State and Local Policy Database

Arkansas

State Scorecard Rank

27

Arkansas

15.5Scored out of 50Updated 9/2016
State Government
Score: 3.5 out of 7
State Government Summary List All

Arkansas offers several consumer incentives for energy efficiency investments, including PACE financing. The state government leads by example by requiring energy-efficient public buildings, benchmarking energy use, and encouraging energy savings performance contracts. There are no major research centers focused on energy efficiency. 

Financial Incentives List All

Financial Incentive information for Arkansas is provided by the Database of State Incentives for Renewables and Efficiency (DSIRE Arkansas) and State Energy Office contacts. Information about additional incentives not present on DSIRE is listed here. In addition to the state-funded incentives on DSIRE and below, Arkansas has enabled Property Assessed Clean Energy (PACE) financing and has two active programs. For additional information on PACE, visit PACENation.

Advanced Energy Technology Loan: This loan finances energy-related cost reduction retrofits and green energy implementation for Arkansas companies. The program encourages companies invest in clean technology and improve the energy efficiency of their processes and facilities. 

Last Updated: July 2016

Building Energy Disclosure List All

There is no disclosure policy in place.

Last Updated: July 2016

Public Building Requirements List All

The Sustainable Energy-Efficient Buildings Program, enacted in 2009 with the passage of HB 1663, directed the Arkansas Energy Office to develop a plan for reducing energy use in all existing state owned major facilities by 20 percent from 2008 levels by 2014 and 30 percent by 2017. Major facilities are defined as construction projects larger than 20,000 gross square feet of occupied or conditioned space. For new construction, the criteria specify that public buildings must be certified to be at least 10% more efficient than ASHRAE Standard 90.1-2007, as it existed on January 1, 2009. The law directed the Arkansas Energy Office to develop a program to manage energy, water, and other public agency utility uses to reduce total energy consumption as long as the savings can be justified by a life cycle cost analysis. The Arkansas Energy Office must update this program annually. HB 1663 also directed the Arkansas Energy Office to complete an energy audit of every public agency within five years.

In May 2009, Governor Mike Beebe issued Executive Order 09-07, directing all executive-branch agencies to submit strategic energy plans describing energy-savings measures that can be implemented by the agencies. The plans should include provisions for collecting and monitoring energy use data. Other state agencies are encouraged to develop strategic energy plans as well.

Arkansas Act 1494 of 2009 requires all state agencies paying utility bills required to submit usage reports through Energy Star Portfolio Manager. Other agencies and institutions of higher learning encouraged to do so on a voluntary basis. The state currently benchmarks over 25 million square feet of public building space. The Arkansas Energy Office (AEO) is currently working with the US Green Building Council (USGBC) to collect and compile individual building reports.

Last Updated: July 2016

Fleets List All

No policy in place or proposed

 Note: For state efficient fleet initiatives, policies listed must make a specific, mandatory requirement for increasing state fleet efficiency. State alternative-fuel vehicle procurement requirements that give a voluntary option to count efficient vehicles are thus not included.

Last Updated: July 2016

Energy Savings Performance Contracting List All

In accordance with Act 554 passed in 2013, the Arkansas Energy Office has designed the Arkansas Energy Performance Contracting Program. The purpose is to guide state agencies to properly use ESPCs; it offers a step-by-step guide, prequalified ESCOs companies, and model documents. Arkansas’ enabling legislation requires that the energy performance contracts require the energy service company to guarantee energy cost savings for the entirety of the performance contract. 

Act 1275 of 2015 also grants counties and municipalities the option to adopt the Arkansas Energy Office's rules.

Last Updated: July 2016

Research & Development List All

No public research centers have a focus on energy efficiency.

Last Updated: July 2016

Buildings
Score: 4 out of 7
Buildings Summary List All

Arkansas has mandatory energy codes for both residential and commercial buildings, though municipalities are allowed to adopt codes more stringent than the statewide mandatory code. The 2014 Arkansas Energy Code for New Building Construction, also known as the 2014 Arkansas Energy Code, is based on the 2009 IECC with amendments. The state has completed several code compliance activities, including a gap analysis and training and outreach.

Residential Codes List All

The Arkansas Energy Code for New Building Construction is mandatory state-wide for both residential and commercial buildings. The residential energy code is based on the 2009 IECC with amendments. This code became effective on January 1, 2015.  

