ARISEIA
  • Home
  • 2023 CONFERENCE
  • About
    • Board of Directors
    • Executive Director
    • AriSEIA Members
    • Events
    • Solar Customers
    • Contact Us
  • Join
    • Code of Ethics
  • News

NEWS

See what AriSEIA is up to on the policy front.

AriSEIA Joins Letter Asking for RCP Changes for Community Solar

9/9/2022

0 Comments

 
Read the Full Letter Here
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:

  1. The RCP-CS mechanism will lock-in the current APS RCP rate level of $0.08465 per kWh as the bill credit rate during an initial five-year (5) stability period (“Stability Period”).  The RCP-CS bill credit rate will be locked-in during the Stability Period effective upon the Commission Order approving implementation of the community solar program.
  2. The bill credit rate of $0.08465 per kWh will apply for community solar projects that apply for interconnection with APS during the Stability Period for a term of twenty-five (25) years.
  3. During the Stability Period, the Commission should utilize the generic community solar docket to further study the community solar value stack to inform the bill credit rate that will apply to community solar projects that apply for interconnection with APS after the Stability Period.  This investigation should include components similar to the study performed by The Brattle Group and filed by the signatories on August 26, 2022.  Specifically, it should address avoided generation, avoided transmission & distribution, avoided emissions, and other benefits that may be identified.  To inform the avoided transmission & distribution component of this analysis, the Commission should direct APS to perform a marginal cost of service study.  
  4. A term of twenty-five (25) years for the bill credit rate shall continue to apply for community solar projects that apply for interconnection with APS after the Stability Period.
  5. Following commission approval of the initial tariff utilizing this RCP-CS proposal, the signatories will file a proposal for hybrid community solar plus storage that includes time of use rates or compensation structures that support development of community solar projects that include storage.  

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:

  • The Commission must finalize the community solar tariff for implementation (six months per Commission Order),
  • Developers will need to work through the interconnection process with APS (estimate 1 year),
  • Developers will need to work through permitting and zoning activities (project location-dependent; estimate 6 months - 1 year),
  • Developers will need to work through engineering, procurement, and construction (EPC) activities (estimate 6 months - 1 year), and
  • Developers will need to subscribe customers to their projects.

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.

0 Comments

AriSEIA Submits Letter Opposing APS RCP Step Down

7/8/2022

0 Comments

 
Arizona Corporation Commission
1200 W. Washington Street
Phoenix, AZ 85007
 
Re: Application of APS for Approval of Revised Resource Comparison Proxy, Docket No. E-01345A-22-0105
 
Madam Chair and Commissioners,
 
Vote Solar, Solar United Neighbors, and the Arizona Solar Energy Industries Association (AriSEIA) urge you to support Arizona families and businesses who continue to face challenging economic circumstances by delaying the proposed 10% step down of Arizona Public Service’s (APS) Resource Comparison Proxy (RCP) rate for at least one year. The RCP Plan of Administration[1] requires APS to submit an RCP export rate annually for Commission approval and specifies that the RCP “may not be reduced by more than 10% each year.”[2] The Commission has the opportunity to provide consumers looking to save money on their energy bill with relief by postponing the up to 10% step down of the RCP.
 
After several tumultuous years, Arizona families and businesses continue to face unusual economic challenges. Over the last year, consumers have experienced the largest increase in inflation rates in 40 years and a 36% increase in energy costs.[3] At the same time, manufacturing and supply chain issues are delaying delivery of solar panels and equipment and driving up prices, resulting in the highest prices for polysilicon since 2011.[4] As noted by APS in its Application, forecasted costs for grid-scale solar increased in 2022.[5] Rooftop solar is an important tool that ratepayers can utilize to help reduce their utility bills and increase energy resiliency at their home. As a result of these unprecedented hardships, many Arizona families and businesses hoping to go solar may find that, due to their own economic circumstances or market conditions beyond their control, it will be necessary to delay installing solar. If the RCP is adjusted downward by 10%, families and businesses who must wait until next year to install solar will see a significantly reduced return on their investment for 10 years.
 
At its current value of $0.09405 cents per kWh, the cost associated with APS’s RCP rate is already lower than other ratepayer expenditures on solar resources. For example, APS recently received approval for its 2022 REST plan which includes $20 to 30 million in annual spending on its utility-owned rooftop solar program, Solar Communities, the closest proxy for a distributed solar installation.[6] The cost of this program includes the capital cost of a rooftop solar installation, which may include recovery of the utilities’ approved rate of return, and a bill credit for participating customers. The cost of the Solar Communities program amounts to approximately $0.147 per kWh over the 20-year lifetime of a solar installation, well above the current RCP rate paid to solar customers.[7]
 
We respectfully request that the Commission reject the step down as proposed by APS and included within the Staff’s proposed order in an effort to support families and businesses facing challenging and unprecedented economic circumstances and provide them with an extended opportunity to capitalize on the power of the sun to reduce their energy bills. An amendment to the RCP step down is attached as Attachment A below.
 
