Home Solar in Arizona Takes Hit After Vote by Corporation Commission to Add Surcharge

Categories: Solar Energy

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Standing close to APS' corner in the battle, the Residential Utility Consumer Office, established by the State Legislature in 1983 to represent the interests of utility customers, pushed the commission to adopt some kind of change for solar users that could offset costs for non-solar-using customers. RUCO analysts said they believed the cost shift for non-solar users might be as high as $20-50 a month due to solar customers.

Yet it was RUCO that hammered out the compromise deal along with the Alliance for Solar Choice, represented by former Tempe Mayor Hugh Hallman.

The 70-cent deal was much lower than what was sought by APS, which has stated the cost shift is more like $83 per month on non-solar customers for every new home-solar customer added to the grid. (Spread out over all 1.1 million customers, the per-customer cost isn't too onerous, yet.)

Bryan Miller of SunRun previously called the APS estimate "made-up math."

The actual number, or even whether it's a positive or negative number, isn't known by anybody due to the complexity of the question. The commission members said they wanted to see both sides get together in workshops to try to settle the question next year.

Commissioner Bob Burns said he believed the current cost shift to non-solar customers was the "tip of the iceberg" compared to what's to come as rooftop solar grows in popularity.

Thursday's vote doesn't mean the battle is over -- it's just beginning. The commission and RUCO expect to monitor rooftop sales closely in the coming months and years to monitor how large the estimated cost shift gets.

The ironic part for solar companies is that the more units they install in Arizona, the more likely their customers will be zapped by increasing fees that tend to erase the savings from solar. That will lead to rejection of solar units by potential customers, or at the least, reduced enthusiasm for the projects.

Ultimately, though, everyone seems to acknowledge the utility model of the past will not work with the home-generation technologies of the future. As our feature article pointed out, a paper by the pro-utility group Edison Electric Institute states that investors in utility companies are unlikely to stay invested in a sinking ship. Tampering with net metering and forcing solar users to pay more is one way to slow down or halt the problem, the paper said.

Yet future technology may allow a significant number of people to unhook from the grid entirely, at a reasonable expense. That, in turn, would upset utilities' ability to provide the same continuous and ultra-reliable, 24/7 electrical power that Americans demand.

For now, though, residential solar companies and their customers must continue to make deals with the devil, a.k.a. the utility, which they cannot do without.

Yesterday's vote by the Corporation Commission sets a pro-utility precedent for Arizona and the rest of the country that's poised to affect solar sales in the near future.

Got a tip? Send it to: Ray Stern.

Click on the next page if you want to read a statement put out at 1 p.m. today by RUCO regarding yesterday's vote:

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15 comments
shaksign
shaksign

There is a really cool solar program in the states right now that allows folks to have a system installed for no out of pocket cost - home owners pay the solar company for the energy the system makes along the way. It's a good program to get for one's home because solar energy is cheaper and cleaner than regular utility energy.

Need to install a solar power system in California, Oregon, Colorado, and Arizona; No hesitation !!!

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SolarCity can install a solar power system on your home for free and sell you the energy it produces for less than you currently pay. This is your chance to save for years to come. 

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Charles-1
Charles-1

If you are a private utility operating as a regulated monopoly (e.g., APS in Arizona) the trick is to keep your customers from generating their own electricity since there is no money to be made doing that - that would be just crazy!

Since your company President/CEO and Executive Vice President are pulling down compensation packages of $11.5 million and $9.3 million per year each (in a good year) you need to keep the revenue sources operating. Instead, build your own photovoltaic (solar) generating array in say, Chino, Arizona, and sell its production to your customers at the retail rate at five times the cost.

Now, that's the ticket! BTW, you will need to revoke that pesky net-metering arrangement.

jerk_store
jerk_store

Ray Stern, I've learned from this article that you are not very bright. 

jerk_store
jerk_store

The fact that this is being decided by the corporations commission is laughable. APS is a private corporation but they're also providing utilities to the public and have a monopoly on said public. This should be handled by the board of supervisors. The outcome may have been no different by why use a body dedicated to private sector business activities, not public energy consumption. 

marcy
marcy

APS puts forth the nonsense that net metering means solar customers use the grid without paying for it.

