APS Stakeholder announcement Aug 21, 2017

Announced 8/21/2017 4:26 PM

Stakeholders,

The Arizona Corporation Commission (ACC) has approved a decision in our rate review, and we are happy to share some details with you affecting our solar customers. We appreciate your support in delivering this message to customers and will be glad to help you with any questions you may have. For your reference, attached are letters that were sent to customers regarding grandfathering. Other resources are available at aps.com/gosolar.

Grandfathering

Current solar customers that are interconnected to the APS grid will remain grandfathered for 20 years from the date of interconnection.
- The grandfathering stays with the premise. Systems transferred to a new premise will require a new application, and the customer would no longer be eligible for EPR-6.
- Over the terms of the grandfathering period, a customer may not increase the capacity of their grandfathered solar system by more than a total of 10% or 1 kW, whichever is greater.
Customers who submit a complete application by 11:59 p.m. August 31, 2017 will be eligible for grandfathering. The system would need to be installed and have AHJ approval by February 28, 2018 in order to qualify. A complete application includes all of the following:
- Customer Application
- Executed Contract
- Disclaimer
- Consumer Acknowledgement
- Installer Application
- Three Line Diagram
- Site Plan
Future solar customers whose complete application (as noted above) is submitted on or after September 1, 2017 may be eligible for Resource Comparison Proxy (RCP) Export rate. This rate would allow customers to receive a credit for excess energy sent to the grid.

Resource Comparison Proxy (RCP) Export Rate

In addition to the typical requirements, to qualify for RCP the solar system will need to meet the following criteria:

Systems over 10 kW DC may not exceed 150% of the customer’s maximum one-hour peak demand over the prior 12 months. (For example, if the customer’s maximum peak demand is 8 kW, then the maximum size system installed would be 12 kW DC.)
The nameplate capacity cannot be larger than the following electrical service limits:
- For 200 Amp service, a maximum of 15 kW DC
- For 400 Amp service, a maximum of 30 kW DC
- For 600 Amp service, a maximum of 45 kW DC
- For 800 Amp service, a maximum of 60 kW DC

Use this link to learn more: Rate Rider RCP

Interconnection Application Checklist

The checklist used to review applications has been revised to include RCP qualification criteria, and is attached for your convenience. Please use this tool to ensure applications meet the qualifications and Interconnection Requirements for expeditious approval.

New Homes

In order to qualify for RCP (see RCP requirements above), customers installing solar systems over 10 kW DC on a newly constructed home that does not have established usage history will need to provide load calculations stamped by an Electrical Professional Engineer in Arizona. These load calculations will need to be uploaded to the application under the document type “New Build Load Calculations”.

Resubmittals After Approval

In order to continue our efforts to streamline the application review process, applications that have new diagrams submitted after approval (i.e. change in equipment and new diagrams are uploaded) will need to be canceled and a new application will be required. The new application will be subject to the rate rider in effect at the time the complete application is submitted. This change is effective immediately. (See below, APS has extended this) Applications with resubmittals prior to today will continue to be manually processed.

Saver Choice Tech Plan Qualification (Formally known as R-Tech)

The Saver Choice Tech Plan Qualification application will be available online August 22, 2017. Customers interested in this experimental rate can apply if they meet the requirements.

Use this link to learn more: Saver Choice Tech

Solar Water Heater Incentive Program

The Solar Water Heater Incentive Program is now closed. Applications that have already been submitted will remain active.

We appreciate your patience as we process the high volume of applications received over the past several months. We will continue to work with you and answer any questions that may arise during this time of transition.

If you would like more information regarding the rate review decision, please visit azenergyfuture.com.

Sincerely,

APS Renewable Energy Team

On 8/21/2017 5:35 PM, APS Renewable Energy emailed a revision:

Stakeholders,

We are contacting you again to provide a slight change and clarification regarding resubmittals after approval, which was mentioned in the Stakeholder Communication sent today. Due to feedback and some concern regarding this change, we will be postponing this policy until after the Grandfathering 180 day period is over.

It’s important to know that equipment changes or shortages do not extend the 180 day Grandfathering period.

We appreciate your feedback and flexibility.

Sincerely,

APS Renewable Energy Team

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Net metering is dead. Long live net metering

The must-see panel of Intersolar North America (if you could only see one) discussed the most pressing issue in distributed solar today: What’s happening with net metering – and where does the industry go from here?

July 12, 2017 Frank Andorka and Christian Roselund

At 9 am on Tuesday morning, one of the most important issues in the industry was being debated in a conference room as part of the Intersolar North America trade show: net metering.

