Arizona’s largest utility Arizona Public Service Co. (APS) won a small victory on Nov. 14 when the Arizona Corporation Commission (ACC) allowed it to impose a fee on solar power users. But it’s a far smaller victory than the utility wanted.
Over the last several months net-metering policies across the nation have faced increasing opposition from utilities. But Arizona’s debate over net-metering was the closest watched in the nation as states, utilities and the solar industry move forward on how best to incentivize homes and businesses to go solar without jeopardizing the integrity of the existing grid system.
The utility argued that its net-metered customers with photovoltaic arrays were forcing its non-solar customers to foot the bill for net-metered customers and that it should be able to impose a monthly fee of $50 to $100 for customers with solar arrays. The fees, the utility argued, would pay for the grid maintenance and other costs that it said its other customers were unfairly paying. The solar industry, along with Arizona’s solar installers and advocates argued that such stiff monthly fees would dis-incentivize going solar in the nation’s sunniest state.
The amount spent in the Arizona for and against such a fee was akin to the money spent in a political contest, with APS spending nearly $4 million and the solar industry spending nearly $500,000 to defend their respective positions.
“APS launched an unprecedented multimillion-dollar campaign to destroy the Arizona rooftop solar industry and failed,” said The Alliance for Solar Choice (TASC) President Brian Miller.
The ACC ultimately ruled in a 3 to 2 vote Nov. 14 that APS could impose a fee—albeit a tenth to a twentieth of what the utility requested. Under the ruling, the utility can charge a fee of 70 cents per kilowatt installed. That equates to about $4.90 a month for a 7 kilowatt array, or about $58.80 a year. APS will start imposing the fee on new solar installations on Jan. 1, 2014.
At least one conservatively-backed organization called it a triumph for solar. “While APS and its national trade association EEI spent many millions attacking rooftop solar, the Arizona Corporation Commission made no changes to net metering,” said Barry Goldwater Jr., Chairman of T.U.S.K. (Tell Utilities Solar won’t be Killed). “The utilities and EEI showed just how far they are willing to go at any cost, and that is the legacy of the Arizona net metering battle—a major loss for APS and its allies.” The organization added that the ACC showed a respect for competition, customer choice and economic growth in Arizona.
The charge of 70 cents per kilowatt will be effective on Jan. 1, 2014, and is estimated to collect $4.90 per month from a typical future rooftop solar customer to help pay for their use of the electricity grid. The new policy will be in effect until the next APS rate case, which the ACC directed the company to file in 2015.
APS characterized the fee as a victory as well, though the utility quickly clarified that it wants more. “The Arizona Corporation Commission has taken an important step in reforming the state’s net metering policy,” said Don Brandt, APS CEO. “The ACC determined that net metering creates a cost shift.”
“Of course, having determined that a problem exists, we would have preferred for the ACC to fix it. The proposal adopted by the ACC … falls well short of protecting the interests of the one million residential customers who do not have solar panels,” Brandt contended. “We will continue to advocate forcefully for the best interests of our customers and for a sustainable solar policy for Arizona.”
The ruling also drew concern from the national solar industry. Rhone Resch, president of Solar Energy Industries Association (SEIA) responded on behalf of the industry. “While we applaud the ACC’s decision to keep net energy metering in place—and appreciate the Commission’s last-minute efforts to find a middle ground when it comes to new fees on solar customers—we are deeply troubled by today’s precedent-setting action.” He added, “Imposing punitive fees on Arizona consumers—without first proving the need and demonstrating the fairness of these charges through a comprehensive, transparent rate case where due process is afforded—is patently unfair, jeopardizing future solar growth and job creation statewide.”
The debate isn’t over in Arizona though. The ACC will revisit the issue in 2015. Based on this debate and findings, expect more of the same, underhanded tactics, political style campaigns and millions spent on trying to influence people to take a stand—not only in Arizona, but across the nation.
“In the months ahead, we will continue our efforts to educate the ACC, as well as public officials all across the state, as to the true market value of solar and the benefits it provides to local economies, grid reliability, consumer choice and environmental quality,” Resch said.
“We are also very troubled by the public campaign of misinformation, manipulation and distortion engineered by Arizona Public Service (APS). This has never been a 'subsidy' problem as claimed by APS,” Resch contended. “Unfortunately, the utility exploited this debate and then used it as an opportunity to stymie competition, 'stick it' to consumers and bolster its bottom line. No one should be surprised. This is what monopolies do."