Home Energy services PSC gives the green light to the city for a solar project

PSC gives the green light to the city for a solar project


Hot Springs is poised to be the largest city in the state to use fully renewable energy for municipal operations, City Manager Bill Burrough recently told the Hot Springs Board of Directors.

The Arkansas Civil Service Commission recently granted the city’s request to expand its solar net metering project beyond its current output of 1 megawatt. Last month’s decision allows Scenic Hill Solar to build five net metering sites in addition to the 1MW facility currently operating at the Southwest Wastewater Treatment Plant on Winkler Road.

All five sites are eligible for 1: 1 credit, which means Entergy Arkansas will credit the city at the full retail rate for each kilowatt hour that the five solar panels export to the grid.

According to the order of the PSC, the 8,670 KW of the five sites will supply 78% of the electricity needs of the municipality. The panel acceded to the city’s request to use the output of more than 30,000 solar modules to offset the consumption of 29 of its most demanded meters, including the Ouachita water treatment plant which treats water. raw water collected by the city’s intake on Upper Hamilton Lake.

“We had a very favorable ruling from the Civil Service Commission on all of our points regarding our solar project,” Burrough told the board last month. “We may need additional properties to meet what we need in terms of total megawatts. We will have a lot of business at three major sites over the next few months.”

Scenic Hill will install, own and operate the arrays. Pursuant to the city’s energy services agreement with Scenic Hill in 2019, the city will pay Scenic Hill 5.90 cents per kwh generated by the panels. The rate will increase by 1% each year to 9.97 cents at the end of the 28-year agreement.

Scenic Hill CEO Bill Halter said cost certainty would shield the city from volatility in the energy market.

“Now the city of Hot Springs government knows in advance what it’s going to pay for electricity,” he said, noting that the current retail rate is around 10 cents per kWh. . “When the external market increases, as it does now, Hot Springs City government meters are protected from these rate increases now and in the future.”

The net metering rules promulgated by the CFP prohibit two production meters from compensating for the same consumption meter. A waiver granted by the commission allows the city to use the output of the 3,400 KW AC solar power plant proposed for the Davidson Drive sewage treatment plant to offset the plant’s consumption and the plant’s energy needs. water treatment on upper Hamilton Lake.

According to the testimony heard by the commission, the land constraints on the upper site of Lake Hamilton and the cost of connecting to the grid of a solar installation large enough to compensate for the consumption of the water plant necessitated the exemption. The 670 KW AC installation proposed for the site is insufficient to service its average load of 1 MW, which is equivalent to 1000 KW.

The city has proposed to use 90% of the output from the Davidson Drive solar power plant’s 3.4 MW grid to offset the load at the upper Lake Hamilton site.

“The ground at (Upper Hamilton Lake site) is hilly and rocky,” Halter said. “There are sheer drops in the water. It was not optimal from the point of view of building a big enough power plant there. We made the argument to the commission, and they were dumbfounded. ‘agree with us. “

The exemption was conditional on the prohibition of crediting the upper Hamilton Lake site for the excess production it would add to the system.

“With the total consumption (at upper Lake Hamilton) relative to the size of the power plant we’ll be building there, that’s really not a problem,” said Halter, noting that the solar power plant will not be enough. large to compensate for the energy of the site. needs, said the commission’s decision to ban the site from exporting power to the grid on a net basis.

If the Davidson Drive solar panel could not be used to offset consumption at the upper Lake Hamilton site, its excess production would exceed what is needed to offset 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 altogether.

“The net metering law says you can’t systematically overproduce your overall consumption,” Halter said.

Entergy argued that the self-production allowed by the Solar Access Act of 2019 shifts fixed utility costs to other taxpayers. When public entities self-produce, they don’t pay tariffs that help maintain the distribution network, the utility said.

A statement released in June 2020 said the city’s net metering project will transfer approximately $ 900,000 per year in costs to other taxpayers. Entergy reiterated her position in a statement she released earlier this month.

“As Entergy Arkansas and others have noted in numerous APSC proceedings and other forums, net metering facilities pass infrastructure costs on to other customers under current rate structures,” the release said. “This ultimately leads to higher tariffs and shifts the costs onto other customers without net metering facilities.

“Other states are also facing this cost shifting and some have taken steps to adjust pricing structures to eliminate or mitigate unfair pricing structures that lead to cost shifting. Entergy Arkansas looks forward to further commission action regarding the cost shifting. including the approval of amended rate structures for these net metering facilities so that all customers pay their fair share of the costs necessary to serve them. “

The commission ruled last month that the city’s net metering project would not result in an unreasonable allocation of costs among other customers.

A witness who testified on behalf of the city said the project will create a direct benefit of $ 600,000 per year for other taxpayers. Entergy’s director of tariffs and utility pricing testified that the utility’s analysis determined that the project would result in a potential cost change of $ 3.6 million.

The city does not own the land for the 600 kW site it has received approval to build on Aldridge Road, north of the 1 MW site currently operating on Winkler Road. Halter has stated that Scenic Hill will purchase the property.

Government entities and nonprofit agencies could not be net metering customers before the Solar Access Act of 2019, which allows tax-exempt entities to contract with solar energy providers such than Scenic Hill.

“In my opinion, if you’re a Hot Springs citizen, you should be pretty proud of what the city leaders have done,” said Halter. “They have pursued this on behalf of Hot Springs in a way that will clearly bring financial benefit. And it will bring financial certainty.”