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Corporation Commission approves monthly charge for APS solar users

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PHOENIX – The Arizona Corporation Commission on Thursday narrowly approved a charge averaging $4.50 a month for APS customers installing new solar systems, resolving a contentious case over the future of net metering.

APS asked the commission to have solar users pay for access to the grid into which they feed excess electricity and in return receive credit against their bills.

The utility sought a higher amount and opposed the final agreement, a joint proposal from the state’s advocate for residential ratepayers and an industry group composed of several rooftop solar companies. That monthly charge, based on a solar system’s capacity, will be 70 cents per kilowatt starting in 2014.

Corporation Commission Chairman Bob Stump, who joined Bob Burns and Susan Bitter Smith voting in favor, said the decision balances the needs of all ratepayers and the future of solar power.

“This commission is interested in ensuring that solar has a bright future in Arizona, but this commission is also interested in ensuring all ratepayers get a fair deal,” he said.

Commissioners Brenda Burns and Gary Pierce voted no, calling the amount too low.

“I don’t know what the right number is, but I don’t think it is 70 cents,” Brenda Burns said during the public hearing.

Prior to the commission’s two-day hearing, during which scores of people spoke, rooftop solar users didn’t pay to access the electric grid. Solar advocates and solar industry groups contended that the benefits of the systems offset the cost to utilities of establishing and maintaining the grid.

Jim McDonald, a spokesman for APS, said the decision recognizes that non-solar users pay for solar users to have access to the grid, but he said the amount doesn’t shift enough of that cost.

“It does not take into account the impact on our million customers who don’t have rooftop solar,” he said.

As more people adopt solar, more of the cost will be shifted toward households without solar, McDonald said.

“Those things just become harder and harder to resolve,” he said. “As we get more rooftop solar customers … what we want is a system that’s fair for all of our customers.”

The decision will grandfather the nearly 18,000 APS solar users as well as any household that adopts solar before the end of the year. The amount will be subject to quarterly reviews.

The Arizona Residential Utility Office (RUCO) will be responsible for monitoring the growth of solar in Arizona and will recommend changes to the monthly rate.

The final amount resulted from a joint proposal between RUCO and The Alliance for Solar Choice, composed of several rooftop solar companies.

Hugh Hallman, the group’s attorney, said the amount approved by the commission will help with the adoption of the new technology.

“But I think it now recognizes that solar is paying a price to support the transition from the old technology of distributed energy – from single plants to homeowners getting to generate their own power,” he said.

Mark Holohan, president of the board of the Arizona Solar Industries Association and solar division manager for Tempe-based Wilson Electric, said the decision wasn’t the best for the solar industry, but he said it’s better than the alternatives.

“It’s certainly a new day to impose a penalty on the solar customer, but at least we believe solar can still be moderately attractive,” he said.

Solar power has a strong future in Arizona, but its growth will somewhat slower, Holohan said.

Patrick Quinn, RUCO’s director, said the decision helps Arizona’s electric future.

“We do think, down the road, there will be some benefits, more benefits for solar energy,” he said.