Arizona Corporation Commission
1200 W. Washington Street Phoenix, AZ 85007 RE: Sulphur Springs Docket No. E-01575A-24-0160 and E-01575A-23-0299 Chairman and Commissioners, We request that you pull agenda item No. 7 from the consent agenda on the September 5th open meeting and place it on the regular agenda to allow public comment and also so that Commissioners and Staff can ask the utility questions. AriSEIA sent Sulphur Springs (SSVEC) questions about this filing earlier this week and scheduled a call with them to discuss those same questions on August 30th. However, SSVEC was not able to answer any of the questions and abruptly ended the call after only approximately 17 minutes. SSVEC filed a different avoided cost calculation on November 6th, 2023.[1] That avoided cost calculation was $.0629, which is greater than their export rate of $.041310. For some unknown reason, this filing never moved forward and was withdrawn one day later. AriSEIA filed a letter in that docket explaining that an export rate below the avoided cost rate was a violation of the Public Utility Regulatory Policies Act (PURPA).[2] Vote Solar and Solar United Neighbors have sued Salt River Project (SRP) in federal court over the same issue.[3] Six days later, SSVEC filed a new avoided cost calculation in a new docket.[4] That avoided cost calculation is $.0307, less than half that of the avoided cost calculation from the prior filing. They filed an amended tariff on August 1st and a Staff proposed order was docketed within a few weeks and it was scheduled for the September 5th open meeting (approximately 6 weeks after being initially filed). Additionally, both tariffs include a meter fee unique to solar customers of $2.70, despite the fact that all residential customers, solar or not, have identical meters. This is the identical issue to the DG meter fee in the last TEP rate case. AriSEIA presented extensive evidence on why that fee was unjustified and it was ended as a result.[5] AriSEIA would like the following questions answered by SSVEC before this item receives a vote:
Respectfully, /s/ Autumn T. Johnson Executive Director AriSEIA (520) 240-4757 [email protected] [1] SSVEC Tariff Filing, November 6, 2023, available here https://docket.images.azcc.gov/E000032051.pdf?i=1724737112344. [2] AriSEIA Letter, July 9, 2024, available here https://docket.images.azcc.gov/E000036580.pdf?i=1725068843076. [3] Complaint for Declaratory and Injunctive Relief, U.S. District Court for the District of Arizona, Case 2:24-cv-02021-DJH, August 12, 2024. [4] SSVEC Amendment to Application, August 1, 2024, available here https://docket.images.azcc.gov/E000037043.pdf?i=1724736609230. [5] TEP rate case, AriSEIA direct testimony, P. 365, January 27, 2023, available here https://docket.images.azcc.gov/E000023835.pdf.
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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. 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. Arizona Corporation Commission
1200 W. Washington Street Phoenix, AZ 85007 RE: APS 2024 RCP, Docket No. E-01345A-24-0095; TEP 2024 RCP, Docket No. E-01933A-24-0094 Dear Chairman and Commissioners, Both Arizona Public Service (APS) and Tucson Electric Power (TEP) have filed in the above noted dockets to request the maximum annual reduction in the Resource Comparison Proxy (RCP).While it is AriSEIA’s position that the underlying Value of Solar decision from Docket No. E-00000J-14-0023 should not be modified in the new export rate Docket No. AHD-00000J-23-0273, we would like to highlight concerning developments in the residential solar sector in Arizona. Recently, Arizona has seen several major residential solar companies leave the Arizona market. Very large residential solar installers based in Arizona have closed entirely. And just in the last week, several AriSEIA members have declared bankruptcy, including companies local to Arizona. Overall, residential solar installations in Arizona are down 31% year over year. Installations in the state are at their lowest level since 2020, a year in which the Commission decreased the RCP by less than the maximum. The decline in residential solar installations, bankruptcies, and company closures are not due solely to the RCP. But a decrease in the RCP will continue to exasperate this alarming situation. Solar represents a significant amount of jobs and economic development in Arizona. Such a significant downturn in this sector in the sunniest state in the country should be cause for concern. Further, distributed generation, including rooftop solar and battery storage, is a critical tool in the toolbox for peak demand reduction and grid reliability. With solar alone, it is possible for rooftop solar customers to completely eliminate or dramatically reduce their peak usage. With a battery, it is possible for them to provide that capacity back to the grid. With well designed policies, these resources can benefit all ratepayers. Respectfully, /s/ Autumn T. Johnson Executive Director AriSEIA (520) 240-4757 [email protected] 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. Autumn Johnson is executive director of the Arizona Solar Energy Industries Association. Arizona Corporation Commission
