AriSEIA filed for reconsideration/rehearing today on the APS grid access charge and "legacy adjustment." These are two charges that uniquely punish solar customers for using less power from APS. The fee is currently ~$2.50 a month per customer, but APS has said it should be $88 a month per customer and the ACC has ordered them to increase it in their next rate case, which they plan to file this year. Applying for rehearing is a necessary step towards appealing to the Arizona Court of Appeals, which we plan to do on January 30th.

FOR IMMEDIATE RELEASE
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Contact: Autumn Johnson
520-240-4757
[email protected]

Phoenix, AZ: Today, the Arizona Corporation Commission (ACC) voted to uphold a fee on all Arizona Public Service (APS) solar customers. APS has nearly 200,000 solar customers, all of whom are paying 15% more than the rate increase approved for all residential customers this year. The ACC upheld the fees after granting a rehearing on this issue at the request of AriSEIA, Vote Solar, and the Arizona Attorney General’s Office. The ACC refused to consider key evidence in the record.

In January, the ACC surprised stakeholders by inserting a “grid access charge” into APS’ nearly completed rate case. AriSEIA argued the fee should be removed from the rate case decision, which was unheeded by the ACC. Therefore, AriSEIA and others immediately filed for reconsideration/rehearing, which was granted. After nearly a year of litigation, the ACC upheld the original decision after a number of abnormalities in the execution of the case, such as constraining the evidence to be considered, moving the hearing earlier after APS requested more time for adequate customer notice, an abbreviated briefing scheduled, and then scheduling the vote before the recommendation was even written.

​AriSEIA demonstrated at the hearing that based on a quantitative analysis of several national expert witnesses, APS had miscalculated the cost of service to solar customers. That miscalculation reflected that solar customers were not paying their fair share, when in fact, the inverse is true. Solar customers pay more than they should and actually subsidize non-solar customers.

APS testified that if the ACC eliminated the solar fees, the difference would be $.25 to residential customers. Despite the evidence, the ACC will penalize solar customers several dollars per month and approved an amendment to increase it in APS’ next rate case, which is anticipated to be filed in 2025.

“The evidentiary record makes it clear that solar customers are subsidizing non-solar customers and yet APS and the ACC continue to penalize solar customers with unfounded and discriminatory fees,” said Autumn Johnson, executive director of AriSEIA.

An appeal to the Arizona Court of Appeals is likely in 2025.

The Judge issued a recommended opinion and order (ROO) upholding APS' discriminatory fee on solar customers. The vote by the Commission is on Tuesday, December 17th at 9am. The ROO as drafted fails to resolve many of the underlying issues that prompted a rehearing in the first instance. The ROO is inadequate for the following reasons:

