Energy - Joint

Right I want to first I want to thank everyone for come we've got a few more centers they're gonna show up here but We're going to start off By looking at the Jan we're gonna have a pretty tight agenda today produce should should have a lot of discussions I want to tell anyone that sitting out here an audience or anyone that might be outside that we have a sign up sheet for the public to sign up for the which read more less the second half of the meeting which will be talking about some of the net metering issue so if you want to discuss those are I want to be heard on this please sign up on the sign up sheet up there so we'll we'll make sure that we have time to do that and with that I'll turn over comments to my co chair Senator Ballinger. I just reshape people being here I know that a lot of folks are ready to go home as far as as a members and and I appreciate as as many people as are here from the public in the audience I appreciate you guys come and take part of your government. Thank you so we're going to start we're gonna skip over. We're gonna skip over Senate resolution thirty four we're gonna go to Senate resolution thirty two did you say you're going to present that from up here. Yes it's okay with you as chairman of all right after the premiere of the Senate resolution thirty six is basically room replaces Senate resolution thirty four and for the House members you guys have this is Reprezent Justin Boyd we work together a putting putting resolution together and that was actually Senate bill or Senate resolution thirty four beard is and then we've got some input from other folks to kind of make a little more broad as so that is this is now Senate resolution thirty six is married with the House resolution and the Senate decided to this committee which I think is appropriate but essentially what it is is it's resolution that urges the of the administration federal administration to to a brace exploration and to expand our our energy policy to become more energy independence you know we we do understand the the the person that the drive to incorporate more renewables I I think that's a I think that's appropriate but I think also not not leaving behind at least for now the oil and natural gas because we see that it becomes a national security frankly of world security issue when when we become dependent upon oil and natural gas in places like Russia is just a resolution just asking for them to embrace a more broader of you of energy policy and I'm I'm happy to answer any questions. Senate resolution thirty six for the folks in this game. Okay are there any questions by the committee. Seeing none. is there anyone in the audience that has any questions. I just make a motion proper time to adopt a resolution zero one speak for or against the bill. What saying none. All right. Are you close for them I am close and your motion I have a motion and of this allows obviously for the Senate but I move that we adopt the resolution. I have a second. Sam motion and a second all those in favor say aye hi he opposed. The resolution passed that thank you Committee. All right the next item on our agenda will be John battle is going to talk to us a little bit about the global market and and what affects he sees it they could have on energy here on our home state. Please recognize yourself for the committee and then you are. Okay to proceed. Thank you Mr chairman members of the committee on John Bethel I'm the director of public affairs for entry Arkansas and chairman was correct I'm going to speak very little about this subject because it's a it is a it's a lot more complicated subjects and I can speak it at length about but I'll I'll give you a perspective from from energy Arkansas's point of view and from of from and from an Arkansas standpoint as a electric utility here in Arkansas we generate electricity using a variety of of fuels including coal natural gas nuclear hydro solar and so we have a diverse portfolio of of generating resources which is good for Arkansas because one one component of that doesn't drive the price for what you what you see on your electric bill each month which is good here in Arkansas and I know the other electric utilities in the state are also diversified in that way which is which is good specifically looking at the natural gas and oil and the impact of the the events in and in Ukraine on that. Prices of natural gas have trended up over the last the couple years and we've you know we've seen that both and at a in your in your natural gas bills and in your of electric cost to the extent that the there's electric generation with natural gas and so that's you know that's a trend we've seen since this conflicts started obviously you've seen oil and gas prices have have have increased of and we think that that'll that's the the effect we're seeing immediately we don't know I don't know you know how how much that will drive prices up or for how long that will drive prices up but we've been on of that trajectory of of prices going up but as I started off the good thing for Arkansas is that your of electric utilities and I speak specifically to enter G. has a mix of resources there for that one component the natural gas component you won't see the full effect of the change in natural gas prices on electricity prices in Arkansas because we get electricity from a variety of sources which is which is a real benefit to the state and something that we are certainly continuing to to make sure that we have a reliable safe and and cost effective generating mix to serve our customers and I think that's so I'll stop there before I get too far afield I'll I'll take questions and as I said I'm my expertise is not is as broad as the topic about which I'm speaking but I'll I'll tell you what I know and what I don't know and and. I'll take whatever questions are available okay we have a few questions Six sixty three year. I thank you Mr president so often. Mr about the so the question I have and you may or may not be able to answer this is about besides the Physical conflict that's going on in Ukraine obviously there's a new aspect to it but we haven't really seen a whole lot and past warfare and that is the cyber side of this there are assets on the work you Craney inside that are doing cyber attacks against Russia and of course they are retaliating with cyber attacks on on their side Hi how are you all posed to be able to handle those threats or what can you tell us about keeping your systems. resilience against cyber attacks so that we maintain the reliable. And I can I can speak generally about therein just note that the cyber security in the electric utility industry is is an important issue and there's a lot of effort to make sure that we are are prepared and take steps to be cyber secure I know there are a couple of national task forces that devote a lot of attention to that and coordinate with the the national security organizations to make sure that we're prepared and knowledgeable and and are are taking all the steps necessary and and possible to protect against of those kind of of threats to the system hi thank you thank you Mr. Yeah. All right of representative Ladyman. Thank you Mr John this is a more of a long term question but. You mention all the above and we need to do that I agree with you on that but on not a question I got to thinking about hydro when you mention that you know one Arkansas we're blessed with a lot of hydro power the Arkansas River B. relate Norfork lake and and I believe that slow costs once the constructions done but you know Brazil they depended on that heavily and back ten twelve years ago they had droughts and it was a big problem so I know hydro is not consistent or cannot be consistent at times but my question is is that really is there really any option to develop more hydro I know we haven't had any in a few years is is that still an option for inter G. or nationally I think in Arkansas the opportunities may be limited I know I'm not aware that we have an active effort that introduced to explore other opportunities for more hydro power in Arkansas we but We do have our our facilities or or on on lakes you know the the facilities we own an operator there and and a number of the the hydro facilities in Arkansas are on the dams at the lakes and then there are some on the Arkansas River as well and and and and so. I can't really predict as far as where you go with with more hydro I'm not sure that that's going to be something that comes about soon. Well it's really not in that camp follower. Is really not in the discussion even I don't even see it nationally but are you aware of any national discussion about hydro it doesn't seem to get any attention anymore I'm I'm not aware of a of an extensive discussion no Sir thank you. Senator Ballinger thank Mr. Well I assume you guys are really looking at and and considering like the the thing that I'm a little bit concerned about and honestly wonders why I want to have this meeting as it is I feel like it's almost inevitable that we're going to see the substantial increase in gas prices especially as we as we move more towards more renewables and in particular we and do you know what the way you handle wind energy and that's in consistency as you replace it with gas which means more gas coming online and and if you know if we're in a situation where you there is there is prolonged conflict I could definitely see a scenario where a lot of people who are recommending cutting off all natural gas from from Russia to Europe in the address world right so if that happens then we're going to see of a global fact on the on natural gas in particular but but even outside of that if the war is prolonged the natural gas that passes through Ukraine is going to very likely be be hindered so you know the the question as well you know you have it are we making any plans moving forward for how we're going to handle things you know if we see it or is it just a matter of like there's really not much we can do we have to wait to see if it happens then that point will handle. I think from a from an Arkansas perspective on that And from entered the Arkansas perspective on that the the of the majority of the kilowatt hours that we deliver to our customers Board were generated at Arkansas nuclear one right and then you know a significant amount came from a of the white left independence of coal facilities here and and then from we do and I know the other utilities do as well have of natural gas facilities that that supply some of their their need as well and so in the short run and I think that Arkansas still well positioned even with the the addition of renewables as we've made I think the from interviews perspectives the renewables we've added have been cost effective and I think or or a good addition to the portfolio but we've also maintained of our other resources that can can operate at all times and so and I think that they can operate economically still And then I think we'll the there's a lot to be learned yet as far as the effect of the the the the. Conflict in Ukraine as far as longer term effects on on the energy prices obviously it's going to have a an effect and in the near term and and like I said I don't I'm not able to predict really how how much or how long that that last. Mr mode now the appropriate time have Mister Thomas come down and just see if there's any other questions for him as chairman you will have one more question from Senator Stubblefield that will bring term. Thank you Mr chairman. A John. Are you familiar with the Jones act. no Sir. Jones act was passed actor wore one Cup to because subrange were second option ships are you do you know if we have any liquor ships as if the United States is building initiative to carry liquefied natural gas. I'm at that's probably beyond my of my direct knowledge as well you don't know that I don't know I know that do export some liquefied natural gas in there may be others here that can speak that's always for shift because we don't have any ships to transport liquefied natural gas. You would have to know the answer why because we're sitting on a lot of natural gas in this country that we have I live in a gas field has been basically shut down for years because of the price I understand you know the producers I want to make a profit. We're sitting here on the gas with these wells have been shut off we have the ability to to produce a lot we've got a lot of natural gas in the United States but we don't have any way to transported without getting other foreign countries involved with because we don't have the ships to transport it why are we making why we manufacturing ship that can carry liquefied natural gas that's I I really I don't know the answer to that question but from a you know you mentioned the domestic supplies of natural gas and I think that as the prices do move up the that may be of prompt more production from our our domestic supplies well that's what I understand may may happen but I've that again I'm I'm on the on the age of what I'm I'm well qualified to talk about. Well you know I'm a strong proponent of natural gas not just because we have wheels on on our property but because it to clean. Form of energy and it's a a reliable source of energy and I just think we need to be using more of it but we also need to provide a way. To to get some of his natural gas to Germany who's who shut down all the nuclear plants totally reliant now on on Russian for the gas supply and and look at the mess we're in because of that. And we had we prepare for this years ago. And at some of these things like the Jones act that should have been repealed years ago. I think we've led to much politics get involved in our energy. Policies and it it's it's called a lot of turmoil over the over the entire nation so I'll have some more questions so just to get to thank. Thank you. Saying no more questions we appreciate you coming talking to us today John absolutely thank you Committee. That. Please identify yourself with the committee and the members of the committee I'm Ted Thomas I'm chairman of the public service commission folks are feeling the impact this natural gas price and we're hearing from an offer to members of the legislature I've heard from your constituent service office I've heard from our customer service office my colleagues at the commission have heard and even my wife asked me what's going on with or natural gas bill what's going on is a triple whammy we have three problems sitting at the same time the first is the gas cost from the winter storm February twenty twenty one workstream we measures those cost occurred over ten days in multiples of the amount that occurred in gas purchases the entire year. Three or four of our utilities had like four and five times the dollar cost of gas in ten days the needed for the entire previous calendar year those are almost completely rolled into rates. I will be a five ten percent AS a guess that's the first when the second whammy is commodity cost. the waves. The third when we will be electricity and I'll hit all of these the way that natural gas is regulated is we regulate the pipes. Not the commodity that runs through the pipes. The pipes or natural monopoly you don't want competitive pipes so we do cost of service regulation with respect to the fight network the gas that flows into the network is followed through at a cost basis the rate payers and roughly half and half half for your gas cost is that distribution network half is the commodity The interface of where the pipeline in the gas. We have what we call gas purchase plans and we regulate those we want the utilities to purchase large volumes of gas to get good deals and they have plans and we don't want them to favor one customer or another and and all of that so we regulate that. The commodity price spike in my view has three causes one we've had a traditional we've had a like a five year period of low natural gas prices and stable natural gas prices in fact some natural gas producers went bankrupt and never financial articles and articles in the financial press that begin to appear that people that finance fracking operations wanted them to reduce construction reduce investment. To reduce supply the increase prices the more threatening to withhold finance. This happened last year that's the first then normally how supply and demand works is it balances when profits go up it brings in more investment to increase supply which brings profit down and the reverse winners insufficient investments supply goes down price comes up this is difficult and natural gas because of seasonal usage seventy percent of the natural gas the Jews between November and March so as a supply was painting we were coming into the high usage these at the same time now what this means is we don't know whether this is a new normal. Or will go back to the way it was with prices into you get through the season until the weather warms up you go back to the normal art less usage pattern with the consistent that will be in you know may June and I've watched the prices very closely and we'll see if the higher prices increased production that will bring the prices down we're not consumption period major being in a Christmas tree business the price that really matters is in December and the supply demand time of the other doesn't really matter the third problem is the international problems. Europe was dependent on Russian natural gas we do have a vigorous program of liquid natural gas which is part of what's driving the price up. for American consumers and you know you can put out a cigar in petroleum. They build these double hold ships they can't even model what would happen if someone set them off for this pressurized liquid natural gas but it's very expensive it adds a lot to the price and you can see part of how all this energy problem works when you look at New England how they do the contract and to put the gas in a vote next who wants it the most base the biggest price. Since New York has a pipeline blockade Weakland can't get gas the competing with the with the Germans to buy that gas and their prices are astronomical but but the supply drag on a gas increases our price so we have a circumstance where for foreign policy reasons we're trying to use natural gas to help the customers in Europe while at home we're talking about trying to phase it out not use it at all. That's nuts okay that's does not speak my in my view. So. But the supplied the department is. Supply and demand set the price in the market. That's the bottom line sellers and buyers bidding and it fluctuates and with that the investment fluctuates with the key for policy is if you do stuff that reduce the supply. You're contributing to a price increase period there's always an excuse there's always an excuse well if you build that pipeline the prices bad today it won't matter. Well seven years from now it might matter. When you have high prices its mistakes that you made years ago not prices and you make now and it is a problem that I've talked about extensively I've talked to many of you about it it hasn't been a political priority because prices were low. To the left carbon reduction is a prime priority. Resistance to the right it's been cold jobs that's been a priority to producers the producers interest not the consumers environmental interest not the consent procedure be surprised now the consumers are taken in the shorts because nobody's paying attention to them for the last five years when natural gas prices are low it's quite frankly not surprised. Fracking has saved consumers billions and billions and billions of dollars. Fracking is what drove coal bankruptcies because gas and coal compete for you never heard that. That's the truth. We should have defended fracking instead of coal jobs and if we had customers might be. In a better place the federal policy mostly controls the supply demand balance not a whole lot we can do here but don't complain about what they do in Washington DC what about state policy. Roughly half the bill is are regulated part. The other half is the commodity price as I've already said we set the rates the cost of service rate making for that are we doing our part well here's my thoughts on that every two weeks I get a complaint about the executive director of the public service commission Donna gray she's too tough on utilities. She's too tough on utilities Donna great is too tough on utility I hear it again and again and again and in a time when people are struggling because those prices are high give me some level of comfort we don't want to be too tough on utilities you want to be tough but fair. That's a bounce we try to get that balance we consumers are struggling it's good to know that with somebody on a watch as a reputation of being tough on utilities. With with respect to competitive options at the consumer end in natural gas we don't really have any because way it's a network if you're gonna do competitive style for innovative stuff really what you're going to do is change when you put at the end of the pie not what happens at the consumer and there's two things are going on or not yet scaled one is renewable natural gas from biomass DO you funded our project to see biomass in a pressure cooker. Now comes the methane make the chemical composition matched and the pressure management put it in a pile it's not scaled but it's a potential opportunity this legislature last time This past to build allowed us to do that it was actually an exception to the least cost gas statute police cost gas statute the legal obligation to the utilities to purchase the least cost gas now why would we ever make an exception to that. Well it's for innovations it's to give them a chance to try something new that initially will be more expensive every new technology as in order to see if they can develop a viable alternative this course is caution your what's about questions we have about one car shipped we are nothing about other questions your phone might be four G. only. What is the cost of your phone