PHOENIX — After sending shockwaves through the state’s solar industry during the last couple of days, Arizona Corporation Commissioner Nick Myers removed a proposal that would have significantly reduced compensation rates paid to future solar homeowners.
As 12News reported earlier this week, Myers filed a proposal Tuesday to push down the price utilities like APS pay to rooftop solar homeowners by 37% beginning Sept. 1. Solar industry leaders said they were blindsided by the news.
“Giving the market no time to respond to that, it just doesn’t make any sense at all,” said Michael O’Donnell, vice president of Sun Solar.
The industry was anticipating a less severe 10% cut to rates beginning in September. A 2017 settlement at the commission states the rate private utilities pay homeowners, known as the Rate Comparison Proxy, can be incrementally reduced each year but not by more than 10% annually.
Dozens of solar company owners, employees and activists showed up Thursday at the commission to voice their concern over Myers’ proposal. They noted Myers and his colleague Kevin Thompson have vowed to create an environment of regulator stability. Myers’ proposal would do the opposite, they said.
The solar industry has already experienced year-over-year declines in business due to rising interest rates and other negative economic conditions, said Autumn Johnson of the Arizona Solar Energy Industries Association.
“Some companies are already looking at 20% declines in revenue,” Johnson said.
Myers said he believes predictions of doom by solar industry leaders are hyperbolic. The first-year commissioner has been outspoken about his belief that the solar industry “should stand on its own two feet” and not rely on government support or subsidies.
Critics of Myers say he misconstrues the issue by incorrectly using the term “subsidies” to describe fair compensation payments to home solar owners. They allege Myers also ignores other benefits home solar energy provides to the overall grid and the environment.
On Thursday afternoon, Myers announced he was reversing course and would withdraw the amendment and a second, less aggressive amendment that would have cut rates 20%. However, Chair Jim O’Connor scheduled to revisit the issue at a meeting in October.
Myers suggested this is just the beginning. He said he will pursue further cuts to the RCB because he believes non-solar ratepayers are disproportionately affected by the rooftop solar compensation model currently in place.
“The people most affected by the subsidy are low-income,” Myers said.
“We’ve heard multiple times today that the industry won’t ‘pencil out’ if the RCB (Rate Comparison Proxy) goes down further, possibly even with this ten percent decrease that will likely pass today,” Myers said. “If an industry that is fifteen or twenty years old cannot survive without a subsidy, how bad of a business model is that?”
The commission ultimately voted 4-1 to reduce the RCB by 10%. Myers cast the lone “no” vote.
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