Arizona solar compromise

Neither APS nor solar industry advocates thrilled with Arizona Corporation Commission’s net metering decision


Few recent solar policy issues have fostered as much controversy as the net metering battle in Arizona. On the one side, utility giant Arizona Public Service insisted it needed to charge its solar customers with additional fees in order to cover grid maintenance costs allegedly unfairly shouldered by nonsolar customers. On the other side, solar industry advocates railed against attempts to water down or eviscerate the existing NEM policies, claiming that any additional levies on solar users would deal a possibly mortal blow to the fast-growing residential PV market in Arizona.

Thursday’s compromise decision by the Arizona Corporation Commission–which left NEM in place but imposes a small monthly fee on new solar customers starting in January–left neither side thrilled with the outcome. Local, national, and cleantech media outlets including PV magazine, Greentech Media, Solar Server, and PV Tech reported on the ACC hearings and final vote en masse, but there was some divergence in how they positioned the “who won, who lost” fallout from the decision.

Here’s how Reuters led its story:

“Arizona on Thursday dealt a blow to the state’s largest utility by approving a monthly fee on customers with solar panels that Arizona Public Service said was not enough to offset the costs that those rooftop systems have heaped on its remaining ratepayers.”

A similar line was taken by AZ Capitol Times in its lead:

“In a blow to Arizona Public Service, energy regulators agreed late Thursday to a compromise proposal charging users of solar rooftop panels with a fixed fee of 70 cents per kilowatt. The new charge, which will begin next year, is only a fraction of what Arizona Public Service sought – which was to reduce savings from the solar incentive by roughly half.”

Yet the Arizona Republic/AZ Central lead suggested a different loser:

“The state’s rapidly growing solar industry suffered a setback Thursday when the Arizona Corporation Commission narrowly voted to impose an average $5 monthly fee on new solar customers’ bills to make them pay for using the power grid.”

Then there’s Associated Press, which led with the following:

“Arizona regulators on Thursday voted to adopt a roughly $5 monthly fee for customers of the state’s largest utility who install rooftop solar panels in a move that had the solar industry declaring victory over what it saw as an effort to topple its business.”

AP’s characterization of the industry “declaring victory” flew in the face of trade organization SEIA’s statement:

“While we applaud the ACC’s decision to keep net energy metering in place–and appreciate the Commission’s last-minute efforts to find a middle ground when it comes to new fees on solar customers–we are deeply troubled by today’s precedent-setting action. Imposing punitive fees on Arizona consumers–without first proving the need and demonstrating the fairness of these charges through a comprehensive, transparent rate case where due process is afforded–is patently unfair, jeopardizing future solar growth and job creation statewide.”

As for APS’s own press release, the spin cycle was in full effect:

“The Arizona Corporation Commission ruled today that Arizona’s net metering program should spread the cost of maintaining a reliable electrical grid more fairly among all APS customers. In a 3 to 2 vote, the ACC instituted a charge on future customers who install rooftop solar panels and directed APS to provide quarterly reports on the pace of rooftop solar adoption to assist the Commission in considering further increases…. 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.”

Patrick O’Grady of the Phoenix Business-Journal shared a quote by solar advocate Barry Goldwater Jr., which found the chairman of the Tell Utilities Solar Won’t Be Killed (TUSK) group not about to let the utility off the hook:

“While APS and its national trade association (Edison Electric Institute) spent many millions attacking rooftop solar, the Arizona Corporation Commission made no changes to net metering. The utilities and EEI showed just how far they are willing to go at any cost, and that is the legacy of the Arizona net metering battle–a major loss for APS and its allies.”

Social media has also been abuzz with reactions and comments about the ACC vote. Arizona resident and solar businessman Jeff “Solar” Spies of QuickMount PV, who attended the ACC hearings and commented on the record about his “disapproval of the unethical antisolar commercials being funded by APS,” posted his thoughts after the ruling via Facebook.

“I think the public comments helped keep the fees from being higher. The compromise net metering monthly fees reached between three of the ACC commissioners and solar lobbyists was considerably less than APS wanted, and significantly less that commissioners Gary Pierce and Brenda Burns were prepared to support. While these new monthly fees are not onerous, I ask myself, ‘have we started down a slippery slope to future higher solar taxes’?”

Renewable Energy World’s Jim Montgomery aptly summarized the grumpiness on both sides in his informative wrap-up piece:

“In the end, ACC seems to have split the difference: acknowledging the value of distributed-generation solar, while also trying to address a certain level of cost shift it causes. Proving, perhaps, the wise observation that a fair bargain leaves both sides unhappy.”