1200 W. Washington Street Phoenix, AZ 85007 RE: Docket No. E-01575A-23-0299 Chairman, Commissioners, Staff, and Sulphur Springs, AriSEIA was not aware of this docket until recently and we understand that the Company intends to raise this issue in its forthcoming rate case application. However, we want to make it clear that an export rate (in this case the DGEE) below avoided cost is a violation of federal law. The Company’s filing makes it clear that its avoided cost is $.0629 and its current DGEE rate is $.041310.[1] The Company then filed for a withdrawal of the proposed tariff seeking to rectify this discrepancy one day later stating, “[a]fter working with ACC Staff we learned that the last approved export rate year can remain in effect multiple years until SSVEC filed for an update.”[2] The Public Utility Regulatory Policies Act (PURPA) was enacted by Congress in 1978 for the primary purpose “to lessen the country's dependence on foreign oil” and to encourage the development of renewable energy technologies as alternatives to fossil fuel.[3] The Federal Energy Regulatory Commission (FERC) develops rules to implement PURPA. PURPA achieves its purpose by requiring electric utilities to purchase energy and capacity from qualifying facilities (QFs).[4] Those rates are set at avoided cost. The utility's avoided cost is the “incremental cost to an electric utility of electric energy or capacity or both which, but for the purchase from the [QF]…, such utility would generate itself or purchase from another source.”[5] The avoided cost rate must be just and reasonable, in the public interest, and nondiscriminatory against QFs.[6] PURPA prohibits utilities from engaging in price discrimination when they borrow supplemental power from or to small energy producers.[7] Congress enacted PURPA to “overcome obstacles imposed by [] utility monopolies for non-utility generation, including customer-sited small renewable generation.”[8] Qualifying small power producers includes residential customers with rooftop solar.[9] Importantly, the courts have determined that QFs are entitled to key protections against discriminatory rates and charges. “For example, when a home or business with solar panels needs to buy extra power from or wants to sell surplus power to the local utility, PURPA bars the utility from charging that home or business different rates than it would any other customer or supplier.”[10] “Section 210(f) requires state public utility commissions and nonregulated independent utilities to ‘implement’ the rules issued by FERC under Section 210(a) by incorporating them into their regulations and procedures.”[11] The Commission’s decision as to the implementation of PURPA can be found in Docket No. 81-0045. The Commission last visited PURPA in Docket Nos. 17-0360, 16-0272, and 18-0087 in 2019. While the Company intends to file a rate case sometime at the end of this year, that means solar customers have been underpaid for at least a year, depending on how long the rate case takes to resolve. AriSEIA believes this delay is in violation of PURPA and that it was inappropriate to withdraw and then close this docket. AriSEIA respectfully requests that the Company include a proposal to rectify this situation in its 2024 rate case, including a mechanism to make these solar customers whole. AriSEIA also requests that future filings that make it clear the export rate is lower than avoided cost be resolved promptly. Respectfully, /s/ Autumn T. Johnson Executive Director AriSEIA (520) 240-4757 [email protected] [1] Sulphur Springs Valley Electric Cooperative, Tariff Filing, Docket No. E-01575A-23, Filed November 6, 2023, available here https://docket.images.azcc.gov/E000032051.pdf?i=1720586124384. [2] Sulphur Springs Valley Electric Cooperative, Tariff Filing Withdrawal, Docket No. E-01575A-23, Filed November 7, 2023, available here https://docket.images.azcc.gov/E000032051.pdf?i=1720586124384. [3] FERC v. Mississippi, 456 U.S. 742, 745-46 (1982). [4] 18 C.F.R. § 292.303. [5] 18 C.F.R. § 292.101(b)(6). [6] 18 C.F.R. 292.304(a)(1)(i)-(ii). [7] 16 U.S.C. § 824a-3-(b). [8] Petition for Enforcement Under the Public Utility Regulatory Policies Act of 1978 under EL24-54, Docket EL24-54-000, p. 2, filed January 12, 2024, available at https://elibrary.ferc.gov/eLibrary/filelist?accession_number=20240112-5029&optimized=false [hereinafter Vote Solar PURPA Petition]; Am. Paper Institute v. Am. Elec. Power Serv. Co., 461 U.S. 402, 405 (1983). [9] 16 U.S.C. § 796(7)(A), (C), & (D). See also 18 C.F.R. §§ 293.203(a), 292.201(a)(1), (d)(1), 292.204(b)(1)(i); In re Westar, 460 P.3d 821, 824 (Kan. 2020); Sun Edison LLC, 129 FERC 61,146 at 18 (2009). [10] Solar v. City of Farmington, 2 F.4th 1285, 1287 (10th Cir. 2021); 16 U.S.C. § 824a-3-(b). [11] Id. at 1288. Arizona Corporation Commission (ACC) Staff issued a second set of questions regarding the new Value of Solar docket. AriSEIA responded to the first set and submitted responses today to the second set. We continue to oppose any increase in the annual step down or any decrease in the 10-year lock in period.