Across the nation, net metering policies are changing. The largest solar market, California, has moved to a successor policy, while other states including Hawaii and Indiana have shut the policy down entirely.

But looking beyond the more severe instances, an exploration of different states shows a definite shift in the direction of policies that attempt to put a more precise value on the electricity exported to the grid by distributed solar, along with a move to time-of-use rates. And more often than not the shift is more incremental than a step-change.

The assembled experts attempted to grapple with these big-picture issues, fragmented as they are in the individual experiences of different states.

Read the rest of the article on

https://pv-magazine-usa.com/2017/07/12/net-metering-is-dead-long-live-net-metering/

Solar Wars Part 1

This is part one of a three-part series discussing “solar wars.” There will be three battles in this war: net-metering, tariff reform, and grid defection. This will have short and long term impacts on the solar industry, and it is expected to drive innovation.

By Bill Ellard, Energy Economist March 9, 2017

The net-metering battle has begun, as utilities across the US are lowering the price they are willing to pay for customer-generated electricity from solar. I am predicting a series of solar wars in the near future. They will be mainly between the existing monopoly electric utilities and the solar industry that is involved with behind-the-meter solar installations. Utilities are not against solar, as this new technology gives them another method to meet electricity demand, but what utilities dislike is their customers producing their own electricity by any means such as solar, wind, or other on-site generators. It means customers purchase much less energy from the utilities.

Up until about 2005, the United States was the leader in solar electric installations, but other countries such as Germany have become larger players. As we can see on the graph, solar was not growing much in the US until about 2011-2012.

This surge in solar installations starting in 2011 has created this first solar battle about net-metering. Before 2012 utilities in the USA had no reason to see solar as a threat to them, as the amount of revenue lost to customer self-generation was extremely small. So during this timeframe, utilities did not mind giving customers full retail credit for their excess energy.

Net-metering typically occurs between 10 am and 4 pm when a customer’s solar system is producing more electricity than the onsite loads require: the sun is shining and the occupants are off at work. This “extra” energy is sent back through the utilityowned meter and into the grid; typically, it amounts to about 20-30% of the electricity produced by the solar system.

Net-metering means full retail credit for one’s excess energy; your bill would have it energy usage reduced, and if your usage goes negative, then you get a rollover credit for you next month’s bill. The battle is about the utilities wanting to change this credit on customers’ bills so that it’s lower than the retail rate of electricity. This has started discussions about the concept of “the value of solar” for utilities in many states.

Many utilities were startled after 2012 by the large increase in rooftop solar installations. In many locations this lost revenue was still not significant, but the growth and trends were disturbing.

Utilities are regulated on a stateby-state basis by their respective public utilities commissions, or PUCs.

The first three states to enter into the net-metering battle were California, Arizona and Nevada, due to excellent solar insolation and relatively high electric rates. Earlier this year, in California, the PUC rejected any changes to net-metering, while in Nevada the PUC allowed the utility NV Energy to reduce its credit to customers by 75% reduce how much they credit consumers bills by 75%.

The Nevada decision is still being altered and reviewed, but Solar City, one of the nation’s largest residential installers, has left Nevada due to this PUC decision.

What happens next in the net-metering battle?

Free Market Innovation and Competition

We had an electricity war over 100 years ago – the current wars. This battle was between Thomas Edison and George Westinghouse: Edison wanted a direct current grid, while Westinghouse fought for alternating current. This war was fierce and very public, as the solar wars are becoming today. Nikola Tesla’s patent for the inductive motor was the innovation needed to help decide the “war of the currents.” Inductive motors work with AC, not DC, so when Westinghouse licensed Tesla technology he was able to defeat Edison, and now we have the AC electric grid. Free markets today are helping to decide our solar war about net-metering. This free market competition in the solar industry has brought down the cost of solar-generated electricity to under 3 cents per kwh.

We are seeing innovation in the energy storage space. Remember the typical residential solar system only nets back to the grid about 20-30% of its production. Most of the electricity produced by a solar system is consumed directly in the home. The reason this is important is that to effectively eliminate net-metering back to the grid, you don’t need a lot of storage. Could it be a strange twist of fate that the company called Tesla can use technology, just as the firm’s namesake Nikola Tesla did, to decide this battle in energy?

The short-term impacts of the net-metering battle will adversely affect residential solar installations in the United States. This will happen on a state-by-state basis, depending on the political leanings of each state’s PUC. Here are some of states that are either in, or may soon enter, the net-metering battle: Arizona, Nevada, Maine, Florida, and Alabama.

