Arizona Corporation Commission
1200 W. Washington Street Phoenix, AZ 85007 Re: Application of APS (Docket No. E-01345A-23-0110), TEP (Docket No. E-01933A-23-0108), and UNSE (Docket No. E-04204A-23-0109) for Approval of Revisions to Resource Comparison Proxy Chairman and Commissioners, The Arizona Solar Energy Industries Association (AriSEIA) previously filed comments in the Arizona Public Service (APS) and Tucson Electric Power (TEP) dockets in this matter on August 4th.[1] That filing covered the history of the Resource Comparison Proxy (RCP), the dramatic increase to consumers for electricity, and the economic impact of high interest rates paired with a declining RCP rate on Arizona’s solar industry. We urge you not to decrease the RCP rate as proposed by Commissioner Myers’ Proposed Amendments No. 1 in each of the above referenced dockets.[2] This Commission has stated multiple times that it supports “regulatory certainty.” On January 3, 2017 the Commission issued Order 75859 in Docket No. E-00000J-14-0023, the Commission’s Investigation of the Value and Cost of Distributed Generation. That matter stemmed from a 2013 APS filing on net metering.[3] It then created a generic docket, known as the value of solar docket, that commenced on January 27, 2014 and ran for nearly two years before an evidentiary hearing was scheduled. The evidentiary hearing ran for two months in the spring of 2016 with more than eighteen parties participating. A 4-1 decision of an entirely republican Commission was issued in January 2017, three years after the docket was opened. Commissioner Burns was the lone dissenter. Implementation of the specific RCP methodologies was then resolved in subsequent rate cases for each utility. Decision 75859 states, There were also concerns raised in regard to the possibility of dramatic changes in the export rate and resulting uncertainty. However, to allow the export rate developed using this methodology to change gradually, it will be updated annually after it is initially set in a rate case proceeding or separate rate design phase. At the time that the initial DG export rate is set, a Plan of Administration that provides the mechanism for annual modifications to that initial rate also will be adopted. The annual updates accomplished between rate cases should be formulaic exercises where the Resource Comparison Proxy Methodology and the Avoided Cost Methodology established in the rate case is updated; however the reduction to the compensation rate under the RCP methodology shall not exceed ten percent per year.[4] Further, while the Commission outlined directions for calculating the RCP in Decision 75859, the Plan of Administration for each utility’s RCP rate requires the utility to submit an updated RCP calculation annually for Commission approval and specifies that the RCP “may not be reduced by more than 10% each year.”[5] The table below highlights the proposed RCP stepdown as recommended by Commission Staff versus the Myers amendments. These reductions run contrary to Decision 75859 and the Plans of Administration for each utility. As such, they do not adhere to the Commission’s own stated goal of “regulatory certainty” and also have not been noticed in accordance with A.R.S. 40-252.[6] Regulatory certainty should apply to all matters before the Commission, not only select matters. Further, it is likely a due process violation to take an RCP methodology from a multi-year process and modify it in an Open Meeting with no testimony, witnesses, or evidence and only two days’ notice, which has the potential to result in litigation. Any deviation greater than 10% from the established RCP methodology should be determined in an evidentiary hearing. AriSEIA’s previous filing highlighted the economic development importance of the solar industry to Arizona. There are more than 300 solar companies operating in Arizona. These companies employ more than 8,000 people in Arizona alone and have contributed $16.5 billion dollars to the state, with $1.5 billion invested just last year.[7] Declines in the solar industry will have ripple effects throughout the economy impacting many other high quality, blue collar jobs, such as in energy efficiency, HVAC, roofing, windows, and insulation. There is no evidence to support Commissioner Myers’ assertion that decreasing the RCP rate by 37-56% will not have a catastrophic impact on an important industry in one of the sunniest states in the country. A table reflecting an increase in DG adoption despite a 10% stepdown in prior years does not mean that increases will continue in the future with a 10% stepdown and certainly not with a stepdown 3-4 times prior decreases. Further, there is no evidence in this docket that the RCP has not dampened growth of this important industry. Because installation rates continue to creep up in TEP and UNSE’s territories does not mean they are not impacted, it simply means the industry has not completely stagnated due to burdensome regulation. APS’ DG penetration is better than TEP and UNSE’s but is still only looking at 1% growth annually since the RCP framework was adopted. Finally, AriSEIA does not agree that the RCP is a “subsidization.” The utilities pay for the power produced that benefits the grid. That power has a number of benefits that are different than utility scale solar. DG does not require new transmission; lengthy Line Siting and zoning proceedings; major land use implications that impact other industries, such as agriculture; or other major infrastructure improvements. The