1. Highlights of Commission Activities Little Rock ASHRAE Monthly Meeting October 12, 2011 Presented By: John P. Bethel

2. Topics Addressed Description of the Commission and utilities Energy Efficiency Programs Self Direct Option Net Metering

3. Three Commissioners Colette Honorable, Chairman; Butch Reeves, Commissioner; Elana Wills, Commissioner Appointed by Governor to six-year terms

4. Regulated Utilities

5. 4 Investor Owned Electric Utilities 17 Electric Distribution Cooperatives 1 Electric Generation & Transmission Cooperative 1 Electric Regional Transmission Organization 3 Investor Owned Natural Gas Distribution Companies 3 Water Utilities 22 Natural Gas Operators (PSO Regulation) 158 Master Meter Gas Operators (PSO Regulation) Approximately 300 Telecommunications Utilities

6. Energy Efficiency Programs

7. Energy Conservation Endorsement Act Ark Code Ann. §23-3-401 et seq. Authorizes Commission to approve conservation and energy efficiency programs and measures Commission adopted rules and approved initial utility administered and ratepayer funded programs in 2007 Commission recognizes energy efficiency programs and measures as a resource Comprehensive programs approved effective July 1, 2011

8. Energy Efficiency Programs Overall Cost Approximately $31.2 million for 2011; $57.5 million for 2012; and $77.4 million in 2013 Recovered through a monthly charge on customer bills Total cost of the energy efficiency and conservation programs is approximately $0.83 to $1.75 per month for an average residential customer

9. Goals for Energy Efficiency Programs Electric Utilities: 2011 – 0.25%; 2012 – 0.50%; 2013 – 0.75% Natural Gas Utilities: 2011 – 0.20%; 2012 – 0.30%; 2013 – 0.40%

10. Energy Efficiency Programs Energy Efficiency Arkansas Arkansas Weatherization Program Energy Audits HVAC Tune Up Compact Fluorescent Light Bulbs Appliance Replacements Custom Programs for Commercial & Industrial Customers Various Rate Schedules

11. Energy Efficiency Programs Self Direct Option for Large Customers Evaluation, Measurement & Verification Lost Contribution to Fixed Costs Energy Efficiency Incentives

12. Self Direct Option

13. Energy efficiency is a resource Large commercial & industrial customers have opportunities & incentive to implement measures

14. Self Direct Option Eligible large commercial & industrial customers can self direct or opt out of utility EE programs Implement an EE measure that produces energy savings equal to or greater than Commission goals Can obtain certificate of exemption for duration of utility’s EE program plan

15. Self Direct Option Eligibility Requirements Single Metered Location 1 MW Peak Electric Demand 70,000 mmBtu annual natural gas consumption

16. Self Direct Option Eligibility Requirements Aggregated Locations 1 MW Peak Electric Demand from multiple locations with a peak electric demand of 200 kW each 70,000 mmBtu annual natural gas consumption from multiple locations with annual natural gas consumption of 14,000 mmBtu each

17. Self Direct Option New investment in EE measure Investment in EE measure within ten years of request for certificate Investment to be made during the duration of utility’s currently approved EE program

18. Self Direct Option File request by Sept 15 of any year Show that it has implemented or will implement a measure that will produce savings that meet or exceed Commission’s goals Show that it has exhausted all opportunities If participating in utility EE programs from 2012 forward, cannot request certificate for 5 years

19. Section 11 Commission may schedule hearing Commission must issue its decision by December 15 unless waived by customer If approved, certificate effective January 1 of the following year No longer charged EECR rate Certificate good for duration of utility EE program plan Up to three years

20. Net Metering

21. “Normal” Metering v. Net Metering

22. Electric Utility System

23. “Normal” Metering Meter at residence or business Measures electricity delivered to customer Meter reading forms basis for billing

24. Electric Meters

25. Net Metering Customer owns generating source Generating source supplies all or part of customer’s need Excess generation delivered back to utility Meter runs backward to “measure” generation delivered back to utility

26. Net Metering Example

27. Overview of Arkansas’ Net Metering Law

28. Net Metering Law Arkansas Renewable Energy Development Act of 2001 Act 1781 of 2001 Act 1026 of 2007 amended law Arkansas Code Annotated §23-18-601 et seq.

29. Net Metering Law Must be a renewable resource Solar, wind, hydroelectric, geothermal, biomass, etc.

30. Net Metering Law Maximum size 25 kW for residential customers and 300 kW for any others Located in Arkansas

31. Net Metering Law Offset all or part of the net metering customer’s requirements for electricity

32. Net Metering Law Customer retains any renewable energy credit associated with generating facility

33. Net Metering Law Electric utilities required offer net metering Commission establishes rates, terms, and conditions Utilities may assess fees for additional costs

34. Net Metering Law Any generation from the customer’s facility is credited against usage at the retail rate Customer may carry any excess generation for up to one year

35. Overview of Commission’s Net Metering Rules

36. Net Metering Rules Net excess generation defined as the amount of electricity that a net metering customer has fed back to the electric utility that exceeds the amount of electricity used by that customer during the applicable period

37. Net Metering Rules kWhs provided by customer serve to offset kWhs provided by the utility and serve to reduce any kWh charges on the bill Distribution Rate Energy Cost Recovery Rate

38. Net Metering Rules Standard Interconnection Agreement Facility must operate in parallel with utility Prevent any back-feeding Manual disconnect switch accessible to utility National Electric Code National Electric Safety Code ICEEE & Underwriters Labs

39. Net Metering Rules Standard Rate Schedule Each utility has comparable tariff Availability Monthly Billing

40. Net Metering Rules Reporting Requirements Annual Reports by March 15 Currently 141 net metering facilities 120 Solar 21 Wind 138 Residential 3 Commercial

41. Net Metering Rules 102 Under 5 kW 37 @ 5 kW or greater 1 @ 20 kW 1 @ 30 kW 1 @ 50 kW 1 @ 100 kW

42. Cost of Net Metering Facilities

43. Very rough information from Internet research (do not rely upon me) Tax credits of up to 30 % Solar facilities $4,000 to $12,000 per kW Wind facilities $3,000 to $10,000 per kW AWEA $350,000 for 100 kW

44. The End Questions?