NewEnergyNews: ORIGINAL REPORTING: Arizona Utility Leads Trend Toward Demand Charges

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    Wednesday, February 15, 2017

    ORIGINAL REPORTING: Arizona Utility Leads Trend Toward Demand Charges

    APS rate case sparks concern beyond mandatory demand charge proposal; Along with a rate structure overhaul, the Arizona utility also wants to cut net metering credits to its avoided cost rate.

    Editor’s note: This controversy will come to a head when the rate case goes before AZ regulators in March.

    Herman K. Trabish, June 7, 2016 (Utility Dive)

    After working for years to win approval from Arizona regulators for higher fixed charges and fees for solar customers, Arizona Public Service altered its strategy in its new rate case and requested demand charges for virtually all its customers. The deferred 2015 request from APS to the Arizona Corporation Commission (ACC) for an increase of its $0.70/kW fixed charge to $3/kW has been abandoned for a more complicated and contentious solution as part of its proposal to invest $3.6 billion in utility operations over the next three years. The demand charges, being new, have raised a clamor. But net energy metering (NEM) credits for rooftop solar would also be reduced.

    APS has long expressed concern that rooftop solar customers, due to their lower demand and NEM credits, do not pay their fair share for grid upkeep, leaving the costs to the rest of the customers. The rate case filing expands on those concerns. The total shift to non-solar customers already totals $42.7 million and will grow by $20.1 million just in the time it takes the commission to rule. Former Arizona commissioner Kris Mayes said the problem is that APS is ignoring all the benefits of rooftop solar and making its calculations only its costs. Fixed charges and net metering rates will get their shares of hearing time in the rate case, but the push for residential demand charges raises serious questions or whether utility customers are prepared and equipped to benefit from them… click here for more

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