they're building five G.. You get ripped off because of a question of user building five G. improvement cost your bill that's a question of economic development. That's a question. I've seen estimates of the vis where the overnight prices less than a dollar a gallon on peak usage is about fifteen dollars down. Do you want to put that big red fifteen on there for your TV. You don't it's arguably. A cost shift if it's if it happens at peak electrical demand I would dress the solar car shift in the next. So the bottom line on natural gas costs is if we wait and see if the prices normalized as the weather gets warm course the foreign policy impact is a big deal there we don't know we don't know what's gonna happen we don't know if they can withhold gas over here trying to sell at all China we don't know what they're gonna do everybody's watchin and the uncertainty is an upward pressure. One price what what. What we need to do is first not do stuff that restricts the supply. If the objective of the administration is to phase out fossil fuels. If the method that they try to use is to phase it out by making it cost too much by restricting supply consumers are gonna get their faces tore off. There's a better way let the market price phase in what new technologies coming in or not but then for that to happen the political messaging has to be improved I think it's nuts ever using our natural gas. To help Europe and trying to restricted the help from consumers in the United States. I think it's nuts. That. You know when you talk about the carbon issues. It's going to be worldwide solution for doing is offsetting increases in carbon we're not solving the problem so you can stand there and I believe there's a correlation between climate change and extreme weather events. But if you increased cost on our people. Without solving the problem did along with those weather effects you have a high energy prices and it's not it's. Blights. No how does that happen. Don't just blame the people's to support those policies that people who should oppose those policies you to look in the mirror and ask them some questions how do we lose to these idiots. I need to up their game to protect consumers in America. With that my next thing will be to talk about third win me which is electric costs and I'll begin that part because part of our response to that is our summer program so when the second part of our program all address that be glad to take any questions all right I have one other Senator sub Stubblefield. Okay thank you Mr chairman of. Ten. You know there's there's another facet of. Natural gas that. A lot of times get so lost in this discussion and that is the fact that. Ammonium nitrate fertilizer is made from natural gas and we use that in farming to grow food. And without food. None of us would be here yeah are there any natural gas facilities in the United States is producing monitoring. I'm not sure on that I do know that from plastics to all kinds of stuff. We can either plastic you know more most of our monitor comes from I do not Russia. Skunks Russia now so we are at the mercy of the Russian the same country that's invading you crying we're at their mercy when it comes to importing ammonia nitrate to grow our food to feed American people. And then we'll buying all from the same country that's invading you crying. Y. O. Y. in the natural gas industry. Of building plans to produce ammonia nitrate to grow food for the American people. With all of the international stop it always comes down to the same thing and that's cost. Why we buy stuff from China because it's cheaper but if you get hot then you got a problem. You get to you get hungry yeah. So. What what you're saying is. That it's better to start our people as long as we can. All I'm saying whatever reason it is like it is is Markham competition on price and if you set up an admin Mohnyin nitrate place that canceling the project because they can get some more cheaper than you're not going to make that investment there is not a reliable source or source that you cannot trust really that source is your enemy and really is holding you hostage. With with food. Should we have a list of priorities. with energy companies when it comes to the products that can produce be produced from these energy sources I mean you have India and China building thousands. Of coal fired generating plants with no scrubbers no filters. And yet we're shutting down. We're making our people bear the cost in suffer this while the third world countries a building thousands. In that same polluting that comes out of those is travel around the earth and we're going to we're gonna be briefed in that. we helping. We're hurting our own people to subsidize the rest of the world. Who could care less whether America exist or not to be honest with a lot of. But when you measure public opinion. And I agree with what you're saying but when you measure public opinion the folks that disagree with that are winning which is why I always say the folks on the other side have to up their game in terms of the political debate this is not more this is more than public opinion this is common sense. This is just basic common sense. If we want to sustain our our nation. Because you have to have food to sustain a nation. You have to have fertilizer to grow that food. All right of resented Ladyman. Thank you Mr. well actually a couple questions but one one thing that really bothers me when we talk about natural gas and you know wells have been shut down contracts have been cancelled can't you know real for all or anything I guess on federal property now in some areas so that reduces the supply of natural gas domestically we're buying natural gas from internationally I think of so the situations in Europe Russia wherever you want to look at conflicts that's going to affect what we can get from other places since as you stated our supplies being reduced because of government regulation. So and the John just mentioned the energy is a good example of. Most of our power and I think John we get forty five or fifty percent from of our power from nuclear and most of the rest of it comes from coal we have about four or five natural gas plants in the state of Maine many of those are peaking plants that don't run all the time. So my question is. If nuclear one goes down That's about seventeen hundred megawatts two plants of one goes down might be eight hundred megawatts or not megawatts so you've got to replace that in these natural gas peaking plants are basically the only place you can go to get that so do you have any knowledge about the supply to these natural gas peaking plants I mean is that at risk if if it is then we're going to have blackouts or brownouts during bad weather situations you have any knowledge about that. The electric system is organized into. Read two Artios who manage the grid so your supply demand balance occurs at the mice so level or the SBP level so you have access to all the resources for that entire thing these things go out all the time in fact the grand Gulf nuclear facility which you know we litigated we're still litigating three five years that's been available on my so peak one time as the years. The lights have flickered. Now when the production stops like it didn't winner that's when you have problems there's plenty production when they're producing even at this high price to keep the system running it's when that production gets interrupted that you have what happens in the winter but it because it's a large created the supply demand balances the entire myself footprint not just Arkansas and having a large footprint gives us a lot of benefit to when our stuff goes down we buy from somebody else and when their stuff goes down we buy from them why are they buy from us but what we haven't had a supply crunch in. Except in that winter storm weather wasn't gas availability. S. the cost is a whole different substance a whole different deal when when you're paying twice as much for fuel as you were last year you feel that in the price side but thus far other than that winner of it there hasn't been a supply constraint and these things crop on and off all the time that that is another big issue when the when when we push the button the unit needs to come on we're working on some stuff on that respect costs you money but it's it's worth it when you need the unit I hope that's responsive to your question. Yeah well I know the speaking plants that we have you know they buy gas from wells in Oklahoma or Texas or whatever so if that's suppress due to government regulation. Then I mean if the entity has their nuclear plant go down. They got a by that on the market that exorbitant price and then it affects like you say the rates let me ask another question if I may Mister chairman yes for. The up Senator Stubblefield talked about the agriculture industry being affected by natural gas up is not only that it is most of the things that we by have some connection to carbon based fuels it may be natural gas it could be oil but it affects everything that we do people don't realize that every product if you make IT ten can or whatever or oil or gas or something is used in a if we reduce that supply then we're not going to have products that we can buy or the price is going to go up yeah. The more the it's on the pricey side there's enough production that when the wells are working there isn't you know there will be the transportation is also an issue that you have the fuel then do you have a few or you need it so you have to that's why the pipeline infrastructure is important but but to your point on the and what I was assistants are still about plastic the Committee called north face that most people cities jackets. You and you know they made some statements about how awful petroleum based products within this state eighty percent of their thing. Come from petroleum based products. But these things happen all the time but you don't see public opinion properly managed for the public understands it. Thanks to change if we're going to protect consumers from high prices I agree thank you thank you Mr. Thank you I appreciate you being here Mr so my my question it you kind of hit on something about you know people really focus on protecting the coal jobs and and they're not really protecting the natural gas and my my view is a little bit different I mean I honestly I I hate to say this because of some kind of cold I don't care that much about the coal jobs none of them are in my district speak up hi so that's not really my focus but but I do appreciate the fact the last winter we the folks might just will keep the heat on yes right and and that's what you know we we're very blessed to have nuclear one here because it provides cheap energy and for the most part are back up in the state is is coal but it it the more the focus becomes on renewables which I think it's I think that is the future and I'm not I'm not here to slow down the nobles all but it it is I mean it does rely on natural gas the problem with with natural gas has some of the same from the renewables and storage of energy right natural gas storage of energy is and is in the pot or in a in a tank or whatever and if you end up with the big event you can't pile up three months worth of natural gas at a point right as you just know you have a mechanism to do that and so so while well I think that that the technology in honestly the it's not easy to invest in pipeline infrastructure was also to push back on that we need to be we need to be communicating I think like you said to let people know how environmentally friendly that is if what's if you want renewables to better also let natural gas pipe be late because you're not gonna get both right so I so I do believe that that's good that isn't we do need to start investing in that but I also I don't want to jump out way ahead to get too far out on skis like like I'm afraid we may be doing with renewables and and not and to to retire to many coal fired power plants to the point where. We're facing potential rolling blackouts right so in this is we have this discussion before I I don't want to feel like I'm a defender of of the wagon wheel because of that I'm not you know I what we need instead of a we need to move forward I'm all for that but I'm also not for driving up the photos my district for the most part I'm not rich the poor you have forty percent energy increase and that's forty percent that they can go spend the money on something else for this frankly go without on some things and and that's where we're at and the more that we get to the point that this is one of the reason why I hope to have this meeting is the more that we we go out and we invest in wind and at one point I I think this the I suppose purposes they're hoping to be seventy or eighty per so when within X. amount of time which you know I just don't see how you do that and you also have stability right like the the the one thing that we can say now now I also agree code you don't slip on slip it off right you can't do that so there are some lack of of a of value or or its designee status like gas plant or whatever but the reality is you know if we end up with another winter event or frankly if we just keep continuing using more gas to produce more energy that at some point is going to be less gas for no people my home to my district teacher ops so anyway I just. You agree that the like we're not ready to to even though it's not about saving coal jobs although I want to lose their job it's if this is about make sure that we still have stable energy and right now we are dependent upon those school has to make that happen we've got a couple of points on that first we're talking about electricity right we're talking about natural gas which about seventy percent these alternatives don't exist there aren't alternatives right isn't fuel diversity that's right the natural but when you look there's a key metric when you look at electricity and that's the level of penetration of renewables if you take a unit of renewable generation unsubsidized it's nearly costs competitive or is cost competitive with any form of generation right the problem happens when the whole system has so much of that the cost don't come from the units the cost from from the other costs of dealing with the variance yes the like Senator mins right so that number and we're already watching that very closely you know twenty twenty five thirty percent is where you begin to have problems when you have extreme events right we're of one or two percent. Yes so we have a runway so it's correct to see their cheap at the lower levels of penetration but when you get to certain levels of penetration the cost of dealing with intermittency and these are five and ten year problems. Off and there other technologies that might help solve this that's where the problem is and it's also in the extreme events of saw chart where SBP went from seventy percent wind on our whole system two three percent in twenty four hours right the lights didn't flicker it's because they're really really good at what they do but when you have that situation and you dump on Extraliga that's when you start to have a problem with the engineers at the utilities and that the Artios were very good at what they do or working on this and amends problem but we have a runway we're we require it cheaply but when you respect that runway it doesn't last forever when you start to get to fifteen twenty twenty five we're already watching it when penetration goes up your costs go up in dealing with their men's okay thank you. Thank you for that thank you Ted we're gonna shift gears just a little bit yeah here and we're to this the next topic which is regarding some issue we're going to be discussing net metering as I understand to be some people. Really dealing with net metering and and and and some concerns related to solar hookups so what I want to do it with this a little bit backwards and we normally do committees and I want to let the the people in the public you want to talk about this come out first so so we could hear their concerns and then after that we're gonna have a couple handle discussions of related to that Right and chairman Thomas is going to be involved with one of those House question so we with that I have one person signed up to speak it's David Rawls. if you want to come up and identify yourself and View this push my button identify yourself you're recognized to talk. Okay. It's already on the nice I'm David roles a poultry farmer from Pocahontas Arkansas I just recently just over the last year installed solar and. The solar company comes in the seem like a good bill got in it along the way was told that I needed to have a liability insurance I was first told around a million dollars of liability insurance. two days ago I was told I need five million dollars in liability insurance. And. Back in January. The co up told my solar producer in an email that I needed a million dollars of life insurance. And the net metering paperwork says I need two million dollars in liability insurance. So I'm looking for a clear path forward as to what that actually need. And so we can get that and go forward with the project basically I don't. It's all over the place and I don't you know originally I was told I needed a million dollars and I have a million dollars liability policy on my farm my solar panels are insured on my farm policy so I was under the impression in the beginning I had everything I needed so but seems like it's moving. Everything moves up or down back in force and there's no clear rule as to what is required or not required. So. In the the policy that I have got a quote on is. You know it would if it's able to change my mind possibly and whether or not I did the sole or not depending on the amount of money it's going to cost me an insurance per year if I do have to have a five million dollar house. So. All right I have a question okay Forty nine. All. Senator Johnson sorry. Thank you Mr chairman Mr all's first of all thank you for coming to testify exactly where do you live. Pocahontas Arkansas okay so you're in the north east corner in which is your coop we're supplier Clay County Clay County co op okay I'm I'm I have had not heard the frame one your neck of the woods but I've heard it. Other places about this and I'm as frankly as confused as you are and that's not good because I vice chair this committee and at least I don't know what's going on and I'm I appreciate you coming in because we we need to get to the bottom of this and you might or might not know but but we've been working on this whole netmetering issue for quite some time and I thought we had everything worked out and then this. Insurance requirement and perhaps some inspection requirements are him come up and I'm I'm come to these can be worked out but yeah but and I'm anxious to have chairman Thomas backs at least get the PSC of point of view on this issue but Are you is your solar system is it hooked up as we stand here today no. And about how much is this cost you so far the of up to the little over a quarter million dollars so you got a quarter million dollars tied up that ain't doing nothing for you it's not making any money it's just cost okay well and that's you know it's kind of last minute I'm here because. You know two days ago is when I found out about the five million dollar policy. It's online let's just you know that's not what I was originally told and so. You know I started to get into it I found out this meetings at noon today so it's just kind of been. Find out about it and let's drive down here and some people has a long way to come out of it you can tell my story so here I am to tell my story two days later I haven't even had a a good chance to get a good quote on what the insurance is even gonna cost me at this point well I'm I'm grateful for you to come out I've got a lot of questions but I think the it's going to have to be to the PSA or possibly the the co ops not and for another thing I have ascertain and again I could be wrong this is just what I'm picking up is that some of the coops save ex and some of the coop say why and a and I support all of them so I want to hear what exactly what they're doing but we got to have some consistent yeah that's what I've gathered its and consistent across the board yes Sir and then you also brought up the state inspection thing that's that's another thing that I'm battling with a little bit because my contractors put all this in. And I guess we're kind of arguing at this level whether the state has to inspect or not. So there's we're going to. What I was told is we're gonna go ahead and hook it up and then if it's dean later that the state does in fact are required to inspect it that M. inspected at a later date but if that six months from now I've done spent the money and paid the contractor what leverage do I have to get him to come back and find any issues that are there if there are any mistrust I cannot promise you the answers you want to hear but I can promise you some answers we're going to get some answers and and I I'm I'm it but the biggest that bothers me is that a lot of members of this committee and I don't even know if the I don't think Senator Wallace is in here today is the first of those of us that worked on this and he was probably the lead person on it and I know there are others on the members of the House on trees I apologize to my friends on the other in the capital but in the other side is committee but we will get you some answers because I'm starting to hear from a lot of people about it and and it's inconsistent just like you said this kind of moving target of of an amount of insurance or with this requirement I'm not sure that we have certainly an asset on the committee that heard this bill in in twenty nineteen and I'm not sure that anything was mentioned about this I could be wrong and and chairman Thomas over here to kind of keep us you know on track but I can assure you we will get answers I hope to the ones you want to hear but I can assure