Insurance & Commerce - Senate

I think when we had left off there was a question that had been proposed by Senator Irvin and I don't see or hear so I don't know if we should take that up now or continue on my comment sir okay she she's in back to back here in just a second okay should I wait to address that or are you going to start addressing here back there okay obviously this is a time crunch and and I'm sorry that we weren't able to get more answers for the committee clearly we are aware that there is a law on the books that exempts manufacturers from sales tax on electricity or natural gas used in their processes that was a law passed by the General Assembly a long time ago and I think that it's well reasoned you know we need more manufacturing in the state we want to incentivize manufacturing in the state they're job creators beyond that I'm not privy to additional information regarding tax incentives for the entities that we represent but I do acknowledge you know that sales tax exemption and we're grateful for that with regard to you senator Johnson's question about capital investments I wasn't able to get any concrete numbers on capital investments I did get numbers on employees from eight of our members which is not the whole group but it's a good portion of them in total the members that we got responses from represent over five thousand five hundred jobs in the state of Arkansas eighty five of those are employed by Arkansas line three hundred and fifty employed by clear water paper twenty six hundred employed by packed of evergreen at five different facilities across the state five hundred and forty two employed biker dal three hundred employed by Martin operating seven hundred and fifty six employed by producers rice mill at numerous facilities across the state three hundred and thirty. Employed by resolute forest products and five hundred and seventy five employed by a warehouse or so again you know these are job creators So kind of back to what I was talking about we were talking about deferred capacity investments and I I hope that I've made that point but I do want to address as senator of an ask me to some of the portions of the bill that we really dislike one of them is the prohibition on net metering if you're an interruptible customer. I think that this issue deserves serious consideration by the Committee interruptible rates are a major benefit of utility grid you know you can see as recently as the huge ice storm that we had a couple years ago there was a need at that time to curtail a lot of usage on the electricity system and that's exactly what interruptible power allows the electric utility can contact the customers that are interrupted bull asking them to curtail their operations and they do and then they turn the power off for a period of usually four hours and they do that when there is a lot of congestion on the system when the demand on the system is at its peak and that allows what we call in the industry peak shaving and it again because of peak shaving that results and deferred capacity investments by the utility so if you can shave your peak obviously you need less production capacity to get to a higher peak and so the the existence of those interruptible customers is a major benefit to the grid and the public service commission has recognized that the interruptible terrifying the inter G. system has been extremely effective it's easy in my opinion it's one of the most beneficial aspects of the state's energy policy it's been a plate in place for twenty five years since the late nineties when the commission required enter G. to open the terrace and set the pricing structure in the terror of but the discounts that interruptible customers get is well deserved and and let me try to explain that by definition an interruptible customer is not taking service from the electric utility when the electric utility is peaking when the demand on the system is. At its highest that is typically going to occur during extreme weather conditions like if there's very cold weather like we saw in the winter storm two years ago it makes it difficult to get natural gas out of the ground it makes it difficult to get natural gas through the pipelines and that creates sort of a supply crunch they're also you know hot weather conditions that can contribute to a peak because of all of the residential customers on the system will be running their air conditioners and that's when the system is typically going to see its highest demand of the year but. Approximately half of the power plants that the utility has are what we call load following plants and that's another term in the industry and what it basically means is that those plants only run when there is a greater demand on the system when the system is peaking. And so because an interruptible customer is not taking service from the load following plants because by definition they are curtailed when the utility is operating the load following plants the Commission has reasoned and this is been a law for twenty five years or more that those customers should not have to pay for the power plants that they are not using and therefore they get a credit against the demand rate components of their electricity bill and again that is well deserved it's based on the fundamental principle that underlies all ratemaking which is what we call cost causation cost causation is just what it sounds if you because the costs you pay for the costs if you don't because the costs you don't pay for the costs that is how all utility rates are set their set based on what's called a cost of service and and and the analysis of cost of service the utility looks at you know similar customers what portions of the system are those customers causing and then they assign those costs to the customers and the design rates to recover those costs and so the point I'm making is that we should not be D. incentivizing interruptible customers this is good for the system and the price signal that the interruptible tear of sins is a very good price signal it encourages customers to adopt what's called demand response which they can do in numerous ways they can either curtail their operations completely unplug or they can self generate But either way there are periods of time when they're not reliant upon the power grid for their operations and that allows the power company to deal with other customers and so if we want to look like Texas you know when you have people without electricity and without he in the middle of some of the coldest times we've experienced historically you know yet let's trash interruptible terrace but if we don't want to look like Texas and we want to ensure reliable power at all times we want to keep that we want to keep that policy that's been seriously affected for the last twenty five years but this bill makes it impossible for a customer that is adopted that form of service to also net meter. I don't see what that has to do with cost shifting I truly don't now. I talked about this a little bit but I want to make sure the committee understands this large customers like the customers I represent have three main components on their electricity bill. The first is called a customer charge the customer charges usually a somewhat nominal fee that's designed to just cover the cost of the system having an additional customer so that's like a customer representative salary a call center costs that are associated with what we call customer counts that's not a big portion of anybody's bill the second component is what we call the volumetric component or the energy component that component of the bill is billed on the basis of kilowatt hours and it's it's you know you take the number of kilowatt hours that the customer used in the billing period you multiply that by the ball you metric rate and that's the portion of the bill that they have to pay for large customers on the introduces some like the ones that I represent the volume metric rate. And I want I want this to be very clear the volume metric rate is less than half a penny thank you have to add what's called the fuel raider to that which is also a volumetric rate but that's just a pass through for purchased power and fuel costs like natural gas but truly the volumetric rate I think for the L. G. S. class is something like three cents. Ladies and gentlemen of the committee the utility is not recovering a large portion of the fixed costs required to serve large customers with the volumetric rate for LGS customers for large customers the way they are recovering those fixed costs is through the third component of the bill which is called the demand rate component the demand rate component is built on the basis of Katie W. which is a measurement of total usage it's a measurement of how much capacity has does the utility need to provide to be able to provide service to that customer. There's a law on the books in Arkansas that says that all production related costs meaning the costs of power plants have to be recovered in the demand rate component for the largest customers on the intercessor now that law is being phased in by twenty twenty four one hundred percent of the production related costs on the interview system will be recovered through the demand rate component for these customers I had one of our regulatory consultants somebody's way better at math and meet calculate the current ratio. This is a woman named Billy let conte who works for a regulatory consulting firm up in Saint Louis she calculated that the current demand re component for an L. G. S. customer on the inter G. system recovers almost ninety percent of the fixed costs associated with providing service to that customer so to the extent that there is cost shifting happening it is not happening. Anywhere near the degree that it is with customers that don't have demand rates for customers that do have demand rates currently the vast majority of the fixed costs required to serve that customer are recovered through a demand rate component but here's the kicker net metering which is the subject of this bill does nothing to change the demand rate component of a customer on the LGS terror of because what happens with net metering is that you simply net out the excess kilowatt hours that you put on the grid or that the net metering customer puts on the grid against the kilowatt hours that they're buying from the utility at the retail rate so it's an adjustment to the customer's bill but it only adjusts the volume metric rate component so because net metering can only affect the volumetric rate component or the energy charge for a large customer net metering does not allow large customers to avoid paying their fair share of the fixed costs of the utility that are required to serve that customer so all of the provisions in this bill and there are a lot of them that are aimed at large customers are not solving the cost shifting problem and that's why I told you want before we adjourned that the real purpose of this bill is to protect the utility's monopoly. This is not a bill that you know only addresses cost shifting if it did it would be targeted at residential customers who have ball you metric rates it would be targeted at small commercial customers who have a demand or a component that doesn't to recover the majority of their fixed costs there is one ray class on the interview system out of four or five depending on kind of how Finley you slice the rate classes there's one rate class that has a demand rate component that's not recovering the lion's share of the fixed costs and that's what's called the SGS class the small general service class but the threshold to qualify for the small general service class I think is ten K. W. subject to checking the terror of and like I said you know seventy five percent of this bill is targeted at customers much larger than that and those customers are not the ones that are cost shifting the existing wall ACT four sixty four of two thousand nineteen acknowledges the difference between ratepayers with the demand rate component and ratepayers without a demand rate components this bill. Treats them all the same. And it shouldn't. There are substantial differences in the rate design for those rate classes and the law should recognize that new wants and the law in the status quo does. Now I I also want you guys to know that you know there's been statements about for example the distance okay you know should be five miles should be a hundred miles. The utility grid is built rate we're not back in the early nineteen hundreds where we need to incentivise wealthy people to build this infrastructure it is built. And you know I'm no physicist I promise you I'm no physicist but moving electrons on the utility grid does not cause additional cost on the utility grid if I have been a net metering plan instead guard and I'm using it to serve a facility on highway ten like a customer that I'm aware of there's no additional costs to move an electron from state guard to highway ten and in fact that's not even happening. You know these are molecules these are subatomic particles guys you put one on and state are you take one off at highway ten it's like a bank account rate when I go to the bank and I put a dollar in the bank I never did get that exact dollar back out rate I mean the banks funds are what we call fungible electrons on the greater the same way they are fungible you put an electrode on the grid you're never gonna get the same electron back so you know the notion that somehow of customers citing a facility some distance away from where it actually is using the electricity that that's somehow causing additional cost on the grid that's just not based in reality it's not based on an understanding of physics. You know I've heard it said that our solar policy is more liberal than California and Hawaii You know that's just not accurate. those states have been encouraging solar adoption for decades and the rate at which customers are adopting solar in those states is way beyond what we have in Arkansas. You know people in California and Hawaii. Probably the majority of residential customers in those states have solar panels on their rooftops. You know this technology can become problematic when there are larger what we call penetration rates but we don't have that here we just don't so to compare as to California and Hawaii is is kind of a false equivalency you know those states they also have renewable portfolio standards which we don't have here you know the Commissioner the the General Assembly is rejected renewable portfolio standard laws teen times and so there's no requirement that we utilize renewable energy here