Arizona Public Service settled a long-running rate case Wednesday that solar power advocates hailed as a hard-fought victory for the photovoltaic industry and its customers in that state.
APS settled with numerous parties on an Arizona Corporation Commission rate case dating back to last year. This settlement allows APS to collect fixed charges on residential customers, but at a lower rate than first proposed, according to sources close to the settlement.
More importantly, sources said, it rejects all mandatory demand charges on residential customers. The Corporation Commission still has to give its final decision.
The overall rate settlement allows for an $87.25 million revenue increase by APS. Distributed generation (DG) customers, such as those with rooftop solar units, will be eligible for four different rate structures, while some will have a grid access charge added in, according to the 19-page settlement.
The policy does not change for current solar customers. New solar customers who sign on after the decision will not benefit from net metering.
“Grandfathered DG customers will continue to take service under full retail rate net metering,” the settlement reads.
DG customers who file an interconnection application before the Corporation Commission decides the case will be eligible for those full retail net metering rates for up to 20 years, the settlement reads. Those rates can be adjusted with subsequent rate cases.
It also removes mandatory demand charges for residential customers and eliminates what opponents called “discriminatory rates” for solar customers, according to reports.
“Arizona’s families and businesses should be able to meet their own energy needs with the state’s plentiful sunshine if they so choose,” said Briana Kobor, DG Regulatory Policy Program Director with the non-profit group Vote Solar, one of the parties who settled with APS, in a statement. “We were glad to arrive at a settlement that takes some steps to preserve customer choice, keeps solar customers on the same rates as other customers, and soundly rejects the idea of penalizing all residential customers with mandatory demand charges.”
APS filed a request for a net metering cut last year. Net metering forces the utility to buy back excess power generated from rooftop solar systems at the retail rather than wholesale rate.
Solar advocates have worried that the APS proposal tried to trim as much as 73 percent from the net metering paybacks, according to previous news reports. They feared that such a cut would make rooftop solar uneconomical for consumers by this summer.
UNS Electric won Arizona Corporation Commission approval in August 2016 to add a monthly surcharge on customers with new rooftop solar systems. It also proposed a net metering cut, but Wednesday’s settlement just dealt with the APS plan.