FOR IMMEDIATE RELEASE

Contact:
Autumn Johnson
(520) 240-4757
[email protected]

Phoenix, AZ - Today, the Arizona Corporation Commission (ACC) voted 4-1 to approve Arizona Public Service's (APS) Virtual Power Plant (VPP) pilot program.  AriSEIA proposed that APS adopt a VPP in its 2022 rate case. The ACC voted on February 22, 2024 to proceed with a VPP as a pilot program and ordered APS to file a plan of administration to implement that program. That implementation plan was voted on today and passed 4-1 with only Vice Chairman Myers voting no.

A virtual power plant allows a utility to aggregate customer owned devices, like batteries, to provide capacity back to the grid. APS' proposal is a pay-for-performance model in which customers are paid only when they provide capacity to the grid and they are paid a rate less than that of comparable wholesale purchases, saving all rate payers money.

"Virtual power plants are a win win for customers and the grid. These batteries are paid for with private capital and are already interconnected and ready for use today. This program will help APS meet the growing demand for electricity in Arizona," said Autumn Johnson, Executive Director of AriSEIA. "Trico already has a VPP and Salt River Project (SRP) just voted to implement one this year. Tucson Electric Power (TEP) plans to propose one in its next rate case. Arizona is moving in the right direction."

VPPs are deployed all over the country. There are more than 500 in the US and their capacity is expected to top 60 GW by 2030. According to the US Department of Energy, “VPPs are among the critical solutions to meet the pressing challenges the grid faces today and in the near term to keep electricity rates affordable while maintaining grid reliability and resilience.”[1] According to Brattle, VPPs could save US utilities $15-35 billion in capacity investment over ten years.[2]

The full docket can be found here.

About AriSEIA

AriSEIA is the leading voice of the solar industry in Arizona, dedicated to advancing solar energy through advocacy, education, and collaboration. With a commitment to promoting sustainable energy solutions, AriSEIA serves as a catalyst for the growth and development of Arizona's solar industry.

[1] US DOE, Pathways to Commercial Liftoff: Virtual Power Plants 2025 Update, January 2025, available here https://liftoff.energy.gov/wp-content/uploads/2025/01/LIFTOFF_DOE_VirtualPowerPlants2025Update.pdf. 

[2] Brattle, Real Reliability: The Value of Virtual Power, May 2023, available here https://www.brattle.com/wp-content/uploads/2023/04/Real-Reliability-The-Value-of-Virtual-Power_5.3.2023.pdf. 

City of Buckeye
Planning & Zoning
530 E. Monroe Ave.
Buckeye, AZ 85326
 
RE: City of Buckeye Battery Energy Storage System (BESS) Ordinance (3.2.2 Use-Specific Standards, Battery Energy Storage System (BESS) and Solar Generation Station)
 
Dear Mr. Wingard and Ms. Woods and Planning and Zoning Staff,
 
AriSEIA appreciates the opportunity to submit this second set of feedback on the proposed BESS section of the ordinance.
 
Definitions
The applicability section specifying that the ordinance only applies to utility-scale BESS facilities is important; as is the fact that the ordinance is not retroactive. It would be helpful to also make the applicability of the ordinance only to utility scale BESS clear in the definitions section on page 89.
 
Similarly, the definition of “solar generation station” should be clear that it applies only to utility scale solar arrays. You can have residential and commercial/industrial ground mounted solar systems and they can export their excess power to an “off-site electric utility provider.” You could make this clearer by setting a threshold for the size of the project (for example over 100 MW) or you could make it clear that none of the power from the project is intended for on-site usage.
 
Setbacks
Tying the ordinance to the most recent versions of UL 9540 and NFPA 855 is recommended. The American Planning Association found the national setback average for BESS-specific setbacks used distances of 50-150 feet from property lines.[1] While the NFPA recommends 100’, we recommend no more than 150’ based on the Phoenix Regional Standard Operating Procedures Battery Energy Storage Systems policy.[2] All electricity generation and energy storage creates some amount of risk. However, battery incidents represent only 2% of battery installations.[3] Setbacks for batteries should not be more onerous than setbacks for other energy storage devices, such as those that contain fossil fuels. The setbacks should be measured from the BESS equipment, not the BESS property line.
 
Height
Both solar and BESS allow height increases to be approved by the P&Z Commission.  The height max is set at 55’, but it can go up to 120’ when set back from the property boundary.  Sometimes it is beneficial to have taller poles – that reduces the amount of ground disturbance.  We would suggest that the text be changed to state that additional height may be approved as part of the site plan process. We do not recommend creating a separate P&Z approval process solely for height.  The height should be considered as part of the site plan. Additionally, site plan approvals should be able to obtain extensions. 
 
