AriSEIA Submits Request for Rehearing in SSVEC Rate Case

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Pursuant to A.R.S. § 40-253, AriSEIA submits this Application for Rehearing of the Commission’s Decision that makes significant changes to net metering, export compensation, interconnection treatment, and related rate design elements applicable to solar customers. As set forth below, those changes are legally flawed, unsupported by substantial evidence, procedurally deficient, and inconsistent with governing constitutional, statutory, regulatory, and federal law requirements. Rehearing is necessary to correct errors of law, address unsupported and arbitrary findings, and remedy due process violations that materially affected the outcome of this proceeding.
At a high level, AriSEIA seeks rehearing on the following grounds:

First, the utility failed to meet its burden of proof. The Decision relies on a defective cost-of-service analysis that does not demonstrate justness, reasonableness, or cost causation sufficient to support eliminating net metering or different treatment for solar customers.

Second, the Commission unlawfully eliminated net metering through adjudication without modifying its own net metering rules. Net metering is required by the Commission’s existing rules, which bind the Commission and the utility. Nothing in the rules or Arizona administrative law permits agencies, including the Commission, to ignore binding rules. Changes in substantive policy of general applicability must be accomplished through lawful rulemaking. The Commission’s Decision unlawfully skips rulemaking and changes net metering treatment through an ad hoc adjudication decision.

Third, the avoided cost methodology reflected in the Decision does not correspond to the definition of avoided cost under the Public Utility Regulatory Policies Act of 1978 (PURPA). The utility’s calculation of avoided cost fails to reflect the utility’s marginal costs that would be incurred but-for solar customer’s exported solar electricity and in a non-discriminatory way compared to how the utility’s other sources of supply are treated.

Fourth, the Decision reflects arbitrary and capricious ratemaking. The Commission’s choice to eliminate the 10-year export rate lock and the premature termination of grandfathering are unsupported by substantial evidence and constitute unexplained departures from prior regulatory treatment. At the same time, the Decision imposes new interconnection fees and other adverse changes on solar customers without evidentiary support or a reasoned explanation for departing from prior Commission practice, resulting in an internally inconsistent and unsupported ratemaking outcome.

Fifth, the Decision unlawfully discriminates against solar customers. Differential treatment, including interconnection fees, is imposed without a showing of cost causation, in violation of the Arizona Constitution, Arizona statutes, the Commission’s net metering rules, and PURPA.

Finally, the proceeding was marred by due process violations. These include an unexplained reversal by Staff following the settlement process, refusal to respond to data requests or engage on critical issues, reliance on untested and shifting rationales, misrepresentations to the Commission regarding AriSEIA’s willingness to negotiate, and no opportunity for AriSEIA to respond to those allegations during the open meeting.

​For these reasons, and as set forth in greater detail below, AriSEIA respectfully requests that the Commission grant rehearing and provide appropriate relief.