APS proposes higher fixed charges for rooftop solar customers

Dive Brief:

  • Arizona Public Service (APS), the Grand Canyon state's largest investor-owned utility, has asked state regulators to allow it to raise fees for customers with rooftop solar from about $5 per month to about $21 per month, Greentech Media reports. 
  • APS submitted a proposal on April 3 to the Arizona Corporation Commission asking for permission to boost grid access charges for solar customers from $0.70 per kW to $3 per kW. Existing systems would be grandfathered in at the current rate, and the utility said in a release that future customers will be able to "choose a demand-based rate and avoid the grid access charge."
  • APS proposed fixed charges ranging from $60-$100 in the past but, in 2013, regulators specified $21 per month as an appropriate charge for solar customers, although they set charges at only $5 per month at that time.

Dive Insight:

Industry observers have been expecting a contentious rate proposal from Arizona Public Service since last month. On Friday, the utility put the speculation on its upcoming plan to bed, submitting a proposal to regulators to raise fixed charges on solar customers from about $5 per month to $21 per month. The utility says the changes are necessary to reduce cost shifting between customers and ensure everyone is paying their fair share for grid upkeep.

The proposal asks regulators to approve a fixed charge that they deemed appropriate back in 2013, when the utility was asking for much higher fees. At the time, three of the elected commissioners on the ACC said $21 per month would be an acceptable solar customer charge, but only approved a $5 per month charge in the interim. Two of those commissioners on the five-person regulatory panel are still serving, and two new commissioners have yet to weigh in on the rooftop solar issue at APS. The remaining commissioner, now out of office, supported much higher fees, the Arizona Republic reports.

The APS filing comes on the heels of other increases in solar charges across the nation, from SRP's recent demand charge in Arizona to Pennsylvania, where PECO and PPL recently proposed higher fixed fees as well. The campaign to mitigate for stagnant load growth by increasing fixed charges is backed by the Edison Electric Institute, the nation's IOU trade group. EEI's well-known Disruptive Challenges paper from 2013 recommended “a monthly customer service charge…to recover fixed costs.”

Solar companies and renewable advocates say increased fixed charges for solar customers are more about protecting utility revenue streams and shareholders than ensuring fair customer treatment. For instance, in a recent op-ed in Utility Dive, former FERC Chairman Jon Wellinghoff and Clean Power Finance's James Tong point out that rooftop solar customers still usually pay more than what it costs to cover their grid expenses. 

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Filed Under: Solar & Renewables Distributed Energy Regulation & Policy