Insurance & Commerce- House

Please introduce yourself and you may present your bill. Thank you Mr chairman I have Jerry coats come join me at the table please absolutely thank you. When you want to talk. Sir if you would introduce yourself and then represent Hudson you can proceed. My name is Jerry coach from Little Rock and and and agents with New York life insurance company and. I have worked with miss Hudson over the last six months on this bill. Thank you. Colleagues this bill and is is an update to a statute that we already have someone not doing entirely new ground but what it does is that it said it to clean up bill in fact that tries to correct some confusion that's been caused and by some conflicting opinions and in case law and and Mr co to who works in life insurance can go into one of the technical details of it but what it really is meant to do is to ensure that beneficiaries of life insurance policies are able to keep more of the proceeds of that policy and part of the problem has been and how life insurance proceeds are defined and there hasn't been a good definition of it in our code and so it has led to some inconsistent results with how it's treated and in various applications and just you know depending on counties and and location and so what we're trying to do is create a consistent treatment of life insurance proceeds so that beneficiaries have a better understanding of what it is that they can expect in a situation in which they're they're dealing with life insurance proceeds and soap Mr because if you can kind of get into the technical issues of it because you are the expert here. That's a tough introduction. Top of as I said I've been in this business for forty six years grew up and grew up in pine bluff and began this this walk in nineteen seventy seven. Understanding how we got to the place where we are today in Arkansas goes back to the very early part of the twentieth century when they wrote the tax code. When Congress did that they left out for all practical purposes life insurance as a tax target it was a matter of social good in the minds of the Congress back then and it remains that way all all up all the way up until today. The proceeds are ignored for income tax purposes by and large the cash value grows referred the access by the owner of the contract is tax free in most cases. And over the years in Arkansas you can look on a hand out that you have in front of you a twenty twenty one summary by the American council of life insurance on the dollar amounts that come in to the Arkansas economy. On absolutely a daily basis the number of jobs created and so on so forth and and this large numbers very large numbers bought homes have been kept together businesses have been able to pass from one generation to the next homes have it remained in families and charitable purposes have been funded with the life insurance contract. About fifteen to twenty years ago states begin to see the need to protect by statute. The proceeds and the values of life insurance contract from attachment. during that time Arkansas remained sort of way they had established as besides and pointed out the definition and the understanding related to the action taken in nineteen seventy three. and so here we are today and on the backside of the ACL live report you have a comparison. Of the statute. In the states that are contiguous to Arkansas. You'll find that Texas Oklahoma and Louisiana. Have fully exempted. the definition fully exempted the proceeds and the values of life futures contract from attachments with exceptions to that attachment in areas like fraud child support and contract purchased after an action is filed those things that you would find normally in an exemption language but other than that there for the exam. Mississippi in its wisdom existed exempted it up to fifty thousand dollars and as you may know Arkansas's exemption is five hundred. Dollars. Tennessee is exempted as long as the proceeds go to a family. Thirty five states have exempted fully the proceeds and and the values and some of them have condition some of them have limits but here we stand in Arkansas with a five hundred dollar limit and For all practical purposes it has no protection. And so that prompted me to begin to try to find someone that could help me. Addressed the issue and. Miss Hudson and I came together in September and begin to work in this direction. And I'll be happy to answer any questions but that's what brought us here today thank you. Thank you Sir for your testimony or the questions by the committee. Represent Lundstrum you're recognized for a question. Thank you for bringing this I'm I am confused it may just be because I don't understand the policy issues and some of the technical language on page two I believe at the the top or excuse me on page one as is used in this section proceeds unveils it talks about the cash surrender value and then it says It starts to make exceptions can you explain that section. Talk about garnishment tax meant seizure creations and demands. Yes so representative Lundstrum what this section does is it talks about what the proceeds are exempt from with the exceptions and for certain things is as Mr cut planned out like child support obligations Medicaid liens alimony claims and so on and so forth and so this is just talking about all day all of the areas in which the and that the proceeds are protected from attachments Mr coach was talking about so it's giving be had this section talks about the things that it is protected from and then it goes into the next section that talks about that things that it is not protected from the situations in which the prices can be attached we took a look at several of the states that are here on the summary and and it turned out that at Texas had that the cleanest language and so some of what we have here is not necessarily new and the rather working with B. L. are they thought that our entire asset you could use a little clean up and so some of this where we're just cleaning up some of what was already in statute because it wasn't very clear but the meat of what we're looking for really is down but it's talking about at that talking about that what's protecting what's not getting down into that the claims and beginning at line twenty two and where it talks about the claims that are not protected. Okay. Thank you. Representative Ken Ferguson you're recognized. Thank you representative Ladyman give question. Thank you Mr chairman of. The the exemptions rebutted here. So it talks about on line twenty five twenty six a claim by the Department of Human Services against the state under twenty seventy six four thirty six. So that is not exempt. The correct that yes that's a Medicaid claims. You can you can explain. What that is what kind of claim that would be sure so and that would that's that's a requirement by federal statute and Medicaid you know and and whether you're getting at a judgment and amount from court or getting something from an inheritance or whatever if you have outstanding debt owed to Medicaid that has to come out of those proceeds and that again is federal statute and so DHS reached out when we were working on this bill and suggested language that would keep us in line with the federal obligations to protect the Medicaid fund. Follows. so this may not even be affected here but would would this affect the assets of a person say if they were going into a nursing home they were looking at their assets would come into play there. I think you would be intentional that we Allow those to be available yeah. I think Arkansas has some limits already set. own own attaching property. and we want to be consistent with those. But we looked at a number of things that could happen in our state that would be important to make it available. And be imperative to make it available and that was one of. But that's underline is new law in this bill is is in addition. My current law. Well that and and in current law that exemption is only up to five hundred dollars and so you know when you're when you're thinking about there's only five hundred dollars is exempt and there really was no guidance on what to do with the rest of the proceeds and current law which is part of the problem and we didn't have sufficient language in current law that that directed how proceeds were supposed to be handled whether it was compliance with federal law and whether it was compliance with some of these add credit credit obligations and so on and so forth what what that formal structure was going to be for those proceeds and so and so this again and I think representative Gazaway ran a bill last session that that started this outline and and so this one is kind of finishing that job and by clarifying very specifically so that all involved know what those parameters are yeah. Foster brown you're recognized for a question. Thank you Mr chair on this claim by the Department of Human Services I'm just curious if a person is residing in a nursing home and they own a life insurance policy. When they pass. The proceeds of their life insurance policy but go to the beneficiary. We're not talking about are we talking about those proceeds that would. End up in the hands of their beneficiary who might be responsible for paying are you know that if they had a but say they've exhausted all their personal money and Medicaid is is. Providing the cost for their care. Would any life insurance proceeds. That would go to their beneficiary at the time of death would those be attachable at this or not are we are we talking about if if I'm in a nurse are this person's in a nursing home and they receive life insurance benefits. Right the second one because that if you go down to line twenty seven on page two and go to each one in order to have this exemption would be talking about an exemption for beneficiary other than the insured and so if if that if someone in a nursing home had a policy it may be a whole life policy that they could access funds from during their life or or but it gave it to themselves and how that would not fall into these exemptions but if it went to a beneficiary of what. So would they be required to access their cash value. No not thank you. Any other questions about the committee. Okay saying none there's no one signed up to speak for or against this bill that I'm aware of but is there anyone in the audience who would like to speak for against this bill. Okay saying none represent Hudson you're recognized you like to close for your bill yes thank you committee for this time I appreciate the good questions about it to and again this this bill is is meant to clarify that that opinions and are able to keep one's life insurance proceeds that were bequeathed to them by and the loved one who who wanted to provide for them after their death and this make sure that there is no further questions about whether or not they're able to protect more than five hundred dollars of that of that policy and to provide for you know their home their livelihood and worked as Mr Coates pointed out charitable endeavors after their death in accordance with their wishes so and I think it's a great bill I'm excited about it and and I appreciate a good vote thank you for your time. Thank you represent Hudson was the will of the committee. Representative Richardson you're recognized for motion. Motion to pass motion to pass by representative Richardson that's a proper motion is in discussion on the motion. Okay. I think this shows some glaring problems with fiftieth I'm glad you brought the bill but fifty thousand dollars to leave a life insurance policy and then have everybody come in and say we want this we want that when you're leaving money to your children it's I wish it within an hour or more but I'm glad you ran the bill there's no limit on this one that was Mississippi okay. A judge for not making that clear okay it. When we look at all the other states it was really unclear all right and so we're trying to do like some of our surrounding states and let's make it clear okay. And as much as possible. Okay so thank you for the clarification there we have a proper motion that discussion on the motion all in favor representative Richardson's motion do pass say aye. Any opposed nay graduation rates and has in the past your bill thank you. I the rate you're recognized. Please introduce yourself and although we all know you but go head introduce yourself and proceed with your presentation thank you Mr chairman representative David Ray House District sixty nine I'll be very brief colleagues because I know we spent a lot of time going over this bill house bill thirteen forty nine this is the. Eighty sports tournaments but legislation after it came out of committee last time I sat down and met with several of the casinos in our state who had some concerns about how some of the language was a little bit vague I went over all of their concerns at length and adopted several of them and put them in the bill highlight the main ones on page one lines thirty through thirty two this was in response to I think representive flowers questions about income that just says that it's subject to taxation on page two lines six through eleven this was very important the casinos they wanted to ensure that it didn't include house banked games in which the participants competed or played against the house and that didn't include games at our casino style games routinely customarily offered at casinos on the same page line twenty eight we added the words and is limited to so that the definition of any sports tournament is just what is in this bill and then lastly at the bottom of page three story online twenty seven this was the main concern that everyone had I think in committee we just clarified that wagering on the outcome of an E. sports tournament is not authorized under this chapter and that that all that the gambling can only be conducted by a licensed casinos under amendment one hundred and with that be happy to take any questions thank you for your presentation members of any questions by the committee. Saying none there's no one signed up in like to speak for against this bill. K. Singh no one represent ray would you like to close for your bill I'm closed thank you committee for your time and attention thank you represent Lundstrum is made a motion do pass during discussion on the motion saying none all in favor say aye. Any opposed nay. Correct answer the rave pastor Bill thank you Committee have fun with the rest of the bills. What. All represented Wardlaw was going to present a bill he said it