you we will get an answer one way or another is better than not yes Sir and you got a bunch of money tied up not doing things well and one other thing to I want to bring it I kind of want to get an answer to this question is when I started my project we were put in and. X. kilowatts of solar. And after meeting with Electric Company was told that we couldn't do we could do that much but we had about transformers because the transformers we head we're not making us. You know we were trying to put like seventeen to a system on a fifteen KV transformer. We'll so we downsize the system made changes accordingly to the rules trying to you know just move forward and be good and everything work out. And then about three months ago found out that that rules that go posted moved to now then we can but one and a half times the amount of solar. On a transformer. So when I started it wouldn't work and then by the time we get to the end of it because we had a rule change. I could have done what I originally wanted to do but at this point I'd already had it that. So that's a little bit of a frustrating to mention seems everything is all over and nothing is here's the rules there from. The state or whatever and this is what we have to follow. Mr roles we can't do our job here unless citizens like you come tell us about these things so I'm extremely grateful for you coming in and Mr chairman after chairman Thomas comes back I think I have some questions along this line for him but I I'm I'm done with Mr Ross thank you for coming thank you thank you Mr chairman thank you and we have a question of Senator Blake Johnson. David this the. Not only on the provider side. But. Your two hundred fifty thousand dollars into this thing and you said you don't have. Any solar panels put up no it's all up the only thing we're waiting is to flip the switch okay your ears are up in the wires are hanging in there at everything is done it's it's actually been turned on and test okay we're I'm waiting as of yesterday at four ten I'm still waiting on the seller contract to get some paperwork to Clay County. The insurance or bill proof of insurance if I have to have it if I don't have to have getting that to Clay County and then waiting on Clay County to come install the new meter and turn into. You're the second one in my district that I've heard from in that situation correctly and the other one is in the same situation last week when I read those wins last Monday three his panel more often I called him about it but he's he's in your same situation. And a drive by those every day but the. So I was I was trying to figure out where the recorder million dollars into it without having to the panel put up yet so I was gonna worry about the other side of thank. All right thank you for coming down appreciated I guess we'll race home whenever we get done. Thanks thank you for having. Thank you US representative Meeks thank you Mr way over here you're far far right so my question is the the insurance that they're asking for this one million five million whatever it is what is it to protect us to protect your system or is it to protect their system in the event of damage were they wanting you to ensure for that amount of money. From my understanding everything of gathered on it It is insurance to protect in case something were to malfunction on my system and caused a surge of higher to go out on to their degree. Which is. I don't I don't really feel like I should have to ensure you know there state on the solar inverters or safety precautions built into they will not produce tire if they do not have right has island thing right so as soon as the grid goes down my systems right what I'm many kilowatts as your system hundred and eighty four point six or ninety four okay thanks all right thank you thank you Sir the. Thank you I see no other questions we appreciate you taking the time to come down here and speak to the committee and the as senator Johnson said bill will work to make sure that we get you some answers to some of those questions thank you so with that I want to buy chairman Thomas back down to talk a little bit about. The angle from the public service commissions as far as not being these connection maybe you can address some of these other issues Mr chairman first all wrapped up in terms of our third win me which is a natural gas price on electric and you know get specifically over the target on those interconnection issues natural gas as you know is used for the generation of electricity I close costs are variable we don't predict them what we do what we do predict them when you're out and set the rates based on that prediction then at the end of the year we true it up and there's either a deficit or surplus that we add on to the next year. So the rates people are paying now or based on last year's low natural gas prices those are going to go up. In April. I'm like natural gas for electric utility customers they're all alternatives to principal alternative that we've acted on its solar there other alternatives that we're trying to act on it because of fierce opposition to anything that allows third parties to give customers an option with respect to monopoly utilities there's fierce opposition so we have one program solar going we have demand response programs that that are still being still being litigated when the solar access bill was passed these percent specific natural gas problems were part of what we were thinking about and I want to read you a direct quote from committee when the bill is passed from me. And bracing new technology when the price is right also protects grandma from the two most significant risk with respect to realist electric bill natural gas prices and federal carbon policy we have a winning ticket under the current federal policy this was in twenty nineteen we need to have a winning ticket if there is a federal carbon policy this is a good bill so or access act because it enhances our policy removing barriers except for price and this policy is showing early signs of working we might be at the beginning of the sustained investment in solar it is built on some existing advantages we have in Arkansas solar production improves as you move south relatively inexpensive flat open spaces particularly. In the delta. We were prepared. We were giving customers an option. To manage the risk of gas prices themselves when we passed that bill that was part of the stated purpose in and to purposes. Two defensive purposes defend against higher potential gas prices that we were thinking about even when prices were pretty low and defend against carbon a policy and yesterday I was on a call or we're talking about it United States Supreme Court oral argument on current policy the biting ministrations current policy is coming and we want to make sure that our policy lessens the impact of that third was offense we want to play some offense. and Economic Development we've seen. The largest economic development project in the state's history with the US steel plants. The US still press release if you look at it it uses the word sustainability seven times. We won on sustainability. When I was appointed to this position in twenty fifteen by governor Hutchinson sustainability in a lot of quarters was a cuss word. And now winning economic development project in East Arkansas on sustainability now some will point out that the US still bill is built on utility scale solar. Not net metering. This is true but it misses the key point. The purpose of the policy is to give customers options give customers options. Last session representatives of big river steel came to me and asked to change the net metering meant limit from twenty megawatts two three hundred megawatts no there would have been some problems with that and I didn't support that but I did draft an outline for them there was never filed as a bill with the folks were aware of. Also when you look at Walmart. Walmart's part of the pro net metering can Contingent. But at the same time when they made their decision. It looks to me like they're going to choose a utility scale Aktion what it's about options that's what it's about and we gave customers options and they push the utility. The competitive option push the utility so when US steel called inter G. was ready to meet the moment and that's how we got the largest economic development deal. In the state's history. In spite of the success of this policy. There has been and remains fierce resistance even to the extent of defiance. Most of the argument is about the cost shift in the net metering order we provided specifically. Bring us your car shifting data form that people with a different viewpoint offer different. And we'll set agreed fee not only contemplates the Kashif from that. Contemplates all the costs of the peer from anybody's plan. We have yet to get a single greed fee filing. Know what I hoped would happen was a state would appear before last session. At one point even hope that we can deal with it is what we should do is take the data I'll do my best to give it a cut and if people don't like it they can come down here and talk to you all. We have the solutions built in and then you all if you think. Dude's crazy we're gonna do some different you can do it if you say looks okay to me you can do that too. We have yet to get our first group V. final. Instead what we get is massive consistent resistance in some quarters not all quarter some quarters some coops not even majority coops. What we have right now is somewhere between eighty and a hundred and twenty solar facilities built constructed sitting out in the sun in an era of high natural gas prices generating nothing. They stand as a warning to the person that made the risk to do that and to their neighbor. Don't go down this road. You will be punished you will be fee you will be litigated it is resistance to the program in some quarters now if you go you have a couple of handouts one of them that looks like this. If you flip over to page three one. You will see the lawful basis of inspection requirement highlighted paragraph D. this is the basis of even having an inspection a net metering facility at the net metering customers expense show me safety performance standards established by local and national electric codes that are listed okay there isn't a little inspection requirement but what there is is a requirement that the net metering customer demonstrate that the facility is safe and the business practices involved. That would be an inspection. So sometimes last fall as part of a strategy to take the rights that this legislature and the regulator gave the customers a strategy developed. That. Instead of having any inspector. It had to be a state inspector. At the time that the man was made there were for state inspector positions three of which were taken. And there was only one status. And in this emerged a memo got written thank you have a copy of from the director of the people that manage the state thing said there isn't a requirement that we managed. Why would we have a requirement based on who signs the payroll check. Instead of requirement that the person that does the inspection be qualified. To meet section you're on three one. Now there might be an argument that this and we're open to all arguments this is probably going to be litigated and if there is an argument they'll get a fair hearing other people will argue different they'll get a fair hearing to now to solve this problem the first thing I did was call senior management of the coops to ask them for help informally this is a problem can you fix it we didn't get any results now one time I did that with one particular contact and because I communicated with them a file the disqualification petition to throw me off the case so my normal tool with dealing with this thing is informal communication which is taken off the table if people are going to play the game what. So our formal response would be to open a complaint filed a complaint started docket process that will take seven eight nine months of those solar panels can sit out in the sun generating electricity over the peak of the summer. You know I wanted to informal if we have to do the formal will do the form. You think about the application fee. If you will look at page two one. Any new or additional charge which would increase and net metering customers costs beyond those of other customers class shall be filed by the electric utility with the commission for approval. We haven't gotten a filing from anyone that says we should add an application. We haven't got file from anyone that says we should add an insurance component. We haven't got the first filing hi we do staff is is called a terror of a terror for the written rules of the road that lay out all the costs this stuff is not in the terror of the law requires by some argument that it be tariff now this argument is complicated by federal regulation from the agriculture department finances Cooper property. And in twenty eleven they passed a regulation it said coops could do a fee and coops could do application so as an argument exist that federal preemption says they can do this. Now whether federal permit prevention says they can do it and not have to do a tariff is a whole different legal argument and also the federal power act which is federal law gives power to the federal government the for the federal energy stored energy record and the state's the federal power act doesn't give the sorority the department of agriculture so there's a preemption argument. And all of this could be solved by litigation but people don't want to pay a lawyer to do a federal preemption case on all of this stuff and you can read this and ask yourself a simple question. Is this clear about what people are supposed to do are unclear no rule on that question when it goes to litigation. Next we have that covers insurance there's a third argument which is called saturation which I think only one call up to the got so much that they're having problems but that should work itself out if you get so much solar on a circuit that it's increasing the cost the net metering law imposes those cost on the net metering customer. So you're interconnections as it gets saturated it should justifiably so increase the cost of interconnection and that should happen by itself when you look at these regulations are previous witness wants clarity you tell me whether there's clarity you're not there's a pretty good argument that there clarity so we'll have to argue on that so I have to tiptoe along so somebody doesn't filed another disqualification petition by what we have is resistance to the law. Resistance to regulation that in my opinion is in fact the basis of the bill that was rejected last time to be deregulated. There are a hundred solar facilities sitting in the sun not directing not generating electricity. They stand as an advertised. Do not take the choice at the legislature against you do not take the choice that the commission approved with these rules and instead if you sign up for solar bring your lawyer bring your engineer wait ten months and get pounded while all you did was try to find an alternative to high natural gas prices to give yourself a customer option. The coop story in Arkansas is a great part of our history. There are folks that stood up when the I. O. U.'s wouldn't serve rural folks and they said we're going to do it ourselves. And that's great they're trying to do the same thing with broadband and I've supported that. The folks that and mounts these policies and try to punish the gentleman they're not doing the right thing. What they're doing in my view stands in contrast with the co op store. How do you fix it I don't know I've asked him to do the right thing I've asked them to look at this stuff I've asked them if they want me to sit down and is stable and tell you about this letter. About talk about safety. This regulation covers the safety. This isn't about safety this is about resistance this is about insisting that a state inspector when the state inspectors office says it doesn't have to be them. Sign the payroll check regardless of experience. Do the right thing sign these people up and if you don't like the cost shift final your cost shift data. And if you don't like what I do with it come to you guys and say Ted got it wrong. That's the remedy. Now to do that formally at the PSC takes months and months and months and in my view this strategy is designed to delay delay delay but gentleman's is neighbors can drive by his house and wonder isn't hooked up yet what's is low your bill I don't want to do what he does because he's pending that's the purpose of the policy we have a formal solution that takes ten months there will be subject to appeal blahblah blahblah blah. Informally just do the right thing. I'll be glad to take any questions thank you have I have a question first. Okay concerning than. Who should be inspecting days and who should be inspecting these I am here where the code enforcement saying well it's not really their thing to do that But. The confusion comes when if I re what's and. He it It. It basically says that it references the national electrical code and some other things there and and those armed force by it in other channels I'm not talking about solar right now but another channels those are. If I bill of a building or something and I have to meet I have to me obviously means the electrical because these people wouldn't with these people not be the state people not be the people that would be responsible for doing that inspection make sure that they was put in according to the National Lezcano. To me it's about the qualifications and another important fact. We have a majority of co ops that don't have this problem. What we have I'll use that don't have this problem other people are figuring it out it's a majority minority of co ops that are pushing this rule and have this problem. So so I'm not trying to be disagreeable here but so you've what you're saying then is that this sentence. In transmission or distribution systems that. the national code at that point doesn't apply but that the rule says you know qualifications you you at a a person that's qualified to inspect at the net metering customers expense. Now if they bring in somebody that's on qualified. What they should do is say we don't think you're qualified if they have an in state facility. Instead of applying it to everybody to defeat the policy they should do it on a case by case basis I'm not an electrical engineer if they take me out to sign off on the inspection they should say we're not hooking it up but you're not qualified but is somebody shows up it's qualified they shouldn't say buddy were not going to do it because you're not paid for by the state. Right but if if I were to build a building. I would not have the right to to say you can't come in the state can't come inspect that builds it needs elected national let's go because because I had this other person who's qualified to do that. I think the state then at a minimum the you'd be you'd be asking the state to say okay here's a list of people are qualified to inspect to make sure installations and or are skinny are done according to the code but. As it exists now I don't think that happens so that that's the reason I want to I don't want to get too far the ditches on that one issue but that's one of that seems to be one of the things that's question who has a right to inspect these things say they're ready to go in writing not to go I thank. Personally I think it did it should be the state in and out but I don't agree with is. Our I think if that's the case we say it is a state that does that we need to make sure that they have the manpower necessary to get these done in a timely fashion so with that I'll turn all right we have a few questions for you start out with the senator Johnson. Mark Johnson. Thank you Mr chairman. Unlike you Mr chairman I am not an electrical engineer nor mine attorney like our PSC chairman my friend Ted Thomas. But a. I think I have a little common sense that I I can look around the country and not see any such. Impediments coming for consumers making the choice to put in solar panels either at their place of business or at their home and I'm a and I'm. I don't have a solar system at my home but I do have a generator I have a back up generator runs on propane. And no one came out hi it was installed by a licensed master electricians and I presume it met all of the electrical code so I'm just starting out with the presumption that all these people do their job and certainly have not had any problem with it well I had a problem with the battery went dead the starter battery but other than that it seems to be a really great things specially last winner of. This bogeyman that seems to be thrown up related to all the things can go wrong and all the equipment upstream that can be damaged I have respect to the have these problems in other states and I'm I'm throwing it out but but to chairman Thomas I really want your at least best estimate of up at the answer these questions is this quarter or this come from it it seems you're just saying they made it up but I and I would like to know is there a ten percent basis of reality in this or is it a hundred percent vote cast. To me you have to separate the issues out to answer the question where they came from the federal preemption issues which are a application fee and insurance requirements come from a federal regulation do they put a number on that date of of yes matter insurance no it's just says and you know it just says a requirement for insurance and we've got bills for insurance that are in excess of the person's utility bill is the required. Annual utility bill costs more to do the insurance which is cost prohibitive to do it in the first place yeah and which seems to be the cost. Right new or additional charges you know if there was a federal there's an argument that this is a federal regulation that mandates insurance the proper way to do it is through our normal terroristic