PHOENIX — A follow-up hearing is underway at the Arizona Corporation Commission to examine the fairness of a grid access charge slapped on 165,000 rooftop solar customers.
The Commission’s four Republicans approved the APS rate plan in February, including a “grid access” fee to rooftop solar customers. The fee was not discussed during the previous months of testimony and evidence, but the administrative law judge overseeing the case included the fee in her recommended order. Despite passionate protests from solar advocates, Commissioners included the fee in their final vote.
'Fee does not encourage customers to generate solar'
The surcharge amounts to an overall rate increase that is 15% higher — about $2 to 3 — for solar customers compared to non-solar customers.
"APS claims they are committed to clean energy. Yet an increased fee does not encourage customers to generate solar from their home,” said Robert O'Donnel, who installed a rooftop solar system at his Sedona home last year.
O’Donnel was one of several solar customers who spoke Monday against the fee.
Kathy Fitzinger said her late husband installed 49 panels on her home in 2018 at a cost of more than $40,000.
"APS is wanting to increase, increase and increase and this is terrible,” Fitzinger said. "Please I beg you don't go through with this.”
APS: Solar customers must pay 'their fair share'
APS did not publicly request the solar fee during the rate hearings last year. But the utility supports it, saying solar customers were paying less than non-solar customers according to a cost-of-service study.
"When a customer class does not pay its fair share of costs, other customer classes must make up the difference to achieve the company's authorized revenue requirement,” said Scott Hesla, attorney for APS, said Monday. "Based on the evidence and arguments that will be presented in this re-hearing, the end result should be an order that simply affirms the underlying rate case in its entirety."
An attorney for solar companies said the fee was redundant because a prior Commission already created an export rate in the Value of Solar case.
"The commission has already said 'this is what we're going to pay for exported energy.' You can't then turn around and punish them for a grid access charge," Court Rich said.
Surcharge is one of several commission votes frustrating renewable advocates
The fee is one of several Commission initiatives over the past year and a half to leave renewable energy advocates frustrated. The Republican-dominated Commission removed environmental oversight for smaller gas-generated electric plants, terminated renewable energy standards, eliminated the possibility of competitive community solar, and has targeted the APS “Value of Solar” rate structure.
Supporters want more solar incentives, not fewer
Prior commissions have taken a more supportive approach to the rooftop solar industry, acknowledging its benefit to the grid.
For example, Republican Boyd Dunn, who served from 2017-2021, told 12News recently the Value of Solar plan was passed in 2017 to “apply an appropriate cost to residential solar to represent a fair contribution to the universal costs of the power grid shared by all.”
According to federal energy data, APS rooftop solar customers produced energy during peak output in 2023 (just over 1,000 MW) that nearly matched the share of power APS receives from the Palo Verde nuclear power plant at any given moment. Rooftop solar customers in all jurisdictions in Arizona produced a combined 3.8-million-megawatt hours in 2023, amounting to about half a billion dollars of the retail price of power that year.
Parties in the case, including the Arizona Attorney General, will provide evidence and testimony throughout the week. Attorney General Kris Mayes calls the fee discriminatory and a violation of the state constitution.
The administrative law judge overseeing the hearing will make a recommendation to the commission about the constitutionality of the surcharge.
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