ACC Staff issued questions to "interested parties" regarding the export rate (Resource Comparison Proxy (RCP)). AriSEIA has opposed reopening the Value of Solar decision. You can read our full responses above.
If you currently have solar on your home or you hope to someday have solar on your home, ACC Commissioners need to hear from you and soon. This is docket number 14-0023 and you can attend the meeting in person at 10 a.m. on Oct. 11 at 1200 W. Washington St. in Phoenix and/or you can call or email Commissioners to tell them not to re-open the decision they already made on solar and renege on their commitment to 270,000 people in the State of Arizona. The contact information for every Commissioner can be found at azcc.gov/contact. In Arizona, Commissioners are also elected statewide and choices they make that impact your pocketbook ought to be remembered on election day.
FOR IMMEDIATE RELEASE
Arizona Corporation Commission Decision Creates Economic Uncertainty for Rooftop Solar Solar advocates criticize ACC's decision. WATCH Our Press Conference Here Phoenix, Arizona — Yesterday, the Arizona Corporation Commission (ACC) held a meeting to discuss the value of solar. The agenda included a vote on reopening the Value of Solar proceeding, whether to change the 10-year buyback rate lock-in period for solar customers and the rule limiting the reduction in buyback rates to no more than 10% per year, and reversing course on the grandfathering of legacy net metering customers. Thousands of people wrote to the Commission, and dozens provided oral testimony during the meeting, overwhelmingly opposed to the ACC reopening the value of solar proceeding or increasing the step-down rate. Those in opposition included solar homeowners, solar workers, clean energy advocates, ratepayer advocates, and every regulated utility in the state. The Commission decided not to re-open the Value of Solar case, which dictates how solar owners who installed in 2017 or later are credited for the surplus energy they contribute to the grid. However, the Commission did vote to open a new docket to re-evaluate the 10% step-down limitation and lock-in period for future solar customers. The original 2017 Value of Solar decision, reached after a lengthy evidentiary hearing and extensive deliberation and compromise, was designed to ensure predictable compensation for solar owners while providing stability to Arizona's rooftop solar market. Current solar customers will maintain their rates. Autumn Johnson, Arizona Solar Energy Industries Association (AriSEIA), said, "We are very disappointed in the decision to open a new proceeding on the value of solar. Even opening the docket plunges the market into uncertainty. The new hearing to design a rate case for future customers could have a lasting and detrimental impact on both the solar industry and consumers. Solar is not just a source of clean energy; it's a driver of economic growth, job creation, and energy independence. It's essential to remember that the solar industry has been a significant contributor to Arizona's economy, providing thousands of jobs and attracting investments that benefit local communities." While the ACC did not re-open the export rate proceeding today, the potential changes could still substantially reduce compensation for solar energy and erode critical protections for homeowners investing in solar power. The step-down limit and lock-in period give homeowners predictability about the compensation they will receive for energy exported to the grid, which is critical when deciding to invest in solar. Changing these rules would directly impact the Arizona solar industry during a period of heavy federal investment in clean energy. “We're deeply concerned that any changes to how solar owners are credited for their extra power will jeopardize the future of rooftop solar in Arizona. Without the assurance of stable and predictable savings, many Arizonans will lack the confidence to go solar. Low-income and historically disadvantaged communities, especially, will be unable to access solar savings. The decline in rooftop solar growth would harm all ratepayers since rooftop solar creates a more affordable, efficient, and reliable power grid for everyone. It's crucial that we continue to work together to ensure a fair and equitable energy future with rooftop solar at the cornerstone,” said Adrian Keller of Solar United Neighbors. Prior to the meeting, stakeholders hosted a webinar and press conference to shed light on the need to maintain the established rates solar customers are paid by their utility for the extra power they provide to the grid. Experts from Vote Solar, AriSEIA, and Solar United Neighbors provided comments during the ACC meeting. "It's disheartening to witness some Commissioners