One of us is a former lawmaker, the other a former lawman. Both of us are very concerned about what lies ahead for all Arizona in terms of the cost of electricity. There are some storm clouds ahead.
We’re hoping Corporation Commission Chairman Doug Little can prevent ratepayers from being soaked by demand charges and uphold net metering. His recent actions and emerging philosophical approach give us hope.
Unisource Energy wants to impose radical demand charges on rooftop solar customers in Kingman, Lake Havasu City, and Nogales. Demand charges don’t bill ratepayers for the power they actually use; they bill customers based on the single hour in which they use the most power.
Unisource also wants to end net metering which allows Arizona families to save money on their electricity bills by allowing them to generate their own electricity and credits them for the clean electricity they send to their neighbors.
Eliminating net metering killed rooftop solar in Nevada. Salt River Project ended solar by imposing demand charges and new solar fees. Now, several utilities regulated by the ACC are looking to do the same.
Demand charges are so unpopular and unprecedented, when Unisource originally tried to impose them on all ratepayers, over a thousand people in Lake Havasu City and Kingman attended Arizona Corporation Commission field hearings to voice their outrage and hardship.
Commissioner Little spoke out against the initial request, in part because of public outrage, but also because he didn’t feel Arizona should subject utility customers to a rate system that is untested as well as unpopular.
In April, Commissioner Little suggested Unisource seek alternatives. Little favored gradual reform rather than the dramatic changes to the rate structure sought by Unisource.
Little wrote: “While I applaud the staff of the Utilities Division for thinking outside the box and recommending a novel approach to rate design, I am concerned that we may be losing sight of the principal of gradualism in regulatory rate making in this instance. Further, I am concerned that the focus on three part rates, and a failure to fully consider other intermediate approaches, may result in the Commission having limited options with respect to the ability to consider and potentially adopt other rate designs.”
There is also a pending study on the value of rooftop solar.
If Unisource gets its way, it’s a safe bet that larger utilities such as Arizona Public Service and Tucson Electric Power will try and push demand charges not only on solar customers, but on all customers. APS’s rate case proposal is already trying to do so.
Furthermore, even if you don’t have solar this matter should concern you because as utilities seek rate increases as they always do, the only way to mitigate the costs are through solar and the savings it provides. If the utility monopolies kill off their only competition, you have no remedy.
On Aug. 9, the Arizona Corporation Commission will hear the Unisource request to penalize solar customers. All of Arizona will be watching. If this request is approved, it would represent the first time in Arizona that a regulated monopoly would be allowed to impose mandatory demand charges on customers. That is not gradualism. It would be a troubling trend for Arizona families and a windfall for utility monopolies.
We’re hoping the members of the Arizona Corporation Commission will embrace Commissioner Little’s call for caution and stop demand charges in their tracks. Taking a stand now will help to protect all ratepayers in the future.
Stand up for your community and stand up for all of Arizona at the same time. This is a matter too important to ignore, for your pocketbook and the future of our state.
You can call the Utilities Division of the Arizona Corporation Commission at 602-542-4251 or 1-800-222-7000
Editor’s note: Mr. Goldwater Jr. is a former Congressman while Mr. Sheahan is a former sheriff of Mohave County