process and there's nothing in the care of the states that. It should be inspection issues a little bit different because there's no federal regulation on man that's just this section how does a net metering customer comply with this section the whole federal regulations staff applies only to the application fee and insurance requirements. Chairman Thomas you and I talked back in twenty nineteen we work on this bill you and I talked a long time actually about a lot of these issues and I will say that without your guidance to the committee and to to Senator Wallace I don't think we were got this bill through but. Do you feel that this action at least I'm not going to paint with a broad brush because some of the coops are doing just fine but the ones that seem to be throwing up the X. the stumbling blocks are they operating outside of the parameters the legislation that we passed in twenty nineteen. In my view subject to the risk of getting as quoted back to me and and another disqualification for the petition when you look at these rules to me there's a very good argument that they're clear not there's another argument we have an obligation to give them a fair hearing and will do so. Thank thank you Mr chairman when I was a young man I have six brothers and sisters and course like brothers and sisters do we fight all the time and one day after a long Saturday of fighting it was me back before my dad with one of my other siblings and my dad said the following all day long it's been you and somebody else in you and somebody else and pointed at me is the problem we have a lot of co ops that don't have this for we have a lot of I'll use that and and none of them love the net metering bill that don't have this problem. This problem or your doubt from a federal regulation and inspection thing by identified a bottleneck and in my view some of them seek to exploit it when the real thing that stuck in their Craw is the cost shift. Finally your greed fee. And also while you're doing it and they will wax eloquent about how it hurts the poor we have places that are spending more and larger fees to defend the poor in the cost if the state is hurting the poor there's a way to deal with the costs if that doesn't involve all of this thank you in the legislature can review to see what we got it right and the courts can review it as well. Thank you Mr chairman I thank you chairman Thomas I I just wanna say Mister chairman maybe we can't get this done on Thursday afternoon when everybody's getting ready to go home we probably need to come back and look at this more thoroughly but it is it is more complex and more troubling to me than I even expected me when I walked in the room thank you chairman Thomas thank you Sir. The representative Gonzalez you're recognized. Thank Mr. miss Thomas it seems like you you did say that the federal rules regulations do allow for a fee and for insurance charges. So is your argument that that those should be applied for through the public service commission and that you all should decide what those. What the fee rate is and what the insurance should be. Or not that that's a possibility To me the right way to changes charges is to go through the tariff process whether that's a legal requirement will be litigated the federal regulation might or might not be consistent with the federal power act so there's there's an argument the federation trumps the law but then there's also an argument that federal law gives for this authority and the state's other authority and at the agriculture department is intruding on state authority but all of this would be briefed and argued and of course that delays delays delays we're processes decide these things we don't have a complaint yet because of seventy five thousand dollar tourney's feed was quoted disassociation to do it at some point we will initiate we're up to here with statutory deadlines. In part because all of this is so contentious all of the time I've got staffers that email me at three o'clock in the morning two or three times a stay up all night doing rate cases and stuff at some point will make space to initiate a process that takes ten months but that doesn't seem to be and all of these things will be argued. That does it have to be a terrifying not is a pre empted by federal or not and not have to be deciding litigation process. Okay one other issue on on the on inspections but it does say on rule three oh one B. that's inverter must be properly installed operated and inspected and tested by utility personnel so it is that the same inspection that were they are discussing areas. I'm sorry I don't believe I think that would probably happen before they would interconnected they when we're going to look at themselves before the interconnected. I think this is a separate thing your term a separate inspector. Or a separate inspection so if you go down the so again like representative Beck said who meets that qualification to do those inspections and and who decides who meets that qualification to me the right way to do it instead of saying nobody is qualified. Except someone who's check is signed by the government would be on a case by case basis so who is saying that. The the ones who are not interconnecting these things are the ones that are saying that you're saying the coops are saying that that would be a status has to be the state inspector do yes but to me they should do is on a case by case basis have some objective determination of what's qualified or not and if this is an issue will add to our rules in terms of what's qualified but instead of paint with a broad brush and saying only one it's qualified knowing that there's for positions three of which are vacant so the things aren't in fact and get inspected so they can sit in the sun without generating power doesn't seem to be the right thing to do so would it not be better for the state Arkansas board of electrical examiners who is currently doing the inspections to just identify who is qualified to to make these inspections and yeah maybe it is a private. Corporation Mavis master electrician I I don't know the answer to that but would not be proper for them to identify say someone with this license with this education is qualified to do these inspections. And then open it up were at that young private companies can make money off of that it says you know on here somewhere else that the the net metering customer is responsible for the cost of of all this to get it set up with that Madison or solution that's with a majority of the coops are already doing. That's what all the investor owned utilities are already doing and there hasn't been one dispute that I'm aware of but the qualifications of the inspector so most are not waiting all state inspections they're they're allowing inspect instruction waiting Jean use not waiting SWEPCO is not waiting we have seventeen electric cooperatives and a majority of them are not it's a majority and minority of electric coops. Insist on this. Okay. Thank you Mr thing alone for a little while. Thank you as Senator Blake Johnson. You're recognized thank you dear ten so. Have you I mean you said there is an informal process you got in trouble for doing informal process by making those calls the major concerns and you are the regulatory authority for the state. So with your comments about the law on a regular the rules that have been promulgated. Can you not send out a letter to them to those co up saying this is this is how we we're gonna handle this is as a regulator I think that's a great common sense solution there's one problem with that there's a law that's been quoted back to us that says the commission so speak through orders. Which requires our link the House process where everybody gets to make their argument and takes a long time in a common sense world. That's to be the way it is and I've already informally done that With with seo Hasted. To the phone I can send a letter then probably hear back that you know. This statute says the commission has to act that we wanted procedural schedule we want this this this this this will get order sometime in November and in the meantime the gentleman that spoke here. Is panels are soaking in the sun nights producing electricity The New do you think that was I mean you related to that three times now. You think that's their fault that are they don't have those three inspectors that should be there. Or or you think they're using that for. For their own gain of some mail or I don't I don't concerned that that's what's going on but is it is another path for resistance to this old plan they don't hire the people. That's that's another. Area of government. That's not their fault and that those those positions are not. The reading section either said has to be a payroll rather than the qualification. And we can goes or formal rule making process. And we'll do that that's in the queue of stuff to do okay. So you said the fees and things should have been done to the terror of prod the sheriff process yells so the public service commission and assess terrace. Well it's not a tariff it in a turf is a word like when you buy something you normally sign a contract you don't typically don't sign a con that turf as a substitute word for contracting electrical because you sign up and you take service under the terror of which sets all that it's not like a it's not like a charge. I'm sorry I in our part that that's just our lingo but what this section two oh three says if they want to impose an insurance charge is an argument that section two oh three says that they should come and have that specified in their written rules of what their charges are which is what's called the terror didn't disappoint solar it's it's everything in you to over the rate is set in a terrace. To a general agreement of how that will be yeah except you don't negotiated customer by customer like you do for buying a car it's it's an offering to any customer that comes along and that service territory it's standardized and we're at the tariff is a starling go for with that is. Well of the. So. And you alluded to earlier about the de regulation and and that was I mean that was mine and the representative fights bill because there was concern about those costs yes on and we had a lot of discussion about that but there's also I mean in the back of our you know of discussion is is the ability to. The. Damage our people through. The. These the these solar installers and and. The ultimate regulatory thing for David and I. Is we have board members on there and and whenever a enough of the this happens. Those those board members are elected by a bunch of folks like David and I and you know if this thing happens. That's that that's an ultimate regulation by producers and and folks that that want to take advantage of this is that right. Yeah but if this is what they do when they're regulated. What will they do when they're not regulated. David and I'll fire them. Well the gentleman who presented earlier might have a list of names were candidates for that because these two hundred fifty grand in the hole take your time natural gas bills he's got solar panel sitting out there doing nothing on a bright sunny day well we the we know what we know how we can we can help do the ultimate regulation. But but I appreciate your testimony and and I agree with customers having choices and and help in the bottom line and that's and that's why he did it and that's why my friend that I drive back to the you have has done it and you know if. If it's good for their bottom line and then it's good for them and it's good for the customer to well but it needs to be good for the customers without unduly burdening the other customers which is why we established agreed fee that nobody has filed yeah and and and that's one of I thank representative five math have you know whenever we discuss that we were going to hold back and see if that was ever done and and sounds like if there hadn't been one yet so hasn't been an application yet ma'am so people that complain to you about cost shift have not filed an application it states that data that documents the cost shift when they're the only ones in possession of that data now on our list of stuff to do which includes the V. staf demand response stuff all the innovation stuff that we want to do is a proceeding more we're going to ask okay give us your car ship date we understand you have filed the fee let us see it because work at the the whole purpose was to tolerate some cost shift and then measure it because the cost shift is de minimus when the employment deployment is to minimize but as it grows we want to monitor that. So it doesn't get out of hand we don't have the capacity to do that we might ask folks for the date that's on our list of stuff to do that's but it's you know. We hope to get to it soon will probably be with you to you. With no I can bring you innovation and Carol's. If it wasn't so much resisted and we had more staff and resources you know some of you keep call it resistance. Let me tell you. I'm resistant to a lot of things tell us see it working. And and that's just how I am as a as as nature now and and I don't want the people that I served to be taken advantage of by the providers Alectra providers or by suit some new technologies like somebody whenever there's a storm that comes in and and once you check your roof no that's the that's the that's the resistance that you might be meeting that you might not appreciate that I will and and and and and I hope I hope I hope you can understand that but that's why trying to make the point that the fallacy is working when you look you know we have is what's called a special rate contract which is that which is a which is a little bit better deal for large and customers that we have to approve we had solar facility in a special rate contract are solar policy is working. The largest economic development project in our state's history use the word sustainability seven times because of our solar policy inner solar cost. The power working I understand resistance to bad policy we've got some pretty good stuff going on out there and it's happening in some places that haven't had any good news in a long long time in the Arkansas Delta and all of that was said when the bill was passed in lucky that fell out of a tree. It was stated at the end of the committee table this is what we're trying to do and you see it start to happen. The policy is working I don't mean it's perfect that we will need to Polish the edges of it but the policy itself is working. I appreciate appreciate your testimony and and I appreciate I mean I I've known you since before you were in the position you are now and and and I know you know you're a. Well thought. Man and and just just to. No no there's there's also a skeptical nature now and it is not an all new things yeah all right appreciate that thank you chairman thank you senator representative fight you're recognized. The well okay now that you're recognized you know this. Okay. Forty two forty two okay Sir you're recognized okay thank you Mr miss Thomas others fifteen cities that are not in your jurisdiction is that correct yes are they have a problem right here. Not that I know of okay nor do they don't under they've all retained except for one they've retained. our state net metering policy yeah the end there is they're putting on solar projects in these US cities are they not. Yes Sir nine I have a project will cities you have new needs that self generate they're doing some soul you also have a cities who are customers of utilities they're using and that me and my to serve their lives well I know a lot of the counties and cities are are putting in solar. And the the the net metering they're not doing one for one are they. All except for one. Which one is not my understanding and this might be dated I think the city asylum springs has passed a resolution. There were other factors. Involved in the exemption of the city. What I would like to get somebody up here from when the city's to to address that the ones you need to talk to our from hope in Prescott because that drove a decision to do the exemption I know in the city of and it was not a one for one of also so I and I think you're wrong and some of them we have somebody from the city's or who is here not answer if somebody here that can answer that question I don't know if there's anybody here can answer that question are you well limit when the senator Thomas of done that if you want represent five we'll we'll see if somebody is here who can answer the question okay thank you Mr appreciate it thank represent Gonzales you're recognized thing Mr I'm still trying to understand the insurance and what the opposition to that is so some of these role co ops are required to have that insurance themselves on everything that that touches their grid is that correct. There was an FDA regulation that was passed. That I think I think it's more time to give them the opposite says they can make that says they can do that rather than required I don't have the federation sitting right here with me well I'm I'm not so I'm not saying on let's take take the sole route if they have borrowed money. Then they are required to have insurance on everything that touches their greed I would be surprised if they weren't. Okay so. Why is it a problem for them if someone is putting solar on to their agreement with why would they not have to have that same level of insurance and and are they saying that the insurance has to be done through them through their their insurance policy and they get to set those rates or they say and if you want on our grid you just have to have your solar an insured and. Basically provide me proof of insurance and they are completely out of the cost side of it so that would take it out of your regulation even if you've applied the rules that you're talking about here correct. Yes but I've seen insurance quotes. They were higher than the cumulative level what I'm getting at is I don't have any control over that over an insurance quote right if it doesn't come through them. So if they are required to have insurance on their system well it depends on how they're thinking if they're trying to use it as a block they might wanna big fat high quote for a policy that doesn't exist so that they don't they don't get to control insurance quotes right at their if you can get it somewhere else and they're just saying you have to provide insurance I mean just like if I borrow money on my vehicle I have to provide proof of insurance. Very large policy limits and required by some of the policies. Okay so so you're saying that will. There should just be some kind of standard on policy limits I'm saying it would be great if they were followed Arkansas code annotated eighteen three six oh four B. and filed all of this and it terrified with the cost benefit and if they to pointed out that look you're preempted by federal law and let everybody else argue that there and we could have had the litigation before the impose the fee before they constructed the unit so it's not sitting out there with nothing happening while all this gets fired over after the fact. Okay that's not where we're at now so what I don't know what is the solution. Today because there is a general control of the. Insurance fees so I don't know why they would have to file that cost benefit with you because they don't control it. Their control the policy limit that they put in their policy okay as. Okay. Which is the key cost drivers. Okay any other questions from committee. The Senate Johnson you're recognized. Thank you Mr chairman Chairman Thomas of county get cut to the chase here your former legislator you know what's in our purview we know somewhat what's in your purview. If we were in regular session at this moment with another month to go to the General Assembly by statute fix this problem and clarify these inconsistencies and and even questions such as representative Gonzalez just ask about how these insurance requirements of what they would be if in that theoretical could that is that within our purview similar we were in session but we need to do that and this statute it's in flexible part of the reason why the legislature delegates us as we can be flexible with the details but if you want a line out minimal qualifications. If you wanted to lay out will course there's also the argument that your homeowners are your regular insurance policy would cover this. You know I don't know what the truth is on that yes. Full statutorily because it's inflexible and getting into those details there's some there's some downside to that so when more normal situations we we delegate this to the commission to work out the details much as we allow agencies to promulgate rules yes under the ministry's procedures and that's true with the whole interconnection thing is very complicated because its engineers the people that designed and built the system you know engineers are pretty proud of their design and rightfully so we've got good designs and when somebody comes in there want to plug something in. You know that there's some. There's some resistance that's perfectly normal that's how engineers are trained thank. so that whole interconnection area is very complex and a blob and that's the kind of stuff that rather than the legislature to the very detailed rules that you sent ya and all this mess you wouldn't want to cross over that line but on the broader policy thing. Yes good answer thank you chairman Thomas thank you Mr thank you senator for the questions we're going to move forward in in we don't have the names of the folks who are going to be on this the solar panel and my question is the individuals who have the answer to the to a representative fights question are you on the panel. If you're on the panel then then we can get that the you know the panel you can be recognized you can answer that question if not then the then I want to make sure he got his is a. Question answer. Looks like we'll be short one chair in front of you gentlemen want to grab