The Arizona Corporation Commission (ACC) has approved a request from major utility Arizona Public Service to raise electricity rates for all customers, assess fixed charges, and to single out those who have invested in rooftop solar with the largest of such charges.
Commission Chair Jim O’Connor said he and three Republican ACC members approved the rate plan without knowing the real effect it would have on customers’ bills. Under the new rate hike, O’Connor promised customers will see their bills rise roughly 8%, far outpacing inflation.
APS president Ted Geisler told reporters that residential customers should expect to see bills increase by about $10 to $12 per month, while customers with rooftop solar can expect to see their bills increase by as much as $15 per month. The move comes on the heels of Arizona reducing its rooftop solar export rates, known as net metering rates, by 10% last summer.
However, the full impact of the rate hike has not been fully evaluated by the ACC. Arizona Public Interest Research Group Education Fund requested the commission reconsider the approval, suggesting that APS should be required to testify under oath the exact projected impact on customers.
“Comprehensive data should be entered into the docket, and APS executives should be sworn in before they speak,” wrote Diane Brown in an appeal from the organization. “The commission failed to ask the questions necessary to ensure they had adequate and complete data before voting on the entire rate plan.”
Michael O’Donnell, vice president of Arizona-based solar installer Sunsolar Solutions called the proposal “truly outrageous.” He said solar customers are already paying about $80 per month on average to be connected to the grid, and that under the new rate structure, these customers can expect to pay $120 per month. This would even apply to customers who produce 100% or more of their electricity from their rooftop array.
Despite having an abundance of sun, steadily rising rates, and high electricity demand due to air conditioning use, Arizona is not a leading rooftop solar market. Export rates are low, and the ACC has approved numerous cuts, reductions, and demand charges on solar customers.
“Arizona is a needlessly difficult state to do business in,” said Christopher Worley, director of policy, Sunrun. “Adding unsupported, discriminatory charges to the state’s already low export rates is punitive to solar customers, bad for the solar industry, and bad for ratepayers.”
The charges retroactively apply to customers who already have rooftop solar and have signed a net metering agreement with APS. This type of discriminatory move by APS undercuts broader goals of supporting energy independence, bill stability, and lowered carbon emissions by weakening consumer confidence that solar is a stable investment.
“Retroactive policies like this undercut market certainty and drive frustration in customers,” said Worley.
The discriminatory charges on rooftop solar customers were justified based on a need to upgrade transmission, and due to “cost-shift issues.” The cost-shift is an argument used by utilities nationwide suggesting that non-solar customers are cross-subsidizing rooftop solar customers by increasing utility system costs.
When net metering rates were cut last summer, APS claimed “the magnitude of cost shift within the residential ratepayer class is within the range of $800 to $1000 per year.” This would amount to an $18 million cross-subsidization.
However, numerous studies by national labs and state groups have debunked utility claims of such a significant cost-shift. Berkeley Labs found that at current levels of rooftop solar adoption, the cost shift is negligible. In its modeling, Berkeley researchers found that rooftop solar creates cost savings system-wide. At solar adoption rates of 10% of electricity generation mix or more, which is roughly where Arizona stands, the cost shift was found to be a miniscule $0.005 per kWh.
What’s more, amendments to the new rate hike create a cost shift in the reverse direction. Amendment 3 on the rate hike, proposed by Chairman O’Connor, would require APS to run a program leveraging customers’ rooftop solar and batteries to export power and serve peak demand hours on the grid.
“Programs like this leverage the investment of solar customers to save money for all ratepayers,” said Worley.
Over 2,000 individuals and organizations in Arizona filed public comments on the rate hike, nearly all of which were in opposition.
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Off grid is enticing.
Solar is great for the environment. My family instead of net metering ended up with a totally solar power home. We love the free energy. No more big utility company bills. Total cost of installation was $29K. Utility company with the city is suing us now. Figure the family will make this up in 20 years especially when rates are rising.
Is Arizona Public Service hurt or helped by the rise of rooftop solar? I don’t understand all the issues here but it seems like APS thinks solar is a threat. So even if solar is the best course of action they will resist. People have to educate themselves and vote otherwise they will continue to receive unwanted colonoscopies.
Seems punitive but in reality the utility is only forcing users to pay for ‘capacity’ to cover the capital side of their business or the capacity payments they make to the power gen companies. They have to construct or buy the generation to provide power even if the costumer doesn’t draw when the sun is not shining. And they won’t provide that power supply option for free. The high voltage side of the power biz has been paying enormous costs for this ‘capacity’ for many years and it is time to pass those costs on to users of that capacity. Just one of many complexities of the power biz….
