​Arizona Corporation Commission
1200 W. Washington Street
Phoenix, AZ 85007
 
Re: Application of APS (Docket No. E-01345A-23-0110), TEP (Docket No. E-01933A-23-0108), and UNSE (Docket No. E-04204A-23-0109) for Approval of Revisions to Resource Comparison Proxy
 
Chairman and Commissioners,
 
The Arizona Solar Energy Industries Association (AriSEIA) previously filed comments in the Arizona Public Service (APS) and Tucson Electric Power (TEP) dockets in this matter on August 4th.[1] That filing covered the history of the Resource Comparison Proxy (RCP), the dramatic increase to consumers for electricity, and the economic impact of high interest rates paired with a declining RCP rate on Arizona’s solar industry. We urge you not to decrease the RCP rate as proposed by Commissioner Myers’ Proposed Amendments No. 1 in each of the above referenced dockets.[2]
 
This Commission has stated multiple times that it supports “regulatory certainty.” On January 3, 2017 the Commission issued Order 75859 in Docket No. E-00000J-14-0023, the Commission’s Investigation of the Value and Cost of Distributed Generation. That matter stemmed from a 2013 APS filing on net metering.[3] It then created a generic docket, known as the value of solar docket, that commenced on January 27, 2014 and ran for nearly two years before an evidentiary hearing was scheduled. The evidentiary hearing ran for two months in the spring of 2016 with more than eighteen parties participating. A 4-1 decision of an entirely republican Commission was issued in January 2017, three years after the docket was opened. Commissioner Burns was the lone dissenter. Implementation of the specific RCP methodologies was then resolved in subsequent rate cases for each utility. 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.[4]
 
Further, while the Commission outlined directions for calculating the RCP in Decision 75859, the Plan of Administration for each utility’s RCP rate requires the utility to submit an updated RCP calculation annually for Commission approval and specifies that the RCP “may not be reduced by more than 10% each year.”[5] The table below highlights the proposed RCP stepdown as recommended by Commission Staff versus the Myers amendments.

These reductions run contrary to Decision 75859 and the Plans of Administration for each utility. As such, they do not adhere to the Commission’s own stated goal of “regulatory certainty” and also have not been noticed in accordance with A.R.S. 40-252.[6] Regulatory certainty should apply to all matters before the Commission, not only select matters. Further, it is likely a due process violation to take an RCP methodology from a multi-year process and modify it in an Open Meeting with no testimony, witnesses, or evidence and only two days’ notice, which has the potential to result in litigation. Any deviation greater than 10% from the established RCP methodology should be determined in an evidentiary hearing.
 
AriSEIA’s previous filing highlighted the economic development importance of the solar industry to Arizona. There are more than 300 solar companies operating in Arizona. These companies employ more than 8,000 people in Arizona alone and have contributed $16.5 billion dollars to the state, with $1.5 billion invested just last year.[7] Declines in the solar industry will have ripple effects throughout the economy impacting many other high quality, blue collar jobs, such as in energy efficiency, HVAC, roofing, windows, and insulation. There is no evidence to support Commissioner Myers’ assertion that decreasing the RCP rate by 37-56% will not have a catastrophic impact on an important industry in one of the sunniest states in the country. A table reflecting an increase in DG adoption despite a 10% stepdown in prior years does not mean that increases will continue in the future with a 10% stepdown and certainly not with a stepdown 3-4 times prior decreases. Further, there is no evidence in this docket that the RCP has not dampened growth of this important industry. Because installation rates continue to creep up in TEP and UNSE’s territories does not mean they are not impacted, it simply means the industry has not completely stagnated due to burdensome regulation. APS’ DG penetration is better than TEP and UNSE’s but is still only looking at 1% growth annually since the RCP framework was adopted.
 
Finally, AriSEIA does not agree that the RCP is a “subsidization.” The utilities pay for the power produced that benefits the grid. That power has a number of benefits that are different than utility scale solar. DG does not require new transmission; lengthy Line Siting and zoning proceedings; major land use implications that impact other industries, such as agriculture; or other major infrastructure improvements. The systems are entirely paid for by individual consumers. They are only compensated for the power they provide to the utility that benefits the entire grid, improves resiliency, and can be utilized with storage in demand response programs. If the Commission wishes to reevaluate the value of DG, an evidentiary hearing, not an open meeting, is the appropriate place to do so. Also, both the TEP and APS rate cases have also reflected numerous incidences of the utilities purchasing wholesale power above the RCP rate. Therefore, it is incorrect to assume that DG is somehow above the market rate for power.
 