one of those share this dragon around. Just to help you be where I hate I hate to cut off anybody at all and I don't plan on doing it but if you guys will come to self police yourself the the reality is you know everybody and I appreciate the folks who are hanging around but if at some point people's people will will lose patience ended up walking out and that's just the realities of you guys to be preserved as possible every great. If you don't mind introduce yourself don't go across panel and introduce yourself for the record and then if you all want to have opening statements and you know what give you leeway as to how you manage your time. I'm sorry let me if you hit the button let's see for the your. This is can you hear me OK thank you thank you Mr chairman members of the committee my name's line Walter from the executive director for the Arkansas advanced energy association and all that my counterparts Senator Sturch. My name is William Williams I'm a territory manager for some pro solar. Hi good afternoon I'm Katie nearby my service president delta solar based here in Little Rock. Good afternoon I'm heather Nelson co founder president of steel solar and also chairman of the board of directors of Arkansas and synergy Association. I'm Kayla Gordon out of Bentonville Arkansas we shine solar and the president co founder there. Thank it's okay with you Mister chairman I'll kick things off that sounds like a plan okay I so again I'm with the Arkansas advanced energy association we represent nearly a hundred fifty members across the state who are engaged in various types of advanced energy's training ranging from energy efficiencies to renewable energy to electric vehicles all of which can help save Arkansans money and have a significant economic impact of the state I want to start by saying the issues that are members and that our Kansans are having is not with all co ops but rather a with just a select few so you know the Arkansas electric cooperatives do great work in rural areas and communities all all across the state and so today you'll hear other testimonies from from stakeholders explaining specific roadblocks they've encountered when trying to implement renewable energy as permitted by ACT four sixty four of two thousand nineteen in the supplemental materials that you received for today's meeting you can find amendment so that was prepared and presented for the staff of the public service commission when these initial conversations became at presented to them last November I'm so that you know we've been having this conversation for a few months now and that provides a screenshot I'll stay in it And a highlight to you more details on on these issues for purposes of this hearing these read about blocks as you've heard essentially fall within within two categories the first is an obtainable inspections and the second is excessive insurance I feel like I'm chairman Thomas has done a good job outlining and explaining those issues and so in the interest of time edit my comments to admit to met a lot of those specifics I did just want to clarify and representatives bag and then also senator Johnson to to some of your questions with chairman Thomas regarding the inspection component the department of labor allows master electricians to become certified as a state inspector Because you're right the department of labor is doing the best they can with the limited resources that they have and it's certainly not the co ops all that's not their job to hire those folks but I will say the co ops have have decided and stated that they will not accept that as an alternative so because of their rejection what members are often left without a solution as we heard earlier and and can expect to begin paying for those solar facilities by up to four months before they're ever allowed to begin recouping their renewable investment so in total as of November as you can see that by that document this was this issue was impacting a hundred and eight Arkansas and today we estimate that number of a affected our Kansans to be triple that closer to three hundred folks. and then as far as you know the that from the insurance component representative Gonzalez yes they don't define the fees back to kinda echo what chairman Thomas at I think the main issue is that. They are requiring and largely commercial policies online often residential projects and so they do determine what those limits are and again there it's not exactly at a logical fit there so again many of those are unattainable those policy simply don't exist for those customers and the few that do you have close depending on the size of facility up for a premium exists in excess of the monthly cost of the net metering facility. And this and then just to recap. On the insurance front in and to put it in context for you again as of November that issue is impacting eighty seven Arkansas and it's also resulted in some customers and installing their solar facilities and several of our members being unwilling to offer seller services in co up territory so we estimate that number to be nearly double today. so ultimately I would just say that these delays matter as we heard earlier in that in a testimony the commission has enacted favorable net metering policy called grandfathering which is set to expire this year by imposing these requirements the co ops are intending to delay their members beyond that deadline so they can no longer take advantage of those net metering laws and at by financially feasible opportunity to to become more independent and I would also say you know German Ballinger you mentioned earlier folks and in your district that are often going without and while I do represent mostly solar companies I spoke with you an elderly couple couple weeks ago that has panels not producing and the quote that she gave me was that the money that they should have been saving on solar in the past six months or so was money that they could have been spending on her husband's cancer Bills and also groceries and that's that's tough to hear. so regardless of specifics on these issues energy providers or ultimately regulated by the public service commission so we can go back and forth on you know the specifics but again the public service commission had no previous knowledge like let's approval of of the requirements so that makes them you know essentially illegitimate so you as a legislature decided to enable more of a free market approach to energy in Arkansas and because of your work or can't and should have the ability to be more resilient and more independent from and I'm a monopoly if they choose you as a legislature passed laws enabling what should be a competitive business environment to cultivate innovative developments through these technologies and so our ask is just that the our cans and trying to utilize those those very laws and technologies because of their economic benefits should not be prohibited by novelistic and entities have demonstrated a hesitance to to advancement so the diligent requirements and unnecessary red tape or or certainly hindering that the growth of our state I would also just like to make a point that we have companies that we work within an RSS ation that are encouraged by the work of this General Assembly this body and they want to conduct business in our state and it's hard for me as a proud or canton to take calls from them saying that that we are not conducive to business in the service area so just to be clear we have had companies that have pulled out of our state from an economic standpoint just because of a handful of these issues. you know I would conclude by just saying renewable energy has economic benefits that are undeniable you know you've heard from from David roles and I historically have an agricultural background it looks like Senator Stubblefield as has stepped out but you know he he's a poultry farmer and he recognized those economic benefits when he chose to invest in solar last year and farmers make a significant risk every year when they decide to put a crop in the ground and they're already taking a gamble on a volatile markets and predictable weather sometimes as we all know trade wars and. Renewable energy is not something that's a gamble but rather one last very less variable that farmers are gradually factoring into their operations to help improve their bottom line and often stay in business because as we know that's not always the case it's simply unacceptable that even though David has taken the right steps he still has panel sitting in this done not producing power just from these illegitimate requirements so agriculture is the background of our state we all know that ninety six percent of our farms are family owned and operated and we should be supporting their success by offering them new tools through these these developments that increase their competitiveness not porting their success by putting pointless road blocks into place so are asked today is is just simply for a stable transparent process it's important now more than ever that we capitalize on the opportunity that we have as a state to maintain our as a leader in this sector and unfortunately this red tape is is hindering our growth and Arkansas is getting left behind in the specific territory areas thank you. Thank you. Thank you Mr chairman Secretary Thomas learned both even up most of my testimony so as not to drag over everything twice in the interest of time I want to try to address the specific questions have been asked Senator Johnson had asked if this is the standard for insurance in other states some pro solar operates in twenty two states and we are subject to about two thousand utility companies two hundred and eighty of those across the United States do require some sort of insurance on a whole it's not commercial insurance though. Which is what is being required in Arkansas standard residential general liability and they give reasonable rates for so it's not uncommon that insurance is needed but commercial insurance on a residential properly a residential property cannot be obtained in the state of Arkansas that's a roadblock to people completing these projects. The second question that was asked was about the rates by representative Gonzalez. heavy Jean does have an interconnection agreement which does require a A a commercial utility policy and specifies the company from which that that policy must come. And no other insurance company will be accepted and in fact other other insurance policies have been rejected. And so it makes it very difficult for our Kansans to comply with the rules with the goal posts are constantly being moved on. Now to the end to the issue of inspections we agree that inspections are necessary for safety David brought up to me earlier that when he built his home he built everything to code and it's in the county and no one required inspection there was though inspection required on that but when he put in a solar system all of a sudden even though it was put in the code and following industry safety standards there was an inspection required on that. It is a dual standard first for a similar project which does go to resistance thank you want to speak to resistance because resistance is healthy when things are on no. What's going on here is not a now we realize that safety is important everyone of our systems that we installed has a shot off. Which if the grid goes down prevents any entry from back for unlike the thousands and thousands of generators that are connected to homes that do not require insurance policies to be connected to homes. It seems like a double standard again. What we want to do is allow Arkansas since the freedom to take advantage of the net metering policies that were put in place here in Arkansas without any undue delays. that are not. Legislative. The last thing I want to bring up was the public service commission as soon as a secretary Thomas says. Does have to speak through orders. I to this day I don't know who the enforcement arm for. The public service commission as. You know if if you have somebody who sells cigarettes or alcohol to a minor there's an enforcement branch for ABC to go out of force that but if you have utilities which what are not in compliance with the regulations are being put out the recommendations of the PSC who enforces that it has to go through legislation passed be drug out has to be done through order so they don't have their own enforcement arm which is how we ended up here in front of you today so that we can start that conversation on that And I understand if I may Mr chairman representative fight had a question you want to specifically answer would mind if I could get him to restate that question. Rizin fight if you want me to fight. Yes my question was concerning the fifteen cities in the State of Arkansas that are not under the public service commission of was or do they have these issues that we're addressing today and also were they under the one for one on the net metering. It's been our experience that we will we've been able to work very very well with most of the municipalities were not getting a lot of push back on the inspections and on the insurance from any to municipalities in fact some of these men municipalities and the city inspectors have been authorized by utilities to go out and perform these inspections. It in the city limits instead of state inspectors. which brings up another point we install everything to international fire code to make sure that these systems that we install on people's homes are safe. International fire code we let our local fire marshals inspect that. And yet when it comes to electrical code we're going to try to impose a state inspection. Where a local inspector who's qualified to make that determination can do it in another area. the state of Arkansas department of labor issued and and I'll quote from it. Until the board is staffed to provide this complementary service in a timely manner energy providers and installers may wish to consider using third party independent contractor contractor that is licensed and qualified in the state of Arkansas to provide the requested inspection service knowing that they didn't have the staff to meet the demands they said that somebody who is a qualified inspectors should be allowed to do this. And. A select few coop said no we're not going to do that. You can only surmise from that that the the reason for that is to delay the completion for these homeowners. Certified inspectors a certified inspector. I was able to answer questions specially yes you do realize that the co ops when you talk about those the. The coops and the homeowners are the same people do you not. I understand that the coops represent the homeowners in a in most cases a lot of the homeowners are not aware of the decisions are being made by the coat coop they just know that there are electors their sole source of electricity till now has been the coops prior to being able to have the solar option and and now roadblocks to taking a section our second option being put it away thank you Mr thank you a German back you're recognized for a question thank you. And again on a Titan don't wish to take sides in this argument but I I want some clarification from your statement you made a statement that the gentleman's house was not inspected but the issue has solar system requires inspection. Do you not agree that that solar system is connected why outside of that individuals. Residential area. I don't know where it's connected but I know they're both connected to the grid right so that's a commercial grid correct. The Great supplying power to the home would be commercially else if the seller you know we're connected to his house it would then be connected to the grid is that correct. yes it would okay so I. I do take some exception I mean I'm not really trying to pick sides here but you are talking about something that's hooked into agreed that goes far outside of that individual's property of the transmission system. If you have a failure or a common failure to transmission system or something like that that would isolated section that system could generate power back on or if you had a failure in your system and it didn't clear the line so here's my question I want to go to. Who's responsible if that system. Does not performing clear the line when the power has been turned off to that one. So in other words a back generates on to the line. The systems themselves are designed with the safety switch in place if there's no power from the grid the system cannot operate so it will not be sending energy back to the grid. Sullivan your statements that is physically impossible because use of the I think someone made a comment about generators generators cannot there if they physically cannot be hooked to at the same time that's that's what happens with those of now you can there are a legitimate news is the license after that I understand do that but my point is that the correct installed they can the generator could never be hooked into the line when the utility is also connected to that line. Physically impossible and that's through transfer switch right okay the so solar systems have a similar transfer switch which isolates it from the grid. They're designed that way. For saying that the solar system can not be on the grid when the great is also supplying power to the house. I got it I don't under I don't know actually okay so the way it works is excess energy from the grid clothes backwards through the meter and accumulate credits a homeowner's fifteen like credits with the utility at night when the solar panels are producing energy flows back in but there has to be an open circuit there has to be closed circuit for energy to flow in and out in order for the solar panels to operate if the AC power is cut to the solar system the panel sees producing. So but so if the grid goes down the payments can operate okay. But they are connected you the solar system is connected to the grid they're connected to the home which is connected to the red statements generator but it has the same safety functions and it has a generator if a generator can never be connected to the grid in generating when the grid is connected to the hall correct so that's the isolation pointless one where your eyes that this isolation switch there we have a civil right isolation switch to prevent backflow which cuts the system off from providing power if there's no AC power to power the inverters okay thank you. It in so and that's the type of thing that would be inspected right at the chairman back I think is I think what he's wanting to do is is make the distinction that that I think we recognize that there is more risk associated with the the. Typedef majoring system we're talking about compared to the House to other people right so I mean I think everything we talk about the reason why you have this which because of risks associated with it I don't think that he's making the argument that there for it that means a state inspector has to be the one who inspected that you know it's a different equation the question is whether I need to be inspected or not need to be inspected and so maybe it doesn't need to be inspected I don't know but but we would agree that there is some risk associated with the with hooking up the net metering to the grad because of that potential that if the switch not hooked up right that he can put power back on the grid get it I'm not allowed is that our experience has been that that piece of the inspection we've generally seen that the utility company is doing so we'll go install it and then at a city or county or state inspector will come out there looking to make sure we put placards in place the right stickers on on on the con do it the the correct wire sizing all those things but they're not actually turning the system on and testing it and then once we have that inspection we notify the utility that we're ready for interconnection the utility comes out and generally a representative from the utility will turn the system on and then use the disconnect switch turn the power off from the home and then ensure that the system. Turns off like it's supposed to when it lost connection from the grid so that piece of the inspection that we're discussing that's the piece of the inspection that the utility company is doing not the state city and county inspect okay so different different part of it okay but my point is the utilities themselves are the ones checking for that right. And then they come out once a year thereafter or lease agreements as they do to continue checking to make sure that the system will shut off correctly in the event of a power outage in our position Mr chairman is not that inspections are not necessary this is electrical equipment should be inspected we wanna make sure we get it right we don't wanna burn down anybody's own. It's who is authorized to do the inspections okay the state has said someone who's authorized someone who is licensed to do the inspection. And a select few coops of said no we're not going to accept that okay against the advice of the state and then when it comes to the insurance. We searched we've tried to work in conjunction with the cops to find somebody who would write a commercial policy for residents and they just won't do it. Except for this one company provided by teddy Jean in their paperwork. They're not gonna write a commercial policy. A residential general liability up a little bit excuse me a presidential general liability policies policy that's a mouthful. Is acceptable and it's done it two hundred maybe different of utilities across the country but that's not what the select few utilities are willing to accept thank you I don't but we kind of cut off I don't know the other panelists wanted if you all want to go through your presentation you know your initial comments or if you want to go ahead and get in discussion but but I know the three of you really have to have the opportunity to have you had a chance talking all the review had not had a chance to kind of