ORIGINAL REPORTING: Solar’s Newest Arizona Challenge

The lurking surprise for solar in Arizona's recent ruling to end net metering; The landmark decision in the state's value of solar proceeding could end up slashing rooftop compensation in half

Herman K. Trabish, Jan. 26, 2017 (Utility Dive)

Editor’s note: Arizona Public Service and other stakeholders reached a settlement in the rate case but the threat to solar owners still lurks in the new rates.

Arizona regulators concluded a closely-watched proceeding on the value of solar by ending retail rate net metering and, to the frustration of solar advocates, siding with utility companies on most key issues. The 4 to 1 Arizona Corporation Commission (ACC) vote at the end of December began a transition away from retail net metering and introduces a replacement rate design. Some solar advocates say the changes undermine the residential solar value proposition. Other advocates and stakeholders say the changes will make Arizona solar better. Few have noticed a surprise hidden in the plan.

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The ACC ruling postponed decisions on the exact value of solar incentives for future utility rate cases. But the commission did act to make rooftop solar customers a separate rate class — a change some in the industry say bodes ill for the solar sector when new utility rate proposals are considered. With increasing solar penetration on their systems, Arizona utilities have rebelled against what they perceive as an unsustainable shift of costs to non-solar owning customers caused by net metering. The December hearing sought to address that. The ACC order clarified how two different valuation methodologies prescribed by commission staff will be applied. They synthesize stakeholder-proposed methodologies made during the VOS proceeding. But the final rate will be determined in each utility’s rate case… click here for more

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