Arizona halts hearing into new solar fees, opens value of solar docket

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Issues of “dark money” in political campaigns, the influence of utilities on the regulatory process appears and a potentially shaky legal basis for certain charges appear to have temporarily stopped utility Arizona Public Service (APS) from imposing additional fees on customers who adopt rooftop solar in its service area.

On Tuesday afternoon, the Arizona Corporation Commission (ACC) ruled to close a hearing which could have allowed APS to impose additional charges beyond the current US$0.70/kW that it collects from its customers who generate power with distributed solar under net metering.

The commission further opened a new generic docket to investigate the costs of service and value of solar for all regulated utilities in the state. This will come outside of rate cases and before APS’ rate case.

Solar advocates including The Alliance for Solar Choice (TASC) and Vote Solar Initiative had called for these issues to be investigated in a rate case, which they said allows for a more full accounting of both costs and benefits. And while the investigation into costs and benefits is a separate process, any new charges will have to be imposed through a rate case.

“The Commission determined that ratepayers deserve a full rate hearing before they impose any fees,” TASC’s attorney Court Rich told pv magazine. “The new docket will discuss the costs and the benefits of solar, which APS did not want to do. They only wanted to talk about costs.”

The re-opening of the docket under which these charges were initially imposed had been contentious from the beginning. Two of five commissioners on the ACC dissented from the decision to open the hearing, and the Administrative Law Judge had also recommended that proposed charges go to a rate case.

Following the opening of the hearing, third-party solar installer Sunrun and its allies formally asked for two of the commissioners to recuse themselves, alleging that APS may have been the source of a portion of the $3.2 million in “dark money” that the two received in their recent election campaigns. The company also asked the third commissioner who voted to re-opened the hearing to recuse himself, citing bias against rooftop solar in public statements.

The use of dark money in particular has cast a shadow over the ACC, and the two dissenting commissioners have sought council on whether or not APS could be forced to testify about its role.

Additionally, Rich says that TASC and its allies had also challenged the mechanism for collecting the $0.70/kW charge, the Lost Fixed Cost Recovery Charge (LFCR). “APS was rightly concerned that the LFCR was unconstitutional, and they would have to return these cost to their ratepayers,” states Rich.

Apparently the heat was too much. While calling TASC’s motions “their most aggressive display of gamesmanship to date” and “an attempt to paralyze the commission,” APS’s attorney called for a more narrow investigation in late September.

ACC went a step beyond this request on Tuesday in closing the hearing entirely. However, the fight is far from over, and given the degree of public acrimony between three sitting members of the commission and APS on one side and the solar industry on the other, the next series of hearings promise to be contentious.

“This is more interesting than regulatory law should be,” notes Rich.