1. The ROO makes it clear that despite comments made at the April procedural conference, in the October Procedural Order, and at the hearing, all of the many concerns regarding the site-load COSS were not considered in the decision[1]; therefore, no due process concerns have been alleviated.
2. The ROO falsely states that the Legacy Adjustment “bares no relationship to the GAC other than the same percentage increase,”[2] which is contrary to the testimony from the hearing.
3. The ROO completely fails to address any of Mr. Lucas’ testimony as to the calculation of the solar credit, which is a part of the site-load COSS. That analysis proved that solar customers are subsidizing non-solar customers, not the other way around.
4. The ROO misstates the Value of Solar decision. The decision as cited in the ROO did not find that the Net Metering Rules resulted in a cost shift to non-solar residential customers.[3] The decision specifically stated that the “the ratemaking implications of this separate class treatment are to be determined in each utilities’ rate case supported by a fully vetted cost of service analysis.”[4]
5. The ROO fails to address the arguments related to the Commission’s own Net Metering Rules,[5] despite the fact this issue was raised in AriSEIA’s request for rehearing and in its pre and post hearing briefs.
6. The ROO fails to address the fact that the infrastructure in place during the test year was designed and built to provide resource adequacy for solar customers’ delivered load only meaning that when solar customers paid their bills for delivered load, they paid all the costs incurred during the test year to provide them with resource adequacy. The evidence conclusively demonstrated that APS used delivered load, and not site load for planning purposes in the 2020 integrated resource plan (IRP) and before.[6]
7. The ROO fails to address the fact that the “risk” argument as articulated by Mr. McClain[7] is contrary to the risk analysis APS actually does as articulated in their IRPs.
8. The ROO misstates the “Challenging Parties’” positions, in that AriSEIA has never argued that solar customers are not partial requirements customers.[8] Instead, AriSEIA argued that being partial requirements customers alone is not a sufficient basis on which to base an additional charge.[9] There needs to be an evidentiary basis on which additional charges are warranted.
9. The ROO falsely states that solar customers are distinct from all other residential customers, without any analysis as to energy efficiency or electric vehicle (EV) customers. The ROO also admittedly does “not address the parties’ various arguments reflecting a deeper dive into the intricacies of those laws” pertaining to discrimination.[10]
10. The ROO, which was filed approximately 24 hours after reply briefs were due, does not seem to at all consider AriSEIA’s arguments in its Reply Brief.
11. The ROO falsely places the burden of proof on the intervenors,[11] when the entire issue on rehearing is whether APS’ fees are just and reasonable and discriminatory.

[1] Rehearing ROO at 22:8-9 and 30:20.
[2] Id. at 16:7-9.
[3] Id. at 39:10-13.
[4] Decision No. 75859 at 174:17-19.
[5] Rehearing ROO at 23:19-20.
[6] Id. at 26:14-15.
[7] Id. at 25:15-17.
[8] Id. at 22:17-19.
[9] Id. at 31:5-6. This is not a “keystone inquiry” and was not challenged by any party. What the Value of Solar decision says on this subject was covered extensively in the hearing.
[10] Id. at 32:2-4.
[11] Id. at 20:3-4.

AriSEIA filed its second and final brief today opposing APS' discriminatory fee on all solar customers. The recommended opinion and order is expected this week, because the ACC has indicated it will be vote on on 12/17.

AriSEIA filed its first post-hearing brief in the APS rate case rehearing. In the original rate case, APS imposed a new fee targeted only at solar customers. AriSEIA asked for a rehearing, which was granted. AriSEIA filed a pre-hearing brief, available here, and also filed its first of two post-hearing briefs. The reply brief is due next week. A vote is scheduled at the Arizona Corporation Commission on 12/17/24.

The Judge in the APS rate case rehearing on the grid access charge fees imposed against all APS solar customers asked parties to submit briefs before the hearing on whether or not the fees are just and reasonable and discriminatory. Read AriSEIA's position at the link above. The hearing starts on Monday, October 28th.

AriSEIA filed rebuttal testimony of our expert witness, Kevin Lucas, rebutting the testimony of APS, IBEW, and Arizona Corporation Commission (ACC) Staff, all who support opposing new fixed fees on all APS solar customers. Read the full filing above. The hearing commences October 28th.

In a bold move, Arizona Public Service (APS) has moved to entirely exclude the testimony of the Arizona Attorney General and the Arizona Governor's Office from the rate case rehearing on its discriminatory charge on all solar customers. In so doing, APS also seeks to exclude most of the testimony of AriSEIA and Vote Solar. APS argues that any evidence used to create the solar charge is not to be examined in the rehearing, thereby rendering the entire process a sham. AriSEIA, Vote Solar, the Attorney General, individual ratepayers, and the Governor's Office through the consumer advocate (RUCO) have all filed in opposition.

Arizona, with its abundant sunshine, seems like a natural leader in solar energy. Yet, according to Autumn Johnson, an advocate for solar energy, the state is facing a significant decline in residential solar installations. Data from Ohm Analytics shows a 31% year-over-year drop in solar permits as of May 2024, marking the lowest level since 2021.