Put most simply, net metering means my excess power flows 50' to my neighbor's house and my neighbor pays me for that power instead of APS.  That's it.

Everything else is just a smoke screen designed to cover up the real problem APS has, more consumers with solar means less capital investments by APS and less capital invested by APS means less profit they can demand.  

That APS has to shrink is a good thing for consumers, and people investing in their stock should price it accordingly.

FUQSRPANDAPS
FUQSRPANDAPS

Ray,

Your opening line should read "Home solar users tied into the grid will save less money...."

People with off grid systems will not be affected.  My system is not tied into the grid or leased.

jeanjb
jeanjb

I have lived here for 55 years and have paid a lot to the pinnacle corp in the way of the highest rates in the nation to build their nuke plant,while California pays way less for the juice from the plant we paid to build!

Reggievv
Reggievv

This Is again what Arizona gets when it blindly votes for the retread Republican legislators running for the corporation commission. Two major solar advocates were voted off the Commission, and this type of anti-solar, anti renewables action was to be expected. APS has a damn monopoly then that idiot Pearce says he is for the free market. THERE IS NO FREE MARKET IN THE REGULATED UTILITIES SERVICE AREAS, whether APS, or TEP, unless you detach from the system completely. This action stunk to high heaven. Fairness my ass, APS. Solar development needs to be encouraged in this State. And when the sun ain't shining, the meter used IS paying to "support the grid,". An incredibly overblown cost.

lycwyd
lycwyd

"One reason we agree with this argument: Imagine if 100 percent of APS' residential customers had rooftop solar under the current net metering scheme, which requires APS to pay retail rates for the semi-wholesale power. That's a ridiculous business model that would cause the utility to go broke, meaning it would be unable to provide the power those same customers need during part of the day and at night. (The utility's argument, of course, is that it would have gone broke long before all customers had solar.)"

LOL. What an asinine argument. The fact that the private company that has the monopoly over entire portions of the state is relying on increasingly outdated resources and refuses to get with the times is NOT the public's problem. They can jump on the solar bandwagon and build new infrastructure to support it but apparently they can't be bothered with such piddly nonsense.

Let's also not forget that non-solar customers were paying an average of about $1.40 a month (by APS' own studies) to "subsidize" solar customers. Less than 5 cents a day. 

james8394
james8394

When APS buys peaking power from one of those gas fired plants out near Palo Verde NGS in the summer to meet load demands, do you think Duke energy (or whoever owns the plant) has to pay APS for the privilege of using the transmission lines? If so, How much?

Please keep in mind that any idiot can run a monopoly and make money. If APS management is not smart enough to make money with the current rate structure, maybe they should pull the ripcords on their golden parachutes.


yourproductsucks2
yourproductsucks2 topcommenter

I will be voting for the democrat next corporation commission election cycle. thus is a sad state of affairs.

royalphoenix
royalphoenix

Bitter Smith reminds me of Horne, always on the ballot for something. She's a corrupt, dumb as they come pos. peace

__McShyster__
__McShyster__

 "the five-member, all-Republican panel"

No need to read any further, just know they did the wrong thing for the wrong reasons, as usual.


ray.stern
ray.stern moderator

@FUQSRPANDAPS Thanks, Mr. Fuq. Although I see no need to change the sentence, (it doesn't say "every single one of all arizona home solar users," after all), your nod to the exceptions out there is duly noted.  

harlotsghost
harlotsghost

@Reggievv You do have a point.  The fixed costs are collected through the monthly service charge, generation, transmission, distribution, meters.  Take or Pay purchase contracts are a management decision.  They contract for capacity and supposedly pass-on variable kwh cost.  The fixed investment has been made.  Adding a rider is fill-in magic to make capacity and consumption appear efficient.  Therefore, conservation, DSM, Solar based on ROI is all spin.  The programs erode revenue.  The commissioners and APS know this.  So they try to spin "paper or plastic."  It's a feel good concept.  You throw recycle material in you recycle bin and you feel good when that truck you pay for comes by and picks it up.  You get no monetary benefit for your contribution.  The other stuff the garbage truck picks up you pay for anyway.  I throw all that crap in the trash.  That's all it is.

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