Help Stop APS from taxing solar

Please deny Arizona Public Service Company's Request to Reallocate Production Based Incentive Funding, docket number E-01345A-12-0290, scheduled to be considered in the Regular Agenda during the open meeting on November 13 and 14, 2013. Passage of APS's request would suppress the deployment of renewable energy in the areas serviced by APS and cement APS's status as a monopoly while profiting excessively from those who, despite being underpaid for their electricity generation, deploy grid-tired renewable energy systems.

10. Arizona Public Service Company (E-01345A-13-0248 ) - Application for Approval of Net Metering Cost Shift Solution.
***Note, the Commission intends to hear public comment on Item No. 10 on November 13, 2013 and each commenter will be limited to 3 minutes.***

11. Arizona Public Service Company (E-01345A-13-0140) - Application for Approval of its 2014 Renewable Energy Standard Implementation Plan for Reset of its Renewable Energy Adjustor.

Filed Date: 7/12/2013
In the matter of the application of Arizona Public Service Company for approval of net metering cost shift solution.

Filed date: 6/29/2012
In the matter of the application of Arizona Public Service Company for approval of its 2013 renewable energy standard implementation for reset of renewable energy adjustor.

Per Procedural Order dated 02/15/2013 docket #s E-01345A-10-0394, E-01345A-12-0290, E-01933A-12-0296 and E-04204A-12-0297 are consolidated

Per procedural order dated 09/28/2012 docket #'s E-01345A-10-0394 and E-01345A-12-0290 are consolidated

Spending by Arizona Public Service Co. and solar groups in a fight over net metering may be getting a review from the Arizona Corporation Commission.

Commissioner Bob Burns has asked APS, the state’s largest utility, as well as Tucson Electric Power Co., Unisource Energy and other electric companies to submit information into any potential involvement in bringing in third-party groups to lobby on the net metering issue.

In his letter to other commissioners, Burns also requested information from the solar companies.

His major concern is that utilities are using money from ratepayers to fund ads, and finding out whether the utilities will try to recover those funds through their next rate increase.

APS has said it has pushed money to two outside groups, 60 Plus and Prosper, that have been running ads attacking several solar industry companies.

The Arizona Solar Energy Industries Association last week called on the ACC to investigate spending by the utilities on the outside groups.

The ads were in response to a fight over how much solar customers are paid by APS for their excess power, a process known as net metering. APS officials spent six months meeting with solar companies in discussion of the process, saying they were shifting costs from solar customers to non-solar customers.

Solar companies that are based in the state or have large operations here have mounted a counterattack with television ads of their own aimed at promoting the program and solar in general.

The ACC is set to discuss what to do with net metering, if anything, in November.

APS Proposal To Tax Solar Energy Gets Big “No” From Arizona Corporation Commission Staff



The staff at Arizona Corporation Commission has issued a memo advising Commissioners to reject both of APS’ proposals to kill competition by taxing solar savings.

According to their report:

“Staff recommends that the Commission not approve either of the NM cost-shift solutions proffered by APS in the instant application for the reasons discussed above. Instead, Staff recommends that no changes be made at this time, but instead, this issue be evaluated during APS’s next rate case.”

The staff report also said the APS proposals yield unwarranted increased revenue to APS without giving money back to the people.

ACC Staff’s report comes after a July 16 letter by Commissioner Gary Pierce to Staff requesting help in analyzing APS’ net metering proposals, primarily due to Staff’s “experience in analyzing costs and revenues related to rate cases.”

APS seeks to end net metering, a process by which rooftop solar customers are fairly compensated for excess electricity they send back to the grid.

The utility’s reaction to the report is stunning in that APS fails to mention its plan was outright rejected. Here is an excerpt from APS’ statement:

“We stand by our initial proposal and we look forward to working with the commissioners, staff and other stakeholders on
developing the right solution for our customers.”

APS has taken spin to a whole new level, a complete departure from reality.

About T.U.S.K
T.U.S.K (Tell Utilities Solar won’t be Killed) was formed to stand for energy choice and energy independence. T.U.S.K. Chairman Barry Goldwater Jr. said, “The Corporation Commission staff doesn’t buy APS’ false claims and let’s hope our Corporation Commissioners heed the expert advice of their staff.”

To learn more about T.U.S.K. visit www.dontkillsolar.com

T.U.S.K. believes that rooftop solar is similar to a charter school—it provides a competitive alternative to the monopoly. Monopoly utilities aren’t known for reducing costs or for driving business innovation, but the Arizona solar industry is. Solar companies have a track record of aggressive cost reduction in Arizona. The more people use rooftop solar, the less power they need to buy from the utilities. Energy independence for Arizonans means smaller profits for the utilities, so APS is doing everything it can to stop the spread of independent solar. Recently, APS has proposed a plan to tax rooftop solar out of existence.

Ian S wrote: »

This is good for now. I would still urge folks to contact the commissioners. I attended a meeting this summer where Susan Bitter Smith was the speaker and she gave some tips on contacting the commission. First and foremost, don't rant! That, understandably, turns them off.

Please deny Arizona Public Service Company's Net Metering Cost Shift Solution, docket number E-01345A-13-0248 submitted on July 12, 2013, scheduled to be considered in the Regular Agenda during the open meeting on November 13 and 14, 2013.

Alteration of net metering should not be considered during this early stage of building out renewable energy systems. Adoption of APS's proposals would work against the incentive programs currently in place for renewable energy and thus be contrary to public policy. Arizona offers property and sales tax exemptions and an income tax credit. The federal government offers a tax credit available to rooftop solar installations. Any consideration for altering NM should be postponed until APS acquires 15% of its energy for retail loads from renewable sources as per Arizona’s Renewable Energy Standard Tariff (REST). APS's application is premature.