AriSEIA opposes the Myers Amendments 1 and continues to advocate for an RCP stepdown less than 10%, which is permissible under Order 75859 and the Plans of Administration.
 
Respectfully,
 
/s/ Autumn T. Johnson
Executive Director
AriSEIA 
(520) 240-4757
autumn@ariseia.org

[1] AriSEIA, Solar United Neighbors, and Vote Solar Joint Letter, Dockets E-01345A-23-0110 and E-01933A-23-0108, filed August 4, 2023, available here https://docket.images.azcc.gov/E000029205.pdf?i=1692739207146.

[2] Commissioner Myers Proposed Amendments 1, filed August 22, 2023, in Docket No. E-01933A-23-0108, available here https://docket.images.azcc.gov/E000029934.pdf; Docket No. E-01345A-23-0110, available here https://docket.images.azcc.gov/E000029933.pdf; and Docket No. E-04204A-23-0109, available here https://docket.images.azcc.gov/E000029935.pdf.

[3] Arizona Public Service, In the Matter of the Application of the APS for Approval of Net Metering Cost Shift Solution, Docket No. E-01345A-13-0248, available here https://edocket.azcc.gov/search/docket-search/item-detail/18039.

[4] 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.

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

[6] Arizona Revised Statutes, 40-252, available here https://www.azleg.gov/ars/40/00252.htm.

[7] Solar Energy Industries Association (SEIA), Arizona Solar Census, Q1 2023, available here https://www.seia.org/sites/default/files/2023-07/Arizona.pdf. 

Arizona Corporation Commission
1200 W. Washington Street
Phoenix, AZ 85007
 
Re: Application of APS & TEP for Approval of Revisions to Resource Comparison Proxy (Dockets No. E-01345A-23-0110 & E-01933A-23-0108)
 
Chairman and Commissioners,
 
Vote Solar, Solar United Neighbors, and the Arizona Solar Energy Industries Association (AriSEIA) urge you to support Arizona families and businesses who wish to invest in their own energy resources by reducing the proposed step down of Arizona Public Service’s (APS) and Tucson Electric Power’s (TEP) Resource Comparison Proxy (RCP) rate for 2023. The Commission outlined directions for calculating the RCP in Decision 75859, and the Plan of Administration for each utility’s RCP rate requires the utility to submit an updated RCP calculation annually for Commission approval and specifies that the RCP “may not be reduced by more than 10% each year.”[1] The Commission has the opportunity to provide consumers looking to save money on their energy bill with relief by reducing the RCP step down less than 10%. This also provides the Commission with the opportunity to support businesses in Arizona by saving jobs.
 
Arizona families and businesses continue to face unusual economic challenges driving up the cost of basic necessities like electricity. Over the last year, consumers experienced a 6% increase in electricity costs[2] following on the heels of a 12% increase in electricity costs the year prior, the largest 12 month increase in nearly 20 years.[3] Rooftop solar is an important tool that ratepayers can utilize to help reduce their utility bills and increase energy resiliency at their home. As interest rates continue to increase to their highest levels in decades, Arizona families and businesses who must rely on long-term financing to afford the upfront cost of a solar installation may find that going solar is no longer an affordable option. Currently, any homeowner looking to finance rooftop solar will find interest rates as high as 11.99%. This makes solar very unaffordable for any homeowner who cannot buy their system outright. Any further reductions of the RCP will reduce the number of Arizona households who are able to benefit from their private investment in solar.
 
Additionally, further reductions to the RCP will depress solar adoption in Arizona and limit opportunities to leverage distributed energy resources for demand response purposes to benefit grid resiliency. Increasingly, customers who invest in solar choose to pair their installation with distributed battery storage. This creates an opportunity for utilities to leverage customer-sited battery storage as a “virtual power plant” that can help provide reliable power to the grid in the evening hours or during summer heat waves. As investments in solar become less affordable, the growth of other innovative distributed energy resources like battery storage will stagnate.
 
Further, there are more than 300 solar companies operating in Arizona. These companies employ more than 8,000 people in Arizona alone and have contributed $16.5 billion dollars to the state, with $1.5 billion invested just last year.[4] Residential rooftop solar installers are reporting a nearly 20% decline in business year over year since 2022, with nearly 35% declines in revenue. This is likely to result in workforce reductions of 20%. 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. High interest rates paired with a declining export rate will exacerbate this problem, resulting in a significant impact to the state’s economy.
 
