OP ED: Tempe Should Embrace Rooftop Solar

Kevin Hengehold November 6, 2013 2

tempe city council

Originally prepared for Tempe’s Rooftop Solar Forum held Tuesday, November 5th at Tempe City Hall.  

First of all, I have to call out APS on its shady behavior.  And I wish there were an APS representative here with whom we could discuss this issue, as it is obviously of great importance to  many Arizonans and Tempeans.

The Arizona Republic reported that APS increased their operations expenses by 5.7% last quarter to account for an increase in their communications expenditures.  This small increase totals up to $12.5 Million.

To put this in perspective, APS says that they have 18,000 rooftop solar customers, all being subsidized to the tune of $800 to $1,000 a year.  That totals to somewhere between $14.4M and $18M.

So this horrible, egregious cross-subsidy that APS claims must be addressed immediately is comparable to what it spends on advertisements about ice cream toppings!

I’m offended that my and my fellow citizens’ utility bills have been so egregiously mismanaged, not only the amount spent but also the manner by which is was spent.  It is very likely that our monopoly utility violated Arizona Revised Statute 41-1235 when it falsely claimed that it was not funding the attack ads on rooftop solar.

I hope that this Council will join the call for an investigation into these matters.  Surely we cannot abide criminal behavior, especially when it is committed by a corporation guaranteed a monopoly on so much of Arizona’s energy industry.

Now that that’s out of the way, I have to echo the voices of my fellow solar advocates and say that net metering needs to be left as it is, at least until the next rate case.

There are two primary impacts of rooftop solar: customers self-supply their own energy and customers provide energy to their neighbors.

At the net metering protest at APS headquarters, an APS spokesperson told me that customers are shifting costs because they used to pay $100 a month and now they pay $10, due largely to generating their own power.  What a crime!

When I thought about that, I said: what BS.

Would they make the same claim on a customer who upgraded their air conditioner and now pays half what they used to?  What if they turn off their air conditioning altogether?  Imagine the gall it would take to knock on a customer’s door:

“Excuse me, you used to use a lot of electricity for your air conditioner.”

“Yea, I know, I turned it off.”

“Well… you used us pay us for that electricity, so we’re here to take the money you didn’t spend on the electricity we didn’t provide you because….”

Why?  Fill in that argument in any way that doesn’t constitute theft from YOUR constituents.

To address the impact of providing neighbors electricity: the argument being made by the utility is that rooftop solar customers who provide retail power should be paid something other than the retail rate.  What else should it be?

The utility’s argument that they could get power for 5 cents, or 3.5 cents, is complete bunk.  They’re referring to wholesale power that needs to be transformed and transmitted and transformed and distributed – not power that can be used right now by my neighbor.  It’s true that we’re in an uncompetitive monopoly market, so in my opinion it’s guesswork to determine the “market value” of rooftop solar energy or retail power.  Recognizing that, we have to use the best indicator we have, which is what APS is charging for it.  If that’s not a fair value, they can change their rates in the next rate case.

Now, the main argument against net metering has been one of cross-subsidization.  It’s no surprise that APS’s study found a cost shift from solar to non-solar customers, and it’s hardly surprising that the Solar Energy Industries Association’s study found that there was a cost shift from non-solar customers to solar customers.  I have to recognize that ACC Staff and RUCO found a cost shift from solar to non-solar customers as well.

In their assessment, RUCO acknowledged that the assumptions made about the time frame of analysis heavily influence the results a given study finds.  So it would seem that when you set the time frame of your study, you choose the results.  Hardly the solid bedrock of evidence APS would have you believe.

Acknowledging the heavy impact that assumptions make on these analyses, one must then turn to context.  Are there other cross-subsidies?  APS offers dozens of rates to its business and residential customers; is everyone subsidizing everyone else?  Is there some poor schlub who got the worst rate of cents per kilowatt-hours and is subsidizing the entire grid?

When I asked RUCO about contextualizing their findings around cross-subsidies, the response I got was:

“Yes, there are cross-subsidies elsewhere. We are committed to exploring these and issuing recommendations to the Commission. Solar may be the fastest growing though.”

So, we know there are cross-subsidies in the rates, but we don’t know how many or how much.  Solar might be the fastest growing – we don’t know.

So why rush to change things when there’s so much we don’t know?

As an addendum, I wanted to point out one of the major secondary impacts of net metering, which is job creation.  Currently, the Solar Foundation lists Arizona as having 9,800 solar industry jobs, the top category of which is installation.  This is due in large part to the distributed generation carveout in the Renewable Energy Standard as well as policies that support distributed generation, such as net metering.  The impacts of destroying or diminishing our net metering policy could be felt in the form of thousands of jobs lost.  I shudder at the thought of a city council or a Corporation Commission embracing a policy with such disastrous effects.

To wrap it up, arguing that rooftop solar customers owe APS more money because they supply power to themselves is ludicrous.  Rooftop solar customers are being credited at a fair price, which is the price APS is charging; if they’d like to see a decrease in the credits, APS can lower their rates. Taking a broader view, rooftop solar has been an economic powerhouse in this state, and in these tough economic times I can’t stand to think that we’d shed thousands of jobs over what amounts to APS’s quarterly marketing budget.

Tempe is in the Valley of the Sun.  Let’s act like it.  I urge you to follow the lead of Cave Creek, Clarksdale, and Guadalupe and pass a resolution protecting rooftop solar.