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AriSEIA and other Solar Stakeholders filed a response to ACC Staff's memorandum calling for comment on five areas of community solar to be resolved in a March policy statement by Commissioners. This is in addition to the various litigated proceedings. You can see the full filing at the link above.
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AriSEIA filed the direct testimony of our two experts today in the Tucson Electric Power rate case. We are focusing on community solar and battery storage programs for residential and commercial customers. The testimony and exhibits exceed 400 pages. You can view the entire filing at the button above. TEP is due to file their response on February 15th.
AriSEIA filed expert witness testimony in the currently pending TEP rate case focusing on why the Commission should deny TEP's request to increase their return on equity (ROE). Additionally, several other parties filed testimony about items other than rate design on January 11th. You can view the docket here.
Arizona Corporation Commission
1200 W. Washington Street Phoenix, AZ 85007 Re: Arizona Public Service (APS) E-32 L SP Tariff, Docket E-01345A-22-0281 Madam Chair and Commissioners, Pursuant to Decision No. 78317,1 APS was ordered to engage with stakeholders, namely the Arizona Solar Energy Industries Association (AriSEIA) and the Solar Energy Industries Association (SEIA), to redesign the E-32 L SP (Storage Pilot) rate tariff to increase customer adoption of the 35 MW commercial pilot program. AriSEIA appreciated the opportunity to provide constructive feedback and generally guide the tariff design process towards a solution that creates value for APS and the adopting customers. Throughout the duration of 2022, AriSEIA met monthly with APS and reiterated that rate optionality and investment certainty are key components of behind-the-meter energy storage adoption as not all customer loads are created equal, and few customers are able to benefit from existing tariffs using 15-minute interval demand charges. To that end, we collaborated with APS on the proposed volumetric, time-of-use (TOU) rate including a substantial differential between on-peak and off-peak rates which de-risks the customer’s energy storage investment in terms of achieving monthly savings while creating grid support during the utility’s coincident peak periods. Our assessment of the new rate tariff is that it will encourage participation in the pilot energy storage program through market-competitive payback opportunities. This rate tariff may also provide a foundation to develop more value-stacking opportunities for utilities such as distributed virtual power plants or similar grid-response programs. While the proposed E-32 L SP pilot revisions are a significant step in the right direction, we believe that further alignment with APS’ true coincident on-peak demand periods is important to creating an equitable program. To this end, we issued our recommendation to APS to limit the on-peak hours to Monday through Friday in lieu of across all seven (7) days of the week as the weekend load and marginal prices are typically much lower and do not merit the same TOU price differential. We look forward to continuing to work with APS as this program evolves. Thank you for considering these comments and we encourage you to adopt this rate in the first quarter of 2023 and to continue promoting more grid-interactive programs for customer-sited distributed energy resources. Respectfully, Autumn Johnson Executive Director AriSEIA 520-240-4757 autumn@ariseia.org John Mitman President, Board of Directors AriSEIA 480-251-2934 john@ariseia.org 1 Arizona Corporation Commission, Decision 78317, November 9, 2021, available here https://docket.images.azcc.gov/0000205236.pdf?i=1670984264693. THE SOLAR COALITION’S EXCEPTIONS AND PROPOSED AMENDMENT TO STAFF’S MEMORANDUM AND PROPOSED ORDER
DOCKET NO. E-00000A-22-0103 The signatories listed below appreciate the opportunity to continue their close involvement in the development of Arizona's community solar program and offer these Exceptions and Proposed Amendment to support the Commission as it decides how to move forward in the Arizona Public Service (APS) territory. This docket presents the Commission with an opportunity to provide savings to electric utility customers, promote electric grid resiliency, and assist Arizona in its transition to clean energy. The signatories have been committed to participating in the working group discussions and docketing information to assist in the Commission’s consideration of a proposal for implementation of a community solar program, as envisioned in Commission Decision 78583 (May 27, 2022). The signatories have come together and presented a comprehensive community solar proposal to the Commission on August 26th based on vast experience in community solar programs around the country. The signatories represent a diverse range of interests and the program proposal submitted encompasses a consensus agreement among all fourteen (14) parties represented at the time of filing, was responsive to the directives in Commission Decision 78583 and to the questions raised during working group meetings, was based on sound compromise, and was tailored to Arizona’s regulatory environment. Unfortunately, Staff’s Memorandum and Proposed Order does not meet the requirements contained in Commission Decision 78583. After six (6) months of robust discussions and dozens of filings in this proceeding, Staff has not provided any substantive policy recommendations on the programmatic elements specified in Commission Decision 78583. Instead, Staff suggests that a substantial portion of the program details be moved to an evidentiary hearing process, which could lead to some elements being significantly delayed. This is not what the Commission directed. Six (6) months ago, the Commission discussed the process of developing a community solar program in detail and decided that this docket and the working group format was the appropriate pathway to create a program proposal on which to vote. The Commission directed Staff to put forth a proposal for implementation in advance of the November 2022 Open Meeting and further specified that the proposal should become effective within six (6) months of Commission approval. An evidentiary hearing would only serve to delay the implementation of a community solar program and needlessly increase the investment of time and resources from participants, Staff, and the Commission. Moreover, because a hearing process would trigger the Commission’s ex parte rules, such a proceeding would limit the Commission’s ability to discuss key program elements with the diverse range of stakeholders, which has been a key benefit throughout the working group process. An evidentiary hearing is simply not required to construct a workable community solar program. Additionally, Staff’s Memorandum and Proposed Order references only Arizona Public Service’s (APS) program proposal. As discussed in the signatories’ response to the APS proposal filed on October 7, 2022, the APS proposal will not result in competitive third-party development of community solar projects and, as such, restricts benefits that would be created for APS customers and should be disregarded. As detailed in The Potential Economic and Fiscal Impacts of Community Solar in Arizona report prepared by the Seidman Research Institute at Arizona State University, the benefits of community solar investment extend beyond subscribers to the program, to the entirety of the state. The rollout of three hundred (300) MW of community solar each year for ten (10) years (study Scenario #6) would contribute over five (5) billion dollars to state Gross Domestic Product (GDP), result in the creation of more than fifty-eight (58) thousand job years of total employment, and nearly four (4) billion dollars in labor income over a study period of thirty-five (35) years. Commission approval of the APS program proposal, as written, would deny these benefits to Arizonans across the state. Simply put, APS’s proposal is not community solar. The signatories have dedicated significant time and resources to help develop a program proposal pursuant to Commission Decision 78583 that includes program design elements based on successful community solar programs across the country and is responsive to feedback raised by parties participating in the working group. However, Staff’s Memorandum and Proposed Order does not reference the signatories proposal, despite the comprehensive and robust information that the signatories have continued to submit in this proceeding. The lack of discussion or consideration of any components of the signatories’ proposal is notable given that only two program proposals have been made in this proceeding – one by APS and one by over a dozen diverse signatories. Herein, the signatories offer Exceptions and a Proposed Amendment to the Staff’s Memorandum and Proposed Order. See Attachment A for the Proposed Amendment. The signatories offer the Proposed Amendment in an effort to assist the Commission in devising a community solar program that is consistent with the intent of Decision 78583 and the months-long discussions in the community solar stakeholder workshops. The participants to those proceedings spent considerable time and resources in those workshops, including the utilities and Commission Staff, and should not be made to duplicate the effort in an entirely new proceeding. The signatories thus urge the Commission to reject Staff’s proposal and adopt the Proposed Amendment, which balances the key program requirements that must be included for successful implementation and operation of the program. Arizona Corporation Commission
