Rooftop solar in Arizona is thriving

April 08, 2015

Ensuring a bright energy future for Arizona requires productive dialogue on energy policy. The latest news release from rooftop solar leasing organization TUSK confuses several important issues, and we’d like to share our perspective. The APS responses are indented following the italicized sections of the release. 

(PHOENIX) APS is asking the Arizona Corporation Commission for another tax on solar power, and it’s using deceptive numbers to sway the media and Corporation Commissioners. 

The tax on rooftop solar customers would be about $20 a month.

Our view: What APS has asked the Arizona Corporation Commission (ACC) to consider is an increase to the existing grid access charge, which helps pay for the electricity grid that all customers rely on 24/7. This affects future solar customers only. Current solar customers would be grandfathered under their original agreements, and future APS customers who choose rooftop solar would still save on their electricity bills. It’s important to remember that if approved, the request would result in no additional revenue for APS.  Interested readers can find more detail on our proposal here.

To justify this solar tax, APS is falsely claiming the rooftop solar industry in Arizona grew in 2014. It actually saw a 10% decrease in business in APS service territory.

APS cited 2014 installation numbers to incorrectly claim that the rooftop solar industry has not been impacted by the imposition of a $5 a month solar tax starting January 2014. 

What APS failed to mention is that those installation numbers are irrelevant because many of those installations reflect sales in 2013, BEFORE the solar tax went into effect.

Our view: Nearly 7,800 APS customers installed rooftop solar in 2014 – that’s a record high. The Marx Brothers used to say: “Who are you going to believe, me or your own eyes?” TUSK asks the public to believe that the growing number of customers installing rooftop solar is not a sign the market is growing. To us, it seems like common sense.

The only relevant indicator of the health of the solar industry is solar applications after the solar fee went into effect in January 2014. Since that time, solar applications are down by 10%, while solar is growing at a high rate in nearly every other state.

Our view: We disagree that it’s the only relevant indicator of growth, but applications are also growing.  In the first quarter of 2015, a record number (2,342) of APS customers submitted applications for rooftop solar.  That’s more than double the first quarter of last year.  Applications in February and March were the most we have ever received in those months.
 

In November 2013, an executive from one of the companies represented by TUSK told the ACC they could agree to a $5 charge “with pain, with significant harm to the industry.” More than 10,000 APS customers have chosen to go solar since the $5 charge took effect. That is significant, but it is not harm.

In SRP territory, applications decreased 96% after the implementation of new solar charges.

Our view: If the ACC approves our request, future APS customers who choose rooftop solar will still save about 10 cents per kilowatt-hour of solar they produce.  

Meanwhile, APS executives seem to be breaking prior promises to wait until the next rate case (scheduled for mid-2016) before making a solar tax hike request.

In the 2014 second quarter earnings call, CEO Don Brandt was asked, “When would that $5 tariff at least be revisited, just procedurally speaking?” Brandt responded, “if you do a rate design change or a change like that that would happen in the next rate case.”

Click here for the complete transcript.

During the 2014 fourth quarter earnings call Jeffrey Guldner, APS Senior Vice President For Public Policy said when referencing potential fees for rooftop solar customers, “We know a lot of that's going to happen in a rate case.” He also said, “...some rate design changes are going to have to happen in a rate case. It's helpful to have the discussion of what that process should look like and what some of the issues are ahead of the rate case filing.”

Click here for the complete transcript.

Our view: Yes, our executives have said that “if you do a rate design change” it would happen in the next rate case.  That is entirely accurate.  A comprehensive discussion of rate design would take place in the next rate case. What we have requested is a narrow interim step until that time. The ACC anticipated in its order from 2013 that the grid access charge could be changed before the next rate case.  

TUSK understands the difference, but is apparently hoping to mislead others.  

It’s also important to note that in its 2013 decision, the ACC found that the existing pricing model for rooftop solar customers was “defective” and “unfair” and that the $21 access charge we are requesting would be a “reasonable” amount.  

TUSK Chairman Barry Goldwater Jr. said, “Arizona Public Service seems to have lost respect for its ratepayers, and the Corporation Commission itself. APS is entitled to make its own opinions on solar taxes, but the utility is not entitled to make its own facts.”

T.U.S.K. (Tell Utilities Solar won’t be Killed) was formed to stand for energy choice and rooftop solar savings. To learn more about T.U.S.K. visit www.dontkillsolar.com

T.U.S.K. believes that rooftop solar is similar to a charter school—it provides a competitive alternative to the monopoly.

Our view: Here, TUSK plays on – and perpetuates – a common misunderstanding.  Rooftop solar is, in fact, nothing like a charter school because it is not an alternative to the electricity grid.  As our CEO Don Brandt said when we announced our grid access filing: “The growth of rooftop solar doesn’t lessen the need for the grid.  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.”

Monopoly utilities aren’t known for reducing costs or for driving business innovation, but the Arizona solar industry is. Solar companies have a track record of aggressive cost reduction in Arizona.

Our view: Actually, the utility and solar industries are both driving business innovation. For example, APS is working with Arizona-based rooftop solar installers on innovative solar technology pilot projects that offer new opportunities for customers to go solar and for APS and the solar industry to partner on important research. These solar companies represent an important segment of the solar industry, particularly in Arizona, yet often get drowned out by the constant rhetoric from TUSK. 

The more people use rooftop solar, the less power they need to buy from the utilities. Energy independence for Arizonans means smaller profits for the utilities, so they are doing everything they can to stop the spread of independent solar.

Our view: Once again, the opposite is true. APS is committed to building a modern electricity grid that enables continued innovation and supports the long-term growth of solar power in Arizona.  Customers with rooftop solar still rely on access to the electric grid 24 hours a day. Everyone agrees that all customers who use the grid should contribute to the cost required to build and maintain it. This is a principle with which the ACC and Arizona’s residential utility consumer advocate agree, and the reason for a grid access charge. 

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