The biggest short-term loser may be Sun Power due to its exposure to the United States residential market, and its weak cost structure as mentioned in my last article on solar.

The longer term impacts on the solar industry are much more interesting. This net-metering battle is driving innovation in the energy storage and inverter space. Tesla has already announced that it will develop the solar roof and its own inverter/storage technologies. Tesla is buying Solar City, so the combination of the two firms can continue to innovate to eliminate the need for net-metering.

In my opinion within a few years, all residential solar installations will have storage, smart inverter, and curtailment control. In this case with no electricity being passed to the utilities equipment and grid, customers will not even need to notify their utility of their new solar system – or ask for “approval.”

With these longer term impacts in mind, I see this as a positive for several companies: Enphase Energy , Solaredge Technologies, Tesla, and Aquion Energy. All these firms are spending money on research and development on smart energy storage, and have shown to be quite innovative. I do see a technological battle between lithium ion battery and aqueous flow type technology in the near future.

About the Author:
Bill Ellard is an energy economist and consultant, serving businesses, utilities, and municipalities and focusing on distributed generation implementation, solar energy, demand response, demand side management, microgrid development, facility energy management, and renewable energy integration. He can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

9th Circuit ruling allows solar company to sue SRP

An Arizona utility can’t escape being sued for anti-trust violations for the rates it sets solely because it’s a quasi-governmental entity, at least not now — if ever, a federal appeals court ruled Monday.

The 9th Circuit Court of Appeals rejected arguments by attorneys for Salt River Project that SolarCity cannot challenge its pricing system. The appellate judges said they have no authority to consider the finding of a trial judge in Phoenix who said the challenge should be allowed to go ahead.

While Monday’s ruling is specific to SRP and its claims of immunity from suit, the implications could be broader.

Unless overturned on appeal, it means SRP ultimately could have to defend in court the rates it charges customers who want to generate their own electricity.

That could lead to rulings on how broad is the ability of utilities, all of which are monopolies, to set rates in a way that could harm other companies. And that, in turn, could impact efforts by other Arizona utilities to increase costs to solar customers.

SRP spokesman Scott Harelson said an appeal is possible.

“We would argue that ours is a statutory pricing process and that the courts have no business setting rates,” he said. But Harelson said if the case goes to court, the company believes its rate structure — and the additional charges imposed on solar customers — can be justified.

That’s the same argument that is being advanced by utilities like Tucson Electric Power and UniSource Energy which have pending rate hike requests.

Arizona Public Service has reached a settlement with SolarCity and other solar companies. But that deal is contingent on review by a hearing officer and final approval by the Arizona Corporation Commission.

Central to the debate is whether customers who install their own rooftop solar units and generate some of their own power are effectively being subsidized by others.

Attorneys for SolarCity contend SRP’s new pricing plan approved last year amounts to a “substantial penalty” on customers.

“Because solar customers are unable to completely disconnect from SRP’s grid — they still need power in the evening hours and at other times when their energy demands exceed what their solar energy systems produce — they cannot escape SRP’s penalty,” the lawsuit contends.

That penalty, according to SolarCity lawyers, is about $600 a year, an increase of about 65 percent over prior rate plans. That compares with an average 3.9 percent increase for residential customers who buy all their power from SRP.

“Customers recognize that SRP’s new pricing plan leaves them with no choice: After the effective date of SRP’s new plan, applications for distributed solar energy systems in SRP’s territory fell by 96 percent,” the lawsuit states.

All that, the lawyers contend, are part of SRP’s illegal efforts to eliminate competition and violate anti-trust laws.

SRP, for its part, contends the fact that the rates were approved by its governing board precludes the SolarCity lawsuit. Its attorneys said there was the legally required notice and comment period, public hearings, a board vote and an opportunity to challenge the board’s decision in state court, something SolarCity chose not to do.

Beyond that, Harelson said SolarCity can’t rely on antitrust claims. He said those laws “generally let businesses set their prices in a way that allows them to recover their costs, without regard to the impact of those prices on companies like SolarCity.”

That contention, Harelson said, is backed by the policies adopted by the Arizona Corporation Commission — which regulates utilities other than SRP — which concluded that utilities should be able to recover the cost of serving any particular group “and avoid shifting costs from solar customers to the rest of the customer base.” But the exact amount of what that figure is has to be decided on a case-by-case basis.

June 12, 2017

By: Howard Fischer, Capitol Media Services