Energy - Joint

It got it got too cheap to to produce gases so that we quit producing it and yet then we also ran out of it it's is it a bad situation. Thank you. Representative what. Two more top. Okay thank you Mister senator you mentioned while ago Some of the utilities may not elect to participate in this correct but what what would be the apprehension just curious. I I'm gonna be a little speculative because I haven't visited with them personally but I think that what they're gonna do rather than than tapping into the to getting the bond and and using the financing this way they're going to manage it on their own like like I said I think the co ops have elected to do of a small rate increase that they feel I can manage it get it paid off over over a period of time and let that go away I I've heard entity is going to manage it I don't know how whether they're getting getting private financing what they're going to do but I don't think that they're going to be tapping into this but but honestly I know that the director Thomas has as information on that and so I would say I'd recommend holding that question for him and he can tell you you can tell you what the lease what he can tell you regarding that. Thank you. Saying no other questions. Senator Thomas. If I could have a special request could you address the issue that happened with a committee of the gas wells as far as ones that were online trying to produce for the because not all members may heard that last time I made. I think Westerman To the Committee I'm Ted Thomas chairman public service commission I speak for myself not for my colleagues I often forget to say that but this time I finally remembered once What what basically with this bill that we had this winter storm there were extraordinary costs and North Senate colleague berries and correct we had low prices now low prices before them before ten days we had record prices we've got people we've got utilities and spent more three four five times more on gas and ten days the needed all of calendar year twenty twenty that's the magnitude of the deal now when that when they get these bills I got a panel. And may recover them later so they have extraordinary bills instead for the most part already been paid then it's how they can cover those from customers and what at that point when you essentially have is a loan from the utilities to the customers and the question becomes what how long should that loan be. I want to be a rate of interest. What this bill does is it creates an option not a mandate. But if the utilities want to borrow the money at a debt rate of interest which is lower than what we call their their total return which averages that equity together as a higher rate which is typically what they seek is their view with interest rates should be. They can lock in at the lower debt only. Then they get paid they get paid by the person sells the bonds so their square and then we were we repay the bonds over time. On customers bills so what you do what this does is gives you the ability to access it that only interest rate as opposed to a debt plus equity right now why would some people not want to do this it depends on how much they bark how much the cost was with with inter Jeez it was significant but it's more of a ripple I wish I could say that for everybody but I can't that they had some credit we we do these and there is like a annual cycle were they had some extra money built up so the use that credit to pay this down in a stretch it over two years. Are going to be a couple Bucks not to turn off the top of my head of a month now what what the court said bill hit but they wanted to do it in one year or not when you're eight nine months or they're gonna take a bigger hit but they're gonna be done with it. The the these the central coop is financing it with no interest the members and they're spreading out over eight months but your coop folks are going to feel this but it's going to go away in eight months with another proposal destruction over five years and seven dollars a month for five years roughly I the coops for average customer twenty dollars a month for eight months now which one these gonna pick Maryland boasts neither of them are good. But when you buy the ball and get it over really you state your finance charges and and that this is an option for emergencies if another emergency comes along and you're already stretched one emergency out over time and you restrict your flexibility but that's why some people would do it some people wouldn't it depends on how much. The depends what time you want to stretch it out and it depends on the interest rate and this gives us an option for a lower interest rate for those in need to stretch it out over more time. Senator Rice. Thank you and I apologize I'm eleven our time here and and their needs and sometimes help we're sometimes they don't can you address of. The consumer view of this bill yes because I was contacted not within my district contacted somebody knew me in about some. What look like extraordinary size bills and it is a storming can you dress their viewpoint. From their peers view point when you have a larger amount. That's owed and you can stretch it out over a period of longer period of time which means the monthly impact less this bill I didn't reduce the interest rate because the only thing you're looking at is the interest rate you actually sell the bonds for. Not what you would in some instance look back at the utility side which is they're not just their data but also their equity which is a rough guess that's about six percent for most utilities and you can do upon finance for two or three percent interest therein course you also have the cost of doing the bonds which go to that would affect its under six percent that is a consumer benefit plus stretching it out longer. but then that that is a two edged sword you're paying more interest but you're getting more time so your monthly impact is less when you compress it you get done with it faster you pay less interest but you pay more for a month and that's just a balancing thing that has to be done utility by utility. Thank you and then two two percent back for the. The permit with the winner advancing this thing is already very studied. You know if you want to deep dive I mean I've got slide decks six already doubled from you know. The deep deep dive to me what happened was it got so cold a lot of gas production froze and it wasn't available. And as the fleet mixes changed. For cost reasons. We find ourselves exposed on the fuel security side with with the gas that's the main thing others other stuff it's intermittent that small part of the mix and say what was in there when there was we know we know it's not always going to be there the stuff that we is designed to always be there that wasn't was primarily the gas thing and what's driving that is as we stated the low cost of natural gas but when that stuff is frozen. when the well heads frozen and there's. When it comes out of ground course we frack with the water into the ground to bring the gas out and when that gas water mixture freezes. You basically have a ball a motion you're part. The numbers power outages. A lack of heating a lack of winterization because it's in the south same reason water pipes bust we don't spend a lot of money we're arising because we don't get this kind of weather very often you just to make some of those kinds of things. Thank you of Senator Stubblefield. Thank you Mr chairman ten. Most of this Getchu talking about freezing. It was not freezing in the lines itself these this is Dr gas correct well as it comes out of the ground. It was at the side of production more than in the pipes but is a comes out of the ground. The drug but. What I'm saying is my mother's on a gas well and and she has a dryer yeah. In her guest never froze up and once what I'm saying is that the energy companies not have some type of a contingency plan are they what's the weather forecast or a. Did you not know in advance that we were expecting yes seven days of of this subzero possibly yes there is a process that has fifteen or twenty steps in it as be peeing myself both goes through and went through where they raise the level of alert if you have a scheduled outage. Your **** not to do the outage you're asked to do whatever you can to get the units back up the problem here wasn't as much the units the problem here was the fuel to put in the units at the production site which is a lot less regulated than it is on the utility side that they're just producers are like French fry producers there's a potato shortage the cost goes up there's nobody that tells them they have to have but even though we have an abundance an over abundance of natural gas in the state we lost forty or fifty percent of the production in Oklahoma and Texas is what happened the wells were sitting near the price vote spanked now if you own one of them wells. And the price was a hundred five hundred times what you were out there with a blowtorch trying to get it running because you weren't selling gas and the price was I. If you're trying to sell it you were losing money now the one that had it on produced well you know there's investigations in terms of of whether that conduct considers price gouging within the meaning of the law but if but fifty percent of the production was down and the ones were taken shorts because that there weren't so many gas into that high price so they have to trying to get their their stuff back on but even with that. Thanks to lasted seven days. You don't to me this is similar to almost what happened in your industry last year during the covid and then we'll process failed let's zero yeah. Yeah yeah because the cost of storage exceed the cost of production. But we have a lot more flexibility with respect or in terms of storing it right and it's a lot harder to you can store it natural gas we doing caverns but still the the amount of gas it takes to make when the power plants run is is a whole lot and we can't remove the capacity to store it. What are you doing to prevent this ever happening again we're studying and always study and constantly study these reliability issues there costs associated