Arizona Solar Skirmish Foreshadows Bigger Battles

Barry Goldwater Jr appears in this web video supporting consumer choice for solar energy in Arizona. It’s not high art, but you get the message. There is a Green Tea Party taking shape in southern and western states, making alliances with green campaigners, and threatening to throw Koch-financed anti-renewable energy campaigns into chaos.

The conflict is that more and more folks are buying solar energy systems. That cuts into big utility revenues – and threatens the business model that has sustained the electric industry for more than a century.  The big Arizona Utility, Arizona Public Service, had proposed a stiff, some would say punitive, charge for solar householders who sell electricity on to the grid. The utility’s point is that even if solar powered homes don’t need as much, or any, power from the grid, they should pay to help support that infrastructure for the larger community, and so that it’s available in times of clouds or darkness.
The booming solar industry wants no impediments to growth. A lot of state regulators are watching this one, and we are a long way from figuring out how this is eventually going to work. But we’d better get started, because, like the internet, solar is now a disruptive technology, and utilities that do not find a way to adapt and adopt will be going away.

Bloomberg:

Arizona is one of 43 states that requires utilities to buy electricity from household solar systems, potentially cutting into revenue for the company known locally as APS. The regulator’s staff recommended Oct. 1 that the utility’s request be rejected and the issue taken up again at a regularly scheduled hearing in 2015 for rates that would take effect the following year. Some conservatives are siding with the solar industry.

Utilities “don’t like the competition,” said Barry Goldwater Jr., son of the late senator and presidential candidate. “I’m a conservative Republican and I think people should have a choice.”

Arizona Public Service spokeswoman Jenna Shaver declined to comment on growing conservative support for solar energy.
(below, Chris Hayes interviews Debbie Dooley of the Georgia Green Tea Party)


Goldwater founded Tell Utilities Solar won’t be Killed, or TUSK, which calls APS’s proposal a “solar tax” that’s unfair to people who have invested in rooftop solar systems. Tom Morrissey, former chairman of the Arizona Republican Party, joined the group as co-chairman in October.

“Utilities have had their heads in the ground for so long they didn’t notice that it’s become cheap enough to compete with them,” he said.

AZ Central reported on the latest status of the net metering debate in Arizona. The state’s utility board attempted to split the baby on this increasingly contentious issue.

“No one goes away completely happy,” Pierce said as he and the other Arizona Corporation Commission members prepared to vote on charging rooftop-solar customers some of the costs of supporting Arizona Public Service’s electric grid.

“They’re happy it’s over.”

The rally outside the Arizona Corporation Commission was attended by hundreds. This photograph was taken before 09:00am, over half an hour before the hearings were scheduled to begin. There were no reports of anti-solar groups attending. Image: TASC.

As is anyone who has been overrun by the campaign-style attacks ads that filled radio, television and the Internet for the past month.

But don’t get too comfortable. This was only the beginning.

The commission landed on a proper compromise, voting 3-2 to charge new rooftop-solar customers 70 cents per kilowatt to support the grid that delivers electricity to them when the sun isn’t shining or carries their excessive power to their neighbors. That works out to about $5 a month for an average installation.

That’s considerably less than the $50 to $100 a month that APS wanted. It’s more than the zero the solar industry lobbied for.

It’s slightly less than the Residential Utility Consumer Office suggested, although it incorporates the office’s suggestion to require regular reviews to consider increasing the surcharge.

The compromise is enough to maintain some balance between solar and non-solar customers, without killing the rooftop industry. It buys time until APS’ next rate case, when the issue can more fully be vetted.

This was just a warmup for what’s to come, a skirmish before the real battle in a couple of years.

PV-Tech:

Arizona has become the first US state to introduce a charge on rooftop PV users in what America’s solar industry has described as a “precedent-setting” action.

At the end of a two-day hearing over an increasingly contentious issue, the Arizona Corporation Commission voted 3-2 in favour of allowing state utility Arizona Public Service to impose a US$0.70 per kilowatt charge on solar net metering customers.

APS had argued that the charge was necessary to offset the cost the growing number of solar systems passed on to non-solar ratepayers. The utility said that net metering customers, which are able to claim credit on excess power fed back into the grid, effectively shift the cost of maintaining the grid on to ratepayers that do not use solar.

The ACC commissioners narrowly upheld this claim, voting for a charge that will be imposed on all new systems built after 31 December this year. The fee is expected to hit solar users to the tune of around US$5 per month.

