Moving Arizona toward a smarter solar future

The Value and Cost of Distributed Generation proceeding being considered by the Arizona Corporation Commission (ACC) is once again shining a spotlight on the state’s solar policies.

Commissioners are scheduled to decide the issue at their Dec. 19-20 open meeting, following hearings held this past spring. In her recommendation to the commission, the hearing officer wrote:

“It is time to provide certainty and a path forward to resolve disputes surrounding the successful integration of DG with the utility's electrical systems in an economic and fair manner. We believe that the determinations we make in this proceeding provide that path.”

The ACC staff, utilities, labor unions, utility consumer advocates and business organizations support the recommendation in moving Arizona toward a smarter solar future.

Here’s what they are saying:

“Staff supports the Recommended Opinion and Order ("ROO") in this matter. The ROO contains a detailed analysis of the positions of the various parties in this docket and a well-reasoned determination of the Value of Solar ("VOS") methodologies to be used in upcoming rate cases. Staff commends the Administrative Law Judge for the significant effort and careful synthesis of the positions in this case and for the balanced and thoughtful decision that resulted.”

Arizona Corporation Commission Staff
  Staff’s Request for Clarification/Modification, Docket No. E-00000J-14-0023 (Nov. 15, 2016)

“The ROO authored by Judge Jibilian is thoughtful and fair. The nearly three year process has been long, difficult, and frankly exhausting. Many other states are currently struggling to do the same thing because there is no blue print for doing so. RUCO is very appreciative of Judge Jibilian's recommendations. The recommendations are based on well-reasoned conclusions. By recommending a bold new way to value renewable energy, Arizona will once again be a proactive leader in smart renewable energy policy.”
 
Residential Utility Consumer Office
  Exceptions to Recommended Order and Opinion, Docket No. E-00000J-14-0023 (Nov. 15, 2016)

“Arizona's energy policy needs to progress, and eliminating the current net metering regime and pricing rooftop solar exports at a fair price based on a transparent methodology are important parts of that evolution. So, too, should residential rate design be reformed so that a utility's recovery of fixed costs is independent of the amount of energy a customer purchases from its electric provider. With the abundance of solar energy potential in Arizona, this Commission has the opportunity to set the nation's model for a sustainable energy policy. The record in this case allows it to act on that opportunity now.”
 
Arizona Investment Council
  Comments to Recommended Order and Opinion, Docket No. E-00000J-14-0023 (Nov. 15, 2016)

“The Unions' exceptions to the ROO, which the Unions find to be overall well-reasoned and balanced in light of the evidence offered in this case and the public interest, echo the concerns IBEW Locals (and many other parties) have expressed throughout this proceeding – i.e., equity is of the utmost importance in this matter.”

IBEW Local Unions 387, 1116 and 769
  Exceptions to Recommended Order and Opinion, Docket No. E-00000J-14-0023 (Nov. 14, 2016)

“As my colleagues and I demonstrated in The Future of Solar Energy, and as many other studies have shown, net energy metering automatically shifts costs from consumers with distributed solar onto those without. Somehow this result has managed to become controversial, but it is simple arithmetic.”
 
Dr. Richard Schmalensee
  Retired Director, MIT Center for Energy and Environmental Policy Research
  Howard W. Johnson Professor of Management Emeritus and Professor of Economics Emeritus, MIT
  Public comment, Docket No. E-00000J-14-0023 (Dec. 15, 2016)
  Chair of multidisciplinary study The Future of Solar Energy (2015)

“In general, the Companies support most of the ROO and believe that it provides a reasonable approach in transitioning from retail net metering to valuing and compensating excess energy from distributed generation ("DG") resources. The ROO seeks to mitigate the impact on non-DG ratepayers from the continuing expansion of DG, yet still recognize the economic decisions of DG ratepayers.”
 
Tucson Electric Power and UNS Electric
  Exceptions to Recommended Order and Opinion, Docket No. E-00000J-14-0023 (Nov. 15, 2016)

In the media

From the start, Jibilian’s order signals a tectonic shift in the Arizona solar market, calling unequivocally for the end to net metering.

“Net metering, and the banking of [distributed generation (DG)] exports associated with net metering, should eventually be eliminated and replaced with a mechanism for the direct purchase by utilities of DG exports,” Jibilian wrote in the her recommended order.

In upcoming utility rate cases, the longstanding NEM retail rate credit must be replaced, and “[t]he value of DG exports should be used to inform compensation rates to be paid to DG customers for their exports.”

Herman Trabish, Utility Dive
  Why Arizona's long-awaited value of solar schemes please no one (Oct. 24, 2016)
An Arizona judge has recommended that utility regulators scrap the state’s current retail-rate net metering policy for rooftop solar customers, and instead credit customers based on short-term valuation methods. The order is part of the Arizona Corporation Commission’s value-of-solar proceeding that seeks to end protracted policy battles over distributed solar in the state.

For two years, regulators have delayed acting on contentious proposals to raise solar rates filed by Arizona Public Service, Tucson Electric Power and UNS Electric until the overarching value-of-solar (VOS) docket comes to a close.

Julia Pyper, Greentech Media
  Continued Uncertainty as Arizona’s Value-of-Solar Proceeding Nears an End (Nov. 1, 2016)


 Download (PDF)