Utility regulators are working on talks to mend the bad blood between Arizona Public Service and the solar power industry. Court Rich, a local attorney representing the solar industry, will tell us more.
Ted Simons: Coming up next on "Arizona Horizon," a representative of the solar power industry talks about efforts to mend fences with APS. And we'll hear from those looking to reverse deep cuts to the state's career and technical education programs. Those stories next on "Arizona Horizon."
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Ted Simons: Good evening and welcome to "Arizona Horizon," I'm Ted Simons. Governor Doug Ducey is working with Senator Jeff Flake and Congressman Matt Salmon on legislation that would remove Arizona from the ninth circuit court of appeals. The bill would either move Arizona to the 10th circuit or to a newly created circuit court that includes other non-coastal states. Those who support the move claim the ninth is overburdened, which results in long turn-around times for court rulings. Critics of the move say it's just an effort to get Arizona out of what Republicans perceived as a liberal-leaning California-based jurisdiction. Apollo Education Group, the parent company of the for-profit university of Phoenix, is laying off 70 employees. That's according to the Arizona Republic, which reports that the job reductions were due to University of Phoenix revenue declines. Apollo is also in talks with a New York-based equity firm for a possible sale of the company. And corporation commissioner Bob Burns today ordered APS to turn over its campaign finance records. This after Burns had requested the utility to refrain from spending money on campaigns involving the corporation commission, a request that APS denied, and then later asked the utility to provide a report of campaign contributions, also denied. Burns now is using his role as a Commissioner to demand the Campaign records from both APS and its parent company, Pinnacle West. An APS spokesman says the utility is taking the action under review.
Is there a chance that APS and the Solar Power industry can get together and, along with the state Corporation Commission, work out an agreement that ends what until now has been a nasty and public war involving accusations against all sides? We'll hear from the Corporation Commission next week, but tonight, we welcome Court Rich, a senior partner at Rose Law Group, which represents the Alliance for Solar Choice. Good to have you here, good to see you again, thanks for being here. Is a compromise in the works between Solar and APS?
Court Rich: The first step is getting everybody to the table, and I think that's where the focus is right now. The solar industry is certainly open to the idea of compromise, and I think that's always a good result in the end but really we're a long way from that and we're talking about just trying to get people to talk, which is a great first step.
Ted Simons: Are the two sides talking?
Court Rich: Well, there have been overtures made to try to get them talking so I think that's the next step is let's try to talk.
Ted Simons: Is the Corporation Commission talking to both sides?
Court Rich: Well, so I can only say from the solar industry's standpoint, it's been reported that a couple of commissioners have met with solar representatives to talk about the concept again of getting everybody in a room and talking. There's a lot of issues, obviously, at play right now and there are ex parte rules with the commission.
Ted Simons: Explain that.
Court Rich: So the commissioners are not like legislators. They're judges. And so when there are actions pending before the Corporation Commission, you have to act like a judge and judges don't go and meet with the parties on the side and talk about issues. It's okay to go and sit down and say hey, I want to get you in a room with the other side, can I help make that happen, but you can't go and say what do you think about this issue, what should I think about this issue? So trying to work through that process is interesting.
Ted Simons: And the major issue here is net metering. Before we get too further along here, what is net metering?
Court Rich: When a solar customer puts solar on their rooftop and invests their own money to build their own generating station, it's sometimes during the day they're not using all that power. And so it flows back onto the grid back through the meter actually rolling the meter backwards sort of like rollover minutes on your cell phone. You get a credit for that. Now, the utilities don't like rooftop solar. They want to be the only ones that have a relationship with their customers. They believe you, me, my neighbor, industries in Arizona, should have to buy power only from the utilities. So APS has been in business for 100 years, they're your only option for electricity. They hate it that their customers can make a little bit of their own power and not buy it all from the utilities. It's all about money.
Ted Simons: They get this credit for electricity that they send back to the grid and basically offsets the power that they didn't use?
Court Rich: Right.
Ted Simons: Now APS says that's all fine and dandy, except that we're having to pay retail rates for this when we could otherwise get energy at wholesale rates. Is that a valid argument?
Court Rich: So it's not. It's a misleading argument. And so let me respond. What happens when I build a solar facility and put it on my rooftop and my neighbor does it and hundreds of thousands of people do it in the state, eventually and this is why the utilities don't like it, eventually the utility that was planning on building a big gas-fired power plant for $1 billion and making a bunch of money off it, all of a sudden, they can't justify that because they don't have to build it because everybody else built it for them. And, you know, the other benefit is, a big benefit here in the desert, is water. We don't use any water to generate solar electricity. They use water to generate those gas-fired power plants, coal power plants. So we have this avoided cost that they try to ignore.