actively seeking to undermine the value of distributed generation and disrupt the stability that consumers have come to rely on. We firmly believe in the value of distributed generation, like rooftop solar, as a crucial component of a clean and resilient energy future. We'll remain steadfast in our commitment to advocate for policies that prioritize the interests of consumers, the growth of renewable energy, and the protection of energy independence. We are proud of the thousands of people who sent in comments and the dozens who testified against these harmful decisions. We will work together in the new hearing to ensure equitable access to clean energy solutions.” said Kate Bowman, Vote Solar. Commissioners Nick Myers, Jim O'Connor, and Kevin Thompson all voted in favor of the new proceeding. Commissioners Lea Márquez Peterson and Anna Tovar voted against reassessing the stepdown and lock-in rates. The dates for the new hearing are forthcoming, with the six-month proceeding to take place next year. ### For media inquiries, interviews, or further information, please contact: Autumn Johnson [email protected] 520-240-4757 Arizona Solar Energy Industries Association (AriSEIA) is a 501(c)(6) trade organization and the state affiliate of the Solar Energy Industries Association (SEIA). AriSEIA works to develop and support policies that create opportunities to advance Arizona’s economy through solar energy, storage, and electrification. We advocate for sustainable job creation and encourage utilization of Arizona’s greatest natural resource, the sun. Solar United Neighbors is a 501(c)3 nonprofit organization that works in Arizona and nationwide to represent the needs and interests of solar owners and supporters. Solar co-ops are part of the organization’s mission to create a new energy system with rooftop solar at the cornerstone. Solar United Neighbors holds events and education programs to help people become informed solar consumers, maximize the value of their solar investment, and advocate for fair solar policies. Vote Solar is a 501(c)3 non-profit organization. Vote Solar advocates for state policies and programs needed to repower our electric grid with clean energy. Vote Solar works to remove regulatory barriers and implement key policies needed to bring solar to scale. Vote Solar works to realize a 100% clean energy future through a solutions-driven, people-first approach. Arizona Corporation Commission
1200 W. Washington Street Phoenix, AZ 85007 Re: Value of Solar, Docket No. E-00000J-14-0023 Chairman and Commissioners, The Arizona Solar Energy Industries Association (AriSEIA) is a party to the Value of Solar proceeding. That matter took three years to conclude, had approximately 35 parties, and resulted in a compromise. That compromise was adopted by an entirely republican Commission by a 4-1 vote. It is not a decision the solar industry is excited about. But it put in place a predictable framework by which homeowners, solar companies, and the utilities understood the regulatory landscape. As such, AriSEIA strongly opposes reopening the Value of Solar decision. This Commission has stated multiple times that it supports “regulatory certainty.” Regulatory certainty should apply to all matters before the Commission, not only select matters. It is impossible to do business when the rules under which you operate can change on a whim. While reasonable minds can differ on policy, the institution has a responsibility to ratepayers, utilities, and the other stakeholders that appear before it, including the solar industry, to uphold its own rules, regulations, and orders. Decision 75859 states, There were also concerns raised in regard to the possibility of dramatic changes in the export rate and resulting uncertainty. However, to allow the export rate developed using this methodology to change gradually, it will be updated annually after it is initially set in a rate case proceeding or separate rate design phase. At the time that the initial DG export rate is set, a Plan of Administration that provides the mechanism for annual modifications to that initial rate also will be adopted. The annual updates accomplished between rate cases should be formulaic exercises where the Resource Comparison Proxy Methodology and the Avoided Cost Methodology established in the rate case is updated; however the reduction to the compensation rate under the RCP methodology shall not exceed ten percent per year.[1] Gradualism is referred to eighteen (18) times in the order. Multiple parties asserted the importance of making any changes gradually. “RUCO assert[ed] that the process of applying step-down schedules to the initially-established rate, and predictably and gradually lowering the rate, as market uptake increases and the cost of solar declines, will allow solar to ‘become a net benefit to all ratepayers - DG and non-DG customers alike.’”