Last Updated: June 2016

Commercial Code List All

The Arkansas Energy Code for New Building Construction is mandatory state-wide for both residential and commercial buildings. The commercial energy code is based on the 2009 IECC with amendments. This code became effective on January 1, 2015. Newly constructed or remodeled public buildings must comply with ASHRAE 90.1-2007.

Last Updated: June 2016

Compliance List All
  • Gap Analysis/Strategic Compliance Plan: The Building Codes Assistance Project conducted a gap analysis in 2010.
  • Baseline & Updated Compliance Studies: Arkansas is one of eight states participating in the US DOE's Residential Energy Code Field Study. Through the project, DOE plans to establish a sufficient data set to represent statewide construction trends and detect significant changes in energy use from training, education and outreach activities. The first stage of the study is comprised of a baseline compliance study.
  • Utility Involvement: NA
  • Stakeholder Advisory Group: NA
  • Training/Outreach: Arkansas Energy Office (AEO) utilized Pulaski Technical College- Center of Excellence to conduct residential code training for builders, contractors, code officials and other building professionals. In addition, AEO also coordinated with the Southeast Energy Efficiency Alliance (SEEA) for training and outreach opportunities. For a listing of current training activities please visit the Arkansas Energy Office web site

Last Updated: June 2016

CHP
Score: 0 out of 4
CHP Summary List All

Arkansas has limited policies to encourage CHP. One new CHP system was installed in 2015.

Interconnection StandardsList All

Policy: Standard Interconnection Agreement

Description: Distributed generation facilities that can be net-metered are able to interconnect using the state’s standard interconnection agreement. Only renewable energy-powered generators are eligible, including biomass. Systems may not be larger than 300kW at non-residential facilities, and an external disconnect switch is only required for some systems.

Last Updated: June 2016

Encouraging CHP as a ResourceList All

There are currently no state policies designed to acquire energy savings from CHP (like other efficiency resources) or energy generation from CHP (in terms of kWh production) that apply to all forms of CHP.

Last Updated: June 2016

Deployment IncentivesList All

There are currently no state policies that provide incentives for CHP deployment.

Last Updated: June 2016

Additional Supportive PoliciesList All

Some additional supportive policies exist to encourage CHP in Arkansas. The Arkansas Industrial Energy Clearinghouse provides support and promotes energy efficiency developments in Arkansas’ manufacturing plants. The Clearinghouse helps industrial companies determine the feasibility of energy projects, including CHP, and helps leverage financial resources available in the state.

Last Updated: June 2016

Utilities
Score: 7 out of 20
Utilities Summary List All

Utility-sector energy efficiency initiatives in Arkansas have increased significantly since 2007, when the Arkansas Public Service Commission (APSC) approved Rules for Conservation and Energy Efficiency Programs requiring electric and gas utilities to propose and administer energy efficiency programs. In 2010, the APSC further established the importance of energy efficiency as a resource by adopting an energy efficiency resource standard (EERS) for both electricity and natural gas, guidelines for efficiency program cost recovery and a shareholder performance incentive, and new guidelines for utility resource planning, which include provisions for demand-side resources. 

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables.

For further reading, in March 2011, as part of the State Clean Energy Resource Project, ACEEE completed the report Advancing Energy Efficiency in Arkansas: Opportunities for a Clean Energy Economy.

Last updated: June 2017

Customer Energy Efficiency Programs List All

In May 2007, the Public Service Commission approved Rules for Conservation and Energy Efficiency Programs requiring electric and gas utilities to propose and administer energy efficiency programs (Docket No. 06-004-R, Orders No. 1, 12, 18). The state’s jurisdictional utilities filed Energy Efficiency Plans in July 2007 containing proposed Quick Start efficiency programs. All seven gas and electric utilities elected to sponsor and fund statewide programs supporting weatherization and energy efficiency education. The three gas companies jointly sponsored a statewide energy audit program for commercial and industrial customers.  Each of the seven utilities individually proposed EE programs. There are 22 electric utilities regulated by the AR PSC, including cooperatives and investor-owned, but not municipal or independent power producers.