but I do not see him so let's go and proceed represent fight you're recognized. Check with you to let me. Members an amendment is being circulated so let's just give it a moment veto get the amendment start reviewing. Five if you would introduce yourself and then you can proceed and explaining your amendment. Okay thank you Mr Lanny Fite District eighty three. this is the of the member we have before you today is the public service commission or reach out to us and said that they needed a little more time to promulgate the rules and so that's the main change we have been Amendment right now. Thank you members are excuse me it also takes the riders out to. Thank you as of five members on any questions of representive fight on the amendment. Where's the beef you're recognized for a question on the amendment. Thank you represented by it does with this amended language of wine this bill up exactly with the Senate bill that's been filed yes it will okay thanks. Thank you identified any other questions by the committee on the amendment only. Okay. Saying none reserve Eubanks has made a motion to adopt the amendment all in favor of the motion to adopt the amendment say aye. If a person on. The motion to adopt the amendment has passed represent by you're recognized to yes I have the at the table with me some of the John Bethel and also other energy. What would you like them to introduce themselves at this time yes Sir that would be fine. Hi good morning Mr chairman members of the committee on John Bethel and I'm the director of public affairs for inter G. Arkansas. Good morning my name is ventral Thompson I'm the vice president of customer service for Entergy Arkansas. I'm Jennifer we can director of government affairs for the electric cooperatives of Arkansas. Thank you rectify you're recognized to present your bill as amended okay thank you Mr members house bill thirteen seventy is a consumer bill it's also got consumer protection and this bill this bill creates a level playing field for all electric customers in the state of Arkansas is stops the cost of ownership all electricity sold to the grid is wholesale with the exception of what is sold by the solar industry today. there is a cost shift and that's why we're here today that call ship goes to all the customers in the state of Arkansas. This year there was uh in two thousand one there was eighteen million dollars that shifted over to other customers in the state. by the contracts we have in place right now that'll be two hundred ninety million by the year twenty forty. And we have not place the year twenty three excuse me twenty two in that yes those numbers will be available in March that will push over a third of a billion dollars it'll be shifted in that time frame. Of the public service commission took testimony on January the twentieth and said that there was from an expert witness and said there was a call ship and the recommendation was a two channel billing two channel billing and basically as whole sale right what we're talking about here today is the solar industry is allowed to do one for one sell back to the greeted at retail rates not wholesale and again they're the only ones that are able sell retail. Let me tell you what this bill does. I received numerous calls issue would guess with a bill like this and I tried to call it a return as many as I could and they were being told that they were losing what they of their contracts which were not the solar people if you've got a contract it carries you and grandfathers you know for one for one. The twenty forty it's still in place matter of fact this bill anybody that gets qualified no line this year receive the same benefits and there was a lot of people that were calling and they were grateful to know about that. Other changes that we have in this bill is of course extending the grandfathering of for one more year to the end of this year should I say. And also we the changes are it can either be two channel billing or one for one of integrate charge when I say two channel billing that selling back wholesale is to retail as they do right now. And also they must be within a five a five mile radius where they place their solar array fifty percent of it must be behind the meter. The net metering customer will be treated like any other customer in the end utility business. All residential is twenty five what's or how to the highest month in the previous previous twelve months nonresidential is five megawatts or higher are the hottest months from the previous. A net metering facility is gonna take territory from the utilities. Of we abetted consumer protection in this bill that was one of the things that we heard a lot up is what my colleagues wanted to consumer protection and after talking to the people I've talked to I think it's appropriate to have that in there. We still have one the most under this bill one the most progressive solar policies of the then in other states surrounding us we're five megawatts most states allow only one medical on about half of them to. we're dropping from twenty we were far above anybody else in the nation. we've made amendments on this bill trying to make sure that no one was had a project that we could not get finished and that's why we've extended it and I think Mr about the will expand on that here a little bit low when he speaks. The recently the California public service commission they published in order and said that that one for one net metering facility just had unfairly harms low income. customers and they went away from it. California why you both have gone away from one for one. And the reason they've gone away from one for one is the burden it puts on other taxpayers. Our policies has in place today are more liberal than California and Hawaii. Of. And at this point I would be willing to answer any questions Mr. Thank you for presentation represent a five are there any questions by the committee hope. I'm sorry your mentor batholiths opportunity to speak. You're recognized Mr battle. Thank you Mr chairman just briefly want to point out that the the bill does not increase utilities revenues it's a matter of the complex Service Commission sets the level of cost we can recover through rates and it's a matter of which of our customers pays and currently with the car shifting the customers with panels shift costs on to customers without panels and they don't pay their fair share of the costs and that's what the bill does it doesn't raise the utilities revenue it simply make sure that the customers ultimately will pay their fair share of using the system secondly it does not destroy a seller kill solar in Arkansas in currently in the in the mice so the Midcontinent independent system operator Q. of there are over five thousand megawatts of projects that are either asking for interconnection or have received approval for interconnection and so those projects are coming to Arkansas they're not coming because of net metering and and that won't change of net metering of the net metering laws change those kind of companies are they're selling into the wholesale market and will continue to do so. The the bill does not deregulate utilities our rates are still set by the public service commission and we can't charge customers rates that are approved by the public service commission and so if we want to change rates even within the confines of the bill it still requires us to go to the public service commission and seek approval and open a public proceeding there's some concern about recovering the net metering surplus payments through through fuel or through purchased energy and that's not anything that would change the the utilities the point of view because currently enter G. Baz wholesale electric power from the Stargardt solar facility located near Stuttgart from the JinkoSolar facility located near Lake Village and the public Service Commission approved of a settlement agreement that included a number of folks that you may hear from today from the industrial customer group of the Arkansas electric energy consumers and the the commission approved a settlement among those parties that those costs would be recovered is purchased energy through that mechanism and so it's treating these purchases from net metering customers in the same way as you treat the purchases from from the other wholesale solar sources of power and so that doesn't and any if that doesn't happen if it happens as it does today those costs are included in the customer's rates otherwise anyway so you're moving it from one place to another you're not change you're not growing the total and in fact when you eliminate the subsidy you're lowering the total and then the law is as represented five point out it makes Arkansas's net metering policy less extreme and moves toward a more mainstream approach. And with that I'll turn it back over to rectify thank you Mr Bethel or certified as or anyone else that at the table that you would like to to speak at this moment before we go to questions. No they share we're ready for questions thank you represent Wharton you're recognized for a question. Thank you Mr chairman Mr Veselin represented by what what wine. I'm not hearing from them this a penalties. Our education cities. Schools and businesses that they are proposing to construct solar arrays but they won't if this bill passes they will be able to do that. Is that correct. Let Mr Bethel after answer that that's all right that's fine under representative Wooten under the bill As amended if a customer has constructed and completed a project and interconnected by December thirty first twenty twenty three they are grandfathered and they'll maintain the one to one full retail credit as they have today until twenty forty likewise if a customer enters into a facilities agreement where they have engineered the project and we've told what it'll cost to interconnect the project and they've paid the cost of interconnection and set up an account they do that by December thirty first twenty twenty three they're also grandfathered through twenty forty so projects that are either complete today will be completed this year or will be in a state where they have executed that agreement pay the cost of construction. And ready to move forward they will also all be grandfathered in so if your school districts and others that have contacted you fall into those categories they would be grandfathered into the one to one if they're not they would go forward under the under the new rate structure the the two channel billing with the avoided cost credit. Well. This could screw up I would have a school district this is is it will share with their board. In the March. But they're not going to have all this work done so hello this is going to impact them what what will they pay you will have to pay more. Or will it save them money or what. I don't know the details of the project but if they if they get it to the point where it would qualify they would they would be grandfathered one one if they don't they would be under the new rate structure where they would pay to the retail rates for power they consume and they would receive the wholesale power wholesale cost for the power that they deliver to the utility but I don't have the specifics on the level of cost for that system or what they might pay I'm I'm sorry thank you Mr chairman. Representative from Ken Ferguson recognized for a question. Thank you Mr chairman I think I have two questions and if not you can put it back in the queue representative fight or anyone at the table we talk about green folly II and. Page seven line thirty two when we had a substitute to the June thirtieth to December thirty first and on the line thirty two will pay seven line twenty four on page nine would constitute this does does it entity being in the construction phase does that constitute them to be grandfathered in for. If they have the engineering work done what kind. Them being grandfathered E. yes Sir customer support for and I can speak for introduce process and then and and I think other utilities have an equivalent practice but the customer would it would execute what we call a facilities agreement means they've done their engineering we've done our engineering and we've advise the customer what the construction cost will be the customer says I accept your proposal I pay that the construction costs we open an account for the customer and then that that if that happens before December thirty first of twenty twenty three then they are qualified for grandfathering in in that situation if they're at the end of December they're likely not to be constructed by that date but they've executed that agreement and they're they're they're for under the law qualified and then it will be completed after that date so they have to. Implement that agreement with that utility company yes Sir and both parties have to agree yes Sir but one party doesn't agree before December thirty first. At. It would it would require executing that agreement yes Sir okay so if the utility didn't agree. Yeah yeah and therefore they would be grandfathered. What we would have to follow the APSC policies that are currently in place with regard to the time frame in which would have to respond and so we be operating under the existing APSC policies with respect to that APS Arkansas Public Service Commission okay operating under their current guidelines that are in place today that would have so long to respond and get back with customers the public service commission rules and regulations that govern how you guys would proceed with that agreement there are there are policies in place today yes the government thanks thank you Mr. Thank you S. M. Hodges you're recognized for a question. Thank you Mr yet represent person covered one of my questions the other one I have I believe it's on page fourteen where it has the five mile radius. believe that's for aggregation can you just explain the five mile radius and why that's why that's in the bill or the the benefit of that. So currently under the wall remote facilities are are permitted and I had that means I to facility can be installed on one side of the state and meter against a location on the other side of the state for territories that for an electric utility service territory that's dispersed around the state I so what this does is for those coming in after who have been grandfathered FOR further distance. After what they're facility they can put it disability within a five mile radius radius and Meeder anything within that five mile radius so they can aggregate those meters