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Arizona solar war hearings to start soon amid costly PR battle

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Jonathan Thompson | Nov 11, 2013 09:50 AM

What started out as a simple request to alter the way Arizona residents are compensated for power generated by rooftop solar has exploded into a full-blown, national headline-making, wacky political war complete with shady dealings and nasty ads. But it should be all over soon. Perhaps.

Arizona Public Service is trying to get that state’s utility regulator, the Arizona Corporation Commission, to alter its net metering program, one of the most robust in the nation, because they say that folks with rooftop solar are not paying their fair share to use the grid. That, they say, could cost non-solar ratepayers thousands of dollars (or $1 per month, according to an HCN analysis). APS submitted two proposals. They hope the ACC will choose one.

HopiSolar
Rooftop solar on Second Mesa in Hopi, Arizona. Photograph by Jonathan Thompson.

Currently, rooftop solar homeowners get paid retail rates for power generated by their panels. That is, each kWh generated offsets nearly an entire kWh used. Either of APS' proposals would result in a new net metering customer getting far less than retail, in effect significantly bolstering her monthly electric bill. The proposals would make it virtually impossible for someone to offset her entire bill with solar, and could quadruple the amount of time it takes to pay off the solar panels with savings on her bills. That, in turn, would clearly make rooftop solar less appealing, at least from a financial perspective. The ACC is expected to make a decision on this issue on Nov. 13.

Meanwhile, the political battle surrounding the proposal keeps heating up. The solar industry and environmentalists are livid, as one might expect. But strong opposition to slashing solar compensation has also come from some conservatives and free-marketeers; national conservative groups, with ties to the Koch brothers, have run over-the-top ads in Arizona attacking solar.

Here are some of the figurative fires that have flared up mostly burning APS in that war over the last couple of months:

• On Sept. 30, the ACC staff issued its report on the proposals, leaning toward keeping the current net metering program, at least for now. It recommended that the ACC reject both of APS’ proposals, and keep the current system in place until APS’ next rate case. In the meantime, the ACC should hold public workshops to try to assign a value to the non-monetary benefits of rooftop solar.

But if the ACC is hankering to do something now, the staff recommends, either: 1. Adjusting the way current fixed cost charges are levied, so that rooftop solar folks pay a reasonable amount for utilizing the grid; or, 2. instead of paying retail rate for rooftop solar, as is the case under the current system, have APS pay a rate based on current wholesale rates for utility-scale solar. Either would result in higher bills for rooftop solar folks, but it’s still a much better deal than what APS proposes.

• Under one of APS' proposal, homeowners that are currently in the net metering system would continue to be compensated as they are now for the next 20 years. But if someone bought a house with rooftop solar, they would be put under the new rate system (if ACC goes for it). That proposal got attacked from all sides, and APS backed off, saying it would grandfather existing solar systems and the homes not the homeowners for 20 years.

• Soon after APS announced it would push for net metering reform, both sides started lobbing public relations grenades, with a variety of ads, many of them hyperbolic, opinion pieces in local newspapers and websites devoted to pulling the public to each respective side of the battle. Then the real ugliness emerged, with the sleazy aura of campaign attack ads. One that called solar companies the “new Solyndras,” implied that net metering is corporate welfare, going to out-of-state billionaire solar company CEOs who wear aviator glasses and exchange briefcases of cash while getting out of their private jets.

The ads were funded by the 60 Plus Association, a hard-right political group that spent over $4 million on Republican campaigns during the 2012 election cycle, and which apparently took a little break from pummeling Obamacare to focus on Arizona’s solar net metering program. APS initially insisted that, though it had given money to 60-Plus in the past, it had no direct tie with the ads. Recently, however, the company admitted that, yes, it did pay 60-Plus to wage a campaign, including the ads, attacking net metering. It was not a smooth PR move, to say the least, especially if they spent ratepayers’ funds on the campaign. The company insists it didn’t, and even told investors that spending for "education" efforts came out of the stakeholders', not the ratepayers', pockets. Of that, the Arizona Republic reported:

Utility officials said that part of the 5.7 percent increase in operations expenses they saw during the quarter, bringing the cost to $233 million, was from the money APS has spent on “communications” regarding the solar issue and energy deregulation, another regulatory issue addressed earlier this year.

The fiasco prompted ACC commissioner Bob Burns to demand an accounting of both sides’ spending on the campaigns. Wrote Burns:

I am troubled by the magnitude and cost of recent public relations campaigns related to the Commission’s docket on net metering. I am concerned that ratepayer money might be funding these campaigns — whether through expenditures that the utilities will seek to recover in future rate cases or through person-hours worked by individuals whose salaries are paid by ratepayers … I am also interested in learning how much money the solar providers have expended on their campaigns related to net metering.

That APS is funneling money into this or any other political campaign that affects them shouldn’t surprise. It’s their profit $226 million last quarter after all, that’s at stake here. In the past, APS and their parent company Pinnacle West have hardly been shy when it comes to tossing money into politics. In the last 15 years, they’ve spent more than $17 million on lobbying, according to the Center for Responsive Politics, and nearly $4 million on campaign contributions over the last 23 years. That’s in addition to big spending in state-specific races. They’ve favored Republicans by a large margin, but also give generously to Democrats.

On Nov. 13, we may find out whether spending all that money was worth it or not.

Jonathan Thompson is a senior editor at High Country News. He Tweets @jonnypeace.

Hans Laetz
Hans Laetz
Nov 19, 2013 03:47 PM
At APS, we care how we live. But not you.

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