Arizona SRP utility will have new price plan for solar systems bought after 12/8/2014

[Volusiano]

The logic is that solar customers are "not paying their fair share" so this is a way to make sure they do. Of course, it's the utility that gets to decide just what "fair share" is. I suspect the number is derived by calculating what it would have to be to make sure residential solar can never pay off for the homeowner.

The demand function is built into the existing solar smart meters (at least it is for APS) so it's an easy implementation. Also, the utility can obfuscate on the actual cost by claiming the customer can adjust their lifestyle to keep demand costs down.

I understand their "fair share" excuse. But what I don't understand is if they want to be fair, they should implement "demand charge" for both solar and non-solar. How is it fair then that solar customers must be subjected to the demand charge but non-solar customers are not? That's the part I don't understand. Is it because solar customers have demand charging built into their existing solar smart meters but non-solar customers don't have the smart meters? I thought SRP has upgraded everyone's main meter to become smart meter already, regardless of whether they have solar or not.

The article mentioned 3 components:

1) Additional service fee of $12.50 on solar customers, but not on solar customers -> OK, I can accept that this is the penalty. If $12.50 is too low, make it $50 or whatever.

2) Lower cost from 10 cents to 4 cents -> cheaper for grid energy but also cheaper for solar credits -> net zero solar customers will probably suffer but solar customers with lower solar production may enjoy lower rate?

3) Demand charge -> why penalize solar customers if they don't make sure to spread out their uses but not penalize non-customers if they don't spread out their use? What does use pattern have anything to do with solar fairness?

[Ian S]

I still don't understand the logic of imposing the demand charge rate on solar customers only and not everyone. What does solar have anything to do with it? Doesn't seem fair to me.

The logic is that solar customers are "not paying their fair share" so this is a way to make sure they do. Of course, it's the utility that gets to decide just what "fair share" is. I suspect the number is derived by calculating what it would have to be to make sure residential solar can never pay off for the homeowner.

The demand function is built into the existing solar smart meters (at least it is for APS) so it's an easy implementation. Also, the utility can obfuscate on the actual cost by claiming the customer can adjust their lifestyle to keep demand costs down.

[Volusiano]

I still don't understand the logic of imposing the demand charge rate on solar customers only and not everyone. What does solar have anything to do with it? Doesn't seem fair to me.

[Ian S]

Here's the latest AZ Republic article on this subject that appeared today online. It seems pretty grim on what SRP wants to do, especially with the demand charge component. One thing that's not clear to me is whether this "demand charge" component is limited to solar customers only or will it apply to everyone? And if limited to solar customers only, then why???

It looks like they had an initial meeting already with 200 people showing up for it. The next one is on 2/9, and they vote on 2/26. For those who can make the meeting on 2/9, if you can report back on how it goes, it'd be much appreciated.

My understanding is the demand charge will only apply to solar customers. The article alludes to what I believe will actually happen: as a compromise by SRP, the grandfathering will be extended to 20 years and will go with the system so if you sell the home, the new owners will get the advantage of the grandfathering. That's what happened with APS and it looks like SRP learned from that. Essentially that splits the opposition into new and existing. The latter in essence will be bought off via more generous grandfathering.

I was on a demand charge rate for many years with APS as it actually saved me money as long as I was careful. However, this demand rate uses a 15 minute interval instead of a 1 hour so if you slip up, it can be very costly. Basically you'll be screwed if you turn on your electric dryer, oven or stove late in the afternoon or early evening from April through September. Also need to keep your AC set at 80F+ although that won't be as helpful since the time interval is only 15 minutes. The charge examples in the article are quite scary and it wouldn't surprise me if they were scaled back by the utility which will then look "good" by "listening to" the customers.

SRP may also follow the lead of APS in showing their commitment to distributed solar by announcing a program where customers can get a small reduction in their electric bill by letting SRP place solar panels their roof. SRP will get all the benefit and PR pats on the head.

It's all Kabuki theater but the net result will be the end of residential rooftop solar - apart from what the utility deigns to install itself - in Arizona.

[Volusiano]

Here's the latest AZ Republic article on this subject that appeared today online. It seems pretty grim on what SRP wants to do, especially with the demand charge component. One thing that's not clear to me is whether this "demand charge" component is limited to solar customers only or will it apply to everyone? And if limited to solar customers only, then why???

It looks like they had an initial meeting already with 200 people showing up for it. The next one is on 2/9, and they vote on 2/26. For those who can make the meeting on 2/9, if you can report back on how it goes, it'd be much appreciated.

[Ian S]

So if Arizona needs to get 5% of its electricity from solar homes/businesses, why allow SRP/APS to demotivate people to go solar?

The utilities don't want distributed solar power.

Political comment removed - we are trying to do better on that front. Both extremes can keep it to themselves.

[Volusiano]

So if Arizona needs to get 5% of its electricity from solar homes/businesses, why allow SRP/APS to demotivate people to go solar?

I'm guessing maybe they're well on (if not well above) the trajectory to get there by 2025 already so they're doing this to slow down the pace.

Solar is so popular in Hawaii that I hear the POCO there has halted its growth and not allow new installations to be grid-tied anymore.

[jds]

Arizona's renewable portfolio standard mandates utilities to get 15 percent of their electricity from renewable resources by 2025. Of that, 30 percent must come from distributed generation on homes and businesses. (excerpt from greenenergyauthority).

So if Arizona needs to get 5% of its electricity from solar homes/businesses, why allow SRP/APS to demotivate people to go solar?

[Tex Willer]

Arizona's renewable portfolio standard mandates utilities to get 15 percent of their electricity from renewable resources by 2025. Of that, 30 percent must come from distributed generation on homes and businesses. (excerpt from greenenergyauthority).

Thanks, found it (cleanenergyauthority). Any idea if there are similar rules for Texas and what those might be?

[russ]

Arizona's renewable portfolio standard mandates utilities to get 15 percent of their electricity from renewable resources by 2025. Of that, 30 percent must come from distributed generation on homes and businesses. (excerpt from greenenergyauthority).

Politics

[Volusiano]

What is the incentive for distribution companies to subsidize solar systems? Do they in turn get some money from federal or state sources or are there rules set by some federal or state public utility commission that require the utility companies to spend money on solar installations?

Sorry, I asked the same question in another thread, but maybe you guys reading this thread know the full story.

Arizona's renewable portfolio standard mandates utilities to get 15 percent of their electricity from renewable resources by 2025. Of that, 30 percent must come from distributed generation on homes and businesses. (excerpt from greenenergyauthority).

[russ]

What is the incentive for distribution companies to subsidize solar systems? Do they in turn get some money from federal or state sources or are there rules set by some federal or state public utility commission that require the utility companies to spend money on solar installations?

Sorry, I asked the same question in another thread, but maybe you guys reading this thread know the full story.

Politics

Politics and nothing more

[Tex Willer]

What is the incentive for distribution companies to subsidize solar systems? Do they in turn get some money from federal or state sources or are there rules set by some federal or state public utility commission that require the utility companies to spend money on solar installations?

Sorry, I asked the same question in another thread, but maybe you guys reading this thread know the full story.

[SunEagle]

Translation: we make more money building large generating stations.

That pretty much sums up their action plan.

[Ian S]

They say that creating power from large generating stations is less expensive then installing high efficient appliances and lighting loads or following conservation practices.

Translation: we make more money building large generating stations.