APS Proposes New Rate Structure - Existing Solar Customers Grandfathered

[HX_Guy]

And then asking for an 8% rate increase? Am I the only one seeing this?

Would be great if it was actually "only" 8%, and for some (maybe most?) it may be that amount...but depending on what plan you are currently on, it can be more like 21% from the numbers I've ran.

Did you know the off-peak rate is going up 32%? Most people you tell that to (including the ones at APS who I brought it up to at a meeting they held in Sun City) said "No way, it's not going up that much!"...then you ask them to do the math on an increase from $0.06/kWh to $0.08kWh, which is what the new proposed off-peak rate is.

One other thing APS likes to throw out there is that it currently has 100,000 customers on a Demand charge rate plan and that they are saving money compared to non-Demand plans, which is actually true for a couple of reasons. One being that those people selected those plans, meaning they are more conscious of when they are using their power and more importantly, two, the current Demand plans are very cheap. Problem is that those rates are going up anywhere from 21% - 33% if you do a side-by-side comparison of the old rates and new proposed rates (which are the ones ones you can do a side by side of).

[Ian S]

Yes, the plans are being grandfathered as well if you have or get solar prior to the deadline. I can actually see a demand for homes with grandfathered APS plans in the future, solar aside. It's like, if you want to live without your demand being monitored, then you better find a house with a grandfathered APS plan...which only solar customers will have.

Are you sure that rate plans (non-solar) are grandfathered for the house? The rationale for grandfathering solar customers is the long term investment made in solar. There is no such rationale for non-solar customers especially if someone new moves in to an existing home.

[HX_Guy]

Are you sure that rate plans (non-solar) are grandfathered for the house? The rationale for grandfathering solar customers is the long term investment made in solar. There is no such rationale for non-solar customers especially if someone new moves in to an existing home.

Non-solar customers rate plans are not being grandfathered. Unless you have solar by July 2017, you are being moved to one of the 3 new demand based rate plans.

Only if the house has solar will the rate plan be grandfathered in with the house for 20 years from PTO.

[solarix]

I had a little chat with an APS lineman last week while they were doing a service change for us. Got to talking about the issue of the proposed change in rate plans. He mentioned how unfair it was that the utility has to "buy" power from solar customers at retail rates. I mentioned to him how unfair it was that we have to pay for all the medical costs of them burning coal and taxpayers funding nuke research and nuke decommissioning (not to mention potential climate change issues). He went back on his mantra of how unfair the solar rates were for them..... He just could not see how the utilities were already receiving all kinds of indirect subsidies.

By the way, all these rate plan changes are just proposals at this time. The AZ state Corporation Commission will have to approve them which will not happen until December at the soonest. So far in the last ten years, the ACC has stood up to APS and all their lawyers pretty well and it is not so likely that these rate plan changes will get implemented. Solar has made great inroads into the political mindset of Arizona and the ACC is very aware of how many jobs they are threatening. In the South half of the state - where SRP has the monopoly, it is a different story. SRP is a quasi-government agency - not a corporation and is not subject to the ACC, which is why they were able to unilaterally implement a $50/month fee on new solar users last year.

Of course, we solar installers in Arizona always love it when APS makes threats about limiting solar as it is great for business - motivating lots of people to get off the dime and give us a call...

[J.P.M.]

I had a little chat with an APS lineman last week while they were doing a service change for us. Got to talking about the issue of the proposed change in rate plans. He mentioned how unfair it was that the utility has to "buy" power from solar customers at retail rates. I mentioned to him how unfair it was that we have to pay for all the medical costs of them burning coal and taxpayers funding nuke research and nuke decommissioning (not to mention potential climate change issues). He went back on his mantra of how unfair the solar rates were for them..... He just could not see how the utilities were already receiving all kinds of indirect subsidies.

By the way, all these rate plan changes are just proposals at this time. The AZ state Corporation Commission will have to approve them which will not happen until December at the soonest. So far in the last ten years, the ACC has stood up to APS and all their lawyers pretty well and it is not so likely that these rate plan changes will get implemented. Solar has made great inroads into the political mindset of Arizona and the ACC is very aware of how many jobs they are threatening. In the South half of the state - where SRP has the monopoly, it is a different story. SRP is a quasi-government agency - not a corporation and is not subject to the ACC, which is why they were able to unilaterally implement a $50/month fee on new solar users last year.

Of course, we solar installers in Arizona always love it when APS makes threats about limiting solar as it is great for business - motivating lots of people to get off the dime and give us a call...

Solarix, IMO, you & I are on the same side of most issues, and I've learned a lot from your input, but would you think it fair if you were mandated, by law, to buy the products you provide to your customers from other customers for the same price you charged them ? And, how is that different than what the POCOs are being told to do with NEM ?

I'm no fan of POCOs business practices, and I believe I understand how the game is run, but buying things for the same price you sell them for doesn't seem to me like a good way to make a profit.

While the lineman's comments sound like the usual company mantra about freeloaders and the poor POCO having a gun to its head, and sort of an insult to solar users , there does seem to me to be a certain level of truth in their side of the issue. If folks really want to effect change, I bet using less power would certainly get the POCO's attention and save a lot of electricity not to mention consumers' money.

