A Dying Light in the Natural State

In March, solar energy in Arkansas was given the death sentence. With Arkansas remaining under conservative reign, there is concern about legislation being in everyone's best interest.

As a first-term governor, Sarah Huckabee Sanders has already been associated with multiple controversies, with Senate Bill 295 adding to the list. While many Arkansans were distracted by the signing of Sanders' controversial LEARNS Act, SB 295 was being promoted and voted on, resulting in the 73-14 vote for approval, as reported by the Democrat Gazette.

Just as SB 295 awaits Sanders' signature to take effect, hundreds of hard-working employees across Arkansas await the end of their careers involved with solar energy. With SB 295 signed into law, the state's few corporations overseeing its energy sources retain a monopoly, refusing Arkansans the option to choose solar energy without all of its benefits.

Just like any other monopoly, the customers are at the mercy of those in power seeking to squeeze every ounce of profit from them, like the tax collectors from the tales of Robin Hood. While the elites at the heads of these corporations continue to increase their wealth, even during recessions, the everyday Arkansan is exploited for those profits.

SB 295 was marketed as the elimination of high energy prices due to the impact of cost-sharing with those generating excess energy through solar energy systems installed at their homes or businesses. In its attempt to unburden customers who do not have solar equipment installed, SB 295 slashes the reimbursement of the compensation given to solar customers by at least half the price, beginning in 2024.

As reported by the Democrat Gazette, the plan is to reduce cost-sharing at retail prices, which is about 11 cents per kilowatt hour and reducing it between four and six cents per kilowatt hour at wholesale prices. Representative Larry Fite, a sponsor of SB 295 expressed his support of the bill to the media as a a means to, "prevent cost shifting and ensure fairness to all rate payers." Adding, "cost shifting reached $18 million in 2021 and will amount to $290 million by 2040... The more power that is sold at retail price to the grid, the more it pushes the cost to other consumers in the state."

The initial proposal for SB 295 would have taken effect in 2023, giving businesses in the solar energy industry little time to adjust for themselves and their employees. After a compromise with the Arkansas Advanced Energy Association (AAEA), solar businesses were given an additional year to prepare for the impact of this bill. Entergy spokesperson Kacee Kirschivink stated, "We appreciate the leadership the General Assembly took on this issue. Reaching a compromise with the Arkansas Advanced Energy Association ensures those who want solar panels can continue to do so, and those who do not will no longer pay more," as reported by the Democrat Gazette.

However, the controversy concerning SB 295 is that legislation was passed on the issue of cost-sharing as the reason for energy price increases without any evidence to confirm the claim of big energy corporations. With the cost-sharing prices being severely limited, it minimizes the affordability of having solar energy installed at homes and businesses, essentially killing several small businesses that work to provide solar energy at homes and businesses.

In rebuttal to SB 295, former Public Service Commissioner Ted Thomas was quoted by the Democrat Gazette for stating, "For over two years, the policy of our state has been that if any utility thinks there is a cost-shift they should provide evidence and propose a grid fee to eliminate the cost-shift... No utility brought the required evidence. Now political muscle is being used in place of evidence."

For businesses like Perihelion Solar located in Russellville, which employs about 12 people, this bill has forced employees to find new careers and cause some of its staff to consider moving out of state. Andy Barrett, the CEO of Perihelion Solar states his initial reaction to the bill's passing as, "I thought it would never pass, that truth would win the day. I thought the AAEA would have our back, fight for truth and not give in. The fact that AAEA compromised with the bill for another year, killed the industry."

Barrett responded to Fite's claims stating, "The statement obfuscates that a residential consumer cannot produce more than they consume in a year. Effectively, what's happening is that utilities is losing a customer, although the customer pays a grid charge to help compensate for grid infrastructure, so the cost shifting is in effect caused by utilities increasing their price to keep their profits positive. In addition, the distributed solar power plants reduce the utilities need for infrastructure improvements for peaking plants. Utilities by design want to spend more capital because they are guaranteed compensation for capital expenses."

Barrett continued by saying, "In Arkansas, the peak price is generally found to be at mid-day when energy is at its highest, which means power produced by solar generated is more valuable to utilities. If you look at your bill, there is a line that says “Fuel and Purchased Power.” If your neighbors weren’t installing solar, it’s highly likely that this cost would be much higher for Arkansas energy customers. In states like California, where solar energy is saturated after 20 years, a change to net-metering would make sense. In Arkansas, the utilities are using their power to prevent competition."

In response to the AAEA's handling of SB 295, Barrett stated, "The moment they made a decision to compromise on the bill, it legitimized the blatant lie. That makes it harder for us to fight in the future. It also makes me suspect the ability to represent the solar energy in Arkansas, due to its incompetence and the fact that utilities and co-ops have members in the AAEA and Entergy having an individual in an important role on the AAEA board of directors."

Barrett, like former Public Service Commissioner Chairman Ted Thomas, agrees that SB 295 will kill the solar energy industry in Arkansas. According to the Democrat Gazette, arguments by utilities corporations that cost-shifting occurs has been rejected by state regulators and at least one court case.

Without the full benefits of cost-sharing given to energy users with solar panels installed, there is less enthusiasm and incentive for Arkansans to install solar panels. It becomes obvious that the solar energy industry will suffer from a lack of clients, which will force solar energy companies to either severely reduce their staff or close their doors, placing a large amount of skilled workers in line for unemployment.

This forced reduction that targets green energy is nonbeneficial for the continuing climate change crisis that impacts Arkansas.

There is no doubt that “the natural state” turning its back on natural energy sources is a disservice to energy users and the climate. In this case, it appears that the dying light in the natural state is the light that once shone bright from green energy.

-Cliff A. May