in Arkansas. So you know we can't we can't compare Arkansas to those states and say we have a more liberal seller policy than those states I mean an informed opinion about this is going to recognize that that's just not objectively true on any level. This issue of cost shifting could be resolved in the status quo there's literally an open a docket at the Arkansas Public Service Commission to study this issue right now it's stuck at number twenty two dash oh one three dash you the commission has ordered the utilities to produce a bunch of data in that docket and they're investigating this problem. The the the legislature does not need to act because the commission is already acting on that issue. I want to talk about. Two more things well three you know I heard some concerns expressed about land use it before when we have a question for year yes Sir okay Centerton. I'm I'm not sure how many other people that we have signed up to test however if you if you okay well. I'm again appreciate your comments. I do think we have a history of legislation that has actually been passed on this issue. And so it is within our purview I think to do that. but at some point I think we're gonna have to limit debate we're as of right now we're not okay go ahead servant to do try to make a lot faster just. Have a great senator. Did you have a question I'm sorry your. You would knowledge so that we as a legislature have acted with legislation on net metering yes ma'am okay forces recently is twenty nineteen and I was in the committee when that occurred and I was part of that process thank you. And and honestly I think a lot of the people that are here. Are defending that laws that you passed in twenty nineteen. you know that law provides the commission with the options that it needs to address the problem that this bill purports to solve. I want I want to talk about. The land use issue. You know I understand concerns about farming I mean our our state has an agricultural economy to some extent and I'm representing agricultural interests but I I had another expert that looked at the issue of how much land would be required to put in solar generation to cover literally one hundred percent of the state's electric generation needs and you could put in a solar array that would cover a hundred percent of the state's electric generation and let's let's let's stay with the bill itself this this let's stay with the building of order I'm so sorry but we've talked about people farming rice in China I have no idea why that has any relationship to the bill that we're discussing so again I'm getting frustrated because my time in all of our time is very very valuable and and I'm not I'm here to debate the bill okay the merits of the bill tell me what you like in the bill tell me what you don't like in the bill but I again I don't want to hear about folks Farman rights in China I just don't Johnson. Mr chairman I hate to bring this up I respect my friend Senator Irvin but you made a pronouncement when we're meeting this morning that we would not limited debate that's correct and I Senator Irvin as I understand it's third I do LOL home but let's stick with the original thing that you said and secretary and and and map sentence center there thank you go ahead. I hear what you're saying. And I'm or speak with the chair says here but what I'm what I will say is is that we're going to bring these people into on the bill because that's all I want to hear because I'm trying to truly understanding and understanding what you're doing I don't blame you at all but I don't hear that stuff this state of the bill thank I do think it is cute committee does have the ability with a motion that we can limited debate so if we could just try to hold them to that so that we don't have to do that because I greatly respect what you're having to do up here but as at some point here we're just going to have to or want to move on because I want to hear from the. Thank you PSA yes I agree that the state would would want to be fair to everyone will want to buy it but let's stay with Americans. I have the utmost respect for the members of this committee and and their service everything I have said is about the merits of the bill in my opinion you know this this bill has far reaching implications for the state and its energy policy and and and this bill touches a lot of different areas. But I I I do have a lot of respect for the fact that you has are working on a lot of issues and I don't envy the job that you have by any means I just wanted to make it clear that you know land you should not be a concern you can literally generate a hundred percent of the state's electricity needs using less than half a percent of the farmland in the state. This is an issue about recruiting industry in Arkansas I mean I'm sure a lot of you guys have heard about the U. S. steel mill that was recently cited in northeast Arkansas. Folks that are looking to put plants in Arkansas or expand existing plants are gonna want to have the option for customer owned generation. And by taking that option away it makes it harder to recruit industry to the state it makes it harder to retain existing industry and it makes it harder to encourage those manufacturers that are already here to expand their operations so that that is a consequence of the bill it will make the job of the people in state government who are trying to recruit industry harder. And then the last thing I'll say is a customer and distributed generation makes a gig the grid more reliable and it makes a great more resilient you know when you have resources spread out across the grid and they're not centralized it makes it to where you know some catastrophic event that was to knock out a power plant is going to have less of an impact that enhances the reliability of our electricity grid it enhances the resilience of our grad and all of these things that I've talked about are reasons that this committee should want to incentivize customer owned generation which is the opposite of what this bill does the biggest issues that my group has with the bill or the prohibition on interruptible charges there's also a provision in the bill that allows the utility to recover the cost of the net excess generation that it buys from a net metering customer through its fuel greater the fuel raider is build on a volumetric basis and so when you put those costs in the fuel Reiter it's punitive to larger customers who use larger volumes of electricity and so by putting those costs into the utilities fuel Reiter you work penalizing larger customers that's an aspect of the bill that we strongly disagree with I mean there there are a dozen things about this bill that I could tell you that I disagree with it's unfortunate that for whatever reason we haven't been able to have more dialogue with the bill sponsors we welcome that we we would love to do that but you know there are a whole host of problems with this bill that need to be resolved and I would encourage you guys to vote no senate bill is. Thank you Mr so. I just got it I think I need some help there yes Sir how how do you define customer owned generation I think maybe that one understand what you're thinking when you say that because it might be different than what that says to me when I hear that term yes Sir it's I mean fairly self explanatory but it's a power plant that the customer builds and owns itself so you know customer owned generation should be distinguished from utility owned generation you know. Under sort of the old model of electricity production the utility owned all the power plants. You know we are now in an era where it is economically feasible for some large customers typically to build their own power plants and that's what we're talking about customer owned generation power plants go ahead okay so this again. I'm just trying to understand everything there's a lot of smoke over here spoke over there and I'm trying to. I appreciate that Sir what Sir what I'm hearing is. Good how can go put in its own solar field and take care of its own energy that that's illegal with this bill it has to depend on energy or other G. and a or somebody else for the power issue saying you can't on your own it doesn't carry your own needs it doesn't prohibit them from doing that but it makes it next to impossible for them to justify that economically and there are aspects of the bill that would make it nearly impossible for large customers to install their own generation assets for example the size cap that's in the bill. Under the existing law a customer could install a facility that has capacity up to twenty megawatts. This bill reduces that by seventy five percent down to five megawatts almost all of the customers that I represent have a load way larger than five megawatts. Okay okay so again I'm trying to digest this so what you're saying to me is the customer can build solar. But only when it's convenient and use it only when it's convenient for the customer the rest of the time the energy company needs to be available to provide energy is that what you're saying well certain solar is an intermittent resource senator I mean solar only produces power when the sun is shining I mean that's a hundred percent true and nobody can deny that but this bill as I said earlier is not just about solar it concerns all kinds of renewable energy but yes the grid needs to be there for a seller customer you know at night during a storm that's that's totally accurate but the thing is you know. These customers are sophisticated economically the ones that I represent you know they make decisions based on pay back periods they make decisions based on returns on investment and this bill would make the pricing structure unstable it's not predictable and no large company that's making business decisions would be able to justify the scale of investment required to build a power plant based on the pricing structure that this bill puts Ford so it takes what otherwise would be a stable return on investment totally disrupts that and makes it uneconomic for the customer to make that decision to invest the capital required to build a customer generator so again I'm I'm I'm. Trying to make it where I understand yes Sir so on and and when somebody else comes up here from the other side I'm asking some tough questions or some questions to that might sound justice pointed okay yes so I'd have not bothered by your tuition customer owned generation. Still depends on some kind of subsidy from the other players in the electric grid I I don't agree that it's a subsidy Sir for large customers. There is no cost shifting of any substantial kind you know they are paying the costs required to serve them through their demand rate. There there's nothing about net metering that changes their demand rate. At the same time there customer owned generation facility provides quantifiable benefits to other ratepayers. So if you quantify those benefits and you offset them against. You know whatever nominal cost shift there may be which I don't think it's of any substance for a large customer the rest of the ratepayers come out way ahead when you do that math senator. Thank you senator Johnson you have a question. Not at this time. Any other questions. Thanks for testimony Sir I thank you all for your time thank you. I think we want to the PSC to cover next. Please our dishes of a record. This winter. This is. Circus I need to start again it is not working. Since now okay. Valerie voice of chief administrative law judge and chief commissioner staff for the Arkansas Public Service Commission. I've had a couple of notes and questions that came up this morning or I'm open to questions from the members. So my first note for you if from the last testament to which generated question is. I get a lot of information on both sides on whether or not our current law as it stands because because this cost shifting. I mean so my biggest concern is is we're somehow shifting costs on to the less affluent from the more fluent and I need to understand that so what I understood from just a minute ago is when we have large customers. There is no cost shift. And so. I mean the the simple yes or no with the al but if you could expound on it as well I would appreciate. There is currently a docket opened before the commission docket twenty two of sixty one you in which the commission asked the utilities to file information on whether there was cost shifting occurring we're currently in the middle of it the utilities both in investor owned utilities and cooperatives have filed testimony the interveners in the case the other parties the commission's general staff the Attorney General and other parties have filed response of testimony there's at least one maybe two more rounds of testimony of scheduled to be filed so the commission has not made a decision yet on whether there's cost shifting. But that's the purpose of the docket there is a the. Additionally when the not twenty nineteen act was implemented the commission invited the company's to file for a great charge to come in and file cost shifting I think someone reference this perhaps in the House Committee meetings no utilities came in to implement a great charge to address cost shifting of so the commission started the stock it and asked for all the utilities to file the information. So just to make sure I understood we just don't know yet it would be the clarifying points on that yes that if it were the commission is currently looking at it there's been no a pronouncement from the commission on whether there is or is not cost shifting that's the whole purpose of the docket to look at it okay so the question the next question then is what I heard from the last testimony was there are. When we have large customers there are quantifiable benefits to other ratepayers. There was a there were a lot of things said and so in your expert opinion is there a realistic way where there could be quantifiable benefits to other rate payers by our current solar policy and how it affects large large customers. That would be part of the examination in that docket the law as it currently stands discusses quantifiable ratepayer benefits as part of that calculation. So that is part of the current law that that I ask the commission to look at modifiable benefits. So I won't make a pronouncement on whether there are not that's a pronouncement the commission needs to make after it receives all the evidence in the dock at. Senate. We'll so what first of all. Let's just do some what ifs so what if you all find that and I understand you've probably got a board commission but what what would be the standard course that if you all did