Arizona Corporation Commission
1200 W. Washington Street
Phoenix, AZ 85007
 
Re: Exceptions to APS Interconnection Manual, Docket E-01345A-20-0152
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Madam Chair and Commissioners,

The Arizona Solar Energy Industries Association (AriSEIA) hereby files its Exceptions to Staff’s Memorandum and Proposed Order filed on September 29th, 2022. AriSEIA appreciates Staff’s efforts in reviewing Arizona Public Service’s (APS) Draft Interconnection Manual (the “Manual”). AriSEIA believes that the Order should be amended to incorporate several outstanding changes that are important to simplifying the interconnection process and are justified based on established technology performance across the globe and in other leading U.S. markets. The following Exceptions detail what changes must be made so that APS customers can further benefit from distributed generation, which will play a critical role in modernization of the grid.

As further background, AriSEIA participated in extensive review and discussion of the Manual with Staff and APS personnel throughout 2022, and we have filed comments in this docket and submitted written feedback to both APS and Staff on outstanding issues. During the deliberation on the Commission’s Interconnection Rulemaking, we expressed our concern that there are many utility requirements that unnecessarily inflate costs while adding unnecessary time and complexity to the process for interconnecting distributed generation systems in APS territory. The Exceptions detailed herein remain in the spirit of this prior notion.

I. Production Meters for Energy Storage Systems (Section 9.2(C) and (D) of the Manual)

Section 9.2.(C) of the Manual states that a customer must provide Production Metering for any Static Inverter based Energy Storage System (ESS) (i.e., battery backup system). In addition to requiring Production Metering, Section 9.2.(D) further requires that “[c]ustomer must provide a suitable visible open disconnecting means […] to electrically isolate any CT rated meter from all potential sources of power.”

AriSEIA strongly believes that Production Metering requirements and, by extension, additional disconnecting means, are unreasonable and unwarranted for any residential or commercial customer-owned ESS designed to provide value strictly “behind the meter.” A solar system Production Meter captures all of its production. When discharging, backup batteries do not create new energy production. Furthermore, Tucson Electric Power (TEP) already acknowledged these arguments and agreed to remove their requirement for ESS Production Metering in the latest version of their Interconnection Manual filed and approved earlier this year.

A proposed amendment making this modification is attached below as Attachment A, AriSEIA Proposed Amendment No. 1.

II. Production Meters for All Generating Facilities (Section 9 of the Manual)
 
In general, and as an extension of our comments above, AriSEIA contends that Production Meters for any customer-owned Generating Facility are unwarranted in the post-incentive era, which included Performance-Based Incentives (PBI) and Upfront Incentives in exchange for ownership of a customer’s Renewable Energy Credits (REC). The applicable requirements of Section 9 are costly and burdensome when considering that distributed generation industries are disproportionately impacted by supply chain and inflation conditions to the extent that project viability is seriously impacted. Meanwhile, it is entirely feasible for regulators and utility companies alike to estimate solar production based on the system details included in Interconnection Applications, and we contend that such estimates are sufficient in lieu of Production Metering.

A proposed amendment making this modification is attached below as Attachment B, AriSEIA Proposed Amendment No. 2.

III. Ground Fault Detection Requirements for Class III Systems (Section 10.2(B)(2)e. and (3)e. of the Manual)
 
Section 10.2(B)(2)e and (3)e. states that systems in the applicable size range may require the addition of ground fault detectors in cases where the Generating Facility parallels the utility through a transformer with ungrounded configurations (float wye or delta). Utility systems must already include ground fault detection and protection with or without the presence of customer-owned Generating Facilities. In addition, Screen B of Appendix B: Interconnection Application Screens validates whether a Generating Facility’s ground fault current contributions are low enough to be safe, and any system passing this Screen should, therefore, be accommodated through existing utility equipment. At a minimum, AriSEIA contends that a clear exemption from additional ground fault detection equipment must exist for any systems which pass Screen B, as well as Non-Exporting Systems and Inadvertent Export Systems of 20 kW or less.

