The staff of the Arizona Corporation Commission is for now opposing a proposal by Tucson Electric Power Co. that would increase costs for customers who install rooftop solar systems.
The commission’s Utilities Division says consideration of TEP’s proposal to alter its so-called “net metering” rules should wait until the utility’s next formal rate case.
The staff argued its position at a hearing before a Corporation Commission administrative law judge this week in Tucson. The judge will make a recommendation to the full commission, which will likely consider the matter this summer.
TEP’s plan would revise the utility’s net metering policy to reduce credits solar customers get for excess power production, and thereby reverse what it says is a cost-shift on non-solar customers. The new rules would apply to customers who applied to install and connect solar systems to TEP’s grid after June 1.
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Under the plan, a typical new TEP home solar customer would face a $22-per-month increase above what current solar customers pay. UNS Electric, a TEP sister company that serves Santa Cruz and Mohave counties, has filed an identical net-metering request, though costs vary.
TEP says its plan would reduce the “subsidy” of an estimated $7 million annually that other electric customers pay to cover fixed system costs incurred by solar customers.
But the commission’s staff says the issue of cost shifting is a complex one that should be fleshed out in a full-blown rate case, where all costs are examined. TEP’s last rate case resulted in a rate increase approved by the commission in 2013, and TEP says it has no near-term plans to file for new rates.
The state Residential Utility Consumer Office, which represents consumers in matters before the Corporation Commission, says the issue can and should be heard before the TEP’s next rate case to minimize any impact on rates.
The Arizona Solar Energy Industries Association contends that allowing TEP to essentially impose new charges on solar customers would violate the agreement that settled the company’s last rate case, noting that pact allowed TEP to collect a special surcharge to offset lower power demand from energy-efficiency measures and rooftop solar systems.
TEP says in its filing that the usage-based fixed-cost surcharge further increases subsidies to solar customers.
Solar-energy advocates including the Sierra Club say that rooftop solar systems provide system and societal benefits that outweigh any break customers are getting on their bills.
TEP is only the latest power company to move to collect more from rooftop solar customers.
In 2013, the Corporation Commission approved a net-metering plan for Phoenix-based Arizona Public Service Co. that cost solar homeowners’ $5 a month — after rejecting a proposed $50-a-month charge that drew loud protests.
The Salt River Project, a self-governed Phoenix water and power utility, recently approved a “demand charge” adding about $50 monthly to the average rooftop solar customer’s bill.
In Pima County, the suburban-rural Trico Electric Cooperative also has proposed a reduction in its net-metering credit to customers with rooftop systems.