Pursuant to A.R.S. § 40-253, AriSEIA submits this Application for Rehearing of the Commission’s Decision that makes significant changes to net metering, export compensation, interconnection treatment, and related rate design elements applicable to solar customers. As set forth below, those changes are legally flawed, unsupported by substantial evidence, procedurally deficient, and inconsistent with governing constitutional, statutory, regulatory, and federal law requirements. Rehearing is necessary to correct errors of law, address unsupported and arbitrary findings, and remedy due process violations that materially affected the outcome of this proceeding.
At a high level, AriSEIA seeks rehearing on the following grounds:

First, the utility failed to meet its burden of proof. The Decision relies on a defective cost-of-service analysis that does not demonstrate justness, reasonableness, or cost causation sufficient to support eliminating net metering or different treatment for solar customers.

Second, the Commission unlawfully eliminated net metering through adjudication without modifying its own net metering rules. Net metering is required by the Commission’s existing rules, which bind the Commission and the utility. Nothing in the rules or Arizona administrative law permits agencies, including the Commission, to ignore binding rules. Changes in substantive policy of general applicability must be accomplished through lawful rulemaking. The Commission’s Decision unlawfully skips rulemaking and changes net metering treatment through an ad hoc adjudication decision.

Third, the avoided cost methodology reflected in the Decision does not correspond to the definition of avoided cost under the Public Utility Regulatory Policies Act of 1978 (PURPA). The utility’s calculation of avoided cost fails to reflect the utility’s marginal costs that would be incurred but-for solar customer’s exported solar electricity and in a non-discriminatory way compared to how the utility’s other sources of supply are treated.

Fourth, the Decision reflects arbitrary and capricious ratemaking. The Commission’s choice to eliminate the 10-year export rate lock and the premature termination of grandfathering are unsupported by substantial evidence and constitute unexplained departures from prior regulatory treatment. At the same time, the Decision imposes new interconnection fees and other adverse changes on solar customers without evidentiary support or a reasoned explanation for departing from prior Commission practice, resulting in an internally inconsistent and unsupported ratemaking outcome.

Fifth, the Decision unlawfully discriminates against solar customers. Differential treatment, including interconnection fees, is imposed without a showing of cost causation, in violation of the Arizona Constitution, Arizona statutes, the Commission’s net metering rules, and PURPA.

Finally, the proceeding was marred by due process violations. These include an unexplained reversal by Staff following the settlement process, refusal to respond to data requests or engage on critical issues, reliance on untested and shifting rationales, misrepresentations to the Commission regarding AriSEIA’s willingness to negotiate, and no opportunity for AriSEIA to respond to those allegations during the open meeting.

​For these reasons, and as set forth in greater detail below, AriSEIA respectfully requests that the Commission grant rehearing and provide appropriate relief.

AriSEIA submitted Exceptions to the Recommended Opinion and Order (ROO) to address several findings and conclusions that are not supported by the evidentiary record, are inconsistent with Commission practice, or undermine regulatory certainty. The ROO adopts Sulphur Springs Valley Electric Cooperative, Inc.’s (SSVEC’s) cost-of-service study despite its omission of recognized distributed generation benefits, eliminates commercial net metering without a fair transition period, removes the ten-year export rate lock even though the Commission recently confirmed that it should remain unchanged, and concludes that SSVEC did not underpay distributed generation members in 2023 despite the Cooperative paying below avoided cost and failing to update its export rate as required. It further approves interconnection fees that are unsupported by the record, declines to direct SSVEC to evaluate virtual power plant and critical peak pricing programs despite consistent support for such programs across multiple Arizona utilities, and dismisses the legitimate transparency concerns raised by the settlement process.

For these reasons, and for those set forth in detail in the filing, AriSEIA respectfully requested that the Commission modify the ROO. AriSEIA submitted proposed amendments addressing the phase-in period for commercial net metering, the ten-year export rate lock, reimbursement of the 2023 underpayment, the interconnection fee provisions, and the virtual power plant and critical peak pricing directive.

