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Arizona Corporation Commission 1200 W. Washington Street Phoenix, AZ 85007 RE: Community Solar Policy Statement, Docket No. E-00000A-22-0103, Exceptions to Staff’s Proposed Order filed February 24, 2023 Chairman and Commissioners, The signatories to this letter — a coalition of solar and storage industry partners, including developers, subscriber acquisition and management firms, and nonprofit advocacy groups — have been participating in the Commission’s effort to develop a community solar program since May 2022, nearly a year ago. Our coalition has worked together, and in consultation with other stakeholders, to submit numerous filings that detail national best practices for community solar programs and recommendations for tailoring a community solar program to Arizona. To inform development of an Arizona-specific program, we have also provided a study from Brattle Group regarding the value of distributed community solar projects in APS’ service territory and a study completed by ASU that highlights the quantitative economic benefits of a community solar program in Arizona. We are supportive of the Commission’s effort to make community solar available to Arizonans and appreciate the opportunity to provide information and recommendations to support this goal. The policy statement and proposed order filed by Commission Staff on February 24, 2023 is misaligned with the common understanding and implementation of community solar across the country. Staff’s memorandum and proposed order fails to address or incorporate any of the feedback and recommendations provided by our coalition throughout the seven month working group process or in our stakeholder comments filed January 27, 2023. Staff’s memorandum includes many shortcomings and, if implemented, would not result in a community solar program, would not spur development of any community solar projects in the state, and would not expand the benefits of solar to families and businesses that currently cannot access rooftop solar. The Commission should reject the Staff proposal. We recommend the Commission either adopt our attached amendment or direct that the five issues of location, structure, LMI carve out, use of an all-source RFP, and must-take requirements be resolved via an evidentiary hearing. If the will of the Commission is to do neither, we ask that you vote no on the Staff’s Recommended Opinion and Order. For reference, a list of our previous filings can be found below: - Response[1] to July 7 Staff Memorandum and July 20, 2022 letter filed by RUCO; - Draft Program Proposal;[2] - The Brattle Group study[3] on the value of DG resources in APS territory; - Response[4] to Commissioner Marquez Peterson’s August 23, 2022 Letter; - Bill Credit Rate Proposal;[5] - Response[6] to APS Program Proposal; - Economic Impact Study conducted by Arizona State University;[7] - Exceptions and Proposed Amendment[8] to Staff’s Recommended Opinion and Order; and - Response to Staff’s request for comment on the forthcoming policy statement filed on January 27, 2023.[9] Decision 78784[10] directed Utilities Division Staff to work with stakeholders to provide a recommendation to the Commission regarding five elements of community solar program design: “(1) Location of the community solar program; (2) Structure of the program; (3) The percentage of carve out for low to moderate income customers; (4) Whether the program should be included in an all-source Request for Proposal; (5) Must take provision.”[11] Despite clear Commission direction, Staff’s memorandum and proposed order does not address or incorporate feedback filed by stakeholders. Additionally, Staff’s memorandum and proposed order includes several provisions that stakeholders have repeatedly demonstrated are not characteristic of other community solar programs and would not lead to a successful or robust program in Arizona. It also includes, without explanation, recommendations that were not discussed or recommended during the duration of the working group process. As a result, Staff’s order leaves the Commission without workable guidance on how to proceed with a meaningful program that benefits Arizona communities. (1) Structure of the Program Staff recommends that participation in a community solar program be optional for regulated electric utility companies. This is not a recommendation that was raised or discussed during the course of the working group process. This recommendation deviates from all traditional, third-party, community solar programs across the country, and will not result in a successful program in Arizona. Decision 78784 tasks the Commission with “adopting a statewide policy” for community solar.[12] Per the language within the Decision itself, a statewide community solar program should apply to all Commission-regulated investor-owned utilities (IOUs) in the state: Arizona Public Service (APS), Tucson Electric Power (TEP), and UNS Electric (UNS). An opt-in program for regulated utilities would result in inconsistent access to community solar across the state, depending on a customer’s utility service territory. Furthermore, the state’s investor-owned utilities have already announced their opposition to such a program, no matter how much their customers may want or benefit from it. We recognize that circumstances may differ for cooperative utilities and recommend that they should be permitted to opt-in to the program. Additionally, Staff recommends that the bill credit for energy exported from community solar programs not exceed avoided cost. The bill credit rate was specifically identified in Decision No. 78784 as an item to be addressed in the evidentiary hearing,[13] not the policy statement. It is premature to determine the bill credit rate at this time, and