state your position. So if you would will go to move on Sturch thank you Mr chairman again Katie any bomb with delta solar and so we are handling installations from utility analysis all the way through long term maintenance for clients across Arkansas these are commercials licensed and we do a lot of agricultural operations work and other commercial business owners and our goal and we've heard this is kind of been a theme is transparency transparency and accountability to our clients we want to be good partners with our and utility companies that were working with and often that means we're making sizing adjustments sometimes location adjustments based on the feedback that we're getting from those utility companies and their analysis and we we talked a lot about safety in each one of our projects is installed by master let tradition in accordance with A. C. guidelines the utility partner is involved throughout the project they're doing their own back the test prior to the system being put into service and when a city or county is required inspection inspections required for making that happen as well so I think you're seeing the multiple layers that are in place today and you know we have faced a significant delay like chairman Thomas described as a system in the delta they're sitting in the sign it's like that new car that you just purchased that sitting in your driveway that you can't turn on and use and you've made a significant investment and in the case of our client is is a farmer just like Mr role so I think the collective message here is that you know we we are wanted to follow the rules having whatever inspections that the PSC's requiring but we need to be timely we need them to be known transparent for this productive business environment to take place and glad to answer any questions after the initial other comments thank you. Let's go through the rest of the panel if centre Johnson if you okay let's can finish and then we'll go okay thank you I have because of the my is anyone's name may I have your name appear I'm totally out so you're fine this is heather Nelson was still sore again and I think in the interest of time and because we really want to answer all of your questions I would just be duplicating things that I've already been said so I'm gonna I'm gonna defer to you and what the questions begin thank you if you have anything else to add they are not that has not already been said though if the question comes up with okay I thank first Senate Johnson in center ice. You're recognized thank you Mr chairman of Mr Nelson and Mr Gordon optometrist sees referred to you because you're in the industry in the insulation industry and I not sure how many states to operate in yes I know that Mister court hearing at least three or four states of. Yes this problem anywhere else. we have to utility cooperatives in the state of Oklahoma that have requested insurance policies for residential customers and for those two utilities we actually of them and said Hey in an effort to help the customer you know with their pay back on this project everything else would you accept shine solar adding your electric cooperative as an additional insured on our two million dollar commercial liability policy and they said absolutely why not in the event that something happens I assume chancellor's gonna get sued anyways so I have that insurance policy can I add that electric cooperative as an additional insured on my policy to cover any installs that we do within your cooperative and it made perfect logical sense and we proceeded and so those are the only two experiences outside of the State of Arkansas that I've had we operate in Kansas Oklahoma Missouri Tennessee and Arkansas and we were able to. And just fine so that that that was a solution we came up with K. Nelson your your end of that are for our firm is primarily focused we were founded here and North Little Rock Arkansas in twenty twelve and so we thought primarily focus here we do handle projects both from anything from two panels on a residential three twenty thousand plus panel so we've installed farmers small businesses homeowners County cities school districts and so and we do and I guess I don't know if it's a a claim to fame or stupidity but we had we probably have done designed and installed the system for most of these villages in the State of Arkansas that includes the cooperatives the investor owned utilities and also some of the municipalities North Little Rock we are headquartered in Iraq and we work all over the state of Arkansas we the team of sixty any problems with North Little Rock electric no Sir nine with North Little Rock electric which is awesome is this palette a and I think it is important to us to restate I think that this is from chairman Thomas to others I think it's really important to to almost over state that the majority of the utilities what they're talking about investor owned utility of cooperative or municipality are you know playing well it's it's a nice playground everybody's in the sandbox and everybody's playing well together we just have some out liars so to speak that are not and one of the things to representative Fite is that you know wanted things to remember is these cooperatives Mr their own members they are one and the same and so their thwarting their own members and ratepayers in doing something that very often in the very beginning they approved everything and then they're changing the rules you know midway through the project partway through the project or the end of the project so I just wanna emphasize that that we have great utilities and state and the majority of them are doing a great job. And we're just having some issues with certain ones but the problem is that there they cover a lot of individual our Kansans business owners farmers and residential and those those individuals in Arkansas need to be protected and they need a fair playing field. And and I appreciate your comment on that And I some of those are are my constituents and I'm I'm concerned about that and when you you said changing the rules of the game we we the General Assembly worked with all the stakeholders and I in twenty nineteen and came up I think with pretty good bill it obviously nothing's perfect and is subject to changes the market in the rules and technology come along but chairman Thomas is the the fair arbiter that we count on and he helped us three years ago and I know will continue to do that but I'm I'm grateful the child came today and and shared with this and I appreciate all of you and Swatter say have your dad for me. Thank you Mr. Senator Rice. Thank you Mr to the chair we'll be hearing from some of the coops be neighbor respond. Yes ma'am we'll get later today I'll just make that statement let let let me put a little. A common person perspective on this one is I appreciate all parties have been view points in this and and a little bit of background I've got a brother that initial system this this last year he conduct made and then turn me on it I've only had one other one besides AM national limitation up and he's my business partner or the seventy two year old a family perjured plants business. We take care of our customers. That's why we stay in business. We have over seventy two years we figured out there's things we have to do to protect for liability. Just because somebody says they can do that or if somebody's buying something online. Or somebody is because a bar required for me ten years ago they they think I need to drop everything I'm doing in give them. A hundred percent of my effort that I can do because I've got my daily business and I know that's not an apples to apples comparison. But I've heard. Some things were companies not saying anything else the company's site in sales. That is all peaches and cream. But is not reality so I greatly thank you stepped out of the room a greatly of. I am sympathetic to the man's got a quarter million dollars in that and even so much got thirty thousand dollars or twenty thousand or whatever to. Would you there's some reason sometimes I'm I'm waiting to hear from that that you have put some things in place you all are talking about total safety. And and I'm I would like to hear if there's some things that have been cost back on a call option that cost me and my rate I don't have so. Thank you. And if it's taken away or if it's diminishing the overall rural electric co ops when they come out and. In taking care of a tree falling on the line I'm out in a rural area when I tell somebody to dig some place didn't bankers record finder to get up and they got out and. The date when it's raining. To get me electricity back again so. I would like to hear some balance to this. Not just the sale from the solar system and I I think I got something a minute ago the we're talking about ongoing customer service in some of that can be because you want to be able to have the sales you will have that customer service to be able to sell the other customers Mr I'm I'm interested in moving along before we lose everybody if I can and I can stay because I'm going to go to I'd like to hear from co op when possible thank you thank you representative brags or next. Thank you Mr this for any of you wanna answer somewhere in the discussion it was mentioned about grandfathering could you tell me what those changes would be at the end of the year and those changes affect any of the issues that the child addressed here. Hi representative right a grandfathering is set to expire at the end of this year so I think the the overarching concern and why that was brought up is because if some of these issues that we're bringing to your attention today are not resolved what what that means is in order for the grandfathering to take effect the project has to be fully interconnected in the final interconnection agreements I'm trying to use as many layman's terms as possible I apologize and the final interconnection agreement filed and so in order that to happen we have to we would have to get through any issues with the insurance certainly or the inspection process so these projects were dragged out and drag out past twelve thirty one some of these individuals and we're talking about everything from residential to a city council a school district could miss out on the grandfathering because their system was a fully connected and we have a former that their system has been ready to go since October of last year and we're still waiting on a this state inspectors office because we have to we have to wait for them and we did submit four and a state inspector for master electrician and they got they got certified by the inspector's office and they were fine with them and then the cooperative in question rejected that and so we're just we're just waiting and so do I think that one is gonna fall across that twelve thirty one no Sir I don't I think that that inspection hopefully it's going to happen in the next three to four months but at some point we we hit the precipice of deals that can't go forward because we have a fiduciary and moral obligation to our clients to say we're not we're not confident we can get you through the entire process before the twelve thirty one deadline and so that is a that is a a a a sub concerned but very rapidly becoming a primary. Concern for our Kansans yes Sir so how would a corporate benefit by the delay. Well if I mean they wouldn't be locked in for grandfathering and some some people will choose not to go solar if if they don't have been incentives or that have stayed with financial. Right there there is under the grandfather and one to one yes Sir okay all right thank you. Thank you a representative Gonzales. Thank you Mr there's a whole lot of this it concerns me and I I want to I'm I'm not against solar I don't know how I've come across so far out of the discredited some situations I greatly concerns me with the the accusations that were made against the packaging co op if if there if they are dictating what insurance company can be used to what the exact rate is at that is problematic and something we probably need to look into but it also concerns me on on this page that I think was handed out by by all the number of customers who are impacted by this and I think you said this number has tripled. Yes so my question is are you all still selling these solar systems in these areas that you know or problematic because to me that's your own obligation we all have to to say to tell the customer Hey we can sell you the system you may spend two hundred fifty thousand dollars and you might not get it hooked up because we're having trouble with the the coop in your area so what is what is happening that has raised that number so high since this is papers come out. At sign so we're not we've we we turn away three to five customers a week that we say Hey at at this time. There's not a clear path on getting solar panels set up for you and so will hang on your contact info and circle back if they ever get resolved but at this point you know we've got the handful of customers that have panels on the roof you got the handful that have signed we have permits were ready to go but we caught it before put panels on the roofs and then you've got the group who were just turning away each week. And representative Gonzales we are still selling in certain areas the the catch to this is that we sell systems. And then when we submit the interconnection agreement then these restrictions come up so we will offer already sold and then it gets put into play and that's where we bring up keep moving the goal posts. we do set expectations with people in areas where there are delays due to inspections or due to the need for insurance or even tell of what the insurance needs are we tell everyone there are delays we tell them where those delays are coming from be aware of it and we're telling we're gonna work with them until we can get this inspection done in their system up and running so that they can achieve the for financial benefit of being sort. And the only other thing that I would add representative is that the list of co ops is growing as well so this was in a select number of co op territories and that has expanded so I know some of our members did not anticipate similar to what we'll dissect an anticipated was gonna be an issue because that has never existed before. And here we are hi I have one today installation crew call me until we were approved interconnection agreement approved. the all the permits approved crew shows up they get panel so halfway on the roof and all of a sudden someone because the homeowners as a way to committee we need a million dollar commercial policy before you can go forward. You can't predict that. Right we'll see no further questions we thank you for coming down and and share your information with us and I what I want to thank all. Any for I'm not advise everyone the gal that I've the the next panel up is going to be from the coops if you guys will start making your way to the front here and we certainly appreciate you guys thing with this is laid out In the hope of trying to move things I had I. We want to make sure everybody got a chance to. The hard sell. If you guys let's take a seat and just. quickly introduce yourselves and and we'll get started. The song Mr chairman. Yes okay. Thank you chairman rector Ballinger members committee for having us here I'll be very brief because it has no longer trying to cut my statements short but Kirkley Thomas vice president government affairs for the Arkansas electric cooperatives. That is a a statewide services company owned by the seventeen distribution properties around the state. They edition serving electricity a lot of work serving fibre broadband over a million people in the state we have representative for a few of those coops in short notice I didn't get all seventeen here but I've got a cross section of co op engineers around the state as well as Mr Derek dice in here who is president CEO of our solar company we about eight or nine years ago we started our own solar services company we're pro solar we we have everything in our mix except nuclear so you maybe can speak to issues from from that side of things because we are actively deploying solar as well but I've got some engineers here that can speak to some of the complexities maybe have been brought forth today we don't have time to debate everything's been said I I will say that the forefront of everything I think these guys do because we are owned by our members as about member safety safety's been mentioned here thank someone says not about safety it is about safety no one's mentioned human life we talk about that feeds not just searching on the system but it backed the because of the Taliban. Loss of life we send our linemen are lying women and we have women and service line and our line personnel. We want to come back home safe and sound so it is a big deal it's woven into our DNA that safety is first. German Thomas managing data net metering data cost shifting data with he has mounds and mounds and mounds of data that's been supplied to utilities over the last couple years so he has that data active phone fees wants to. As to his statements about The finance or or just qualifications I'm not sure what that means I think everything's on the public record of what he might have said to people are not said to people but unless I'm not sure what he's referring to there but anyway we've got experts here with them an addition selves and and they can speak to what they experience and and why they do it how they do it so We'll just go down the line here and make introductions. Go ahead. What lands there Tyson a come from experience of work with number of cooperatives and municipalities and public power reduces across the country I'm before Committee PR of this presidency of I will tell you in my experience of travel across Arkansas over the last two two months one week the experience I've had in talking with the various cooperatives especially when you know the board members as well as citizens has been if you were interested in solar you were interested in home so he went to court for the support of the homes older they're not trying to hinder in my experience of going and talking to these people over this last period of time try to hinder solar the trying to figure out the best way to do it to make sure the customers who are members are getting the product that they've been promised that's one making sure that the system is gonna be protected once the interconnections we into but at the same time ensuring that they are complying with the rules and regulations that are receiving whether it's from our US three totally service or from the state. That's been my directive SDPI to make sure that there's opportunities to ensure that the stuff is going to work properly and be installed properly and safely but no one can if in any circumstance or there's been in public means for the crops or in person means with coops in their boards as anyone in a give it a try to hinder the in stellation of solar I find it somewhat offensive granite I'm new to the company sometimes on offense of the people to imply that just for from their mindset and from what that process is where small number of customers as compared the full length of customers and full breath customers that actually have actually have a service install so I'll pass it on. A good afternoon very you in Arkansas valley electric of the Director ensuring operations bursitis wanna thank of let's be here I might apply the policy makers a past present future for for working on these policies to allow people to to look into renewable resources I think it is the future of it has a place in Arkansas's future I think a. Mostly I appreciate the fact that the that they were forward thinking enough to put protections in there for not just the consumer's us general public but those protections ultimately for the health and safety of the consumer of the the general public first responders and then ultimately all the men and women that work tirelessly to make sure Arkansas electric grid is reliable twenty four hours a day seven days a week and then provide safe reliable power second I think that protection really is protection on the consumers investment that investment they make in the situation I mean you know hard to and fifty thousand dollars I mean we see fifty thousand dollar systems and we've been asked to uphold this policy to to make sure that those contractors are are installing a quality product in these consumers the that product to to be a quality product for the next ten twenty thirty years for them to have a return on that investment The issue we're saying like everybody address and really why we could we could use some help on our members could use some help on is is the the the speed at which the inspections can be done that that inspection process we just to clarify so we have sixty thousand meters we have roughly four hundred active solar count so we're we're pro solar we we that's expanded greatly in the last two years I think we've added three hundred in the last two years so we're looking those up as quick as possible the inspection process has come to a stall we do require inspection we've asked for some guidance on that we we are allowed city inspectors just for a point of reference we've Commission forty three system since September. Thirty eight of those were done inside the city limits we've had five done they were in the counties in the state in the states we don't we serve eleven counties in Arkansas as far as I know we don't have any county inspectors the city inspectors there may have been some cities that have been willing to go outside their city limits and we have Commission no systems if the city inspectors are willing to do that we're we're trying to lobby the best we can for our members we try to direct them those those directions we've asked the the letter we sent a letter that says the the the Department labors not responsible for that or they suggested we go a different route we've asked for