But APS’s immediate response to the commission’s decision was to claim that it did not go far enough.
dontread

“Having determined that a problem exists, we would have preferred for the ACC to fix it,” said Don Brandt, chairman and chief executive of APS. “The proposal adopted by the ACC…falls well short of protecting the interests of the one million residential customers who do not have solar panels. We will continue to advocate forcefully for the best interests of our customers and for a sustainable solar policy for Arizona.”

Rhone Resch, chief executive of the Solar Energy Industries Association, said he was “deeply troubled” by the “precedent-setting action”, implying that the decision will have attracted the interest of utilities and ratepayers beyond Arizona.

“Imposing punitive fees on Arizona consumers – without first proving the need and demonstrating the fairness of these charges through a comprehensive, transparent rate case where due process is afforded – is patently unfair, jeopardising future solar growth and job creation statewide,” Resch said.

Will Greene, the Arizona representative of environmental body the Sierra Club, said the move would “stifle” the growth of solar in the state.

“We acknowledge APS originally proposed a much-larger charge, but our state’s burgeoning private solar industry will still need to overcome this new challenge. Rooftop solar brings important energy savings to working families and it gives us the freedom to be more energy independent.”

Arizona has become the biggest battleground over the solar net metering issue in the US, with APSrevealed to have been secretively funding an anti-solar lobbying campaign.

The issue has also polarised public opinion. At the start of the ACC hearing on Wednesday, an estimated 1,000 pro-solar campaigners turned out to protest against the charges proposed by APS.

43 thoughts on “Arizona Solar Skirmish Foreshadows Bigger Battles”


  1. If the utilities play it wrong, then customers will start going off grid altogether. At 70c a Kw h then the payback period for a comprehensive battery backup gets close to being viable compared to grid back up.

    When night electricity rates are higher than day rates, then the extent of solar power might have be thought about a bit more.


    1. A $300 deep-cycle battery would store 1.2 K W H and if only discharged 50% each time should last 2,500 cycles. This gives a storage cost of about 20c per KWH.

      Yes there other costs but if your electricity provider starts getting too greedy it will be worth doing your sums.


      1. If your night time rate is $0.05/kwhr and the peak day rate is greater than $0.25, you are at break even. Any peak metering rate greater than that nets you a profit. Never realized you could charge from mains and put it back profitably. I realized that when I saw German utilities were doing that with pumped hydro. Solar works that way, too. When solar is producing during peak metering times you are displacing the most expensive part of your bill. If you have excess power, the economics depend on whether you get paid peak rates or not. If you do, solar PV is already lucrative in some areas of the country. There is a big system advantage to local solar PV. Transmission, distribution, and generation costs are all lowered which results in lower next year rates for all.


      1. none of the articles I read in researching this were very clear on exactly what is being charged for what here.
        am checking with some knowledgeable folks on this.


  2. If so few rooftop solar systems threaten the grid, then the grid is the problem.

    I expect to see similar levies against EVs and high mpg vehicles for not paying their “fair share” of the gasoline tax for road maintenance.


    1. Actually, in a sane world the gas tax would just slowly increase to meet the road budget needs. That would serve two purposes – funding the roads and making older cars less desirable. Now if we could only find a sane world to try that out!


      1. I’ve had the suggestion of a 5¢/gallon/month tax increase out there for years.  Just let it run for 5 years or until fuel-consumption targets are reached.  Refund it as a deductible on Social Security taxes and a compensating bump in pensions.


    2. If so few rooftop solar systems threaten the grid, then the grid is the problem.

      APS registered no objection to PV owners disconnecting from the grid.  It’s those PV owners DEMANDING grid services who have trouble with this.  Obviously, the grid cannot be the problem.

      Light-duty vehicles cause essentially no damage or wear to pavement; damage goes up as something like the 4th power of weight, meaning heavy trucks are responsible for all of it in practice.  The only thing that can be legitimately laid on LDV drivers is congestion charges, because there is only so much road.


  3. Long term, people with grid-tied solar should pay an appropriate amount for grid maintenance. But in that same long term, we should have a $100/ton carbon tax, making renewables relatively cheap. Short term subsidizing solar with low/zero grid fees is perfectly reasonable.


    1. To charge people anything for contributing zero-carbon power to the grid is insane. (After the camel’s toe is in the tent, no matter how reasonable the initial charges, they will rise if that’s what the utility officials want–quietly and in too-small increments to elicit enough protest to stop it. By far the best time to create a sensible policy is now.

      The grid is perfectly healthy; only the utilities’ profits and some soon-obsolete jobs are threatened, and to punish forward-thinking and responsible people for upgrading society and saving civilization and millions of species is reprehensible as well as suicidal.

