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TEP Rate Case and Net Metering Nearing End

It’s been a long road. Utilities like Tucson Electric Power have been trying to reduce competition from rooftop solar for many years, but we can trace this rate case back to March of 2015, when TEP put forth a proposal to gut net metering, an important policy that allows a one-to-one credit for any “extra” energy from a solar electric system that’s sent to TEP. (For more info on how energy flows in a grid-connected solar electric system, see our infographic).

This net metered solar electric system in Oro Valley, Arizona is connected to the TEP grid.

In that case, TEP proposed that customers should be credited about 55% of the retail electric rate for energy sent back to their grid, which would have upended the economics of rooftop solar. More perniciously, they also proposed an arbitrary date for this change of June 1st, 2015 in their application, without any approval by the Arizona Corporation Commission. This was in contrast to the ACC’s established precedent against retroactive rates, and no reasonable outside observer thought it likely that the ACC would approve that date. However, it cast a long shadow on the solar market. We objected strenuously. Many customers were concerned that they would not receive net metering if they installed rooftop solar. At Net Zero Solar, we had to both lay off co-workers and take pay cuts.

In time, it became clear that the ACC would not approve TEP’s proposals outside a rate case, and they withdrew their application, but continued to propose the retroactive net metering date, despite objection from many solar companies, as well clean energy advocates and local public officials. As the market realized it was unlikely that the ACC would approve retroactive rates, solar installation continued, although at a slower rate.

Fast forward to today. TEP’s rate case application proposed increased monthly fixed fees, steep “grid access charges,” a decrease in the amount paid for any extra solar energy sent back to their grid, and an increased larger solar meter fee. During the rate case, TEP slightly backed off, finally proposing a starting “export” rate of 10.7¢, a monthly “grid access fee” of $2.50 per DC-kW of installed solar electric capacity, and an increase to the meter fee for solar customers from $2.05/month to $3.50/month.

What do TEP’s revised proposals mean, if they were adopted? Based on extensive modeling we completed, it would take nearly ten years for some customers to recoup their investment in solar, with many customers taking much longer than that.

Under the new rates for solar customers proposed by TEP, simple payback times would drastically increase.

Hearings on the case were completed in mid-November, and those involved with the case have submitted their post-hearing thoughts. Next, the administrative law judge will write a recommended order and opinion (ROO), which will detail how she believes the case should be resolved, and everyone will have their last chance to share written thoughts with the ACC. Although we’d originally expected that the recommended order would be written by now and the ACC would consider the issue in February, that has not happened. We now expect our elected Arizona Corporation Commissioners will consider the ROO in their open meeting March 13th-14th.

Although this has become quite a long process, the good news is until the ACC makes their decision, TEP customers who apply for interconnection will be “grandfathered” into net metering for twenty years. For those who want to install rooftop solar electric systems, now is the time! This urgency is compounded President Trump’s tariff on solar modules, which will increase the cost of rooftop solar once we’ve installed our limited number of tariff-free modules.

If adopted, TEP’s proposed rates would not allow for a robust solar industry in Tucson. As you can read in Louis Woofenden’s testimony, it would take over ten years for most customers to recoup an investment in solar under TEP’s proposed rates, with payback times greatly increasing in the future. We’re hoping that the administrative law judge in this case will reject TEP’s draconian proposals, and take a common-sense approach that will allow rooftop solar to remain a viable option for TEP customers.

What can you do to help encourage the ACC to allow continued rooftop solar for TEP customers? Here are three suggestions:

1. Submit a Comment to the ACC

You can still make comments to the docket, online, at http://eservice.azcc.gov/Utilities/PublicComment, referencing Docket E-01933A-15-0322. You can also mail a comment referencing the same docket number to:

Arizona Corporation Commission
Docket Control Center
1200 West Washington
Phoenix, AZ 85007

We encourage you to make comments based on your own beliefs and values around rooftop solar, but some possible points are:

  I love the opportunity to generate solar energy locally, on my home! We need more solar, not less.

  TEP’s proposed extra charges for new solar customers would be a drastic change for rooftop solar in Tucson. Any changes should be made slowly, so that we can see the effects, and adjust as needed.

  I have invested my own money in a solar electric system to meet some of my energy needs. We need to maintain that energy choice for Tucson consumers. Large solar fields that cost all ratepayers shouldn’t be the only option.

  I understand that TEP and the ACC staff are proposing customers will only know how much they are paid for energy exported to the grid for ten years. As someone who chose to invest in solar with net metering, I’m not sure I would install solar with that much uncertainty.

  I don’t trust TEP’s analysis of the situation. All local installers (including Net Zero Solar) have found that TEP’s proposals will severely hurt the rooftop solar industry.

  As a current solar owner, I want to make sure that local solar installers are around to service my system in the future.

2. Share your Solar Story

We’re looking for folks to share on camera why they love rooftop solar, and why it is important to our community. If you’re interested, get in touch. You could also post something on social media. If you do, please tag us, so we can share it with others!

3. Support Pro-Solar Candidates

In 2018, ask candidates about how they will specifically support increased rooftop solar in Arizona. Solar is a no-brainer, no matter your political perspective!

Have more questions on this? Comment below, and please feel free to get in touch with us.

Lhasha & Russell Love Rooftop Solar

Russell Lowes and Lhasha Tizer have worked tirelessly for many years to fight for sustainable energy and contribute to the Tucson community. After taking steps to reduce the energy use of their home, they installed solar in March of 2013. Here is their solar story, along with their thoughts on the future of energy in Tucson.

You can read more of Russell’s thoughts on solar and energy storage here.

Are you interested in solar, or know someone who is? Did you know that TEP customers can still lock in net metering for 20 years, if they make the decision to install soon? Get in touch with us for details, 520-207-4053, or www.netzerosolar.net.

Sonya Chooses Rooftop Solar

Sonya installed solar on both her own home, and her rental property! See why she believes rooftop solar should be a big part of Tucson’s energy future.

James Loves Rooftop Solar

James “Cosmo” Cramer shares why he loves rooftop solar, and why he thinks it’s important for Tucson!

Rate Case Rundown

There’s a lot going on for solar in Arizona. With the end of net metering, our southern Arizona utilities have each proposed different policies, rate structures, and fees. Here’s a summary of the current status and what to expect in the future:

Tucson Electric Power

 

Can I still install solar with net metering?

Yes, until the Arizona Corporation Commission decides TEP’s rate case, customers can use net metering, and will be grandfathered for twenty years.

What are TEP’s current rates for rooftop solar customers?

Customers with solar electric systems can choose the Residential Basic Plan. This plan includes a monthly service charge of $13.00. Energy charges range between 9.9-12.3¢ per kilowatt-hour, depending on your monthly usage, and the time of year. You’ll also pay some taxes and fees, plus a fee for the bidirectional meter needed for net metering. That meter fee is $2.05/month or a one-time cost of $142.95 for residential customers, or less for commercial customers.

Although TEP has been advertising various rate choices, including time-of-use rates and demand rates, these rates don’t pair well with rooftop solar.
Read More

How Does Net Metering Work With My Electric Bill?

Here is how net metering works with your electric bill. We’ll be sharing more about how billing will work for systems without net metering in the future. TEP and SSVEC customers can still choose net metering. APS customers will not be able to use net metering starting the end of this month, and Trico customers are already on an export rate system.