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Why APS’ proposed use of ratepayer dollars to monopolize solar market is wrong

Libertarians are not particularly fond of regulated monopolies. We favor free markets. We disagree with regulated monopolies using captive ratepayer dollars to inhibit individual choice.

For the first time anyone can remember, people now have the choice to purchase electricity from the utility or use their own. Technology and economics have combined to make rooftop solar a reasonable option for consumers, and 30,000 Arizonans have made the choice to go solar.

Whether you go solar is completely up to you, but as a consumer you now have the option to do business with private companies to power your home. And tens of thousands of Arizonans are signing up and saving money for their families all across the state.

Enter the regulated monopoly.

After asking the Arizona Corporation Commission to tax rooftop solar into oblivion last year, and failing, Arizona Public Service now wants to get into the rooftop solar market. On the surface that sounds like a great idea. On the surface it seems as if APS has changed its mind about rooftop solar. But that’s not really the story.

APS wants to offer rooftop solar on the backs of its ratepayers, collecting the cost of the program and a 10 percent profit from all APS ratepayers. Problem is, there are plenty of private companies providing rooftop solar to residents, at no cost to Arizonans who don’t have solar. The market is doing well, despite APS’ many attempts to eliminate competition. But when APS uses ratepayer dollars and guaranteed profits to join the solar club, it gives the utility the opportunity to undercut and drive these private companies out of Arizona.

The result — expansion of the monopoly for APS.

If APS really wants to enter the solar market, then it should form an independent, unregulated company that does not rely on recouping its costs from ratepayers and a guaranteed rate of return. Have at it. Let everyone compete.

The rooftop solar market represents the first time the folks at APS have had any real competition. And it’s not just from one or two companies. There are lots of eager businesses looking to sell you a rooftop solar system, and that’s a good thing. It keeps prices low. It’s a new industry that provides jobs. It’s a new industry that challenges the status quo. And it scares the daylights out of APS.

Libertarians believe a lack of competition perpetuates the status quo and stifles innovation in both politics and the private sector.

As a regulated monopoly, APS is guaranteed a 10 percent rate of return from the Arizona Corporation Commission. If you’re an APS customer you can’t fire them and hire someone else to provide your electricity. If APS is allowed to use those captive ratepayer dollars to drive private rooftop solar providers out of business, you won’t have any choice in the rooftop solar market as well.

As a Libertarian I think any company has an absolute right to get into the rooftop solar market. But the utility monopoly does not have the right to use the monopoly model to drive competitors out of business. I like solar, but if you’re an APS ratepayer you should not be forced to subsidize what should be a private sector endeavor.

I say, play fair or don’t play at all.

— Barry Hess is the Libertarian Party candidate for governor and the vice chairman of the Arizona Libertarian Party.

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