Waiver Provision
The current ordinance draft covers the primary land use matrix for all zoning districts in Buckeye. The ordinance should include a waiver provision in the event a project proposal conflicts with some component of the permitted ordinance uses but is otherwise an ideal site. The City of Eloy Solar and BESS Ordinance includes such a provision.[4] We recommend adding language such as that included in 21-3-1.39(B) of Eloy’s ordinance.
 
Other
While it is good that the City is looking at ways to specifically permit BESS, it needs to be clarified that the new procedures– in particular the CUP requirement in the AG and R1-43 zoning districts – apply only to “stand-alone” BESS.  An approved solar project should be able to include BESS as an accessory use by-right without an additional CUP process.
 
In the “ownership changes” section, we recommend making the 30 days longer or adding a grace period before voiding all BESS project approvals.
 
The location of the project should be taken into consideration when it comes to perimeter walls and landscaping. How remote a project is or other attributes of the surrounding environment may reduce the need for a specific wall height, type of wall, or landscaping.
 
Thank you for your time and consideration and we look forward to continuing to engage with the
City on this ordinance as the stakeholder process progresses.
 
Respectfully,
Autumn Johnson
Executive Director
AriSEIA 
(520) 240-4757
[email protected]

[1] American Planning Association, Zoning Practice, P.10 (Mar. 2024), available here https://planning-org-uploaded-
media.s3.amazonaws.com/publication/download_pdf/Zoning-Practice-2024-03.pdf

[2] City of Phoenix, Battery Energy Storage Systems, April 2023, available here https://www.phoenix.gov/firesite/Documents/205.20A%20Battery%20Energy%20Storage%20Systems.pdf.

[3] California Public Utility Commission, Energy Storage Procurement Study: Safety Best Practices, 2023, available
here https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/energy-division/documents/energy-storage/2023-05-
31_lumen_energy-storage-procurement-study-report-attf.pdf.

[4] Eloy Ordinance, 21-3-1.39, available here https://codelibrary.amlegal.com/codes/eloyaz/latest/eloy_az/0-0-0-9381.

Arizona Corporation Commission
1200 W. Washington Street
Phoenix, AZ 85007
 
RE: Please approve the APS Virtual Power Plant (BYOD) Pilot Program, Docket No. E-01345A-22-0144; Exceptions
 
Dear Chairman and Commissioners,
 
This issue was thoroughly litigated in the last Arizona Public Service (APS) rate case. APS conducted a robust stakeholder process as ordered by the Commission. AriSEIA recommends adoption of the Plan of Administration (POA) as filed.
 
The Grid Needs More Capacity
APS is predicting unprecedented load growth over the next decade. To meet this rising need, the utility must aggressively add capacity which, if not done thoughtfully, will put dramatic upward pressure on rates. One way to mitigate that upward rate pressure is to avoid direct utility investments where possible and to leverage customer owned assets to provide services that would otherwise require utility investment and risk increasing ratepayer costs. To this end, the Commission ordered APS to implement the money-saving Bring Your Own Device (BYOD) program (also known as a virtual power plant (VPP)) which uses customer owned batteries to meet peak demand. The evidence in the rate case found that such a program could give APS access to batteries at a cost well below the cost of utility owned storage or market purchases.

The Company has projected more than 4,000 MW of new capacity need over the following decade, and its integrated resource plan (IRP) shows that it will be procuring copious amounts of centralized generation and battery storage. APS’ 2024 all source request for proposals (ASRFP) sought at least an additional 2,000 MW of resources by 2030.[1]

Residential Batteries Can Provide Capacity
The Commission has been discussing this concept since at least 2020. In Decision No. 77855, the Commission ordered APS to “permit the aggregation of distributed demand-side resources [DDSR]… and provide compensation for the value each distributed demand-side resource provides, including, but not limited to, compensation for capacity, demand reduction, load shifting, locational value, voltage support, ancillary and grid services…”[2] In Decision No. 78165, the Commission ordered APS to file a DDSR tariff by May 1, 2022.[3] More than a dozen stakeholder meetings were held just in preparation to the filing of the DDSR tariff.[4] Once the tariff was filed, an entirely new docket was opened; workshops were held; national labs were engaged. That docket resulted in an additional year of work that resulted in the Commission finding APS did not go far enough and directing APS to issue a new RFP for the DDSR aggregation tariff.[5]
Also in 2020, Commission Staff recommended approval of APS’ original battery pilot program, which had an upfront incentive for installing batteries. Staff said, “a tariff that compensates customers for the specific benefit their systems bring to the grid can also be beneficial and in the public interest.”[6] Staff characterized such a program as a “forward-looking policy that can benefit all APS ratepayers.”[7] When APS first proposed this pilot, it stated this original pilot would “inform a future potential ‘pay-for-performance’ shared storage program and system planning to ensure continued reliability for APS customers.”[8]

APS sought to expand the original battery pilot, which was fully subscribed by January of 2023.[9] APS proposed expanding the battery pilot program in its amended 2023 Demand Side Management (DSM) plan. APS stated, “reallocating DSM budget to support expansion of the Residential Battery Pilot-an already-successful program that APS believes represents the best path forward to achieve the Commission's DDSR goals.”[10] The Commission has not voted on the APS 2023 DSM plan or its 2024 plan in which it also requested expanding the program.[11]

