(Editor’s note: Posting opinion pieces does not necessarily reflect the opinions of Rose Law Group.)
The Arizona Corporation Commission today (Nov. 13) is expected to hear a request from Arizona Public Service, the state’s largest power utility, to curtail the amount of money power utilities pay for residential rooftop solar power.
The decision could have ripple effects across the state and perhaps the country as Arizona is a national leader in solar power generation.
The commission would be wise to delay a decision until APS’s regular rate increase review in 2015, which would give the state Legislature and perhaps the Congress time to craft a legislative solution rather than a one-off regulatory decision based on one large utility’s belly aching.
The problem for APS, and presumably all power utilities, is that the rapid rise of rooftop solar, spurred by government rules and subsidies, is pinching utility profits.
Homeowners who install solar panels on their roofs generate their own power during the day, sometimes so much that it exceeds the amount of power the homes are using. In fact, it can be so much that even when power use drawn from the utility power grid is deducted, the home at the end of the year has generated more power than it used and gets a payment from the utility at retail power rates (rather than market wholesale rates, which are what power companies pay each other for power).