Tucson Electric Power Co. says it plans to file a request later this year for new rates, including its controversial proposal to cut credits paid to customers with rooftop solar arrays.
In its upcoming rate request, TEP said it also will seek to recoup costs the company has incurred since 2011. Those include the purchase of a natural gas-fired power plant to replace coal-fired resources as well as new solar arrays, investments in new infrastructure and other improvements.
TEP said it will request that new rates take effect by Jan. 1, 2017. Other details, including the plan’s potential impact on customers’ bills, have not been finalized, the company said.
The utility was last awarded a rate increase in 2013, after a rate freeze lasting nearly five years. Base rates rose 9 percent, along with new surcharges to offset lower demand from new energy-efficiency programs and the cost of future environmental costs.
TEP said it would withdraw its earlier, standalone proposal on so-called net metering, which it says offers “fair-market pricing” for the excess energy from rooftop solar arrays. The utilities staff of the Arizona Corporation Commission had contended the issue should be considered as part of a full rate case.
“We’ll be proposing rates that recover our service costs more equitably, allowing us to expand our use of solar energy while preserving reliable, affordable electric service for everyone,” David Hutchens, TEP president and CEO, said in announcing the new plan.
Solar-power advocates and industry groups oppose TEP’s proposal to cut solar credits, contending that rooftop solar provides benefits both to the power grid and society by providing clean energy.
Current net-metering rules provide TEP’s solar customers with bill credits worth about 11 cents per kilowatt-hour for the excess energy, which TEP says is nearly twice as much as the utility pays for energy from large solar arrays and adds to other customers’ costs.
Under TEP’s proposal, the company would purchase excess output from rooftop arrays for the same price it pays for power from community-scale systems, about 5.8 cents per kWh.
The proposed net metering change would not affect customers with existing solar systems or those whose requests to connect new solar arrays to TEP’s grid were submitted by June 1.
TEP’s expected rate request will be the subject of public hearings before the full Corporation Commission considers it sometime next year.
Separately, TEP has filed a plan to expand its state-mandated energy efficiency programs next year, after adding several customer incentive programs this year.