APS settles rate-case dispute with solar industry

The settlement in Arizona today is a monumental achievement and guarantees new customers will be grandfathered at their current net-metering rates for 20 years.

Arizona’s solar industry is celebrating a win today, as they have reached a settlement in the Arizona Public Service (APS) rate case that has been in dispute since last year.

The staff of the Arizona Corporation Commission (ACC) filed the agreement this afternoon, which varied solar advocates hailed as a deal that will help expand the rooftop-solar industry in the state. The full ACC still has to approve the settlement.

Today’s agreement builds on the December decision by the ACC that brought to an end a three-year, often-contentious value-of-solar docket that left all participants licking their wounds. The negotiations that ended today fixes what some saw as the biggest flaw in the decision, namely the terms of the grandfathering rules governing new solar customers.

APS originally proposed grandfathering current solar customers at full retail net-metering rates for 20 years and new customers at the full retail rate for 10 years. The solar industry objected, saying such drastic reductions in payments would devastate the industry because new customers wouldn’t see the payback soon enough to make it worth their while to install solar.

Negotiations between more than 30 interested parties and APS began on Jan. 12-13 in an attempt to resolve this issue. Today’s tentative agreement grandfathers all current and new solar customers at their current rate schedule for 20 years from the time of interconnection, as long as the new customers file for interconnection before a final decision is made by the ACC on APS’ larger rate-case requests.

The joint agreement between the solar industry, APS, and other stakeholders is more proof that rooftop solar is inevitable,” said Anne Hoskins, Sunrun’s chief policy officer. “While Arizona does not serve as a model to encourage innovation in distributed energy, we are pleased that, together, we have ended years of debate on the future of rooftop solar policy in Arizona.”

Sean Gallagher, vice president of state affairs for the Solar Energy Industries Association, said he was glad the grandfathering issue had been settled, which was the association’s priority.“The thorough process concluded outside of litigation, and we hope an era of collaboration will take hold in Arizona,” Gallagher said.

Under the agreement, new solar customers will be able to sign up under initial rates that are as favorable as could be obtained under the Commission’s December 2016 Value of Solar decision, Gallagher added.

“Arizona’s families and businesses should be able to meet their own energy needs with the state’s plentiful sunshine if they so choose,” said Briana Kobor, DG regulatory policy program director with Vote Solar, which was also a party to the negotiations. “Solar is an investment that supports local jobs, improves energy security and helps build a competitive new energy economy in the state.”

“We were glad to arrive at a settlement that takes some steps to preserve customer choice, keeps solar customers on the same rates as other customers, and soundly rejects the idea of penalizing all residential customers with mandatory demand charges,” Kobor said.