1200 W. Washington Street Phoenix, AZ 85007 Re: Support for Approval of a Distributed Demand-Side Resource (DDSR) Aggregation Tariff and Service Schedule, Docket No. E-01345A-22-0143 Madam Chair and Commissioners, Vote Solar, Solar United Neighbors, and the Arizona Solar Energy Industries Association (AriSEIA) urge you to approve the Arizona Public Service (APS) Company DDSR Aggregation Tariff, as amended by the Sunrun Proposed Amendment Number 1 (Amendment No. 1[1] and collectively, the DDSR Aggregation Tariff or Tariff).[2] Arizona is poised to continue to lead the adoption of demand side resources, including distributed battery storage, which benefits all customers. This DDSR Aggregation Tariff will reduce costs for all APS ratepayers, reduce peak capacity needs, and increase reliability and resilience by compensating aggregators for leveraging emerging technologies such as battery storage. The growth and declining cost of distributed storage technology creates a critical opportunity to leverage these customer-sited resources to provide grid benefits. APS’ innovative DDSR Aggregation Tariff is an important step towards realizing a more modern and resilient grid, and now is the time to begin leveraging the grid benefits it will provide. The Lawrence Berkeley National Laboratory (LBNL or the LBNL Report),[3] a third-party evaluator engaged by the Arizona Corporation Commission (Commission), found that participation in this program is likely to be higher than ever because of the investment tax credit (ITC) available for stand-alone storage and other solar incentives available under the Inflation Reduction Act (IRA).[4] If approved, this Tariff will result in actual projects that will generate real-world data about the value provided by participating aggregators. This data is valuable because it will provide detailed insight into the specific value of participating resources and can be used to refine future iterations of the Tariff to improve its cost-effectiveness. The LBNL Report and Amendment 1 rightfully question why APS chose to consider only five (5) years of benefits when the measures employed will bring ten (10) years benefit to the grid, commensurate with the typical lifetime of battery storage. We agree with Amendment 1 and echo its conclusion that this DDSR Aggregation Tariff will provide ninety-five percent (95%) more grid benefits than are presently quantified by APS, including the benefits associated with daily shifting, avoided outages and associated costs, added grid resilience, and avoided carbon emissions. Current benefits under the LBNL Report include: Significant Peak Load Reduction for APS Customers - The LBNL Report found that participants in the program will reduce peak period loads substantially during weekdays by installing battery storage to existing rooftop solar. This reduces costs for all utility customers Increased Reliability and Resilience for Participants - The LBNL Report found that participants who add battery storage to existing rooftop solar will benefit from an annual cost savings of $14/yr. for Flagstaff, $25/yr. for Phoenix, and $29/yr. for Yuma. The LBNL Report also found participants will experience significant resilience benefits, valued at between $2,000 and $6,000 per customer.[5] This is a step towards additional energy efficiency in Arizona. Overall Cost Reduction for Ratepayers - The LBNL Report found that, from a ratepayer perspective, battery storage is cost neutral and does not result in cost shifting (the study did not consider cost for reconfiguration of an existing rooftop array to incorporate a battery). Further, LBNL found that if evaluated over 10 years, as they recommend, the benefits of the resources chosen through the DDSR Aggregation Tariff equal or exceed its costs.[6] This means that both participants and non-participants will benefit from ratepayers with battery storage. We support Sunrun’s proposed changes to the Tariff. These changes include requiring APS to periodically issue a minimum number of requests for proposals to drive competition, lowering bidder fees to encourage aggregator participation, accepting bids from aggregators that partially provide the services sought, and creating an open Tariff that all qualified aggregators may leverage, informed by cost data generated through the periodic RFPs. These changes improve the Tariff by allowing the program to develop to its full potential. Making the Tariff available to all aggregators will help reach the realized goal of bringing the Tariff to ratepayers. While the initial cost savings may seem minor (and also considering the overall benefits are undercounted by 95% in the study), the benefits provided by this DDSR Aggregation Tariff are very significant. Overall, LBNL's expert analysis leads to the conclusion that this innovative Tariff is cost-effective. We strongly urge the Commission to move forward with approving this Tariff in this docket at the November Open Meeting. Failure to approve the DDSR Aggregation Tariff will put Arizona behind the curve of this fast-changing technology and forgo an opportunity to support a program that strives for a positive community outcome and can deliver significant cost and grid resilience benefits. We are eager to participate in the ongoing efforts of the DDSR Aggregation Tariff, which will provide benefits to all ratepayers for many years to come, and feel confident that collaboration with other organizations, consumer