Solar v Utility battle resumes in Arizona

After a year’s hiatus, the fight between Arizona’s biggest utility company and the state’s solar industry is in full swing again.

The Arizona Corporation Commission voted 3 to 2 this week to set a hearing on proposed rate hikes for solar customers of Arizona Public Service, the state’s biggest publicly-traded utility company.

APS was able to implement a fee in 2014 that averages $5 per month for rooftop solar customers connected to the APS grid. That was far shy of the fees the company wanted to charge. So, APS is trying again. The company proposes a fee structure that would cost new solar customers an average of $21 per month, significantly diminishing the cost savings homeowners can realize when they make the switch to solar power.

The commission decision defies staff recommendations and a decision from an administrative law judge earlier this year that the discussion should wait until APS files its next rate case in June of 2016. Commissioners argued that waiting for APS’s next rate case discussion would create too much uncertainty. Solar advocates say the decision to hear the proposal now creates uncertainty for the solar industry.

“The solar industry and customers considering solar are guaranteed to face two years of uncertainty about the future as we fight this increase and then again fight the additional fees and charges that will undoubtedly be proposed in the rate case,” said Mark Holohan, President of the Arizona Solar Energy Industries Association. “We are disappointed that the Commission will not provide ratepayers with the same level of regulatory certainty that the Commission provides utilities,”

The last battle between APS and the Arizona solar industry was long and ugly, lasting nearly a year and resulting in accusations that the utility used dark money to secretly fund fictitious grass roots groups opposing net metering and supporting increased fees for solar customers. APS never answered the accusations.

The utility argues that customers who install rooftop solar are costing the company and, in turn, other ratepayers. In order to offset the cost shift, APS says it needs $21 a month from solar customers. Solar advocates site numerous studies showing that distributed solar generation saves utilities on infrastructure expenses, providing value instead of expense to utilities.

The two sides will begin arguments soon and there is no definitive decision date from the corporations' commission.