“The eyes of the country and the energy world at least are on Arizona to see what we can come up with.” Bob Stump, chairman Arizona Corporation Commission in the USA Today on the ACC’s net metering decision.
As Chairman Stump predicted, last week’s ACC proceedings captured the attention, and dollars, of utilities and clean energy advocates across the country. Utilities tuned in to see what they might be able to get away with in their own states. Clean energy advocates followed closely in order to prep for the next wave of attacks by fossil-energy powers on the infant renewable energy industry.
Arizona voters learned the most.
Commissioners opted, in a 3-2 vote, for a $5 per month charge on the average-size rooftop solar system installed in APS territory after December 31st, 2013. The two “no” voters, Brenda Burns and Gary Pierce, wanted a higher charge. As Commissioners heard public comment, which was overwhelmingly opposed to a charge on rooftop solar, hundreds of solar supporters rallied outside, some sticking around for hours to earn their chance to speak.
Here are my key takeaways from the two-day marathon-meeting:
(1) Those who thought newbie Commissioners Bob Burns or Susan Bitter Smith would cede to Commission veterans Gary Pierce or Brenda Burns throughout their first terms, were mistaken, and this was especially apparent last week. Burns has surprised many with an independence streak, culminating in an historic request for transparency from APS only weeks before the net metering vote, forcing the utility to disclose dark-money activities. Ratepayers can only hope Burns continues down the rabbit hole of utility “extracurricular spending”, which includes lobbying, public relations blitzes, needless advertising, campaign contributions (including to ACC candidates), and donations to seemingly every organization under the sun, from Chamber of Commerce groups on down to mom-and-pop charities. Burns could cap his long career in public service with a campaign to cut the fat from the bloated monopoly utility. Every captured-ratepayer would be behind him.
(2) The other Burns – Commissioner Brenda Burns – confirmed she has no qualms crushing the adolescent rooftop solar industry, and would have gladly done so had she been able to rally the support of her peers. “I’m not sure what number is right, but I know 70 cents is not enough,” Burns stated as she voted “no”. The comment was in reference to the 70 cents per kW charge the Commission passed (amounts to $5 for the average sized system). Solar industry officials made it clear that any charge above $5 would deal severe damage to their market as many solar leasing customers save roughly $5-10 per month from their systems. Even Pierce, the other “no” vote, in the interests of gradualism offered an amendment with up-front solar incentives to initially offset the $50 charge he proposed. Burns wanted a hefty charge and opposed any offsetting incentives. If Burns had gotten her way, thousands in the solar industry would have likely found themselves out of a job and years of solar progress would have ground to a halt. Arizona is lucky cooler heads prevailed.
(3) A significant moment came when Erica Schroeder of the Interstate Renewable Energy Council questioned the necessity of a charge by pointing out the Commission’s lack of sufficient analysis of the grid-benefits of rooftop solar, such as reduced power plant and transmission infrastructure required from the public at-large when private dollars are invested in local solar systems. Schroeder cited a study placing the value of rooftop solar to the grid at 12-17 cents, well above the average rate in Arizona. Stump quickly responded, asserting that Commissioners had “reached a consensus that a cost shift does indeed exist” and that any examination of the value of rooftop solar would take place in a rate case. With that, attorneys for the solar industry entered damage-control mode, working to limit the size of a charge to a non-fatal amount. It is unclear why Stump and the other Commissioners thought it prudent to rush into a charge on rooftop solar while intentionally failing to look at the full picture. They will have an opportunity to correct this mistake in APS’ 2015 rate case.
(4) Commissioner Bitter Smith deserves accolades for how she conducted herself throughout the multi-month course of the debate. By all accounts Bitter Smith heard and respected the concerns of all parties, personally responding to letters from constituents. She could have made a stronger case on the day-of-the-vote to decide the issue in the appropriate venue, the 2015 rate case, but perhaps saw any effort to that end as futile given the movement towards an immediate charge from her colleagues.
(5) In addition to transparency efforts, Commissioner Bob Burns’ closing comments provided a glimpse of possible big-things-to-come from the veteran politician. Here they are in their entirety:
“I think this is possibly the tip of the iceberg. With technology that is in the pipeline and liable to come online, this whole issue of cost shift and who pays for those who are left on the grid after people leave the grid, is the biggest issue in my mind. My biggest concern is for those left on the grid paying for that cost. My view is that in the not-so-distant future, the entire business model of the utilities may need to be addressed. Because can it survive under its current design? I’m not so sure that it can with technology coming down the pipe. So with that again I vote aye.”