systems are entirely paid for by individual consumers. They are only compensated for the power they provide to the utility that benefits the entire grid, improves resiliency, and can be utilized with storage in demand response programs. If the Commission wishes to reevaluate the value of DG, an evidentiary hearing, not an open meeting, is the appropriate place to do so. Also, both the TEP and APS rate cases have also reflected numerous incidences of the utilities purchasing wholesale power above the RCP rate. Therefore, it is incorrect to assume that DG is somehow above the market rate for power. AriSEIA opposes the Myers Amendments 1 and continues to advocate for an RCP stepdown less than 10%, which is permissible under Order 75859 and the Plans of Administration. Respectfully, /s/ Autumn T. Johnson Executive Director AriSEIA (520) 240-4757 [email protected] [1] AriSEIA, Solar United Neighbors, and Vote Solar Joint Letter, Dockets E-01345A-23-0110 and E-01933A-23-0108, filed August 4, 2023, available here https://docket.images.azcc.gov/E000029205.pdf?i=1692739207146. [2] Commissioner Myers Proposed Amendments 1, filed August 22, 2023, in Docket No. E-01933A-23-0108, available here https://docket.images.azcc.gov/E000029934.pdf; Docket No. E-01345A-23-0110, available here https://docket.images.azcc.gov/E000029933.pdf; and Docket No. E-04204A-23-0109, available here https://docket.images.azcc.gov/E000029935.pdf. [3] Arizona Public Service, In the Matter of the Application of the APS for Approval of Net Metering Cost Shift Solution, Docket No. E-01345A-13-0248, available here https://edocket.azcc.gov/search/docket-search/item-detail/18039. [4] Arizona Corporation Commission, Order 75859, Page 151, Line 24 through Page 152, Line 4 (emphasis added), Filed January 3, 2017, available here https://docket.images.azcc.gov/0000176114.pdf?i=1692725715837. [5] See Appendix H, Arizona Corporation Commission, Decision No. 76295, (Aug. 18, 2017), https://docket.images.azcc.gov/0000182160.pdf?i=1657139837798 (emphasis added). [6] Arizona Revised Statutes, 40-252, available here https://www.azleg.gov/ars/40/00252.htm. [7] Solar Energy Industries Association (SEIA), Arizona Solar Census, Q1 2023, available here https://www.seia.org/sites/default/files/2023-07/Arizona.pdf.
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Eloy City Council
595 N. C Street Eloy, AZ 85131 RE: Opposition to Sections B and F(2) of the Revision of the City’s Zoning of Solar Generating and Storage Facilities Dear Mayor and Council Members, The Arizona Solar Energy Industries Association (AriSEIA) is an Arizona based nonprofit, focusing on policies that advance the adoption of solar, storage, and electrification. We are active at all levels of government in the state and represent organizations throughout the clean energy economy. I am writing to urge you to modify or eliminate Sections B and F(2) from updates to 21-3-1.39. We previously submitted a letter to this body in February 2023 and have attended three meetings of the Council or Planning and Zoning Committee. We are encouraged by the City’s willingness to make modifications throughout this process. However, there are still two major areas of concern. First, the City should not arbitrarily limit expansion of solar to 16% of City acreage. This number is not based on the public interest or any quantitative or qualitative assessment of appropriate solar development in Eloy. It is a duplication of a Coolidge requirement. This kind of restriction limits private property rights of landowners in Eloy, unnecessarily restricts economic development in the area, and risks grid reliability. With the peak records we are seeing broken this summer,[1] massive load growth in the state,[2] and increasingly hot weather,[3] Arizona’s utilities will need to build significant new infrastructure to keep the lights on in Eloy and around the state. Limiting that development on the front end is unnecessary. The City already has a process by which to approve projects and, if so desired, could keep the second half of Section B, without the 16% cap. Second, while we recommend no cap on the amount of storage per project, any cap should be based on capacity not lot size. Further, that cap should be closer to 10-20% of capacity, not 5% of lot size. This is also arbitrary, needlessly limits reliability, and impedes a growing technology prematurely. We recommend modifying Table 3-1-1 to remove the “Lot Coverage, Maximum” or modifying it to “Capacity Maximum” and 10-20%. Finally, we would like to address some of the statements made over the course of this process that may be based on misunderstanding. Throughout the western interconnect, the grid is interconnected all over the western US. Power is produced and utilized all over the west. Power in Eloy comes from New Mexico and California, for example. Limiting renewables development in Eloy because the power is not used on site is counter to how the grid operates. We are seeing increasing local opposition to renewables development. Coolidge[4] set a limit previously and Mohave County[5] is considering a one-year moratorium. Columbia Law School has found more than 200 local restrictions specifically against renewables.