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BEFORE THE
ARKANSAS PUBLIC SERVICE COMMISSION
IN THE MATTER OF NET-METERING AND THE
IMPLEMENTATION OF ACT 827 OF 2015
)
DOCKET NO. 16-027-R
)
ARKANSAS ELECTRIC COOPERATIVE CORPORATION AND THE
MEMBER COOPERATIVES’ SIMULTANEOUS SURREPLY COMMENTS
I.
INTRODUCTION.
In accordance with Arkansas Public Service Commission (Commission) Order No.
1, which initiated this Docket on April 29, 2016, Arkansas Electric Cooperative
Corporation (AECC) and the Member Cooperatives 1 (AECC and the Member
Cooperatives) (collectively, the Cooperatives) hereby submit their Simultaneous Surreply
Comments (Joint Surreply Comments). Given the depth and breadth of the Reply
Comments filed on August 19, 2016, the Cooperatives’ failure to address herein any
argument made in the Parties’ simultaneous Reply Comments should not be construed as
a waiver or relinquishment by the Cooperatives of the right to contest or challenge such
argument(s) in the future.
The Cooperatives continue to request that the Commission adopt General Staff’s
(Staff) Proposed Amendments, as modified by AECC and the Member Cooperatives in
AECC is the wholesale electric supplier and is owned by the 17 electric distribution cooperatives in the
state, which are: Arkansas Valley Electric Cooperative Corporation; Ashley-Chicot Electric Cooperative,
Inc.; C & L Electric Cooperative Corporation; Carroll Electric Cooperative Corporation; Clay County Electric
Cooperative; Craighead Electric Cooperative Corporation; Farmers Electric Cooperative Corporation; First
Electric Cooperative Corporation; Mississippi County electric Cooperative, Incorporated; North Arkansas
Electric Cooperative, Incorporated; Ouachita Electric Cooperative Corporation; Ozarks Electric
Cooperative Corporation; Petit Jean Electric Cooperative Corporation; Rich Mountain electric Cooperative,
Incorporated; South Central Arkansas Electric Cooperative, Incorporated; Southwest Arkansas Electric
Cooperative Corporation; and Woodruff Electric Cooperative Corporation.
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their August 19, 2016 Joint Reply Comments. Further, the Cooperatives specifically
request that the Commission: 1) Establish a maximum generation threshold; 2) Reject
efforts to expand the interpretation of the term “owner;” 3) Reject efforts to allow
“virtual” net-metering; and 4) Approve a one-time fee for the effectuation of net-metering
service, as proposed by Entergy Arkansas (See EAI’s Reply Comments at 12).
II.
A MAXIMUM GENERATION THRESHOLD FOR NET-METERING
FACILITIES SHOULD BE ESTABLISHED.
The Cooperatives agree with Staff’s proposal regarding Rule 2.06, Application to
Exceed Generating Capacity Limit, inasmuch as Net-Metering Customers wishing to
exceed 300 kW should first seek Commission approval. Staff believes these customers’
requests should be dealt with on a case-by-case basis. The Cooperatives agree and also
believe net-metering customers should not be allowed to exceed their own maximum
usage. 2
In addition to ensuring net-metering facilities are appropriately sized to netmetering customers’ “requirements for electricity,” the Cooperatives continue to request
a maximum generation threshold be established by this Commission, such that any
facility in excess of 1 MW is not considered a net-metering facility, and instead should be
subject to approval by the Federal Energy Regulatory Commission as a Qualifying Facility.
A 1 MW threshold is consistent with the Commission’s current Cogeneration Rules, as
well as Ark Code Ann. § 23-18-602(a), which states that “net energy metering encourages
the use of renewable energy resources . . . by reducing utility interconnection and
administrative costs for small consumers of electricity.” To this point, utilities, in their
Ark. Code Ann. § 23-18-603(6)(E) states that a Net-Metering Facility “is intended primarily to offset part
or all of the net-metering customer requirements for electricity.” (Emphasis supplied).
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annual reports filed with the Commission classify anything larger than 1 MW as industrial
or large. 3
Accordingly, the Cooperatives request this Commission approve Staff’s proposal to
Rule 2.06, adding a maximum generation threshold of 1 MW.
III.
THE TERM “OWNER” SHOULD BE STRICTLY CONSTRUED IN
ACCORDANCE WITH ARKANSAS LAW.