with reliability issues there's no free lunch with the stuff And there's. You know what every winter and every summer there's a winter or our plan this is this is on your summer peak it also is in the winter they identify metrics it's an engineering process where even when nothing happens that you hear about in the news it's still studied and recommendations are made what we can do better and there's going to be tons of them but it's mostly going to be or in my view fuel security related to natural gas. Thank you Mr chairman. Senator Johnson. Thank you to the left Blake Johnson okay other Senator not concern about that thank you. Could you. To continue on with the Senator Stubblefield the Texas federal regulation is different than even the Oklahoma regulation so maybe that could help clarify for Senator Stubblefield and now you know that might be something that comes out of the study that no that's with the electric side in the thirties. The federal jurisdiction is based on interstate commerce so what they did in Texas was basically severed their greed from the rest of the country on an alternating current basis or store called direct current tie. And they did that so the for the federal regulator wouldn't have jurisdiction over them but the regulatory thing when it comes to the gas production wells is pretty much that's not regulated really anywhere. And is that it was the fuel input. Not now everything myself included struggles when it's zero degrees outside there were there were some equipment on utility side shortcomings. But that wasn't the massive driver of the problem the massive driver the problem was the lack of fuel because of winterization at the production site. Which is regulated the same it's only the electric system Texas has a special rules but those rules made it more difficult for men to import electricity from other places which is why they're and event was so much worse and we're bringing power from the east all the way to S. P. P. which is the western or with the central plains. So in the future if we're going to rely on natural gas to be the one of our clean sources of energy rather than coal those things are going to have to be secured correct yes the other thing it absolutely has to happen is the political debate nationally has to change. Last week the American petroleum institute the oil and gas industries lobbyist group agreed to basically supporting some version of a carbon tax. If you lose the debate nationally. Because we have other costs coming from the EPA. If we lose those debates nationally you know. Then we can do you know we can spend a whole lot of money. I mean there isn't a good option if you lose the energy debate national. And when you surrender your position before the first shots fired I don't know how we're going to do with that battle and the single predicate the most important factor in my mind for our policy is protecting us against those cost consequences from DC. Thank and if I thought we were gonna win that battle I would have different recommendations of what we should be doing but when when an entity like that surrenders its position before the for shots fired it doesn't give me a great deal of confidence that the folks in Washington DC are going to protect your consumers from higher costs. It it it isn't a concern if you don't secure those natural gas sources. If we go to natural gas rather than cool cold yes absolutely. And the concern for both gas and coal or other political entities. That want to ban those is fuel sources and the appear to me to be getting the upper hand. And when we make a commitment to a gas unit or coal unit a new one that's a forty fifty or sixty year commitment and under our regulator a regulatory system. We're gonna buy that you know whether we produce electricity out of it or not so if we make a fifty year commitment to a dash unit and gaskets band as a fuel source and ten years we get to pay for forty years and don't get any luck Tricity. That's where we're headed and then you take that problem which is the environmental problem and then you stack it on this problem that we're looking at now when when. That's two problems coming together that could be very expensive. And we are on the reliability thing twenty four seven all all the time not just when it's in the newspaper now and and this was obviously. You know fail we don't have a tornado proof system we don't have a weather proof system we can make it better but that's an incremental engineering thing how much are we willing to pay. M. I. and all those cost will be the environmental concerns and and not wanting to use those sources environmentally is gonna lead to a cost which is gonna lead to the consumer which is possibly in the peaks in summer time gonna lead to to heat related fatalities yes consumer cannot. Cannot do that do this concerning the cost no cost effectively have have that so and every nickel goes the consumer that's true with every business. If you wanna tax cows you're taxing people to buy hamburgers. If you wanna tax dog food production people have dogs so you can talk about a corporate tax but that's just a pass through that the cost of doing business it gets past the consumer make no mistake every single cost gets passed consumer. As you stated thank you to. See all. Did you part by Canada number. I'll say no other questions from the committee of. Senator Ballinger are you ready to close for your bill. Yes there's nobody else here that needs to speak for against them I'm ready close you know in short this is a a tool something that we're providing a mechanism to enable utility providers to try to reduce the impact on our our constituents on the consumers yeah I'm at I it was a hopefully this never happens again hopefully we're putting this this Code section together to deal with this emergency but I think even if it even if this does this is good policy to be able to minimize the impact on the road on the on our constituents so I'm so that I appreciate a good vote and to make a motion actually looked Center Johnson do you mind taking my chair since I'm running the bill. And center back to you have a but I know that we have to divide the vote but that I'll make a motion to pass. All right. We have a motion do pass. Is there any questions or do we. One for for god we need a second. Garner second that okay so we have a motion to pass has been seconded is there any discussion on the motion. It I would just a M. Germany you may want to explain to the committee how this has to happen and now we have to divide it up so that they will understand because the fact that this will go to separate houses and separate bodies S. B. as a proponent. Right so there will be a separate vote on it That's all of that will have the Senate vote first on it and they will have the house vote on. Is there any discussion. Our server Johnson. We have a motion the second the Senate vote Clark we call the roll of the Senate first. Johnson I think we you can start with a voice vote as long as it's not contended that. The. To do just a clear things up a bit. We probably got I'm I'm I apologize right right back at we can vote as a whole body here are or if there's a motion to is to split the vote we could do that she saw. We don't need Division logically if we do not want to divisional is not we can both as a whole lot. Is there any discussion on that. The representative chairman back the only thing that is is my understanding that we actually had to have a separate vote of each body because it was a joint committee that will not be coming back to committee and if I'm wrong of staff says says I'm wrong I'm I'm good with just having a vote. There there's not a requirement that it be a division of the out then I'm good as long funds that's good and it will go. To the Senate in this case and then over to the House directly over to the house for about all right so I'm sorry for the confusion so here's what we're gonna stay are are all right although we're voting together all those in favor of the motion to adopt Senate bill the. Five eighty eight say aye Post. Hearing none Senator boundary of past your bill thank you committee. So the next bill. On the agenda is House bills sixteen sixty five representive hall. So. Alasan individuals a table to please identify themselves for the committee and then a representative ha cure of recognized to present your bill. Thank you Mr chairman committee my name is Randy imager I'm the executive director of the energy policy network where an organization nonprofit that supports coal based generation and I appreciate the opportunity to visit with you today what. Okay thank you. A representative Spencer Hawks. Senator Bob Ballinger. State. Thank you Mr thank you Committee this bill is a simple bill is gonna have been a big impact on minutes to changing times this bill requires PSE during ratemaking process to evaluate remit their remaining useful life to include in the evaluation. Cost benefit analysis rate impact analysis and an analysis on the impact of the reliance and resilience of the grid. Then explicitly state the commission's findings If they're in the public's best interest and with that I would like to turn over the testimony time to my friend missed ready images. Thank you representative I did have a quick handout there's only eight slides and I would I would be very brief and going through those if I could to explain the need for this legislation The first slide is it just in again I thank chairman of public service commission just talked about a little bit about taxes one of the things it's unknown there was a lot of finger pointing when things went south in taxes over the five day period of the blackout but one of the things we've discovered instead of pointing fingers to different individuals if you had all the generation on in the state all the wind up all the baseload plants up to solar going you still would not have had enough power to keep the black out from taking place over a twenty four hour period some of it they could of the over the five days but there was still a twenty four hour period where they still would have had blackouts even with all the plants up and running. What those shows and it's on the second page