Finally! Arizona Net Metering Fight Defused…for now

on November 19, 2013 at 4:30 PM

We-Ko-Pa Golf Club 14th sunrise

Quick Take: If you’ve been following the residential solar net metering controversy, you know it’s a hot issue. And a lot of the heat has been concentrated in Arizona where utility Arizona Public Service Company filed a request with state regulators to lower the above-market prices they pay for electricity generated by privately owned rooftop solar panels. The rooftop solar industry, of course, has been fighting back.

Last week, the Arizona Corporation Commission (ACC) voted on a plan that imposes a “modest” fee on new residential solar owners. The regulators’ compromise seems to end the battle… at least for the time being.

The ACC ruled in a 3-2 vote that the state’s net metering program should more fairly spread the cost of maintaining a reliable electric grid among all of the utility’s customers. As of Jan. 1, 2014, a rate of $0.70 per kilowatt will be charged, meaning a new rooftop solar customer could expect to pay about $4.90 per month for their use of the grid. The rates will be in effect until January 2015 when APS will file its next case, as directed by the commission.

Essentially, commissioners agreed that non-solar customers have been paying more toward the cost of grid maintenance.

APS won’t see the money from the new charge. Instead, it will be used to “modestly reduce the impact of the cost shift on non-solar customers,” according to an APS news release. Existing solar customers and those who provide an application and signed contract for solar installation will not pay the fee if they provide the documents by Dec. 13, 2013.

Don Brandt, APS chairman, president and CEO, responded “The ACC determined that net metering creates a cost shift. We applaud the ACC for cutting through the rhetoric and focusing on how the cost shift impacts non-solar customers.”

But Brandt also said the decision didn’t go far enough. “Of course, having determined that a problem exists, we would have preferred for the ACC to fix it. The proposal adopted by the ACC, and surprisingly championed by the state’s consumer advocate RUCO, falls well short of protecting the interests of the one million residential customers who do not have solar panels. We will continue to advocate forcefully for the best interests of our customers and for a sustainable solar policy for Arizona.”

Quoted in a New York Times article, Bryan Miller, head of the lobbying group Alliance for Solar Choice, said “Those fees are real and they’ll have a real impact on the industry, but they do not accomplish APS’s goal of destroying the rooftop solar industry.”

Edison Electric Institute President Tom Kuhn described the ACC decision more favorably. One comment:  “There are a number of state commissions currently reviewing outdated and unsustainable net metering policies. By adopting common sense reforms today, the ACC showed leadership in protecting electricity customers in Arizona, while also ensuring that solar has a bright future in the state and around the country.” EEI represents U.S. investor-owned utilities.