Continuing to apply net metering unaltered to commercial and industrial customers (page 2, line 15) while arguing that NM for residential customers must be altered to pay for costs of the grid, is unfair. The result of APS's proposals would be to discourage residential distributed energy systems in favor of commercial, industrial and utility scale systems. It suggests APS's intention is to suppress residential renewable energy systems.

Direct cash incentives paid by utility companies should continue to be phased out as per REST compensating for the declining cost of photovoltaic panels. No alteration should be made because it is working as intended.

Figure 1 on page 5 labeled Typical Customer Usage shows an approximately 2 kW power consumption in the wee hours of the morning. My electric power consumption at such times of the night when I am asleep is about 20 W, one thousand times less than APS asserts is typical. I have a hard time believing that clocks, phantom loads, lights and refrigerators typically consume 2 kW at night. Perhaps APS's "Typical Customer Usage" includes more than homeowners, such as street lights, businesses and industry. Integrating the curve shows their typical customer is consuming about 73 kWh/day which is far in excess of the typical residential usage of about 30 kWh/day. I also wonder if this "Typical Customer Usage" is typical of homeowners with grid-tied photovoltaic systems who are more inclined to conserve power. Things can be done to reduce nighttime loads on the grid, such as using battery powered clocks, the switch on a power strip to turn off phantom loads, LED lighting and timers to force refrigerators to operate only during daylight. Perhaps APS should advocate educational programs to reduce wasted power instead of increasing rates to people who use less of their product.

On page 4, line 19, APS asserts a cost-shifting issue:

"And because Net Metering allows customers installing rooftop
solar to avoid paying for infrastructure they rely on and
services they use, these installations come at a cost to APS’s
remaining non-solar customers."

If cost-shifting is even occurring, the magnitude contributed by residential distributed energy systems is presently insignificant, limited to 5% as per REST. Again, APS's application is premature.

According to APS's figure 2 on page 6 the vast majority, 94%, of the residential photovoltaic electricity is consumed at the residence where it is generated placing no cost upon APS. From the chart, I estimate 6% is export energy. APS sells that export energy to a neighbor at full retail price incurring no cost to generate the electricity. The distribution cost is nothing more than one residential transformer, some aluminum cable and a power pole or two meaning APS profited well from that sale. In figure 4 on page 8, the typical system shown does not generate an annual surplus of electricity because the system is not sufficiently sized and because clouds reduce generation (the chart is for sunny day power generation). The customer with the grid-tied PV system would pay APS for the power he used from the grid at the full retail price (the green area labeled "APS provides power") and thus already pays for his use of the utility grid. In actuality residential distributed energy reduces the amount of electricity APS sells to customers, and APS is trying to spin this fact by falsely claiming cost-shifting.

APS's claim on page 9, line 24 that the cost-shifting amounts to $1,000 per year per rooftop solar system is contradicted by their own data. For 94% of the generated PV power the inverter is only using the grid to synchronize its output waveform. The inverter is not drawing the power that it outputs from the grid. On page 6, line 14, APS claims, "It permits them to avoid paying almost their entire electric bill." This is clearly false for the typical customer shown in Figure 2 because he is consuming considerably more power than he is generating. Figure 5 on page 8 shows the average residential rate at $.14 / kWh. If an average residential customer consumes 30 kWh/day, then his annual bill is $1,534. APS is arguing that 65% of the bill is cost-shifted when they provide only a small fraction of the net power to a house with a grid-tied PV system. On average, a residential grid-tied solar system reduces APS's revenue because the customer uses less of their electricity.

If APS really wanted to be fair, they would argue for a metering system that detects where the energy is generated and where it is used.

A. Electricity generated by the homeowner's PV system and used by the
homeowner would not be billed.
B. Electricity generated by the homeowner's PV system and sent to the grid
would be purchased by APS at some fixed rate ($.06 / kWh)
C. Electricity generated by APS and used by the homeowner would be billed at
the full retail rate.

Instead APS is trying to force people to pay them for the power they generate and consume in their own home.

The Net-Metering Option forces customers with residential solar systems to use the ECT-2 rate which incurs a monthly service fee between $50 and $100 or about $1,000 / year. This would be a massive rate hike to homeowners who reduce their use of APS's product by going solar which is not fair. People who use APS's product should pay for it while those who do not, should not.

The Bill Credit Option proposes to pay customers with rooftop solar at the market rate for electricity from Palo Verde Nuclear Power Plant, which would probably range between 3 and 4 cents per kWh. Solar power does not have the same costs as nuclear power. Nuclear Power is heavily subsidized by the federal government conducting research and development, the Price-Anderson Act which limits the liability in the event of a nuclear accident and the federal government having the burden of disposal of radioactive waste. The cost of a solar system includes all of its costs unlike nuclear. What will become of this market rate when Palo Verde NPP eventually shuts down? The value of solar power should be determined by its own unique characteristics. 3 or 4 cents / kWh is far below the cost and value of solar generated electricity. APS wants to charge the full retail rate for all the power the residence consumes even when it consumes the power from its own solar system.

Approving either option would discourage if not outright halt the installation of residential solar systems and allow APS to capture solar incentives for its own profit from the few who would install them. These are not the intentions of current public policy for renewable energy systems.

At Page 14, line 3, making the grandfathering clause not transferable to a new customer at the same premise would devalue residential solar systems placing an additional financial burden on the customer.