper Lake Hamilton site, its excess generation would exceed needs to meet the city’s electricity needs. This would violate the Renewable Energy Development Act, which prohibits net metering customers from producing more energy than they consume in total.

“The Net Metering Act says that you cannot systematically overproduce your total consumption,” said Halter.

Entergy has argued that self-generation enabled by the Solar Access Act of 2019 shifts the utility company’s fixed costs to other tariff payers. If public institutions produce themselves, they do not pay any fees that help maintain the distribution network, said the utility.

A statement released in June 2020 said the city’s net metering project will shift about $ 900,000 a year in costs to other fee payers. Entergy reiterated its stance in a statement it released earlier this month.

“As Entergy Arkansas and others have found in numerous APSC proceedings and other forums, net metering facilities shift infrastructure costs under the current tariff structures to other customers,” the statement said. “This ultimately leads to higher tariffs and shifts the costs to other customers without net metering options.

“Other states are struggling with this cost shift, and some have taken steps to adjust tariff structures to eliminate or mitigate the unfair tariff structures that are leading to cost shifts. Entergy Arkansas looks forward to further Commission action to address the cost shift, including approving amendments Tariff structures for these net metering facilities so that all customers pay their fair share of the costs required to operate them. “

The commission had ruled last month that the city’s net metering project would not lead to an unreasonable allocation of costs to other customers.

A witness, testifying on behalf of the city, said the project will provide direct benefit to other fee payers of $ 600,000 per year. Entergy’s director of utility tariffs and pricing said the utility’s analysis indicated the project would result in a potential cost shift of $ 3.6 million.

The city does not own the land for the 600 KW site it has approved on Aldridge Road, north of the 1 MW site currently operating on Winkler Road. Halter said Scenic Hill will buy the property.

Government agencies and nonprofits could not be net metering customers prior to the Solar Access Act of 2019, which allows tax-exempt companies to contract with solar providers like Scenic Hill.

“If you’re a citizen of Hot Springs I think you should be pretty proud of what the tour did,” said Halter. “You have done this on behalf of Hot Springs in a way that clearly offers financial benefit. And it will provide financial security.”

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