AriSEIA filed its reply brief in the Sulphur Springs rate case today. AriSEIA is the only intervenor in that case to provide any meaningful push back on the utility and its wildly anti-solar rate design. Our recommendations are as follows:
1.  Reject or modify the proposed settlement to the extent it establishes a Distributed Generation Exported Energy (DGEE) rate of $0.0307 per kilowatt hour for three years without demonstrating compliance with the avoided cost floor applicable and without showing substantial evidence supporting the value.
2. Reject the settlement provision that freezes net metering and limits grandfathering of existing customers to the earlier of twenty years from installation or November 17, 2035, because Decision No. 76465 stated that to deviate from that framework required a showing of good cause supported by evidence. (AriSEIA-22 at 12).
3. Preserve the ten year export rate lock in applicable to distributed generation customers because the Value of Solar decision requires a ten year lock in period (AriSEIA-22 at 10) and the Commission just reaffirmed that framework in the RCP Docket No. 23-0273.
4.  A six-month implementation buffer must precede elimination of NEM or adoption of new tariffs,
5. Direct SSVEC to perform the required annual update consistent with the Plan of Administration and demonstrate that export compensation is not less than avoided cost.
6. Require SSVEC to credit customers for the year in which they were paid below avoided cost for their exported solar (2023).
7. Reject imposition of interconnection fees that were not supported by record evidence, were first provided after the hearing, and were never subject to cross examination. (Joint Opening Brief at 12–13).

AriSEIA filed its brief today in opposition to the settlement agreement between Arizona Corporation Commission (ACC) Staff and Sulphur Springs (SSVEC), which eliminates net metering for commercial and industrial solar customers, eliminates grandfathering for solar customers, violates federal law by allowing the export rate to drop below avoided cost, eliminates the 10-year export rate clock for residential solar customers, and imposes punitive interconnection fees on solar customers. 

AriSEIA filed nearly 1000 pages of exhibits in the Sulphur Springs rate case in which the utility seeks to undermine the contract rights of solar customers. AriSEIA also filed a response to SSVEC's attempt to strike our testimony on their underpayment to solar customers, an issue we have been raising for almost two years.

AriSEIA filed testimony today opposing the settlement agreement entered into in the Sulphur Springs rate case with Arizona Corporation Commission (ACC) Staff and the IBEW union. The settlement agreement violates federal law by allowing the export rate for solar to fall below avoided cost. It eliminates grandfathering for customers that already have solar on their businesses with no warning. And it eliminates the 10-year lock in for new solar customers, even though every other utility provides it. The settlement agreement in not in the public interest.

AriSEIA filed surrebuttal testimony in the Sulphur Springs (SSVEC) rate case, We oppose the settlement agreement entered into between the Arizona Corporation Commission (ACC) and SSVEC and continue to make the following recommendations:

• Reject SSVEC’s proposal to eliminate net metering for all non-residential systems, entirely. SSVEC’s proposal is not justified and disproportionately impacts a relatively small number of customers.
• Approve the elimination of the DG meter fee.
• Reject SSVEC’s proposal to eliminate the 10-year export lock for DG systems.

If the Commission adopts the proposed settlement, The Commission should make the following modifications:

• Freeze net metering for all non-residential members effective 6 months after the date of a decision in this docket.
• Allow grandfathering for all non-residential net metering members for 20 years from the system installation date.
• Establish SSVEC’s avoided cost as the floor for the Distributed Generation Export Energy (“DGEE”) Rate.
• Maintain the 10-year export rate lock for all customers. The settlement agreement is at odds with Staff’s position on the same issue in Docket No. AHD-00000J-23-0273.
  
• Direct the Company to develop and file with the Commission within 12 months of the decision, a pilot battery energy storage demand response proposal and critical peak tariff substantially similar to Trico Electric Cooperative’s applications in Docket Nos. E-01461A-24-0122 and E-01461A-23-0271, respectively.

AriSEIA filed direct testimony in the Sulphur Springs (SSVEC) rate case today. Our testimony makes the following recommendations:

• Reject SSVEC’s proposal to eliminate net metering for all non-residential systems, entirely.
• If the net metering proposal is approved, reject SSVEC's proposal to back date the effective date of a net metering freeze to the date of filing.
• If the net metering proposal is approved, reject SSVEC’s proposal to limit grandfathering to November 17, 2037.
• Reject SSVEC’s proposal to eliminate the 10-year export lock for DG systems.
• Approve the elimination of the DG meter fee.
• Require SSVEC to provide a bill credit to all residential DG members for the difference between the export rate and the actual avoided cost rate for all exported energy in 2023, plus interest. 

Both Trico and SSVEC have proposed numerous anti-solar positions in their pending rate cases, including ending net metering for commercial solar customers, introducing new fees for solar customers, and ongoing export rate problems. AriSEIA has intervened to advocate on behalf of solar customers and installers.