Rooftop Solar Fees

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The Arizona Corporation Commission voted to allow Arizona Public Service to proceed with a separate case to consider raising rates for solar rooftop users, instead of having to wait until a comprehensive rate case next year. We’ll get an update from Arizona Republic reporter Ryan Randazzo.

TED SIMONS: Coming up next on "Arizona Horizon," we'll update a move to increase fees for rooftop solar customers. Also tonight, the latest on concerns over supplies of Colorado River water. And we'll hear from both sides on proposed changes to state election law. Those stories next on "Arizona Horizon."

VIDEO: "Arizona Horizon" is made possible by contributions from the Friends of Eight, members of your Arizona PBS station. Thank you.

TED SIMONS: Good evening, and welcome to "Arizona Horizon," I'm Ted Simons. The head of the Tonto National Forest today announced that any action regarding wild horses along the Salt River will be postponed for at least 120 days. The U.S. Forest Service considers the horses as safety hazard and plans to have them removed. After significant public criticism the plans are to have a collaborative solution to the issue. Former Tempe Mayor Neil Giuliano is returning to the valley will to lead Greater Phoenix Leadership, which used to be known as the Phoenix Forty. Giuliano will take over in November after leaving as head of San Francisco AIDS Foundation. The Arizona Corporation Commission met to consider a request by APS to raise fees for rooftop solar customers. Here to tell us what the Commission decided or didn't decide is Ryan Randazzo, who is covering the story for "The Arizona Republic. Good to have you here, thanks for joining us.

RYAN RANDAZZO: Thanks for having me here.

TED SIMONS: They are looking to raise fees on those who install solar?

RYAN RANDAZZO: Right. So the utility wants to increase the fees, about $5 today, they want to raise it to $21. What the Commission decided to take up this issue in the next year, before APS files a full rate increase when they try and raise rates on all of us.

TED SIMONS: They basically delayed the decision.

RYAN RANDAZZO: They could have made the decision yesterday. The solar industry was vehemently opposed, they don't want the fees raised today or tomorrow. They will consider the increase before the full increase on everybody.

TED SIMONS: And consider, what, cost analysis or some sort of other investigation here?

RYAN RANDAZZO: They set months of proceedings ahead on how they will look at this, what the scope of this investigation will be, cost analysis is one. How much does it cost the utility to serve these customers and what is the fair price for those making some of their own power but still relying on the power grid.

TED SIMONS: All of this analysis and then they will come back and just another hearing?

RYAN RANDAZZO: Yeah, they will have a few hearings on this topic. They hope to wrap it up by June of next year. The same month, you can expect another rate hike request from APS.

TED SIMONS: So they are not going to wait for next year's overall rate increase, but they are going to do this next year anyway. Why not just do it when the rate -- lots of folks think they should be doing it for the overall rate increase.

RYAN RANDAZZO: That was the question of the day yesterday. Why go through the process two times, it's exhaustive, it requires as lot of staff time at the regulatory agency. They decided because there are so many people installing solar today, they need to address the issue right now. They say those people are not paying their fair share of using the utility grid. The commissioners do seem to agree on that point and that's why three of them at least decided to take the up now.

TED SIMONS: Those three were Stump, Little and Forese voting as a bloc.

RYAN RANDAZZO: They faced a lot of criticism because they were elected last year, they were widely believed to be funded by APS. Then they come out in their first action and vote for what APS wanted, to go down this road and look at these rate increases. The solar industry doesn't want to consider these increases.

TED SIMONS: So as far as the delays concerned, APS says this is ok I'm sure they would have rather had the increase yesterday but they are okay with let's look at it more closely?

RYAN RANDAZZO: They really want to look at it in a vacuum, not in the full rate case where there's a deeper dive and investigation into their costs and expenses. They want to look at this alone and raise the rates as soon as they can. The full rate increase won't go into effect until November 2017. This way, if they do get a rate increase it won't go into effect until next year.

TED SIMONS: And yet, they get this increase separate in a vacuum, and it happens early June, and the overall rate increase in late June, you could have a double increase here, couldn't you?

RYAN RANDAZZO: For solar customers that's definitely a possibility here. You're going to see new solar customers subjected to one fee increase, and then immediately there will be another proposition to increase fees further on them.

TED SIMONS: After yesterday's decision and action, APS happy, the solar industry not happy?

RYAN RANDAZZO: It could have been worse but they are very frustrated because this puts doubt into whether or not people should go solar. They see the headlines and debates over new fees. It puts a question over whether or not they should go solar so it makes it harder to sell these systems if you're continuously fighting rate increases for solar customers.

TED SIMONS: And you got into this a little bit earlier, but let's get back to it. The reason that APS wants the fees for solar users increased.

RYAN RANDAZZO: They say that a bike you use to avoid driving your car to work three or four days a week, it's good, you save money on gasoline, it's obviously good for the environment because you put fewer pollutants in the air, but you still have a car payment. You still use your car to go to the grocery store. That's the way they see it and that's what the fight is. What is a fair cost for someone who generates some of their own power but relies on the power grid at night and on weekends when they are using more electricity than their panels create. Think of the power grid as the car you still rely on.

TED SIMONS: Or the road someone has to pay for, same kind of deal isn't it? The idea is you're not paying your fair share for the grid. And also, if you're not paying your fair share isn't the argument that those who don't have solar are paying more than their fair share?

RYAN RANDAZZO: Somebody else has to pick up the car payment then. You don't have zero car payments because you ride your bike four days a week.

TED SIMONS: As far as solar companies are concerned, how do they counter that argument?

RYAN RANDAZZO: They say there is a great benefit for the electricity they put on the grid and that's really the debate. The utility is saying all you're doing is saving us fuel in our power plants at the middle of the day. That's the only benefit to solar and the solar industry says no there's a lot more benefit there's less wear and tear on your power plant and transmission lines, you're avoiding carbon and pollution. But the utilities and the industry are miles apart on what the value is.

TED SIMONS: I guess back to the road analogy, if fewer people are driving that particular road, fewer potholes and maybe less need for more roads.

RYAN RANDAZZO: But you still want the road in perfect condition when you are on it.

TED SIMONS: Exactly. So when's the next hearing or analysis or whatever?

RYAN RANDAZZO: They have a whole process to consider meetings on this, but they should have a decision they believe by next summer.

TED SIMONS: We'll look forward to that, thank you for being here, we appreciate it.

RYAN RANDAZZO: Thanks a lot.

Arizona Republic utility reporter Ryan Randazzo

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