Think of it this way: solar gen can’t provide reliable power when the sun doesn’t shine so you either need a very expensive array of batteries or access to a backup system which is not solar. So a homeowner either has to pay for that or disconnect from the grid completely and take the risk of having no power when the sun doesn’t shine. Which seems to be a certainty every night in Arizona or most of the rest of the planet…
If I ever get solar, it’s so I can be off grid, some of these people are already spending 1000s, just go all the way.
I don’t live in AZ but have family there. For many parts it should be leading in solar adoption.
APS lacks vision and needs a change in leadership to get on course.
Another red freedom state taking money from citizens to give to corporations. Who’da thunk it?
Arizona solar customers should band together and instead of community gardens have community solar projects which provide power to all community members and remove themselves from the APS grid entirely.
If we covered up 25% of Arizona with solar panels it would power the entire United States.
I agree John about having community solar farms. I’m from El Paso Tx and EP Electric has started a community solar farms but they are incorporated with this endeavor.
It would be nice to have it in El Paso without a cut for EPE.
“If we covered up 25% of Arizona with solar panels it would power the entire United States.”
How about at night?
I agree with your first statement, your second statement is utter nonsense, your math (if you actually even did it) is exponentially off.
25% of buildings or 25% of the land mass of AZ could power the US? Covering 25% of the land mass of the state would be an almost impossible task but 25% of all structures is doable for sure.
All you need is a 100 square miles of solar panels to supply the entire nation with power. Storage would only require 10 miles square.This is according to Elon Musk in a interview..
It’s disappointing that solar users expect a connection to the grid to be free. It’s just like EV drivers complaining about paying a fee to offset avoided gasoline taxes. They are still using infrastructure and it’s not free. Time will tell if the charge is the right amount of money, but the absolute value isn’t great.
Arizona, just do not pay you electric bill, let them shut you off, switch over to off-grid solar plus battery and do not ever re-connect. It is time to kill the Big Monopoly Utility Companies and build local micro grids in Arizona. Show them the SUN and Rooftop off-grid solar Rules.
My wife and I purchased our retirement home in Quartzsite Az with the plan to purchase ROOFTOP SOLAR SYSTEM as soon as we can sell our California home. We had thought to do this before moving in permanently. Our hope was to get away from outrageous electric rates and crooked legislators raising taxes and fees to line their pockets. We have decided to sell our dream retirement home in Arizona and relocate to Missouri. So to the people of Arizona your foolish voting and support for the same ultra liberal fools as California has done, will put your ONCE awesome state transition to sinkhole for your hard earned dollars. PROTEST PROTEST PROTEST and NEVER VOTE THE DEMOCRATIC PARTY IN YOUR LIFETIME.
And I thought that my state (Ohio) was a cesspool of utilities owning our GOP politicians. We are years deep now in what the FBI called the biggest corruption scandal in state history and it is still going on. Ohio ratepayers were shafted by HB6, a bill written by the energy companies to inflate their profits and it was rammed through our GOP supermajority state government with a $61 million dollar campaign to elect energy company puppets to office and key legislative offices. Our former house majority leader is now doing 20 years in a federal prison. Look to the money angle!
It sounds like some money changed hands to get this passed.
This sounds predatory. $80/mo just to be connected to the grid? Absurd!
I strongly disagree with ACC’s actions. Especially singeling out rooftop solar customers for higher increases with no supporting data. The ACC should not be caving to political or APS pressure. They need solid data before taking action.
Sounds like a punishment to me for daring to not having to completely rely on the electric grid.
Shocking. We were all of us naive to think that when we did the right thing and shifted ourselves to solar and other renewables that the gas and oil industries would quietly leave us to it. Next there will be extra road taxes for EV drivers to subsidize struggling gas stations.
Sounds like corrupt politicians doing the bidding of a big business interest.
In effect extending a ‘take or pay’ system to homeowners…
Like it or not, the ‘take or pay’ concept has been a part of energy pricing for a long time, although it might be unprecedented to charge homeowners so much for ‘capacity’.
Electric companies can see the writing on the wall. Roof top solar cuts into their bottom line and livelihoods. They say it costs them upkeep for transmission lines. I call BS on this nonsense. We are arms of the electrical production and we contribute to the grids output, however, nobody is paying our maintenance upkeeps. Utility company are anti-green and it is nothing more than a government sanctioned monopoly.
Time for solar customers to get battery and generator backups. Then disconnect from the grid completely. CA is doing the same thing with solar customers. Utility companies just want to keep their pockets lined.
Bet the Republicans that approved this are getting large donations from ASP
What I’m hearing from this is that some people are not happy about the success of solar and want to artificially strangle the market for it. I don’t have the spoons to do any digging right now but I bet if you followed the money it would lead to other energy producers.
At a time when people are trying to reduce their carbon footprint and save on energy consumption.This is highway robbery! Absurd!!!