is really the problem in taxes was more of a historical problem over the last five years the state is close six major coal fired power plants eleven units six thousand megawatts of capacity enough to generate electricity from four million homes in seven natural gas plants fourteen units over three thousand megawatts natural gas capacity another for another two million homes in that state. So really the prom interactions started five years prior when they started closing baseload power plants I just I think part of what we're trying to do is to make sure that doesn't happen in the state of Arkansas even if you keep a plant us in spending reserve even if you keep a plant of that is still operational maybe is not running at a hundred percent but still could be called upon it if needed in an emergency situation the next slide basically shows the fuel mix in the State of Arkansas on the left hand side you'll see forty two percent of the electricity is generated from oil I mean from natural gas thirty six percent from coal thirteen from nuclear nine from hydro and then you have one percent that's basically the other renewables if you look at twenty thirty and two major coal plants going offline being retired that's why go up in independence power plant that's twenty three percent of the electricity in the state of Arkansas so you have twenty three percent of your base load generation that will be leaving by twenty thirty part of it have a bit by twenty twenty eight the other half by twenty thirty. A I'm not sure what entered she plans on using to replace that twenty three percent what it should be something that's looked at seriously by the public service commission. I move on the cost in the next minute you should be very proud in the state and utility should be very proud you got the fourth lowest electric cost in the nation of any other state you're twenty two percent below the national average electric rate and that's something to be proud of this just shows the national average and some of the surrounding states and of course the cost of electricity in New York on the far right that's almost fifteen cents. But when you look at. What could happen in the future I know we've had testimony and there's been a lot of public articles about how entered you will save two billion dollars in additional environmental controls on these two power plants what they don't talk about is the costs associated with closing the plants the cost associated with xcelerated depreciation the cost of building the new generation the cost of building the new transmission that will come into play to replace these two large coal plants. An independent the economic firm a look at it for us and came up with just the scenario if you use natural gas to replace the coal plants it would be over three billion dollars in cost to do that so I would ask that of we do look at it public service commission will be looking at what the new generation to replace that would have been worse is adding the controls to those existing plants that the consumers have largely already paid for. The next two slides a basically one to look because they and I'm not slamming renewables what I'm trying to do is say we need to keep some base load here for reliability and for cost but we always hear that wind and solar will lower electric rates it's cheaper these are states in the Midwest Nebraska Kansas North Dakota and Iowa and this is the amount of renewables that they've increased over the last decade twelve years actually. And you can see Iowa has increased actually fifty two percent of the electricity in the state of Iowa now comes from when. in the far right is Arkansas the next page shows the increase in electric rates. In in in those same states over the the period from two thousand eight through twenty twenty you can see the electric rates have gone up forty percent Nebraska forty three in Kansas North Dakota forty ia thirty seven and of course Arkansas Department it's gonna only twelve percent over the last twelve years. And this is based on a residential electric correct so I guess the the thought is here it's not always going to lower electric cost when you move away from baseload electricity something that you for the most part it paid for and go to a renewable energy. Finally one last slide in this is really the. We look at beyond Arkansas at my so and SBP that serve the state of Arkansas you can see that in the future eighty eight percent of the new generation slated to go into my so is wind and solar in ninety one percent of the new generation of listed to go into the southwest power pool by twenty thirty is wind and solar so what we have is a massive amount of wind and solar that will be added to the system of both my so and S. PP and it's B. who've been of Arkansas to try to keep based low power in place whether the nuclear gas or coal to keep reliability on and keep costs down. I will say there's been questions about the public service commission already doing this analysis the representative Hawks talked about will say that there's been some a request back when the interview in the Sierra Club said downloaded a voluntary agreement to investigate that the Attorney General sent over a petition to this out to the public service commission to investigate it that was in two thousand eighteen it's been over two years and the investigation has not taken place and finally I guess the only other thing I would say is that I know there's some folks who believes this ought to be in the Resource planning process of the. Of of the public service commission utility should have it in the resource planning resource planning is basically a report to the commission the ratemaking processes where the commission has the authority really to do a of some changes and request in and make changes and whatever the generation mix will be in the future. I would just a. Ask for any questions. The router you have so that yet the basically I you know I feel like bugs Service Commission has done a good job in Arkansas and evidences that we have the fourth lowest energy rates I appreciate the fact that they're doing that. One of the things that I'm I'm a little bit concerned about is as we move forward. It imperfectly the problem is that wind energy is is not real expensive now wind energy is is relatively cheap if you get past the transmission getting it here but it's not relatively stable right so it will never replace baseload generation not until battery technologies such to use for huge amount of energy which no may not happen in our lifetimes. So if that's the case then we've got to have base load generation and what what we seen at least as of right now is gases not is not that when we have that big winter event and so the question is how do we how we slow down the plans in the future to start shutting down coal and we may not have the option opportunity that it may come from the feds and we'll have we may lose in court women that have no ability to to fix that but what we need to do as a body is try to do everything we can to slow that down not because we think Kohl's better than winter or soul or anything else but because the fact that are low rates for our consumers and our stable system is at stake when you try to do everything we can to slow down so and so that I I'm happy to answer questions but. They'll be better prepared to answer the me I'm sure. Okay if you guys referred questions Senator sub Stubblefield. Thank you Mr thank you Mr chairman. Randy. Good to see you again yes Sir this you you know I think may have problems we face today and in regards to energy and maintaining a constant baseload is a is a difference in political ideologies and I've said this for years because I served on the inner council in certain states interview board that we have we have a we need never ever to forget the source of energy that brought us to the place we are today in our country. And that is carbon fuels and I've been to those coal fired generating plants where you could eat off the floor and there was nothing coming out of those tax. But steam. The cleanest energy used using coal to generate electricity. And then we have the other side of the political ideology we're we're we're saying you know we've got to raise our roads streets state now to prevent the ocean flooding arose while other countries like India and China and a number of other countries are are camping out all kinds of I mean there's no scrubbers of no filters there's nothing on the coal fired generating plants in knowing that they're building thousands more. What the people here in this country are suffering from high energy rates you look at California who transitioned to to green energy much too quick shut down the nuclear plants and now they're having Blake Brown else blackouts we don't want that in Arkansas we saw what happened in Kansas and I will they too thought this was the the the way to go not so. You're sitting there at twelve o'clock at night it's twenty below zero. And the and the and the Suns not shining in sometimes it doesn't shine for weeks I don't think we never ever need to forget the sources of energy that made this country the greatest the most powerful country in the world. And it was it was not solar or wind and I'm not discounting those I say they have a place. But we need and we never forget the the sources of energy that made us a country where are in those are those are carbon fuels. And I don't think we need to follow the path that Californians somebody's of the State of taking. That's that's not necessarily question as to statement. Thank you Mr chairman. Thank you. A representative Watson. Thank you Mr chair thank you centers Stubblefield. Have had a chance to visit with my son this past two weeks lives in northern California. Things at the C. N. is a. Unbelievable two Arkansas. This service sixteen sixty five. Applaud that is a definitely a step in the right direction for site we have got to have that. No doubt about it and and I appreciate you Represent a hawk to Senator Ballinger own House bill sixteen sixty five on a section one. Line twenty. Struck down about line twenty two subject subchapter two Arkansas affordable energy act. Stay with me on if you will flip