Arizona Corporation Commission Agrees to Compromise Nem Plan

AriSEIA November 18, 2013

In what can only be called a stunning rebuke of APS’ request to charge solar array owners upwards of $100 per month and put an end to net metering and solar choice in Arizona, the Arizona Corporation Commission on Thursday voted 3-2 to institute a 70-cent per Kilowatt (kW) fee for new solar system owners installing systems after Jan 1, 2014. All current owners and those who install systems prior to December 31, 2013, will be protected from this new fee—at least until the next rate case when even more changes will be on the table. The vote came at the end of one day of public comment from Arizona business owners, investors and the public, and another full day of deliberation and discussion by the Commission, APS and interveners.

The 70-cent alternative to the APS proposal was the result of a collaborative effort by the solar industry and the Arizona Residential Utility Consumer Office (AZRUCO), an Arizona consumer watchdog group. They recognized the real damage implementing the APS proposal would have on Arizona businesses and jobs and found an interim solution that could alleviate some of the purported cost pressure for the time being and allow the parties to prepare for a more deliberate process during the next rate case.

“We want to thank Chairman Stump and Commissioners Bob Burns and Susan Bitter Smith for being open to alternative ideas instead of sticking just to the APS proposals,” said Mark Holohan, AriSEIA President and Chairman. “This charge puts more pricing pressure on our industry because even if the average savings for solar array owners is $5 to $10 per month, this new payment to APS eliminates or cuts that savings in half. We’ll have to see how consumers respond to the new charge. Even though this is much less than the $50 or $100 per month charge APS wanted, it will have a significant impact on our industry. The upside is we can now slow down and have a rational discussion of the real impact of solar on utility costs in a rate case, which is the proper venue for this discussion.”

While the Commission, AZCC staff and AZRUCO found that a cost shift from solar to non-solar customers exists, AriSEIA does not believe the evidence presented at the open meeting or in support of the docket is strong enough to make such a direct connection. This belief is supported by the APS filing on Tuesday that shows the average residential solar system owner pays APS an average $71 per month in charges and fees.

“This is a significant admission on the part of APS,” said SouthFace Solar Electric owner and AriSEIA board member Corey Garrison, “because it shows that solar customers are paying to support connections to the grid. We have been saying there is no free ride and APS’ own submission shows this to be the case. We hope the Commission and their staff take note of this admission and reconsider this part of their decision.”

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