ORIGINAL REPORTING: Why Arizona's long-awaited value of solar schemes pleased no one

Why Arizona's long-awaited value of solar schemes please no one; A year of hearings and a new recommended order leave the ACC right where it began — with utilities and solar at odds

Herman K. Trabish, Oct. 24, 2016 (Utility Dive)

Editor’s note: This Arizona ruling, subsequently affirmed by the Commission, was controversial but it led to a groundbreaking settlement between the parties early this year.

Just as Solomon’s decision to split the baby displeased both mothers claiming it, the long-awaited preliminary decision in Arizona’s value of solar proceeding displeases both utilities and solar advocates. In October of last year, the Arizona Corporation Commission (ACC) attempted to stem two years of contention between utilities and solar companies over the value of residential solar energy to the grid by ordering a new evidentiary proceeding on whether a cost of service valuation, a cost-benefit analysis, or another methodology best captures the value of rooftop solar to the utilities paying for it. The hope was that the value determined in the proceeding would replace the retail rate net metering program now used to compensate rooftop solar owners for the power their systems send back to the grid.

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On Oct. 7, Administrative Law Judge (ALJ) Teena Jabilian issued “Recommended Opinion and Order” (ROO) to the commissioners that called for a shorter-term valuation for rooftop solar customers and recognized their right to be compensated for their generation. It signals a tectonic shift in the Arizona solar market, calling unequivocally for the end to net metering. In upcoming utility rate cases, the longstanding NEM retail rate credit must be replaced, and “[t]he value of DG exports should be used to inform compensation rates to be paid to DG customers for their exports.” Some 30 parties took part in the VOS proceeding, including Arizona’s investor-owned utilities, electric cooperatives, and public power providers. Vote Solar, The Alliance for Solar Choice (TASC), Western Resource Advocates, and other environmental and solar advocates also participated, as did the Residential Utility Consumer Office (RUCO), and other consumer, labor, and industrial power user advocates. There were significant divisions on the ALJ’s decisions… click here for more

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