APS subsequently closed its battery pilot program because the Commission voted to pursue this VPP program instead in Decision No. 79293. At the February 22, 2024 open meeting in which the 2022 rate case was voted on, Vice Chairman Myers specifically asked Staff and the administrative law judge about their opinions on moving forward with the VPP program. Commission Staff said they have “no concerns moving forward” with the VPP program as was directed in the Recommended Opinion and Order.[12] Judge Harpring said the VPP “would present an opportunity that APS currently lacks that could be a lot more meaningful than APS’ battery pilot” and “I think this is an opportunity. APS needs a lot of dischargeable resources. This would provide a new dischargeable resource and I see that as a positive.”[13]

Denying the POA would eliminate all battery pilot programs at APS and would set Arizona back more than five years. That is not an efficient use of taxpayer dollars as the Commission has been pursuing this since 2020 or ratepayer dollars since APS has been working to aggregate demand side resources also since 2020. Another rate case would result in an unnecessary delay of at least two more years.

There are more than 500 VPP programs in the US.[14] By 2030, VPPs could reduce peak demand in the US by 60 GW. By 2050, VPPs could grow to more than 200 GW nationwide.[15] According to Brattle, VPPs could save US utilities $15-35 billion in capacity investment over ten years.[16] According to the US Department of Energy, “VPPs are among the critical solutions to meet the pressing challenges the grid faces today and in the near term to keep electricity rates affordable while maintaining grid reliability and resilience.”[17] Salt River Project (SRP) just committed to develop a VPP program by the end of 2025.[18]

Residential Batteries Add Capacity For Less Than Market Purchases
APS provided the quantity and price of its wholesale market purchases from 2018-2022 in the rate case.[19] An analysis of this data shows that the Company routinely paid in excess of $200/MWh for market purchases, with occasional purchases in excess of $1,000/MWh.  AriSEIA/SEIA’s analysis showed that the average weekday market purchase cost between 2019 and 2022 was over $100/MWh between 5 PM and 9 PM, the exact hours the VPP program would target.[20] 

But if one looks at the actual highest-cost purchases, the avoided energy potential is much higher. AriSEIA/SEIA determined the 500 highest cost hourly purchases throughout the year and then analyzed the purchases that fell in the core summer months of June to September from 2018 through 2022.[21] 

Even in 2019, which was an outlier in terms of the low quantity of high-cost market energy purchases, the average purchase during the high-cost hours was nearly $400/MWh. In 2021 and 2022 (and likely 2023), the price and quantity of high-cost purchases surged, with the average high-cost hour moving north of $800/MWh. 

Additionally, at $110/kW per year, the VPP program is less expensive that the cost of utility scale battery storage. The evidence in the hearing showed that the revenue requirement for APS-owned utility-scale batteries costs ratepayers $208/kW per year.[22] AriSEIA originally proposed $150/kW. The valuation in the POA is the result of a compromise derived out of the Commission ordered stakeholder process in Decision No. 79293.

Please Adopt the APS POA
In Staff’s Memorandum, they correctly assert the numerous benefits that this program can provide to the grid and they correctly state that all of these numerous benefits were discussed at length during the six month stakeholder process, which led to the creation of the POA. It is incongruent to argue that APS does not consider enough of the benefits which would “lower the net cost of the BYOD Program” and “increase the availability of customer incentives” while also stating that the program presents a possible cost shift.[23] Making the program a pilot capped at 5,000 customers was a compromise that the Commission already voted on in Decision No. 79293. Changes to the size of the program are not part of the Commission order to APS or Staff and are outside the scope of the POA. Additionally, the costs of the program are already factored into the per-kW valuation. The payments to participating customers are already reduced to cover the costs of the program. Further, while Staff expresses concerns of a cost shift, they also argue that APS should rate base the VPP program, which would allow APS to collect a return on the VPP program, which would increase costs for everyone.

As mentioned above, APS’ first battery pilot was fully subscribed. As of January 31, 2025, APS had more than 4,195 customers with batteries and another 1,250 were in the interconnection pipeline. Given the increase in electricity rates and the decrease in the RCP, most installations will soon be solar plus storage. Further, it is the installers who obtain customer enrollment, not APS or EnergyHub. The installers already have direct relationships with qualifying customers and have a natural incentive to educate customers as to the program. APS’ Cool Rewards program currently has 95,000 enrolled customers, capable of conserving 160 MW of energy.[24] The potential for a battery program is significant.
As was directed in Decision No. 79293, APS thoroughly considered the kW versus kWh issue, which was resolved in favor of a program design with a $/kW payment structure. We have no recollection of Staff ever raising this issue in the stakeholder process. As a capacity resource, which is the point of the program, kW are the appropriate metric. This was also discussed at length in the rate case testimony.

