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News

From the Manager’s Desk: Your electric bill is impacted by private solar compensation

January 9th, 2023

BRADLY CASTOR, CEO FOR RICH MOUNTAIN

At Rich Mountain Electric Cooperative, our mission is clear. It’s to provide you — our member/owners — with Reliable, Affordable and Responsible energy. We take our mission very seriously and want you to be aware of a state energy policy that impacts your electric bill.

Currently, homeowners and businesses that install private solar panels are credited for energy they produce at a rate more than twice the price that we can buy energy from wholesale power markets. A state government ruling requires Rich Mountain Electric to pay this price. This unfairly impacts our member/owners because this higher cost is ultimately passed on to you.

When private solar installations produce more energy than needed, the excess energy is put on the electric grid to be available for other members. The solar owner is compensated through a process called net metering.

The market value of wholesale energy varies over time and is currently approximately 5 cents per kilowatt hour. However, the average rate to deliver electricity in Arkansas is, on average 12 cents per kilowatt hour, which is what private solar owners receive in compensation, making it the highest price that utilities pay for energy. It’s a huge windfall, and a clear subsidy, to those who can afford to install solar panels — at great expense to you, our member/owners. Rich Mountain Electric is not against private solar installations; we simply don’t agree with the current state policy regarding net metering rates.

Net metering enables solar owners to receive the equivalent amount of energy as they produced in excess back from the utility at zero cost, which shifts the financial burden on non-solar members for infrastructure, maintenance and operational costs. Again, this is no fault of private solar owners, but an issue with state net metering policy.

Combined, the Electric Cooperatives of Arkansas have the state’s largest share of net metering accounts. We’re big fans of solar; it’s an integral part of our Balance of Power generation portfolio. However, we don’t think it’s fair for you, or us, to pay more than the market rate for excess energy produced by private solar installations.

Those who have already invested in solar to net meter will be protected and allowed to continue under the current policy, but to ensure fairness for all, the policy going forward for new net metering customers must change to protect all ratepayers from higher costs.
Those who have already invested in solar to net meter are protected by grandfathering and would be allowed to continue under the current policy, but to ensure fairness for all, the policy going forward for new net metering customers must change to protect all ratepayers from higher costs. It’s time for the state to end a rule that forces utilities to pay more for electricity sold into our grid from private solar installations, punishing you, our member/owners with higher rates.

Image of a group of solar panels

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