Thank you for your consideration of this important matter.
 
Sincerely,
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
  
ATTACHMENT A
 
JOINT STAKEHOLDER PROPOSED AMENDMENT NO. 1
  
Purpose: This Amendment denies the step down authorized in the Decision to give property owners an additional year to install rooftop solar systems at the current export rate. The Commission recognizes that challenging and unforeseen economic circumstances experienced in the last few months may have forced many property owners who otherwise would have installed rooftop solar systems in 2022 to put plans on hold. The Commission also recognizes that the majority, if not the entirety, of the year 2022 will likely be characterized by supply chain disruptions, exorbitant inflation, and high energy costs, presenting reasonable grounds for the Commission to consider the year 2022 an exception to the standard RCP formula. Under this proposal, the Company will still be required to file an application for the step down in 2023.
 
Page 5, Line 10
 
DELETE
 
            Approve
 
INSERT
 
            Deny
 
Page 5, Line 11
 
INSERT after “herein”
 
            The Commission recognizes that much of 2022 has subjected ratepayers to unforeseen economic hardships due to supply chain disruptions from COVID-19, high energy rates due to global events, and unprecedented inflation. Therefore, it is not appropriate to decrease the RCP at this time.
 
Page 5, Line 14
 
DELETE
 
            $0.08465
 
INSERT
           
            $0.09405
 
**Make all conforming changes
 
[1] See Appendix C, APS Application, (April 29, 2022) https://docket.images.azcc.gov/E000019056.pdf?i=1657141638108.

[2] See Appendix H, Arizona Corporation Commission, Decision No. 76295, (Aug. 18, 2017), https://docket.images.azcc.gov/0000182160.pdf?i=1657139837798.

[3] U.S. Bureau of Labor Statistics, Consumer Prices Up 8.6 percent over year ended May  2022, TED: The Economics Daily, (June 14, 2022), https://www.bls.gov/opub/ted/2022/consumer-prices-up-8-6-percent-over-year-ended-may-2022.htm.

[4] Bloomberg News, Solar Material Price Jumps Most in 8 Months on Supply Woes, Bloomberg, (June 29, 2022), https://www.bloomberg.com/news/articles/2022-06-29/solar-panel-material-price-jumps-most-in-8-months-on-supply-woes.

[5] APS Application, (April 29, 2022), page 4, lines 6 - 8, https://docket.images.azcc.gov/E000019056.pdf?i=1657141638108.

[6] Arizona Corporation Commission, Decision No. 78583, (May 27, 2022), https://docket.images.azcc.gov/0000206888.pdf?i=1657141036380.

[7] This estimate is based on a 6 kW system and a cost of $2.60 per watt, an 8.7% rate of return, annual production of 1,706 kWh/kW in the first year, and 0.5% annual panel degradation.
0 Comments

    AriSEIA News

    Keep up with the latest solar energy news!


    Archives

    March 2023
    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    November 2021
    July 2021
    November 2020
    October 2020
    September 2020
    August 2020
    June 2020
    April 2020
    January 2020
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018

    Categories

    All
    ACC Updates
    ADOT
    APS
    Arizona Department Of Environmental Quality (ADEQ)
    ASU
    Autonomous Vehicles
    Auxin
    AZ Legislature
    BBB
    City Of Eloy
    City Of Flagstaff Updates
    City Of Tempe Updates
    Community Solar
    Coolidge Expansion
    DDSR Aggregation
    Election
    Electric Vehicles
    Electrification
    Energy Rules
    EVs
    Federal Policy
    FTC
    HB2101
    Hopi
    Hydrogen
    Interconnection
    IRA
    Just Transition
    Municipalities
    Navajo Generating Station Updates
    Navajo Nation Energy Updates
    Newsletter
    Proposition 127
    Rate Cases
    RCP
    Resource Planning
    SolarApp
    SRP Updates
    Storage
    SunZia
    Tariffs
    TEP
    Transmission
    Tucson Updates
    Utilities
    Utility Scale
    Zoning

    RSS Feed

Picture
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.

FOLLOW Us

JOIN ARISEIA
Copyright © 2019 AriSEIA - All Rights Reserved 




  • Home
  • 2023 CONFERENCE
  • About
    • Board of Directors
    • Executive Director
    • AriSEIA Members
    • Events
    • Solar Customers
    • Contact Us
  • Join
    • Code of Ethics
  • News