SRP’s monthly fees on solar customers unfair and unjustified

All Arizonans should have the choice to use solar and other technologies to meet their own power needs on their own property.

Sean Gallagher

Sean Gallagher

But Salt River Project’s decision to single out customers who generate their own power and hit them with a new charge averaging $50 each month seriously jeopardizes the future of rooftop solar on homes, farms, businesses, churches, schools and military bases in the greater Phoenix area.

The charges are so high that some customers would actually pay more after installing solar than before, which is simply not right.

Solar is the fastest-growing source of renewable energy in America, employing nearly 175,000 American workers and pumping $15 billion a year into the U.S. economy.

The 1,929 megawatts of solar energy currently installed in Arizona ranks the state 2nd in the country in installed solar capacity and is enough to power 271,000 homes. The Arizona solar industry employs 9,170 workers at 637 establishments throughout the state and is ranked number 3 in solar jobs nationally.

In 2013, $1.2 billion was invested in Arizona to install solar for home, business and utility use, providing them with clean energy and helping them reduce their utility bills.

The Solar Energy Industries Association doesn’t object to investigating the costs and benefits of solar generation and net energy metering, or to ensuring everyone who benefits from the grid pays for those benefits.

We do object to the imposition of charges that seem punitive, and that don’t take all of the facts into consideration.  Despite its rhetoric suggesting that solar customers shift utility costs onto others, SRP failed to back up its assertions with facts.  SEIA objects to the broad assumption that any differential in payments by customers necessarily reflects an unjustified “cost shift.”

Retail utility rates often include cost shifts – such as setting the same rates for rural and urban utility customers of all types (urban customers are typically less costly to serve due to population density) – that functionally serve as cross-subsidies.

These cost shifts are justified by a variety of public purposes, both practical and policy-driven.  It’s neither logical nor fair to rewrite ratemaking rules for one set of customers or one policy initiative, while ignoring similar effects of other rates and policies.

Unfortunately, SRP’s rate increase would have the practical effect of stymieing — if not killing — the growth of rooftop solar in its service territory, hurting thousands of its own customers who understandably want to use their rooftops to generate their own energy, using  Arizona’s abundant sunlight.

Although SRP agreed to last-minute changes, mostly protecting the thousands of families, businesses and churches that have already installed solar from being hit with unfair charges, new solar customers face the full brunt of the new charges.

These new solar customers are being asked to bear costs that are disproportional to the value they are receiving– and that ignore the benefits they are actually providing to the grid.

Before SRP proposed its rate hike in late 2014, the Arizona Republic reported that more than 600 customers a month were adding solar power, most through leases, and without the utility providing any incentives as it had in years past.

But only about 20 customers have requested to interconnect solar arrays since the December 8 deadline to avoid the new fees. Why the slowdown?

  • SRP says their new charges represents the solar customer paying for their connection to the grid, but numbers produced by SRP do not add up.
  • The SRP proposal says new customers will have a tiered demand charge as well as a facilities charge, which together will hit the average new solar customer with a $50 a month increase on their bill.
  • The new charges would be in addition to the regular SRP monthly basic service charge.
  • The charges are so high that some customers would actually pay more after installing solar than before.
  • The board approved the plan even though hundreds of customers showed up at meetings to denounce it.

Whether it was by design or by accident, we believe SRP’s rate decision is fatally flawed. We strongly urge SRP to go back to the drawing board, and we are ready to help SRP develop a plan that is fair and that reflects the benefits to both solar customers and the grid provided by rooftop solar.

Editor’s note: Mr. Gallagher is the vice president of state affairs for the Solar Energy Industries Association

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