TEP tacks on a special solar fee in new rate plan

When the Arizona Corporation Commission (ACC) decided in December to end net-metering in the state and move to a new tariff system, it said the new tariffs would be decided on a case-by-case basis as utilities completed rate cases moving forward.

Well, Tucson Electric Power (TEP) received final approval from the commission for its rate plan yesterday, and new solar users are being charged a separate fee for the privilege of being solar customers – and residential customers will be hit the hardest.

Under the new plan, residential customers who put new arrays on their roofs will see a monthly fee of $2.05, which the utility says will be used to cover the costs of the second electric meter that will measure the solar output from the array. New small commercial customers will pay a fee of $0.35 per month. Existing solar customers are exempt from the charge.

What’s not included in the new rate plan is how solar customers will be compensated for the excess energy they produce and sell back to the grid. Under the old net-metering rules, customers were compensated on a one-for-one credit at the retail rate.

In December, after an arduous three-year “value-of-solar” battle involving the utilities on one side and solar advocates on the other, the ACC decided to scrap traditional net-metering rules for a future “tariff” system, which is expected to be determined by the end of the year.

While the ACC decided to grandfather current solar customers under the traditional net-metering statutes for 20 years from the interconnection days, new customers will only receive 10 years — which will hurt both solar lessees, loan-holders and potential cash deals.

Around 30 groups took part in the deliberations, including solar advocates Vote Solar and The Alliance for Solar Choice, along with electric co-operatives, the state’s utilities.

After the December vote, Commissioner Bob Stump said the ACC’s decision reflected the solar industry’s own rhetoric about self-reliance and independence and freed the solar industry from continued dependence on subsidies from non-solar users who, in his view, have picked up the tab for solar users’ “self-consumption.”

It should be noted that more than sixteen states, the Berkley National Laboratory and others have commissioned cost-benefit analyses on whether having solar consumers on the grid has a negative effect on non-solar customers. All have found that the “cost-shift” argument to be almost entirely illusory.