some guidance I guess our guidance if I was asking for some would be for them to provide who that is and then tell us to that list is not have a speak that list I think it has to be impartial from us and I think it has to be impartial from installers I wish we could I wish we could have TPI seal solar shines all of the whole group but that is not be a surprise but on not all contractors are created equal and we seen out we see a lot of that installs that ultimately we it's our responsibility to protect member and so to my recollection We we follow a lot of we have a lot of regulatory bodies that we follow you know our US any CNC OSHA. This might be the first time thank you is the first time the first time we've ever had somebody from that regulatory body ask us to circumvent this section policy or liberally interpreted for risk of safety for financial gain. Hell I'm Jesse graves the managing engineer Clay County electric sold miss roles of electric cooperative I would agree with bear about pretty much everything he said we. We do have rules. That are basically our care center filed in in in all the seventeen costs and and I need to start up I guess by saying we are we are owned and are the people that that are that we answer to our our members Clay County electric is eighty five hundred members thirteen thousand five hundred meters basically I work for those members I mean I mean I work for them I talk to him every day I have people in my office every day and what I see more than anything else is many of them in their school intermittent like seventy being taken advantage of. When I come in people are coming in telling them this is the thing that's it's all rainbows butterflies in fairy dust they come in said my office if they should if they do comes at my office what should be the very first thing they do for us to go over everything and we've got some some good operators it that provide them the correct information that and we're fine with that we're not anti solar ready to repeat that were not anti seller out and I'll tell you so much as I just installed a solar system on my place im pei I paid the five hundred dollar application fee I'm going to the preliminary design all have an outside inspector inspected state inspector or county or city the way the the way the carefree right now all our reviews section for certification the system is being installed in compliance with the local building electric code of city council signed by the inspector we need direction on who either take that section now or we need direction on who that is because it's not the call we go down to the top of the meter on high voltage and below the meter that's any any C. rules not any Essie we go by the NTSC we don't behind the meter we don't inspect that we don't know what it should look like most of the should know what it looks like we know our power lines we've got fourteen thousand four built in our system they've got seventy six twenty in their system it's high voltage what we are concerned about more than anything else is one of the systems failing and when I say you know they're they're designed not to fail I agree I agree with with one of the one of the owners of the companies they're designed not to fail but there's nobody sitting in this room that can save a guaranteed one hundred percent that they will never fail we get a bad lightning storm come through in one of the inverters gets hit by lightning and now it's producing power when it shouldn't produce power and. Like the chairman set up there they are connected to the grid all the time you if the grades given them signal sixty cycles a second then they're fired up in their work and integrate doesn't give them signal they're not supposed to work shall the probability is very low. That they malfunction but there is a possibility and impossibility is what the insurance requirements for we take our insurance required directives from. It's the Iraq let me pull it up real quick. So it's. Bear with me. Interstate renewable energy council basically there are council that sets forth. Rules regulations kind like the NEC I like the any S. they set regulations rules I say this is what you should follow if you're going to do this methodically and thoughtfully and morally so we we pulled up and what they say is you know for the size system under seventy five K. W. system they need one million dollars worth of coverage on a seventy five to five hundred they need four million dollars worth of coverage our board rules that we adopted has those coverages in there everything Mr also awhile ago and he's a good gentleman I met with him several times all the all of our rules everything are online there on our website you go to Clay County electric dot com right now you can sit right there and do it right now go to click ILEC dot com click on solar everyone of the rules are there. Everything that we follow everything we tell them to do I'm doing right now it might it might place I want install system see what it's all about to see how it all works I can tell you this I installed a system it cost me seventeen thousand one hundred dollars I did all the work myself and there are charging forty five thousand dollars for that size system I installed in a week by myself it would take for decent workers a day to install the same system. So there is a money problem there is a money issue going on not in it even if you don't count all the federal money that's being thrown at at all of this. Not all answer any questions you got but we're doing the best we can on limited resources we got sixty right at sixty M. Kel employees I had a hard to engineer last year just to keep up with the solar stuff. Why why should my other members have to pay for that and I know I I heard Mr compensated we would wax on eloquently about how we would cry and everything it of what we're having to go through what we have to spend but. It affects everyone of my other members if one member wants to put solar on I don't have a problem with that but don't expect my other members to subsidize. Whether it be through hours that I spend hours of Demeter Department Spence the making a new meter hours that my billing department has to spend because now they have to figure out how do I take the power that we send and then the power that we deliver and subtract that out any special you got eight a farmer to come says I want to put on an aggregate six meters on this well how do you keep track of that our software just now catching up to where we can where we can actually do that so it's. It's a lot of little issues and we're not trying to impede or keep them from doing it we want them to follow the rules don't go to the website and look we've got it we've got a document this I think it's thirteen will appoint a flow chart says do this do this do this do this in high usually find out that the somebody to the seller it's on somebody troops in one in one of my servicemen called me says they've already built it and then I start following documents alternative the next person. Thank you the kids go up with Woodroof electric I am the distribution engineer for for them and I handle all of the sellers that comes through us we have a lot of the same policies I want to be here today and and talk because we have a lot of the same policies that some of these people that are getting backlash and it seems to be working really well for us in our area we haven't got the backlash we do require that you have an inspection done we do require that you have insurance on any new ones going back to grandfathering that she didn't fully understand grandfathering what that does is it locks them in to understand that their investment they're making today is it going to impact them negatively in the future so I want them to allow that whatever's situation they come in under that will that's how they're going to continue to get done we have personally in the House grandfather people and as we adopt new policy as it goes for. This policy that it's coming as if you're are you as far or as a federal bar where it says in there that you have to have an ID or policy it is to be fully instated all your board has to approve it the same board that's appointed by its membership it runs or or company. I have kind of the same stuff that that some of these other don't have we have some some installers they're great and then I have some some some terrible stories that I could share if if need be of but do this inspection process we we have had things turn over just as simple as like the disconnect that they're talking about that doesn't really work the same as the generator one but they they claim it does that that disconnect was wired reverse on one leg so when you for the disconnect through this inspection it was found and killed have the power to the house I mean these are the things that are being found once again this is in any C. code we are governed more by the NTSE code on the opt-out centimeter. I don't take much time and a lot of people left but I'm definitely here for any questions. Caldwell's C. O. for south central a trick and I want to kind of just wrap up I'm actually not an engineer in an operation side for a really long time and I appreciate all summer one rests on these comments and and also do a little better clarity on some of the comments from earlier in the afternoon one thing that I think we all probably know here but a good reminder is is like correctly stated when we first started talking answers your seventeen distribution co ops that make up the liquor Cooper's of Arkansas so when we start talking about some other things that happen and bring Mr Hasting ended like this conversation or something like that that that's not exactly relevant because we are made up for the electric coops Arkansas but we're also all independent when it comes to distribution and it comes in that manner and at home there may be different things that each individual seventy one each of the seventeen may have to do differently because a we may not be a we may be in our US more we may not not all seventeen or are you as borrowers so we don't get our Long fronts to the USDA some of us are so there's different things we have to do Others may serve and a very urban or city area that the inspector the inspectors are available to be able to go out and inspect these things so they may not be hindering they might not be causing problems there so we may be you know I'd just bring up a few points just to say that you know we come together a lot of times as electrical off of Arkansas but when it gets down to a time to the individual in meters all of us are going to have different approaches to this to make because of the demographics or whatever the geographic areas that we make up it may be different for each of us so deathly one how like that we. We are owned and you all know this and understand this we're owned by our members we are boards are elected by our members and if we're doing something that the majority of our members are against then guess what especially the guy that wears the CEO title he's probably leaving pretty quick because it's more got replaced and other things like that happen we got to keep in mind sometimes very made a good point about his actual breakdown or break down is similar to our net metering subscribers or customers or somewhere in one probably less than one percent actually so the decisions I have to make every day is a take care of the eight thousand members and I can't just completely go off the rails and I'll and not protect the eight thousand whenever it comes to the less than one percent and I definitely have to follow the law and the rules and that is what south central for sure again because when we're talking about net metering I do speak on south central behalf not the holder costs of Arkansas is we're trying our best to follow that act that was put out for us to follow through and and part of the we charge the five hundred dollar connection fee for as in connection fee that five hundred dollars I can actually back it'll because I had to do that for board and where that calls come from is not a magic number that we pulled out of our hat just to to use five hundred dollars and it does not cover the cost at all of the just going through the interconnection process I can go on a lot of the stuff we've already talked about but I welcome any questions and I appreciate just time for an. Thank you of I'm gonna jump in here first with questions at and I'm. It's like today someone get directed to the point we've had some people say that the rules keep changing in the middle of the game. I've heard of. I apologize for not to say that these are posted. That's what they are they've always been that so. Enter that I mean I understand that there could be difference and in the policies between the cost because I will I'm assuming you're boards establish your policies so. The the question I have is. That's okay but I don't think it I don't think it's okay if you if we are actually changing the rules in the middle of the game as you know that the person I just pull back my notes for murder. David said that it was one million it was two million now five or something like that so how did that. So let me give you a little clarity I are a maybe I can bring some clarity to it We had a start we had a a board policy we put through probably first of last year I can get you the exact date and in the middle of summer we start we decide to add some things Mr also come in on the first policy because that's when he started his build so you'll be grandfathered in on the original rules were not going to hold him or anybody else that started building during that time the new rules basically are was was signed by our board on I think October twenty eighth of last year and we added some different The I guess different breakdowns of insurance requirements and it's probably to right now it's it's too Mr roles favored and duties on older older policy I think the reason was one two one million two million three million four million depending on the size of the system out and I believe our system right now says one million four million ten million I it's it's a different stepping Pala process and we're in we've improved the the the system quite a bit from there. That. It's got to do with the board changes and anybody that that is started their process before the changes will be grandfathered in at the at what those were the to make sense right so you're you're saying that. A particular installation site rules do not change from the date that you're first told in another words I'm grandfathered into the old to the old system and it is that. The other there multiple call ups representative here is that the case with the co ops here. Yes for Arkansas well. Is it is that's exactly correct for would reflect your government as soon as soon as that process is started the first application preliminary site request with that first phone call this lets us know that they are trying to go seller whatever that policy is that day that's what they will remain under him without even going to the public service commission to submit under grandfathering acts or rules or anything like that is that is something that we hope we realize our membership is making an investment in their making on the decisions of what that's going to read return on for them for the next thirty years at that point in time we don't for see wanting to. Just run amount just because they've decided to do it that's that's not what we're here for we're here to give them the best product best benefit no we can do to for them now look for their safety reliability in their future. Thank you I'm a good mother and at all real quick representative back to the the one key piece of this I think we're all set this the plan merry entering cut interconnection agreement is or the the ACT four sixty four okay that's the number one thing it's all in all of our tears the date that it sign that that that's the National Trust for south central I think it's the same way for all of us here that's the date that we say okay we know now that you're want to do it a net metering and interconnection here the problem that we run into sometimes in that some of our members may be running into and I don't think it's necessarily with anybody it's inside this room but other companies if there may be some that happen there with going back to some of these we don't get that into the system to don so that could be a problem with if company if solar company ABC what is it starts with the customer and says Hey we're gonna so you this today and they did a agreement with us for six months ago and I think that's our policy at that point time then yeah that's how things could get messed up from the sole provider side or whatever the case is once the utility south central especially we get the interconnection preliminary interconnection agreement estate inside until this kind of generically what you want to do then that's the day that whatever policy where under at that moment time is what you will stay under for the rest your life with us so just a to help me to make sure because we said the constant contact and used I think when they contacted us what you're saying is the rules that apply to every installation are the rules at that point when they sign this interconnect contact eliminator not later connect when the preliminary plan which is the first step in in the public service commission's policy that's what they should do first a lot of times they don't do that I would like to add that sometimes we get these though a lot of this paperwork is not even filled out by our members. It is filled out by the seller facility and what I'm finding is that sometimes the seller facilities doing these docu signs they are not fully engaging with that member all of what's really going on like they say that there is insurance issues there are some of these things now it is the responsibility that member. to go out there and read some of these things and it I do when I get one of those in I try to make a call to that member to make sure that they do fully understand how you sign this document we also receive some of these they've been signed and by the time we receive them it was signed four months ago. So I mean that's that's pretty often. But it and I'm not just going to belittle the point too far but you're saying the date the document was signed is when the rules are so that they don't change after that point thank you senator Johnson. Thank you Mr chairman a gentleman thank you for coming and even if we fail here I appreciate your efforts trying to bring some clarity this is less clear as mud me right now a couple of concerns Mr T. where you mention the a solar customers thank you more time in there for the year sept thirty your other customers are subsidizing their situation you consider that because of solar owners are providing net metering and you're getting discount power back to that could we not say that perhaps in some cases they are subsidizing your other customers and I have I just submit that to you that I it probably on a case by case basis varies but I will say that if if everybody puts a little bit back a and then that actually is lowering your costs because I know that. Power from the grid varies greatly from that time and and sourced from which you're having to buy or your suppliers have and by but I just want to make that statement to you before I ask but is now respond to that of course Sir yes the only comment I would have is it's not discount power so it's it's one for one so if it costs us a lot more money to buy that power back from the the the consumer than it would be from wholesale power provider. Okay I won't argue that point can I have one thing to that too yes Sir since we are very rule like in our case if you want to talk about risk residences were barely over two meters per mile of line there line losses transformer losses so that electron that we are right there at that meet or having to pay full retail price for only a percentage of those may make it to the next customer they're able to get your so no it is still. And as you said that Alectra on that cost varies depending on a lot of things line loss we're in the State of Arkansas you are have a remote you are and I'll stipulate all those variables but the second question I had this interstate energy renewal counsel is that the name of it and where are they located. And who are they really. They've been they've been around for forty years I believe they're located in in California we'd we wanted not Albany New York one twenty five off road suite two oh seven all The New York New York they've been giving recommendations now for forty years basically I mean are there the one to point to to to get everything besides going to IEEE so they're they're you're too big Kirkley I may get back with you about finding those folks we can do that later time in the interest of time of. Now the one question this is the one where I might kill harsh and I apologize up front for that who is the insurance company that's the approved insurer that's that these customers must go through I want to know who that is and where they're located. So that of I would say that does not apply to south central will speak on south central behalf first of all we have not been approach though I actually personally like I do I don't remember which one the developers brought it up about the fact that they added somebody on their policy in Oklahoma southcentral would look at something like that I think many of us would we've got to have the commercial policy to take care of all the points that we may refer represented back pointed out earlier every everybody's kind of got back to the point made it does make some sense about the insurance I'm not real sure about the statement was made directly about paging southcentral Kentucky there's formerly has a policy now that's available there's a local insurance company they're out of Arkadelphia this bigger now that they're trying to get their head wraparound exactly and I forget the name of