within a five mile radius from the facility. I guess my question is what problem is this fixing what is the what is the problem with the larger than five mile radius so with the five mile radius is a reasonable distance because you know that the facility will be distributed to a customer to the customer with an. With one that's certain transformer on that certain substations so that's where as if they're willing to power across the other side of the state that customer that built the facility is actually using it and they're just sending power to the grid and the the further away from the the fifth of sorts or the place where the powers consume from the past where the power generated they'll use more utility facilities and potentially avoid paying the full cost of service of serving that customer under the under the rate structure and so this is a way to help mitigate and eliminate the the shifting of costs between customers. Thank you as a lemon you're recognized for a question. Senate Ferguson asked my question thank. Thank you and represent Ferguson you are recognized for a question one more question thank you Mr. A neighbor who stays a House. away from me so I'll be out in the yard the other day and he it's so something about this bill in the paper he asked me sir brother Ferguson he led eighty three years old he said to he was thinking about buying him soliciting pity said by the time I pay for what I probably did but he wanted to know. It enacted I'm understanding this correctly this is not going adversely affect individual and concern about senior citizens how does this affect the entity individual consumers. The the individual customers will be grandfathered in just like the the commercial and industrial customers if they have a facility that meets the requirements by the end of December this year. They get the same one for one deal that they have today and then if they don't they would be under the new the new rate structure and then for customers such as your neighbor that may have have questions as to whether they're they're being being treated fairly or being being handled in a way that's in conformance with Arkansas law the the bill also adds amendments to the to the deceptive trade practices act that enable the attorney general's office to help protect those customers in the event that they are R. But misled or mistreated by a provider at all it contains a list of requirements that those sellers are required to meet so that those customers have a have good information upon which to make a decision. Okay. Thank you Watson Mr you're recognized if I can get just a little history lesson when this was passed originally and what the intention was and why it's here today Because it seems like it's gotten way out of hand and why not in the public service commission. In in twenty nineteen when the when the legislation was last amended there was uh presentation and there was an expectation of of the. I think the General Assembly and everybody involved that one to one net metering would not continue you were given assurances by witnesses in the proceeding that suggested that one to one would not continue that would change the nobody was expecting that to continue and I think from introduced perspective we we took that and and were expecting the the one to one situation to change in expected all that to be done by December thirty first twenty two when the grandfathering ended that made that made sense that you would start down that path and get to that point we'll unfortunately that's not happened we're still four years later at the the one to one rate structure with the cost shifting having grown a lot over those four years and so I think the the situation as it was presented to the General Assembly presented to the parties in the proceeding is much different and what happened and therefore we believe it's necessary to to make the the policy here at the General Assembly to make sure that what was expected happens. Follow up. I understand that but again why is it here and in front of us today is it a particular if there's a glitch in the law or is to be I guess I'm wondering by the public service commission is not handling this and why legislatures handling that I just like some clarification there I think it's two fold I think the one is Arkansas's statutes are and policies as they're set forth right now are are extreme when you compare of to the policies nationally and so it's necessary to to make it less so when it metering started it was really envisioned as a facility behind an individual customer's meter off centering offsetting all or part of their load and what we did in twenty nineteen is we made it possible for facilities to be remote from the the load they serve and we went from sizes that were more customer specific to sizes that were multiple customer or malt certainly multiple location sized utility scale facilities a twenty megawatt and so it really got the policy out of sync with what net metering was intended to be and what doing that combined with the maintaining the one to one rate structure in place moved costs from customers that have panels to customers that don't and so it created that miss allocation of costs that the Kashif from those with to those without and that it disproportionately falls on on low income customers customers that can't afford those panels and also on mom and pop businesses large businesses everybody that either elected not to have a word can't happen is paying for those that do and so the putting in place the framework that is is contained in the bill will will correct that problem. Thank you Watson road you're recognized for a question yes Sir thank you Mr chairman I have a couple questions having to deal with definitions so on the line should be on page thirteen starting at line twenty three this kind already been touched on but I just I'm a little slow but I was waiting on okay so the terminology says allow a net metering customer that submitted a standard interconnection agreement. And I heard I'm a little bit ago that it was the but you know both sides would need to agree but when I look at this as as they simply need to have submitted the agreement. But not necessarily. And agreed upon I'm I'm I wanna make sure I understand that correctly because can I get back okay here's my agreement with even greater not non grandfathered can you can you walk me through that yes Sir the the standard interconnection agreement is a form document that is set by the public service commission approved by the public service commission and that document is executed and and completed once the project is built and ready to interconnect with the utility system and go online and so it's not a matter of everybody has already agreed this is what we're gonna do at this location and then that that piece of paper is everything's complete it's ready to go online and then the other document that's in that that section is the facilities agreement and that was the situation I was discussing with representative Ferguson where the customer comes to the utility and says I have engineered a project at this location. And this is what I want to build the utility does the engineering work and says okay to serve the facility that you want to build at that location I have to build next amount of facilities and it's going to cost why dollars. And the customer says I'll pay you why dollars they pay they make that payment that they're required to make under the law under the rates that were approved we open an account. We begin our construction work customer begins their construction working at some point in the future we get to where we execute that standard interconnection agreement that we just talked about it so if you've done either of those things before December thirty first twenty twenty three the project's grandfathered at the one to one. Follow up. You're recognized thank you Under the the the terminology that you just referenced the facilities agreement that says or equivalent document could you just define when equivalent document would be and also I know this kind of two part but with the standard interconnection agreements sounds like this is pretty well documented a process. Do you have an understanding of like an acceptance denial ratio of what that looks like you could dive in both of those appreciated all right could I'll answer your. Second question first if you can help me with the first one the the second question is I don't have information on the acceptance that I'll process I do know from from entered the Arkansas is experience we have a a good track record of working with our customers and meeting their needs I think we have a very a good process in the law really reflects the process that we're using and I think the process to the other utilities are using as well and then the facilities agreement or equivalent document the energy refers to that agreement as a as a facilities agreement and the other utilities may call it something else but is the it's the the document that you execute between the parties once you're ready to we've we've identified what the customer needs to build on what we need to build execute that we open an account for the customer they make payment project again they can be denied should they not meet. It's specifics that are laid out correct. Yeah but that's only on technical issues yes it's only on when the engineering the need to be more engineering study done and that's what this the standard is set and it's not changing for acceptance or denial as well as ultimately getting to exit okay thank you thank you very much Mr. Thank you representative representative Alan recognized. He just left for. Represent Hodges you're recognized thank you Mr one more question I've heard some conflicting information on this so for two channel billing if I have somewhere in my home we have two channel billing. Can I use the energy I'm producing. First at my own home. Before I send it to the created order two channel billing is what I'm generating automatically push to the correct and then I'm having to. Pull down from the from the utility yes under two channel billing you can use what you can use what you generate and if you generate more than you use than it crosses the meter and would go on shall be registered on channel two is coming out and then on channel one what you're purchasing from the utility is measured and you pay the the rates are set by the public service commission for that service so but the thing that you consume and generate consume on your side of the meter is the customer you get to keep it you get to do that first thank you may I may I also say that in Arkansas you can self generate whatever amount you all of your if you're going to push it on the list on the grid in your limitation about this bill and have been in the past we haven't changed a nonresidential of it also you know you've got the option of getting a battery and and the Bill have one for one if you got a battery and not push back. Thank you. Any other questions about the committee a reference yes thank you I have a couple questions about cost shift and I'm not sure who the right person to dress that I just address it to the conglomerate here You you mentioned the numbers which I was glad to hear the number not necessarily what it was but that there is the eighteen million dollar cost shift I think with the previous year still waiting for the current year is that accurate So that is. Well my understanding is that is being pushed on to the standard electric customer somebody who is not operating with solar on a net metering agreement is that correct. celt. How much cost shift. For re shift could could we realize or see in some way shape or form should this bill pass like who is going to see that on there bill how how does that how does that materialized. I think what the the cost shift that has occurred has occurred over time and it's growing because the number of systems in place is growing and so given that we're by under the bill would be grandfathering facilities through December of this year I would expect that a shared facilities at one to one that Kashif will will continue to grow until you stop. And then once you've what you've done that after December thirty first of this year going forward the Kashif shouldn't grow it is if you are not go substantially if you've ever been implemented the the two channel billing format so for projects that commence on that date going forward that amount should grow what you get since those projects are grandfathered there twenty forty that amount is is going to be with us whatever that is at should continue because those projects are going to continue to operate as they do today but you'll you'll cure it from happening and happening going forward follow Mr if if I understand right now forgive me if I get the statistics on the terminology wrong but it roughly is it that the the retail rate of the kilowatt per hour is is IT twelve cents that is that about right in that the the wholesale rate is about five. Is that and so the differences of about seven. It depends on the utility depends on you know what you're you're measuring the the the market price in but somewhere between about eleven cents and forty six cents or twelve cents and the forty seven senses for the air for the sake of discussion will just about the rise it's five seven twelve. Would we expect those numbers to change between now and twenty forty. Yes I would because one thing is the utilities are continuing to invest in our systems bill bill project retired things and so over time utility rates will change ours have grown at a compound annual rate of about one and a half percent or one percent over the last several years but that that number would change the the base rate number the that the utility charges and then the market price for electricity does very and so it with very year to year over that I think it's reasonable to expect it would over the the from now to twenty forty both would change and then but the wholesale retail difference that all not the number but more less the process remains the same for those on the net metering yes Sir okay so that the cost shifting will adjust. Roughly in parity to the the rate increases it's all going to be yeah one the one still if for the customers that are and will be one one yes and for the customers that are under the new rate structure than the they wouldn't be and the and the the Kashif should be eliminated by the two channel billing approach okay I fall thank you thank you Mr. Thank you any further questions by