On October 1st the Arizona Corporation Commission issued recommendations in response to APS’s proposed rule changes directed at residential solar customers. The staff recommended that the Commission not approve either of APS’s proposed Net Metering cost-shift solutions including the $50 to $100 infrastructure connection charge. Net Metering is the mechanism that allows residential customers the right to offset energy purchases from the utility with self-generation solar energy on a one-to-one basis.
The ACC concurred with APS in recommending that existing solar customers should be grandfathered under the old rules. They also said it was their belief that any cost-shift created by these proposals is fundamentally a matter of rate design and that the appropriate time for changing rates is during APS’s next general rate case.
They also believed that this recommended course of action is the most effective and appropriate method of dealing with the cost-shift issue APS outlined in its July 12 filing. However, since it is not yet clear whether the Commission will decide to deal with this issue immediately, two alternative proposals as bridge solutions were outlined.
The first proposal is a flat charge provision for all new solar customers; the charge is designed to recover a portion of the costs arising from transmission and distribution fixed costs. The estimated impact of this flat charge would amount to a monthly increase of between $2 and $3 for new solar customers, not the $50 to $100 a month charge proposed by APS. An alternative proposal is a Distributed Generation Premium initially implemented at $2.75/kW and adjusted based on the effect it has on new solar installations. Distributed Generation being the excess solar electricity generated by the consumer systems and supplied to the grid.
These proposals, like those from APS, are only recommendations. Any changes to the existing rules must be voted on by the Arizona Corporation Commissioners. The Commissioners are scheduled to take up the issue at its October 16th and 17th hearing.