advocates, Staff, and the utility will contribute to a bright future for residential solar in Arizona. Thank you for your consideration of this important matter. Respectfully, Autumn T. Johnson Executive Director Arizona Solar Energy Industries Association (AriSEIA) autumn@ariSEIA.org 520-240-4757 Bret Fanshaw Western Region Director Solar United Neighbors (SUN) bfanshaw@solarunitedneighbors.org 602-962-0240 Kate Bowman Interior West Regulatory Director Vote Solar kbowman@votesolar.org 703-674-8637 [1] Arizona Corporation Commission’s Decision No. 78165 (E-10345A-19-148), Filed July 28, 2021, available here https://docket.images.azcc.gov/0000204280.pdf?i=1667008921051 [2] Sunrun’s Exceptions to Staff’s Memorandum and Proposed Order, Filed October 26, 2022, available here https://docket.images.azcc.gov/E000021983.pdf. [3] Arizona Corporation Commission’s Memorandum Re: Lawrence Berkeley Laboratory Reports, Filed September 30, 2021, available here https://docket.images.azcc.gov/E000021442.pdf?i=1667005959409 [4] Arizona Corporation Commission’s Memorandum Re: Revised Lawrence Berkeley Laboratory Report, Filed October 21, 2022, available here https://docket.images.azcc.gov/E000021864.pdf?i=1667005959409 [5] See LBNL Report at page 12. [6] See LBNL Report at page 15. Arizona Corporation Commission
1200 W. Washington Street Phoenix, AZ 85007 RE: Response to Chairwoman Marquez Peterson’s Letter Dated August 23, 2022 - Community Solar (Docket No. E-00000A-22-0103) & (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 advocacy groups — appreciate the Commission and Staff conducting the working group meetings regarding the implementation of a community solar program in Arizona. We believe that a properly constructed community solar program will provide bill savings to electric utility customers, promote electric grid resiliency, and assist Arizona in its transition to clean energy. We are committed to docketing information that will assist in the Commission’s consideration of a proposal for implementation and we look forward to continued participation and discussion in the working group sessions. The signatories are filing this letter in response to Chairwoman Marquez Peterson’s letter dated August 23, 2022 which posed questions about thirteen models she requested be compared to community solar. As requested in the Chairwoman’s letter, attached as Appendix A is a matrix that provides an analysis of the models referenced. As explained more fully below, most models described in the letter are not community solar and are not models the signatories are recommending for Arizona. Some of the models describe existing tariffs or programs and others describe hypothetical models that, as far as we know, have not been implemented elsewhere, making direct comparison challenging. While the signatories do not recommend adoption of the models referenced in the matrix, the signatories desire to assist Staff and other stakeholders in their review of the models. It is important to note that 22 other states have already implemented community solar programs, and there is substantial precedent for how community solar programs work and experience with the models they follow. The underlying structure of community solar programs across the country is largely the same, and is consistent with the signatories’ program proposal filed on August 26, 2022 (henceforth referred to as “Signatories’ Proposal”). There are, of course, variations among existing programs which were achieved via policy making and/or regulatory decisions. The Signatories’ Proposal relies on common components of community solar programs around the country and has been tailored to Arizona and can be implemented within the existing regulatory framework. Because there is substantial precedent for how community solar programs work across the country, we do not believe it is necessary to complete an exhaustive review of each of the thirteen models referenced in the Chairwoman’s letter beyond what is provided in Appendix A. Below, the signatories have answered, in greater detail, the seventeen questions posed in the Chairwoman’ letter relative to the Signatories’ Proposal. As requested in the Chairwoman’s letter, the signatories seek to narrow the focus of the Commission’s research of how a community solar program fits within the existing regulatory and ratemaking framework in Arizona by reiterating the signatories’ preferred community solar model, filed on August 26, 2022 (henceforth referred to as “Signatories’ Proposal” and noted as item 4 below). The signatories have made four filings to provide the Commission with detailed information on community solar program implementation in Arizona and how the preferred model would work. These filings include:
The signatories will be filing additional information to further supplement the Signatories’ Proposal to address topics discussed at the working group meetings held on August 30 & 31, including a bill credit rate proposal. The Signatories’ Proposal will provide substantial benefits and consumer protections for customers. Please see below for answers to the questions posed by the Chairwoman relative to the Signatories’ Proposal... Arizona Corporation Commission