A proposed amendment making this modification is attached below as Attachment C, AriSEIA Proposed Amendment No. 3.

IV. Study Feed (Appendix C of the Manual)
 
The Commission’s Rules for Interconnection established that fees are allowed for utility studies “if a tariff containing such a fee for the Utility has been approved by the Commission.” Both APS and TEP include written handbook provisions which require specific fee deposit payments and provide for refunds through subsequent adjustment to the actual study costs (though costs are not defined). AriSEIA members consistently experience disproportionately high utility study deposits relative to the actual charges that are attributable to the work involved. Refunds are issued after extended periods of time (often in excess of 12 months) and represent a consistent majority of the original deposits that were made. Considering the excessive study deposits that the industry continues to grapple with, AriSEIA contends that the deposit amounts, and philosophy on study deposits, be revised in accordance with the following comments, and should be submitted to the Commission for approval:

1. The work covered by Supplemental Study Deposits should not vary by system size as the effort to study a utility circuit’s minimum daytime load does not vary materially based on system size below the Class III threshold. The experience of our members shows that deposits of $500 consistently cover a utility’s cost to provide such studies.
2. The Commission should consider whether approving a charge and deposit for Feasibility Studies will discourage submissions at the feasibility stage and lead to wasted resources on more processing of later interconnection applications for projects with feasibility issues.
3. The System Impact Study and Facility Study deposits should not exceed $1,500 for systems at or under the Class III threshold based on observed study costs and refunds.
4. For systems between one and two MW, Table C.1 refers the reader to Schedule 6, which only provides guidance for Generating Facilities “for which the total generation output […] is sold directly to APS,” meanwhile there are many large commercial customers for which generation is sold directly to the customer through other means. We believe that the deposit amounts provided for the 500 – 999 kW systems should also be sufficient to cover the costs of the one to two MW Generating Facility studies.

A proposed amendment making this modification is attached below as Attachment D, AriSEIA Proposed Amendment No. 4.

V. Rate Schedules Applicable to Distributed Generation, System Size Limiting Factors (Appendix D of the Manual)    
 
Under System Size Limiting Factors in Appendix D of the Manual, item 1.b., the methodology for calculating the maximum system size for non-residential DG systems is presented as “125% of connected load for its meter, where connected load is defined as the maximum demand divided by 0.6.” Item 2.a. further defines that the “connected load is measured in AC.” Based on AriSEIA discussions with Staff and APS, and written redlines from APS, AriSEIA notes that the intent of the definition in 2.a. was to establish that the system size is measured in AC, rather than “connected load,” which would translate to the output of the methodology in 1.b. being a non-residential DG maximum system size measured in kW AC.

A proposed amendment making this modification is attached below as Attachment E, AriSEIA Proposed Amendment No. 5.

VI. Conclusion
 
Because these manuals are iterative, the utilities should establish a stakeholder process to discuss developing issues with the manuals and technological change.
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We respectfully request the Commission direct APS to file a revised Manual with the amendments attached below by November 15, 2022, to be effective immediately upon filing. Thank you for considering these comments meant to improve the compliance of the APS Manual with the spirit and letter of the Commission’s Interconnection Rules.

Arizona Corporation Commission
1200 W. Washington Street
​Phoenix, AZ 85007

RE: Response to Arizona Public Service Community Solar Program Proposal - Docket No. E-00000A-22-0103 and Docket No. E-01345A-21-0240

