Ruling Solar

By Christina Birchfield | 11/25/2013

An Arizona regulatory commission approved utility rate increases on new solar rooftop customers. Utilities and interest groups hope the ruling goes national.



The Wednesday, November 14, decision by the the Arizona Corporate Commission (ACC)  begs a question: Will the ruling spark a midnight run on rooftop solar before the rates— only for new solar rooftop systems—start January 1, 2014?

The new rate approved was a win for Arizona’s largest utility, Arizona Public Service (APS). APS serves 1.1 million Arizona customers in 11 of the state’s 15 counties. In a press release on APS’ Web site, the utility proclaimed, “The Arizona Corporate Commission ruled today that Arizona’s net metering program should spread the cost of maintaining a reliable electrical grid more fairly among all APS customers. In a 3 to 2 vote, the ACC instituted a charge on future customers who install rooftop solar panels and directed APS to provide quarterly reports on the pace of rooftop solar adoption to assist the Commission in considering further increases.”

The new “$0.70 per kilowatt” charge will be effective on January 1, 2014. APS estimates it will collect $4.90 a month (70 cents a kilowatt for the average-size seven kilowatt system) from future solar rooftop customers “to help pay for their use of the electricity grid.” APS has roughly 20,000 solar rooftop customers now; they are not to be affected by the rate increase for 20 years—at least that is what the commission says now.

APS successfully argued that “the current net metering program creates a cost shift, causing non-solar customers to pay higher rates to cover the costs of maintaining the electrical grid.”

In past articles on solar power, we have pointed out that solar customers in Arizona do pay a customer service charge, which they are told is to maintain the grid. Never mind that solar customers also pay taxes and other fees on a per customer basis. Moreover, utilities pay less to solar customers for the extra power the customers produce and return to the grid than those solar customers pay for the power they buy from the utility (also, the solar customers are told the lower amount they receive for selling the electricity they produce is in order to pay for the costs of solar customers’ use of the grid). So are future customers being double charged? Paying more than their fair share?

Back in the day when electric utility companies were encouraging rooftop solar installation, they told consumers that installing their own solar panels helped the utilities. Installing solar prevented utilities from having to go through expensive, time-consuming and sometimes futile legislative processes to gain approval for more and/or larger generation facilities. Utilities told consumers that increasing population meant that there would be more demand for electricity, which could not be met without potentially rationing electricity. The solution, they said, was for consumers to step up with energy conservation (that often meant purchasing new appliances) and the installation of rooftop solar.

Also, consumers were told, rooftop solar would help utilities meet requirements to obtain a percentage of their generation needs from alternative energy such as wind and solar. And though the utilities offered customers incentives and discounts and the promise to buy back the extra electricity generated, solar rooftop customers have invested many thousands of dollars in their systems in the hopes of amortizing those costs by reduced energy bills over time.

Times change.

In its press release APS, stated “that the ACC professional staff and the state’s Residential Utility Consumer Office (RUCO), among other organizations, also agreed that “a cost shift exists.” APS claims that the extra revenue collected from solar customers will not increase the utility’s revenue but rather “will modestly reduce the impact of the cost shift on non-solar customers.”

Don Brandt, APS chairman, president and CEO, said the new rate that goes into effect in January 1, 2014, for new solar customers, “falls well short of protecting the one million residential customers who do not have solar panels. We will continue to advocate forcefully for the best interests of our customers and for a sustainable solar policy for Arizona.”

The Huffington Post, also reported on the requested rate hikes. It reported that local solar advocates had accused APS “of trying to to kill the state’s burgeoning solar industry.”

Solar advocates launched a counter campaign, but with fewer partners and far less money, few have seen the solar advocates efforts. It was the anti ads claiming solar customers were not paying their fair share not the pro ads praising solar rooftop that got television time. Consumers do not see their neighbors electric bills so would not understand that they were being misled.

Here is the link to one of the ads, solar advocates produced about how The Edison Electric Institute is seeking to help its shareholder-member utilities charge extra to rooftop solar customers. It is entitled, The power to make you do what we want—Edison Hates Rooftop Solar. Let us know if you saw it broadcast on television anywhere. Many utilities are members of The Edison Electric Institute (EEI).

The Huffington Post had also revealed the groups behind the anti-solar ads shown on Arizona television stations were being funded with APS contributions. Chief among the groups on the anti side were 60 Plus, which the Huffington Post reports is backed by the Koch Brothers and Prosper. Prosper has a particularly interesting Web site that tells viewers that solar customers are paid “three times times the market price and other Arizonans are left paying the bill.”

We know that in Tucson, home of the latest VISION House that Tucson Electric Power pays less for the power it buys back from consumers than for what it sells to them. How much, we wondered, were APS consumers being paid for their solar. We called APS to inquire. Their communications team answered some questions, but said they did not know what solar customers were paid for their power compared to what APS charges them. They said they would get back to us. We did not hear from them by deadline. When we do, we’ll let you all know. But we know of no electric utility that pays its solar customer what Prosper claims: “three times the market price.”

APS also revealed that it had directly spent $3.7 million on public relations to promote the rate hikes and EEI spent $520,000 on 10 days worth of television ads just before the regulatory agency met, according to the Huffington Post. This is versus half a million dollars the pro-solar groups spent fighting.

On November 5, PRnewswire, in a release from The Alliance for Solar Choice, reported, “As Arizona utility APS falls deeper into scandal after lying about funding from dark money organizations to attack rooftop solar, the Alliance for Solar Choice (TASC) today called on utility trade organization Edison Electric Institute (EEI) to disavow APS' underhanded behavior and state whether or not they have also used dark money.”

The release continued, “APS is trying to eliminate net metering because they—and other see rooftop solar as a threat to their monopoly. In place in 43 states, net metering gives solar customers fair credit for the excess electricity they send to the grid for the utility to sell to other customers. Studies in states including Arizona, California, Colorado, and Vermont have shown that net-metered rooftop solar delivers a benefit to all utility ratepayers, solar, and non-solar alike.”

The Alliance for Solar Choice (TASC) member companies include REC Solar, SolarCity, Solar Universe Sungevity, Sunrun, and Verengo.

So, the Goliath versus David battle has begun. In Arizona, there may be a last minute rush, especially among APS customers, to install solar before the new-customer-only rate charge goes into effect on January 1—or, customers may be scared off by the threat of future rate hikes. The new kilowatt hour rates may now only affect new APS Arizona customers, but existing rooftop solar homeowners are in no way assured that the new rates or more won’t soon apply to them through APS, in the state or throughout the U.S.

News > Ruling Solar

Social Media