A Renewable Energy Feed-In Tariff guarantees the price of renewable energy electricity through long-term power purchase agreements between renewable energy producers and electric utilities. The Bill calls for utilities to offer to purchase up to 2% of their electricity from renewable energy sources in Arkansas.

Long-term contracts secure financing for RE systems. This feed-in tariff will provide a guarantee for individuals, companies and utilities willing to purchase RE systems.

A REFIT will insure that the RE industry will continue to reduce cost and improve performance. A customer's return on investment depends on the cost and performance of the system, and customers will opt for systems with the highest return.

This legislation jump starts the renewable energy industry in Arkansas by establishing a performance-based payment system for renewable energy producers with facilities of 5 megawatts or less. Some examples are small and medium scale wind, solar energy, and biomass, such as chicken litter or forest waste.

This legislation promotes energy independence for Arkansas by promoting Arkansas-based energy production instead of energy imports. Individuals, farmers and small business will be rewarded for installing renewable energy equipment and putting clean renewable energy on the grid. Clean energy reduces future negative impacts on health, water, air, and soil quality.

HB1851 protects Arkansas interests under a likely Federal renewable energy standard (RPS), by making sure some of the renewable energy is supplied from Arkansas rather than sending rate payer dollars to brokers selling Renewable Energy Credits from out of state wind farms.

Utilities are reimbursed for the costs, plus paid to administer the program. Just like we pay for new power plants, the costs are spread across the entire rate base. Rate impacts will not exceed 3% but will likely be on the order of ½ %. A rate increase of 17% was recently applied for to cover just the cost overruns of the coal plant under construction in southwest Arkansas.

This legislation will keep dollars in Arkansas through federal investment tax credit, accelerated depreciation schedules for commercial applications and forthcoming federal stimulus funds that target renewable energy development.

This legislation will reduce stress on the distribution system by promoting distributed generation and reducing peak energy demand. In the case of solar, the power is produced at the time of day and year that it is most needed.