Arizona Commission Imposes Net Metering Charge


In a three-to-two vote, the Arizona Corporation Commission (ACC) has approved the Arizona Public Service Co. (APS) request for a charge on future rooftop solar panel installations connected to the grid under the state's net energy metering (NEM) program. The charge, amounting to $0.70/kW, will be effective Jan. 1, 2014.

According to APS, the charge will collect $4.90 per month from a typical future rooftop solar customer. The utility says the charge is needed to defray the cost of the solar customer's access to the electricity grid. The new policy will be in effect until the next APS rate case, which the ACC has directed the company to file in 2015.

Current solar customers and those who submit an application and a signed contract with a solar installer to APS by Dec. 31 are not subject to the new fixed charge.

‘The ACC determined that net metering creates a cost shift,’ says Don Brandt, APS chairman, president and CEO, in a statement. Although welcoming the ruling, Brandt says the ACC did not go far enough in making up for the cost solar customers impose on the grid system at the expense of non-solar ratepayers.

The APS proposal was deeply unpopular with installers of residential solar energy systems from the outset. NEM's ability to"make the meter run backwards," is widely viewed as a key component of the sales pitch to prospective homeowners where such policies apply.

Solar sector advocates were cautious in their reactions to the ACC ruling. In a statement, Rhone Resch, president and CEO of the Solar Energy Industries Association, expressed mixed feelings. While applauding the ACC's decision to keep NEM in place, and appreciating the attempt to find middle ground in the charge imposed, he nevertheless was ‘deeply troubled’ by the ‘precedent-setting’ decision.

‘In the months ahead, we will continue our efforts to educate the ACC, as well as public officials all across the state, as to the true market value of solar, and the benefits it provides to local economies, grid reliability, consumer choice and environmental quality,’ Resch says.

Supporters of NEM policies argue that utilities and regulatory bodies do not properly take account of the value distributed solar brings to the electric grid and the communities it serves. The Interstate Renewable Energy Council has produced a guidebook for state utility regulators to help them quantify the value of distributed solar as a resource.

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