Madam Chair, Commissioners, Commission Staff, and Interested Stakeholders,

The signatories to this letter — a coalition of solar and storage industry partners, including developers, subscriber acquisition and management firms, and nonprofit advocacy groups — appreciate the time that the Commission Staff, and stakeholders have dedicated to conducting five comprehensive working group meetings to date regarding the implementation of a community solar program in Arizona. With this letter, we provide a summary of necessary changes to the Arizona Public Service (APS) community solar program proposal, filed to the docket on September 26, 2022.  While the signatories appreciate that APS has offered a program proposal as required by Commission Decision 78583, the signatories find several components of the APS proposal to be inconsistent with that Decision and generally not representative of how community solar programs operate in established markets across the country.  The signatories believe that the APS proposal will not result in any competitive third-party development of community solar projects and, as such, restricts benefits that would be created for subscribers and ratepayers as a result of such development. In fact, APS’s proposal would let a single large-scale, utility-owned project interconnected on the transmission grid satisfy the entire community solar program requirement. The Commission should reject this program structure. 

The signatories agree with the four core principles guiding APS’s program design:  

1. Prioritizing low and moderate income customers, 
2. Ensuring adequate consumer protections, 
3. Eliminating or mitigating any cost-shifts through an appropriately designed bill credit rate, and 
4. Ongoing evaluation of the community solar program to guide longer-term program expansion.  

​The program proposal the signatories filed on August 26, 2022 is consistent with Decision 78583, the core principles listed above, and with community solar programs nationally. The signatories maintain that the program proposal we offered represents the best balance of benefits for all stakeholders. Should the Commission attempt to work within the framework proposed by APS, the signatories offer the following recommendations to be incorporated into the APS proposal.  These recommendations are necessary for implementation of a successful competitive community solar program. Our recommendations incorporate certain elements of the signatories’ August 26, 2022 program proposal and were further supplemented by the bill credit rate proposal filed on September 9, 2022.  The signatories request that Commission Staff adopt these necessary recommendations in its Recommended Opinion and Order (ROO).  
Key changes and clarifications to the APS program proposal are required in the following thirteen (13) areas. Comprehensive rationale behind each of these changes is provided below. 

1. The bill credit rate must be increased to appropriately reflect the characteristics of community solar resources, be consistent with Commission Decision 78583, and  ensure robust subscriber participation.
2. Initial program size must be larger than one hundred and forty (140) megawatts (MW) in order to provide meaningful benefits to Arizonans.
3. The bill credit term must be increased to twenty-five (25) years to account for the realities of financing larger distributed generation projects.
4. The low and moderate income (LMI) subscriber carve-out is an important component of the program that must be workable in design and requires more consideration to maximize participation. 
5. The Request for Proposal (RFP) format for selecting projects must be eliminated or at a minimum substantially modified.
6. Utility-scale, transmission-connected projects must be eliminated.
7. Economic curtailment must be eliminated for projects to be financeable and to maximize benefits to subscribers.
8. Program capacity should not be determined in APS’s Integrated Resource Plan (IRP) proceedings. 
9. More types of customers must be eligible for participation to maximize the benefits to Arizonans.
10. The participation of third-party-owned projects vs. utility-owned projects must be considered in more detail. 
11. How the utility disconnection moratorium interfaces with the community solar program must be considered in more detail.
12. Utility approval authority over subscription rates and marketing materials must be eliminated.
13. The two (2) percent fee for consolidated billing and the annual subscriber organization fee must be reduced or clarified.

To further supplement these recommendations, the signatories have provided Attachment A to this filing, which includes a table and graphs summarizing bill credit methodologies, values, and terms from nine programs across the country where the signatories have experience, which  are also representative of successful, robust programs. We also provide Attachment B, which summarizes program size and LMI subscriber considerations in programs across the country.  Finally, we provide Attachment C, which summarizes the key considerations of subscriber organizations and financiers when financing community solar projects.

Investing in infrastructure is an opportunity to imagine and build a better future for everyone. The influx of federal dollars from the recently-adopted Inflation Reduction Act and the Bipartisan Infrastructure Law is a once-in-a-generation chance to imagine what a better future for Arizona looks like and then to make it real. 

