In a victory of David vs Goliath proportions, policymakers in Arizona stood up for its citizens by rejecting an attempt from the state’s largest utility to squash rooftop solar. Five months after Arizona Public Service (APS) sought approval to slap hefty new fees on its customers that go solar, the Arizona Corporation Commission (ACC) voted yesterday to uphold Arizona solar savings and energy choice. While the vote was clearly a win for Arizonans, the ACC’s approval of a small but troubling new fee makes it clear that there is a significant amount of education left to be done regarding distributed solar’s tremendous value.
Driving this proposal was that fact that solar is offering customers an affordable new energy option, and Arizonans are increasingly choosing to generate their own power from the sun. Rather than working with its customers and meeting this new market demand, APS attempted to dig in and regulate against competition to maintain its monopoly hold on electricity.
APS Proposal Denied
APS had proposed a new $50-100 monthly charge for solar customers, a discriminatory fee that would have wiped out any savings these customers would currently receive from their solar investment. APS justified the solar fee by saying that net metering – a program that ensures solar customers receive full retail credit for power they deliver to the grid for their neighbors to use – is a bad deal for Arizonans – but that’s just not true: private investment in reliable, local power generation benefits all ratepayers. Full retail net metering credit is a simple and proven way for customers and utilities to assign value to that power.
A study conducted this year for SEIA showed that these net metered systems actually deliver much more: $34 million in annual net grid benefits for APS customers alone. That’s before accounting for the social and environmental benefits: cleaner air and thousands of local jobs. APS’s proposals were clearly not grounded in a fair accounting for DG solar’s real value, and our allies argued strongly in favor of undertaking that fair accounting in the appropriate venue: the next rate case.
Despite millions of dollars on spent on a misleading campaign by the utility and its proxies, public outcry against the APS proposal was overwhelming. A poll conducted last week found that, even after months of being blanketed by utility ads, a whopping 81% reject APS’s solar fee and 77% would be less likely to vote for a candidate who ends solar savings. Over the course of this long campaign, more than 30,000 Arizonans emailed the ACC in support of rooftop solar.
That support was demonstrated in person earlier this week when 1,000 Arizonans gathered in front of the ACC this week to protest APS’s proposed fee. Inside a steady stream of about 100 citizens — solar workers, solar customers, non-solar customers, environmental advocates, retirees, veterans, even one passionate 11-year old girl — urged the Commissioners to stand up against the utility for the good of Arizonans. Yesterday’s vote is a resounding demonstration that the peoples’ support of solar trumps corporate money. It showed just how out of step APS’s anti-solar efforts are with the needs and demands of its own customers, and we were pleased to see Commission acting on behalf of the public they serve.
Interim Fixed Fee Adopted
It’s important to note that while the most egregious aspects of APS’s proposal were soundly rejected, the Commission did vote by a 3-2 vote to implement a relatively small but still unjustified new fixed fee of $0.70 per kilowatt as a monthly charge for all new residential solar customers (i.e. if you have a 5kW system on your house, you would pay $3.50 a month). The vote broke down as follows: Commissioners Stump, Bitter-Smith and Bob Burns voted “yes”, and Commissioners Pierce and Brenda Burns voted no, arguing that the fixed fee was too low.
The fee will be collected through the “Lost Fixed Cost Recovery” (“LFCR’) adjustor mechanism. APS is already using the LFCR to collect funds from customers to account for the fact that the Company is losing money when customers invest in energy efficiency or DG solar.
The new fixed charge will stay in place until APS’s next general rate case, which must be filed in June 2015. However, the Commission did add a clause that allows the ACC to periodically adjust this charge in any APS LCFR reset proceeding, which happen on an annual basis. During the next rate case, net metering will be addressed in more detail.
Existing solar customers will not be assessed this charge, and will be ‘grandfathered’ under their current rate structure arrangement, at least until the next rate case, though verbally several Commissioners expressed intent that they would be grandfathered from the charge in perpetuity. However, all rooftop solar customers, including existing customers, will soon need to sign a disclaimer that acknowledges that rates can change in the future.
In the interim between now and the next rate case, the Commission has also decided to hold a series of workshops to determine the true costs and benefits, and any associated cost shift, of net metering. Vote Solar looks forward to participating in this process and making sure that individual solar investment is properly valued.
We strongly disagree with the Commission that net metering represents a cost to non-solar ratepayers, and we hope through the workshop process facts can be brought to the table to dispel this myth once and for all. Rooftop solar is helping Arizona families, schools and businesses take charge of their power supply and their electricity bills like never before. This private investment is helping build a cleaner, safer and lower cost energy supply for all of us.