      The grid has to be maintained; it also has to adapt to the realities of providing energy in the age of climate catastrophe. The only sensible way to do that is to charge everyone according to how much power they take out of it, not how much they put into it. This will pay for the grid while it encourages efficiency, conservation and changed, more ecological lives. As less energy is used, the rate charged per unit can rise. Cheap and easy efficiencies will be encouraged first, then increasingly expensive changes will become economic as well as necessary and sensible. Seasonal and day/night differences in charges according to local climate and conditions could fine tune and encourage even smarter efficiencies.


      1. To charge people anything for contributing zero-carbon power to the grid is insane.

        Really?  Suppose you “contribute” it as a direct hookup of your DC output to the wires, causing a host of problems.  Still not something that ought to be charged for?

        Larger electric consumers pay for a lot of things besides energy.  They pay for harmonics added to the grid (and sometimes find it worthwhile to buy their own filters).  They pay for reactive power consumed (and sometimes find it worthwhile to buy their own condensers to generate it).  They pay for variability of load, and can get discounted power if they’ll accept interruptions in service.  Intermittent supply is sold cheaper by the utility.  Why shouldn’t it command less when the utility is buying?

        The “negative load” characteristic of home-based RE causes problems for the grid.  A lot of this can be managed technically, but it requires things like curtailment and the grid-operator controls to perform it.  If PV owners “ate their own dog food” and directed power to batteries, water heaters or the like to make their output to the grid ramp smoothly and predictably, the grid operator could just treat them like any other generator.  It’s up to the RE industry to make this happen, because nobody else can do it.

        The grid is perfectly healthy; only the utilities’ profits and some soon-obsolete jobs are threatened

        I suggest you read this analysis of the timeline and causes of the 2003 Eastern blackout and reconsider your appraisal of what’s “obsolete”.  You can legislate that RE gets some things for free, but if you knock off too much e.g. reactive power from the grid, you’ll find out in mere seconds just how relevant—nay, essential—it is, and always has been.

        A grid-tied PV system is as useless as tits on a bull without an energized grid hooked to it.  If you don’t listen to the people who know what’s involved in generating and transmitting power, you are going to enter a world of hurt.


        1. “Suppose you “contribute” it as a direct hookup of your DC output to the wires, causing a host of problems. Still not something that ought to be charged for?”

          Absurd strawperson, like several other points you make. Not charging for it doesn’t mean the utility can’t protect its customers, employees and the grid by regulating connections with sensible public-interest specs. IOW, not punishing specs or preventative OCDism. Non-profit/cooperative/community-owned utilities actually run in the public’s interest and with a larger, wiser vision of what they’re there for would help with this.

          I said nothing about the price the utility should be paying for the energy it buys. That’s something to be negotiated; the criterion most obvious to me is that it stimulates clean energy development and decreases fossil fuel and nuke energy, since that’s what the survival of civilization and possibly humanity, and the avoidance of extinction for millions of species in the next 100 years depend on.

          I agree about the needed maintenance and upgrades in grid and other infrastructure. I won’t even try to explain what I meant by my healthy grid comment; too complex and deep for this discussion, apparently, and expressed badly by me. Right wing sycophancy to the rich has resulted in Proposition 13-like local, state and federal tax-cutting insanity all over the country and many places in the world, slowly (or not so slowly) causing the rotting away of civilization. We need to restore funding for public functions and things that help people and repair and upgrade our entire energy system to encourage and adapt to a Solarwind economy.

          As for your last comment, I’m not sure if that’s a physical threat or some strange way of asserting your supposed superior knowledge or… well, I don’t know what it is.


  4. The big Arizona Utility, Arizona Public Service, had proposed a stiff, some would say punitive, charge for solar householders who sell electricity on to the grid. The utility’s point is that even if solar powered homes don’t need as much, or any, power from the grid, they should pay to help support that infrastructure for the larger community, and so that it’s available in times of clouds or darkness.

    Precisely.  If consumers want to both buy and sell energy without providing the other services required to make the grid function, they are going to find that those services will be “unbundled” and they will pay for them separately.

    If this is NOT done, the utilities and PV “have nots” will effectively be taxed (twice, given solar subsidies) for the sake of the “haves”.  Utilities will lose money, which will result in less maintenance of the very things which provide the essential services to everyone, including those “haves”.  The result is collapse.

    If PV owners want to go completely off-grid, let them.  Providing their own reactive power, supply-buffering and backup is quite feasible.  It’s just a long way from cost-effective… and that’s the point.