in isolation from other important program details which have not yet been determined. Regardless, the proposed bill credit would be by far the lowest in the country and would not result in the development of any community solar projects. Finally, Staff recommends that “[a] participating regulated electric utility company may offer community solar itself or via partnership with a third party.” It is unclear whether Staff is recommending that the regulated electric utility will use a third-party to administer the program or whether this statement is related to community solar project ownership. Community solar projects should be owned by competitive third-party entities in order to benefit Arizona customers through the use of private capital to develop projects. There are several important components that define the “structure” of a community solar program and are not addressed in Staff’s memorandum and proposed order, including transaction and crediting structure, program size, permitted resources, procurement structure, project maturity requirements, ownership, bill credit term, guaranteed savings, eligible subscribers, the treatment of unsubscribed energy, and all elements of consumer protection other than how the program interfaces with the utility disconnect moratorium. These components were discussed at length in our last filing on January 27, 2023.[14] (2) Location of the Community Solar Program Staff recommends that “[c]ommunity solar energy should be generated within a participating regulated electric utility company's service territory.”[15] We agree, and further recommended that individual community solar projects be connected to that utility’s distribution system. (3) Percentage Carve-Out for Low-Income Customers The joint signatories have previously recommended a low- and moderate-income (LMI) carve out of 20%, based on the models we have seen created in other markets. However, we can support an LMI carve-out of thirty (30) percent, as recommended by Wildfire. This aligns with neighboring states, such as New Mexico, which have recently opened third-party community solar programs. Staff recommends that the remaining project capacity not reserved for low- and moderate-income customers be “limited to non-profit (including faith-based organizations), schools, municipalities, extra small commercial, and small commercial customer classes.” This definition excludes residential customers. Decision No. 78583 clearly states that participating customers should include residential and low-income customers.[16] A recommendation that non-LMI residential customers be excluded from the program was never raised during the course of the working group process. Even residential customers who are not low-income cannot access rooftop solar if they are renters, live in a condo, or face other technical barriers to installing solar. A statewide community solar program should include all residential customers. (4) Whether the Program Should be part of an RFP Staff recommends use of a request for proposal (RFP) model for a community solar program in Arizona, without providing any details about how such a process could work. As discussed in our prior filings, states that use an RFP process for selecting community solar projects do so in order to select projects based on the benefits they deliver to participants and communities, not cost alone. Community solar programs need not rely on a price-based RFP procurement format to control project and/or program costs because project compensation is wholly determined by the value of Commission-approved bill credits paid to subscribers. (5) Must-take provision Staff states that a “must take requirement is not appropriate for Arizona’s community solar and storage program,” implying that utilities should be able to curtail community solar projects for any reason. Consistent with the precedent set in programs around the country, the signatories recommend against routine curtailment of power produced by community solar projects. There should be, of course, permissible instances during which the utility can curtail community solar production for emergency safety or reliability purposes. Like rooftop solar, community solar project subscribers derive value from their subscription in the form of bill credits only when power is produced and exported to the grid. Decision No. 78583 states, “Direct bill offsets may be considered for subscribers to produce savings in a structure substantially similar to that offered to rooftop solar customers.”[17] If a utility curtails community solar projects on a routine basis, it would unreasonably deny bill credits and savings to subscribers who sign up for the program and substantially differ from the structure through which rooftop solar customers experience savings.[18] Additionally, without predictable certainty regarding if and when projects will be producing energy, it will be impossible to secure financing to develop and build community solar facilities. The signatories are not aware of any community solar program anywhere else in the country that currently allows for routine curtailment by the utility. Utilities have stated that curtailment of community solar projects is necessary because negatively priced power is available, at times, on the market. In such instances, it is economic for utilities to curtail the highest-cost marginal resource in exchange for cheaper or negatively priced power on the market. Customers benefit when utilities curtail resources with high fuel costs or significant pollution impacts in exchange for cleaner, more affordable resources like solar. IOUs in Arizona do not curtail rooftop solar production, and yet they are able to appropriately manage the totality of resources on their system in order to provide cost-effective and reliable