Staff states that, “given the increasing demand for electricity in Arizona, Staff recognizes the importance of leveraging existing capacity resources and supports the advancement of technologies.”[25] We agree. According to APS, “APS resource planners expect peak customer demand to grow to more than 13,000 MW by 2038. For perspective, it took APS 140 years to reach 8,200 MW of peak demand, and customer needs will increase by 60% in only 14 years.”[26] The Commission has been discussing this concept for five years and this exact program for two years. Additional delay is unwarranted and needlessly limits capacity resources that are already available today at a time when we are experiencing significant load growth at a price less expensive than the alternative.

As Staff correctly points out “APS was ordered to meet with other interested parties to collaboratively reach an agreement on the language of the BYOD POA.”[27] And against all odds, APS has done just that. Please approve the POA as drafted. AriSEIA has attached AriSEIA Proposed Amendment 1 to modify Staff’s draft order to approve the POA.
​
Respectfully,

Autumn T. Johnson
Executive Director
AriSEIA 
(520) 240-4757
[email protected]

[1] APS 2024 ASRFP, available here https://www.aps.com/en/About/Our-Company/Doing-Business-with-Us/Resource-Planning/Request-for-Proposals.

[2] ACC Decision No. 77855, Docket No. E-01345A-19-0148, available here https://docket.images.azcc.gov/0000202797.pdf?i=1741200024102.

[3] ACC Decision No. 78165, Docket No. E-01345A-19-0148, available here https://docket.images.azcc.gov/0000204280.pdf?i=1741200631832.

[4] APS DDSR Tariff, June 1, 2022, Docket No. E-01345A-22-0143, available here https://docket.images.azcc.gov/E000019505.pdf?i=1741200030297.

[5] ACC Decision No. 78878, March 16, 2023, Docket No. E-01345A-22-0143, available here https://docket.images.azcc.gov/0000208710.pdf?i=1741200030297.

[6] ACC Decision No. 77762, Docket No. E-01345A-19-0148, available here https://docket.images.azcc.gov/0000202207.pdf?i=1741200977874.

[7] Id.

[8] APS Supplemental to the 2020 RES Plan, August 26, 2020, Docket No. E-01345A-19-0148, available here https://docket.images.azcc.gov/E000008576.pdf?i=1741203415780.

[9] APS 2023 Demand Side Management Annual Progress Report, March 1, 2024, Docket No. E-00000U-18-0055, available here https://docket.images.azcc.gov/E000034300.pdf?i=1741300652460.

[10] APS Amended 2023 DSM Implementation Plan, May 31, 2023, Docket No. E-01345A-22-0066, available here https://docket.images.azcc.gov/E000027360.pdf?i=1741300107475.

[11] APS 2024 DSM Plan, November 30, 2023, Docket No. E-01345A-23-0088, available here https://docket.images.azcc.gov/E000032472.pdf?i=1741374160495.

[12] February 22, 2024 Open Meeting at 7:21:00.

[13] Id.

[14] Utility Dive, US VPPs Can Meet Summer Demand Peaks Faster, Cheaper Than New Generation and Transmission, July 10, 2024, available here https://www.utilitydive.com/news/us-vpps-can-meet-summer-demand-peaks-faster-cheaper-than-new-generation-an/721024/.

[15] RMI, Virtual Power Plants, Real Benefits, January 2023, available here https://rmi.org/insight/virtual-power-plants-real-benefits/. Attachment A

[16] Brattle, Real Reliability: The Value of Virtual Power, May 2023, available here https://www.brattle.com/wp-content/uploads/2023/04/Real-Reliability-The-Value-of-Virtual-Power_5.3.2023.pdf. Attachment B

[17] US DOE, Pathways to Commercial Liftoff: Virtual Power Plants 2025 Update, January 2025, available here https://liftoff.energy.gov/wp-content/uploads/2025/01/LIFTOFF_DOE_VirtualPowerPlants2025Update.pdf. Attachment C

[18] SRP, Board of Directors Approves Pricing Proposal, February 27, 2025, available here https://media.srpnet.com/srp-board-of-directors-approves-pricing-proposal/.

[19] AriSEIA 4.03_ExcelAPS22RC03362_Hourly Market Purchases 2018-2022

[20] Lucas Direct at 59.

[21] This is twice as many as are allowed in the BYOD program, which authorizes 60 event days with events up to 4 hours.

[22] See Kevin Lucas in hearing test. Sept. 1, 2023 at 00:04:31.

[23] Utilities Division Memorandum, February 26, 2025, Docket No. E-01345A-22-0144, available here https://docket.images.azcc.gov/E000041768.pdf.

[24] APS Customers Served with Reliable Power During Record-Breaking Heat, October 7, 2024, available here https://www.aps.com/en/About/Our-Company/Newsroom/Articles/APS_Customers_Served_With_Reliable_Power_During_Record-Breaking_Heat#:~:text=APS%20Cool%20Rewards%20acts%20like,small%20power%20plant%20would%20produce.