    The booming solar industry wants no impediments to growth. A lot of state regulators are watching this one, and we are a long way from figuring out how this is eventually going to work. But we’d better get started, because, like the internet, solar is now a disruptive technology, and utilities that do not find a way to adapt and adopt will be going away.

    If it weren’t for subsidies, “renewable portfolios”, must-take provisions, feed-in tariffs and net-metering laws, grid-connected PV would mostly exist as a hobby (ditto wind).  Utilities cannot “adapt” to government-sanctioned theft of service.  Those services must be paid for somehow or they cease to exist… and the grid, and the energy supply even of those with grid-tied PV, with them.

    This does not make good sound bites, and doesn’t appeal to “Greens”.  It’s just the truth.


    1. if not for 60 years of subsidies and government research, as well as the Price-Anderson act, there would be no nuclear power plants, not even as a hobby.
      If there were not 40 years of government supported research, there would be no internet. If not for the tax funded super highway system, our auto industry would never have grown to be so dominant. It was government research and buying power that made personal computers possible. Government research created the original modern wind turbine designs, as well as solar photovoltaics.
      Government funding and support were critical for the Erie canal and the transcontinental railroad.
      Government has had a role, for good or ill, in all our most important technological advances. As citizens, it is our job to properly judge what that role should be.


      1. if not for 60 years of subsidies and government research, as well as the Price-Anderson act, there would be no nuclear power plants, not even as a hobby.

        1.  60 years of subsidies?  You must be counting the nuclear weapons program as a “nuclear subsidy”.  The electric power sector pays plenty of taxes, and the waste disposal fund to which the industry pays 0.1¢/kWh contains billions even after the sunk costs of Yucca Mountain.

        2.  The government has never spent a penny on Price-Anderson.  If you repealed it tomorrow, utilities would breathe a sigh of relief because they wouldn’t be on the hook for anyone else’s accidents.  They’d spin off the nuclear plants as separate subsidiaries to firewall their liabilities and keep chugging.  The chemical industry gets by without anything like Price-Anderson.  Accidents like West TX are taken care of by private insurance.

        And I believe you are very wrong about what industry would have done.  In the 1960’s, nuclear reactors were cheaper and used much cheaper fuel than coal-fired boilers.  Until the NRC’s regulatory ratchet started up (pre-TMI; arguably, it was an NRC-mandated instrument which malfunctioned and helped lead to the TMI meltdown) nuclear power was on track to completely displace steam coal.  Read Cohen’s chapter 9, “What Went Wrong?” for something that will change your perspective of history.

        Government research created the original modern wind turbine designs

        That does hinge on what you mean by “modern”; the first megawatt-scale wind turbine was a wholly private effort.  When government gets all the research money and there’s no R&D tax credit, you’re kinda stuck with what they do.

        But none of this is relevant to the proper sharing of grid-related costs between Arizona utilities and PV owners who want to be both buyers and sellers on that grid, or the impact of legislative mandates on the cost of serving the public as a public utility.


        1. “the first megawatt-scale wind turbine was a wholly private effort”

          If you’re referring to the Smith-Putnam turbine built during WW2, I guess that was a good thing, since one blade snapped off and landed over 700 feet away.

          Imagine if that happened in modern times and under a government program.

          The rightwingnut windbaggers would have a field day and, of course, it would be Obama’s fault.

          http://en.wikipedia.org/wiki/Smith-Putnam_wind_turbine


          1. It’s mute testimony to a bygone era:  a time when private industry undertook what we’d now see as ground-breaking research and development projects and commercialize any worthwhile results, before legislation put government bureaucracies in charge of deciding who was allowed to do what and what efforts were deserving of money and other support.

            I learned about the Smith-Putnam wind turbine a great many years ago, and that account didn’t mention that WWII controls on essential materials made impossible the repair that could have prevented the thrown blade.  (I’ve posted a video of a very impressive blade failure in a modern HAWT; there was no damage except to the machine and its tower.  I haven’t noticed anything in the way of backlash to it, have you?  Even the majority of RE-skeptics correctly treat it as a curiousity, no more.)


          2. Wind backlash?
            I’ve seen plenty of that and I’ve wasted far too much of my time dealing with windbaggers – those people are so deranged they almost have me believing in the damaging effects of “infrasound”.

            A couple years back when a terrific windstorm destroyed some turbines in Scotland, they were besides themselves with joy.

            I’m sure they’ll be happy to see any video of a damaged wind turbine.


