AriSEIA Joins Response to APS Community Solar Proposal

READ THE FILING HERE

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.