In 2010, the APSC further established the importance of energy efficiency as a resource by adopting an energy efficiency resource standard (EERS), guidelines for efficiency program cost recovery and a shareholder performance incentive, and new guidelines for utility resource planning, which include provisions for demand-side resources. Since then, electric and gas utilities have significantly expanded their energy efficiency program portfolios in order to meet the annual energy efficiency targets. Recovery of direct program costs associated with commission-approved energy efficiency programs is accomplished through an energy efficiency cost recovery rider on customer bills.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables.

Last Updated: June 2017

Energy Efficiency as a Resource List All

The Commission approved "Resource Planning Guidelines for Electric Utilities" in Docket 06-028-R (final order issued in January 2007). These guidelines include specific requirements for demand-side resources. Utilities are required to consider "all reasonably useful and economic supply and demand resources that are available to a utility or its customers" for "incremental capacity needs." Further, "utility efforts to encourage energy efficiency, conservation, demand-side management, interruptible load and price responsive demand should be identified."

Although there is no loading order prioritizing energy efficiency, the Commission approved Rules for Conservation and Energy Efficiency Programs in May 2007 (Docket 06-004-R), and subsequently established an EERS in 2010, requiring utilities to file energy efficiency plans to implement cost-effective energy efficiency programs. 

Last Updated: June 2017

Energy Efficiency Resource Standards List All

Summary: Incremental savings targets began at 0.25% in 2011, ramping up to 0.75% for 2013 – 2014, 0.9% annually for 2015 – 2018 and 1.00% for 2019. Yearly incremental natural gas savings of 0.5% for 2017-2019.

In December 2010, Arkansas PSC adopted an energy efficiency resource standard (see Docket No. 08-144-U). The targets set by the Public Service Commission were moderate, rising from a yearly reduction of 0.25% of total electric kilowatt hour (kwh) sales in 2011, to 0.5% in 2012, and 0.75% in 2013, Natural gas targets are 0.2% in 2011, 0.3% in 2012, and 0.4% in 2013.

In January 2013, the Public Service Commission issued an order in Docket 13-002-U seeking comment on proposed savings goals for the next three-year program cycle. The proposed goals by the PSC staff would double the previous yearly electricity savings levels to 1% of sales in the first program year, 1.25% in the second, and 1.5% in the third.  Proposed savings targets for natural gas would more than double the previous targets: 0.6%, 0.8%, and 1% per year. Based on stakeholder feedback, the PSC rescheduled the filing date to June 1, 2014 for the next three-year program cycle, and pushed back the start year so that the new program cycle is 2015-2017. For 2014, the PSC directed program administrators to use the energy savings targets, budgets, and the incentive structure previously approved for Program Year 2013 (unless program administrators seek to make modifications to program plans for approval by the PSC). In September 2013, the PSC issued an order setting an electricity savings target of 0.9% and a natural gas savings target of 0.6% for 2015. These targets were extended through 2016.

In December 2015, the PSC issued an order extending the 0.9% electricity savings target through 2018, ramping up to 1.00% in 2019, with a natural gas savings target of 0.5% for 2017-2019.

Last Updated: June 2017

Utility Business Model List All

In December 2010 the Arkansas PSC approved a joint electric and gas utility motion to allow the awarding of lost contributions to fixed costs that result from future utility energy efficiency programs. All investor owned utilities are approved to recover lost revenues as part of the annual energy efficiency program tariff docket (See Order No. 14 Docket 08-137-U).

In 2007 rate cases, the Arkansas PSC approved a decoupling mechanism, a Billing Determinant Adjustment tariff that furthers its goal of promoting energy efficiency, for the three major natural gas distribution companies in the state. The purpose of the BDA Tariff is to account for declines in non-gas revenues due to declining gas volumes caused by conservation and decreasing billing determinants. The tariff applies to the Residential and Small Commercial rate classes and was in effect for three evaluation periods (2008, 2009, and 2010). (See Docket No. 07-016-U for Arkansas Oklahoma Gas).

In December 2010 the PSC issued an Order approving a general policy under which the Commission outlined steps to approve incentives to reward achievement in the delivery of essential energy conservation services by investor owned utilities. (See Order No. 15 Docket 08-137-U). Incentives were approved for all three gas utilities in the state and the two largest electric utilities in 2012 and 2013.

Energy efficiency performance incentives are awarded annually for achievement ranging between 80% and 120% of the Commission-established performance goal.  The performance incentive is 10% of portfolio total resource cost net benefits, limited to a percentage of program budgets ranging from 4% of program budgets to 8% of program budgets, based linearly on the degree of achievement.

