PHOENIX — The long-term future of the rooftop solar industry could change after a pivotal vote Wednesday at the Arizona Corporation Commission.
The regulating body’s three most politically conservative commissioners voted 3-2 to open a new legal case that re-evaluates rooftop solar export rates. The “Value of Solar” rates were last set in 2017 after a multi-year evaluation by commissioners and staff. That decision was largely viewed as a defeat to the solar industry because it eliminated net metering. But it nonetheless provided predictability in the market for solar companies and customers.
On Wednesday Commissioners Jim O’Connor (R), Nick Myers (R) and Kevin Thompson (R) voted to re-evaluate those rates for the purpose of possibly scrapping them entirely in the future.
“We are not back in 2014 looking to help an emerging industry gain a foothold,” said Chair O’Connor. “I look forward to the substantive and informed discussion that will come from holding a hearing on these narrow issues.”
O’Connor said homeowners already enjoy federal and state tax credits for purchasing solar panels and he questioned why the commission needs to dictate export prices that utilities pay to homeowners.
Commissioners Lea Marquez Peterson (R) and Anna Tovar (D) voted to keep the current rate structure intact. Dozens of solar industry employees and environmental advocates attending the meeting warned that by relitigating the issue, the commission will rattle the industry of more than 300 companies and 8,000 employees.
“From solar customers, to companies, to stakeholders, they do not want it (the case) reopened,” said Tovar. “Perhaps we should heed their warning and maintain the status quo. We would be able to gain so much more information if we just waited.”
APS and the state’s ratepayer advocacy group RUCO also publicly asked the commission to leave the issue alone.
Under the 2017 Value of Solar agreement, about 170,000 APS customers are currently locked into ten-year exported rate plans. On average, APS purchases excess energy from solar homeowners at 7 cents per Kilowatt Hour and the utility sells it for more to other customers.
“Even just re-opening the discussion to decide if they change the rules, that decision alone will have a drastic impact and cause the industry to potentially come to a halt,” said Jake Bastian of Chandler-based Icon Power.
Commission staff will evaluate 10-year locked-in rates of future customers. The process could take several months, one commission staff member said.
The broader context surrounding such decisions is the climate crisis. Scientists worldwide – from NASA to the World Meteorological Organization – are urging governments to transition to a fossil-free economy as quickly as possible. Methane and CO2 produced by fossil fuels cause global heating, and Arizona’s 10 hottest summers on record have all occurred since 2011.
“It is a moral imperative that we do all we can, as soon as we can, to address climate change,” said Arthur, a speaker at Wednesday’s meeting.
In response, Commission Chair O’Connor told Arthur he needed to focus on specific issues.
“With no disrespect that was a very interesting and passionate speech. But entirely off point,” O’Connor said.
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