Regulators get earful over proposed fees on rooftop solar

2013-11-14T00:00:00Z 2013-11-14T18:36:14Z Regulators get earful over proposed fees on rooftop solarBy Kyle O’Donnell Cronkite News Service Arizona Daily Star
November 14, 2013 12:00 am  • 

PHOENIX — Customer Dru Bacon compared Arizona Public Service Co.’s approach to household solar to Eastman Kodak Co.’s inability to recognize the future of digital photography.

Mesa resident Jeff Hodgkinson said groups supporting the utility’s request to charge new solar users a fee for accessing the electric grid are engaging in smear campaigns against those opposed to it.

Russell Pearce, the former state senator, said it’s unfair for ratepayers to subsidize solar users, while Steve Pierce, a current state senator, said solar users should pay for the grid just like other customers.

The Arizona Corporation Commission began hearings Wednesday on changes to so-called “net metering” rules proposed by APS that would require customers with rooftop solar installations to pay fees to offset fixed costs APS contends are being shifted to other ratepayers who use grid power.

And though the Corporation Commission is only preparing to rule on the proposal from APS — the largest state-regulated utility — the panel’s decision is likely to set a precedent for other utilities, including Tucson Electric Power Co.

Scores of people signed up to share their thoughts at Wednesday’s meeting. Most speakers opposed the fee APS is seeking, while the scene outside included a DJ, band and dozens of people holding signs objecting to the proposal.

At present, an Arizona homeowner with a solar system feeds excess electricity into a utility’s grid and receives a credit against his or her bill. Arizona is among several states looking into altering their rules for the practice, known as net metering.

Solar users, who currently don’t pay for access to the grid, and solar industry groups contend that the benefits of the systems offset the cost to utilities of establishing and maintaining the electric grid.

While solar advocates want to maintain the status quo, APS has made several different proposals to the Corporation Commission, including a monthly charge of between $50 and $100.

In October, the Arizona Residential Utility Consumer Office, the state’s advocate for residential ratepayers, recommended a monthly charge for solar users that would equate to about $7 a month for the average solar system.

The APS and RUCO proposals would apply only to new solar installations.

TEP spokesman Joe Barrios said that although TEP has not filed to request changes to its net-metering rules, the company agrees with APS that the current rules result in problematic cost-shifting.

“We agree with APS that there’s an issue,” Barrios said. “We’ve been talking about it for some time, but it just never got that far” to formally request changes.

TEP and sister rural utility UNS Electric filed comments in the APS case, supporting the concept of a monthly “premium” charged to customers with solar installations based on the size of their systems.

TEP could support a charge "that meaningfully mitigates this issue, that would be an appropriate approach to the issue,” Barrios said.

TEP’s next move depends largely on what the regulators decide to do in APS’ case, Barrios said, noting that some parties have proposed generic hearings or workshops to address the issue industrywide.

“Whatever they decide could influence us, obviously, so we’re interested, we’re watching the proceedings,” he said.

The five-member commission is expected to vote today at the conclusion of the two-day hearing.

Meanwhile, groups for and against the proposed net-metering changes have launched advertising and public relations campaigns in recent months, to the extent that Commissioner Bob Burns requested that groups disclose their spending.

Earlier this month, APS disclosed that its parent company, Pinnacle West, spent about $3.7 million on its net-metering public relations campaign, according to a Corporation Commission docket filing.

The Alliance for Solar Choice, one of several solar advocacy groups to file with the Corporation Commission, reported spending more than $330,000 on its effort.

With more than 100 people registered to speak, the commission limited comments to three minutes per person.

Bacon, a solar user from Goodyear and retired chemical engineer at Kodak, said APS should look at the experience of his former employer, which recently emerged from bankruptcy after failing to respond to a disruptive technology.

“I would ask APS to look at their business model and find a way to remain relevant,” he said.

Hodgkinson said solar users allow utility companies to generate less power, which reduces fossil fuel use and capital costs. He questioned how utility companies can lose money when they control the transmission of power.

Barry Goldwater Jr., chairman of Tell Utilities Solar won’t be Killed, one of the main groups opposing APS’ proposal, said the utility is committed to solar as long as it can pass the costs to ratepayers and earn a profit.

With the solar industry just becoming profitable, now isn’t the time to change net-metering policy, he said.

“I’m suggesting to you to not to pull out the rug from under this industry,” Goldwater said.

Pearce, a Republican from Mesa, said ratepayers shouldn’t subsidize solar users.

“Free markets are an important part of our country,” he said. “To manipulate the free market is wrong.”

Pierce, a Republican state senator who said he was representing himself as a citizen, rancher and APS customer, said a solar user should pay for the grid just like any person should pay to rent a piece of machinery.

“Someone else paid for that to come out to my house — 25 miles from Prescott — and I would expect to pay somebody for the use of that,” he said.

Star Assistant Business Editor David Wichner contributed to this report.

Copyright 2014 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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