Last Updated: June 2016 

Evaluation, Measurement, & Verification List All
  • Cost-effectiveness test(s) used: TRC, UCT, PCT, RIM
  • Uses a deemed savings database: no

The evaluation of ratepayer-funded energy efficiency programs in Arkansas relies on regulatory orders (APSC Rules for Conservation and Energy Efficiency Programs, Docket 06-004-R). Evaluations are administered by the Arkansas Public Service Commission (APSC). Evaluations are conducted for each of the utilities, but there are no specific legal requirements for these evaluations in Arkansas. Arkansas uses four of the five classic benefit-cost tests identified in the California Standard Practice Manual. These are the Total Resource Cost (TRC), Utility/Programs Administrator (UCT), Participant (PCT), and Ratepayer Impact Measure (RIM). The rules for benefit-cost tests are stated in APSC Rules for Conservation and Energy Efficiency Programs, Docket 06-004-R. Arkansas specifies the TRC to be its primary cost-effectiveness test. These benefit-cost tests are required for overall portfolio, total program, customer project, and individual measure level screening.

The Commission requires each utility to hire an independent EM&V contractor, and to jointly fund an Independent EM&V Monitor.  The Commission required an EM&V collaborative to develop a Technical Resource Manual that is updated annually and approved by the Commission. 

Last Updated: June 2016

Guidelines for Low-Income Energy Efficiency Programs List All

Requirements for State and Utility Support of Low-Income Energy Efficiency Programs

No specific required spending or savings requirements identified.

Following unsuccessful attempts in the early 2000s to create a low-income weatherization program, the Arkansas Public Service Commission (PSC) approved the Arkansas Weatherization Program (AWP) in 2007 in Order No. 4 in Docket No. 07-079-TF, as a Quick Start program. In February 2010, the PSC approved AWP to run through June 2011 and subsequent orders have extended AWP through 2018. In 2014, in response to a proposal to develop a consistent approach for weatherization programs across all Arkansas utilities, the PSC approved a uniform weatherization program in PSC Docket 13-002-U, Order No. 22 at 11.

Cost-Effectiveness Rules for Low-Income Energy Efficiency Programs

Arkansas does not require program-level cost-effectiveness for low-income programs.

Coordination of Ratepayer-Funded Low-Income Programs with WAP Services

AWP funds from utilities are administered in conjunction with US DOE WAP funds. The provider installs the approved measures in the home. Part of the cost of the audit and installation is covered by the customer’s AWP utility, and the balance is the responsibility (co-payment) of the customer. Customers eligible for the DOE WAP have their co-payment covered by that federal program.

Last updated: June 2017

Self Direct and Opt-Out Programs List All

Customers with over 1 MW or 70,000 therms in monthly demand may opt-out.  Only non-manufacturing customers must offer documentation of similar planned or achieved savings. A significant percentage of eligible load has opted-out, although it varies by utility. There is no requirement that energy savings achieved by opt-out customers be evaluated. 

Last Updated: July 2016

Data AccessList All

Arkansas has no policy in place that requires utilities to release energy use data to customers or third parties. 

Last Updated: June 2017

Transportation
Score: 1 out of 10
Transportation Summary List All

Despite having transit legislation, Arkansas has not really focused its efforts on policies to encourage energy-efficiency in transportation. There is significant room for growth.

Tailpipe Emission Standards List All

No policy in place or proposed.

Last Updated: July 2015

Transportation System Efficiency List All

Transportation and Land use Integration: No policy in place or proposed.

 

VMT Targets: No policy in place or proposed.

 

Complete Streets: No policy in place or proposed.

 

MAP 21 Freight Plans and Goals: Arkansas has a long range plan in place for freight transportation but it does not highlight concrete freight system efficiency strategies or include efficiency performance measures. 

Last Updated: June 2016

Transit Funding List All

Passed in 2001, Arkansas Act 949 established the Arkansas Public Transit Fund, which directs monies from rental vehicle taxes toward public transit expenditures.

Last Updated: July 2015

Incentives for High-Efficiency Vehicles List All

No policy in place or proposed.

Last Updated: July 2015

Appliance Standards
Score: 0 out of 2
Appliance Standards Summary List All

Arkansas has not set appliance standards beyond those required by the federal government.

Last Updated: July 2016