APS must ask for its solar fee increase in a rate case, Ariz. judge rules

Dive Brief:

  • Arizona Corporation Commission (ACC) administrative law judge Teena Jibilian recommended that regulators dismiss the Arizona Public Service (APS) request to reset the fixed fee on its solar-owning customers from $0.70 per kW to $3 per kW.
  • Judge Jibilian decided the utility’s proposal to increase the extra cost of owning an average-sized residential 7 kW system from $4.90 per month to $21 per month should wait until the utility brings its full rate case before regulators in 2016.
  • If commissioners concur in their August 18-19 session, they would likely reconsider the fixed fee along with the full set of proposed APS rates. The utility's new rate proposals may incorporate its need to manage greenhouse gas emissions in response to the just-released EPA Clean Power Plan. That could leave APS less inclined to compromise the solar value proposition with the fixed fee.

Dive Insight:

“APS believes they are losing money. Solar businesses believe they are losing customers,” observed Pace Energy and Climate Center Executive Director Karl Rabago, a former Texas utility commissioner. “The Commission’s most powerful tool right now is the power to convene.”

Rabago recommends a special proceeding to determine the impact of solar on non-solar owning customers and a cost-benefit analysis to determine the value of solar in Arizona. “Then, I would resume the Reset Application with the new guidance.”

Because of a rate design the Commission has found “unfair” and “defective,” solar owners “don’t pay their fair share,” APS argued in a recent ACC filing. APS asked that its lost fixed cost recovery adjustment “be reset to $3 per kW, an amount the Commission has already found to be reasonable.”

APS claims the real cost of solar is $68 per month. Judge Jibilian found the APS $21 per month proposal would reduce non-solar owners’ bills $0.23 per month.

Filed Under: Solar & Renewables Distributed Energy Regulation & Policy Corporate News
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