Economic and Policy Challenges
Several factors contribute to this decline. High interest rates, currently above 8%, make financing solar systems more expensive, deterring potential customers despite the federal tax benefits available under the Inflation Reduction Act.

Beyond economic barriers, state policies are also to blame. Arizona has reduced the export rates for excess solar energy, meaning homeowners are paid less for the energy they send back to the grid. Additionally, recent increases in fixed fees for solar customers, such as the grid access charge introduced by the Arizona Corporation Commission, have made solar less financially attractive.

A Missed Opportunity
While other states continue to support solar growth through net metering, Arizona's policies are pushing it in the opposite direction. Johnson points out the irony that Arizona, with over 300 sunny days a year, ranks only fifth in solar capacity nationally—a position that should be much higher given the state’s natural advantages.
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Looking ahead, Johnson is concerned about the state’s direction. With increasing political skepticism toward both residential and utility-scale solar projects, Arizona risks missing out on a significant economic opportunity. In a state where solar should be thriving, policy and economic barriers are holding it back, leaving the future of solar in Arizona uncertain.

Same APS discrimination against solar customers 

Arizona Public Service likes to tout itself as somehow new and different. It is not the APS we remember involved in scandals at the Arizona Corporation Commission (ACC) or opposing renewable energy like with Proposition 127. They have new leadership and clean energy goals now. But if you are paying attention, APS consistently makes decisions that undermine renewable energy and hurt solar customers.

Last year, APS opposed the adoption of community solar in Arizona. Community solar is an option for customers that want rooftop solar, but cannot install rooftop solar either because they are renters, or live in multifamily housing, or have an older roof. It allows them to participate in the clean energy transition while also increasing a distribution grid resource and saving them money on their electric bills. The ACC ended up adopting a policy to kill any advancement of community solar in Arizona.

APS continues to ask for annual decreases in the export rate solar customers are paid for the extra solar power their rooftop panels produce and they sell back to the grid. APS buys it at a fraction of what it sells it to your neighbors for. APS has consistently fought against you having any options to sell that extra power elsewhere, including supporting HB2101 in 2022, which eliminated competition in the electric sector in Arizona.

APS simultaneously has advocated for increased fixed fees on solar customers. APS has nearly 200,000 customers with rooftop solar and it has advocated for all of them, every single one, to pay 15% more for the same power than their neighbors without rooftop solar. That new fee is the subject of ongoing litigation at the ACC and APS has most recently advocated for 74,000 of those customers to be completely excluded from the hearing entirely. These customers got solar years ago and are on rate plans called “Legacy Solar.” 

If APS is successful, not only will these customers be subject to APS’ discriminatory fees on solar, but they will be deprived of their due process rights, as well. APS has also argued (and won!) that the evidence used to substantiate this discriminatory fee on solar customers not be evaluated in the hearing. So, the evidence used to substantiate the fee is not part of the hearing in which the ACC decides if the fee is even legal.

Earlier this year, the ACC ordered APS to start a pilot program that aggregates the household batteries that customers pay for with their own money to offset energy APS needs when demand from customers is especially high. APS was ordered to undergo a stakeholder process and work collaboratively with the community to develop a fair program. Instead, APS has come up with a program that will almost certainly fail, because it inadequately pays for the resource it takes from customers. 

APS will continue to penalize solar customers unless the utility is held accountable. APS does not like solar customers because solar customers pay for their solar panels themselves. APS does not own them and does not earn a profit margin off of them. APS’ nearly 200,000 solar customers need to pay attention and need to tell the ACC that APS must stop its needless attacks on solar customers. 

Unfortunately, the ACC just sided with APS and determined that some solar customers may, indeed, be excluded from the rate case rehearing and that the underlying evidence APS provided to justify the discriminatory fees on solar customers will not be evaluated. This raises serious concerns about the validity of the rehearing. The public needs to reach out to the ACC in support of solar. You can file a comment with the ACC and be sure to reference Docket No. E-01345A-22-0144.
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Autumn Johnson is executive director of the Arizona Solar Energy Industries Association.