Arkansas Code Annotated § 23-18-603(5) defines a "Net-Metering customer" as
“an owner of a net-metering facility.” Intervenors, 4 such as, urge this Commission to
interpret the term “owner” to include “lessees” so as to expand the definition of “NetMetering Customer.” 5 However, lessees are not owners. 6
When interpreting a statute, the most basic rule of statutory construction to which
all other interpretive guides must yield is to give effect to the intent of the legislature.7
“[L]egislative intent, which is the true goal of every effort at construction, is of supreme
importance.” 8 When the statute is clear, the intent must be based on the plain meaning
of the language used. 9 Contrary to the Intervenors’ interpretive arguments, the term
“owner” denotes a higher interest than what is possessed by a “lessee.” The term “owner”
means “someone who has the right to possess, use, and convey something.” 10 Although a
“lessee” could, arguably, temporarily obtain the right to possess or use a Net-Metering
Facility, such rights are granted in the sole discretion of the “owner.” Thus, the
FERC Form 1 Supplement Annual Report and Electric Cooperatives Annual Report (RUS Form 7).
See, APSC Docket No. 16-027-R, Reply Comments “Attachment A” of Walmart at 2-7 (August 19, 2016);
Reply Comments of Pulaski County at 2-4 (August 19, 2016).
5 Id. at 4; Id. at 2-4.
6 Smith v. Improvement Dist. of Texarkana, 108 Ark. 141, 156 S.W. 455 (Ark. 1913).
7 E.g., Roy v. Farmers & Merchants Ins. Co., 307 Ark. 213, 216, 819 S.W.2d 2, 3 (1991).
8 See, Holt v. Howard, 206 Ark. 337, 340, 175 S.W.2d 384, 385 (1943).
9 Id.
10 Black’s Law Dictionary (10th ed. 2014), Owner.
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Intervenors’ suggestion that lessees should be elevated, as a matter of law, to the rights of
an owner for the purposes of the Net-Metering Rules strains credibility. Claiming a
“lessee” of a Net-Metering Facility has the same rights as an owner of a Net-Metering
Facility vis-à-vis the utility in an Net-Metering Agreement is contrary to Arkansas law.
As an initial matter, there is direct Commission precedent on this issue stemming
from APSC Docket No. 12-060-R, when an intervenor previously claimed that “meter
aggregation should not be limited to situations in which the customer owns a net metering
facility.” 11 According to that intervenor, it was “important to include generation facilities
leased from, or otherwise owned by, persons other than the customer within the rules.” 12
In response, the utilities argued that adoption of such recommendation would violate
AREADA’s definition of a Net-Metering Customer as an “owner of a net-metering
facility.” 13 Ultimately, the Commission held that “[a]s recommended by utilities, and in
conformity with AREDA, customers must own the facility or facilities . . . .” 14
This Commission’s interpretation of AREDA is highly persuasive, and will not be
overturned unless it is clearly wrong. 15 Further, the General Assembly is presumed to
know the interpretations of the Commission, 16 and known interpretations will be
presumed to have been adopted by the General Assembly. 17 Thus, when the General
Assembly enacted Act 827 in 2015, it had the opportunity to clarify any inconsistencies
concerning the Commission’s interpretation regarding ownership. Given Act 827 did not
See, APSC Docket No. 12-060-R, Order No. 7, page 3 (Sept. 3, 2013).
Id. (emphasis added).
13 Id. at 4.
14 Id. at 10.
15 Southwestern Bell Tel. Co. v. Arkansas PSC, 69 Ark. App. 323, 13 S.W.3d 197 (Ark. Ct. App. 2000).
16 Arkansas Public Service Com. v. Allied Tel. Co., 274 Ark. 478, 481, 625 S.W.2d 515, 517 (Ark. 1981).
17 Id., citing, Shivers v. Moon Distributors, Inc., 223 Ark. 371, 265 S.W. 2d 947 (1954).
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alter or otherwise address the Commission’s declaration that “owner” means the
customer must own the facility(ies), the Commission’s ruling is the adopted intent of the
General Assembly.
Notwithstanding that fact, Pulaski County (at page 3 in their Response to Staff’s
Strawman Proposal comments filed on August 19, 2016) cites to Munson v. Wade, 174
Ark. 880, 298 S.W. 25 (1927) for the proposition that a tenant farmer has an ownership
interest in the crops he or she produces. Pulaski County then asserts that an equivalent
example exists here for tenants of “photovoltaic array and the ownership of the electricity
produced.” 18
However, Pulaski County’s comparison is misplaced.
In the case of
receiving a credit for a net-metered facility, Ark. Code Ann. § 23-18-603(5) specifically
requires ownership of the underlying property (net metering facility) before a claim can
be made to the harvest of the property (electricity). No similar, equally restrictive or
relevant statute existed in Munson.