[25] Utilities Division Memorandum, February 26, 2025, Docket No. E-01345A-22-0144, available here https://docket.images.azcc.gov/E000041768.pdf.

[26] APS Secures its Largest-Ever Energy Supply to Reliably Serve Customers, November 20, 2024, available here https://www.aps.com/en/About/Our-Company/Newsroom/Articles/APS_Secures_its_Largest-Ever_Energy_Supply_to_Reliably_Serve_Customers#:~:text=APS%20resource%20planners%20expect%20peak,is%20conducting%20a%202024%20ASRFP.

[27] Utilities Division Memorandum, February 26, 2025, Docket No. E-01345A-22-0144, available here https://docket.images.azcc.gov/E000041768.pdf.

Both Trico and SSVEC have proposed numerous anti-solar positions in their pending rate cases, including ending net metering for commercial solar customers, introducing new fees for solar customers, and ongoing export rate problems. AriSEIA has intervened to advocate on behalf of solar customers and installers.

Salt River Project
1500 N. Mill Avenue
Tempe, AZ 85288
 RE: 2025 Pricing Proceeding Recommendations
 
Mr. President, Board Members, and Staff,
 
The Arizona Solar Energy Industries Association (AriSEIA) is the solar, storage, and electrification trade association for the State of Arizona. We advocate for pro renewables policies at every level of government. AriSEIA does not speak for or represent a single company. We represent nearly 100 companies in the State and we advocate for policies that we think are beneficial for the industry and the grid and best serve the public interest to the greatest extent possible.
 
As such, we agree with most of the proposals made by the other organizations, namely Southwest Energy Efficiency Project (SWEEP), Vote Solar, Wildfire, Arizona PIRG, Western Resource Advocates, and Sierra Club on February 6th. We also support many of the points made by Mr. Neil. We agree with an evidenced based approach to policy and ratemaking. We do not support or endorse comments or proposals that impede the clean energy transition, either by individual commenters or individual companies. Batteries are an essential and integral component to increased renewables on the grid, both at the distributed and utility scale levels. Misinformation about the safety or efficacy of batteries is unhelpful and shortsighted and we encourage the board and management to disregard such comments and proposals.
 
Correcting Battery Misinformation
While China is currently the world's leading manufacturer of battery cells, a diversified supply chain outside of China is rapidly developing, including manufacturing here in the U.S. The risk of China-only sourcing diminishes by the day.
 
Residential batteries do not fail at high rates; they work well when properly installed. Very few residential batteries fail. Like any other mechanical or chemical device, batteries degrade over time. The manufacturer maps, specifies, discloses, and guarantees this degradation. After 10 years, typical home batteries are guaranteed to still produce 70% (on average) of their original rated capacity. Capable installers consider this degradation when modeling system performance and expected savings and discuss these factors with their clients. Every home is different, uses different amounts of energy, and has different load profiles from other houses. Ethical, competent solar installers study the complexities of home batteries and design the best system for the home, the homeowner's usage, and savings goals. Batteries are often used to achieve these goals, and when designed and installed correctly, they will provide many years of reliable operation and savings.
 
There are very few fire risks associated with modern batteries. Manufacturers have incorporated numerous safety features designed to ensure safety, and data shows very few issues. Additionally, the best practice in Arizona is to install the battery inside of a home, in a garage or utility room, and not outdoors. Home batteries are widely available and can be ordered, delivered, and installed today. Out of half a dozen popular battery manufacturers, only one is experiencing supply issues.
  
Virtual Power Plants
Distributed batteries allow individual ratepayers to reduce their electric bills and increase their resiliency in the event of a power outage, while also benefiting the utility and other ratepayers, by providing valuable capacity when the grid needs it most. Valuing that capacity sends a price signal to a ratepayer who has used their own capital to install a battery to provide the stored energy to the grid, instead of their own home, when there is strain on the grid. This is a supply virtual power plant (VPP). SRP can call an event on a hot August afternoon and thousands of homeowners can respond by allowing SRP to use their batteries, instead of them using the stored power themselves.
 
According to the U.S. Department of Energy, there is currently 30-60 GW of VPP capacity on the grid today, but that amount needs to triple by 2030.[1] Arizona Public Service (APS) is in the process of adopting a VPP modeled off of AriSEIA’s proposal, which is derived from a very successful VPP program called ConnectedSolutions. Our proposal is a pay for performance only model that allows the utility to call up to 60 events in the summer season for up to three hours. A third party aggregator operates the program just like a smart thermostat program. Participants can lock in their rate for five years. While we understand that actual adoption of a VPP program within this pricing proceeding may not be possible, we recommend the Board direct management to engage with AriSEIA to develop a program to bring to the board for consideration by the end of the year.
  