find that how would you all proceed. If the commission identifies that there is cost shifting their the commission's current policy is that the utilities can volunteer of and institute agreed charge to cover that cost shifting the Supreme Court in the case said that there wasn't sufficient evidence of cost shifting on which to establish a great charge the commission would have to find utility by utility specific information that there was cost shifting and then we could set a specific charge to cover that cost shifting. Okay. As far as this bill goes do y'all have a position on it. Currently I mean this is new legislation I understand what you're doing what do you all have a position on this bill. On the policy no Sir I believe obviously the legislature is supposed to tell us the policies that in response to implement them. If there's a procedural something that causes us some concern I've certainly like to let you know about that but as far as policy by policy five miles versus a hundred miles or one one verses of what it cost no Sir okay just one more people and. I don't know this so don't think I'm asking someone no I do not know so you you all you all are the ones who is to is instigated this to start this process is that correct is that what I heard you say Sturch what process this study that you all are doing where you're hearing testimony and all that on the call shooting yes Sir okay. So. Why did you all start that was that the calls of the legislation that was passed earlier that said you would do that. He was that and again I would I would probably mostly guilty of voting for this because now I'm starting to wonder you know at that time you know if if if this dollar for dollar stuff and what I'm hearing is true which I'm kind of like Senator board here it was to me all this is smoke on all sides and I just wanna get to the bottom of it and do what do what's right so why did you all start that what did the legislation direct you ought to do that. That was passed previously the legislation does is in all of the Julie matters tell commission to set their appropriate rates terms and conditions of in the stock it's where the large customers were coming in to exceed the one megawatt limit there were allegations that the recall shifting first don't approved at the shelter because of cost shifting or if you approve it let's have a great charge or something to address the cost shifting so in various stockists as we've looked at what rules to implement what cost rate structure to implement. The utilities and other parties have talked about cost shifting and generically and so the commission had implemented this okay for it need to address cost shifting let's do this great charge and by the Chiles come man and then again when they didn't. We thought it would be appropriate to gather the information to determine utility by utility after the Supreme Court case whether there is cost shifting and whether we need to implement a great charge or some other rate Turman condition to address it okay do have one more so and I understand you're probably trying to digest say who knows but. With where you are in the process right now and with your experience what you've seen how much longer is it going to be before there's going to be a decision on that are we talking about something that's two weeks two months two years or what. Two weeks no okay two months may be and it's we're fairly far along in the process I hope it doesn't take two years but these are complicated matters as as many people have testified to hear in but okay so this is a this body set to adjourn sometimes it took sometime in April. He yet again I know that I'm just asking you some you wouldn't for see that anything would transpire before that. I don't think six seven weeks away I don't think so especially knowing the debate is taking place over here if the if the policy changes and we have to shift gears I don't want the commission to have to do something and then you all decide we need to do something else and then turn around so that's why I think it's important to understand what the General Assembly wants us to do and what direction we need to take thank you ma'am. Any other questions. Seeing none any other comments you might well I just I don't there was a couple things that I noted in some testimony this morning that someone that downs on when the senators and ask of where the one to one. Is what it was in rules or statutes. Good. It's the kind of been Senator Hickey that that one no one is in the statute I think someone had referred to with the residential there's various rate structures that we could adopt and they as commission adopted the one to one the one to one for customers nonresidential customers without or with the demand charge is embedded within the statute so that is where the one one comes from the other question when Mr Bohannon Was up here he was talking about the provision on grandfathering. On Lives on page thirteen of the bill the amended bill and about whether the rates could change and and allows them at net metering customer but basically to be grandfathered under the right structure but then the section C. talks about that subject should remain subject to any other injured modification and rates terms and conditions and that that means that the customer is subject to not that they will stay with the net metering right structure there's one one avoided cost would cost plus a great charge they're grandfathered at the net metering rate structure but the other rates terms and conditions what is the demand charge what is their energy charge what's the underlying basic rights That's what that means that that can change all of that metering right structure can't change and that is already and it's been has been in the Commission rules and perhaps even previous legislation but I just noted that those two things or some confusion and I thought maybe I could clear that up. Centerton. What you just discussed on page thirteen another that was a concern that was brought to me but your explanation I think was a perfect explanation for the concern that was brought to me that should satisfy that act concerned and. You said it kind of is it and is it an rule or in statute do you know. Okay Sir I don't know exactly if it's in the statute exactly work like that right now I know that is verbatim from what is in the commission's net metering rules two point seven age has been in effect for quite some time but ever since we've adopted grandfather grandfathering means or as we call it now rate structure law means the net metering rate structure changes but your underlying rates can change like anybody else's if the charge customer charge or demand charger those things change and that we require the utilities to have customers sign an acknowledgement that they understand that it's not that your rights are frozen it's just there your net metering rate structure is frozen so that that's sense quote okay and then it would be helpful and you don't have to answer this now but it would be helpful if you could provide different sections that are in this bill that you may already have been rule as the example that you just gave I'm not sure if there are not that I that might be helpful you don't have to answer that's the only one I know of a okay when I heard it this morning I remember that that phraseology and was familiar and identified in the rules okay if there's something specific I mean most of this is new and so okay of the the amendments wouldn't be in the rules okay but but that that does capture it okay thank you centreboard. Thank you Mr chair so at I've heard this term a lot and I think I know what it means but I'm trusting you to confirm for me that I know what it means so one to one. If I'm selling something for five dollars and you provided to me then I have to give you five dollars for so even so so I've got an apple and and and and it sells for five dollars and you provide me with that apple I have to give you the five dollars. Is that. It's more like I have to give you an apple black center we're talking about a a a a Use of energy if I use a portion of energy you're going to credit me with a portion of energy I'm literally not paying it a five dollars you're paying me but but it's at retail rate it's not at wholesale rate. Right there's no it's not monetized at the rate it's monetized value so if I have a hundred kilowatt hour credit I get a hundred kilowatt hours now how that is based ten cents thirteen cents whatever but otherwise I'm it's just an exchange of kilowatt hours. Okay and the other thing that I've heard that I want I'm looking to you to clarify because your position is and. It if if you're if the seller. Provider if you will sins that kilowatt. Then no matter what whether the Electric Company needs it or not the electric company has to accept. The accepted as a credit. If I've over produce if a customer over produces then you get that credit that you did then you get that kilowatt hour back. No matter what even if for whatever reason they didn't need it. Thank you to the utility neonatology if it's excess power it's put on the grill yes. Okay. Thanks any other questions. Thank you for your testimony thank you. The next we have a shine make memories what looks like. Thank you Mr chairman and members of the committee hi my name is Sean McMurray. I represent this time uh with Mr tensely Arkansas electric energy consumers before I worked for Mr Tinsley's loft with Mr tennis senseless law firm I was in the consumer utilities division attorney general's office for over twenty five years representing the interests of all Arkansas utility consumers. And. Up so I have a perspective of of all for all customers in that my years of experience. And of. I am not in appreciation of your time I would just highlight from the bill a few of our concerns. That we have. Not just for our members but for all consumers in Arkansas. I'll start on page two of the bill. Where. The definition of avoided cost. The fund on. As Page two beginning on the line thirty two going on page three. It's the twelve month average of the prior calendar year of the applicable locational marginal price associated with the electric utilities loads on. In the following applicable independent system operator market that is made conduct independent system operator or the southwest power pool my so or S. PP. The problem with this definition. Is that it's a twelve month average. Of that test of that ill M. P. locational marginal price. The L. and P.. Is the price in the market but that price varies from minute to minute. And. So that there are times when the LMP will be. Ten dollars and there be some times when it'll be negative depending upon how much. Demand there is for capacity at that moment. The problem with the twelve month average is it averages twenty four seven hundred you out of three hundred sixty five days a year which includes. Night time. Weekends. And other times when the solar to take the example if it's a net metering solar facility. Is not producing electricity Senate into sending it into the correct. The highest price will be during the day. When it's when it's sunny because it'll be warmer see all of the highest demand and that's the highest price for the LNP. So therefore this definition by. Including the twelve month average artificially reduces the price. First solar provider because the sole provider is always providing power at higher than the average. The question right yes Sir Mr all right so if you did it by the minute it would still be the same because you're going to still you're going to still have that aspect of it. at that time. No Sir because if the if the aim is to accurately. Measure the value of that solar. Good power it should be when the solar provider is providing that power. Because energy when it buys on the market it might by Senator G. and it it varies for pot by the time that it. Has to buy power we would be doing back up in justice and I apologize I don't mean in Rome no guns Center or boarded calls may be made we need to back up to that this is the definition of that correct that so I guess that's exactly as it sounds aborted clearly does let's go down that road if we don't if you survive maybe that simple but I that I want to hear that. All right so the intent as I understand the term avoided costs in the statute is to. Reflect the actual cost. That the utility avoids. Two when it was. It because of what the solar provider. Is sending the utility. All right. You to the seller provider will never be sending. Electrons into the grad. When the sun is not shining. That's all I need here Mr I understand what you say thank you Sir Sir. Then our there are several provisions looking at Page four line nine. As an example. Where slimmer limiting net metering customers to individual customers whereas the current law allows for commonly owned facilities. Such as farming operations. Then on several farms or a city that also owns a water treatment facility. This thing goes along with what Mr tens of was saying about. Limiting the scope of potential. Self generating entities. Then I'll look at page four. Lines twenty nine to thirty two. Which Mr Templi also pointed out discussed about interruptible customers being prevented from being that metering customers in this bill and I would just add to Mr Tinsley's testimony that several major hospitals. Our would be impacted by this provision. Then I'll look at. Page. Five lines twenty to thirty. Where there is a limit to five thousand K. W.. The size. Is limited as opposed to the current. Limit of twenty. House. K. W. or twenty megawatts. I know that of the Central Arkansas Water witness this morning mentioned that this would disrupt his operation because it would artificially limit the size. And it's true of other entities that would want to have larger arrays. Of soul or or whatever other renewable energy they would want. And then I would also that I would note on page six line thirty four. And this relates to a discussion earlier about quantifiable benefits. It. As you can see the scratched out section eliminated section defines quantifiable benefits it sets a standard for the commission. Because. There was some during the debates about the rules on our net metering. Of there were several injuries that questioned some of the claims by solar. It's about we're gonna we we have all these benefits and solar is bringing some of which are quantitative and not qualitative. I'm sorry our qualitative and not quantitative so this statute I think in twenty nineteen. Of rightly set forth the standard they said well you as are trying to show benefits well. They are you must