We respectfully request that the Commission reduce the step downs proposed by APS and TEP, as included within the Staff’s proposed order, in an effort to support families and businesses and provide them with an extended opportunity to capitalize on the power of the sun to reduce their energy bills.
 
Thank you for your consideration of this important matter.
 
Sincerely,
Autumn T. Johnson
Executive Director
AriSEIA
autumn@ariSEIA.org
 
Adrian Keller
Arizona Program Director
Solar United Neighbors (SUN)
akeller@solarunitedneighbors.org
 
Kate Bowman
Interior West Regulatory Director
Vote Solar
kbowman@votesolar.org
 
[1] See Appendix H, Arizona Corporation Commission, Decision No. 76295, (Aug. 18, 2017), https://docket.images.azcc.gov/0000182160.pdf?i=1657139837798 (emphasis added).

[2] U.S. Bureau of Labor Statistics, Consumer Price Index Summary, (May 2023), https://www.bls.gov/news.release/cpi.nr0.htm.

[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] Solar Energy Industries Association (SEIA), Arizona Solar Census, Q1 2023, available here https://www.seia.org/sites/default/files/2023-07/Arizona.pdf. 

AriSEIA filed exceptions and four proposed amendments today to modify components of the Arizona Corporation Commission's (ACC) Recommended Opinion and Order in the Tucson Electric Power (TEP) rate case. We filed amendments seeking to implement a Bring Your Own Device/Virtual Power Plant (VPP) program, implement design changes to several rate tariffs, refund an over-collection on solar customers, and create an affirmative duty on the utilities to notify the ACC to changes in approved fees. A vote is expected on August 8th.

AriSEIA filed a reply brief today in the Tucson Electric Power (TEP) rate case focusing on mechanisms to improve the use of storage for residential and commercial customers to benefit the grid widely. TEP has ignored and attempted to delay any such programs throughout the proceeding and for several years prior to the case.

AriSEIA filed its opening brief in the TEP rate case on May 26th highlighting our recommendations on the revenue requirement (including return on equity (ROE) and common equity ratio), as well as rate design (including community solar, a bring your own device/virtual power plant proposal, tariff re-designs for R-TECH and LGST-SP, and ending the distributed generation (DG) meter fee). 

Support for Arizona Public Service (APS) and Tucson Electric Power (TEP)’s Request for an Extension of Integrated Resource Plan (IRP) Filing Deadline

The Joint Signatories, all members of APS and/or TEP’s IRP Advisory Council, write to support APS and TEP’s request to extend the deadline for filing their IRPs from August 1st, 2023, to November 1st, 2023, contingent on timely access to the modeling software and training.

The APS and TEP Resource Planning Advisory Councils (RPAC) comprise a diverse group of stakeholders and community representatives the RPACs have been providing input to APS and TEP on their next IRP on behalf of residential and business customers, local governments, public schools, the limited-income community, and the solar and environmental community, among others.

We have been meeting monthly since the spring of 2021 for APS, and the fall of 2022 for TEP, to share perspectives and provide input to help both utilities chart a long-term integrated resource plan that maintains reliable, affordable electric service through a balanced, flexible resource mix, which also advances sustainable outcomes. Meetings have addressed topics vital to developing a comprehensive, integrated resource plan, such as load forecasting, existing resource fleet and transmission systems, technology options and costs, and environmental impacts. During these meetings, stakeholders have been invited to listen, offer feedback, and pose questions. Participants have also been encouraged to present their own views. All meeting materials, agendas, and summaries are publicly available on APS and TEP’s RPAC websites. 

Also, pursuant to the Commission’s Decision 78499, APS and TEP are preparing to provide access to modeling licenses for RPAC members so that they will have the ability to conduct their own modeling analysis to better inform and provide feedback to the final IRP scenarios. However, APS and TEP have not yet provided RPAC members with the model licenses or data necessary to start the modeling efforts. Because the three months remaining before the August 1st deadline is not enough time to give this process the due diligence it deserves, a three-month extension to November 1st, 2023, is justified.
This new engagement model provides value to the Commission, APS, TEP, and other stakeholders by:

1. Helping APS and TEP to craft a resource plan that is informed by and reflective of stakeholder and community input, and
   
   
2. Contributing to the publicly available information that others can use to conduct their review and evaluation of APS and TEP’s IRP filings, including dozens of modeled IRP portfolios.