Accordingly, the Cooperatives respectfully request that the Commission reject
efforts to change its plain-language interpretation of the term “owner” with respect to
Net-Metering. To the extent that further record development of this key legal argument
is required outside of Net-Metering, the Cooperatives respectfully submit that it would be
more appropriately addressed in APSC Docket No. 16-028-U, which was initiated – at
least in part – to address legal and policy matters related to non-net-metering generation
facilities.
IV.
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EFFORTS
TO
ALLOW
“VIRTUAL”
NET-METERING
CONTRAVENTION OF ACT 827 OF 2015 SHOULD BE REJECTED.
IN
See, Reply Comments of Pulaski County at 3.
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The Direct Testimony and Exhibits of Attorney General Witness Curt Volkman19
(AG) and the Reply Comments of the Sierra Club, 20 advocate for the expansion of netmetering to include “virtual” net-metering, which allows a Net-Metering Customer that
has Net Excess Generation Credits to credit another customer’s account. This approach
to net-metering should be squarely rejected. AREDA’s plain language states a NetMetering Facility should be one used to “primarily . . . offset part or all of the NetMetering Customer’s requirements for electricity[;]” notably, the statute does not refer to
multiple parties. 21 In enacting this provision, the General Assembly used the singular
form of Net-Metering Customer, not plural. To adopt these witnesses’ positions, the
Commission would have to change the term “from singular to plural, and impute words
to the legislation not otherwise denominated, referred to, or implied in any way.” 22
“[P]rovisions not included by the legislature will not be read into a statute.” 23
Also, as noted above, this is an issue already decided by the Commission. This
Commission held in APSC Docket No. 12-060-R that “…Combined billing for the purposes
of net-metering aggregation is not required or allowed. Meters may be aggregated among
accounts that are in different rate classes, provided that they are in the name of the same
customer.” 24
When the General Assembly enacted Act 827 of 2015, it had the opportunity to
clarify any disagreements with or inconsistencies concerning the Commission’s
See, Direct Testimony and Exhibits of Curt Volkman on behalf of the Office of Arkansas Attorney General
Leslie Rutlegde at 11 (August 19, 2016).
20 See, Reply Comments of the Sierra Club at 1.
21 Ark. Code Ann. § 23-18-603(6)(E).
22 Chlanda v. Estate of Fuller, 326 Ark 551 (Ark 1996).
23 Fountain v. State, 103 Ark. App. 15, 17, 285 S.W.3d 706, 707 (2008).
24 See, APSC Docket No. 12-060-R, Order No. 7 at 10 of 14.
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prohibition against “virtual” net-metering. Act 827 did not alter or otherwise address the
Commission’s prior interpretation again making the Commission’s ruling the adopted
intent of the General Assembly.
Accordingly, the Cooperatives request the Commission reject efforts to allow
“virtual” net-metering.
V.
THE COMMISSION SHOULD PERMIT UTILITIES THE OPTION OF
ASSESSING A ONE-TIME CONNECTION FEE FOR NET-METERING
SERVICE AS PROPOSED BY ENTERGY ARKANSAS, INC. (EAI).
EAI’s Reply Comments 25 requested consideration be given to allow utilities to
assess a one-time fee to cover the costs associated with connecting net-metering facilities
and ensuring they are compliant. In recognition of the costs to initiate service, the
Commission currently allows utilities to charge a connection fee for routine electric
service requests for new or reconnecting customers; typically covered in tariffs entitled
“Charges Related to Customer Activity.” The same logic behind connection fees for basic
service holds true for those seeking to provide Net-Metering Generation to the utility.
Although the Net-Metering Rules allow a utility to apply to the Commission to recover
such costs on a case-by-case basis, in reality, such a request would be burdensome and
impractical. Therefore, a more appropriate solution is to establish a Net-Metering Facility
one-time connection fee to recover the additional costs, as further detailed by EAI.
VIII. CONCLUSION.
For the foregoing reasons and authorities cited, AECC and the Member
Cooperatives respectfully submit these Joint Surreply Comments for the Commission’s
consideration.
25
See, Reply Comments of Entergy Arkansas, Inc. at 11-12 (August 19, 2016).
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CERTIFICATE OF SERVICE
I, Lori L. Burrows, do hereby certify that on September 9, 2016, a true and correct
copy of the foregoing Simultaneous Surreply Comments was served on all Parties
required to be served by the Secretary of the Commission in accordance with the
Commission’s rules for electronic filings.
Lori L. Burrows, Ark. Bar No. 2004092
Arkansas Electric Cooperative Corporation
501.570.2147 | Lori.Burrows@aecc.com
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