demonstrate. Costs that are related to the provision of electric service will be appointed by the utility and a monetary value provided to a utility by the use of net metering. As specified by a market mechanism so there's standards for defining. Quantifiable benefits which miss Boyd said the commission is doing now. In trying to apply the standard. To make sure that it's not pie in the sky benefits but the real benefits that can be quantified. And this act would eliminate that. Prevent the of public service commission from quantifying benefits. Eliminate been implementing that all together. And a. I will also finally Look at. And this is kind of technical. But it's on page nine lines fourteen to seventeen. It says. A. C.. Yeah the the cost described under subdivision C. one A. of this section including without limit that are covered through rates used using the cost of service study underlying the rates approved by the commission and the electric utilities most recent application for a general change or modification of the electric utilities rates under that section. So it basically says that the rate. To be set for solar customers or other net metering customers may only be based on information provided by the utilities. In their cost of service studies at the commission. And the reason I say that's technical because ordinarily when you when you are on the public service question is determining what rates are reasonable. That it not only includes the information provided by the utility but also reasonable adjustments suggested by other parties and the way I read this it would seem to preclude the Commission from considering the. Impact input of up. Other parties. These are just a few as I said I don't want to take any more time but these are examples of. Provisions that we that we thank. Went way beyond what is the purported purpose of the bill which was to limit cost shifting or eliminate cost shifting. And inst actually. A. Wind up being an I. competitive in terms of a potential self generation in the state of Arkansas. Do you have any questions for Mr Murray. And. One and then I'd I'd like to get somebody back up here on this of what it cost I mean I understand we went through a lot but you know. I do I do kind of wonder about that so. So how would you how would you attempt to define that that you think would be appropriate to try to do for well that's a fixed assessed your day and I can't I know that Joe thought about that so. Hello. The the the the the The reason I could not I cannot say what that is is because we don't have the in. I don't have the necessary information the necessary information would be in the hands of the utilities. And a combined combination what the Tonys of when they're running their units. Relative to when the of net metering customers running there's so where would that be something that the the commission right there is that something that they would only take into account with that be a calculation that they would have to come in this in the commission of could it have a docket to make that determination. Could we see if they've got a. A position on that tell us from one of the bill that would you like. Graduations on your phone to allow your job. The question was yes ma'am okay so it's four talk about page two of course lines thirty one in this definition an issue that he takes with that is that you know we're having to a definition of avoided costs which of course you sat there and listened to what he what he said that that's basically that whatever they're producing. Or that that's the cost of the utilities are doing and he takes issue with the calculations because he says well that's normally a time of course when they wouldn't be produce I think we can all center and understand that so have you all ever dealt with that. looted or looked at that or do you have a formula yourself that you would use. The utilities already file terrace it indicating what they're aborted cost our under twenty three three seven one seven oh two which is referenced in the part of the definition that's stricken twenty three three seven two defines aborted cost as the support on page two lines thirty three through thirty six. That's how it defines it I believe it's for what they paid of code generators combined cycle that that are I'm sorry at. Power producers that already put on that they are required to take so that is one definition. The way it is is a separate definition so it's basically because. Could I say that's because then the. I mean that's the address kind of an apple an orange deal for me because we really had never looked at something for. Something that's only going to be generated by the solar or during those times so. I mean. It is it is it safe for me to say then that we really have never looked at that as far as something this fire. From an affordable cost for solar. Not specifically for solar now it's just a board will cost and this is as I think Mr Murray pointed out even the one that's currently and is an average the utility calculate Senate pays an average cost and as opposed to a exact time of day costs but that would be would that be. But that but the under that calculation would that be for somebody that was able to generate twenty four seven. Under the current yes nation yes it's for all. Like although also the paper mills had a Loosen the work number I have a a site with their signed up and if they produce excess power up under the as a qualifying facility under federal law sometimes the utility had to take certain amounts of power so they had to have a right on file as to when they took it they had to take it it's not it's changed over the years but it's not necessarily twenty four seven but they could be producing day or that let's just believe so per Mille example yeah okay. Do you do you have do you happen to know of other states if they address this would cost. Riding aboard costs yes force for solar. I assume I have but I don't know what that would be for certain thank you. Centreboard. Thank you are you had mentioned anti competitive and so that It made me think of a couple questions here that I'd like to answer so one of the debates I've heard in this argument about this bill even as it's been amended is seller introduces competition in the market place so question number one is how does competition in this market help the everyday average ratepayer. Well. Ultimately well. To the extent to the extent that. Self generation. Reduces the utilities need to build power plants. Or or set off the the time that the necessity to build new plants. That says ratepayers money. Okay so now conversely. How does that competition hurt the average everyday rate power pair. Yes. The costs that. The average ratepayer. Would pace. Okay. I guess issue that the other way to the extent. That the net metering customer. Avoids. More cost. Then It is for. Of. That could that could be and that's what we're talking about the possible cost shift. So. Then the kind of follow up and bring the two together yes Sir the utility companies themselves are really the only ones who are going to know whether there. Ratepayers costs are going up or are not. I must say I mean like like I. I'm not sure what. I'm not sure I'm following so you're saying that. Competition could reduce the need for utility companies to spend money and so rates might stay level or go down because they're not having to build more infrastructure that is correct yes there are some here verses if they're having to buy and if more energy than theoretically at some point they're having to maintain infrastructure and health things that rates could go up so the only person the only entity in this in equation that could truly answer that is the actual utility company to to know how how the deals are impacting them. I believe that the utility is certainly in the best position to know that okay. Thank you yes. Any other questions. Sixteen no other questions thank you for your testimony thanks for your. Just in your response to Senator Hickey as question you said that the necessary information is in the hands of the utilities but then in reference to page nine under lines fourteen to seventeen I think you have a complaint that. That the that the information was in the hands of the Tel Aviv so no one can you give me and give me an example of the additional information that you would prefer. And when a yes yes by Senator My point was that in an ordinary proceeding for the public service commission yes the. The utility presents information and as as you can get an imagine it's voluminous information and it's complex. It provides that information to the public service commission as its regulator. Other parties public service commission has a general staff which participates the Attorney General often participates other ratepayers or ratepayer groups like our. Of men are of of. Grew up participate. We look at what the information the utility provides. And we are usually disagree. With some aspects of what they say the information they provide. And that's what I meant was. This is a provision that I was referring to serve appears. To limit our ability to do that. Two. Provide an alternative approach to of the information that the utility. Provides because many of this is complicated and many of this involves a judgment call for that. Experts may differ on okay I am and maybe that can be addressed as far as how it appears verses you know the reality of how it's written the sponsor could answer that question and then just one other question yeah I've done probably research on other states as to the definitions that are used in this bill do you know if those definitions that are used in this bill as the new definition if those exist in other states. A there are. There are many different approaches to and I. I think. Everybody's looking for the magic bullet. To get it right. Okay and so there's I'm not sure there's one out there now and I. And that's why in our view. The current law that this law would change. Which provides a mechanism for the public service commission is the regulator to look on a utility by utility basis and will based on evidence by all parties. Make a judgment as to. What the proper rate is for that utility for that night your customer thank is it is a better way to go then to. Are provided a specific prescribed number thank you. Thank you thank you thanks for your testimony thank you. Brent Stevenson. Thank you Mr chairman members of the committee please do not mistake me for technical expert in the subject area in two separate record. Thank you Sir first off I want to make an apology public policy Senator Dismang yesterday I made a comment on my house insurance and commerce committee that I had talked with the sponsors of this bill when I was being questioned by the committee and I either missed heard misspoke I did not have the up to you talked to Senator Dismang or representative fight but I had talked to the co ops about possible language going into the bill and I want to publicly express. My apology to service by thank you. I'm here to talk about the business aspects of this bill as related by Mr Tansley. And Mr McMurray. There's three three major areas here that have issues to be able to create an environment whereby you keep pressure on utility rates to state down. Outside of this these three things if they're not taking the member not addressed then the pressure will be rates going up to the small mom and pop the individual residential ratepayer centreboard. First off you you eliminate those eighty one customers that may have the ability at some point in time. If the technology changes. Different sources of fuel change and they're able to utilize that to construct their own. Our for their facility. If they have an interrupter not allowed to participate. Number one. Number two the five megawatt restriction means if you've got some sort of facility out there and I represent coke industries and for the purpose of which are paper and sawmills that probably have more than five megawatt need. They can't even construct their own. Generator to take care of their own need with the five megawatt restriction according to my counsel okay so now you're subjecting them to it's always been the captive to the utilities just fine. But as long as. The rates stay where they are that's great but we're we're going to have issues on prices going up in these companies may want to bill to construct their own generation now. It's not economically feasible weight but otherwise they would we have one paper mill in the state who is in a self generation self generation type posture and that's it these facilities to. The generator on steam for their operations okay but they do need the utilities are so there's no need for them to be made toward utilities but they do need to have the opportunity and the ability to handle their investments their own energy portfolio as best they can weather be purchased from utilities are to build build their own generation. I'll repeat what I said yesterday to the house insurance and commerce committee and that is four years ago when this bill was passed or the first to the end of two thousand nineteen Bills passed an act I said to this table thank you may be the only one that set in this table and warned that you would be back here with the message some time to try to figure out how to clean it up we're here I will post to you again that this type of. Even though you do guys have the purview to do it. The public service commission is much more technically savvy to make those decisions even power them over the years trying to make this kind of decision on this technical a prospect we'll be back here shortly with another problem to solve. Okay. And just one more. Espectadores. Is that. With the five megawatt limitation. Imagine what the state would be like to be remembered five thousand rolls of toilet paper per day. That's what you're doing your restriction the commodity. And when you restrict the commodity either don't have the supply. Or the price goes up. All rights or any questions thank you Mr chairman members committee. Any questions. Senator Johnson. Thank you Mr chairman Mr Stevenson A couple years ago we had a little weather incident the winter yes Sir. And some the utilities are member that was act you would probably be able to tell me what city it was but one of the municipal power systems in south Arkansas was hit with some unbelievable. Increases in the rate because of where they had to buy on the market because they're not protected by some of the seven years which one that law has no Sir what I do know this Prescott come to mind that it may not be and I apologize to praise god within