New federal funds have enormous potential to save residents and businesses money on energy and transportation, create new jobs, and expand prosperity – while also improving our health and protecting our climate. However, how local governments choose to implement new policies will have a large effect on their overall impact. We, a coalition of 14 clean energy, energy efficiency, community health, and environmental justice groups, write to ask you to maximize the benefits of this unprecedented opportunity and to steer our region toward a better future.

Specifically, we urge you to identify, direct federal funding towards, and maximize public participation in projects and programs that will: 

1. Save people money by reducing consumption of electricity, gas, and liquid fuel; while increasing penetration of renewable electricity and expanding access to regional electricity markets.
   
2. Create green jobs and grow the workforce, with a particular focus on training new workers for forward-looking careers, and helping workers in legacy fields – such as natural gas and petroleum supply and distribution and combustion vehicle maintenance – to transition to new economically sustainable work opportunities. 
   
3. Reduce climate-changing pollution in line with the United States’ goal to cut net greenhouse gas emissions 50% below 2005 levels by 2030.
   
4. Improve public health by investing in opportunities to cut smog and soot pollution, and by promoting active transportation options including biking and walking.
   
5. Advance equity by targeting programs and investments toward communities that have historically been left behind, or that have been disproportionately burdened with the negative impacts of legacy pollution from industry or highways; and 
   
6. Do no harm. Finally, the state and local governments should avoid spending money on projects that actively increase pollution, increase or extend reliance on fossil fuels including methane gas, waste money, deepen inequities, or impede a just transition for workers – such as widening a highway through a low-income community.
   

Opportunities to deliver these kinds of benefits to the region and state are plentiful within the Inflation Reduction Act and the Bipartisan Infrastructure Law. For example, states and local governments can:

• Improve building energy efficiency to increase occupant comfort, save money, and conserve resources. New federal laws include a range of incentives for residential and commercial building owners to invest in building performance upgrades, with a significant portion of the funding going to lower-income households and disadvantaged communities. For example, the Arizona Department of Administration will be responsible for setting up our share of the $4.3 billion HOMES Rebate program, and for allocating new funding for worker training. Local governments can increase the value of this effort by encouraging property owners to plan and carry out building efficiency upgrades and by using new federal funds to support the adoption of modern, high-efficiency building codes.
  

• Accelerate the deployment of efficient electric appliances to help residents and businesses lower their energy bills while also reducing pollution. New federal laws include a variety of incentives and programs for consumers to buy energy-efficient, electric appliances, such as heat pumps for heating and cooling buildings and to supply hot water, and induction stoves for cooking. For example, the Arizona Department of Administration will be responsible for setting up our share of the $4.5 billion High-Efficiency Electric Home Rebate Program, and for allocating new funding to train installers. Local governments can increase the value of this effort by encouraging residents and businesses to choose efficient electric appliances  – and discourage inefficient combustion appliances – through marketing, policy, and/or complementary incentive programs.
  

• Electrify vehicles to save money while also protecting the climate and improving public health. New federal laws contain provisions that will help accelerate the electrification of all vehicles, including light-duty passenger cars; medium- and heavy-duty trucks; and off-road equipment. State and local governments should take advantage of new incentives and funding sources to electrify their fleets, while expanding convenient networks of public and private charging stations, in partnership with electric utilities. Local governments should also pursue funding to electrify transit and school buses, garbage trucks, and other service vehicles; while also encouraging and assisting local fleets in acquiring and deploying electric vehicles (EVs) using the new 30 percent tax credit for commercial EVs and charging equipment. A variety of programs can help fund this work, including existing highway funds such as the Congestion Mitigation and Air Quality and the Surface Transportation Block Grant programs, as well as new dedicated funding sources like the National Electric Vehicle Infrastructure program.
  

