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Arizona Solar Center Blog

Commentary from Arizona Solar Center Board Members and invited contributors.

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Déjà Vu

Seems like we have been here before--the rooftop solar debate in Arizona is being branded as a debate about fairness.

But fairness for whom?

The SRP Board of directors hired Ashley Brown, a Harvard University consultant and former regulator from Ohio, to orate on management’s proposal to restore “fairness” to its utility pricing system by imposing new fees on solar customers.

Appearing in a pre-recorded video that was broadcast to an audience of nearly 700 SRP customers during last week’s open meeting on the new proposed charges, Brown summed up fairness as the utility earning a fair return on its investment through a pricing plan that reduces the burden on non-solar consumers.

Brown followed that scripted video with an editorial in the Arizona Republic where his lead paragraph suggests solar companies are the ones being unfair. “The proposed changes have been unfairly criticized by the rooftop solar companies for reducing utility support for rooftop solar,” he wrote in his lead.

For the second time in 18 months fairness is being defined from the utility point of view.  Maybe someday fairness will have a broader definition and include fairness for all.

A recent article by the Arizona Republic's Ryan Randazzo highlights how fairness sidesteps solar customers: Randazzo wrote that under the current SRP management proposal, a rooftop solar homeowner could actually wind up paying a higher bill than a homeowner without solar.

To add insult to injury, ratepayer money is being spent by the utility to promote its questionable definition of fairness, a definition that would now shortchange the very same customers that the utility not that long ago encouraged to spend large amounts of money to invest in solar and inject clean electrons into our electrical system, thereby benefiting the grid, the economy, our air, our health.

This about-face raises the following question: Where is the fairness in a system that will penalize tomorrow what they incentivized yesterday?

Consider that a previous SRP Board approved rules that mandated 20 percent of their retail sales come from sustainable resources by 2020, including rooftop solar.  Surely SRP did the math to determine the consequences of such a policy, no?

Their customers did.

Randy Miller is an SRP customer.  Miller did the math before investing thousands of dollars in rooftop solar. Over the past eight months Miller’s solar has supplied 98.5 percent of his household electricity consumption. Yet, under the new proposal from SRP his bill will go up 300 percent.

rooftop-solar-newbuild.jpg

Where is the fairness in that system?

Brian Boyette said he was given an incentive by SRP to go solar, and that played a large part in his decision to invest in a rooftop solar system for his home.  With solar he has been able to reduce his utility bill to an average of $75 a month.  SRP’s proposal would increase his monthly bill an average of 116 percent to more than $150 a month.

Where is the fairness in that system?

Rose Marie Ost is an SRP customer who entered into a solar lease agreement in good faith that it was the right thing to do. She feels duped by her utility that wants to change the rules in the middle of the game.

Where is the fairness in that system?

Tim Casey has lived in SRP territory since 1977.  Casey believes he was misled and is now being abandoned by SRP after he partnered with the utility on a rooftop solar system in 2010.

There are more than 15,000 more stories that call the fairness of this proposal into question.

SRP wants to establish a new rate class for rooftop solar without any consideration for the solar customer’s considerable investment.  The utility argues on the one hand that it should be guaranteed a fair return on its investment in the grid, and on the other hand that this guarantee does not extend to its solar customers that they encouraged to invest in solar.

But the fairness debate goes beyond existing customers. What about new solar customers?

During the last fairness debate in 2013 over APS’s net metering charges, utility staff estimated that 80 percent of energy generated by a rooftop solar system is used directly by the homeowner and never goes back onto the grid.  Eighty percent of a rooftop solar output has no impact on the grid.

A truly fair program would treat that 80 percent no differently than a customer who turns off the lights or raises their thermostat. Customers who generate their own electricity and use it onsite should absolutely have a right to purchase less power from their utility without financial penalty.

If fairness is the end game, shouldn’t the definition of fair be fair?

Jim Arwood
Communications Director
Arizona Solar Center

Question:

What is fair?

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Comments 3

Jim Stack on Sunday, 15 February 2015 07:35

Yes lots of personal stories of home owners trying to do the right thing while also saving money. SRP should come out with new rate plan that are optional where owners can add some battery back up and help the GRID in the late evenings when they say they need help. The duck curve is real and there are a few hours in the morning and evening when loads are high and Solar PV is low.

Given the right incentives customers will take action to help work together again. With a small battery back up system it can pay off for all of us and be flexible for any future changes. Rate hikes are fair but they have to be applied to ALL customers in the same way.