them at any municipality I have no knowledge but there was something like that Quintel pulling in a raid in PP just went crazy there for a little while If you're if you're thrown into a market if an industry from into a market and that they can offset that with with the in this case having its five megawatt women this is is I think what you're saying is all this is a. Passed on to their customers whether it's through the cost of a roll of toilet paper or whatever is that can what you're saying. For what can be passed on on certain would be but a lot of it cannot be and I must compliment if you bring up the one where they're going to twenty one one of one of the companies I represent had tremendous increase matter fact over a week. Their bill was put their normal one year. Bill was. And enter G. to their credit work with them to get that back down to zero so I had soft energy for making that big knowledge of that business and I think they did it with members of other customers too so there to be complimented for that one other point I want to make if you what is that in this bill bill hello MP the price Mr McMurray was talking about that is a big step in the right direction from where we were four years ago okay the twelve month average may be a little too infrequent hourly may be something you might want to consider that's your decision but the LMP is a step in the right direction that's but there is a positive in this bill. Mr Stevenson The cloud things I'm trying to pin down on this this Going from twenty five megawatt limit to a five megawatt limit is. Is that seriously detrimental to your class in it going forward especially if they decide some kind of code generation or or whatever it it would be a killer if that facility needed to provide its own self generation for whatever reason that may be and be restricted by this fall not able to make that investment and keep a facility operated and as follows that would possibly. Tend to be layoffs and lack of production things like that. Potential yes Sir okay yes Sir thank you Mr Davidson thank you Mr. Centreboard. Thank you Mr chair so I'm trying to again cut through because I've got some less a fluent people who I'm afraid not be paying subsidizing more fluent but we're also trying to balance it were work we're getting a market off the ground yes so. The government is doing whether we were think where the right place or not the government is intervening and regulating the market. One of our jobs whether we like it or not there there. It's not a free market right. So. Now it's good. So. If. There we go back to your companies could build a plant if the technology were available that really there's nothing in here that keeps the plant from building its own power source and taking care of its own energy needs all the time it's just as long as it sharing with everybody else then this action this. Government change makes it harder right I mean the way the way the attorneys have advised me is that the five megawatt limitation is on construction of any self generation that's what they Mr counts on I'm not the technical expert I understand thank you I appreciate it and I need to provide clarification that that's not the way the bills written you can build whatever you want to behind your own meter. It's when you're trying to push it out to everyone else is what we're addressing here so that that's what the limitations for so if you want to build one use it on your own as long as you're not trying to push it back out as a net metering customer do which one. In that in that enters into the economies of scale that if you've got a fifteen megawatt need in order to feed a bill that we need to build twenty five megawatts make it economically feasible you can put it on the grid thank you restrictive that point and that extra ten megawatts within go a long way to keeping prices down for all customers. Thank you Mr chairman members of the committee right but may provide updates for Mister Stevenson but here here's what I what I want to know what I don't know if it's the of the utilities or the finally from the PSC again but here's what I want to know this one to one is requiring this retail price so whatever that's pushed out over the greeted whenever it's not needed. By the electric companies are they still getting that price or does that little electrons is German back here said is it basically just eventually spin out of control and it's lost or they are they required to sell it at a reduced at a reduced rate I mean are they only getting is if if the one one is and I don't know what calculation is a bit of a dollar. But they can't sell it for a dollar. Are they always able to sell it for calendar they sometimes having to sell it for eighty cents and we've created. We've created an issue were were forcing them. To take something and sell it at a loss I think Senator board was kind of hitting on that with the apple when I heard what you said with the apple because it's a credit so but the credit is whatever the rate that they're going to have to do but. When that when that was produced it one on the Greeed. And from my simple syrup for your I assume that the utilities got to take it and do something with it. So. I need somebody to tell me how that works and what that cost is and if they're able to sell it for that. Hypothetical calendar that I put in here or not so again Mr Sims and I don't know if that's for you or I can give you my simple okay I understand you it. The electricity goes on the grid and it flows to where it's needed and utilities and my so figure out where that is in a move that electricity to where it's needed and then dispatched in that format has paid for all that sort of thing it's very technical the and that's what I'd like to know from someone. If if my hypothetical calendar which I'm I'm just making that up of course I want to know is it are they always able to get that calendar are they having to sell at a sell that product if the demands not there at that point in time for less than a dollar. That makes sense to you or I can deal Monday I looked at my sos dash board and talking with my folks a coke industries and the my so days for sure what the crisis and within twenty minutes and one from twenty one dollars twenty three dollars so the price can change pretty quickly whether it be day or not. Some kind. And again it's up to them in the utilities will step forward and. Answer the question or or help me with this. If we have energy John Bethel I think an answer that question I mean I was I mean I can give you might expect explanation to if you can buy something at wholesale. And then you're forced to buy something at one to one it's costing you more than if you had just bought it wholesale and that's at the end of the day and that's why the definition for voting cost is the wholesale rate on average but I think you probably speak a little more depth to it but that that's the general thing that's happening here yeah the Mr chairman. I'm John Bethel drug director public affairs Richard the Arkansas thank you Sir go ahead. the then Senator Dismang really hit it is under the current one to one exchange the customer puts energy does and they receive a credit that's effectively valued at the at the retail price and ordinarily whenever we buy a power else otherwise we would back power on the wholesale market at the wholesale market price which is a lot less than the retail price which would come from where some other generating plant in another state or wherever else or in Arkansas somewhere else yes Sir okay. All right. And that's that's fair there and that that helps but. But what I also want to know is that. And I know you can't track it but so that's coming own that's coming on the greeted and I understand if it's a if it's a time when there's some high demand everybody's running their edition yeah your bill so it for that hypothetical calendar that I'm I'm doing the same that you had to pay I understand your infrastructure costs and all that I'm not I'm not going there. But if that sent out there whenever you do not have the demand. What happens what what are you all doing with it at that point in time because I guess it's just. It's just coming back to the grid and then what happened so I'll know that you know if it's at a time I mean we just have to adapt our system either throttle something back or throw something up whenever that power comes on and off and of to your question is to the whole the avoided cost you know as to why you would use that average number. Because it's a billing construct and what the customer sees on their bill is the average number and so when you're either credit with the retail price that's what's on the bill and that's the it's it's kind of an average number or when you're creating at the wholesale price what they see on their bill is an average number and so it does vary over time but it seems it seems reasonable to use a comparable number as to what's on the bill okay so maybe maybe my question then wasn't the right one it may have been the other one because it sounds like to me that if that calendar if that dollars out there and you all got it your just going to throttle back going on what you're making in producing at that point and you're going to sell that little can water whatever's out here to some retail put customer for the dollar but. The the bill and you can say yes on that or whatever but I will go one step further wait which I think you're going to say however we would rather not do that because we're able to buy. For sixty cents from someone else from about another topic generator is that correct because we really don't avoid anything because we've got to be ready to serve that customer hundred percent of the time every hour every hour of every day and so we're we're we have to have facilities in place ready to turn on turn off to meet that customers need all of our customers needs so we're not avoiding anything because that customers put in power to us and when that customer puts power to is it's not for our purposes and we can't plan for it so we've already planned for and run everything we're going to run and spend everything we're going to spend and so all that does is keep that customer from paying his fair share of the costs we have to produce to serve them and everybody else. I understand thank you senator Boyd. Thank you Mr chair so again I don't want to ask you to get into everyone last part of your business or you know divulge confidential information. But it was testified that an energy company is the person the entity that can best tell us if this is costing energy companies more money that would then be passed on to customers so can you confirm and give away some detail on what's going on there yes Sir it and in the in the commission proceeding that has been the most recently and we filed and commission proceedings over several years the effect of the cost shift on us in the most recent proceeding for energy Arkansas the Kashif from customers with panels and and sold a net metering facilities at their homes in place of business to customers that don't have those it's about seven million dollars annually based on the most recent by the was twenty one was that was the most recent period however the number of systems on that are connected to intercede are growing at a at an exponential rate and so I think that seven million dollars is a pretty conservative number if we don't change things because it's going to continue to grow because the number of systems are continuing to grow and so that's that's where it was in twenty one it's probably if we measured in twenty two would be larger we may if we don't do something and we and and well by this point twenty three it's going to be larger still and so that's that's a number for inter G. I think for all the utilities in Arkansas the the annual number was sixteen to eighteen million dollars at the on the same basis as are seven million. So if this continues at the current rate under the current plan. The significance of that cost shift for your customers is going to be more noticeable would that be correct. Statement yes it's a it's and it's a matter that'll just keep getting bigger. Any other questions Senator isn't. Thank you Mr chairman. Mr Bethel I'm having a lot of trouble with this balancing act between The net metering customers and the error interruptible customers. And. You statement ago basically that yeah we have to have the capacity to take care of all these customers but that's not exactly completely true on the interruptible customers because you have the option to turn off in certain correct in certain situations and they agreed to that for some consideration is that correct yes Sir we can interrupt those customers only in the circumstances that are specified in the in the right. Yes Sir and if we know what it is it's a hundred ten degree day in July or real real cold in the winter it's something like that and I I get that and I've I've seen it even recently with the natural gas side to. Company in my district almost had to shut down things were so bad so I understand that but I still don't see why there would be in this bill a reason for any interruptible customer either cannot or severely limited on the ability to in any way provide any code generation or or or other internalizes yes certainly want that I sure can they're they're two questions there one is the question of whether they can generate or not and it's center Dismang pointed out earlier the customer can can own generation and can use it to meet their needs as much as they would like and they can also put that power to our system under other arrangements the net metering is essentially they're given the wholesale market price they can put that power into the wholesale market so net metering and self generation are not the you don't have to have net metering to have self generation and the reason why you don't want to come by and and you shouldn't combined net metering and interruptible service is because the interruptible customer receives a discount for providing a an amount of capacity that is interruptible and if you have an interruptible customer that is contracted for forty megabytes of interruptible capacity and at the same time has twenty megabytes of net metering that's operating behind the meter at all times and putting power does it sometimes when we call for an interruption forty megawatts which is what we contracted for and what their discount reflects and when the we call for that and when they interrupt their only interrupting twenty megawatt and so they're getting a discount for which they are not providing the other side of the of the service