Arizona Corporation Commission weighing change in solar credit rates

Energy regulators in Arizona are weighing whether to make rate changes for rooftop solar power customers, including whether to cut credits.

The Arizona Corporation Commission was scheduled on Monday to discuss proposals to change net metering that will give less credit to customers of solar energy.

It follows submissions from the state’s two main utility companies and recommendations made by an ACC administrative law judge.

The potential changes are welcomed by some, including the utilities, but decried by the solar panel industry and activists claiming they will have a negative long term impact.

“I do not know all of the details as to the commissioners, but in general I am glad that they are discussing this,” state Sen. Debbie Lesko (R-Peoria) told the Arizona Business Daily.

The changes are for the benefit of the majority of energy users as the subsidies for solar panel users shift the cost to the majority of people who do not want solar or cannot afford it, Lesko said.

Lesko said she hoped the commissioners do come up with some type of resolution to the longstanding wrangling over the credits for solar customers.

Under the current system, solar customers are credited monthly for any excess power generated and returned to the grid. This credit is for the full retail rate of 11.5 cents per kilowatt-hour.

The two state regulated utilities want to cut those credits. Tucson Electric Power Company has proposed cutting the rate to the cost of power generated by its solar farm, approximately 6 cents per kwh. Arizona Public Service Co. argues for pricing the credit at 3 cents per kwh.

Administrative Law Judge Teena Jibilian recommended solar customers no longer be credited at the full retail rate. New credit rates should be based on short-term studies based on costs avoided by rooftop solar, or about 2.5 cents per kwh.

Opponents argue that her recommendations would effectively discourage customers from switching to solar and take no account of the long term benefits.

Lesko said she keeps an open mind about all energy sources, including the traditional. On solar, the key to its future is in finding a way to store the energy.

There appears already to be a downturn in the installation of solar panels, possibly linked to the uncertainty on the credit issue. As of November TEP counted 3,019 rooftop solar installations tied to its grid, compared with 3,199 in all of 2015 and 1,937 in 2014, the Arizona Daily Star reported.

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