We also hope that a new engagement model will support an IRP process before the Commission that is less contentious than prior IRPs and will ensure that community input and feedback are considered from the outset. To realize these outcomes, however, RPAC members engaging in the additional modeling process must be allowed to complete their analysis fully with enough time to bring results to the RPAC consistent with the Commission’s directive. Without additional time, these efforts may be for naught. 

Because this is the first time this kind of advisory structure with modeling access has been implemented, ensuring that all RPAC participants have a solid understanding of various complex energy issues is essential. As such, many of the RPAC’s initial meetings have focused on education and information sharing. While these educational sessions have been valuable and necessary, the RPAC members have yet to receive the modeling licenses or modeling data and have not begun reviewing and providing input on the dozens of modeled IRP portfolios that APS and TEP produce. Approving APS and TEP’s request to extend the deadline for the filing of their IRPs from August 1st, 2023, to November 1st, 2023, and providing RPAC members access to the modeling license no later than May 2023, would enable the completion of this vital work. This deadline extension should be contingent on the utilities timely providing license access and training. The extension should require APS and TEP to provide access to the model and the requisite training within 30 calendar days of the decision.
​
Thank you for considering our comments, and we encourage the Commission to discuss this matter during the May Contingency Open Meeting date on May 11th.

Arizona Corporation Commission
1200 W. Washington Street
Phoenix, AZ 85007
 
RE: Joint Exceptions to Tucson Electric Power Company’s PPFAC rate adjustment Recommended Opinion and Order, Docket No. E-01933A-19-0028
 
Dear Chairman O’Connor and Members of the Arizona Corporation Commission,
 
On behalf of the Residential Utility Consumer Office (RUCO), Freeport McMoRan, Southwest Energy Efficiency Project (SWEEP), Arizona Solar Energy Industries Association (AriSEIA), Vote Solar, and Wildfire, we appreciate the opportunity to provide the attached proposed amendment to Commission Staff’s proposed Order regarding Tucson Electric Power’s (TEP) request to increase the Purchased Power and Fuel Adjustment Clause (PPFAC).[1] In response to the TEP continuing to have a sizable under-collected balance in recent years, we would like to offer a joint amendment to address forward-looking adjustments attached herein.
 
Thank you for considering our amendment, and we look forward to discussing this matter during the May 2nd Open Meeting.

[1] https://docket.images.azcc.gov/E000026030.pdf?i=1682711963707

Arizona Corporation Commission
1200 W. Washington Street
Phoenix, AZ 85007-2996
 
RE: Resource Planning and Procurement in 2021, 2022, and 2023 (Docket No. E-99999A-22-0046) and In the Matter of Resource Planning and Procurement in 2019, 2020, and 2021 (Docket No. E-00000V-19-0034)
 
Chairman O’Connor and Commissioners,

At the February 2022 Open Meeting, scheduled for February 8th and 9th, 2022, the Commission voted to acknowledge the 2020 Integrated Resource Plans (IRPs) of Tucson Electric Power (TEP) and Arizona Public Service (APS).[1] In addition to acknowledging the IRPs, the Commission placed numerous other requirements on the utilities, including a requirement to provide stakeholders and Commission Staff with the requisite tools to meaningfully participate in the subsequent modeling process.

IT IS FURTHER ORDERED that Arizona Public Service Company, Tucson Electric Power Company, and UNS Electric, Inc. shall in future Integrated Resource Plans negotiate a project-based licensing fee that permits up to 12 Resource Planning Advisory Council members and Staff the ability to perform their own modeling runs in the same software package as these load serving entities, and to provide all necessary data and support to fully utilize the models. The load serving entities shall absorb the cost of the licensing fees.[2]

To date, nearly 15 months after this vote, neither utility has complied with the Order. Stakeholders have been requesting access since Q4 2022. Stakeholders are still waiting on Nondisclosure Agreements (NDAs) from TEP and were told by APS that training on the software would occur in April 2023. Only the utilities have the ability to execute NDAs, provide the licenses and data, and conduct the requisite training. Without these tools, stakeholders are unable to meaningfully participate in the manner desired by Order 78499.

We ask the Commission to direct both TEP and APS to provide all of the above mentioned tools no later than May 31, 2023. Additionally, because of this lengthy delay, we ask for the IRP filing deadline to be extended past August 1, 2023. That is simply not enough time to conduct modeling and provide meaningful feedback on the results. Finally, we ask that the Commission take this issue up as soon as possible, at either the May 2nd Open Meeting or the May 11th Contingency Meeting, because the June Open Meeting is too close to the IRP deadline to permit resolution of these issues with sufficient time to carry out the analysis envisioned in the Commission’s Order.