• Reduce the need to drive by investing in public transit, biking, and walking. Whether the transportation infrastructure funds in the Bipartisan Infrastructure Law will reduce or increase pollution depends on what states and local governments choose to do with the money. Leaders should prioritize projects that reduce the need to drive, increase safety, and maintain a state of good repair. For example, the Georgetown Climate Center estimates that limiting investment in roadway capacity expansion – which increases driving – could cut transportation pollution by 1.6 percent over the next five years. Because vehicle electrification alone will likely not be sufficient to reach our national, state, and local climate goals, regional planning organizations and city transportation planners should incorporate pollution and vehicle miles traveled reduction targets into their infrastructure investment plans. Additionally, local leaders should invest in opportunities to improve access to clean transportation infrastructure and service for low-income and disproportionately impacted communities.
  

• Build compact, location-efficient cities and towns designed around mixed-use, transit-oriented development, with attention to equity and affordability. Residents of location-efficient neighborhoods can accomplish their daily tasks with less time, money, and pollution. Local governments can enhance the value of new investments in sustainable transportation infrastructure by promoting compact, infill development that enables more people to live close to jobs and services, with convenient access to a variety of transportation choices. Local governments with transportation-efficient land-use plans will have an edge when applying for funding from the new Rebuilding American Infrastructure with Sustainability and Equity and Safe Streets for All programs. States and local governments can also access assistance with planning for transit-oriented development through a pilot program at the Federal Transit Administration.
  

• Increase the supply of clean electricity and energy storage to power our lives without pollution and improve the resiliency of the electric grid to increasing threats from climate change. States and local governments should ensure that utilities are incorporating the upgraded tax credits in the Inflation Reduction Act into their least-cost resource planning – because clean energy is now even cheaper. Further, state and local leaders should promote distributed energy resources such as rooftop and community solar and stationary battery storage – both residential and commercial – taking advantage of newly enhanced federal support. Opportunities are available everywhere across the region. In particular, new federal policy targets funding specifically for rural cooperative electric utilities, agricultural producers and rural small businesses for investments in clean energy and energy efficiency. State and local leaders should encourage and assist their constituents in taking advantage of these opportunities.
  

• Improve the flexibility and efficiency of the power grid to save consumers money and integrate higher levels of clean, renewable power on the grid. New federal laws contain a variety of funds that can help states, cities, electric utilities, and others expand demand response programs and actively manage new, flexible sources of power demand. States and local governments should work with utilities to expand demand response programs and minimize electric system costs. Further, government leaders should work with utilities and business partners to pilot new technologies, such as bi-directional EV charging, to unlock new revenue streams and magnify the benefits of new clean energy investments. 
  

• Identify and invest in grid expansion to support a regional market and to transmit and distribute cheaper electricity throughout the West. New federal policy contains billions of dollars for upgrading our electricity system to carry more clean energy across a larger geography. States and local governments should work with utilities to invest in an electricity grid built for a clean energy future, beyond simply investing in basic maintenance of our current system. New funds can help convene stakeholders for conversations about setting up a regional electricity market, which Advanced Energy Economy estimates would create up to 650,000 jobs and save 11 Western states as much as $2 billion a year on electricity. And new federal policy makes billions available for transmission upgrades to help unlock that potential.
  

• Improve industrial operations to use more clean electricity and less polluting fuels while getting more work done with less energy. New federal laws offer multiple pools of money for factories to upgrade their facilities and equipment, including funding for new technology demonstration projects, technical assistance, clean hydrogen production, low-carbon aviation fuel production, low-carbon cement and building material manufacturing, battery manufacturing and recycling, and carbon capture and storage. State and local leaders should work with industrial businesses to help them take advantage of new funding and expanded markets.
  

• Facilitate a Just Transition to help workers and communities successfully navigate and benefit from progress toward a clean energy future. New federal laws offer billions in funding targeted specifically toward communities experiencing the energy transition first-hand, such as communities that host a coal-fired power plant scheduled to close. For example, the Inflation Reduction Act offers new loan guarantees to help utilities refinance coal assets and re-invest in clean energy technologies. State and local governments should actively work to support workers facing change by facilitating the development of new, accessible economic and job training opportunities. 
  

