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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’s a Residential Demand Charge?

Wondering what a residential demand charge is and if you should switch electric rates? Check out our new infographic! If you have comments or questions, please share them below.

Wait, TEP is Proposing More Anti-Solar Rates!?

Maybe you’re someone who checks every utility bill insert. Or maybe you just can’t get enough of the legal notices in the back of the newspaper. But if you aren’t “that guy” (or gal), you might not know that Tucson Electric Power is yet again proposing changes to rates around solar in the second phase of their rate case.

Forgive us for sharing the same narrative that’s been true for a number of years, but yes—these proposals are bad for Tucsonans who want to install solar on their own homes, but good for TEP’s proposed company-owned solar, and great for TEP’s profits.

First, some good news. The Arizona Corporation Commission (ACC) has made clear that they support “grandfathering” of net metering for existing solar customers, which will apply based on the date of the decision in this second phase of TEP’s rate case. So if you’re thinking about solar, there’s still a little time to get it installed under the current rules.

Net metering rides into the sunset

As we’ve shared before, net metering for new customers will be phased out, as each utility completes their rate cases. For Trico customers, net metering is already gone. TEP, UNS Electric, and SSVEC customers will have net metering available until phase two of each rate case concludes.

So what will replace net metering? A “DG export rate.” This rate, which is expected to be somewhere between 7-12 cents per kWh for TEP, will apply to any energy that a solar homeowner sends to TEP. For any solar electricity energy that you use as it is generated, you’ll save money at the retail rate. This means that TEP customers who install solar after net metering is gone could lose 30% or more of the value of a solar electric system compared to current rates. The amount of lost savings is highly dependent on a homeowner’s specific energy use patterns.

Proposed rates are more complex

TEP is proposing that new  “distributed generation” or “DG” customers—those who produce their own energy at their homes—must be on one of two specific rates.

The first proposed is a time-of-use rate. In addition to a monthly service charge of $13, you’d pay more for electricity during certain hours. For example, in the summer, the peak is from 3:00pm-7:00pm, and you would pay about fourteen cents per kWh under the proposal, while you’d pay just under ten cents per kWh during off-peak.

TEP's proposed summer time-of-use rate for new solar customers.
TEP’s proposed summer time-of-use rate for new solar customers.

In the winter, the proposed difference between peak and off-peak pricing is less, with off-peak a little under ten cents per kWh, and peak pricing a little more than ten cents per kWh. In winter, the peak period would be from 6:00am-9:00am and from 6:00pm-9:00pm.

TEP's proposed winter time-of-use rates for new solar customers.
TEP’s proposed winter time-of-use rates for new solar customers.

Time-of-use rates are generally designed to incentivize energy use in the off-peak time, when it’s cheaper for TEP to generate or purchase energy. For example, you might want to wait until after seven to start the washing machine, dryer, or other large loads during the summer.

Of course, some loads just can’t wait. You’ll probably need to run your air conditioner when you get home, whether it’s a bit expensive to do so or not. Similarly, it’s not usually practical to wait to cook dinner.

To add insult to injury, TEP is also proposing a new “Grid Access Charge” for those on this rate option. This charge would be based on the size of the installed solar electric system, and would apply to each month’s bill.  TEP says this is because solar customers “avoid paying their share” of the cost of the grid (though this conclusion is dubious).  This charge is proposed to be a whopping $3.50 per month per kW of solar electric system size. So for a fairly typical 8 kW solar electric system, you’d be paying an additional monthly charge of $28.00!

The second proposed rate option for solar customers also has a time-of-use component for your energy costs, and maintains the basic service charge of $13. But it adds another wrinkle: a demand charge. A demand charge is a charge based on the maximum amount of energy you use over a short period of time. In TEP’s proposal, they would measure your energy use over each hour during the month, and would bill you based on the maximum energy use over a one-hour period during peak time. For example, in my modest 1,100 square foot home with a relatively small 3.55 kW solar electric system, my maximum 1-hour peak use was 7.21 kW last August. If I were on that proposed rate, I’d pay $84.34 just in demand charges for that month, not to mention all the other charges!

Energy production and use for my home on August 11th, 2016. My highest 1-hour usage was between 7:00-8:00pm, and was caused by running my air conditioner (about 5kW) and my oven/stove (about 3kW).
Energy production and use for my home on August 11th, 2016. My highest 1-hour usage was between 7:00-8:00pm, and was caused by running my air conditioner (about 5kW) and my oven/stove (about 3kW).

Both of these rates increase the complexity of the decision to install solar on your home. It’s not too tough to understand and react to time-of-use rates. But demand rates are much more challenging for consumers to react to, and it’s more difficult to model estimated savings from solar, energy efficiency, or other technologies.

More meter fees

TEP has also proposed a new meter charge for solar customers. Back in February, the Arizona Corporation Commission approved a new $2.05/month charge for solar customers, due to the greater cost of the specialized meter needed to record energy flowing both to and from the grid. Although we aren’t exactly happy about this solar-specific surcharge, it does seem to be a reasonable amount to cover the costs incurred by TEP. And customers have the option of just buying the meter up-front, for $142.95.

Now, TEP is adding another wrinkle: They want to raise the meter charge to $4.32 each month! They claim this is due to the fact that TEP chooses to install a solar production meter, plus they say that billing costs increase significantly for solar customers. But the thing is, the solar production meter actually doesn’t provide any benefit to solar customer. Each solar electric system we install includes Enphase Energy’s monitoring solution, which accurately records both the energy output from your system and the amount of energy you use in your home, and makes this data available to you on a user-friendly portal in near real-time. The solar production meter does benefit TEP though, since they can use that meter to keep track of system performance, and can use the data to confirm compliance with ACC policy.

Help keep solar an option for everyone, like this Tucson family who installed a solar electric system on their mid-town home
Help keep solar an option for everyone, like this Tucson family who installed a solar electric system on their mid-town home!

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

So there you have it. Net metering on the way out. Complicated demand charges or punitive solar-specific rates. Fees for metering infrastructure that solar customers don’t need. And it all seems to be calibrated to make it harder for TEP customers to choose to produce some of their own energy on their homes. This flood of poorly-considered anti-solar policies needs to be stopped. The ACC and TEP 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 under these proposals.

Hearings will start with public comment on Monday, June 26th (see below for specifics) and could continue through mid-July. 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 early fall, but the exact schedule may change.

How to take action:

Give public comment at the Commission on June 26th, 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. Over the coming weeks, we’ll share more specifics about the proposals, if you’d like help with some possible points to bring up in your public comments. Or feel free to contact us with questions.

Submit a public comment opposing these anti-solar rates. You can comment 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

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!