BTW, and NOMB, but where do your customer's most often sit on the economic ladder ? Lots/few of your customers in places like Winslow for example ? How about the reservations ? Not a knock, but part of the POCO rub is that only the economically well heeled get to screw the POCO. Any of your customer's on the bottom rung ?

On the other side of the coin however, one thing I've not yet been able to square in my own mind is how the solar naysayers often make a big deal of how solar impact will never amount to more than fly specs in the energy mix from one side of their collective mouth, while screaming about how the POCO's are forced to charge non solar users outrageously higher rates to make up for all the solar freeloaders out of the other side of their mouth. As in, if solar is such a small part of the mix, why are non solar users charged so much, or, if the solar contribution is as small as alleged, much of anything at all, where's the legitimacy of the beef on all the lost revenue ? Just wonderin '.

Seems like both sides of the issue are trying to dance with my leg.

[sunnyguy]

It is fair because in exchange they get a monopoly. If you were allowed to sell power directly to your neighbor then no the utility shouldn't be forced to buy from you. But you would be able to get close to retail rates doing so and wouldn't care. The best utilities should hope for is a transaction fee like visa.

[solarix]

Right Sunnyguy, utilities are a monopoly and are mandated to serve the public interest - not make as much profit as possible. They are assured of making a reasonable return though. If the public regulator decides it is in the best interest of the public to promote solar generation and requires the utility to incentivize it, then the utility has to do it but can ask for a rate structure to still make a return on their capital. Yes, the general rate payers are subsidizing solar but then all along, the utilities have been helped with direct and indirect subsidies to promote cheap and reliable electrical power. Fairness is not the bottom line. The electric grid is a socialized, economic system meant to promote universally available electric power. Think of all the rural areas where it was never profitable to string wire to. All subsidized by the REA program and unfair to the urban rate payers who helped pay the freight. Now that the grid is built out everywhere this is no longer an issue. No, the issue now is transitioning the grid to clean, renewable energy sources and the regulators are changing the rules and incentives to match. The utility's argument about "fairness" is off-point and irrelevant PR.

[huge]

So far, APS has grandfathered their rate plans. I have customers still on the old TOU plan which was on-peak from 9am to 9pm (what a sweet deal for solar).
I just quoted a guy with a big house $2.36/watt (yes, that's not a typo) on a 9.6kW (58% of his usage) that will pay off in 5 years because he has the 9-9 plan.

Do you also do installs in CA? How do you make money with that price? There are companies in CA that won't budge under $4

[solarix]

Good solar panels now cost under $0.70/watt wholesale and including all equipment under $1.25/watt. I'll be the first to mention all the overhead costs involved with being in business, but our cost of living is not as ridiculous as in the socialist republic of California either. Still, I marvel at how solar installers there are charging $3.50/watt! Too bad you can't outsource solar installation....

[Crowbar]

Right Sunnyguy, utilities are a monopoly and are mandated to serve the public interest - not make as much profit as possible. They are assured of making a reasonable return though. If the public regulator decides it is in the best interest of the public to promote solar generation and requires the utility to incentivize it, then the utility has to do it but can ask for a rate structure to still make a return on their capital. Yes, the general rate payers are subsidizing solar but then all along, the utilities have been helped with direct and indirect subsidies to promote cheap and reliable electrical power. Fairness is not the bottom line. The electric grid is a socialized, economic system meant to promote universally available electric power. Think of all the rural areas where it was never profitable to string wire to. All subsidized by the REA program and unfair to the urban rate payers who helped pay the freight. Now that the grid is built out everywhere this is no longer an issue. No, the issue now is transitioning the grid to clean, renewable energy sources and the regulators are changing the rules and incentives to match. The utility's argument about "fairness" is off-point and irrelevant PR.

Please correct me if I'm wrong, but I thought APS would only buy power from you (panels on the roof of your home) at a wholesale price so they can charge a retail price. Doesn't seem to make sense they would buy from you at a retail price and sell for the same??

[solarix]

Yes, APS hates giving solar people retail credit for their excess solar power - but this is the net-metering deal that was implemented by the AZ Corporation Commission to promote the use of solar power. And solar has boomed as a result. Since net metering went into effect, the percentage of APS's capacity that is renewable has gone from 0% to almost 5%.
On the other hand, with most solar customers on the standard (12.5 cents/kwhr or less) rate plan, APS should be happy to get mid-day solar power and sell it to other regular rate payers that are on the higher rates.

[Ian S]

"On the other hand, with most solar customers on the standard (12.5 cents/kwhr or less) rate plan, APS should be happy to get mid-day solar power and sell it to other regular rate payers that are on the higher rates. "

I'm surprised that most APS solar customers are on the standard rate. Last I looked that really only made sense if your production was >~80% of your overall consumption. Even then it can be iffy depending on your usage patterns. I'm pretty sure that I'm better on the TOU plan as my system only offsets around 2/3 of my overall consumption. I've found that since 2012, with one exception, I was able to bank enough peak kWhs to go the entire year without purchasing a single peak kWh of electricity. So all of my power purchases are at the low off-peak rates. Furthermore, my system size is such that my banked on-peak energy dips to nearly zero in September thereby ensuring that my December true-up (at the $0.029/kWh rate) is as low as it can be.