Successfully implementing the Inflation Reduction Act and the Bipartisan Infrastructure Law will require coordination and cooperation across all levels of government. Our organizations stand ready to assist with the task at hand. We look forward to meeting with you and your staff to help identify opportunities to increase benefits, connect your staff with grant-writing assistance, support your funding applications, or discuss your investment or synergistic policy plans. Additionally, please take a look at the resources and assistance available through the Local Infrastructure Hub, including a grant application bootcamp for small- to medium-sized cities. (localinfrastructure.org)

We look forward to working with you to maximize the benefits of this unprecedented investment in the future of our region.
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​To Members of the Salt River Project Board and SRP Management,

Attached please find the People’s Energy Plan to provide clean energy alternatives to the proposed portfolios currently being considered by Salt River Project Agricultural Improvement and Power District (SRP) in your Integrated System Plan (ISP). The proposed portfolios we present are supported by various communities and stakeholders, including those who have signed this letter, who are concerned about a clean energy future for Arizona. Strategen, a consulting firm focused on decarbonizing energy systems, has done the modeling and analysis for the People’s Energy Plan.

The People’s Energy Plan presents a comprehensive and detailed resource plan that lays out a roadmap for how SRP can meet its clean energy obligations to SRP ratepayers and stakeholders, as well as the people of Arizona. SRP has the potential today to help Arizona address climate change. The People’s Energy Plan is a culmination of direct feedback from everyday hardworking people, community leaders and stakeholders who have strongly voiced what they would like to see from SRP as the Integrated System Plan moves forward.

Unfortunately, SRP has been doubling down on fossil fuels with its efforts to expand the Coolidge Generating Station with 16 additional gas units that would contribute to environmental injustice in the community of Randolph, a proposal to keep the Coronado Generating Station running longer, gas expansions at Agua Fria and Desert Basin, and most recently, proposed gas at Copper Crossing. SRP’s plans to spread out gas turbines to various locations in smaller configurations come at a higher cost for ratepayers and avoids oversight by the Arizona Power Plant and Line Siting Committee and the Arizona Corporation Commission. This is the wrong direction for a utility that indicates it is dedicated to sustainability.

The People’s Energy Plan provides a reliable alternative to more gas and continued reliance on coal and finds the following:

• A more ambitious 85% carbon emissions reduction target, reducing CO2 by 85% from 2005 levels by 2035, is feasible and can result in additional emissions savings.
• The Coolidge gas plant expansion is not part of a least cost portfolio.
• Retiring and replacing SRP’s coal-fired generating units with clean energy could save SRP customers $620 million and avoid 43 million tons of cumulative CO2 emissions. Even higher savings and reduced emissions are possible with the new federal support that is part of the Inflation Reduction Act.
• SRP's current 2035 sustainability goals don't drive any new incremental emissions reductions and are readily achieved by previously announced coal retirements.

Recommendations in the People’s Energy Plan include minimizing investments in new gas, reassessing the retirement dates for coal-fired generating units at Four Corners and Coronado, continuing to support demand side resources, setting more meaningful carbon reduction targets, and exploring the incentives available through the Inflation Reduction Act.

We invite SRP leadership and Board members to thoroughly review the People’s Energy Plan and engage with the People’s Energy Plan coalition to ensure that the ISP represents a fair and transparent process that results in the cleanest and most equitable possible path forward for Arizonans. We expect the People’s Energy Plan will be a useful resource that SRP can implement to benefit ratepayers, Arizona communities, and the environment. SRP can and should be a leader among the state’s utilities in developing clean renewable energy, promoting energy efficiency, and integrating further adoption of distributed energy resources. The People’s Energy Plan demonstrates how SRP can achieve these goals and move away from reliance on coal and gas.