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Commission Must Adjust Solar Subsidy
Commission Must Adjust Solar Subsidy
By Robert Robb, columnist The Republic | azcentral.com Thu Apr 25, 2013 - The Arizona Corporation Commission’s solar energy policy is about to drive into a ditch. Extricating it will be neither simple nor easy.
In 2006, the commission deemed that regulated utilities had to get 15 percent of their power from renewable sources by 2025. Although there’s a token amount of wind and other sources in the mix, in Arizona, renewable principally means solar.
Since solar is more expensive than other sources, the commission has approved a surcharge on the bills of captive costumers to provide a subsidy. By the end of this year, APS customers will have paid nearly $550 million more for power than necessary to fund the solar subsidy.
The problem is that the subsidy will no longer provide an incentive for new solar. This year, virtually all the money, around $100 million, will go to underwrite solar that already exists and is producing power – purchase agreements APS has signed with merchant solar plants and commercial rooftop solar systems.
The commitments to these legacy subsidies are long-term. Which means that APS’ captive ratepayers will be forking out $100 million or more a year for the foreseeable future with little in the way of new solar to show for it.
And now, the commission is going to be asked to referee a catfight between APS and residential rooftop panel companies over a thing called net metering.
APS, Tucson Electric Land Near Top of List for Utility Solar Power Providers
APS, Tucson Electric Land Near Top of List for Utility Solar Power Providers
April 19, 2013 - Phoenix Business Journal- Arizona Public Service Co. is one of the largest providers of solar power for utilities in the U.S., according to a report from the Solar Electric Power Association.
In the annual report that measures the amount of new solar added by each utility during 2102, APS, the state’s largest utility, ranked No. 4. Tucson Electric Power ranked No. 7 in a list dominated by California, Arizona and New Jersey utilities.
SRP Board Approves Price Decrease
SRP Board Approves Price Decrease
By Ryan Randazzo The Republic | azcentral.com Mon Apr 8, 2013 - Salt River Project’s residential customers will save about $10 this year thanks to a price decrease the board approved Monday.
The municipal utility will reduce two line items on customer bills from May to October: the fee for power-plant fuel and the fee for renewable energy.
The company is able to reduce the fees because natural gas and renewable-energy prices are both lower than anticipated.
The fee reduction will pencil out to about $1.72 a month for the average residential customer. Both fees are charged per kilowatt-hour, so customers who use more electricity will save more.
SRP officials said the company will be able to meet its renewable-energy goals even with the reduction.
The utility is working to provide 20 percent of its electricity from renewable sources such as wind and solar, as well as through energy efficiency, by 2020.
SRP is able to reduce the tariffs because it has a surplus in both accounts, Associate General Manager and Chief Financial Executive Aidan McSheffreyCQ said.
“Both factors need to balance revenue and expenses,” he said. “Revenue needs to track expenses one for one.”
The utility had more renewable-energy funds than anticipated because of higher electricity sales so far this fiscal year, he said. Administering its sustainability program also has cost less than anticipated this year.
APS President Donald Robinson Dies After Long Illness
APS President Donald Robinson Dies After Long Illness
By Catherine Reagor The Republic | azcentral.com Thu Apr 4, 2013
Donald Robinson went from leading Arizona Public Service Co.’s regulatory efforts to becoming its president during his 34 years at the power provider. He died Thursday after a long battle with cancer.
Robinson, 59, had been on medical leave during the past year. He had been with Arizona’s largest power company since 1978.
“Arizona has lost one of its true leaders of business and community,” said Gov. Jan Brewer.
APS Chairman and CEO Don Brandt called Robinson “a true gentleman and a real friend.”
“There have been few – maybe none – who have known our business and our state like Don,” Brandt said. “He had an incredible sense of what was best for our customers and our business, but was even better at relating to, and empathizing with, our employees.”
While president at APS, Robinson oversaw company’s electric operations, including fossil generation, renewable generation, energy delivery and customer service, resource acquisition, power marketing and trading, resource planning and environmental health and safety.
By Ryan Randazzo The Republic | azcentral.com Sat Mar 23, 2013 -- With five Republicans in charge of Arizona utility regulations, all who appear to welcome free-market competition, merchant power suppliers see the state as ripe for another shot at utility deregulation.
Arizona began planning utility deregulation in the 1990s, about the same time other states were attempting to open up their markets. The effort was killed by a judge’s decision in 2004, but could see new life.
“We will prudently and cautiously examine how other states have fared under retail competition and ponder whether the time is right for Arizona to follow a similar path,” said Bob Stump, chairman of the Arizona Corporation Commission.