Respectfully,

Autumn T. Johnson
Executive Director
Arizona Solar Energy Industries Association (AriSEIA)
520-240-4757
autumn@ariseia.org

[1] Open Meeting Notice, Docketed February 3, 2022, Agenda Item 26, available here: https://docket.images.azcc.gov/0000205866.pdf?i=1682712327380.

[2] Decision No. 78499, Docketed March 2, 2022, Page 14, Lines 9-14, available here: https://docket.images.azcc.gov/0000206081.pdf?i=1682710289643.

Arizona Corporation Commission
1200 W. Washington Street
Phoenix, AZ 85007

RE: Joint Comments in the request of Tucson Electric Power Company for approval of the PPFAC rate adjustment, Docket No. E-01933A-19-0028

Dear Chairman O’Connor and Members of the Arizona Corporation Commission, 

Vote Solar, the Southwest Energy Efficiency Project (SWEEP), and the Arizona Solar Energy Industries Association (AriSEIA) appreciate the opportunity to provide these comments on Commission Staff’s Recommended Opinion and Order (ROO) regarding Tucson Electric Power’s (TEP) request to increase the Purchased Power and Fuel Adjustment Clause (PPFAC). If approved by the Commission, TEP’s proposal would increase the average residential bill by $13.11 (10.8%) on top of the previously approved PPFAC, which was $6.36 (5.1%). The Staff’s proposal would increase the average residential bill by $12.07, plus the existing $6.36, for a total impact of $18.43 per month. 

The volatile nature of natural gas costs is an important reminder that the Commission should consider all tools at its disposal to mitigate significant increases to customer utility bills via fuel adjustors. After all, TEP’s request equates to a $19.47 monthly charge for the average residential customer. Notably, greater investment in reliable, affordable energy efficiency and renewable energy are vital solutions to insulate customers from this price shock and volatility. At the Energy Reliability Summit and Summer 2023 Energy Preparedness special open meeting, several commissioners reinforced the importance of demand response in maintaining reliability. Tools like demand response can also save costs for individual customers and the grid. 

Further, energy efficiency is well documented to cost less than other alternatives, including gas resources. During times of upward utility bill pressure, TEP’s energy efficiency offerings are especially vital because they can help residents and businesses control their energy costs, drive down energy bills, and redirect savings to the local economy. Additionally, renewable energy, such as wind and solar, offers a price-stable alternative because it has no fuel costs. However, the current structure of fuel adjustors passes 100% of fuel costs on to customers, significantly reducing the utilities’ incentive to make every effort to mitigate increasing costs. Utilities must consider fuel and other operations and maintenance costs when making resource procurement decisions because customers pay for the totality of those costs, not just capital costs. 

A Bring Your Own Device (BYOD) program is another option to reduce customer exposure to  volatile fuel prices. Dispatch of customer-sited batteries, when demand is high, reduces the need for utilities to purchase more expensive peak power. As a result, customer-sited solutions like a BYOD program benefit the grid while reducing reliance on fuel adjustors.
​
In conclusion, the current structure of the PPFAC creates significant exposure to fuel price volatility that results in variable and unpredictable customer bills. Accordingly, the Commission should examine the structure of fuel adjustors like the PPFAC to determine if the reinstatement of a cost-sharing provision to protect ratepayers from skyrocketing fuel costs is warranted. We believe this examination should occur in the Company’s current pending rate case or through a separate proceeding before the following PPFAC rate period proposal is filed. 
We appreciate your consideration of these comments and ongoing efforts to protect Arizona ratepayers.

Respectfully,
​
Kate Bowman
Interior West Regulatory Director
Vote Solar 
kbowman@votesolar.org 

Caryn Potter
Arizona Representative
SWEEP
cpotter@swenergy.org

Autumn Johnson
Executive Director
AriSEIA
autumn@ariseia.org

AriSEIA filed a response to TEP's rebuttal testimony in the TEP rate case today. The testimony covered three main topics: the company's return on equity (ROE) proposal, community solar, and rate design for distributed solar and storage. TEP has attempted to have several of our issues removed from this rate case, but we have highlighted this is simply a delay tactic and should be denied. Read the full testimony above.