over one page. the. Number one insurer here we go again ensure that Arkansas continues. Struck down just a little bit on the same page if you may. Which is a second page. Line twelve and thirteen existing electric generating unit means a facility for the generation of electric energy in this state only if it was intentionally but Hey we're we're told that Arkansas. just water what the Not saying a problem button. Just to be little more iron clad to have a hand in Arkansas on there also let your energy in Arkansas that is previously provided just a thought on their but it's for again is a house bill sixteen sixty five in my opinion yes this is needed we have got to go forward I hate to use the over expression over expressed thought about having all your eggs in one basket. The please let's don't do that and I know that's not your guys intent for that. no further comment. Senator Blake Johnson you are recognized for. Got a question or you. What's his name Jack. Yes Randy Randy Randy what to. There is some coal fired plants that were shut down because the code was frozen. And there's one in plum point over there that some of my you know small communities are part of and in southeast Missouri also are part of can you tell me what happened the with the cold freezing up in in these situations. Sure in any utility make an answer that better than I can but my understanding there's two options in in that case usually others it depends on whether you live south I know the the coal plants in taxes or not used to freezing up files freezing up but a lot of it is either done one of two ways or is there is a liquidate spread kind of the. Basically and I under pres type of liquid does that sprayed on some coal piles to keep them from freezing the second is simply moving the cold around keeping it moving with the with bulldozers and that sort of thing it can happen in extreme cold situations they're more prepared than that in the in the coal plants in the north Michigan Wisconsin in those areas and they are in the south but it can happen but for the most part is very doesn't happen very very often and most the time utilities or on top of a by keeping of a coal pile moving or keeping an eye and a free spread on top. We'll was that the case I mean in Arkansas because that's what I was told what happened that one point. I don't we actually had and I'm not positive about one point that we have that actually happened a couple places and actually had a whole diesel to to all the coal to to get it get a I've been going and but if you look at the statistics the number it is still regardless of the circumstance and I think secretary Thomas made the comment that that you know nothing works well when you get below zero and and I think that's even article five prepare plans did but if you look at the production and the drop off in production of every other form of power none of that compared to the stability of call even though we did have piles of coal the pros of that to be called. Jerry can I have one more question all right the. You know you said that one day in Texas that. There's no possibility that All production would have covered that day. The is that including mitigation where they want to shut off the shut off their manufacturing in those areas the state if those mitigation procedures would happen I don't even know if they had those in place because they're not part of those regulated areas. That's a good question in to be honest with you I don't know the answer to that I think this was a basically trying to keep. The electricity on to those essential places hospitals homes of the essential of fire and rescue and that sort of thing is what what my understanding was that you it was not necessarily to keep all the manufacturers going in at a hundred percent I will check on that and make sure I get the exact answer to that question thank you thank German. Saying no other questions I'm gonna move to the those who have signed up to speak for against the bill first all recognized Bradley harden with the southwest energy powerful. Right I I I appreciate for the problem with the that night at southwest energy our company would you please identify yourself for the committee. Thank you Mr chair members of the committee my name is Bradley harden that manager of government affairs for southwestern electric power company and weird regionally known by the acronym SWEPCO. But SWEPCO is a three state electric utility we serve customers in Arkansas as well as in Louisiana and in taxes with generating plants in all three states three in Arkansas four in Louisiana and for in taxes the concerns that we have about the bill really we're I believe raise just a moment ago by by representative Watson because we are a three state utility and but because of what is we we believe perceived as as a bit of a vague three and And Section two on page two we would we would be concerned that there might be some interstate commerce issues that could arise if if this is not addressed with a little bit of specificity. The specific language I'm referring to reach existing electric generating unit means a facility for the generation of electric energy in this state that has been that is previously provided power and While it may be implied that this was intended to refer to a generating unit that is located in Arkansas. And it might be possible that one would infer that is what it means that that is not what it state and if anything we would ask that the this the sponsor consider amending the bill to add the word located. And. When it says located in the state of Arkansas then I believe that would address some of the concerns we have about. Perhaps trying to impose some of this same same language on units that are located in Texas and Louisiana there are regulators their their governments there that all also opine on issues such as this so again we would respectfully request consideration of adding a line thirteen the word located to specify that this does indeed refer to units that are in the state of Arkansas and only in the state of Arkansas but also add that earlier you heard a reference to the integrated resource plan and SWEPCO does participate every three years in the integrated resource plan will be doing it again later this year and it's true that collaborative process with the public service commission and a broad stakeholder group that includes representatives of all of our customer bases and other other individuals and entities that that is the process that helps determine what our future generating resources will be. And we believe the integrated resource plan has worked well and we would encourage consideration that it has worked well and deferred to the integrated resource plan also I read I referenced having three generating units in Arkansas two of those are coal fueled units one is a natural gas field units unit and we have not announced plans to retire those units and That I hope would be a bit would would allay any concerns but we've not announced plans to to retire those units one's been in operation since nineteen seventy eight and I noticed on page one of the bill in section two it recommends fostering investment as appropriate and existing electric generating units to extend the useful life of such units and we indeed did that just several years ago SWEPCO and its co owner of the flint creek power plant invested over four hundred million dollars on new air quality control systems there to extend the life of that plant so that is a very tangible and current example of how that has taken place and we look forward to continuing to operate that plant. Those are my comments if anyone has any questions I'll stay at the table for just a moment. The representative pike you're recognized for a question. Thank you Mr chairman maybe this is more questions far beyond our staff. That when we have a bill directed for the Arkansas legislature clearly for the state of Arkansas and it says in this state to me there's no question what we're talking about because it was drafted for this legislature of could be on our staff Pappas within. I'm sorry I was struck go ahead. Okay Mister over what I heard I heard you when you started that okay I was asking and I was saying my understanding has always been since I've been in this legislature that when it says in this state it was drafted for the state for the Arkansas legislature so in this state clearly can be no other state and I was asking if B. OR stat could clarify my understanding of that. The judge. Give give me just a. We were trying to under trying to get an answer to see if we get the the Attorney. For this committee here's an option here to build that are not here. Thank you for. Mr if I may it please Hammer offer a perspective on that. As I mentioned we have the generating units in Arkansas Texas and Louisiana and in fact by the end of April or early may we're going to have another generating unit which is located in Louisiana Oklahoma that will go into a commercial operation and those are facilities that are generating. Energy electric energy that will be consumed in this state. It would be a mistake to to to insure that the only kilowatt hours consumed by swept goes Arkansas customers are generated in Arkansas. All of our plants are fully and occur in our connected with with our transmission system and it is just as likely that kilowatt hours consumed this morning in Northwest Arkansas came from Louisiana or Texas plant as an Arkansas plant and that is that is representative why we were. Requesting that specificity. I understand that that may have a follow up but I was just talking about the drafting of this particular bill and when this particular bill says in this state it clearly means Arkansas and that is my understanding perhaps staff can correct me if I'm wrong so if we did the the the legal counsel has is watching in the just texted us and told us that it doesn't. Thank you. Okay. You have a question. No other questions. Senate about. Those are and I appreciate you you come in today and and honestly I appreciate all the work the SWEPCO has done it you guys have been part of the the question as provided as cheap stable power and so and and honestly I think that with the