PHOENIX — The newest state utility regulator is blasting Chairman Doug Little for sidelining a discussion of whether Arizona Public Service should be forced to use some of the money it has from ratepayers to reduce peak energy demand through battery storage.
The Arizona Corporation Commission’s Andy Tobin told Capitol Media Services that all he wanted was to discuss at a meeting this week the idea of requiring APS to look at things like storing energy in batteries. He said that would go a long way toward addressing the bid by APS — and other utilities — to impose new demand charges on customers on top of what they already pay for electricity.
But Tobin said when he refused a request by APS to table the issue, the utility went to Little. And the chairman admitted he used his authority to yank the item from the agenda.
Little would not consent to be interviewed, instead issuing a statement blasting Tobin’s idea, saying it could result in “substantial additional costs to ratepayers if not properly implemented.”
“We cannot shoot from the hip on important policy matters like this,” his statement read. And Little said it would have locked APS into programs to shift energy use away from peak periods for five years “without regard to whether they were cost effective or not.”
But Tobin said what Little has done, at APS’ behest, is short-circuit any discussion.
“It makes me mad,” he said. “I wasn’t very pleased we couldn’t even have the conversation.”
Central to all this is the bid by utilities to change how residential customers are billed. They now pay a base fee for being connected to the grid, with a charge based on usage.
What APS is proposing and other utilities are considering is adding a demand factor, with the bill based in part on the highest demand. So a customer whose air conditioner, dryer and pool pump all kicked on at the same time could face a much larger bill for the entire month, even if he or she kept overall energy use low.
APS has a “demand-side management” plan, using ratepayer dollars for things like rebates for customers to buy programmable thermostats and more efficient air conditioners.
But Tobin said the company has nearly $26 million in demand-side funds sitting idle. So he proposed spending $4 million of that on incentives to reduce energy consumption during demand periods, including energy storage.
Little acknowledged at the meeting that APS had asked him to pull the item, saying utility officials were concerned they did not have the time to review Tobin’s proposal, which had been introduced just the day before. But the chairman said he had intended to do that even without APS input, saying what Tobin wanted had “sweeping implications.”
Tobin, however, countered that APS had given commissioners only a week to review the utility’s plans. Anyway, he said, there was no reason not to explore the issue.
“It would have been nice to have the conversation,” he said. And he chided APS for wanting to change the rates to reduce peak demand while not really doing anything about it — like proposing a storage pilot program.
“Why didn’t they come up with the idea?” he said.
Little is not the only problem. Commissioner Bob Stump weighed in with his own prepared statement saying Tobin should “begin focusing on good-faith consensus-building, as opposed to confrontation, as we work together on issues we all agree are critical to Arizona’s future.” Stump, too, would not consent to an interview.
But Tobin said what Stump essentially wants is a discussion of the issue behind the scenes, away from the public.
“Having withdrawn it entirely I think was a mistake for the chairman,” he said.
“And then for them to tell me that I’m not a team player?” Tobin continued. “What does that tell you? Do they want to just coordinate this not in public?”
APS insists it’s not necessarily opposed to some kind of energy storage, calling it in a statement “an increasingly promising element in the delivery of electric service.”
Company spokesman Jim McDonald said APS already is looking at energy storage, both at the residential and the “grid” level. And he said APS intends to work with the commission as they consider the issue.
There is a political side to all of this. APS has refused to confirm or deny that it funneled money into the 2014 campaign to elect Little and Tom Forese through one of two “dark money” organizations that were spending heavily to influence that election.
Campaign finance records show that Save Our Future Now and the Arizona Free Enterprise Club together spent more than $3 million on that campaign. Both groups have refused to reveal their donors, saying they are organized under federal tax laws as “social welfare” organizations, exempt from state financial disclosure laws.