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)
[email protected]
520-240-4757
 
Bret Fanshaw
Western Region Director
Solar United Neighbors (SUN)
[email protected]
602-962-0240
 
Kate Bowman
Interior West Regulatory Director
Vote Solar
[email protected]
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. 

AriSEIA filed joint comments today with Solar United Neighbors and Vote Solar in the various Demand Side Management (DSM) dockets and the docket containing APS' DDSR Aggregation Tariff. The comments highlighted that customer-sited energy storage systems can be a useful tool in reducing customers' electricity consumption. The comments were in response to a letter issued by Commission Kennedy in the DSM dockets.