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Entergy Arkansas has taken another battering on the solar energy front with a regulatory ruling that restricts the utility from providing special rates for solar power it generates.

The Arkansas Public Service Commission ruled Monday that the state's largest utility is prohibited from carving out supplemental rates for cities, counties, school districts and nonprofit organizations.

Entergy's rate plan, submitted in August, "is not just and reasonable or in the public interest," the three-member commissioned said in the ruling.

The order gives solar advocates their second key victory this month while Entergy officials defended their position on solar rates despite a differing view at the commission.

In a statement, Entergy's regulatory affairs chief, David Palmer, said Tuesday that the company's rejected rate structure "best protects the interests of non-participating customers."

Monday's ruling allows the electric utility some leeway, opening the opportunity to resubmit the rate proposal if it is "more protective of the interests of non-participating ratepayers" and the rates promote competition while also protecting the public interest.

Entergy said it will submit a revised proposal to the commission within the next 30 days.

The Arkansas Advanced Energy Association, an advocacy group for the solar industry, opposed the rate proposal from Entergy and labeled it anti-competitive.

The group said Tuesday that it will work toward "growing Arkansas' economy and workforce through the expanded utilization of advanced energy technologies, including solar technologies, and is pleased the Commission rejected the proposal as unreasonable."

Entergy submitted the rate proposal soon after the Arkansas Legislature approved Act 464, which paved the way for governmental and nonprofit agencies to contract independently with solar providers.

In opposition to Entergy's rate proposal, the advanced energy association said in filings that the initiative "seems to be an attempt to undercut the net-metering opportunity created by Act 464 for certain tax-exempt entities."

The company's goal was to provide favorable rates and stem the tide of public entities that would abandon its electric grid and opt for less expensive solar power.

Today, more than 25 public entities across Arkansas, including several school districts and the cities of Alma, Clarksville, Fayetteville, Forrest City and Hot Springs have signed independent contracts with solar companies.

Entergy, which provides electricity to about 700,000 Arkansas customers, said it will continue to work with ratepayers on solar-power issues.

"As we have said throughout, we will continue to advocate on behalf of all our customers and to offer solutions that meet their needs," Palmer said.

Entergy has a substantial commitment to developing solar projects in Arkansas. The company operates an 81-megawatt facility in Stuttgart, is building a 100-megawatt solar farm in Chicot County near Lake Village and recently received approval to build another 100-megawatt plant near Searcy.

On June 1, the commission issued an order upholding existing rate structures for solar's net-metering users, who return excess electricity they generate to the grid. Net-metering customers will continue to receive credits of about 10 cents per kilowatt-hour for the power they generate and return to the electric grid; roughly the amount equal to what Entergy charges homeowners for energy consumption.

Solar will remain at the forefront of the commission's agenda this summer. Regulators have three large commercial projects lined up for consideration from Bank OZK, Central Arkansas Water and Producers Rice Mill.

CORRECTION: Entergy Arkansas serves about 700,000 customers in Arkansas. An earlier version of this story incorrectly reported the number of customers.

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