US: TEP to wait for 2016 rate case before attempting to modify net metering

Utilities in Arizona have been pushing back strongly against distributed solar, arguing that they should either not be required to compensate customers for electricity they generate at full retail rate, or requiring additional charges for these customers.

However, at least one of these conflicts will take place on better ground for the solar industry. On Thursday, the Arizona Corporation Commission (ACC) approved a motion filed by Tucson Electric Power (TEP) agreeing to wait until its 2016 rate case to make its argument for why solar customers should be reimbursed at the rate the utility pays for large-scale solar.

The utility’s motion to move this request to the rate case came after the recommendation of staff and other parties to the proceeding who argued that this matter would be better served in a rate case. TEP has also agreed to modify a warning to its customers that the policy could be changed, by removing a June 1st, 2015 date for this change.

The utility has pushed for the reduced rate since March, arguing that the reimbursement rate should be the same as payment for utility-scale solar. The utility puts this figure at just under $0.06 per kilowatt-hour, or a little more than half the current retail rate for residential customers.

The way that this has played out is in stark contrast to Tuesday’s ACC decision to hear a request by Arizona Public Service (APS) to increase its charges on customers who install solar. That decision was made against the recommendation of an Administrative Law Judge and despite arguments from solar advocates that this decision belongs in its next rate case, where a more full accounting of costs and benefits can be explored.

"Vote Solar is surprised, and quite frankly disappointed, that APS did not receive a similarly consistent decision by the ACC," said Vote Solar Interior West Regional Director Jessica Scott. "Arizonans deserve a transparent conversation about the very real benefits of private investment in distributed solar, and we hope to see that conversation involve stakeholder input during a cost and benefit analysis."

In the past, such accounting of costs and benefits has typically not supported utility allegations of a "cost shift" from customers who install solar PV to other customers. A recent report by North Carolina Clean Energy Technology Center and Meister Consultants concludes that many state studies have instead found that net-metered solar produces benefits to all customers in excess of the retail rate.

Correction: Several corrections were made to this article at 5:00 PM EST on August 21. The earlier version incorrectly stated that ACC had forced TEP to move its proposal to the rate case, whereas TEP voluntarily did so following staff recommendation. Additionally, the language warning TEP customers who install solar was modified, but the warning was not removed as the earlier version incorrectly stated.