The town of Cave Creek is the first Arizona town or city to officially oppose rate hikes for solar power users being proposed by Arizona Public Service. The town unanimously voted to oppose the rate hikes, saying that it could hurt the installation of solar power in homes and hurt the economy. Cave Creek Councilman Ernie Bunch will talk about the vote.
Ted Simons: The town of Cave Creek is the first Arizona municipality to officially reject a proposal to raise rates for solar panel users. Joining us to explain what was a symbolic yet unanimous town council vote is Cave Creek council member Ernie Bunch. Thanks for being here.
Ernie Bunch: Thanks. First time. Scared to death.
Ted Simons: The council votes to oppose solar rate hikes here. Couple of options. Why?
Ernie Bunch: The solar industry is really important thing for Arizona because we have so much sunshine. Creates a lot of electricity. APS is really looking to yank the rug out from the bottom of the solar industry in the state. It's not a good thing for Cave Creek. We're wide open spaces. We love the outdoors. We are the kind of community -- we always have had a lot of solar installations in the town.
Ted Simons: One bills credit on returned power back to the grid, with net metering being the idea if you don't use as much power you get reimbursed. The second would be paying what APS considers a fair price on them getting the returned power. What's wrong with those ideas?
Ernie Bunch: There's probably nothing wrong with the ideas in principle, but the real world effect of those ideas is that without a good financial gain solar is not going to make a lot of sense. Solar in all honesty will never pay for itself completely. It's probably the most expensive renewable energy source that we've got. Numbers I saw about three years ago were over the life of the system about 12 cents a kilowatt to generate that. Without getting the kickback why would anybody put those systems on their homes without a good benefit?
Ted Simons: Yet APS says because people are getting that benefit and they are not paying as much as they used to and we have done a number of stories on this and whether the future of utilities is the way they are now that's a different beast all together, but they say if you got your solar panels and I can't afford that, you're paying less which means some of us have to start paying more and that's not fair.
Ernie Bunch: Once again that goes to the fact that the solar really is the most expensive renewable energy source. I think the country as a whole has missed the boat. If you look at the European union you'll see most of the power used in Europe is generated from nuclear. The American people have a real aversion to nuclear power plants but that's what makes the most sense. It's probably around a penny per kilowatt for generation over the life of the plant. Public opinion has caused APS and other utilities across the country to do things that are not in their own best interests.
Ted Simons: Interesting. That's something that we'll talk about at a later date. It is fascinating when you think about the future of utilities. Your VICE mayor was quoted saying cave creek represents rugged individuals and Cave Creek should oppose a monopoly's efforts to suppress the free market or otherwise create is incentives for individual investment in alternative energy. Do you agree with that?
Ernie Bunch: For the most part. He talks very eloquently. He's an attorney. He can't help himself.
Ted Simons: Let's parse it down here. Is APS trying to suppress the free market?
Ernie Bunch: I don't think so. In the solar energy, the market has actually been propped up by the incentives and net metering going on. APS has a legitimate argument. I'm cursed with seeing this issue from both sides, however, I don't believe that the two ideas that they sent to the corporation commission are all they should be there and they need to sharpen their pencils. I'm assuming that's APS's prayer, they hope the corporation commission rubber stamps them and sends them back.
Ted Simons: Again, VICE mayor in the paper saying the APS wants state sanctioned consumer funded corporate welfare. Do you agree with that?
Ernie Bunch: Probably to certain extent. Yes.
Ted Simons: Why? Why do you say that?
Ernie Bunch: Well, we're going to have a moment here.
Ted Simons: You go right ahead.
Ernie Bunch: Ask me again, please.
Ted Simons: The idea that this is state sponsored, consumer funded, corporate welfare on the part of APS, the reason I bring this up, this is the town's vice mayor, and those are pretty bold statements there. That's pretty rough stuff. I want to know if you agree with that.
Ernie Bunch: Probably not 100%. He's a pretty good guy, very opinionated. Speaks very forcefully.
Ted Simons: Let's talk about what APS says. They say solar customers get too much credit for power sent to the grid. Valid argument?
Ernie Bunch: Yes. They are getting many times the numbers I have seen are 14 to 16 cents a kilowatt. Quite honestly I believe that they should be more in line with what they pay for the wholesale, people when they buy stuff off grid bring in here. I also think that they should be allowed or that consumers should be allowed to bank that over a yearly period and use it against their accounts the whole year.
Ted Simons: When APS says they are looking to pay a fair price for the power that's returned to the grid, it sounds like you think that there's room to move there.
Ernie Bunch: There is. Like I say I believe that what they sent to the corporation commission was their prayer and hoping their prayers are answered and the reasonable solution lies somewhere in the middle.
Ted Simons: Speaking of bold statements, APS has said that solar users benefit from a reliable grid with little or no cost. Do you think that's true?
Ernie Bunch: That's true as well. I'm conflicted.
Ted Simons: You're seeing things from both sides. I find that very interesting. Yet the council voted unanimously and it sounds as though you believe this could hurt the economy up in Cave Creek and hurt the way a lot of people live.
Ernie Bunch: I think it's going to hurt the solar industry. I believe when the incentives are gone it won't make much sense. We have seen what happens when government tries to push solar on the populace with Solyndra where tons of money were lost from the production end. When those things, they produce those things with all the help, then you have to have a marketplace for those to go to. If we shut down the marketplace there won't be any home for the existing systems that are out there and what's supposed to be built in the future.
Ted Simons: If the two options are not all that feasible, attractive, yet you understand why they are coming from because again if someone's paying less someone will wind up paying more, this is again for the structure of the grid, for transmission lines. I don't think they are arguing power plants any more. The more solar the less you need power plants somewhere. Be that as it may, is it understandable to you that something has to be done, that this is just basically -- the model isn't feasible for APS?
Ernie Bunch: Absolutely. The numb I have seen is that they are losing approximately $18 million a year, 18,000 solar customers. They believe they lose about $1,000 per household per year. That's not good for their shareholders. One of the things that helped me make my decision to vote in favor of the resolution was they came in and talked about it being a fairness issue, not a money issue. That's not right. It's a money issue. What they are looking is down the road when they have 60,000, 100,000 solar customers and that number that's 18 million now becomes 60 or 100 million and they are in trouble. It's a financial issue.
Ted Simons: From their perspective they say those 60,000 are paying less, everyone who is left if I don't have the solar I'm paying more. That's not fair.
Ernie Bunch: That's right.
Ted Simons: There's a fairness issue in there.
Ernie Bunch: Yes.
Ted Simons: Thanks for joining us.
Ernie Bunch: Well, thank you.
Ernie Bunch:Councilman, Cave Creek;