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APS solar proposal falls short for Arizona

Dem Corporation Commission candidates question Republicans’ commitment to solar energyArizona Public Service has been granted monopoly status to provide power in certain parts of Arizona. It’s also a publicly traded company and has a fiduciary obligation to maximize profits for shareholders.  This may lead the company to pursue policies that are in its interests but not those of its ratepayers. 

This dynamic is on clear display as APS now works on their response to the impacts created by the Arizona rooftop solar market. By its own admission, its customers’ adoption of rooftop solar is eating into its profits, and potentially its stock price. 

 As the public is exposed to a debate between APS and solar advocates, some historical perspective might be helpful. 

While serving as a Republican in the Arizona Legislature, I believed that in the 21st century Arizona’s economic future would benefit by harnessing its greatest natural resource — the sun — to become a national leader in the solar market. But APS nearly always opposed efforts to allow a vibrant solar industry, because the more energy efficient customers become, the harder it is for APS to reach its profit. The utility portrays itself as pro-solar because solar has broad public support. Nevertheless, they have only carried out projects required of them by law.

Their latest proposal that would undermine rooftop solar in Arizona would undoubtedly be detrimental to the livelihoods of the 10,000 individuals employed by the Arizona solar industry. So, a growing economically viable industry in Arizona is at risk, at a time when Arizona is trying to rebuild its economy and create healthy business competition. The key word here is “competition.”

One option in the APS proposal is the equivalent of a monthly tax/fee on solar customers. Initial indications are that this tax/fee would be $50-$100 or more for each solar customer.

Another option would offer solar homeowners a quarter of the current credit they receive, while APS would then sell that solar electricity that they did not create for a profit.

So far, APS proposals will eliminate the entire reason that retirees and families go solar, which is to take control over their energy consumption and plan wisely for their families’ future.

The solar industry is not asking for a new tax on Arizonans, just appropriate compensation from APS for rooftop generated solar energy. 

APS’ most persuasive point is that it should be compensated something for use of its power lines to transport new solar power. But let’s recall my original point. The state has granted them monopoly status and a guaranteed 10-percent profit. For that extraordinary right shouldn’t we ask for something in return, like allowing rooftop solar to grow in Arizona?  And what is magical about 10 percent?  Readers should ask, if the return were changed to something slightly less wouldn’t this entire debate be gone?

APS is also now fighting attempts to create a more deregulated market. I have some sympathy for this position. But if we didn’t have deregulation, shouldn’t we have some competition in Arizona via rooftop solar?

I am all for a win-win solution, in which APS and solar companies reach an agreement. But if APS insists on a win-lose as is currently proposed, their proposal must be rejected. As the nation turns its eyes to Arizona and how this debate will impact solar around the country, can we really believe that perhaps the sunniest state in America would be the one to eclipse the savings, promise, and choice of solar?

Lucy Mason, former state representative from Prescott.

3 comments

  1. The APS proposals certainly fall short of the best interests of Arizonans and certainly furthers the interests and the guaranteed profit of this regulated monopoly. But that is to be expected. Any other course of action would not have make good business sense.

    Randall Edington, APS executive vice president and chief nuclear officer, earned a total of $9.13 million in 2012. APS President/CEO Don Brandt received a total compensation of $11.5 million in 2012. His total compensation was $7.9 million in 2011. Who do you think is paying for this compensation?

    The new EPR-7 rate proposed by APS to the Arizona Corporation Commission requires residential solar-system customers pay the difference between the peak-demand APS retail rate of about $0.26 per kWh or more, and the wholesale rate of $0.04 per kWh, JUST TO USE the electricity that they generate from their OWN solar panels, when connected to the APS grid.

    Once again, under this rate, residential solar distributed-generation (DG) customers will be required to sell ALL of their generation to APS at the WHOLESALE rate and then pay the RETAIL rate for ANY electricity they use. I kid you not! They will pay $0.21 per kWh to APS on-peak JUST to use electricity they generate themselves.

    This rate (and also the APS-proposed ECT-2 rate) will certainly kill any incentives to use or install residential photovoltaic (PV) generating facilities.

  2. I agree with Mr. Whitlatch except on his final point. For some people it would be a disincentive to getting solar. But for many who see an ever escalating rate increase, it will be an incentive to go off the grid and abandon the utility completely. Technology is quickly bringing the cost down and increasing the reliability of off-grid systems. If you have natural gas, there is a new turn-key system with solar PV with batteries, solar hot water, and a natural gas powered generator that automatically starts when your stored power runs out in the evening or on cloudy days. Good bye, APS. Unfortunately, this leaves the utilities to serve only the least able to pay their ever-increasing rates. It is a vicious circle in which no one wins. It might get so bad that the likes of APS might have to revert to being a REAL utility, serving the needs of the public, rather than a cash cow for investors at the end of every quarter.

  3. Jon Findley, you are absolutely correct.

    Affluent Arizonans can install 8.8 kW (STC) of photovoltaic (PV) generating capacity for about $20,000. And, for double the cost, another $20,000 will buy 20 kWh (16 kW usable) of highly efficient LiFePO4 energy storage and 8 kW (with 200-500% short-time overload) of 240 VAC split-phase inverters for the storage system. A natural gas powered generator will nicely complete the system.

    Take a look at the Bosch BPT-5S Hybrid PV energy storage system, subsidized for consumers in Germany.

    Germany just broke its monthly solar power generation record once again. In July 2013, the grey-skied country logged 5.1 terawatt hours (TWh) of electricity from solar power, slightly better than the 5 TWh of electricity generated by wind turbines it produced in January 2013.

    Again, you are correct, the poor and lower middle-class (who finance the obscene compensation of APS executives) are the losers who cannot take advantage of free solar energy streaming onto their residential lot.

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