1200 W. Washington Street Phoenix, AZ 85007 RE: Resource Comparison Proxy Proposal for Community Solar (RCP-CS) (Docket No. E-00000A-22-0103) & (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 advocacy groups — appreciate the Commission and Staff conducting the working group meetings regarding the implementation of a community solar program in Arizona. We believe that a properly constructed community solar program will provide bill savings to electric utility customers, promote electric grid resiliency, and assist Arizona in its transition to clean energy. We are committed to providing information that will assist in the Commission’s consideration of a proposal for implementation and we look forward to continued participation and discussion in the working group sessions. At the working group meetings held on August 30 & 31, 2022, the signatories made a verbal proposal on the bill credit rate for the community solar program in Arizona. As requested by one of the Commissioner’s offices, the signatories are submitting this letter with the written details of that proposal. As background, the Commission previously approved the Resource Comparison Proxy (RCP) as the compensation mechanism for rooftop solar projects in Arizona. The signatories suggest that the Commission use the current RCP rate for Arizona Public Service (APS) as the initial bill credit rate for the community solar program with two required modifications, discussed herein and summarized in Appendix A. These modifications to the administration of the RCP are required because of the unique characteristics that community solar projects bring to customers and the grid in Arizona. Hereinafter, we refer to this proposal as RCP-CS. The RCP-CS proposal below is consistent with the Commission Order that initiated this proceeding. Specifically, the Order stated that the program should be “...designed to attract long-term private sector investment” and that “[d]irect bill offsets may be considered for subscribers to produce savings in a structure substantially similar to that offered to rooftop solar customers, eliminating the need for incentives. The value proposition for subscribers should be similar to those participating in onsite generation.” The Commission did not order that the bill credit rate mechanism for community solar should be exactly the same as the existing RCP, rather the value proposition should be “substantially similar.” As such, the RCP-CS proposal recognizes the fundamental dynamics of implementing a successful community solar program in Arizona while using the existing RCP as a starting point to simplify the initial bill credit setting process. The signatories offer the RCP-CS proposal below:
The study prepared by The Brattle Group and filed by the signatories on August 26, 2022 supports this RCP-CS proposal. The Brattle analysis suggests that the value of community solar is at least, if not higher than, the current value of APS’ RCP. The Brattle analysis found the value stack of community solar to be approximately $0.09683 per kWh (compared to APS’ current RCP of $0.08465 per kWh). Therefore, the Brattle study findings support the reasonableness of locking-in the bill credit rate at the current level of the RCP during the Stability Period. Further, the Brattle study supports the removal of the component of the existing RCP that allows rates to decline by a maximum of ten percent (10%) year over year because the study shows the value of community solar increasing in the future. The signatories propose that the RCP-CS rate include a Stability Period to allow critical time for the community solar program to be implemented successfully. The Stability Period is a necessary component of the proposal as it will take time for community solar projects to be constructed and for the Commission to gain experience with the community solar program. Several steps must take place before a community solar project is placed into service, including the following:
While some of the activities mentioned above can occur in parallel, some of them are sequential. The five-year Stability Period will allow critical time for projects to come online with reasonable commercial certainty and for the Commission to gain experience with the community solar program. The Stability Period will also allow for additional time to study the value stack of community solar projects to inform future bill credit rates. It is common in other community solar programs around the country to allow for program parameters that promote predictable program ramp-up through this type of approach. Attached as Appendix A is a table that compares the existing RCP with the proposed RCP-CS, including why the changes above are necessary for a community solar program. We appreciate the opportunity to address these important questions. We look forward to continuing to engage in the working group process to develop a successful community solar program in Arizona. Arizona Corporation Commission