the committee whether Walker you're recognized so far all of my questions were answered that one and I'm not go back to where both parties have to agree on this well for my hang ups that so if electric and entity decides to reject a project even though all the requirements limit like let's just say that was submitted everything was made on November thirtieth or whatever because you made a comment about there would be the public service commission would have something in there about how long they would have to respond I have no idea what that requirement would be so is it a hypothetical so let's say the person gets a notice that that had rejected even though I met all the requirements what there is an appeal process where they could appeal it to the public service commission exponentially if the denial notice with provided after December thirty. Yes so currently today any time a customer has an issue or complaint with anything at the utility they have the right to go to the public service commission and open up an acquittal a complaint and so they they still have that ability today and going forward yes Sir follow up. You are recognized it and if the witness we get a little closer to the mark for level of trouble hearing about that thank you for state Russian Walker so. So it won't affect if the appeal process is after December thirty of it will not affect them being grandfathered in if the public service commission approved that they should have been approved subject to check I would think that when a complaint is that the public service commission all activities stop on that particular account and so subject to check and based on the PSC's guidance I'm I'm going to state I want to say yes that it would but things with Paul's until that investigation is complete but again that subject to check the rules okay thank you. Thank you as of eleven you're recognized. Thank you Mr chairman Mr battle could you explain to committee the concept of interruptible service. What that actually means and how does this bill effect that one way or the other. interruptible service at a at a high level and I've got a I've got a companion here that's pretty well versed if we need to but a customer receives a discount of on their monthly service in exchange for being at interruptible so if we have a need for capacity either call by mice or a system issue for energy we would say customer I need you to interrupt your operations down here minimum demand and and they they respond and so that's of basically what interruptible service is an under the bill you're not able to come by and interruptible service and net metering and the reason for that is is a couple things primarily the biggest reason for it is is if you have a customer that is signed up to be interruptible for forty megawatts of capacity and so we expect whenever we say customer interrupt that will get forty megawatts of capacity if that same customer has twenty megawatts of net metering that's running all the time behind the meter feeding power to us then we call for forty megawatts of interruption from and we've been we've given that customer discount that reflects forty megawatts of interruptible capacity but what we call for the interruption the customer only interrupts twenty because they've got twenty megawatts of net metering that continues to run and so at a real federal high level that's the problem because the customer is getting a bigger discount than what they're providing and then secondarily we can take the the the capacity of the interruption to the mice market and sell it as a resource M. and the revenue from that we used to offset the energy costs for all of our customers and so we also lose that and so that's the reason why you need to prohibit the combination of interruptible service and net metering and further we've had decisions for. the federal energy regulatory commission as well as my so that would indicate that you're not supposed to have those things in combination and so that's and if that's about as detailed as I can provide you on on that at this but this point but I do have a person that expert if you want more so I'm assuming that we're talking about with interruptible service we we're we're talking about manufacturing facilities we're not talking about residential correct correct usually large manufacturing facilities would be are are some hospitals you know their dates but it's larger customers usually multi megawatt loads I think would be a fair description and of. Of the clients that are currently. Your customers that have the opportunity for the interruptible service discount as opposed to the net made how many of them currently we are on interruptible service contracts. Of the net metering customers yes I think there's currently there's one there may be more than one but the the the bill is written such that if a customer has gone through a PSC proceeding which they would have to for a facility that is large enough and and I know what least one customer has done that and they the Commission has has made a decision about About that customers application then that customer does qualify for grandfathering until the facility if it if it is constructed within the deadline for grandfathering per the bill they're grandfathered and the law is the bill as written also if that customer has the question of whether you can come back and interruptible service and net metering and the Commission the and the for the customer that that we're we're aware of the Commission hasn't ruled on that issue let's assume that the commission does rule on that issue the bill enables the but the customer to keep the deal that they are trying to get approved by the public service commission so it doesn't disrupt in either either with or without interruptible service that that decision still lies at the public service commission and it be either way it goes that facility is grandfathered provided that they are in service or under construction by December thirty first and and it is it the you know we would meet that okay thank you thank you Mr. Thank you represent eleven any further questions about the commit represent road you're recognized yes thank you thank you for your time you've had to answer questions questions and I just had a follow up to representative walkers question but that is a very good point and I've heard a lot from my constituents that concern whether they already had a project with you guys a clearly addressed how they will be grandfathered but those who are in process you said subject to check that you would need to verify for sure on the the appeal timeline so to speak for. I understood the question to be does. With the APSC extent would be a PSE challenge or or inquiry Paul's. Or allow more time passed the December thirty first time frame I think that's how I understood the question and I said that based on the current policies when a complaint is made at the public service commission all activity related to that account essentially pauses and to the extent the APSC agrees that that is the right policy that we would follow then that's what that's the policy would follow yes yes and so I think I followed you as well to an I prophetically I think that the question at least for me or for for my constituents would be should they apply whether to business or its individual they've done their project for a reason the date has passed and then they receive their denial even though maybe they submitted before hand or say they were even denied right up to the date in the end of December whatever should they be denied I would like to know is there an appeal process for them if they're denial took them past the December thirty one date that's the that's the question of what I wanted to a clarifying answer. And and I think they could I have well I can't speak with authority but one possibility would to toll that date would be to pay the the connection charge that's been quoted to them at that point and then resolve the dispute. But I can I can certainly say permittee's point of view it would be our expectation to work. And we and we do each day to work with the customers to try to resolve those issues as expeditiously and and agreeably as possible to John's point we're gonna work with our customers to make sure that we do the right thing by them yes and I appreciate the answer I felt like for our positions is had to ask and I appreciate that thank you. Thank you of the road any further questions by the committee. Representative image you're recognized for a question. Thank you Mr chair can you at can sorry how long does it typically take a project to execute the interim connection agreement. I'm not sure I can answer that question today because I think it takes it it it could vary based on the product right But we have thirty days to respond to an interconnection agreement to eight dollars that we received it and to provide feedback to the customer that we are working on that And connection agreement. A follow up and whether and how often they have been delayed in the past. From entity standpoint I don't I don't recall that there's been any. Agrees activity with delaying application so uh from my perspective I can't speak to that but I don't I don't think that that is the case. Thank you Watson Lundstrum recognized for. Any further questions by the committee. Okay saying none will now turn to the public assigned up the perfect first poster signed up as Ted Thomas to speak against the bill. Question right when you're recognized thank you Mr chairman and could you tell me how many people we have signed up to speak for and against total number of people. At this stage what twenty people who have signed up to testify. Mr chairman I like to make a motion based on all the questions in the discussion that we've had in the number of people that we have signed up I would make a motion that we limit the debate to five minutes per person the. So your motion is to one to five minutes on the per person for the public debate is that correct okay that is a that is a proper motion all in favor represent ways placements motion say aye. It post I know. The ayes have it we will limit it to five minutes for public debate. Sir if you would please introduce yourself in a positive test one thank you are I'm Ted Thomas I designed this policy. I liked the movie Rambo enters a great scene after Rambo is recapping. And not one of the law enforcement guy says what in why did Rambo get created and colonel Trautman Roxanne and said god didn't create Rambo I did I designed this policy is not my policy it's the state's policy shortfalls but I designed it had Central Park and in the five minutes isn't a fair way to discuss this I've Springs it need to be heard if they won't get hurt because we just got capped at five minutes and so. First of all a California Ted here that's false our policy is a more liberal in California California clues environmental benefits and we don't the environmental benefits exceed their avoided costs are avoided cost is higher that's false that's not true. One of the largest Texas is larger there's no monopoly in Texas you can build as much conseils much. Size is being described as liberal it's not height economies of scale or will you build markets around what capitalists know about economies of scale when you scale and make it bigger you save. This bill limits scale they said they want to the PSC and they didn't get what they thought they would get with his what they didn't tell you they went to the PSC and didn't get what thought they would get and the appeal. And six judges unanimously on the court of appeal said they had not proven their cost shift. Five thousand page record. They had two years to decide why we hear represent once from ask the right questions why are we here when you create the PSC. To deal with these issues. Let me give you some math on Kashif one cent per customer per month does that bother you. Maybe maybe not one cent per month okay now it's time to buy six hundred customers. Then times that by twelve months a year. Then times it by twenty years. That's a one point four million dollar cost shift. There is one point four million dollar question if the well maybe it's a penny a month put that in perspective. Three things there of key design features designed by many this is risk management there's all this talk of an energy transition that appears to be happening is filled with risk prices move technology moves federal policy means how can we measure this risk in a regulated monopoly it's ME in utilities select criticizes Marlys tomorrow but I was in a very key role. I wanted to spread that wrist other folks of other people of a different perspective on what the environmental risk wise with a technology request they could do it. Spread the risk. That's what. We're talking about projects we're telling ourselves. We will these projects because of this policy. We gotta Sabin we gotta say from. What's great about this policy we argued for years ago there were no projects. There was hopes and dreams of entrepreneurs and risk takers. We came through. We are project these projects and we're going to projects the you can't see. We're going to businesses under get started. The trump. Question. Again not fair to do this in five minutes I designed this policy there's hundreds of millions of dollars we're gonna chop it off. That's what the bill is designed to do is completely consistent with that. Courtship was inherent. Courtship was put protection was inherent in the design of the bill. It was inherent in our policy. I said one one would not stand and people run around with a little videos. But I also said that we would measure Kashif cumulatively so to minimize cost shift wouldn't kill projects we would measure it cumulatively that's the right way to do it okay. Thirty three cents six cents okay what would you do that how many units are the. That's the data. For two years around this place in showing us the data file that they could file a grade fee at the PSC to day with the data. They filed one round of dated the PSC. He went to the court of appeals they lost all the issues. The other thing we lost with that with this is you not bad not to appeal because we put it twenty twenty date and it. Any costs if you could mitigate after twenty twenty. The appeal and we lost that day in the cost of. What we do now Mister Thomas up apologize to have you but the five minutes have expired would you be willing to accept questions yes okay the representatives. Well represent age you're recognized for a question thank you Mr chairman Mr Thomas