to to warrant that discount and then otherwise also whenever we do interrupt those customers if we are also able to take the value of the interruption to the market place and receive revenue for that an offset everybody's bills and whatever. For you have a customer with a net metering and interruptible service it's not eligible for doing that and so we lose that revenue that also works to the detriment of all of our customers we don't have a problem with working with our interruptible customers to provide the service to them but we just don't believe that it's appropriate to combined net metering and interruptible that doesn't mean that an interruptible customer can't have self generation it just can't have net metering self center right to right it's about the structure it's about whether it's netmetering or not and it's about how that system operates in conjunction with our system and so they could put into the grid but they would be paid based on what the greeted with Septembers playing at that moment in time yes or something okay of. Mr Bethel of energies already passed phase out of the two coal fired plants in Arkansas. are those dates that were stated the dates that correspond with the into the useful life of those plans effectively yes there the the the dates are part of a consent decree that was part of up by settlement of the federal federal to get litigation but it's it's it's substantially consistent with his will I plan with whom was the settlement agreement there were several parties involved in that you tell me who they were all the co owners of the plants and then that the Sierra Club. Sierra Club is sitting the energy policy for the state of Arkansas plans to possibly have a longer useful live not exactly know because under the federal emissions regulations and environmental regulations if we were to try to operate those plants longer than the the date set in the consent decree we would have to make the investments in the environmental controls on the plant and those likely would cost more than it cost to build the plants initially and so the economics of doing so wouldn't be in the interest of our customers. Thank you I would let me can I help one thing quickly Mr chairman I have this is a private or questions for me pardon but are these plants. One of those dates on those plants that you could tell me because I think that affects this legislation because it's all about the total generation capacity I would I would disagree with you respectfully on whether this legislation has anything to do with those plans because this is this is a billing construct for individual customer owned generation and those are resources that serve all of our customers the the current to date to cease to burn coal at white bluff is twenty twenty eight and the currency's to burn code eight independence near near new art is twenty thirty okay thank you Sir thank you Mister chairman which entity will point to just like Dismang take me out and it will go up. Kok afterwards. Where were you here when this one one past yes Sir I was all right were you all down here screaming about this or what what how did this transpire or was there something else close to take place or what during the committee meeting and during the discussions of the legislation you were assured by the chairman public service commission that one to one nobody was arguing to support one to one and that it would change and that we would fix the car shifting problem and. At that time the utilities were given assurance that we would address those issues we had a lot of concerns about the bill that passed but based on those assurances from the public service commission at the time the same the same ones you got as a legislator to pass it we stood down and did not oppose the bill and it passed with the with a wide majority we've just we have since that past those assurances have really not come to back to come about we find ourselves here today in a similar situation where we were four years ago did did the legislation that we passed in I probably voted on but you know we're sitting here dealing with thousands of bills. Did did it allow. For the commission to just that one to one downward yes the rules yes Sir that was actually allowed within the legislation but you're telling me that never transpired it hasn't happened because we've we've continued to bring forth the arguments to support making the change and it just hasn't because of the it just hasn't happened of the public service commission okay. All right when when was it legislation was that was that nineteen yes okay so whose responsibility was it to happen to push that was it was it you all as the. The utilities was it the solar or was it the commission themselves how what what how was that from that committee meeting that you discuss how how where was that conversation and that action supposed to take place in from the public service commission in the proceedings there so did did so did not so we just got out of committee it was one to one and nobody ever did anything there mental a number of proceedings but and and there's been a number of efforts to point out the car she of we've we have provided information before twenty nineteen and after twenty nineteen showing that there is a cost shift from the one to one and and and just have not been successful in persuading the other the public service commission to act on that. And I think there been other utilities to do that and it it's a you know unfortunately we've there and there's been litigation there's been court challenges that all because the the time the toll without getting the problem solved so the failure here the failure here was the legislation the the the let us probably let myself just let me put myself in it because I this point I don't care about take the blame so the the the the issue was here is that Hickey if I voted on at which I probably did it seems like I remember all this I said well it all sounds good we've got this one to one the commission is going to come in they're going to look at everything and. And they're going to they're going to do what is correct because that. That is what we test them to do so that has not happened. So if I'm looking at this right this legislation. Is more specific and we're going to have to require it because obviously if this didn't happen we're in twenty twenty three down that was two thousand nineteen if that is not happen then. What. Senator dismaying here's just attempting to do is we've got to put this in legislation. I mean that's the way I see this I guess it's more of a statement Mr not a question I apologize for that but you know if if somebody else is not done our job here then that's what we have to be tasked to do and and so. You would ask me you know as to how it ma'am and the policies that we were implementing in twenty nineteen we believe were out of line with with a number of state and they still are and what we were willing to to go forward there thinking we would solve the Kashif problem and make it make it better but we haven't and so the combination of the cost shift in the other aspects of our net metering policies in Arkansas make them rather extreme compared to the rest of the country. In my opinion would you agree so that's that's the issue that we always have here whenever we are not specific within any type of legislation and we just did it did it all some other stuff and we're trust in somebody else to get to get it right. That is our failure down here so anyway I'm I'm doing. Thank you senator Hickey thank you Mr president. Thank you Mr chairman what I'd like to make a motion that we limits and what are the let them with me when we take for this guy. Page you're up next we've been sitting here long time today you've got five minutes to tell us what you will tell us. Thank you Sir that the clock is started. Senator with all due respect that's unfair. I designed this policy hi what Mr Bethel dissent is false it's very complicated. And I can't do in five minutes. I've got a chart that will will do better job of explaining. Senate nine. It. Just one point of clarification. You did not designed this policy you were not a legislator you had input into the policy because you were granted that latitude. I've already said a couple of times now and I I do think that needs to be clarified because that that is probably the most money point of all of the testimony that we get to hear. That sent on out no Sir. You're still not a legislator. Some how it is being confused our responsibility as a committee. And as a legislative body. We create the parameters we created parameters in nineteen with the understanding and assurances from you. Before the PSC. It is not the other way around Sir. And so as you're making your comments today. And I know that there's some common you'll have about rainbow and god and whatever else and your authority in your position. It was a legislative body that created in past it not the PSC yes Sir that's absolutely true and yesterday in the committee I said not only that I designed it but I said it wasn't my policy because I don't do policy it was a policy designed that was adopted by the legislature you're absolutely correct about that. Now that that let me first respond to Mr Bethel. What happened was in June of twenty twenty right after twenty nineteen. We issued an order. That said a utility could file a grid fee. That would be applied to future solar projects. To reduce the cost shift even on pre existing. So are facilities. But they had to bring the data not only the cost shift they had to put to propose the terror of the mechanism to charges the new solar people that and we do we issued the rule in twenty twenty of June. And the final rule was approved in December of twenty twenty of the rule did not change it was approved by the legislature. And it permitted the utility to bring a grid fee charge ever since. Not everyone has been filed they could still do that today now they told you they brought all the evidence we review the evidence we manner decision but the court of appeals reversed six judges unanimously said there's no evidence of caution. That was a really important decision because they sent it back to the Committee we lost that June twenty twenty date forever. We had the cost shift ball in front of this. The problem with the one to one debate. Is a matter of quantity if I told you that there was some guy up on the fourth floor of this building who would give you six cents if you brought him free but you had to go up there and you couldn't use the elevator. You wouldn't do it if you want you have one really important question how many units are there how many times can I do this and in the June twenty twenty order we asked the utilities to file your data and tell us what the cost shift is expressed in its impact on customers. Because of its one cent per customer per month. Why are we here for hours and hours and hours. If it's a dollar or two then we start to care if it's five or ten dollars. You got a problem. But the problem is a lot worse because people appeal the decision and I told them repeatedly people are sitting in this room someone dropped the bill for this very reason if you appeal and get sent back to the PSC we can't go back in time and say of June twenty twenty in the car so if that happens in between and guess what happened between June of twenty twenty. And the appeal. The federal administration switched. Gas prices shot up. The solar subsidies at the federal level shot up. We had it under control until the appeal. That's what actually happened and they could still file the good for you today. The problem with the one to one thing and just and and I also said that the committee in this always gets left out that we would measure it cumulatively that if it was de minimis we wouldn't worry about it we wouldn't try to say okay here's six cents in here sorry what's the right number we would take it all and put it in a pile and figure out how much impact that has on the other customers because we've had all this economic development is great. What we need to try to figure out is how we can keep all of that economic development and reduce the cost it to zero and we can't. This bill doesn't do it. The bill is wrong and then Senator Hickey you're right over the target on avoided costs this definition is a standard definition the one that you see struck through. It's that way everywhere. We have my so an SBP. There's also K. so cried seven in fact this slide that will talk about leaders from a presentation was comparing all of the. It's the point of sale. Here's why this bill is bad who is sat at this table and told you why that definition needs change. Such a nobody before you start senate I just wanted to clarify you're speaking you're speaking in what capacity because I know you are former PSA as set point air but if you'll just clarify for us yes the different roles that you're kind of playing here thank you I'm a private citizen I'm aware and support the rules regarding former. Public officials going and I'm in full compliance with those rules nobody is paying me to be here first amendment I'm a private citizen speaking about a member a matter of public concern. So nobody said why they have to do this now if you went and bought gasoline. Today you want to pay what you paid when it was delivered. Not some other average the key with understanding the avoided cost. Is making equivalent. The the utility gets paid the same for its solar generation and then that metering because it takes all the stuff it takes its load it takes self generation it takes its generation and all of it goes to the RTO of all and it's all paid the exact same price. Coal hydro wind gas geothermal hamster on a wheel it's all paid the exact same price and it's what's called marginal cost which isn't the load constantly means it looks like a roller coaster and a generation has to follow and its balance with the marginal cost is is what's the next unit we need going to cost so because it just a little bit what's that going to cost everybody gets paid that cost the utility solar gets paid that cost. The and in the the utility gets paid for the net metering generation at the same cost have the point of sale. What this thing does is it changes it from the point of sale to a point that you've in no it's never sold to undermine it. To make it different than utility if if if you took this step if you if the if my so and that's PPE said okay energy. You've got this solar. What we're gonna do is instead of paying you what it is worth when it generates. We're going to average that. They would go to the first and they would kill and a second