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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.

What is TEP proposing for rooftop solar customers once their rate case is complete?

TEP is proposing increased fixed fees, steep “grid access charges,” a decrease in the amount paid for any extra solar energy sent back to their grid, and an even larger solar meter fee. For more detail on these proposals, see our blog post.

For a typical customer, these proposed changes would mean it would take well over a dozen year to recoup their investment in solar. Want to see how it would affect you? Try out our calculator.

What happens next?

The administrative law judge in this case heard public comment on this case, on June 26th. Hearings on the case will resume on October 23rd, 2017. After hearings are done, the law judge will write a recommended order and opinion (ROO). That ROO will be submitted to our elected Arizona Corporation Commissioners for a vote, likely in late 2017 or early 2018.

You can still make comments to the docket, online, at http://eservice.azcc.gov/Utilities/PublicComment, referencing Docket 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

A solar electric system in Tucson, Arizona

Trico Electric Cooperative

 

Can I still install solar with net metering?

No. On February 24th, 2017 the Arizona Corporation Commission voted to end net metering for Trico members.

What are Trico’s current residential rates for rooftop solar?

Trico’s customers currently pay $20 in fixed monthly charges under the standard residential rate. Energy charges are between 11.8-12.8¢ per kilowatt-hour.

Rooftop solar customers will be compensated at a 7.7¢ per kilowatt-hour “export rate” for any solar energy that’s not used immediately as it’s produced. They would also pay a $3.38 monthly fee for a “monthly data cost.”

What happens now?

Trico customers can still choose to go solar under these new rates. Because of the large difference between retail energy rates and export energy rates, it will be important for your installer to understand your specific energy use patterns. If at all possible, you should obtain interval data from Trico and your installer should carefully model the relationship between solar production and your energy use.

Sulphur Springs Valley Electric Cooperative

 
Can I still install solar with net metering?

Yes. SSVEC’s rate case is in process, but members can still use net metering until the rate case is resolved.

What are SSVEC’s current rates?

SSVEC’s residential members currently pay monthly service charge of $15.00, but this charge will rise to $18.00, $22.00, and $25.00 over the next three years. All members also pay various taxes and fees. Members who own rooftop solar electric systems also pay a monthly $2.70 net meter fee.

What is SSVEC proposing for the future for rooftop solar customers?

SSVEC has proposed an increased monthly fee of $35.00 for customers with solar, $10.00 more than other residential customers. They have also proposed a drop energy charges to 10.3¢/kWh. The biggest hit would come from the proposed drop in compensation for energy export, to 7.1¢/kWh, with this rate dropping about 10% each year. Rather surprisingly, they are also proposing there be no ten-year “lock-in” of the export rate, even the ACC directed utilities to implement this lock-in.

The bottom line for new customers is that it would take over fifteen years to recoup their investment in solar, if SSVEC’s proposals are approved by the ACC. For more information on the possible effects, see our blog post.

What happens next?

The hearing for this case was on July 20th. Interested parties will file two rounds of “briefs” by August 31st, and September 15th. When this is complete, the law judge in the case will write her recommended order and opinion, before sending the case to our elected commissioners. We expect that the Commission could consider the case as early as October.

Until the case is decided, SSVEC customers can still use net metering, and will be grandfathered for twenty years from the date of interconnection. Note that SSVEC is proposing increased monthly charges and decreased energy charges even for customers with grandfathering.

You can still make comments to the docket, online, at http://eservice.azcc.gov/Utilities/PublicComment, referencing Docket E-01575A-15-0312. You can also mail a comment referencing the same docket number to:

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

Arizona Public Service

 

Can I still install solar with net metering?

Barely! On August 15th, the Arizona Corporation Commission voted 4-1 to approve a settlement in the APS rate case. Customers who want to use net metering will need to have an application in to APS by August 31st, 2017.

What are APS current rates?

APS’s new rates are effective August 19th, 2017. Most solar customers will want to choose the Saver Choice rate. This rate has a monthly charge of about $13.00, and energy charges that vary by time of year, and time of day. Those energy charges range from 3.2-24.3¢/kWh. Rooftop solar customers will also pay a monthly “grid access charge” based on their solar electric system size, of $0.93 per kW-DC.

What will APS rates be when net metering is gone?

Effective September 1st, new solar customers will still be on the rates mentioned above, but will receive 12.9¢/kWh for any energy exported to APS, with that rate locked in for ten years. That export rate will be adjusted downward each year.

What Do SSVEC’s Proposals Mean for Solar?