when you introduce yourself I didn't get to you representing today I'm representing nobody a private citizen I'm a former and there's lots of laws that say what form of people can do those laws are good laws I follow those laws there's nobody that's paying me to be here today a private citizen exercising my first amendment right. All right. Not covering this bill right that this is a flawed bill and it's a flawed process you're recognized webservice. Other entities that sell power to the degree that or to the electric companies did they sell it to them at wholesale yes if you will have all of the only one that we're trying to sell back and forth that's to sell at retail that's wrong but seems like to me based on what I've heard today if you look at Page two of the bill. The bottom line thirty two. It changes the definition of already cost to the point of sale the current definition is the point of sale if you buy eggs you go to the store you buy your eggs that's what you pay that's what the marginal cost is indestructible ends on the bottom they changed it to the average. So you have the utility solar system on one side of the street and the third party on the other side of the street they both sell it at the same rate. They get credit at the same right to my cell but under this bill you're going to average in the other hours when the prices lower and you've created an imbalance so the utility gets the same benefit permission and the third party unit for my so and it's PPE. But there's a cost of going the other way because they're going to pay them more. There's a problem with this bill the bill the complex and it's intended to deceive and in hopes that people can't explain it now I disagree with that that's that's that's. Unbelievable say that but I'm not there either so as to explain its own power back to the grid at row wholesale. Other entity other solar entities that sell to the to the utilities or to the good work you want to call it that sell it back posted. Utility customers. I don't understand your question. Other. Facilities that that are using solar to generate electricity are those are there any out there that are selling it to the Electric Company that wholesale. Not in the current rates. But what we should do is we should cumulate that. And measure with the cost shift is if if the gentleman here is Mr a and Mrs Mr B. and they want to do a business deal. And there's a cost shift that affects representative warrant the right way to do it is to measure the cost shift. That influences him. Not just one party hiding the data where everybody can see the date in debate it and then if if Mr a and Mr B. still want to do the deal then they write a check. Instead of banning the transaction you should mitigate the cautious but that's a question of data. The utilities have the data and if not filed with the public service commission. They're hiding what the date is so they can exaggerate it so they can got the solar program that's what's happening and you and you to and and this is one wanted they systematically under pay through the change language the solar. Utility on one side of the highway. Mister Thomas thank you man to that question but I do believe represent Allen to. You're recognized thank thank you Mr chairman all my colleagues represent Lundstrum asked the question earlier to entity with this bill was passed in two thousand nineteen and in the end the requirements of the what was supposed to be done in two thousand nineteen was not done. So why was it. It wasn't done because according to the to to the court of appeals they didn't provide the evidence that they what they thought would be done should be done. That's what the court of appeals found we had a five thousand page record and the court of appeal said you have not proven cost shift. That's why it didn't happen because they didn't have the evidence. Follows the term it's my understanding. That the PSC. Did not do. What they were supposed to do. The PSC entered an order that said if you can if you can prove bring us agreed fee charge brings the data that justifies the charge. And then for anything after the date of that order the new solar projects will have that charge added. So that the cost shift is flat and out to nothing. The PSC said a good policy they could follow agreed fee today. They don't want a data based grid fee or they would file it today what they want is a is a formula that ran through the legislature. Where you can't even respond to questions that changes the rates in ways that meet that I understand and a few of us understand. Most people don't. And then it's gone. We'll keep the projects we have and they'll be no more well exported ran kids and grand this is how we get that up to forty nine and everything we have a business deal that people want to do. And we have political power. Kelly made deal Mr Mr Thomas said I think you've answered that question we got to try to keep this moving we do have someone else. But jim Ken Ferguson you have a question thank you Mr chairman I have a question of the chair I have a question for the public service commission that don't know if the here and I don't know would you allow them to come to answer it's that time table question that I have. thank you for that I frankly do not know if the PSC is here we can certainly find out and and I will try to get someone here to assist in your kitchen answered your question so we'll work on that. Right now thank you Mr thank you what about okay. Thank you Mr chairman that the PSC anomalies there is a cost you yeah what what the PSC found was there was potential evidence of cost shift potential or was there a motion that there was while also important is the world reasonable because it is just opinion everybody's month we probably don't care there other variables that change more than that so we wanted enough cost shift that is on reasonable we found there was potential evidence of on reasonable cost shift okay and the court of appeals reversed that say for example it was a call yes so who pays for at the time who pays for the cost goes to other customers. Of the costs will guide me yes I have at this. It has do is paying for right as as our. The lawyer fees we had one coopted had nineteen customers in a spent hundreds of thousands of dollars those costs are also paid the the armies of lobbyists those costs are also paid in your bill all costs are paid in your bill so you're saying that the consumer pays for yes absolutely okay thank you that's why we had costs should mitigation in the original policy. Thank you miss Thomas I see no further questions for Mister Thomas of. I apologize resume wouldn't you're recognized. Mr Thomas. That's a pretty serious indictment of a corporation to say that they're hiding data up to the war how come you all in it appears he had come out and take some kind of a subpoena action or something to get that information if you feel that he would they were hired to get to know well you know they're hiding the information that we returned to me a little bit we represent one we did. What what when the rules for passed through this centre my question on the hell you know that they're hiding Davis because we ask for it in September after a committee hearing where multiple witnesses said we'll give you all the data we wanted the public service commission asked for into if you're not gonna fall for agreed fee we want to know what the cost shift is and their lawyers have opposed and ask for to delay in the PSC proceeding that was designed so that this committee could have the evidence. But that doesn't mean they're hiding it just because it took a legal maneuver I mean that's certainly if you that explained it in that manner less different than saying that they it is taking a legal maneuver or not to file it so it's not publicly known before a vote on this policy is in my view hiding it thank you Mr chairman thank you Mr toms. I thank represent represent road during. Yes thank you I had one quick question follow up with an explanation for your answer. As I understood this at the end of twenty twenty two was the one to one supposed and. The grandfathering I don't mean to catch up I just yes or no on that because I'll I'll ask for more expansion on the answer what the bill the twenty nineteen bill gave the the public service commission the discretion to measure the cost shift and also to measure the benefits and to cumulated what this bill deletes any consideration of benefits so you don't take the benefits with the cost you just take the cost and gave the commission to discretion going forward to set the policy. The policy that we chose to set wish to keep net metering and allow them to do one to one and give them agreed fee and the appeal. Kill the timing of the grade fever another great fee can still be done to the law didn't require us to move we acted on evidence and then the the court of appeals reversed part of all ruling because I said there wasn't any evidence of caution. Okay thank you. Thank you committee and members I see no further questions Mister Thomas Mr Thomas thank you for testimony. We will move now to the for side and Kurt Castleberry if you would come to the table and speak for the bill. Sir if you would please introduce yourself and you can proceed with your testimony and do remember you're limited to five minutes so try and plan accordingly I thank you Mr chairman good morning everybody members of the committee my name is Kurt Castleberry I'm a former employee of inter G. Arkansas spent forty years at the company I recently retired I work now as a as a consultant for energy Arkansas. And I don't have a along testimony by any stretch I just wanted to convey that in my previous job responsible for planning and operating the interests Arkansas's of power and power delivery system as well as this generation supply plans and I I just want to say that let the committee know that the solar industry is very robust in this state. you my father Mr Bethel talk about how many megawatts or being planned to be added to the state and there's a lot of them the mice so Q. is where you pick those up that's this public information on on their website but there's over five thousand megawatts there that are being planned to being added to the system I have generator interconnect agreements assigned those are the contracts that allow them to connect to our bulk power transmission system lot of power to put that in perspective energy Arkansas has a the peak load of less than five thousand megawatt so a lot of power to be added and then there's a long list of others there kind of waiting in the queue you know in the in the range of more than twenty five thousand so the soul as rich live in well we have are very excited about for the state we've added a lot of economic so that benefits all of our customers all seven hundred thirty eight thousand of our customers and certainly the big benefit to our industrial customers who have sustainability goals so well wonderful of situations being able to expand solar in our state and so I think that's a it's a great place to be this bill does not prohibit that by any stretch at all as you heard Mr bevel say so that's all of the communicates the committee and if their questions of me along those lines I'd be happy to answer them. Thank you for testimony any questions by the committee. Okay thank you thank you. Next on the list is ed tensely to speak against the bill. Please plan on your test for the last five minutes yes Sir will the. The New. But first a little bit of background my name is intensely I am the chief executive officer Bernard I graduated from Sheridan high school and from the university of Arkansas in Fayetteville. Bernard and its predecessor companies have provided energy services to large energy consumers in Arkansas for thirty years during that time frame we have worked for nearly every hospital university and college in Arkansas. Importantly in this setting there is one thing that Bernard is not we are not solar developers Bernard is never profited from solar energy or net metering. Secretary of in other words my only interest in this debate is the best interests of our customers second a disclaimer I am speaking on behalf of myself I am not speaking on behalf of any organization any specific customer or even Bernard. Third moving on to House Bill thirteen seventy I would like to make two points and then concluded the recommendation and if I have time at the end I like to re address three of the committee's previous questions my first point you've been hearing about solar energy net metering cost shifting or the lack there of from utilities and the solar industry for you for several years and it's been a hotly contentious debate both sides act as if they are right on every point almost to the point of it and indignation if you suspect that somebody is not telling you something and you are absolutely right the utilities are not telling you to very important things first the utilities primary concern about customer owned solar energy and that metering is not cost shifting but rather an erosion of their earnings regulated investor owned utilities only earn a return on their assets when customers install solar generation systems it differs the the need for utility investments in large scale power plants in other words customer owned solar power is the utilities competitor second utilities are also not telling you that cost shifting in Arkansas at this time is in the tail to support this statement I offer two pieces of evidence one the utilities have attempted and failed to make their cost fifteen case on four separate occasions at the Arkansas Public Service Commission and the fifth time at the court of appeals as Mister Thomas mentioned second electricity rates in Arkansas have not increased faster than in states that do not have a net metering. My second point house bill thirteen seventy goes far beyond preventing cost shifting includes many provisions that have little or nothing to do with cost shifting including the following house bill thirteen seventy limits the size of the seller rated five megawatts preventing large customers from realizing the benefits of net metering house bill thirteen seventy also prohibits net metering for customers such as hospitals universities and large industrials that take service under ended up under in interruptible rate schedule from my perspective the only purpose of these provisions is to restrict utility competition limit customer choice and expand the monopoly status of a regulated utility beyond its intended purpose finally