Yes lots of personal stories of home owners trying to do the right thing while also saving money. SRP should come out with new rate plan that are optional where owners can add some battery back up and help the GRID in the late evenings when they say they need help. The duck curve is real and there are a few hours in the morning and evening when loads are high and Solar PV is low. Given the right incentives customers will take action to help work together again. With a small battery back up system it can pay off for all of us and be flexible for any future changes. Rate hikes are fair but they have to be applied to ALL customers in the same way.
Peter Schumann on Sunday, 15 February 2015 16:26

Yes Jim!! This is totally bizarre!!
History form my perspective has shown the basis of commerce is " user pays"!! The more you use the grid power the more you pay. SRP logic is mired in some frame of reasoning that solar "self gen'ers" are getting something for nothing. Yet, as you pointed out out, it was a different story yesterday!!
Frankly, SRP have turned out to be either the most unimaginative and repressive organization I've seen. Using their monopoly position ! The whole "openness" of listening to their constituents was just a charade! They'd already made their minds up.

However, there may be a little light at the end of a gloomy tunnel for current (and future) Solar Self Genners!! I'm working on a solution that will overcome the SRP "demand" charge. More later when I have the prototype operational.

Yes Jim!! This is totally bizarre!! History form my perspective has shown the basis of commerce is " user pays"!! The more you use the grid power the more you pay. SRP logic is mired in some frame of reasoning that solar "self gen'ers" are getting something for nothing. Yet, as you pointed out out, it was a different story yesterday!! Frankly, SRP have turned out to be either the most unimaginative and repressive organization I've seen. Using their monopoly position ! The whole "openness" of listening to their constituents was just a charade! They'd already made their minds up. However, there may be a little light at the end of a gloomy tunnel for current (and future) Solar Self Genners!! I'm working on a solution that will overcome the SRP "demand" charge. More later when I have the prototype operational.
Guest - Terry Finefrock on Monday, 16 February 2015 09:56

Am weary of the greedy and selfish regulated utility manipulations....they are simply trying to protect the interests of the shareholders and highest AVERAGE wage of any industry in the state of AZ....the consequence of the ACC's rate structure, guaranteed recovery of ALL costs, even if excessive, AND profit(ROR)as a percent of cost.....time to demand that the elected commissioners do what's right for ALL ratepayers, not the Utility shareholders and Union employees, change the rate to have the Utilities EARN their generous compensation via delivery of COST REDUCTIONS, not increases, to ratepayers...eliminate the guaranteed profit(ROR), assure tht utilities have skin in the game when proposing capital investments, IRP's, when selecting generation and consequent delivery technology and costs, a customer centric continuous improvement culture..if reduce costs by 10% reduce rate/surcharges by 6%(Ratepayer value), shareholder utilities and employees EARN 4%....if bid the territories without requirement that they use existing assets very likely would include much greater LOCAL solar, storage, avoid average 4.8%/year increase in utility revenues(ratepayer costs), lower rates over next 20-30 years.

Here's an idea: http://tucson.com/news/opinion/column/guest/economic-development-start-with-a-tucson-metropolitan-microgrid/article_4b6733da-98bf-5c8b-aaac-fc3f20ddf77b.html

Am weary of the greedy and selfish regulated utility manipulations....they are simply trying to protect the interests of the shareholders and highest AVERAGE wage of any industry in the state of AZ....the consequence of the ACC's rate structure, guaranteed recovery of ALL costs, even if excessive, AND profit(ROR)as a percent of cost.....time to demand that the elected commissioners do what's right for ALL ratepayers, not the Utility shareholders and Union employees, change the rate to have the Utilities EARN their generous compensation via delivery of COST REDUCTIONS, not increases, to ratepayers...eliminate the guaranteed profit(ROR), assure tht utilities have skin in the game when proposing capital investments, IRP's, when selecting generation and consequent delivery technology and costs, a customer centric continuous improvement culture..if reduce costs by 10% reduce rate/surcharges by 6%(Ratepayer value), shareholder utilities and employees EARN 4%....if bid the territories without requirement that they use existing assets very likely would include much greater LOCAL solar, storage, avoid average 4.8%/year increase in utility revenues(ratepayer costs), lower rates over next 20-30 years. Here's an idea: http://tucson.com/news/opinion/column/guest/economic-development-start-with-a-tucson-metropolitan-microgrid/article_4b6733da-98bf-5c8b-aaac-fc3f20ddf77b.html
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