Arizona to consider additional charges on solar outside of APS rate case

Arizona has been a center of the fight over the future of distributed solar in the United States, and the political decisions made there are often not to the benefit of the solar industry.

The latest is a decision by the Arizona Corporation Commission (ACC) to consider a request by Arizona Public Service (APS) for further charges on its customers who install solar PV. APS is asking for charges of US$3/kW per month on its customers who install PV, well beyond the $0.70/kW per month which the agency granted in November 2013.

In doing so, ACC overrule the recommendations of an administrative law judge and requests by solar advocates that this matter be heard as part of APS’ next rate case. This includes an estimated 250 solar advocates who attended the hearing, organized by Tell Utilities Solar won’t be Killed (TUSK) and The Alliance for Solar Choice (TASC).

"We want to make sure that this is a fact-based conversation based on real data, which can happen in a rate case," explains Vote Solar Interior West Regional Director Jessica Scott. "If solar gets discriminated against outside of a rate case, it’s harder to have context."

The existing $0.70/kW charge was also granted by the ACC in separate proceedings from the APS’ rate case. While this resulted in a roughly $5 per month charge on the average solar customer, this time the charge could be as high as $21.

There is a lack of consensus about the impacts of this previous charge. GTM Research calculates that from 2013 to 2014 the capacity of residential PV installed in Arizona grew from 73 to 94 MW. While this is a slightly lower rate than the national residential market growth, APS also reported on Monday that it received more than 1,300 applications for new PV systems in May, June and July. In the past 12 months the company counts a record 9,400 rooftop PV applications.

APS is not the only utility in Arizona that has imposed charges on customers who install solar. In February the board of public utility Salt River Project (SRP) approved a host of new fees on solar customers which add an estimated $50 to the average monthly bill. Vote Solar estimates that solar PV market volume in SRP’s territory has fallen 95% since these charges were implemented.

In the 2013 docket, APS had originally tried to replace the state’s net metering program, and this approach has been repeated by a number of other utilities across the United States. A recent report by the North Carolina Clean Energy Technology Center and Meister Consultants found that during the second quarter regulators in 16 states considered changes to net metering laws. Many of these proceedings were driven by utilities.

However, in all but one state regulators found that instead of the cost shift to non-solar customers alleged by utilities, there was no significant impact or a net benefit from other customers installing PV.

This may be an important detail, as the ACC has adopted an amendment which will require it to consider costs and benefits when looking at APS’ most recent request. However, advocates say they are not sure what form this will take.