I encourage you to vote against house bill thirteen seventy for the following reasons first it will directly kill large scale solar projects for Arkansas hospitals universities and colleges second by killing these large scale projects house bill thirteen seventy will increase healthcare and higher education costs in Arkansas third by providing an uncertain price signal to consumers the definition of avoided costs that we heard earlier house bill thirteen seventy will essentially stop customer ownership of solar in Arkansas published twenty three twenty twenty three hundreds of jobs will be lost forth by killing large scale solar projects and essentially stopping customer ownership of solar Arkansas post twenty twenty three House Bill thirteen seventy will divert millions of dollars of federal incentives that would have otherwise been paid directly to hospitals universities and colleges in Arkansas under the inflation reduction act to other states in short it house bill thirteen seventies enacted bad things will happen and one of them will be higher education higher health care and then hired high. Our health care and education costs for all Arkansans the conclusion I appreciate consideration and your service to the state of Arkansas dyestuffs division time. We have ten seconds okay well I don't have. I did two or three questions or after that like to readdress hopefully I'll get an opportunity amount. Well so we're now at that stage represent Allen what did you have a question. Thank you for coming today and I appreciate your comments it seems like you have laid out a doom and gloom. Synereo. So can you substantiate what you saying what you just said about kill and of hospital costs going up kill economic development. So forth and so on so you can you explain what you got to information from sure Bernard does a lot of economic analysis on behalf of Arkansas's universities colleges and hospitals that's what we do we help them identify opportunities to invest their capital in different types of transactions many of them have implemented aggressive energy conservation programs based on those analysis and so what I'm saying is that unless there is a certainty of the return on investment they won't make those investments and that by changing the definition of what the how the economics work that definition of avoided cost which is highly uncertain that the universities the colleges and hospitals will not make those investments and solar power you contrast that with the utility as you heard the utility representatives state earlier when they have an investment in solar power they're automatically rounded recovery of those investments either if it's a PPO eight through the easy are one investment they own the return on rate base so they get automatic relief and guarantee of a return whereas they're denying the customer the same right under this bill okay. Thank you. These questions for questions thank you ma'am thank you for your testimony did did I hear you say that solar owners are competing with utilities yes in a in a fashion that they are that utilities competitor every time that a customer owns a solar generation it defers the need for a utility owned generation plant the only way that the utility earns a return is on the investment in assets it's and it's unlike other businesses that may have an opportunity in an unregulated competitive environment they have a return on assets and or sometimes called the rate base and they're allowed to earn a return on that if they don't have those investments where the where their investments are fully depreciated they're they're opportunity return does what so what happens if the customer invest in solar generation assets it reduces their investment a recent study actually a study that was done in twenty fourteen so when say it's that recent by the Lawrence Berkeley lab concluded that net metering would have little or no effect on ratepayers but it would have an adverse impact on the stockholders of investor owned utilities with solar is indeed. Competing. With utilities that how does it make sense for a utility to buy it at retail from the competitor. It's a you're using now why would they pay a net metering why would why would they pay a one to one credit is that what your question is yeah I mean that we keep hearing retail wholesale the way I see things now it and I'm just trying to follow all these costs actually gives me a good segue to go back to one of the questions that was asked earlier so I apologize I wondered that but I will come back to yours the question was asked earlier about two channel billing and how that works in a specific example was given a residence so typical residence in Arkansas uses approximately twenty thousand kilowatt hours per year of electricity to produce twenty thousand kilowatt hours per year you would need approximately ten kilowatts of solar power but the average used at any given instant in time at that residence is only three kilowatts of power so for the predominately when the array is in use seven kilowatts on average of its power is going to be exported at the avoided cost rate and not credited at the retail rates the answer given earlier they would be first credited at the retail rate is not quite accurate because the bulk of the output but actually be credited at the avoided cost rate not the retail rate when the array was in use so that want to get that question was asked earlier back to your question why would a competitor the utility be forced to buy power from another competitor at the retail rate because in this particular case the benefits as alluded to by Mr Thomas outweigh that that do that the impact in the utility is made whole for those costs through engine in this case for the formula right now plan which is enacted by the General Assembly and an accident twenty five of twenty fifteen. The benefits outweigh that. I don't know any other business mine included that I would be forced to buy from a competitor at the cost I'm selling my car regulated monopoly in in you are not you're in a private industry and you're competing without benefit the public service commission is the only proxy for competition they have. It's a different environment for questions related committee recognized for a question thank you Mr chairman you talked about okay so were feel that uses solar fuel. Is competing with the energy or anybody else's so there so rule electric. Are you aware of other entities with any companies or individuals. That also compete with the insurgency. You know there are people that own wind farms. The excel at power that they compete with the internet you there are companies that own power plants that are operated by coal or natural gas certainly there's hydro power so all of these the individuals and companies out there for your definition are competing with the insurgency so why is sold or any different than these other folks that are using just different kind of fuel because these are customers that are forced to buy their power that they need from the regulated monopoly. Those those independent power producers are not. The key differences there that the utility has a monopoly status to sell them that power they can go by somebody else when you say they're competing with energy the only competing for the generation assets not the transmission or distribution assets getting that getting the wires from the generation plant to the customer but the the utility has a monopoly on that. But that's a different service when you talk about transmission wheeling power from across the state that's a different company altogether anybody this generating power no matter what the fuel is they're competing like all other businesses in their industry. So why are we giving advantage to one particular section of that industry just because they use a different kind of fuel to generate power as I mentioned earlier the simple answer is the concept the benefits outweigh that they that may become what are those benefits I don't hear anyone if it's one of the many benefits and economic benefits the lower cost of health care at a lower cost of higher education increasing the portability and access to health care and higher education to all Arkansas. The creating jobs economic stimulus that provides there's been lots of testimony the Arkansas Public Service Commission on those four dockets and at the court of appeals and I mentioned earlier that indicated substantial benefits to the citizens of Arkansas. Thank you for testimony any other questions but many. Seeing none the next to speak for the bill is buddy hasten. Sir if you would introduce yourself and you may proceed with your testimony implement the five minutes Sir somebody Asencio Arkansas electric cooperative corporation for thirty six years of my life ever since I left the farm I've been dedicated to power generation or distribution of power. Above operated personally or managed every form of power on the the did we talk about today whether that's a nuclear reactors at the North Pole. Solar fields when fifth windfarms natural gas coal hydro. And I think you guys have asked the right questions. We're here today represent the coops and I may be although everybody tries to be me. The one person that's going to speak to you today that I do not have a profit motive Cooper is an internationally known as good for communities. People come together in cooperatives to band together for strength and power against monopolies so property was was formed eighty years ago for the very reasons that we're talking about monopolistic stuff I am here today representing one point two million our Kansans who belong to cooperatives that come together to seek affordable reliable responsible power. I think it's fair to say there is a cost shift every PSE in the country you could you could go out and spend days on Google and find it it's it's real we connect with everyone can haggle about how much is reasonable that's probably a good debate is somebody paying ten dollars and I like to feel reasonable one dollar two dollars I think that's not that's that's interesting. But we had one to one retail in this state for twenty years. And. There was an expectation on the last to go around that this thing would kind of come to an end. But to expand the things we would get to avoid it cost I think Thanks bill is a good compromise to do what was originally intended which is get us to avoid cost which does in the cost shift. And we are not able to end of the current cost shift nor are we asking to so as they told you aye aye Mr Bethel so perfectly explained all the cost shifting that is going on for twenty years and all the cost shifting that will go on for the remainder of this year will continue to go on to twenty forty that will continue that would be considered reasonable. But this curve is growing exponentially not linearly exponentially and if you were to go out look at S. PP if you go look at my so what's in their queue to be built in the State of Arkansas is thousands of megawatts of solar the solar panels everywhere in the state are going to keep coming to the state they're not going to dry up and blow away I'm here to date not to stop to shut down so or I'm I'm currently commissioning a hundred and twenty two megawatt solar array that will come on the summer I'm not anti solar all of the above I love every form of energy on the planet I believe in diversity in every area of my life and energy is another place that I believe in diversity diversified power generation portfolios are good I'm here today because it matters who pays for it. Yes we're regular by the PSC yes our customers are treated as if it were a monopoly work co op most co ops aren't regulated by PSC's in Arkansas they are but. The the the the other questions should be asked the gentleman asked a question about your eighty three year old neighbor that wants to put solar on. What about the eighty three year old neighbor next door that doesn't have solar you asked should we care about the senior citizens I care about both of them equally the man that once the solar and the man that doesn't happen when the man that puts it on gets it at the expense of the man that doesn't have an receives no benefit for it as a cooperative that is not fair and we are absolutely about fairness down the line for all of our members and that really is the real reason I'm here today and I do agree with the customer protections that were put in at the end that's something I think it's just good for everyone of the state to make sure everyone's getting a good deal with what they buy my job is not to run out into the solar panels of our members homes my job is to give them what they want but my job was also to make sure that what they want is fair for everyone in the cooperative and that's why I'm here today and I appreciate your time and appreciate all the attention you're giving this. Thank you for testimony many questions by the committee. Okay saying none thank you thank you. Mike Hester is next to speak against the bill. Thank you Mr chair yes Sir good introduce yourself to your with then proceed with the testimony Mike Hester superintendent Batesville school district we were the first solar project for pre K. through twelve in the state of Arkansas and we were the largest energy efficient project for schools in the state of Arkansas two thousand nineteen our board has established for goals student achievement tractor attain staff and help create efficiencies and establish partnerships and we will do that through the Act of two thousand nineteen through our solar and energy efficiency mode we were able to identify savings and what we did how we check the box office we took all those savings and we gave it to our teachers so when you start talking about cost shifting and benefits for me it stands like this we were able to give our teachers a ten thousand dollar raise on the base in just four years because of those savings. Now that's is bigger raise they've ever had we are the oldest town in Arkansas and that would never happen without ACT two thousand nineteen our teachers have always been below the state average and now the law with the state average what we're trying to push for the upper half because of these kind of initiatives that we're using to get the money back to the teachers in his or that benefits that teach if I put the best teacher with your kids every day. My neighbor our community there get the best teacher we can afford and we can compete with and I'll write you measure that but I measure as everything in a young person's life that what