Time of Use
64% of SRP’s customers are not on a time of use rate and 95% of SRP’s customers can opt out of a time of use rate. Only 5% of SRP’s customers are solar customers and, yet, they are the only customers required to be on a time of use rate. All customers should have the same rate plan options and all customers should be defaulted onto a time of use rate. Contrary to the comments of the board consultant, no one has argued for 100% participation on the time of use rates, but it should be the majority of customers and customers should have to opt out, rather than opt in. No current time of use customers should be defaulted to non-time of use rates in 2029. They should instead be defaulted to E-28. The differential between the on peak and off peak rates should be roughly 3:1 and that differential should be between on and off peak, not on and super off peak. The on peak time of use window should be three hours to maximize participation.
 
We recommend that E-16 and E-28 have the same on peak period. To alleviate management’s concern about the shifting on peak window and the need to cover more than just 3 hours, we recommend customers have the option of one of two staggard on peak windows. We recommend a 4-7pm on peak option and a 6-9pm on peak option. This alleviates strain on the grid, allows families to select which plan works best for their schedule, and does not penalize solar owners.
 
We also recommend that the super off peak window be 10-3pm in the winter. This aligns with both the costs experienced by SRP and with what other utilities, such as APS, are currently offering. This will reduce customer confusion, creates an evidence and cost based program, and does not unnecessarily penalize solar customers.
 
Fixed Fees
AriSEIA agrees with the other organizations that made comments on February 6th. Fixed fees should be as low as possible, as volumetric charges better align price signals with behaviors that improve efficiency. However, to the extent SRP has fixed fees, there should be parity between solar and non-solar residential customers. Solar customers should not be singled out for punitive and discriminatory fees.
 
Export Rate
SRP’s export rate is significantly below the other large utilities in Arizona. The valuation of the avoided cost is not correct. That methodology has not been highly scrutinized by the Arizona Corporation Commission or stakeholders because the Resource Comparison Proxy (RCP) framework has not yet rendered it necessary; however, SRP’s proposed export rate methodology in this case is inadequate. AriSEIA met with SRP extensively about our concerns with the value of solar study in 2024. The current cost allocation study does not correctly assign value to capacity costs and avoided transmission and distribution costs. We recommend that SRP adopt an export rate closer to that of Tucson Electric Power (TEP) to be evaluated on an annual basis and locked in for existing customers for a period of ten years, not one year. Even though SRP is three times larger than TEP, their current number of solar customers are comparable. Therefore, TEP is a reasonable starting place for an export rate that is fair to solar customers, but is closer to the current SRP proposal.
 
Additionally, any customers on a net metered rate should be allowed to stay on that rate until 2034 and not be inadvertently bumped in 2029, as is currently proposed.
  
If SRP provided more than two months to process this pricing proceeding, AriSEIA could provide a more detailed analysis and recommendation as to solar rate design. Organizations need time to hire an expert, have the expert review the workpapers, run their own analyses, and make a detailed recommendation. Therefore, we recommend the board set a vote on this pricing proceeding this summer, since the rate will not take effect until November of 2025, so that the best possible recommendations can be brought forward.
 
Commercial Rates
SRP seems to want to move to more plans with a storage component, but not in a way that will increase the adoption of storage. We recommend SRP adopt a pilot storage rate similar to the E-32L SP rate that APS adopted in 2024. APS developed that tariff in 2023 as a result of the prior rate case in a stakeholder process with AriSEIA. A copy of that tariff is included as Attachment A.
 
Recommendations
As such, AriSEIA recommends the Board offer amendments that accomplish the following:
 
1.      Move the final vote on the pricing proposal until summer of 2025, with new rates to still take effect in November of 2025;
2.      Open all four proposed rate plans to solar and non-solar customers;
3.      Default all new customers to E-28 with an opportunity to opt out;
4.      Have the super off peak time be 10-3pm in winter, instead of 8-3pm year round;
5.      Have the same on peak time of 4-7pm or 6-9pm on both E-28 and E-16 with the ability of the customer to choose which of those periods works better for their family;
6.      Move the export rate closer to that of TEP with a 10 year lock in, evaluated annually by SRP;
7.      Adopt a pilot commercial storage rate similar to APS’ E-32L SP;
8.      Grandfather all net metered customers on their current rate until 2034, if so desired by the customers; and
9.      Management should be directed to work with AriSEIA via a stakeholder process to develop a VPP program to be presented to the board by the end of the year.
 
Respectfully,
 /s/ Autumn T. Johnson
Executive Director
AriSEIA 
(520) 240-4757
[email protected]

[1] U.S. Department of Energy, Pathways to Commercial Liftoff: Virtual Power Plants, Sept. 2023, available here https://liftoff.energy.gov/wp-content/uploads/2023/10/LIFTOFF_DOE_VVP_10062023_v4.pdf. 

