Arizona Public Service will soon start installing solar panels on residential homes after the state’s energy regulators paved the way for it to enter the residential solar market.
The Arizona Corporation Commission today approved APS’s proposal to generate 10 megawatts of energy through residential solar systems. This allows APS to compete with private rooftop solar companies, which argued against the project.
The final program is a scaled-down version of APS’s original plan to produce 20 megawatts of solar rooftop energy. Commissioners had expressed skepticism at the plan, particularly after commission staff concluded that the utility does not need the additional energy source to meet its renewable energy requirements.
But the Residential Utility Consumers Office, a small watchdog agency, said a pilot project would yield benefits if it targets low-income consumers who currently don’t qualify for a lease or cannot afford to buy a solar system.
RUCO added that a pilot project would also be useful in studying the integration of solar energy into the state’s electricity infrastructure.
APS eventually revised its proposal, limiting it to 10 megawatts and agreeing not to recover the costs through the state’s renewable energy standards, which means consumers won’t have to pay for it right away.
Instead, APS will seek to recover its expenses in its next regular rate case, which is scheduled for next year.
In this regard, APS’s final proposal hews more closely to Tucson Electric Power’s plan, which the commission approved last night.
Just like yesterday’s hearing, Commissioner Brenda Burns dissented from her colleagues.
She argued that, whether it’s 10 megawatts or 20 megawatts, APS does not need the additional energy source to meets its renewable energy requirements.
At the end of the day, APS will seek to recover its expenses, and if the commission approves that in the next rate case, it will add $28.5 million into the rate base “plus rate of return on megawatts that we don’t need,” she said.
But Commissioner Robert Burns said the project has merits.
His amendment became the vehicle to approve APS’s plan. He said he wouldn’t be offering his amendment if he thought it would harm ratepayers.
“I believe that this will in the long run benefit all of the ratepayers or I wouldn’t be doing it,” Robert Burns said.
The commission took pains to say it is technically not “approving” the proposal.
Instead, the panel’s official position is that it has “no objection” to the pilot project. That position shouldn’t be viewed as “pre-approval for rate making purposes in a future rate case,” the commission said.
By not objecting to the proposal, the commission is also not claiming that the project is “prudent.”
Staffers said since APS is not seeking recovery through the renewable energy standards surcharge, it technically does not need the commission’s approval to implement its residential solar program.
But Robert Burns said it would be wise to get the commission involved nonetheless. That way, energy regulators can keep an eye on the project.