Ted Simons: But they will say it's not necessarily an avoided cost if you and all your neighbors are doing that, and here I am in an apartment or condo complex and I don't have the opportunity to do that on my own, if you're paying less, and we're all paying for the same that means I'm paying more.
Court Rich: Actually, it doesn't because when they don't build that next billion dollars power plant your rates and the apartment complex, they don't go up. You would have had to pay for that just like everybody else so it saves everybody money over the long term.
Ted Simons: But can you see their point, though, that if you pay less, if everyone is paying less for solar, those without solar necessarily will have to -- if they're not paying more, they're certainly not paying less.
Court Rich: The point is it stops the utility from having to build infrastructure that everyone would have to pay for but don't just take my word for it. Around the country there have been studies after studies that have been done by utility commissions and other states, Nevada for one, I think Louisiana, there's some others, where they find there's a net benefit, that's the lingo we use, when you take into account the costs associated with net metering and people putting solar on their roof and value all the benefits that everybody else gets, the benefits outweigh the costs.
Ted Simons: Is it fair for everyone? I'm trying to get the other side here. Is it fair for everyone when we're using the same grid and that grid was there before solar city even existed, is it fair for you and your neighbors, God bless you, you're doing well, I don't. For whatever reason I can't afford it, I can't do it, is it fair for both of us to have to use the same grid that APS or the power companies provided but at different rates, at different costs?
Court Rich: This is sort of the argument that the telecom industry would make back in the day when we had those giant cell phones that cost $1,000 and people were stopping using their home phone lines as much. And the telecom companies would say oh, but cell phones are just for the rich, that's not for everybody, now everybody's got a cell phone. My elementary school kids have cell phones. That's the same thing with solar. It used to be just for rich hippies. Now, the reason the utilities care I would submit to you is that solar financing has made it, it's the middle class, the ability to save a few dollars on your electric bill that makes a big difference.
Ted Simons: Do you still believe the Corporation Commission wants to tax solar out of existence by way of -- at the behest of APS? Do you think that's the case?
Court Rich: Here's what I believe. It's undoubted is that the utilities in Arizona want that to happen. There are six proposals at the Corporation Commission. Every one of them, if adopted, would end the solar industry in that utility service territory. We saw it in S.R.P. S.R.P. did this last year and boom, we already know what happens when they make these changes that the utilities want, solar is dead. There's no more solar industry there.
Ted Simons: So if you're saying they get their way we die and if they're saying we get our way or we die, and everyone else dies...
Court Rich: That's a good question. They're not saying that. They're not asking to destroy the power companies.
Ted Simons: How do the power companies exist, how do they survive when everyone's got a panel on the rooftop and they're not paying money anymore?
Court Rich: First of all, APS the last go around in this battle disclosed that the average solar customer still pays $71 a month to APS for power. So they're not paying $0. The average customer is paying $71 a month. You could live in an apartment, spend $71 a month. You could be a snowbird that only comes in town a couple of months out of the year, average paying $71 a month or less to the utility. So solar is not the problem they're making it out to be and you can look at Hawaii, California, adoption rates are so much more than we have here in Arizona and those utilities are in business and making money.
Ted Simons: Is there a compromise? Is there a financial model that's out there that works for all sides?
Court Rich: Well, I would submit that the status quo actually does work but I don't know. That's the question. We've got to try to get to the bottom of that.
Ted Simons: Commissioners Forese and Little, as much as he can in his position as a commissioner, are saying that the nasty fights that are going out there back and forth, hither and yon, it's nothing, nothing is getting accomplished. Both sides are going to have to budge if something happens here. Does he have a point?
Court Rich: I certainly would love to avoid the nasty fights but a little history lesson is instructive. We have a solar industry in Arizona, the state was offering incentives for people to go solar, those incentives went down and down and the solar industry grew and grew and then, all of a sudden, we didn't need the incentives anymore and the utility made a proposal, APS back in 2013, to charge people $50 to $100 a month to go solar. That would have wiped out the solar industry, just no doubt. And then people complained that the solar industry reacted negatively to that and made some noise instead of just going quietly in the night. It's a two way street. The easiest way for the utilities to approve that they like rooftop solar would be to stop making proposals that would result in wiping out the rooftop solar industry. That would really help calm the waters.
Ted Simons: So there is a way to calm the waters. Is there a way for your side to calm the waters?
Court Rich: I think talking with the other side is a good first start but as long as there are proposals on the table that would result in mass layoffs, we saw it in Nevada already, the Nevada P.U.C. there changed the rules and left no economic, no viable way to install rooftop solar anymore. As long as that gun is pointed at the solar industry's head, they would be crazy to stop complaining about this. So I think it's definitely a two-way street there.
Ted Simons: So you say there's a chance, in other words?
Court Rich: Sure.
Ted Simons: We'll stick with that. Good to have you here.
Court Rich: Appreciate it.
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Court Rich: Solar Industry Attorney