City of Surprise
Community Development
16000 N. Civic Center Plaza
Surprise, AZ 85374
 
RE: City of Surprise Battery Energy Storage System (BESS) Ordinance (Chapter 106, Article X, Sec. 106-10.22)
 
Dear Mr. Abrams and Community Development Staff,
 
The Arizona Solar Energy Industries Association (AriSEIA) is the State’s solar, storage, and electrification trade association. We are active on energy policy issues at every level of government in Arizona. We have previously engaged on the City of Eloy, Mohave County, City of Buckeye, Town of Chino Valley, and Yavapai County solar/storage ordinances. Between Option 1 and Option 2, we prefer Option 2. However, we recommend the City consider an Option 3. Namely, we think the ordinance should be split between battery energy storage systems (BESS) and hazardous materials. The setbacks for those different types of facilities should be different and combining them increases fear and misinformation about BESS and clean energy broadly. Additionally, the definitions need to be modified and should be clear that they do not apply to solar or to distributed generation or storage. Finally, we continue to recommend the setbacks be based on evidence and best practices. We recommend that the City reduce the BESS 1,500’ setback from residential property (B) requirement to 150’. We also recommended adding a waiver provision to the Article.
 
Glossary
It is unclear why there are multiple definitions for battery storage and additional definitions for energy storage. The ordinance should keep the first definition for BESS. Energy Production should be completely removed from the glossary and title as the ordinance applies to storage and not generation, such as solar. Nothing in the glossary pertains to manufacturing. The definitions for Battery Storage and Manufacturing, Energy Production and Storage Facilities, and Energy Storage Facilities are redundant. The section on Hazardous Material should be a separate ordinance. The glossary should be clear that the ordinance only applies to utility/grid scale projects and not any distributed, behind the meter projects, such as residential or commercial.
 
Setbacks
The setbacks in (A) and (B) should be from the structure, not the property line. If the intent of the setback is for evacuation purposes, it makes sense to only measure from a dwelling unit. The 1,500 setback in (B) is not based on a setback from any other jurisdiction, a recommendation from the National Fire Protection Association (NFPA), or best practices. The American Planning Association found the national setback average for BESS-specific setbacks used distances of 50-150 feet from property lines.[1] The BESS 1,500’ setback requirement is significantly above BESS setback standards in other jurisdictions and will restrict clean energy development in the City of Surprise. While the NFPA recommends 100’, we recommend no more than 150’ based on the Phoenix Regional Standard Operating Procedures Battery Energy Storage Systems policy.[2] In the event the City will not consider the most conservative end of the range based on a nationwide review, we recommend no larger than a 500’ setback, commensurate with subsection (A).
 
The American Clean Power Association (ACP) provides a helpful FAQ that covers questions about battery safety and air emissions.[3] ACP also has a Claims v. Facts one-pager on battery safety, included again as Attachment B. “It should also be noted that the average emissions rates of equivalent masses of plastics exceed those of batteries.”[4] Additionally, sampling was done by the Environmental Health Division and the U.S. Environmental Protection Agency (EPA) after the Moss Landing incident and “no threat to human health or the surrounding environment” was found.[5] All electricity generation and energy storage creates some amount of risk. However, battery incidents represent only 2% of battery installations.[6] Setbacks for batteries should not be more onerous than setbacks for other energy storage devices, such as those that contain fossil fuels.
 
In (B) we agree that any setback required should be from the dwelling unit like the Yavapai County ordinance, not the lot line. And it should be measured from the actual BESS structures, not an overall project site that might also include solar.
 
Waiver Provision
The Ordinance should include a waiver provision in the event a project proposal conflicts with some component of the Ordinance, but is otherwise an ideal site. The City of Eloy Solar and BESS Ordinance includes such a provision.[7]
 
We have attached a draft Option 3 as Attachment A. Thank you for your time and consideration and we look forward to continuing to engage with the City on this Ordinance as the stakeholder process progresses.
 
Respectfully,
Autumn Johnson
Executive Director
AriSEIA 
(520) 240-4757
[email protected]

[1] American Planning Association, Zoning Practice, P.10 (Mar. 2024), available here https://planning-org-uploaded-media.s3.amazonaws.com/publication/download_pdf/Zoning-Practice-2024-03.pdf.

[2] City of Phoenix, Battery Energy Storage Systems, April 2023, available here https://www.phoenix.gov/firesite/Documents/205.20A%20Battery%20Energy%20Storage%20Systems.pdf.

[3] American Clean Power Association, Energy Storage: Safety FAQ, available here https://cleanpower.org/wp-content/uploads/gateway/2023/07/ACP-ES-Product-4-BESS-Safety-FAQs-230724.pdf.

[4] Consolidated Edison and NYSERDA, Considerations for ESS Fire Safety, Feb. 9, 2017, at iii, available here https://www.nyserda.ny.gov/-/media/Project/Nyserda/files/Publications/Research/Energy-Storage/20170118-ConEd-NYSERDA-Battery-Testing-Report.pdf.