because it's wrong you pay at the point of sale. The old definition and I don't know if this it might have been peddled with this is a standard definition I don't think there was a definition similar to this that pre existed this law this was in the creation of this this is been around forever the concept has been around forever the concept is the same everywhere and it you pay marginal cost at the point of sale and so what they do is they take and it should be the same if the utility is getting paid for net metering at the time of the point of sale to credited the net meter gets should be the same. If you run your hydro. From twelve PM mark at all night you should only get the part from running at night it's the point of sale they're trying to say well they separate from and in the the problem I have the best expresses my reservations about this bill is whoever wrote this new this I don't know who put these words on the page. Who ever wrote this new this nobody has sat at the end of the table and said look at page two why should we replace this mess this is why this old definition is wrong and this one is right nobody has said that. They made a bet. I don't think the but that I couldn't catch it but they made a bad that I couldn't explain it to you. And this bill is filled with complexity. That they hold that can't be explained to you to got the solar industry. When the right answer is how do we try to keep the economic development projects or reducing the cost shift at scale to zero. And we did that twenty twenty the public service commission did that twenty twenty insert file agreed fee. Not everyone read fees been filed because it's small now it's getting large and it's even larger because of the lack of judgment of the people that pursued the appeal when I publicly told what the risks were. That's the problem with and then the Mr memory mention benefits why do you subtract benefits then these aren't social benefits social benefits are good but they shouldn't be in utility rates. This isn't teacher salaries this is an economic development this is benefits that changed the cost that's right there on page six. It's in the language is being struck reasonably democratic costs. Based related to the provision of electric service based on utilities most recent cost of service. That means it's costs at full back through the utility system what we should do is take avoided cost get the definition right. What trying to submarine it by averaging hours in that have a lower price offset it with the benefits. That's your true cost shift then impose agreed fee. That puts the other customers to zero then we can keep all this economic development and one thing about economic development US steel. This is how the competition works okay. If you're Walmart Walmart when to enter G. and said we we love having his net metering option that's why they supported. What we want what can you provide us you've got solar to sell. And testified in committee in twenty nineteen okay we got these third parties we want them to sell but we want the utilities to be able to compete with them and have a competing offering. Walmart in inter G. agree together on a thing they called green promise. Walmart energy agreed. And just about the time the agreed here came U. S. steel. The green promised tariff we put solar in that at the PSC as part of at a cost shift for economic development which ever you can development project as a cost shift and we got US steel U. S. steel used towards sustainability seven times in their press release that was what was important to them we delivered but the utility was ready. The utility was ready because they had to develop an offering. So that other customers so they could push back against I mean I I got a call the governor's office more than once there's a thing called sepal be these are the customers at one of these up and we proved it and they signed up to speak to some of their soul or on the field and started attaching it to particular customer so the customers can say Hey were green we got the competition between the utility and that's what I said in the committee let's bring entrepreneurship to the edge of the monopoly. So the entrepreneurs come up and the utility gets better and its work. And we had the cost shift deal it still they can follow a thing tomorrow. Again and again last session when they wanted to be some of one to be reckoned deregulated monopolies talk about the cost shift file your grid fee Senator Ballinger the co chair of of Joint Energy when you guys going to file your good fee the S. C. and I made to help make the decision the reason we ask for the data. In September was because we know what the plan was they were going to try to run a bill without that data and this is that bill. The data doesn't resolve the cost shift the day tells you what it is we need the data with the formula in the terror of to impose the charges to reduce the cost shift to zero how many times the people sent into these tables and offered bills with economic development and happiness lignite Bill I remember years ago there was a research triangle bill there's bill after bill after bill after bill this one took off and nobody's talking about can we keep that pipeline going. And mitigate the costs we can put this bill doesn't do it the first thing it does an avoided cost is systematically undermines the value of solar. And and it here is how you can what is the utility had average there so over the internet so we're business to. What if we said okay utility we're going to be you. What you're proposing to pay the net metering customer and guess what it's not a system benefit comes at your hide. They have you an amendment on manta reverted to the old law before the car got to the top of the hour. That's the truth right there we have two systems to two systems get paid by the same thing by by my soonest PP exactly the same thing. And under the old language which is being stricken that benefit flows right down flow to the utility customers info Senate meeting customers same dollar standard definition of avoided cost point of sale you get paid when you generate just the way you pay when you buy your down the gas you pay the price it is then not the price of this someone's got a question for you here to serve. Thank you Mister Thomas I appreciate this but again another lot bill started so go off and I want to confirm it You keep talking about other people generating solar and then you talk about the utility companies generating solid. Is there a distinction in the fact that like the utilities company job is to. Produce energy I mean versus somebody else doing their job for them for the benefit will. What what we have and I think everybody sees there's an energy transition some people think it's bad and some people think it's good but what we're in right now we have all these different technologies. You have different load with the visa of different technologies with battery the prices are going crazy the price of natural gas is going crazy and we have federal policy. one administration brings an EPA Hammer the other one reverses it now the EPA hammers back you have all of these risks. And in my view and I'm not just talking about the utilities talk about me too because I was the regulator that if you have me and the utility trying to manage all of that risk. Instead let's let customers manage that risk if they want to. It was a risk management choice the same way a bank's indicates alone they make one big loan to one customer then they spread it out among other banks to syndicate the risk this was the syndication of the risk policy with respect to changing technology changing commodity prices and changing federal policy. I understand it through the experts. But if US still has goals are important to them when we let them do something different if the cost responsibility will fall to them why not let Walmart do something different if they want to call themselves green and they want to pay for the right to call themselves green let him do it. Yes Sir Senator. I hear you. And trust me I'm all for competition. But what I'm I'm still not getting two is there still nothing that prevents a company from like going out and creating their own. System I mean if they got the batteries in the way to store it if they have I mean what are we really telling. Some US steel that they can't produce their own energy or we saying that we're going to limit the way other customers potentially subsidize you mean on some level you the knowledge there's a cost shift and we've gone from one of its pennies that's negligible and we don't care but when it gets to dollars but what but that that when we get to seven million dollars a year that starting to get into calendar so I that's where I was trying to displayed here is because I want there to be diverse diversification on the market and certainly if a company is coming here and and bring jobs I will I want them. If they want seller I want them to have it if they want something else as long as it's but not overly damaged environment I want them to have that too but at some point it's one thing if we're subsidizing the economically because it's a transparent tax benefit it's another thing when we're subsidizing it by putting it off on somebody else's electric bill and that's where I'm trying to. Senate really dig down and understand what's happening. Okay to me the key on that is. What's magic about putting it behind the meter. More determining the price that it costs all the stuff goes into the gumbo all the load goes into the gumbo if I. The cost shift is the same even if it's behind the meter. You know why you've heard about behind the meter so much. Because if you're the Little Rock water plant in the middle of Little Rock there is no behind the meter there's no place to put it. All of these restrictions. Our state you to so you can't pretty it's got to be behind the meter well nobody has that much space behind the meter it's got to be within five miles well nobody it's all designed to stop skilled competition and if Walmart would have gone to enter the with five megawatt Max instead of twenty they might not have been responsive. That in a Ford eliminating the cost shift. Caused by people not paying their fair share for the wires. And your bill the eliminate the cautious bill is true to its title and they're paying their fair share the wires why are we restricting where they can use them. They're paying their fair share by definition of the bill. Now it's gonna be five miles it's going to be behind the meter it's all to keep the scaled down to reduce the competitive opportunity to protect the monopoly thank you for the record it's a hundred miles not pass. Thank you was there was five before I. Yeah. But again complex questions. Why why did they change the voided cost. Why haven't they filed the data. They have the data. My energy is filed data on individual products projects but that doesn't matter what you have these unit fits in with everybody the solar guys have data on their product but they don't have the rate structure now one other thing this bill because a bunch of milestones of I'm gonna take one diversion I think this thing will actually help when I get to it now that that might look crazy but we'll get to that let let's let's get to the point were already or what to try to get a little bit leeway here thank you this bill has a number of deadlines and says you have to do something by such and such date. We have a hundred and twenty solar facilities that are sitting in a sum not hooked up in the not hooked up at all. Where they're still paying a full bill because people don't follow the law what you're doing is giving them a time frame to have a follow the law for eighteen months there's a Viet nam vet that's been in Arkansas business they won't hook him up. They're trying to impose a charge on him. And the law says you can impose a charge on somebody unless the charges on file with the PSC we haven't even tried to put the charge on file and they will not come up with that question for you here is a there was an amendment for that. Again yes an outlet if there's a complaint. We have a contempt filing already. They refused to follow the law. What do you do when a regulated monopoly refuses to follow the law we don't write a Hey you guys what about reducing the the penalty on bank robbery. That's what is going on with not all the costs but seven of now let me tell you what this thing is okay this is the best for the first two years isn't Commission term the PSC the one thing I wanted never to have to explain is this disk how this cautious that work as complex as you do a complex of all the time. It is complex in counterintuitive because everything you buy you buy you put your money on the table you walk out and that's it and when you're thinking about Alectra city you're thinking about kilowatt hours here's McGill hours here to check for good electricity is to private products. His capacity. And it is energy. The capacity or fixed cost. And the energy is the meter spending and you pay both and that we use in the car if you're true crime fan you know why it's a a twenty fifteen Hyundai Elantra I brown color so we have here we have two cars that are identical. The same price everything and you look you were going to finance some for twenty years or twenty thousand for five years at four thousand per vehicle you got to pay that four thousand whether you use that car not. You can't send the bank a note didn't drive this month. Next month I'm going to drive and I pay my payment you've got to pay no matter what their utility charges are like that fixed cost and their other utility charges that are variable. And it's mixing them together is very complex that's what causes all of this complexity so we have two cars. The fixed cost is four thousand dollars. Because by five years. If you drive twenty thousand dollars part. If you drive twenty thousand miles at four thousand comes up to twenty cents per mile. But if you only drive ten thousand miles. It's forty cents per mile so one car cost twenty cents a mile the other costs forty set and it's the exact same car but the usage is different that's the demand charge a demand charges basically the customer get sent that fixed costs and that's what they pay now let's look at two twenty five to twenty thousand dollars are you twenty thousand mile person and I just took thirty miles to go down to make the math easy times three dollars a gallon two thousand. So you have. That's your variable costs and so the the what the other car is cheaper but when you combine the two together one car costs thirty cents a mile drive and the other car