[6] These projects can only be located in some geographic locations. Increased limitation impedes our ability to transition the grid, save water, reduce air pollution, and keep the lights on. It has also been said that renewables projects do not “benefit residents” because the bulk of the tax revenue benefits the County and schools more than the City. However, the schools and County services do benefit residents. Residents work in the schools and send their kids to those same facilities. Personally, where I send my children for 1/3 of the day matters a lot to me as a resident. More funding correlates with better facilities and outcomes. Each of these projects contribute tens of millions of dollars to the local economy, several million of which does go directly to the City. Eloy and Pinal County have very serious air quality and water quantity challenges. It is important to look at economic development opportunities wholistically. These challenges will limit the types of businesses and industries that choose to locate in Eloy. There are only so many industries that do not need water, for example. Renewables, including solar, are an ideal economic opportunity given the constraints of the local area. I have re-included data regarding the water usage and emissions of renewables for your convenience. Solar has no point source emissions and lower lifecycle emissions than fossil fuels. It also uses less water in operations and in its lifecycle than most other electricity generating technologies. Lastly, new companies are relocating to Arizona every day and many of them are doing so to help meet their clean energy goals. The national Solar Energy Industries Association (SEIA) tracks clean energy procurement on behalf of businesses in their Solar Means Business Report and the numbers are staggering. We encourage Eloy to not indicate to those businesses that they are closed for business. Please reject Sections B and F(2) of the staff proposal. Thank you for your consideration to this important matter. Sincerely, Autumn T. Johnson Executive Director AriSEIA (520) 240-4757 [email protected] [1] Daily Energy Insider, Arizona Public Service Breaks Own Peak Demand Record Seven Days Running, July 26, 2023, available here https://dailyenergyinsider.com/news/40515-arizona-public-service-breaks-own-peak-demand-record-seven-days-running/. [2] APS stated in its currently pending rate case that they are looking at a 40% increase in peak and a 60% increase in demand by 2031. [3] Arizona Republic, July Earned Phoenix Hottest Month on Record for a US City, August 1, 2023, available here https://www.azcentral.com/story/news/local/phoenix-weather/2023/08/01/july-earned-phoenix-hottest-month-on-record-for-a-us-city/70505349007/. [4] Coolidge Council Restricts New Solar, May 14, 2022, available here https://azbex.com/local-news/coolidge-council-restricts-new-solar/#:~:text=After%20nearly%20a%20year%20of,the%20list%20of%20approved%20uses.. [5] Mohave County Board Materials for August 7, 2023, available here https://lfportal.mohavecounty.us/bos/DocView.aspx?dbid=0&id=2038857&page=1&cr=1. [6] Columbia Law School, Report Finds 228 Local Restrictions Against Siting, Wind, Solar, and Other Renewables, May 31, 2023, available here https://blogs.law.columbia.edu/climatechange/2023/05/31/report-finds-228-local-restrictions-against-siting-wind-solar-and-other-renewables-as-well-as-293-contested-projects/. Mohave County Supervisors
700 W. Beale Street Kingman, AZ 96401 RE: Moratorium on Renewable Energy Projects Dear Chairman and Supervisors, The Arizona Solar Energy Industries Association (AriSEIA) is an Arizona based nonprofit, focusing on policies that advance the adoption of solar, storage, and electrification. We are active at all levels of government in the state and represent organizations throughout the clean energy economy. I am writing to urge you to not to halt all renewable energy projects for the next year within the county. Much of Arizona has very serious air quality and water quantity challenges. Increased deployment of renewable energy can help alleviate both problems. Solar has no point source emissions and lower lifecycle emissions than fossil fuels. It also uses less water in operations and in its lifecycle than most other electricity generating technologies. Further, solar and storage have the opportunity to greatly benefit Mohave County economically. A 25-year fiscal impact summary for an average project reflects the potential to bring in more than $2 million to the City, $12.5 million to the County, and nearly $17 million to the local school districts. That’s a total positive fiscal impact of nearly $32 million from a single project. Further, new companies are relocating to Arizona every day and many of them are doing so to help meet their clean energy goals. The national Solar Energy Industries Association (SEIA) tracks clean energy procurement on behalf of businesses in their Solar Means Business Report and the numbers are staggering. Please affirm the Mohave County Planning and Zoning Commission decision. Certainly, do not institute a moratorium on all solar development in the county. I have attached some information on the number of jobs attributable to solar in Arizona, the water usage of solar (operations and lifecycle), and the lifecycle emissions of different electricity generating resources. Sincerely, Autumn T. Johnson Executive Director AriSEIA (520) 240-4757 [email protected] AriSEIA submitted a joint filing today calling on the ACC to extend the deadline for comments in its 5-year review of several rules, including resource planning, energy efficiency, and renewable energy. The ACC is reviewing all rules over a 5-year period, but most of the dockets are little known and, therefore, have no comments. AriSEIA asked the deadline for comments be moved to the end of September.