we put beside them are quality people because the benefits of this law and these acts and then we were able to then to reduce those costs to keep pushing that for teachers I'm working with a hospital they're using the savings they saw what we did our line college the hospital a White River health the city or county they all are trying to start issues or they're in the middle of initiatives because the hospital can reduce the cost for patients and insurance premiums the city can patch streets the county can build roads with the savings churches can make tight budget stretch that meets needs throughout our communities because of this act does it and it wouldn't have happened without this act and so we've even tried to because we were the pioneers and they feel we are the pioneers though because with the pioneers and so solar we wanted to enjoy that The New I'm restrictions that went on that you can go a little bit bigger so we're trying to we're I'm cooperating with our hospital to be able to do to get into a bigger field to get more discounts so that invite I'm so that we can translate those savings to our student achievement because when you start when we put students first that starts by putting the best teacher with those kids so that's how this translates for me as a superintendent and as I work with other non profits we don't want to see that your way it takes risk for a school board for me as a superintendent when I put my career on the line to try something nobody else has done when I asked board members to step out and to do something that they may get tarred and feathered. A town for. When you mess around with the initiatives when it when we come through the more featured on national tell we've been our to to be featured on national television international media groups and we tell our stories because it we've checked all the boxes to bring it around to a benefit for company but when you limit that and start messing with it superintendents get all tense and boards of education get tense because if you're going to allow corporations to comment and then Pinker with it and reduce that you're going to scare everybody off on initiatives and so that's my fear we've got this thing rolling it's it's working and we don't want nonprofits to lose that for what they're doing for their communities. I appreciate you considering I wasn't here me today thank you for having me here. Thank you for testimony would you accept questions sure. Personality recognized thank you thank you for coming today my question is how much you'll statements were tied to energy efficient versus all the. about About half of them we had a five point four million dollar project in energy and solar and we had to millions was guaranteed two million over twenty years of savings but with the cost of things and everything it socially H. backs and all that we we've in this section will be four million now but about half of it was so what happens the energy efficiency okay so you would agree using less energy self like the best approach but using less energy yeah we are we're trying to be efficient yes as well as find and what's his what's unique. No Way I my thirty year career have we been able to nonprofit to generate revenue and that's to me that's wonderful because now when you talk about not having to go ask for millage on my community because I needed to raise for teachers or help with facilities or whatever I mean I have to cooperate them to the city and county and higher ed and we ought to come to understand is on militias and so if we can cooperate and work with things like this we all can do it for less because of this and so it saves everybody then on taxes thank you for coming thanks for being so passionate thank you appreciate it love thank you represent Lundstrum recognized for a question yes thank you for what you did for your school I'm a little confused this bill doesn't impact you because you're grandfathered in. M. M. what am I missing here. What you're missing is the impact of non profits to still continue with that and other school districts to jump in on it to make it a bigger impact for the state and and you will scare off when this is perceived in my opinion as corporate greed that tries to monopolize and then that means you're going to be in a mass is the school board and superintendent or as a hospital administrator when you try to jump in here and this thing is is volleying around SO you're going to lose you're gonna lose people want to take the risk and take conditions they'll still be able to do this and still be able to participate correct. I don't I'm not sure that and I'm not sure if it will be at the same cost savings because you know it almost was not worth it for two million twenty years but the efficiency side also kicked the okay thank you. I apologize representatives road for question Sir how many teachers did you give a ten thousand dollar raise to. we had Thank. The base that was every teacher that was our base the ten thousand dollar rates went up plus as well as we did how many worried that we have turned fifty teachers certified to folks and we have we gave a we were a twenty year state twenty expense we moved up to twenty five we only paid to a master's and we moved up to a docket which is two more steps for four degrees a beyond that you're saying that sold or gave you two and a half million dollars in savings to give your teachers. give us a break is more than that with efficiencies at all what those efficiencies have nothing to do with solar all right now LED lights things other than just energy thanks yes Sir no it would just solely so solely seller it was energy efficiency as well. To the further questions thank you for. Thank you appreciate Sir I apologize if you would take one more question vice chair brown has a question sure. Thank you for taking one more question today we've been talking about cost shifting and we're talking a lot about utilities cost shifting up seller customers cost shifting costs for infrastructure and maintenance and building out the of utility lines and what have you shifting all of that cost on to non solar customers but now you and the gentleman from Bernard have been maybe Ted Thomas we're talking about these benefits that accrue to the community because we have such a robust the seller program. But I'm having a problem with that. We should not. The building those kinds of benefits off the backs of people who do not have seller who are not. Paying. Their rightful share of those overhead costs to the utility companies are bearing that that's that's my. That's a question it wouldn't wouldn't you agree. Do you understand the question I believe I do and what I would say is. When you're in the hospital. And the kid I educated is got your life in your hands you're going to want them to have had the best teacher that they had could could get to work with you and that benefit how you yeah I know you can't crunch that in the form of at that moment hi but the quality of life that we're able to benefit our nonprofits with with these benefits are a quality of life issues that make a big difference in everyone's life and so if I can attract and retain the best teachers to stay in the profession there's not anyone that you can see in society that didn't get the benefit of that. I understand that I think we're trying to address that with our education bill I'm just I'm just having a problem with the well you know the the claim that will keep our. Insurance premiums down our our education costs down By you Ballaugh ng seller. I don't I'm not quite certain how much I mean are you were you selling seller back to the greed or were you just producing for your school and then drawing whatever over region needed one of the great into the grant and get the credits for against our bill. and and yes ma'am of the the institution that gets the benefit of solar has to make those decisions about how they use those profits or those credits are revenue and in our district we chose to put it back in our teachers because again for us to put students first we have to start with our staff and we feel like that's where the most money is game for what we do and it's a pity people business and how do commend you for raising your teacher salaries thank you thank you. Thank you for testimony no further questions for you the next on the list is lance McElroy you're in the audience. Please come forward. Well I'll still say good morning since before noon on behalf of mayor George McGill Mr call Gaskin and myself I'm lance mac for the utility director for Fort Smith they send their warmest regards some of you may know George he couldn't be here with me today so. As a city we are opposed to the bill. as someone who fully understands the impact of four eight. Both water and sewer and understands what goes into that which is not as simple as what it sounds and much of that same principle goes into electrical rates and things that are passed on because you're looking at infrastructure cost this is still not a good bill. We are looking at solar because solar makes sense in the aspect of dropping the overall impact on the taxpayers and ratepayers. The question was asked about well why solar and why not gas or coal. Shore has much less environmental requirements. Then. The gasp generated plants coal generating plants and nuclear electrical plants otherwise those will be going up all over the place when was the last one the you remember being built. in addition to that. We have for treatment plants to those or water to form a wastewater wastewater plants or on either end of the city and we have room at those plants to put in solar panels. If under this current bill with a seven mile difference between as the crow flies. If we put it in at one plant. There's no benefit at the other plans because the five mile radius. Well to water plants on different counties which means if we installed it there yes we may have some benefit because when it comes to utilities water and wastewater electrical is our highest cost even exceeding personnel electrical is our highest percentage cost. But if we did that there will we're selling into a smaller area than what we could. you know it limits the size of a bill that we could do but yet we just heard about a hundred twenty megawatt that the energy company can put in. Yet the city of Fort Smith would've been limited under this bill. This would eliminate a choice of of being able to save taxpayer and ratepayer dollars. And again city of Fort Smith as against this because it's not good for Fort Smith it's not good for the river valley and as we view it it is not good for Arkansas and I thank you for your time. Thank you represent Ladyman if if you to accept a question represent what amounts more happy thank you Mr chairman thank you for being here I don't know I don't quite understand why you're limited because I've run water plants and treatment plants the license from both the better mayor and I understand you're you're big enough that you can do your own P. P. agreement purchase agreement while what would you do that why are you limited. if you need five hundred may once you could put in that many. Panels there's a thousand acre solar farm going in about Newport right now so I don't understand why you couldn't just do that have your own agreement. What what could you do that is to do this netmetering. The issue is and and you're right this is gotten very cloudy because it started off with a talk on net metering. And you're hearing about a lot of other issues that are tied into this bill not just net metering. I'll be truthful with you I have a spare a talk with someone who works in Electric Company I highly respect this person we agree to disagree on that metering for the simple fact that. If we want to build our own form our own solar farm and we became the the mass producer for Fort Smith. The potential of us having to also build the infrastructure. The winds and the and all that that's already existing. Would be great. So I'm I'm looking at kind of a holistic aspect not just net metering although net metering again it is U. as this committee is hard. Where is the data I am a chemist by training. Data is what drives my decisions. And I have not seen the data that there is now to that point my understanding of the public service commission they do allow for grid fees in a grade fee says that if you're going to put it into a credit it's going to cost you know there's gonna be depreciation of that great of the lines and all that they can the the public. Entity that owns that read to charge something that's how I understand it if I'm wrong I'd be more than happy to defer to it to the experts. But the fact is that hasn't been done those calculations haven't been done instead. Going with something that has been in place with the public service commission. Who have done a great job they looked at it they said. I don't think so court said and I don't think so the next thing to do as well we didn't like what the court said we didn't like with public service said let's just change the law and that's how it appears and that's what we're seeing. So I hope that answers your question not really could have fallen. The power plants for twenty years and when you're talking about building a power plant the size for your needs from the infrastructure Wouldn't be that bad and it should be economical for you to do that you don't have to look to the grid if you've got a big load you're better off just doing known staff the high ordinance that sort of thing that you need wouldn't be that much money if you're going to benefit the savings that you're talking about you might get the solar so I don't understand your your point on that So why are you opposed to other fuels I don't understand that I'm not opposed to other fuels in fact I think we the United States I said it takes more environmental. There are more environmental regulations for those other fuels to generate to me I'll be truthful with you and please don't hang me out but nuclear power is safe and it's clean the reason we don't see more of it in the United States but we see it all over Europe and other countries is because we have in our memory three mile island and three mile island scared the bejesus out of a lot of people that's another discussion for a state but thank you very. I don't see any further questions B. thank thank you so much thanks to speak against the bill is Jeff Weatherly. I know I'm a pretty myself please yourself wanted five minutes to members to remember I know it's confusing but the do you do not ask me for