[2] “Staff assert[ed] that it is critical that the Commission's move away from the current framework be accomplished in a gradual manner.”[3] Further, the Commission’s order determined that the proposed methodologies “provide[d] a path for a gradual transition away from the current net metering model.”[4] The Commission stated, “[w]e believe that this will reduce the risk of dramatic changes to customers and the solar industry and is consistent with our interest in rate gradualism.”[5] Again, this adherence to gradual changes in rates or regulations is an essential component to regulatory certainty. Increasing the stepdown percentage would run counter to the positions of RUCO, Staff, and the Commission, as well as the stated goals in every rate case in recent memory. Decision 75859 also locked in the export rate for a period of ten (10) years.[6] This period provides regulatory certainty for the homeowner. Homeowners make significant investments with private capital, into a generating resource that provides predictable power to the grid. Those investments can be tens of thousands of dollars. Those investment decisions take into account the export rate. It would be impossible to evaluate such a significant investment decision without certainty as to the Commission’s regulations for a period of time directly after the investment. Given the cost of the investment and the longevity of the system, ten (10) years is a very reasonable lock-in period. There are more than 350 solar companies operating in Arizona. These companies employ approximately 8,337 people in Arizona alone and have contributed $16.8 billion dollars to the state’s economy, with $1.5 billion invested just last year.[7] Residential rooftop solar installations are down almost 30% year over year since 2022. This decline is due in part to the declining export rate, in combination with very high interest rates for anyone taking out a loan to install solar. Any homeowner looking to finance rooftop solar will find interest rates as high as 11.99%. Further declines in installations are likely to result in workforce reductions. Individual installers are considering job cuts of dozens of jobs with an average, annual pay of $62,500 a year. A decline in solar will also result in declines in the roofing industry and other energy efficiency contractors, such as HVAC, windows, and insulation. Reopening this docket will plunge an already struggling industry into uncertainty. It is hard to imagine why anyone would install solar when they have no way to predict what the Commission will do or if it will continue to honor any decision it does reach longer than an election cycle. High interest rates paired with a declining export rate and significant regulatory uncertainty will result in a substantial negative impact to the state’s economy. Companies looking to do business in Arizona investigate the regulatory environment prior to investing in the state. The rate riders for the Resource Comparison Proxy (RCP) are notably forward looking. For example, APS’ rate rider explicitly states, “[t]he RCP rate may not be reduced by more than 10% each year” and “[e]ach Customer’s initial RCP rate will be applicable for 10 years from the time of their interconnection.”[8] Similarly, TEP’s website on RCP specifically states, “the RCP will not be allowed to fall more than 10 percent annually.”[9] Companies do not make business decisions in two-year election cycles. Changing the rules that impact major investments for homeowners or businesses is not good for the economy or the State. Lastly, the Commission spends considerable time discussing staffing shortages, high workloads, and trouble juggling competing deadlines. A redo of a matter that took three years is simply not a good use of Commission or Staff time and resources. AriSEIA urges you to vote no on reopening the Value of Solar docket for the reasons stated above. Respectfully, /s/ Autumn T. Johnson Executive Director AriSEIA (520) 240-4757 [email protected] [1] Arizona Corporation Commission, Order 75859, Page 151, Line 24 through Page 152, Line 4 (emphasis added), Filed January 3, 2017, available here https://docket.images.azcc.gov/0000176114.pdf?i=1692725715837. [2] Id. at 96, Line 20-23. [3] Id. at 137, Line 11-12. [4] Id. at 148, Line 7-8. [5] Id. at 154, Line 2-4. [6] Id. at 156, Line 22-24. [7] Solar Energy Industries Association (SEIA), Arizona Solar Census, Q2 2023, available here https://www.seia.org/sites/default/files/2023-09/Arizona.pdf. [8] APS Rate Rider RCP, Page 1 (a) and (c). [9] TEP, Resource Comparison Proxy Export Rate, available here https://www.tep.com/rcp/. |
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