without this legislation you guys will probably still be very thoughtful about what you do and and I know that you're still dependent upon call for part of your your mix and so I know that you're not you know you're not in a position you're just aunt uncle but it just point blank that if we change that to say the state of Arkansas would you be supportive of this legislation. I believe there are concerns would go away yes so just by just by changing that to the state of Arkansas you guys will be okay with legislation I believe there are concerns would go away is it and I appreciate that that that is that is a it's great to hear it would've been nice to hear that two days ago sure so that we we have ability to amended and have it because yeah I'm not sure that I can imagine any other there's active in the law that says you don't lead you don't perfect language lead to certain consequences you know if what we're talking about is elect electric generation it seems like it be hard to say that that would could apply and and in the state that it could apply to only electric consumption and state. Mister Mister chairman I have a question for the public service commission of the agency what is thank would be of this language if that's okay. So we have some more discussion the Milanese let me say what. Okay. Senator Blake Johnson. Chairman for the purpose of amendment. Discussion. What you're Amendment. The Page two line twelve. After facility. The in circuit located in the state of Arkansas. Okay so have a. A motion to accept. And then this as stated there. So. Is there is question well that first have a second here is there any discussion on this. Red lead with that is is that the proper place were you and request that. That would work fine. All right so there's no discussion on that. Senator Johns as of. Thank you Mr chairman of. Senator Blake Johnson motion I think is good is in order and to clarify of committee to serve on committees that do not allow. non printed amendment a verbal amendment that's adopted is this is however this committee has not adopted rules that would would restrict that so in the event that this amendment passes it would be valid and could then be engrossed to the bill I'm Y. S. chairman Ballinger Peking covers and in my analysis of that. Instance and the same to our house chair chairman back. Yes okay then then I do what I have we I guess we do have a motion on the floor I'm through my discussion on. Is there any other discussion on the motion. Right with that all in favor of the motion say aye. All opposed. The ayes have an amendment has been adopted. All right. There's no other this. Questions I have some of the. So. The next person up is is gonna be buddy Hester with the electric coop to speak for sixteen sixty five thank you Mr Arjun Kerr. Thank you thank you Mr brown. Please advise please identify yourself for the committee I'm body haste and I'm the CEO of Arkansas electric cooperative corporation. Go ahead. Well good morning I'm relatively new this state I think I've been here eighteen months my first time in this room was March first to discuss the winter storm and so I think it's pretty appropriate that would be here today because it's a very similar and as you guys have been tying together events as I've been sitting here listening to the last bill on this bill issues in taxes in issues that Could be challenges for our state For the coops of our mission is affordability reliability responsibility and we take that mission very seriously Kirkley back to my test sometimes take it too seriously but we think it's a serious matter. How we live in a country where there's probably not a. Child in school today or anyone that walks into a room flicks on a light switch of the light doesn't come on they just assume there's something wrong the Les Paul but they don't so soon there's something wrong with me. Meaning we we we sort of take reliability is just it's it's always there it's a product that's always there and it's always going to be there and it just is what it is. What it takes a lot to put electricity there and haven't that reliable. In a co op we have a saying aye aye the mix matters. And you do need a good portfolio just like all of you I assume don't have your entire retirement savings right nine one stock that non coke. Or Pepsi or whatever but other makes matters. Coal plants gas plants renewables hydro all all of that matters for me I think we've been very consistent with our message since I've gotten of the State of published three articles in our monthly magazine Arkansas living invite you to read them. One of them's called powering the future that was written in July twenty twenty. There's a section that referred to as the perfect storm and I would remind you we wrote that article in July of twenty twenty and it exactly predicted exactly what happened in Texas and then with this most recent winter storm it's not because we're clairvoyant and we don't have a a time machine down at one cooperative way. It's just that we've seen these forces in our country and forces electric power supply. Kind of pushing back really really hard on base load sources in and what caught what that causes we run another one called ducking the duck curve in January twenty one which gets into some of the the problems and some of the issues out in California when you start abandoning baseload resources and over relying on renewables and just this month I think it's it in mailboxes mine got to my house last night it's called mission impossible where we tried to explain to our members what happened with this winter storm in great detail where the cost came from in kind of what we're trying to do doubt the co ops to you know to prevent recurrence and so I'm here today really really for that because. as a mentor of mine told me that we need three things in our industry to kind of get to the the to get to the CO two issues that are out there in the national debate any causing the three TV's and any time when the transmission and when you technology. And so what I see with house bill sixteen sixty five is this is a a way to slow the roll or to slow the we're to to maybe put some speed bumps on the highway just abandoning baseload resources and going all in on on other intermittent resources and so gives The Three TV's more time gives us more time to build more transmission and hopefully better technology because from where I sit today I don't think there is a technology solution out there and while some may be comfortable diving off of a cliff hoping the water down below is deep I'm never been one to just do that because some may say that's not the thing you just committed suicide. So coops are nonprofit and and and I will leave you with this analogy I grew up on a small farm in Iowa. My dad was the proverbial Steve Martin poor white sharecropper and I will. And we we we had tractors in a co op world or in my inform where we use the tractor as long as it makes sense so to the individual's whole life it's some point that tractor might take need more maintenance that might have other issues in it what's not serve in the farm then you got to go get something new but until that time we use it because that's the most cost effective way to do it and the same thing is true of power plants and that's how we have the coopers view it so we support house bill sixteen sixty five because we believe it is a way to pull the topic of reliability out into a more get it more light of day so that it can be talked about discussed and that the that you and the public everyone would know a little bit more about the costs of the banning these resources apiece thank you. Thank you and I read your article it was very. All right are there any questions. Thing number appreciate you coming for the kids and the next person with up will be Chairman Thomas again for informational purposes. I'm the Thomas procedure speaking for myself miscible with the bill is trying to do. What I wish was different about it is that we did this when we study our long term planning issues which is what we call the I. R. P. process which is integrated resource plan. Rather than a rate case. And in this particular we're talking about the coal units in Arkansas the two that are Where the subject of the discussion this is how this would work. Because we just extended F. R. P. the formula rate plan for inter G. they will not have another rate case in five years. So the earliest that this bill will allow study of the Arkansas Code will require steady of the Arkansas coal plants is the year twenty twenty six. Now last week I offered an amendment that basically switched it to the R. P. process which is happening right now in seven twenty twenty one. The PSC shall discuss these issues and and didn't use the words IRP Bennett said we would do with this year we would wait five years that's the problem with putting it in a rape case. And and the study I always support the study. This agency exists which led legislatively delegated authority and from a. Practical reality the reason you don't have a a a case each a bill each session setting electric rates is good you've delegated that authority to us so the study is very important and what you want to study is very important. and that Amendment I've got in the sponsors handers a couple things I want to respond to first of all with the notion that an investigation was code for. The problem with that is is how many times do you want investigated before the decision is made. We could of investigated banner conclusion would have been meaningless. Because of the new administration tells us to put two billion dollars of scrubbers on that plant we're gonna one study that we're not good ones that we looked at in twenty eighteen. We also want to wait for the federal court. To do its thing. We've heard a lot about the problems in California and Texas which are real problems I want to tell you about two problems that we haven't heard about one in the state of South Carolina and another in the state of Mississippi and South Carolina the legislature heard a presentation from people that wanted to sell them something and they bought it and they passed an act that was called the baseload Act. There's a straight line