1200 W. Washington Street Phoenix, AZ 85007 RE: Support for SunZia Southwest Transmission Line (Docket No. L-00000YY-15-0318-00171) Chairman and Members of the Line Siting Committee, On behalf of the Arizona Solar Energy Industries Association (AriSEIA), we are writing in support of the proposed SunZia Southwest Transmission Line. Our mission is to develop and support opportunities to advance Arizona’s economy through solar energy, storage, and electrification. As proponents for fostering a booming solar market, we strongly believe in building clean energy infrastructure, which is a necessary step to further the energy transition. Our state has immense solar potential and the possibility to become a solar hub. In the last ten years we have seen a 90% drop in the cost of utility-scale solar, a trend we expect to continue as the technology keeps improving and becoming more efficient.[1] Building out crucial renewable infrastructure will also serve as an important incentive for developers looking to expand their renewable projects into our state. This line is expected to bring in millions of dollars in direct tax revenue across the entirety of the line. The “direct impacts of the Project’s development in Arizona are estimated to be approximately $585 million.”[2] The project is also expected to add hundreds of new jobs, dozens of which will be permanent. The renewables industry has potential to generate a major boon to our economy. In 2021, the solar industry generated over $33 billion of private investment in the American economy.[3] Offering pathways to boosting the renewables industry is particularly crucial in this moment when supply chain constraints have led to fluctuations in the market for the first time since consistent projections have steadily decreased in price over the past decade. Arizona is at a pivotal point in diversifying our energy generation and taking advantage of a prosperous and high-demand industry. Laying the foundation will be a necessary step to tapping into these channels. We ask that the SunZia Southwest Transmission Line be approved. Sincerely, Autumn T. Johnson Executive Director AriSEIA (520) 240-4757 autumn@ariseia.org [1] Lazard, Levelized Cost of Energy, available here https://www.lazard.com/perspective/levelized-cost-of-energy-levelized-cost-of-storage-and-levelized-cost-of-hydrogen/. [2] Moss Adams, SunZia Transmission Project Economic and Fiscal Impacts Analysis, June 23, 2021, page 3. [3] Solar Energy Industries Association (SEIA), Solar Industry Research Data, available here https://www.seia.org/solar-industry-research-data#:~:text=In%202021%2C%20the%20solar%20industry%20generated%20more%20than%20%2433%20billion%20of%20private%20investment%20in%20the%20American%C2%A0economy. Arizona Corporation Commission 1200 W. Washington Street Phoenix, AZ 85007 RE: Community Solar, Docket No. E-00000A-22-0103 and APS RES, 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 advocacy groups — appreciate the Commission and Staff conducting the working group meetings regarding the implementation of a community solar program in Arizona. We believe that a properly constructed community solar program will provide bill savings to electric utility customers, promote electric grid resiliency, and assist Arizona in its transition to clean energy. We are committed to docketing information that will assist in the Commission’s consideration of a proposal for implementation and we look forward to continued participation and discussion in the working group sessions. We put forward, as Attachment A, this draft program design to aid in the working group discussions and the successful adoption of a community solar program in advance of the November Open Meeting. We additionally put forward, as Attachment B, an assessment regarding the Commission’s authority to implement the community solar program and tariff outside of a rate case. Further, we appreciate the letter filed by the Chairwoman on August 23, 2022 regarding the various models of community solar her office sees as relevant to this proceeding. The undersigned stakeholders plan to file a separate response to that letter as soon as possible with answers to the questions therein that are grounded in the program proposal put forth below. We appreciate the opportunity to address these important concerns. We look forward to continuing to engage in the working group process to develop a successful community solar program in Arizona. |
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The Arizona Solar Energy Industries Association (AriSEIA) is a 501(c)(6) non-profit trade association representing the solar, storage, and electrification industry, solar-friendly businesses, and others interested in advancing complementary technologies in Arizona. The group's focus is on education, professionalism and promotion of public policies that support deployment of solar, storage, and electrification technologies and renewable energy job growth and creation. |
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