Court Rich, cochair Rose Law Group Renewable Energy Department, Jason Rose, spokesman for TUSK, explain net metering dispute
The current fight over solar power in Arizona is taking on epic proportions as attack ads pop up, accusations fly, and unlikely alliances form. The outcome of the battle between Arizona Public Service Co. (APS), the state’s largest electric utility, and the private solar industry could influence the development of solar both in the state and the country.
The controversy boiled over last week when APS submitted a new pricing plan proposal for solar power customers to the Arizona Corporation Commission (ACC), the state’s utility commission. Critics fear the new plan will destroy Arizona’s blossoming solar power industry and cost thousands of jobs.
Known as “net metering,” in most states with significant or growing solar power use, large utilities are required to buy unused solar energy from residential customers and send it through the grid to non-solar customers. Additionally, in states like Arizona, utilities are required to pay a retail price for excess residential solar power, as opposed to the lower rate paid to industrial providers.
The new plan proposed by APS would give residential solar customers two options: “net metering” or “bill credit.” Under the new net metering option, customers would continue to be compensated at current rates, but would have to pay an extra charge for their use of the power grid. This would amount to an extra charge of $50 to $100 per month.
Under the bill credit option, solar customers would be compensated by a bill credit where the rate would be the same that APS pays industrial power generators, a drop from about 12 cents per kilowatt hour to around four cents.
Current solar customers and those who apply before October 2013 will be given a 20-year grace period before the measures take effect, to help offset their investment in solar power.
Critics say that either way, the proposed change essentially amounts to a “solar tax,” and will destroy Arizona’s solar energy development.
As the nation’s leader in per capita solar energy with over 18,000 current residential solar customers and 10,00 solar-related jobs, there is much at stake for both sides riding on the ACC’s decision.
APS advances several arguments for the change in rates paid to and by residential solar customers. For one thing, APS claims that net metering, as it is, without the added monthly charge, is “cost shifting.” In other words, according to APS, when using solar power, many residential customers avoid paying fixed costs and surcharges paid by non-solar customers that help to maintain the grid.
APS argues that solar customers benefit from a reliable grid when they do not use solar, for example, at night, in the rain, and when they need more power than their solar systems are producing. Solar customers also use the grid to sell power back to the company.
According to APS, when solar customers do not pay for their use of this infrastructure, non-solar customers end up paying higher prices, resulting in a cost shift that APS considers unfair.
The Arizona solar industry has compelling arguments of its own as to why the proposal should be denied by the ACC. The industry has put forth a study that concludes that APS will benefit greatly from savings related to lower maintenance costs and a reduction in the need to build new power plants.
The industry also claims that by effectively placing a tax on any new solar systems after October, APS’ new plan will devastate the nascent Arizona solar power industry and its 10,000 workers.
Critics also claim that APS is just looking out for its bottom line as it is expected that there will be over 50,000 residential solar customers in Arizona by 2016.
“Studies show net metering is not a cost-shift. APS is talking about it because solar causes people to buy less of what APS is selling,” says Court Rich, Chair at Rose Law Group Renewables.
The battle is getting increasingly heated as a new ad attacking solar energy was posted on the web and appeared on local cable TV stations. The ad promotes AZSolarFacts.com, a non-profit organization backed by 60 Plus, an advocacy group for conservative minded retirees.
“Current policies aren’t fair because solar users are paid five times the market rate. Those costs are passed on to those who don’t have solar,” claims the three-second ad. “The average home solar system adds $20,000 in costs for customers who don’t get the benefits.” The ad or website fail to cite reliable research to back these claims.
What has leaders in Arizona angry is not the poorly researched information in the ad, but who is behind it. Even though APS has denied any involvement with the ad, several news outlets have uncovered that both 60 Plus and APS use the same political consultant.
APS’ move has produced some unusual alliances.
“[APS views] the recent election of an all-Republican ACC as an opportunity to kill the independent solar market in Arizona,” said Jason Rose, spokesperson for Tell Utilities Solar Won’t Be Killed (TUSK).
TUSK, a new organization formed by former Arizona Republican Congressman Barry Goldwater, Jr., believes that the Republican ACC will come out on the side of solar.
“We have no greater resource than our sun,” Goldwater states on the TUSK website. “We can’t let solar energy—and all its advantages and benefits it provides us—be pushed aside by monopolies wanting to limit energy choice. That’s not the conservative way and it’s not the American way.”
If what has occurred in other states is an indicator, Goldwater may be correct. In Georgia, the Tea Party aligned itself with solar energy to force the Public Utility Commission (PUC) to offer more solar net metering. In Idaho, the PUC rejected a plan by a utility to end net metering. Other states like Kansas and North Carolina are also supporting renewable energy.
In states such asCalifornia and Arizona, however, the future of solar is still in question.