between the baseload Act in South Carolina in a nine billion dollar hole in the ground. Because they compel them to build a nuclear plant they spent nine billion dollars on it. And then they didn't want to complete it because it would cost them less thank you nine billion dollars then to complete the plant. They did securitization. Sixty years. On my hundred and fifteenth birthday they're still going to be paying for a sixty year old hole in the ground. There are lots of mistakes here but the biggest mistake this needs to be decided by engineers. Not political muscle folks someone say something I represent the buyer's. Your consumers I love all my sellers because if there were no sellers my buyers would be unhappy. But I'm not here speaking on any source is valid so you something. We did the same thing in Mississippi. They passed a law that had the same title. The base load act. That led to a seven billion dollar utility disallowance where the Mississippi commission have a choice who's going to need the money ratepayers of the utility and the way it worked out there they chose the utility that was a four to three vote in the Mississippi Supreme Court is what kept ratepayers from eating a seven billion dollar I got a seven hundred million dollar gas plant. And they paid seven but may I support nuclear technology that was a carbon capture thing I support carbon capture technology. But when you turn fuel supply into a political football. And lobbying muscle not engineering dictates where you spend you can make an enormous. Consequence decisions that don't turn out very good and with respect to coal in general when you look at the entirety of the winter event the good news for coal is I think they did a good job. The bad news for coal is in my view is that women didn't work it was in Arkansas. We have the plum point plant that wasn't up the citizens and pick it are gonna get hammered probably on this stuff worse than anybody else because of the critical point there wasn't working now that coal plant mostly service Missouri there's a few spots in Arkansas so you don't hear much about one point because it's tied to other customers in order to these two big coal plants that we're talking about retiring and this is back of envelope stuff that we for thoroughly investigated. Probably a hundred and fifty or two hundred million dollar cost cost cost consequence of them not rent. Some when you talk about reliability you got you need to be there when gas was four hundred dollars million BTU those things were running. The main justification in my mind for having them as a hedge against gas prices we paid for the insurance. They weren't there when we needed them. No that's not to say call underperformed because when you look at all of it my so as BP Texas when you take the big picture it did all right the problem is the price for here in our state there's a mixed message with all the stuff of what we need to do is listen to the engineers and if you want to see that detailed level that these people get ghoul nersc national electric reliability council and just flip through the stuff you can find on there if you if you're trying to take it no having trouble sleeping it'll put you to sleep but will also demonstrate to you the rigor and detail that goes into these kinds of studies another one. Google my so in R. I. I. A. which is their renewable integration assessment this is what they say about how verbal resources can work within the system of the studies they might be right they might be wrong the forecast in the future which is inherently unpredictable these matters are studied in great detail by people who share a Mister Haskins concerns about keeping the lights on and I have my you know my perspective is is also come from the consumer my role in this process as we said what's called a terror of you run costs through the terror of and the bill goes to people's houses if they don't pay that bill or rules say you write a nasty letter asking to pay it if they don't pay it again. The Senate dark. And he said the doctor it's hot in the Senate are it's cold and I signed the papers that make that happen which is the solemn responsibility that's how hard we study this stuff and will continue to stated in terms of the bill itself I'm fine with the concept which was directed at higher P.. You have a timing problem with the interview plants if you pass the bill is it is it mandates a study in twenty twenty six. You pass the bill is amended to the R. P. process will study in twenty twenty one and in terms of the practical outcome of this bill one of the main things I think you the legislature contain is were in that cycle doing R. P. right now these things will come out in the fall they should be presented to this committee and then you'll see the kind of factors that go into these long range that with that I'd be glad to answer any questions. I think that Senator Ballinger has a question. You're recognized. Thank you Mr chairman thank you again Secretary times it would you mind like specifically is there anything in this legislation that would lead to the problems that you saw in there that we saw in Mississippi Tennessee I thank well this is an interpretation thing in the early deal it appears to to really urge that we run the plants no matter what. And I don't think that's what's intended I think he wants to study the economic value yes yeah it's it's run the plants if it's going to if it's going to help right in a dog yeah don't shut it down just for physical reasons yeah if it's comparable. You want that's what you do in a stabbing you different scenarios different resources right and there's nothing like that with this act of. You know if it's intended to mean that we have to keep these retirement or keep these plants rolling even if we get a two billion dollars cover thing I don't think that's the intent then I would have a problem with it so but you're basically I think what you're what you're warning against is like Hey get to Alteryx involved in the process yes we could be in an and drug but one flags that off is the word base load because the acts in Mississippi and South Carolina were both called baseload acts right okay makes sense so is there anything in this legislation that would prohibit you from doing the study now no we do all the time already but it's in the air peace process right so it's I guess my question is that we're in I mean one you know you understand our our intent and what are what we're what we're going for a minute and that was honestly what I thought your argument was going to be is the bill as a necessary because we do that already right that's what I thought you what you would say means no harm either right you guys wanna emphasize something that we need to study we need to study it right and that's why I generally support concept of the bill the right and so so would you but you could start in two thousand with with what the state we're doing now you can make a focus and and let us know the cost benefit analysis all that has that information your together you're working on you can provide that through the state correct yeah you doing now okay thank you. Thank you. Seeing no other questions of the procedure comments thank you all right this settlement skewed hold on just a second Senator Blake Johnson. So. You said it would be twenty twenty six by. But what I heard just then it was it you can do it with the R. P. study that you're doing right now is that correct do they would happen anyway. And to me it makes the the. The bill would be better if it were consistent with our planning processes rate cases is Your setting rates. For a designated period of time there's all of these other issues. The RP is the R. P. is is a three year cycle planning process were you looking to the future and say what resources do we need in the future which which is to me spot on with respect to what the resource mix going to look like what happens you know when to retire unit should we retire units when do we do new units when do we make the comparison of what we think the costs will. And your in the last year of we do that every three years and we're in the middle of that the the final results will come out in October. Of this year I think everybody's on the same cycle too so by definition. We're we're doing this wrong by put it under the rate. That's my view it clogs up the rate case process which is a whole different thing I know the views expressed here earlier that was different than that to me the right place to put this is in the R. P. process in the timing also works because it's twenty twenty one and if you're leading up to an oral amendment I can read you what I sent Ali I believe that oral amendment up to Senator Ballinger if he wishes. But I think we're we're already going to have to engrossed differently already so I think that would be it if that's the will of committee I think that would be the. What should be should be done in the to make the process happen sooner than later. Senator Ballinger did you have a question or comment. Yes I need to learn the post button and then you can recognized so I guess my my question is I don't see the harm in gathering the information now and then any time that we have have a. When we're dealing with the rates that information be included again eight AM what I would say is that if that's the case that there is a harm I think we have a lot of time between now and two thousand twenty six to make whatever type of modifications that we need to do that you don't see I mean is it what would be the what would be the harm of you doing this and when when we actually have the the rate case it's all of the other things you're doing a rate case on as specified time frame. It it's the really looking at different issues it's it's but project with our costs are going to be me but their costs and rates. So you are doing a cost benefit analysis when you do the right case. It it's more there there's some degree of projection. But it's more projection with the costs can be built that's like a six or twelve month kind of thing. This is in twenty twenty eight it's really what we talk about a rate case with respect to a plant that's retiring in twenty twenty eight. Is