TEP files to decrease payment for solar PV customers

Arizona has been a battleground in the conflict over net metering between solar advocates and utilities, and the fight is far from over.

Last week Arizona utility Tucson Electric Power (TEP) filed for a case to design new rates for its electricity customers, with proposals that will dramatically effect compensation for its customers who install solar.

TEP has proposed a new rate structure with a basic service fee, lower per kilowatt-hour (kWh) rates and a charge based on the customer’s highest hourly energy usage. The utility wants to make this plan optional for other customers and mandatory for PV system owners.

Additionally, TEP wants to reduce the rate of compensation under net metering from full retail to a rate similar to what which it pays for utility-scale PV, which is around US$0.06/kWh. In a press statement the company referenced the cost of community solar, which it plans to offer in 2016.

"A utility that proposed something as extreme as what TEP is now proposing was Salt River Project in Arizona," explains Sunrun Director of Public Policy Kim Sanders. "SRP’s proposal caused a 95% decrease in solar installations. TEP clearly wants to kill solar competition."

While solar advocates are clearly not pleased with TEP’s proposals, the choice of venue is more favorable. Vote Solar Initiative has previously stated that it feels that a rate case is the correct process to evaluate such proposals. In late October, Arizona regulators closed a hearing that could have allowed utility Arizona Public Service to impose additional charges on PV system owners outside of a rate case.

This came after a legal challenge from the solar industry and a request that three regulators recuse themselves from the hearing.

Update: This article was modified on November 10 at 10:50 Central European Time to include the quote by Sunrun.