[5] County of Monterey, Air Quality Testing Information and Process During Moss Landing Fire Incident, Sept. 30, 2022, available here https://www.countyofmonterey.gov/Home/Components/News/News/9345/1336.

[6] California Public Utility Commission, Energy Storage Procurement Study: Safety Best Practices, 2023, available here https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/energy-division/documents/energy-storage/2023-05-31_lumen_energy-storage-procurement-study-report-attf.pdf.

[7] Eloy Ordinance, 21-3-1.39, available here https://codelibrary.amlegal.com/codes/eloyaz/latest/eloy_az/0-0-0-9381. 

AriSEIA is making several recommendations to SRP's board of directors at the February 6th pricing proceeding meeting. AriSEIA will subsequently submit written recommendations. A vote is expected by the board on February 27th. The changes have a disproportionately negative impact on SRP's solar customers, which are only 5% of the residential customers. Our slides are below. More information about the pricing proceeding process can be found here.

APS has been charging a punitive and discriminatory fee against residential rooftop solar customers for almost a year and AriSEIA has been fighting it every step of the way. Today we joined with the Solar Energy Industries Association and two individual ratepayers in filing for an appeal with the Arizona Court of Appeals.

AriSEIA filed for reconsideration/rehearing today on the APS grid access charge and "legacy adjustment." These are two charges that uniquely punish solar customers for using less power from APS. The fee is currently ~$2.50 a month per customer, but APS has said it should be $88 a month per customer and the ACC has ordered them to increase it in their next rate case, which they plan to file this year. Applying for rehearing is a necessary step towards appealing to the Arizona Court of Appeals, which we plan to do on January 30th.

Salt River Project
1500 N  Mill Avenue
Tempe, AZ 85281
RE: Salt River Project (SRP) Status Change Enforcement of Master Meter
 
Dear Board of Directors and Staff,
 
It recently came to our attention that SRP proceeded with a rule change that reduced or eliminated a multi-family development’s ability to meter their facility at a centralized location. This change has significant impacts on our industry and our collaboration efforts with property developers using the Low-Income Housing Tax Credit (LIHTC) who proceeded over the last 18 months with development plans incorporating solar projects to an almost ubiquitous degree to claim the 20% Qualifying Low-Income Residential Building or Benefit Project tax credit. These developments have executed contracts, ordered electrical gear, and proceeded on the basis that their ability to elect the metering infrastructure design of their own accord would be unhindered. The essence of the solar bonus from the LIHTC program is to ensure that solar benefits are passed through to Low-Income Residents to reduce costs, and we urge SRP staff to adjust the rule change allowing for both centralized and distributed metering arrangements subject to a developer’s preference.
 
It is also important to point out that in SRP territory, the lack of Virtual Net Metering, a program which allows multi-family developments across the country to apply solar benefits virtually from a single (most cost effective) interconnection point, is not an option and therefore the only sensible route for these properties to access solar is through a pre-meditated strategy to centralize their electrical infrastructure in a manner that allows for a solar project to be implemented.
 
We recognize that our request may relate to other circumstances for Limited/Moderate Income (LMI) residents who wish to access SRP’s existing bill assistance programs, and we understand the importance of SRP’s plight to continue providing value to these residents in every form possible; however, the millions of dollars that have been invested by numerous LMI residential developers (Ulysses Development Group, Weis-Dominium, DEVCO to name a few in the area with active solar interests) under the auspice of their ability to centralize metering for a cost-effective solar project should be considered.
 
We understand the argument that low-income residents will lose access to individual plans for low income residents, but also want to point out that individually metered solar projects have the same restriction, i.e., once solar is put on an apartment complex, the ability to access low income rate plans is eliminated.
 
This change will result in projects costing 10% - 20% more due to the multiple interconnections, and the challenge to manage the property will be increased. The benefits of allowing master metering with solar are that the developer can install a solar system, share the savings with the tenant, and have a much easier time administering the site than with numerous interconnections.
 
SRP is expecting massive new load growth. We would encourage SRP to work with developers and solar companies to create development friendly policies that encourage more generation on the grid. Solar and solar+storage can be a great asset to “beating the peak.” Putting restrictions on the most straightforward way to achieve those goals is a detriment to the projects and the residents.
 
Further, such significant changes should undergo a stakeholder process before being implemented. This is the first we have heard about this change and the impending change or its justifications was never discussed with AriSEIA.
 
We recommend changing the Electric Service Specifications in 9.I.F to:
 
F. A Master Meter Service is available for new commercial and multi-level residential projects where SRP’s billing meters cannot be located on the ground floor or one level below the ground floor, provided this is not the lowest level of the Building. Also, master metering is allowed when a developer is intending to install a solar system and it would be infeasible to install it on every meter of the building.
 
Sincerely,
/s/ Autumn T. Johnson
Executive Director
AriSEIA 
(520) 240-4757
[email protected]