APS asks to reset grid access charge for future solar customers

April 02, 2015

APS requested today that the Arizona Corporation Commission increase the grid access charge established by the Commission in November 2013 from 70 cents per kilowatt – or approximately $5 per month – to $3 per kilowatt, or roughly $21 per month for future residential solar customers. Existing rooftop solar customers would be grandfathered under the agreements they originally signed.

Highlights of the request:

  • The ACC concluded in 2013 that $21 per month would be an appropriate charge, but initially set the charge at $5 per month with the acknowledgement that it could be changed in the future.

  • Future rooftop solar customers would have the option to choose a demand-based rate and avoid the grid access charge
  • Future rooftop solar customers would still save on their electric bills
  • APS is partnering with Arizona-based solar installers to grow the rooftop solar market
  •  The request results in no additional revenue for APS

In its 2013 decision, the ACC found that the existing pricing model for rooftop solar customers was “defective” and “unfair” to non-solar customers. Commissioners concluded that a monthly charge of $3 per kilowatt would be “reasonable” to cover the cost to operate and maintain the electric grid, but decided to move carefully, begin with a smaller charge of 70 cents per kilowatt and monitor the issue. The ACC anticipated that adjustments might need to be made before the next APS rate case, when it can consider comprehensive rate design. The APS request simply asks the ACC to now implement its 2013 decision.
The APS proposal would not fully resolve the cost shift and is intended to be an interim solution until the issue is addressed in the next APS rate case or another proceeding.
“The growth of rooftop solar doesn’t lessen the need for the grid,” said APS Chairman, President and CEO Don Brandt. “In fact, it’s just the opposite. The continued growth of rooftop solar depends on a modern grid that supports the two-way flow of electricity, accommodates the highly variable nature of solar power while maintaining reliability and backs up solar power with fast-starting, flexible conventional power sources.”
If the Commission approves the request, future APS customers who choose rooftop solar will still save about 10 cents per kilowatt-hour of solar they produce.

Solar customers also have an option to enroll in the Combined Advantage rate plan, an existing plan open to all APS residential customers that includes time-of-use pricing with a demand charge. The demand charge helps pay for the grid and gives customers control because the charge is tied to a customer’s energy usage during peak hours. Customers who add solar and enroll in this rate plan are not subject to the grid access charge.

Since 2013, the solar market in APS’s service territory has continued to see high activity. Almost 8,000 customers installed rooftop solar systems in the APS service territory in 2014, the highest total ever in one year for the state’s largest electric utility. Currently, APS has more than 30,000 residential rooftop solar customers.
In addition to its innovative APS Solar Partner program, which will add solar to about 1,500 customer homes this year, APS will continue efforts to expand the rooftop solar market. The company is working with the Arizona Solar Deployment Alliance, a group representing local solar installers, to develop pilot projects that offer both new opportunities for customers to go solar and for APS and industry to partner on important research. 

DOWNLOAD: The Proposal and the Precedent


Contrary to the common misperception that rooftop solar customers are “off the grid,” they actually depend on electricity and other services from the grid 24 hours a day: in the morning to power appliances before the sun comes up, in the middle of the day to send excess energy back to the system and to enable major appliances (such as air conditioners) to turn on and off, on cloudy or rainy days, when their homes use more energy than their panels can provide and at night.
“If you don’t use the grid, you shouldn’t have to pay for it, but if you do, you should pay your fair share. And today, virtually everyone uses the grid,” said Marc Romito, APS Manager for Renewable Energy.
With more than 60 years of solar leadership and more than $1 billion invested in solar projects across Arizona, APS’s renewable energy portfolio contains enough solar to power more than 220,000 homes. With programs like AZ Sun and APS Solar Partner, and power purchase agreements with third-party providers like the state-of-the-art Solana plant, APS’s solar footprint extends well beyond residential rooftop solar.