what what cost should you get for this in the next year or in the next period between this rate case and your next one it's more of a cost thing. What are the costs appropriately put in rates right and what is your long term plan now those to merge if you know if we decide we're gonna run another forty years and we need five hundred million dollars investment to make that happen well when that five hundred million comes along when the costs come along as we stated in a rape case. That just for the purpose of the committee from my standpoint I I absolutely and I appreciate the fact that he's doing some of this and then we'll do I definitely don't see the harm and I see the value in requiring the more information in when we don't the rate case so from my standpoint at this point I wouldn't be wouldn't be interested in entertaining myself an amendment but obviously it's a will the committee. Senator Blake Johnson. Senator Ballinger how about doing it in both. That way you have one and twenty one and one in twenty six. Is that the I mean if if if you're gonna. Absolutely yes no I I would be definitely would would be willing to from my standpoint entertain that I I would assume represent Haak what's with with all as well. So do you have that the language that we did add. In in the. Section eleven oh four. Or or or the R. P. and the ratemaking. The men would basically strike anytime in a rape case and and replace that with once every three years and not specify where. Be online. Get my. On line eighteen and nineteen on page two of H. B. sixteen sixty five straight the words in any electric utility ratemaking process and put in the word starting in twenty twenty one and continuing once every three years and then change this section title. get rewards ratemaking and empower retirement review. All right. There there's good character. were to go ahead Bob. Senator Ballinger. I actually I think maybe that that should be fine with me because that when we're we're still doing it again actually before the the two thousand twenty six times would be part of our normal planning process right and so we getting into thousand twenty one and continuing eight you know in a every three years yes. And in place of the language about the ratemaking process. And then I'm good with it like I. I did not think of the. Read ME hardens thing but I do think you had a point on and I know it's interpretation question if the folks in Louisiana wanted to tell us we could retire our plants we probably would appreciate that and vice versa so but whatever the interpretation on that well I guess that was sold by amendments so that wasn't a concern also it's already been addressed but actually miss that invited. Brown Collins. So. Is there a motion to amend. All. From the Committee. Mr chairman why don't we why don't we do this if if we feel like you will have thirty minutes left. and I hate to because of the nature of of our committee we don't need all the time so he did not. Not do this in this bill is not coming back to committee so would it be would be appropriate for us to either take a short recess and come back with language I hate to to because we only have thirty minutes left another building here right to not be lies all the time the maybe pull down with the intent that we're not leaving without taking a vote on the bill. Would that be appropriate. As opposed to. I do if I'm understanding you as opposed to recessing would be permissible to hear the other bill during that period while we prepare The Amendment yes one of the I mean if it's okay with the rest committee okay with you the chair why don't we what we plan on doing that will get the wording make sure we have it exactly right what we agreed to as far as on the amendment and and try to get back to getting this done in time. And I'm saying this because I'm getting mixed messages from from other individuals have a vested interest in legislation exactly what language should be so if we get language right O. make it easier. So as I understand your point that the form of a motion that we suspend action on this bill at this point you're gonna go we're gonna work to get the amended language during that time they were not going to recess we're going to hear the the only other bill that's in front of this committee and then you guys will be returning with the the agreed upon language yeah and I would just say and serve as a motion to please the chair and and the bill sponsor will pull this down work on this we can move on as long as we have opportunity come back during this committee. All right thank you so. I have a second on that motion is very discuss. All those in favor. Opposed. All right the ayes have it so with that we're going to be moving on to the next piece of legislation before this committee. Which is house bill seventeen fifty one representative in it. You're recognized to present your bill. All. Please there everyone to table identify yourself for your for the committee before you speak. Mr fox well. You can lay both those mikes on. The stock of my name is Joe fox. All right you're recognized and is it going to present for the bill are you gonna present first okay I'm Denise representative Denise Ennett and I am I represent district thirty six good afternoon to the chair and the committee members. This is a bill about tax fairness solar is one of the fastest growing industries in Arkansas and now businesses around the state are investing in renewable energy this bill ensures that business owners know the impact to their property taxes before they make the investment it provides certainty certainty encourage investment. Why reduce the tax value by discounts incentives it ensures that the actual value of the vestment is what tax is what is what is taxed not higher value. Why why ten percent residual value after ten years. This. Lines state sorry this line state tax line up with the federal law making the tax depreciation period longer than federal law the more consistent and more consistent than the longer term that typically applies to buildings and fixtures. What are assess what RSS is doing now it depends on the county this is part of the issue this bill addresses. And I'd like to introduce Mr fox if if we all have any questions on the bill and he can answer the questions. Recognized I'll just give a are amended to a background I'm here representing myself as a small business owner who has developed one renewable energy project specifically a solar installation on my business at the time Community bakery here in downtown little rock I'm working to develop a much larger renewable energy project a community solar center with seven small businesses in the summer Truly of value should be. Is that what you're saying yes shows a quick example in my community based reseller project the ticket price was eighty thousand dollars but might federal and state tax credits together amounted to forty four thousand dollars so might net price paid was thirty six thousand dollars that's what I ended up investing who who who paid the difference on that eighty in the portfolios were tax credits and they came off of my tax bill both my federal and state tax bill so much is true that I paid one party the eighty thousand dollars and I got this the forty four thousand dollars back from another party but that's the net amount that I Your compensation from a different source is not the true assessed value that's that's my question and he come up that are going to say it but I do welcome to my ideas to give another the board thank you. Senator Johnson. Thank you Mr chairman of fox welcome we're glad to have you of. This guy's a clarification I want to follow up on Senator Rice as questions the credit you receive or for federal income tax credits they weren't credits against property taxes correct is that yes so your cost basis is your gross cost of the equipment less those federal credits which deems comes up with a net cost so that becomes your cost basis for assessment purposes is that the way the bill would would read would would the law would read it this bill is enacted that's the concept yes so it it in your situation your your first year basis would be thirty six thousand dollars that we what we be assessed and then of course the county would look at twenty percent of that is your assessed value and you'd pay your the millage based on that that amount is that my seeing that correctly yes okay so so the if there's a subsidy involved it's at the federal income tax level not the Arkansas property tax assessment level is that also correct me clarify in my specific instance I got both a federal tax credit in Arkansas credit the Arkansas credit was not for property tax it was for contributing to the rehabilitation of historic structure on which I made this investment which was a relevant to the the solar or energy saving aspect it just happened that you did get a tax credit for for doing something else to a historic building as opposed to buying a solar unit so so what I'm at least for purposes of our discussion we can take that out of the equation because many of these projects will be in either new construction or something is not a historic structure so I I'm I'm I don't wanna mix in our urban centers and we lack incentives to to save historic buildings on the other hand we want to come up with a way for the assessor to do this but my point being that none of those while this would lower your your your assessment base they had nothing to do with you getting a benefit on Arkansas property tax from those credit programs I'm I'm I stating that Iraq correct yes yes okay so so what this will do is it put you in at at the what I would call the net cost of the system after the incentives and then you'll only be paying your regular property tax to Pulaski County in this case on that Twenty percent of that that value and then the the depreciation annually would would apply bring it down to the the base which would be ten percent of that is where it would go the only have one more question I understand that there's a longer useful life of the systems and then ten years do you have a is estimate or determination of the of the life of the system. There are different components to a solar