power to customers. We have recommended that a community solar program include a specific annual capacity allotment, and that utilities account for community solar project capacity in their long-term resource planning processes. This will make it easy for utilities to predict the amount of community solar resources that will be available to them and plan their operations and future resource procurement accordingly. We have attached a proposed amendment below as Attachment A. [1] Response to Staff Memorandum, filed in Docket No. E-00000A-22-0103 on July 29, 2022. See: https://docket.images.azcc.gov/E000020412.pdf?i=1673898931456. [2] Draft Program Proposal, filed in Docket No. E-00000A-22-0103 on August 26, 2022. See: https://docket.images.azcc.gov/E000020811.pdf?i=1673359840801. [3] Study of Community Solar Value Stack in Arizona, conducted by The Brattle Group, filed in Docket No. E-00000A-22-0103 on August 26, 2022. See: https://docket.images.azcc.gov/E000020793.pdf?i=1674487120887. [4] Response to Chairwoman Marquez Peterson’s Letter, filed in Docket No. E-00000A-22-0103 on September 9, 2022. See: https://docket.images.azcc.gov/E000021024.pdf?i=1674487120887. [5] Resource Comparison Proxy for Community Solar, filed in Docket No. E-00000A-22-0103 on September 9, 2022. See: https://docket.images.azcc.gov/E000021023.pdf?i=1674487120887. [6] Response to APS Program Proposal, filed in Docket No. E-00000A-22-0103 on October 7, 2022. See: https://docket.images.azcc.gov/E000021583.pdf?i=1673359840801. [7] The Potential Economic and Fiscal Impacts of Community Solar in Arizona, filed in Docket No. E-00000A-22-0103 on November 2, 2022. See: https://docket.images.azcc.gov/E000022238.pdf?i=1674487120887. [8] The Solar Coalition’s Amendment and Proposed Exceptions to Staff’s Memorandum and Proposed Order, filed in Docket No. E-00000A-22-0103 on November 4, 2022. See: https://docket.images.azcc.gov/E000022223.pdf?i=1674662938969. [9] Response to Staff Request for Comment on the Community Solar Policy Statement, filed in Docket No. E-00000A-22-0103 on January 27, 2023. See: https://docket.images.azcc.gov/E000023855.pdf?i=1677286561482. [10] Decision 78784 filed in Docket No. E-00000A-22-0103 on November 21, 2022. See https://docket.images.azcc.gov/0000208038.pdf?i=1673898931456. [11] Decision 78784 at pg. 11. [12] Decision 78784 at pg. 11. [13] Decision 78784 at pg. 11, Line 23. [14] Response to Staff Request for Comment on the Community Solar Policy Statement, filed in Docket No. E-00000A-22-0103 on January 27, 2023. See: https://docket.images.azcc.gov/E000023855.pdf?i=1677286561482. [15] Staff Memorandum and Proposed Order, filed in Docket No. E-00000A-22-0103 on February 24, 2023, Attachment A. [16] Decision No. 78583 filed in Docket No. E-01345A-21-0240 on May 27, 2022 at Page 11. See https://docket.images.azcc.gov/0000206888.pdf?i=1677813967352. [17] Decision No. 78583, May 27, 2022, Page 11. [18] Response to APS Proposal, Item 7.
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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: Exceptions to APS Interconnection Manual, Docket E-01345A-20-0152 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:
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. 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:
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.
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. 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: Standardized Contract, Agreement, and/or Tariff for 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. At the working group meetings held on August 30 & 31, 2022, there was discussion of whether a contract, agreement, and/or tariff would exist between a community solar developer and the utility to which a community solar project is interconnected beyond a standard interconnection agreement. Further, there was discussion of whether such contract, agreement, and/or tariff would be subject to negotiation for each project or standardized. At the working group meetings, representatives of the signatories to this letter stated that there would be a contract, agreement, and/or tariff to govern the interactions between the community solar developer and the utility to which a community solar project is interconnected. The representatives of the signatories also stated that the contract, agreement, and/or tariff would be standardized such that it would not be subject to negotiation for each project, thus eliminating any concerns about taking up time and resources to execute. The signatories committed to filing standardized examples from programs in other states that could be used as a template for the community solar program in Arizona. Attached to this letter as Appendix A is the Solar Rewards Community Producer Agreement that is used by Xcel Energy in Colorado. Attached to this letter as Appendix B is the Standard Contract for Solar Rewards Community that is used by Xcel Energy in Minnesota. The signatories have previously referenced certain components of the community solar programs in Colorado and Minnesota because each state has a mature community solar program. The Colorado example in Appendix A is a standardized contract which exists outside of the utilities tariff as a program document. The Minnesota example in Appendix B is also a standardized contract, however it exists within the utilities electric tariff. The standardized examples attached to this letter will need to be edited to reflect Arizona-specific program requirements We appreciate the opportunity to address these important issues. 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: 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: 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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