there is another company in Little Rock for south central that is not the case we don't have one document or and I'm I'm glad to hear that anybody else no not the case for Clay County. Arkansas also who the provider will I want to get to the bottom of that book and and again it might be untrue but I want to get to the bottom of it any time you say we've got a sole source on this if you got to go through them that's very problematic for those after speaking with the a lot of that that they came in from the or US there were there was a little bit us some of the attorneys that says some of those rules up of and what the insurance coverage isn't needed to be that there was a so under rider it was but the underwriters willing to work with any insurance company. Well it but even so I mean the whole idea market is you have multiple under riders that that I know which from it now it does come that is absolutely the case that I could see how that could have been turned around to say that paging west say and that's the only insurance company to go with the it is an example I'm not look at their website I'm not obviously not speaking on pages behalf but now it Kevin just brought that up I do know what it probably came from that's an example of the policy or the underwriter that could do it I don't I would have to say I don't think any distribution go up in the US is trying to get insurance business I guess I'll leave it that. Well many years ago he's not around anymore we had a Senator that came up with a bill that so if you were a notary public in Arkansas you had to have a bond and is so happy his client was the only one in the state that sold those bonds and sadly for him he ended up in a federal penitentiary but but that not withstanding when you hear anything it says sole source you got to all of our our hackles go up I know you all were in our position you to understand that so so I wanted I want to know all these things in and I appreciate what I appreciate you all sit through all this Mr chairman I appreciate you letting me ask all these questions just to further yesterday that point are course Sir are U. S. requires competitive bidding. So if your parents are US you can't sole source. So just how right now for use of the sole source on it somebody's website that. But of course and I've seen this in many different areas you've got this is the only guy that really meets our criteria will then somebody else can step up and make the market competitive and bring the premium costs down just like we have multiple solar companies out there that was just one of them spells a cost a whole lot more money so I'm a believer in free enterprise an insurance market and the solar market but German first I want to thank you all for sharing with us today but I I've got this funny feeling or I'll be back looking at this in the future but but I appreciate your candor Kirkley appreciate your friendship and and representing my constituents or your members and we'll we'll keep plugging along we'll get this sorted out I thought I thought we had it sorted out and twenty nineteen but I guess we're not quite there but thank you thank you Mr chairman. A Senator Rice. Thank you for B. berries and in my. Rambling will go the one thing I was trying to get across I'm very sensitive to the liability and. What I found out the last guy that touches you usually the guy that the consumer wants to fall. In because when that solar system fails you're hooked up there and you provide prior to that all of the members pay far if anything goes wrong they're still going to point the finger back at you. So my question is I understand in and I appreciate the clarification from. Both sides in this are all parties are still say side to say parties is that there is a preliminary agreement that has to be signed off on is there anything because I didn't know what I ask this when the when the server developers were appear is is there something that they sign off on that they are held liable for. In that preliminary meeting. About being the correct system about being a certain grade system because we are under some systems are not as good as others is there anything the result is that and on the front end that the standard interconnection agreement which is the binding contract between the interconnection agreement from the member not the seller facility but the member to the co op does state that they have to follow a lot of those same codes that they said the builder equipment to. and in if those that equipment doesn't meet those specific codes then then we can obviously turn it down you know that Tripoli standards that the the NESCAC codes all all of that sort of stuff but as far as I don't know that anything says that if their system fails then we can automatically point the finger at them I don't think there's anything out there it in that I know of you know and and whether it was justified or not it's all what you can't be a one way street when when there's sometimes things happen on different parties I can speak that we we have implemented a metering system and all that it said it doesn't have much to do with other than it has disconnects and they're supposed to work remotely anytime we need him to so that when somebody moves in or out of a home we can disconnect on to the next render comes into the home without Senator for a lawn we repeatedly have issues of ants building up inside the electoral quick make sure no circuit boards shorting out the context locking the context down to where it does not turn off when it's supposed to. And that's the concerns with any technology that we have this interconnected to a trillion dollar infrastructure for their thirty thousand dollar solar facility and I'll. Follow up on that I been in our business fifty years more of others three years over million he's he's got of the fix it grin but he's able to go back and tail genius technicians it design is to. About what happens in Arkansas because of unity because of I am because of other things in like you talking about here million times except one time you're not supposed to get a feedback. But lightning storms and stuff can happen in this does happen and I okay all kinds storage to you've got a lot more not but it happens and that's three concern about you know who we point a finger at and that's the reason we have to be careful in these banks basically new technologies it's not just a second one side bill thank you Mr. Senator Ballinger. You Mr but one thing that becomes sparked my curiosity is coming out of your applied for cost sharing cost shifting it the and I I'm I'm I guess there's some reason for that but it seems like like at some point because because or there are costs associated with delivering the energy that's that's why that that's that was the negotiated that's why guys paying the retail rate is because you guys can now recoup some of that cost in theory. I can speak on Arkansas as have those that so up until this point I feel like we're just trying to keep my head above water we have four hundred system set up we that that's of of the piece of S. the. Workload we didn't experience three years ago now we do so we actually don't have any cost associated with that solar right now those are things are researching and we don't have the data put together to to submit those once we would it would be go through that process the terror process okay are you guys are you guys collecting the data many guys trying to to assess it it's complicated yes we're trying to assess what it would take on average what kind of manpower we put into it and the challenges you get a you know my understanding is will have an opportunity to say okay there's a one time fee we'll somebody mentioned earlier we are we we will go check those annually to for safety reasons we can't recoup that cost so the ongoing cost is something that I'm not sure that we have an Avenue to recoup that I can't remember legislatively but I I thought it was all of the expenses associated with it you put into it and and help obviously PSCS degree but I think up front it is so long going cost I don't know how I don't think there's an Avenue to re reboot okay only cost. It is it is pretty much the same reason with everybody because it to me it seems like that is a lot of the concerns that we have the obvious safety concerns everything else but a lot of the concerns we have with the expense associated with with these folks using the solar yeah the whole point of the of the compromise was that they can now you all can go back and say Hey the the but there's expense you get a benefit out of this and so that is borne by all the rest the members now the rest of embers get have that recouped by the by virtue of that culture the German soldiers some of our co ops most are currently working on that okay data we've provided mountains of data to the commission of past years on it but but I think we're working on that currently in place I know enter general speak for most beverage I know they they provided data to the even submitted a great charge but I will speak on his behalf but so there's been a lot of data provided so let me let me say this isn't it's my understanding that actual requires you all to file a petition for the cost sharing or I don't know what's called fishing or filing or whatever you do I mean I understand that a being provided but ultimately you have to say Hey we have this cost and would like to recoup it and it requires an actual filing for that right but you guys haven't done that yet you've given on the data BM Vaught have done that okay thank. Senator Blake Johnson. So. The residential. liability. We'll most all those kilowatt hours be under that minimum we're it's a million dollar liability and that is is that has to be commercial it can't be party residential liability policy. Yes most of those residential are under a million dollars as far as. Whether it needs to be commercial what it extends I thank the determines point earlier it extends outside of their residence so it extends beyond their property so you mean is let's talk worst case scenario worst case we have a bad storm comes. Powers down and I've got one of my linemen up online working on that line he knows he knows the bombers heart is dead there's no power on it and the sun comes out the next day like it usually does and now power being produced from from somebody on solar system any push back in into the line and he's up there on the line and now he's dead and he don't go home. That's that's what that protection is now whether needs to be commercial or residential I that's that's beyond what I know I'm an engineer I'm not a yeah I'm not a guy that does insurance the title about the commercial bees the the insurance when because I'm trying to there's a local company there like I said that they want to get the business they're they're actually based in Arkadelphia but all the way across the state I asked about the the residential could just be a residence was residential and once the lady I was talking with one states all like look at the policy it there's not a classification for residential that does that so it's not actually my insurance and I'm calling insurance governing such machinations it's just a commercial policy is actually what it is I mean and again it is not a residential policy anymore so would that be a rider on your homeowner's. Just just to add to that if you don't do it other residential because typically that's only encompassing the property itself it's not actually outside the property. There are policies the guy called other places that's where I'm at tell which way to go the offer umbrella policies that are on the individual so if you are sued by the cooperative because of the interconnection you can have it on the news that that's where you can add potentially. That type of policy nest some semi commercial but is really considered an umbrella policy is not just any property if you have a vote you take it out on a lake you can cover that too but just this is not just have to be on the properties of this committee met and other always have to be commercial it will bill if it's allowed under conditions like an inland marine products of like that. Yes. All right. I appreciate it thank you thank you all for coming to us for a. All right next we have a representative Gonzalez thank you Mr can't can any officer while the the gentleman the first came up and testified and and hooked up. That would be on a county While we were in this meeting I received all the documents the I guess they're they're final stand here connection agreement that's been signed off by a a Step by an electricians amassed electors and so we there's a couple points there we made a decision several months ago because the state was having such trouble getting people out Clay County made a decision that yes we will allow a master electricians certified and state of Arkansas to sign all you got to put is his license number she's got but our license number on there they got a sign off and we're okay with that and then the the insurance requirement we haven't received insurance that validation that they've got insurance yet so that once once that's all done look like all the paperwork come through this morning and I don't I don't know if the insurance papers come through but if they did we'll we'll go out more put a meter and that's what happened. Sure. Your are you saying David once once you're expected now and everything's approve you've got a meter and and and and then they say now has to be a state inspector will that be required I would say for you would be just like all the time I you be grandfathered in. Sure and I I want I want to make one more point to because of something David brought up and I and I apologize for this early on Clay County said it's a one for one I if he installs a hundred fifty kilowatt system and we had to have a hundred fifty KBA transformers and there's a one for one and we had such problems with with people like David they they won out and install a larger system or they were going to install on your system so we look at the data and decide that we could do a one and a half and it come I'm sorry did it come after you but you are some of the reason that we went back and and look at what we were doing so it was to help our members that we increased it from one to one and a half so they install say a ten K. W. system and they've got a ten K. W. pot they're they're good but if they had if they start of fifteen they could still do it on ten K. W. ten KBA transformer and and what we found is during the summer there's times when they do run they run more than the the hundred percent what the rated so we decide to take that I guess we're taking that risk allowing them to put more power through transformative what's right. So. Regs Gonzales to the delay if you allow me what we the Committee rules as if you're speaking to the committee had to be identified for the because we're all very aware so we if if we have something to say we'll have to bring them up and and you have to identify yourselves go ahead now I have no other questions So I do appreciate everyone saying I think we've got a lot of good information and I and I and maybe I'm reading of more between the lines and then there but I think that maybe I hate to say the two sides are or whatever have had seen some of the other issues and and hopefully this will. This will help some of the future of force and and we're certainly surprised as a senator Johnson as several I'm sure we're gonna be doing some more work on this but but hopefully that I know it's been informative for me and I think several the members on the committee so I thank you all for staying with us this late in this afternoon so with that. Thank you okay I do have one thing the the Mr Thomas did almost made a comment about about saturation substations oh no that hasn't been really talked about because that's not really is a safety issue with that is clear clearly an issue of other members compensating and paying for someone else's choice to go solar we are all distribution co ups and do not own generation transmission so the moment of those electrons that that creates go back on to the transmission grid that we paid retail full retail rate on is a straight loss that the rest of our members are gonna subsidize since we're not for profit so that there would be I would like some clarity I guess in the future if we do meet again more on that what is going to happen because we do have one station that has recently gotten saturated with this amount of solar that we expect that would not push back on the transmission both we had anymore it will start putting pushing back on transmission certain times of the year at it might wrong in that is exactly the kind of stuff the cost sharing proposals bills to address like that is what it was four is is because of the fact that there are these other costs and all these other members and I and I get it like it does take some time and I get it that you guys are just you guys have a hard to get people hooked up and flipped on you got your focus here but to me it seems like alternately I mean I I agree like I remember actually so represent makes is not here years and years ago represent makes come out take a chair joining John House said back then and and that was the discussion back then and and honestly that that fruit was what was finally born through the legislation that we've had recently and here we are still not really done with it but the whole point was yeah there is some there is some benefit that they're getting by selling you retail energy. That that we ought to be recouped that there's some benefit that that they're getting the at the expense of the other members for the other utility ratepayers or whatever so therefore we need but that evidence out and we need to get we need to set up some proceeded to try to offset that. That that makes sense. The I'm not sure if I'm following you saying that you're saying that that the member the rest of our membership is reaping benefits from someone else's choice no no no just the opposite I'm I'm so you're right. I agree you've made the point a couple times so why don't we actually go and set up your make up make application make a filing with BSE and set it up so you can recoup those the the fees so so that your other members are not bear that expense but on the evidence show the show the the burden or the benefit that they're getting without having to pay for the transmission and everything else right and then in that way your other members rocks and he's that was for my question before just like I expected it to be before now now I'm you know I'm about two thirds ignorant when it comes to preserve energy and I realized so you know I understand it takes time and I understand how things it makes sense to you guys just aren't there yet but I would say you get there and that'll serve your members better because that was what the whole point of that legislation try to me honestly we would have supported the idea of make you pay retail if you didn't get recouped your some of the expenses. Well it also let bill just a clever we you know we resisted that bill for a long time and then it and a lot of work anyone's mouth put the bill itself was sort of broad you could interpret pre probably. Yeah we were sort of left to believe that I think there was testimony said we don't intend to have one for one but at the end of the day that's what came out in the order we were rather surprised by that yeah so that's the reason we backed off from the bill because we were pretty much told a back office things but go through without well that's are you know we don't want to make a regulators irritated or mad and let's just see what the order is works or what to believe it's going to be a decent order. The order was one yeah so I'm not saying we wouldn't of continue to resist if we had known that yeah I think that I think I remember that the plan wasn't for to be retail rate but something something probably less was part of the discussions I don't I don't think you're you're wrong but ultimately the the I think that that goes into part of the question then if you're paying retail then the expense associated with that should be all set you just have to be able to put it together and honestly if if you know if the chairman Thomas doesn't doesn't do you're right then that's when like you said you come to the legislative body we provide some for oversight right we're seeing you know a lot of states run country pull that back now we have the most liberal you know that very possible nation probably because we're so progressive here in Arkansas. Back to the one thing on the deregulation it was it wasn't a deregulation bill I got called a remote represent you bankrupt it was talking about that was a bill dealing with self regulation for co ops county municipal systems that was actually led by some of our pro solar Washita electric Ozarks electric is a wrestling to more progressive things without the the lag time is that we go through the rates will process so I didn't catch all levels will make that one. All of. One more question that just came in if you guys will entertain. Senator Gonzalez. All of our representatives are. Thank you Mr I just wanna try to clarify follow up on on what Rep what Senator Ballinger was talking about which I think is also. It up and rule three oh one G. that says of a existing facilities are not adequate to interconnect the cost falls on the net metering customer so but it's it's going to be happy all to qualify those costs save your substation can't handle anymore what is that cost that is going to. Take the build out of the substation or whatever that takes to. To make that where they can that they can so we are gonna have quite quantify that and you know I guess turn that over to public service commission for review or whatever. All right well thanks again for everybody's time with is the lead our realize you're right to maybe your your afternoons everything but with no other business before the committee we are Jr.