installation it is true that the photo vote the Peavey panels typically have a longer life however first of all the output of those panels degrades you every year by half to one percent so they are depreciate of other decreasing in terms of what they produce secondly there other major components of the system such as inverters that in the installation I'm looking at developing the warranty on that's only ten years and then you have tracking systems with these bigger projects that you've got movable parts motors and warranty on that equipment only five years so in my bakery installation and I had plenty of of of Quitman that and moving parts and well where is it. It doesn't last That long so anyway yes I think the ten years is a reasonable number as I say that's what Texas does I'd I'd mention that you know we're not asking for this property to be exempted from property tax which some of our neighboring states do do such as Missouri or Tennessee where they only assess one eighth of the cost twelve point five percent of the out of the initial cost so this is not I I don't think I don't wine were. Most of the equipment I think standard equipment is in the in the same range Production equipment manufacturing environments. I appreciate your testimony and I'm I hope we we clarify that I'm just wanna make sure that if we don't get mixed up with federal income tax credits verses credits on on property tax which is really the issue we're we're looking at here is establishing a baseline for of ad valorem taxation thank you very much Mr thank you thank. Mistrust one quick question and and we we are we need to live along this. The tax credits that you received on the income taxes you received in the first year all. Over they are like a sometimes that's over five years or something like that. I could I could use it all in the first year I'm sorry I could not use it all in the first year so this is my concern then is but but yes it could be it could be claimed all in the first year if you have enough taxable income to offset it so so how would. My concern within then for the first year the the base on the you did not get all the tax credits but with the bases still have been the lower right for the full amount that you've got over several years do you understand my are you saying that it does a bill indicate maybe I just didn't pick it up that since there were no X. dollars of percentage of tax credits available all right then that would decide the base but if you did not have income you could not have used those is that not correct. Correct. It it was going to get. You're going to get the credit value as quickly as you can use in a year or two so you're what you're saying is if you don't have five thousand dollars with the credit the first year then that the tax the the the tax base for the personal property would in based on that five thousand dollars not the larger. Let me clarify that I I was able to use all the federal credit in year one by the state credit I did okay I didn't have enough of it so the bill tension is of the bill is that you would only lower the price of your tax based upon the credit that you receive whether they came from tax of whether they came from the state or the federal is that correct yes all right thank you senator Johnson Blake Johnson. Members we've heard both sides of this that the Income tax credits and and spoke about the property tax credits in them under green sheet the revenue impact is undetermined the If we pass this bill adherence is not the the state revenue is going to be impacted it's going to be your local county governments impact in assessment so if we passes out I would I would assume that county judges will be would be contacting both the ends of this of this legislature. With the possible impact this can have. Thank you body. Senator mark Johnson I appreciate serve like Johnson's question I think it's it's there's validity there however I'm I'm I think we're also at a point where would like to see some consistency on how something this it's not totally new technology but probably we're starting to see much more applications of of solar installations in in in Billings and therefore that has to be valued at some level and and at this moment I don't know what the The sensors around state would do it it appears and I know we have like we have someone with his sister sociais Haitian to testify but there is absent this bill I assume that they would start with the full retail value as opposed to what appears I think Joseph it's a actually a lower value because you're starting with what your net cost is instead of your gross cost would be and that I would think it would be to the there's some consistency here with how you you value any tangible personal property it's in first years is what it's Act what actually cost you and this incident to answer Senator Blake Johnson is comment or or think about it could be that we would be lowering the assessed valuation in a given taxing entity rather than in the we would be lowering it with this bill rather than raising it or leave it the same and and affecting the assessment by the the local assessors because they if they go with what you paid the bigger amount you know it would. I'm sorry I have a motion. If I can that help that has to follow the main motion. The motion for committee consideration as following a main motion we don't have a motion to to accept is this yeah. I wish to hear testimony I'll you back my time as chairman. Thank you all right with that said we are running short on time we do have rusty hill from the sensors are so sensors speak I get are there there are no other questions of the combatants speak again. When you get her please identify yourself with the committee on. And. Hello my name's Russell hill I am a the assessor Washington County and I'm also representing the Arkansas assessor's association the problem that we see with this bill is it attacks the integrity and the equity in which the way that the assessor's value All property across the state of Arkansas at the the issue we have is is with with taking a piece of property that's already discounted and rebated and then starting the value there it also conflicts with the Arkansas Code twenty six twenty six nineteen oh two which states that each county in the state of Arkansas shall be required to appraise all market value real estate normally assessed by the county assessor and so what we're our goal as assessors is to hit market value as close as possible and so this would threaten the integrity of our values by doing this and it would also affect the equity for other property taxpayers it would have a revenue effects on the local level namely the school districts because they receive eighty two to eighty five percent of the property taxes in that taxing districts so the schools will be mostly affected so if we were to go in here and in essence what we're doing is we are skewing the values of this property and so that's why we uh assessors across the state or against us we do have a department the Arkansas assessment coordination department as he mentioned about bearing values with that property they can set the guidelines for the assessors across the state as far as depreciation schedules and different components as they depreciate over time it does have an effect and we do that with all sorts of personal property we have a certain depreciation schedules that we did pre. She ate each year that property goes down but I think that's something that the state department needs to to create those guidelines for the assessor's caress Apollo thank you very much Is the may I respond to that. I've I've spoken with the assessment coordination position that I'm sorry that it's not a question of representative you're allowed to there are no other questions all of. You're allowed to close very briefly for your bill. I'm close. All right what's will the committee. Signal motion your bill is spelled sir. Okay we're I think we have agreed upon bill on that the. As the seventeen fifty of seventeen sixty five. Sixty six five okay that's house bill sixteen sixty five. Representative Ballinger are. A representative Hawker centre Ballinger whatever wants to. Bring that amendment. We do we actually have staff working diligently to get your paper amendment but since it is not here I may go ahead to make a motion for a verbal amendment you have the bill when you because of I get my bill to staff as of with my chicken scratch on it. Okay so the motion for the with the verbal amendment. Okay well you have a motion for to make a verbal amendment yeah for a and I and I hate that with the I know the staff is working on that but now we've got down to six minutes all right before we have to show the will of the committee I have a motion for it to verbally amend this yes let me let me hear the response read amendment would be okay so on page two. We have the original language that we we said in the state of that would would read me the facility located in state of Arkansas for generation we're going to add one more thing to that this is a a facility means. A. Hey entity regulated by the public service commission located in the state of Arkansas for the generation of power so that the first part of the amendment. The second part of the amendment and I have that verbatim so I read it. It's on lines eighteen and nineteen Page two. Straight through the words any electric utility. Right making ratemaking process and in that place at the words starting in two thousand twenty one and continue on once every three years and strike the words breaking rank ratemaking on seventeen. F. R. one seventeen a page two and the place at the words retirement review. And that's my motion. Got a second. That I have a motion the second adopt that verbal amendment all those in favor say aye. Posed. Which motion. I have a motion for immediate consideration on. So if I'm a holder most for just a second. There's no discussion on this this bill. Do you have a motion you have a motion to pass so I have a motion do pass on Senate or house bill sixteen sixty five. As certified as amended sixteen sixty five as amended. Those of favour say aye aye opposed. Hi seven thank you past your bill as amended.