cost fifty cents a mile drive what causes the cost shift is when you reduce the number of miles driven. When the car is says we direct drive twenty thousand miles. If the car only drives fifteen thousand miles the math changes and the thirty cents goes up. That's what drives the caution there's no sale there's no kilowatt with a price tag it's usage. And when people use solar it reduces the usage and because your fixed costs depend on how much units there are it's called the unit is a sniff fixed cost it changes the rate when we do the rate we have to guess the consumption we don't know the consumption so we guess the consumption we guess the miles and we set the rate but if the consumption comes in different it changes the rate. That's what the cost shift is not on the big customers now what if you did it and we talk about rate design that's charging different customers different amounts so if you look at the fifty cents a mile yes yes I don't care about this with you look forward to okay so all right so however if you driving a car less. Again stuff I don't know if you're driving a cordless courses going retain its value more so yes losing this. Electrons OR whatever this gentleman back here for like referred to this is your put in those you're putting those on the line that's going to their plant and everything like that does that does that depreciate. Those tough calls to or is it or is it not hurting that at all well we are using it less what does so that's what I'm saying so you're putting your putting energy out on lines into their plants and whatever else they're doing. The so that would be where you met you somewhere you missed it with your example in my opinion because this car you got over here that you drove less without the point. That it's going to be worth more. So same is the same as their their infrastructure mmhm and I don't know how much that drags it down or. Wears out a wire that's not that's not my Special don't close but we but if that is the case you have to out that part because there's going to be there and there's going to be a calls to them. Because that's being put put only to the. But you also have the savings of not being generated less wear and tear from running something less you get the corresponding thing on the other side you're talking about with their point yeah. And that's why on page six when they take out the benefits and are not a lot they're not big numbers but they exist so we shouldn't take amount of one example is line loss they say why should I pay that. When I can buy from someone else what if what they're buying is here and what that something else is in Mason city Iowa there's a engineering formula about how much load how much power you lose because of resistance to the line that's a benefit it's a small benefit but it's a benefit that should be taken into consideration when computing cost shift and on page six it says we don't care if you can prove benefit you can't use that to offset the cost shift that make sure cost shift in addition to it improperly can you improperly cackling avoided cost by doing it time other than the point of sale now we can't do the benefits. This isn't getting. Straight up without subsidy this is limiting skill to do to avoid competition now the the rate the thing I want to talk about that I hope you understand somewhat Mr Tinsley said. The retail customers are mostly just pay fifty cents a mile. So this goes straight to point we're ten minutes now yes when the retail the small customers mostly pay fifty cents a mile this is an over simplification so when the small customer puts one out there the detriment to the system is fifty cents and again oversimplification the business customers don't pay fifty cents they pay ten cents they pay that four thousand dollars a year fixed charge. And then they pay ten cents. So there's a difference in value of one to one one two one after they're already paying their demand charge. Has a much smaller cost shift than one to one at the residential. We need to address the residential. Out destroying the competitive opportunity that larger customers have because of the rate design and one question that that the same as crap how does well all of the center has a question he has one six. But think about why they changed the definition of avoided cost who knew that and why did they do it. The New was complicated they've never explained it it made it what was apples to apples apples to oranges with respect to utility property that is the heart and soul of this bill it uses complexity. And the difficulty of explaining this stuff to over simplify to kill a policy that's working and we go five years. We're gonna miss him it will be obvious then it's a mistake we try to keep the pipeline in this doesn't do it it doesn't look at that systematically undermines appointed cost and it takes benefits out the computation separately. Thank you want to know a couple things in hours are what you said I wanna make a hundred percent sure nobody sent me a text or anything that you used to be our our PSC chairman and you've left their. You said you are being paid to be here just a private citizen mmhm do you have any ties to solar whatsoever I have no such ties to so or what so ever in state or out of state okay. Nine. So you drive no income from from that directly or indirectly. I work with my so South transmission issues for an entity that supports more transmission and my so south you could say that well if you build more transmission we want there to be I mean all of this stuff comes together but there's no there's no sewer advocacy groups or producer nothing. Well I guess so but from my standpoint so your security are you sitting there telling me that after two thousand nineteen. Everything was in place. Y'all got everything done you're supposed to be done but it was totally the utilities who did not make the move is that what you're saying yes I'm saying there was an order in June of twenty nineteen June of twenty twenty. That said we see some evidence of car shipped in this is what we got tripped up by the court of appeals if we said there was no evidence of cost shift then there's not a rate to grandfather what we were trying to do is say to cut off at that date any solar going forward would be subject to agreed fee to mitigate the cost shift. Then there was an appeal and and there was a five thousand page record in the court of appeals said two years. And the court of appeal said there was no evidence of cost shifting okay let me ask another question about this to create her to Mr Stevenson to talk about a paper mill so they're they're putting stuff out there on the grid to. Okay not so there's something else whatever it is yes okay yes. With the utility be able to differentiate. The difference between that was being generated by that paper mill and solar is there what you don't do that okay so. With all of this. With. Senator Dismang grandfather this stuff in I see the deal with the wholesale would want people to our rural like this I do struggle a little bit with what you're saying with this affordable calls. But I will tell you right now I wouldn't know how to get there because if you can't differentiate between it when it's coming into them. Then it looks like to me that you're going to have to have some and I assume this definitions used other places maybe that's what the paper mill is been using I don't know if. Senator it's whenever the generate. It's a time stamp you can't tell a soul or electron from a is combining power at the paper mill you can't tell the electrons but you can meter the electrons and you can say this is when it was produced and you take your price when it was produced and you match them together you don't take. It's just like it is now. Just leave the definition alone and nobody's described why you have to change the definition and I'm here telling you it systematically under cuts and I don't know whether they're right or not I saw one deal in summer only this is exaggerated in the summer there was almost a two to one difference in the price. When you cut the price in half you've gone beyond eliminating cost shift at that point you're getting away you're cutting economic development just leave it alone why is it change I challenge anybody in the room to sit right next to me and tell me why you're changing the definition of avoided cost that paper mill is been there for twenty years and the and the and the definition it's been roughly the same every year and and it's a little different but it doesn't matter in a person casts it is every four seconds. They do a price and I think I'm beyond the question that I will ask questions Senator Dismang just in his phone again out with there's a there's an article or is it Ted Thomas starts Conway based consulting firm answer energize strategies yes Sir okay. That no no so we're involved with that no. My first client was recurve. Which does demand response I wanted to do demand responsible for solar and all this popped up we did this over all that's dead all the innovation we were going to do with demand response has been killed over this. The card the card is recurve analytics of mill valley California an open source platform for virtual power plants networks decentralized medium scale electricity generators like wind farms solar arrays and networks power storage systems convey they measure that that would seem like to me that is if not directly is it's real close what would they do they don't produce anything they only measure and they're mostly energy efficient where you paid by them you ever used by them okay yes so you have so Revenue hat so you have received revenue they're not in the solar business. They measure the Alps but. This is basically a software program to take all of this stuff and it also includes somebody being paid to grid use less like if you switch out white indirect Mr Thomas if if the if that's what they're measuring. That would be in direct they are benefiting from the more solar that is out there so that that is in direct so if they're measuring power there that's all I need to know on that. It in any power they're measuring all power not just solar power. With any other questions for Mister Thomas. Thank you for your testimony Sir thank you. Fifty nine were closed. So there's a couple things again I shorten an abbreviated my testimony on the stick with that even from this morning because I said before there was an agreement with the a a a E. a for compromise that was reached in in fact going through all this testimony we had there was a there were no no votes in the house they passed this same version earlier this afternoon and yet that's partly why I appreciated my conversation earlier the question is pretty simple to me. We established ACT four sixty four that was something the legislature created we punted and said Hey PSE at the direction of Ted Thomas which I would tell you by his testimony is clearly biased on the issue as a stance. We trust you to take up this issue here we are coming back in fact Senator at the end of the table asked the chairman at the time how long will it take and he said the same spot how long will it take for this issue to be resolved six to nine months said the chairman. One one was never supposed to stand. It was never intended to stand. Other committee members ask Is there cost shift and is it disproportionately impact low income people. Well in a riddle the response was yes and maybe no. What I'd like to say is we are legislators this is our function we can talk about the PSC all we want to. But we have the responsibility to set the guidelines which is what this legislation is doing. We're taking up the failure of our past chairman in setting a policy today which again we have the right to do and we're supposed to do I believe. If we want to subsidize solar so be it don't hide it in the bill. Make it transparent present the bill let's vote on it up or down but again we've allowed through a game and what I believe is pretty clear to testimony some bias to occur in regards to solar and we've hit behind bills. Three net metering. We've done everything that we can to be fair to all parties. We've grandfathered everything we can every way that you could possibly even into the future you're grandfathered. You can still develop projects today as long as you're underneath that class. All the way up until nine thirty twenty four we put guardrails in so that these utilities are not able to just walk in and pretend like nothing's happening no ward whatever it may be. You can try to be fair. We are not the only state that is trying to come to a resolution on this in fact if you look at a surrounding states and I take offense to the fact that someone says that we're not to pose for one of the most progressive in the country we are. There are so the companies that have financially benefited right greatly I thank you probably heard from a few. But again that doesn't take away from responsibility we did look at what other states do I would still tell you with what we're doing because we are mandating through this legislation. That the energy whether or not they need it is going to be purchased by the utilities at the wholesale rate. Average so that rate per year. We mandated that we are mandating that other states don't even do that. They cap the size much smaller than we have in projects again I I believe that we will still be competitive now will it be as rich of an industry that was probably not should it'd been is Richard was in my opinion no. But with that I appreciate it and I appreciate the compromise and the fact that we are able to work through some of these issues with the mass bass majority of those involved and as far as the interruptible service customers. We are incredibly competitive in the state of Arkansas with their energy rates. Someone say that's on the backs of residential users and ratepayers. I have a hard time. Back up in as far as a compromising conversations I've asked for this is the moment the bill was filed for irreparable customers. And I was told it was because there is a bill out that has yet to be filed and that's which essentially we were waiting on and I don't know maybe there's a game I don't know how it works but that never came to even be discussed until six PM two nights ago. But with that again we try to be fair I I hate the insinuations and points that were not and I appreciate a good vote hi motion that we do pass with amendment as amended. We have a I have a motion by Senator Dismang a second by Senator Irvin to approve as amended plus the will of committee with past say aye. Opposing sign. That. Senator you pastor bill. We stand adjourned.