Solar advocates do battle in Arizona (again)

By John David Baldwin on May 2, 2015

The board of the Salt River Project (SRP) provides electrical power to nearly a million retail customers in the state. In February it voted to establish a new “demand charge” on customers who are also solar homeowners. This charge amounts to a $50-a-month rate hike for the average solar customer’s energy bill. Only those who signed solar contracts prior to the December 2014 introduction of SRP’s proposal would not have to pay the monthly charge. This decision occurred despite the fact that, according to VoteSolar, a utility’s demand charge typically applies only to industrial customers. The vote went through despite hundreds of protesting solar users who appeared at a meeting by the board to plead with SRP not to approve the demand charge. The protesters complained about being “duped” and “done wrong” by the utility.

If you experience a feeling of déjà-vu after reading the above paragraph, you should. In November of 2013, another Arizona energy provider, Arizona Public Service (APS), succeeded in its attempt to get the Arizona Corporate Commission (ACC), the regulator of the state’s private utilities, to allow APS to add a fixed fee to solar homeowners’ monthly electric bills. However, the ACC permitted a fee of only $.70 per kilowatt-hour per month for solar users, rather than the much higher amount – at least $50 per month – that APS had originally asked for. In other words, the adopted resolution means that the owner of a 10-kilowatt residential solar system pays a monthly surcharge of $7.00, and the owner of a (more typical) 7-kilowatt system pays, roughly, an extra $5.00 per month. (In addition, APS has recently asked the ACC for approval to raise the grid access fee – which had already been set in 2013 at $5.00 for all customers – to $21.00 for new solar customers only.)

The reason that SRP was able to go through much the same process that APS went through over a year ago, but with a very different result, is that SRP is a government-created public utility, rather than a private utility. It is not regulated by the ACC. Because of this, there is no commission to reject or modify SRP’s plan; only the solar users themselves spoke out. Unfortunately, their protests were ignored. As is usual, the new charge was presented to the public not as being in the financial interest of the utilities themselves, but as an attempt to level the playing field in favor of non-solar customers, as if solar customers were somehow not “carrying their weight” within the grid and ignoring the grid benefits of solar all together.

The largest solar provider in America, SolarCity, has filed a suit in Arizona federal court against SRP over its decision to approve the demand charge. SolarCity claims that the charge “eliminates the economic value to customers of generating their own power,” and is designed to maintain the utility’s status as a monopoly within its area of service. (SolarCity also says that, because of SRP’s previous agreements to purchase solar power from several large-scale solar projects in the state, the utility may be attempting to use the charge as an incentive to would-be solar customers to obtain their power directly from those projects, rather than from installing panels on their rooftops.) The company claims that, since SRP first introduced the plan in December, applications to SolarCity for solar panels in that area have dropped by 96 percent.

We will keep you updated on this and similar stories as they unfold.