          3. Let’s post a picture of Fukushima for comparison.

            I admit, it was spectacular (fuel-air explosions do that quite well).  But it took one hell of a tsunami to start the chain of events, and in the end the death toll related to radiation was exactly the same as in the disintegration of that wind turbine:  zippo.


        2. 1. Yup. Both ways. At first TVA and Hanford wanted to use military reactors used in the weapons program to generate electricity that defrayed the huge cost of creating nuclear bombs. Then private industry complained about competing with subsidized military reactors. Then they realized they could sell enriched uranium to private industry to defray enrichment costs. Military and private nuclear are enmeshed.
          2. This has all the earmarks of voodoo economics. Insurance doesn’t cost anything. Right.


          1. Interesting effect: when I try to vote on one post the heading jumps aside so it’s impossible. Only one post, always jumps. What sort of wizardry is this?


          2. Seen that happen a few times, especially on deeply nested comments; if you’re on Windows, try using CTRL+ or CTRL- to change the zoom level up or down for the webpage.


          3. Then private industry complained about competing with subsidized military reactors. Then they realized they could sell enriched uranium to private industry to defray enrichment costs.

            That’s not credible.  For the first 4 decades of commercial nuclear, the only enrichment plants in the USA used gaseous diffusion.  The major cost of GD is electricity for pumping, at about 2500 kWh/kgSWU.  This is directly proportional to the amount of material enriched, and government doesn’t pay for amortizing defense installations.

            Military and private nuclear are enmeshed.

            Today, all enrichment operations in the USA are commercial plants using gas centrifuges (which cut energy consumption to 40-60 kWh/kgSWU).  Nobody’s making weapons, and I suspect the Navy buys its uranium enrichment from contractors.  That would be the only “enmeshment” remaining.

            Insurance doesn’t cost anything. Right.

            Please have the decency not to erect straw men.  The total payout for the only reactor meltdown in the USA came to $71 million, far less than the mandated per-plant private insurance.  The US government has never laid out a penny to fulfill its Price-Anderson legislated role as insurer of last resort.


          4. So the US gov operated two enrichment plants under DOE. The Atomic Energy Commission was abolished in 1974 because of its poor record of regulation and replaced with ERDA and NRC. It was still government operated and paid for until it was privatized under USEC in 1996. Enrichment has been government run in the US for decades and under military and government control for much of them. So much for private operation. The USEC facility in Paducah is being shut down. Congress balked at the bill. It was supplied with electricity by huge coal fired plants belching vast amounts of pollution and CO2. Enriched uranium was used for weapons for decades and for reactors. If you think the only payout was 17 million, explain and reference your statement. The cleanup of Three Mile Island, a partial melt down, cost a billion dollars in 1993. If so, the fund is not covering real clean up costs. The government doesn’t pay for amortizing defense installations? Just what do you mean by that?
            http://www.nrc.gov/reading-rm/doc-collections/fact-sheets/enrichment.html
            http://ecowatch.com/2013/05/28/slow-cooker-at-paducah-comes-to-boil/
            http://blog.cleanenergy.org/2012/05/31/political-hypocrisy-uranium-enrichment/
            http://en.wikipedia.org/wiki/Enriched_uranium
            http://www.nytimes.com/1993/08/15/us/14-year-cleanup-at-three-mile-island-concludes.html


  5. My folks just installed solar in Sun City, AZ, (where they get almost as much sun as Germany). Dad has all of Bill O’Reilly’s books, wrote fan letters to him and Mom’s a Birther! But they both embrace solar, and forward thinking Dad has already said, “in another 10 years, we’ll have even better technology, and we’ll most likely get it”. All 7 of Sun City’s recreational centers have solar, and next week I plan to go down there to talk to the board about planned permanence LED technology that will serve them for the next 23 years. Go Green Tea Party!


    1. “where they get almost as much sun as Germany” – that’s a joke, right?

      “Dad has all of Bill O’Reilly’s books, wrote fan letters to him and Mom’s a Birther!”
      Ouch, I assume you avoid talking politics at Thanksgiving?


  6. Not clear in any of the stories above is how APS credits solar PV system owners for power returned to the grid. For my solar PV system here in TX El Paso Electric credits excess at the 2 cent wholesale rate to my account rather than the 11 cent retail rate. This differential must go part of the way towards covering their fixed costs.

    If APS is honest in claiming that they need $50-$100 from every residential account owner to break even on their fixed costs ( at a modest level of solar PV penetration) small residential PV systems make no economic sense.


    1. That’s right. You are getting 2c and they are selling it at the peak rate somewhere above 25c? Plus you lower (not raise) others rates by reducing peak demand. They are making like bandits.

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