Arizona Corporation Commission
1200 W. Washington Street Phoenix, AZ 85007 Re: Application of APS & TEP for Approval of Revisions to Resource Comparison Proxy (Dockets No. E-01345A-23-0110 & E-01933A-23-0108) Chairman and Commissioners, Vote Solar, Solar United Neighbors, and the Arizona Solar Energy Industries Association (AriSEIA) urge you to support Arizona families and businesses who wish to invest in their own energy resources by reducing the proposed step down of Arizona Public Service’s (APS) and Tucson Electric Power’s (TEP) Resource Comparison Proxy (RCP) rate for 2023. The Commission outlined directions for calculating the RCP in Decision 75859, and the Plan of Administration for each utility’s RCP rate requires the utility to submit an updated RCP calculation annually for Commission approval and specifies that the RCP “may not be reduced by more than 10% each year.”[1] The Commission has the opportunity to provide consumers looking to save money on their energy bill with relief by reducing the RCP step down less than 10%. This also provides the Commission with the opportunity to support businesses in Arizona by saving jobs. Arizona families and businesses continue to face unusual economic challenges driving up the cost of basic necessities like electricity. Over the last year, consumers experienced a 6% increase in electricity costs[2] following on the heels of a 12% increase in electricity costs the year prior, the largest 12 month increase in nearly 20 years.[3] Rooftop solar is an important tool that ratepayers can utilize to help reduce their utility bills and increase energy resiliency at their home. As interest rates continue to increase to their highest levels in decades, Arizona families and businesses who must rely on long-term financing to afford the upfront cost of a solar installation may find that going solar is no longer an affordable option. Currently, any homeowner looking to finance rooftop solar will find interest rates as high as 11.99%. This makes solar very unaffordable for any homeowner who cannot buy their system outright. Any further reductions of the RCP will reduce the number of Arizona households who are able to benefit from their private investment in solar. Additionally, further reductions to the RCP will depress solar adoption in Arizona and limit opportunities to leverage distributed energy resources for demand response purposes to benefit grid resiliency. Increasingly, customers who invest in solar choose to pair their installation with distributed battery storage. This creates an opportunity for utilities to leverage customer-sited battery storage as a “virtual power plant” that can help provide reliable power to the grid in the evening hours or during summer heat waves. As investments in solar become less affordable, the growth of other innovative distributed energy resources like battery storage will stagnate. Further, there are more than 300 solar companies operating in Arizona. These companies employ more than 8,000 people in Arizona alone and have contributed $16.5 billion dollars to the state, with $1.5 billion invested just last year.[4] Residential rooftop solar installers are reporting a nearly 20% decline in business year over year since 2022, with nearly 35% declines in revenue. This is likely to result in workforce reductions of 20%. Individual installers are considering job cuts of dozens of jobs with an average, annual pay of $62,500 a year. A decline in solar will also result in declines in the roofing industry and other energy efficiency contractors, such as HVAC, windows, and insulation. High interest rates paired with a declining export rate will exacerbate this problem, resulting in a significant impact to the state’s economy. We respectfully request that the Commission reduce the step downs proposed by APS and TEP, as included within the Staff’s proposed order, in an effort to support families and businesses and provide them with an extended opportunity to capitalize on the power of the sun to reduce their energy bills. Thank you for your consideration of this important matter. Sincerely, Autumn T. Johnson Executive Director AriSEIA [email protected] Adrian Keller Arizona Program Director Solar United Neighbors (SUN) [email protected] Kate Bowman Interior West Regulatory Director Vote Solar [email protected] [1] See Appendix H, Arizona Corporation Commission, Decision No. 76295, (Aug. 18, 2017), https://docket.images.azcc.gov/0000182160.pdf?i=1657139837798 (emphasis added). [2] U.S. Bureau of Labor Statistics, Consumer Price Index Summary, (May 2023), https://www.bls.gov/news.release/cpi.nr0.htm. [3] U.S. Bureau of Labor Statistics, Consumer Prices Up 8.6 percent over year ended May 2022, TED: The Economics Daily, (June 14, 2022), https://www.bls.gov/opub/ted/2022/consumer-prices-up-8-6-percent-over-year-ended-may-2022.htm. [4] Solar Energy Industries Association (SEIA), Arizona Solar Census, Q1 2023, available here https://www.seia.org/sites/default/files/2023-07/Arizona.pdf. |
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