permission for a follow up just ask your questions hi my name is Jeff Weatherly representing lexicon Inc we are a family owned construction and fabrication company headquartered here in Little Rock I'm also representing myself as an individual we think we were one of the first private companies to build a race we have to raise we have one in north northeast Arkansas Mississippi County a in Mississippi County electric cooperative service area we have one in central Arkansas in the interview services area we spent of our company and you know individually we spent about six and a half million building these two arrays one thing that we did do we we have to pay the interconnection fees that's one thing it's not been talked about today we spent we paid and and I'm still getting rebates and everything but approximately eight hundred thousand dollars I paid enter G. to to hook up into their substations so all all ratepayers would benefit from that that's something I haven't talked about when everybody hooks up you pay an interconnection that everybody's we basically upgrade this at the substation. We went into this in twenty nineteen it was purely financial we looked at it Mr Scheck who is now passed away he got to me said Hey look at this thing and see if it makes sense and we looked at it and and we're here for the long wait what we celebrated fifty years in twenty eighteen we were here for the long term we look at it we said as a long term investment this made sense we weren't let's look into a cost shift but just the way the law was was written it made sense so we did it that way first. Secondly our customers started asking us about our social and and and environmental I will probably try it privately held we don't have to we will have all the same requirements but we're now able to tap that we are that we're you know green that we provide most of our electricity through our to our solar farms but the most important thing for us was we didn't go into this for cost shifting and I think the one thing that we have talked about today that made and maybe that you guys need to consider is that solar and the reason I think that maybe cost shifting isn't occurring that and I welcome energy to to to come present because I don't want our we have several hundred employees in Arkansas we don't want them paying anymore but solar provides energy at the very peak of the day when it's the most expensive time that they would other what the the utility. With otherwise be running a peaking unit or they would be on the out in the market buying power so that's the thing that that I think is offsetting yes I'm I'm trying in I but I do pay demand charges I'm only offsetting about fifty percent of my utility bill the other fit every meters different I've got multiple meters. My but it averages about fifty percent of my bill is is energy that I'm able to offset with might so race and the other fifty percent I continue to pay demand charges if those demand charges aren't sufficient the PSC has rules and that's what that's what energy when and I want them to I want them to present those and if I need to pay more demand charges I want to pay more demand charges I don't want my employees but if we move away from one to one. You know for you know hopefully is not retroactive I still cannot understand this bill but it it's retroactive then my financial that the how I was going to pay for this thing is totally blown out of the water of its if it if I if I'm grandfathered until twenty forty that I'm okay but you will prevent other people from doing what we did now I do believe that what we are doing is we are competing with the with the utilities but what you've got is you've got private people. The private people like us and you've got school districts that we're building it's just like they said instead of the utility building an asset we're building it It at but I think everybody's benefiting. But all we did was we we look to the law it made sense it took me at all it depends on what our utility is what the rates are but it's a it's a six day you're paid back for us but we've been in business for fifty years and so we we said this makes sense for us so we did it like I said for financial but also for marketing reasons the one thing they did talk about was the five mile radius I hope you guys and I could see will might maybe they're talking about that but if you build something further than five miles from your. The. If I hit I hit a button up here that I didn't know what it did but if you're if you're without if you're outside five miles my understanding is they have the ability to ask for. Early early enough your time is up okay so to the Committee members I have questions. Yes Mister Ladyman. Thank you madam chair and I'm apologize I was out for a minute and may have missed this but you talked your term of the man when I came back in that you're producing power today when I speak to man actually the peak is only five to six in the afternoon because you have heat build up so you may not be producing during that time because it might be dark. I mean all other power plants I mean there's all kinds of different you know windfarms gas plants whatever they're all producing power during the day as well during the peak time. So should I get one one meaning like I mean it it why are you different than they on their producing all day they don't shut down there today and I you know I worked at a peaking plant and at the peak your paid extra for having equipment available so that if if the you're gonna have amount out and they realize they need a hundred megawatts in the call you up and they say start up hundred megawatts your paid for having that equipment available twenty four seven three sixty five. The solar panel is not available twenty four seven three sixty five so how can you say you're a Peking provider. I understand Sir but I still. Solar still producing during the this update hours which tend to be the the highest peaking times and that. I welcome you when we've always said. As a company we said if if there's cost shifting we want to see the facts just like the prior gentleman said but it if there's cost shifting that that are that the solar panels are not producing you know enough to cover the offset you know that if the if there's cost shifting we want to pay more demand charges but I think great follow up because so do you know any power plant that shuts down there in the day. I'm sure there's lots of big lining the dower during the peak time as well right yes thank you. Thank you any further questions by the committee. Senate thank you for testimony Sir. Next to speak against the bills Michael Clayton if you come to the table please. Just introduce yourself a positive test one. Yes thank you for the opportunity to speak my name is Michael Clayton and I'm the director executive director for North Little Rock wastewater we serve the wastewater provider for my mail North Little Rock parts of her would impact the county from the Galloway area to the morning interchange and we have about a hundred and five thousand people that we serve we have for treatment plants and I have two hats that I'm wearing today one hits the north rock wastewater is utility we actually two years ago we provided we built a seller facility just a little under make a lot. That we own ourselves and we we we hired a firm to do the design build there were the actual owner of the facility and we worked with our energy provider to do a net metering set up now. Prior to the completion of that project we spent nearly a year and a half of analyzing the numbers in the margins were really close on whether is be financially feasible to move forward with the project in and we spend roughly one point four million dollars for the project and our electricity that we should for that we we spend about one point almost one point two million dollars a year electricity for for treatment plants in seventy five pump stations that we have so we're we're we're we're all get money come to lecture city so we're trying to find ways to to reduce our costs and one wise we did was put in a so the facility for one of our facilities now we have for treatment plans one of my male wanted man the white oak area and by the burns park facility one insurer would which is all by Sam's club area and then one over to the side of town over there so we're scattered for more than five miles apart when the treatment plants and and so one the opposition to the have I wanna be careful with the our our our position we were in favor of the solid facilities in the net metering all but one of the things will be careful with this the grandfathering portion of it from what I understand was to twenty forty and we completed a project two years ago or a year and a half ago and and weeks back about a thirty year life for facilities and using the numbers or the estimated numbers that we believe that we would acquire for the one one or the net metering approach so after twenty years my understanding is we we we run the risk of our numbers changing based on the investment we've already made. That concerns me and concerns us if the utility four investment we would like to have more of a Suren says to that our investments are solid and that more not at risk at the end of twenty years before investment there the other had done one to say that I'm where I'm also up the president in the Arkansas water and wastewater manager substation and our board has taken the position that we want to be careful here that in the sense that we just want assurances that our constituents or members have the protections and assurances that their current projects that they have already completed or this in the planning stages are not impacted in a negative sense sure Sir so that's the short center we're trying to get the testimony very short but it's not approach here that would like to talk about and involved sent from Little Rock wastewater has to and also for the water wastewater major subsection. Thank you. Thank you for testimony any questions by the committee. Seeing none thank you thank you. Committee my intention is to do one more witness before we recess for lunch. Doug Meyer is next on the list to speak against the bill. Good afternoon. My name is Doug Meyer and I own rusty tractor vineyards Just off of colonel when Davido done. We've installed two solar rooftop solar. Plants not plants but arrays and we're almost a hundred percent self sufficient we're the first solar farm winery in the state of Arkansas. I have a couple couple concerns with this bill. One is as you know for commercial accounts they have a demand charge. Residential clients do not have a demand Kamal component they only have a customer charge an energy charge the demand charges based on a fifteen minute period of great issues during the month it is my understanding that this bill addresses residential and commercial the same. Why are these address the same commercial residential they are to me they're apples and oranges and it would only make sense to look at each rate schedule differently when it pertains to cost shifting. And then we'll talk a little bit about retroactive it concerns me greatly that we're talking about grandfathering all these companies for twenty twenty three but we're nine months away from being no more grandfathering. So like I said I have to to a race now. If you look at page nine line twenty four but of the bill by June thirtieth twenty twenty three Commission shall approve modifications to each electric utility's rate schedules applicables to met neutering customers to ensure that all existing. In perspective net metering customers pay all applicants will writers and surcharges. Existing and prospective net metering so that. To me that's pretty ambiguous I'm I'd I'd like to have legal. Wording on that. When the grandfather language an act for sixty forces on page eight line thirty six. To remain under the rate structure and affect when the net metering contract was signed for a period not to exceed twenty years so this concerns me with the new language that all existing is included. I'd like to talk just a minute about the five mile radius. If the State Capitol Building right here right now. You wanted to do net metering. And do a solar array. Not only would you have trouble finding five ten twenty acres within five miles of here but it's not just five miles you have to be relatively close to a substation if you're not relatively close to a substation the cost to hook up would be just astronomical so I I don't understand the five miles at all in my opinion should be fifty miles this should be anywhere within their their grit. With the five miles would greatly greatly inhibit of future solar issues. And the last thing I'd say is an and the gentleman with lexicon talk about this it's it's return on investment you know I made a considerable investment doing the solar. In. With the the two thousand nineteen bill it made sense it went from a fifteen to twenty year pay back to six to eight years. What I have done it. January twenty twenty four absolutely not because of its return on investment if if it takes fifteen to twenty years to get my money back from savings it's just not worth it so in my opinion starting January one twenty twenty four this is greatly going to adversely impact the solar industry in Arkansas. Thank you thank you for testimony would you accept questions absolutely resumes you're recognized thank you I appreciate your testimony I just want to clarify something you said on page nine line twenty four that is amended to be December thirty first. You said June. This is This Is by June twenty twenty thirty Commission shall approve modifications that's the line that was amended to be December thirty first okay but my point still being tuition it it it affects existing customers right. But to me that's my grandfather if a different race schedule to existing customers that's not what we've been told. Anything further committee any further questions by the committee for this witness. Okay thank you Sir for your testimony. Members just to kind of let you know what my intention is we still have numerous people signed up to speak on this matter it's my intention to frankly let people speak I know there's a lot of interest in it and that is what I intend to do so represent Ferguson you you made a mention of the PSC I'm working on trying to get someone over here to answer your question specifically thank you and I will do that I will work on that during lunch so we are going to adjourned until fifteen minutes after session today.