Welcome to the solar coaster

Members of Sulphur Springs Valley Electric Cooperative (SSVEC) have a pretty good feeling of what the “solar coaster” is. Since April of 2015, when SSVEC abruptly proposed elimination of net metering, they’ve felt the tug of war between utility interests, the solar industry, and other stakeholders. We’re now in the home stretch of this long, involved process. Over the next 2-3 months, the Arizona Corporation Commission (ACC) will decide if they want there to be a minimally viable solar market within SSVEC’s service area, or if the current solar slowdown will come to a complete halt.

So how’d we get here? Since this post isn’t intended as a sleep aid, I won’t dig too deep. As noted above, SSVEC proposed gutting net metering over two years ago, and tried to make those changes effective about 30 days after submitting their proposal, before any review by the ACC occurred. This effectively stopped the solar market in their territory—in the next four months, we had only one customer choose to install solar with the possibility of the new rate structures hanging over their head.

Since that time, SSVEC has proposed increased basic monthly charges for all customers, and even greater solar-specific monthly charges. In October of 2016, the ACC approved an enormous increase in monthly charges for all customers from $10/month to $25/month, phased in over four years, but deferred decisions on solar until after the Value of Solar docket was completed. Unlike other Arizona utilities, SSVEC has not proposed residential demand charges, because they don’t currently have the metering technology to support that type of rate.

With the ACC’s December 2016 decision on the Value of Solar, net metering is indeed now riding into the sunset. But the question is now what solar-specific fees (if any), the ACC will approve for SSVEC, and how much co-op members who install solar will be compensated for solar energy they send to SSVEC’s grid.

How will this affect those who install solar after the ACC’s decision?

In this “Phase II” of SSVEC’s rate case, they’ve proposed the following for new solar customers:

An increased monthly fee of $35, $10 more than other residential customers.
A retail rate of $0.102996 for energy purchased from SSVEC.
A first-year export rate of $0.071165/kWh for solar energy sent to SSVEC, with this rate dropping by 10% in years 2-5, and by 11.5% in year six.
No ten-year “lock-in” of the export rate, even though utilities were directed to do so by the Commission.

If approved by the ACC, the result of these proposals would mean very few (if any) SSVEC customers would choose to install solar. As shown in the table below, it would take a minimum of 15 years for an SSVEC member to recoup their investment in a solar electric system. You can see more in my comments to the ACC.

To continue with a viable solar market, the ACC should adopt the 10-year export rate lock-in, a higher initial export rate, and reject extra monthly fixed fees for solar customers. I’ve found that if the initial export rate was set at $0.10/kWh, this would allow the continuation of a stable (if likely smaller) solar installation market in SSVEC’s territory.

The ACC’s own staff (“Staff”) have also proposed rates in the case. Their proposed rates aren’t as bad as what SSVEC wants, but would make the economics of solar installation very challenging, with simple payback times of about 13-14 years for the next three years, then jumping to over 17 years for systems installed in 2022.

What about current solar customers?

The good news is that the ACC has made clear that customers who already have solar or submit an interconnection application to SSVEC before the decision date will have net metering available for twenty years. They will also remain on a two-part rate, which means they’ll pay a monthly customer charge and a per-kWh energy charge.

But SSVEC is proposing to change the customer charge and energy charge, even for existing customers! This will affect the financial benefits for customers who already have solar installed. After a four-year phase in, solar customers would pay an extra $5 each month in customer charges. Not great.

Much more troubling is their proposal to lower the energy charge from $0.118046 to $0.102995 over the same time. This would mean a drop of 12.8% in the value of energy produced by solar.

It’s time to tell SSVEC to back off on their anti-solar proposals

So there you have it. SSVEC and the ACC need to hear from folks who love their solar, and the ability to choose their energy sources. We also really encourage people who are thinking of installing solar in the future to participate in the process, since your ability to go solar will be greatly reduced if these SSVEC proposals are approved.

Hearings will start with public comment on Thursday, July 20th (see below for specifics) and could continue through the following week. After the hearings are complete, the administrative law judge in the case will complete a recommended order, which will go to the full ACC for their decision. It’s likely this final decision will be made in later in the fall, but the exact schedule may change.

How to take action

Give public comment at the Commission on July 20th, starting at 10:00am. The hearing will be held at the ACC’s offices here in Tucson. The address is 400 West Congress, Room 222, Tucson, Arizona, 85701.

Submit a public comment opposing these anti-solar rates. You can comment online, at http://eservice.azcc.gov/Utilities/PublicComment, referencing Docket E-01575A-15-0312. You can also mail a comment referencing the same docket number to:

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

Spread the word. Let your friends and family know about how these proposed rates could affect them, and how they would hurt local small businesses like Net Zero Solar.

If you have thoughts or questions, we’d love to hear them in the comments!