The five members of the Corporation Commission set utility policies.
Stump spoke last week at a conference hosted by the Competitive Power Alliance, where several companies touted the virtues of utility deregulation in states such as Texas and Pennsylvania.
Arizona’s deregulation efforts lasted several years, with utilities bracing for competition and forming separate companies to market electricity. But shortly after the first large utility customers began to select their electricity providers, the effort was shut down. Arizona never got to the point where residential customers were able to select power providers.
By Ryan Randazzo The Republic | azcentral.com Feb 22, 2013 - Thanks mostly to a rate hike that became effective in July, the parent company of Arizona Public Service Co. reported Friday that its fourth-quarter profits nearly doubled.
Phoenix-based Pinnacle West Capital Corp. reported profits of $22.6 million, or 20 cents per share, compared with $12.6 million, or 11 cents per share, in the same quarter of 2011.
The results beat analyst expectations of 17 cents per share.
Revenue for the quarter was $693.1 million, compared with $667.9 million in the same quarter of 2011.
The rate hike that went into effect for 1.1 million APS customers last year did not raise bills immediately because falling natural-gas prices offset the increases in other parts of the bills. The complex settlement helped the company improve its earnings without an immediate bill increase to customers.
“(The rate hike) allows retail rates to change gradually over time through a number of adjustment mechanisms and help us avoid the need for large, base-rate increases every few years,” President/CEO Don Brandt said Friday.
Base rates increased $116.3 million annually with the rate hike. But customers actually saw their bills go down about 1 percent because natural-gas prices were low, and APS passes the cost of natural gas directly to customers with no markup.
APS actually was paying customers a credit on their bill reflecting the low gas prices. Bills are rising though. The credit was erased, and the surcharge for natural gas went up this month an average of $6.05 a month for the average household using 1,100 kilowatt-hours of electricity.
Yet another charge on APS bills makes up the cost of paying for power lines and other “fixed costs” that the utility must maintain even as it sells less electricity. That charge is kicking in now, adding less than 40 cents a month to bills. That charge offsets some of the money the utility spends helping customers conserve electricity with efficient lightbulbs and other appliances.
Guest Column: Solar Power Must Flourish in Arizona, But Not at Taxpayers' Expense
Guest Column: Solar Power Must Flourish in Arizona, But Not at Taxpayers' Expense
Bob Stump, Brenda Burns, Bob Burns, Gary Pierce and Susan Bitter Smith Special To The Arizona Daily Star/February 12, 2013
A recent article addressed the cost of solar incentives, but it told only part of the remarkable story developing at the Arizona Corporation Commission. The true headline is that while incentives have gone down each year, renewable energy installations have dramatically increased.
Arizona utilities, as regulated monopolies, are ahead of schedule with regard to renewable energy production, especially for residential and commercial installations, and we do not want to see customers pay more than they should. After years of generous incentives have helped commercial solar get off the ground, the declining costs of solar have brought us to a place where the market can nearly sustain itself without them. The fact is, Arizona is a leader in renewable energy and will continue to lead - while keeping costs as low as possible.
Last fall, the Solar Energy Industries Association praised Arizona for being second in the nation for solar installations, slightly trailing California. The association called 2012 an "unprecedented, banner year for solar installations." Arizona added more residential solar in 2012 than in the past three years combined. In 2012, Arizona was No. 1 in the Southwest for rooftop solar. The ACC is proud that Arizona has achieved this level of success while gradually lowering incentives and thereby protecting ratepayers' pocketbooks.
Enviros, solar officials fear AZ panel's move could hurt industry
February 02, 2013 • Julia Taylor Cronkite News Service - PHOENIX - Environmentalists and solar-industry leaders are saying they fear that recent cuts to renewable-energy incentives by the Arizona Corporation Commission will lead to future reductions that could harm the industry.
The commission voted 5-0 last week to cancel incentives for large commercial customers' solar projects in areas served by Tucson Electric Power Co. and Arizona Public Service Co. It also cut back on incentives for residential customers' installations.
Those incentives, funded by ratepayer surcharges, come in the form of utility rebates that complement federal or state tax credits.
Opponents of the cuts rallied Wednesday outside the Corporation Commission office in Phoenix.
"There's no question they're doing it calculatedly; they know what they're doing," said Randy Dunton, a project developer with Hawkins Design Group, which develops power plants for commercial businesses.
Opponents said cutting incentives will make businesses and homeowners less likely to convert to solar, which in turn will deter solar manufacturers from opening plants here. They also argued that they had little time to voice those concerns before last week's votes.
Activists also criticized a proposal Commissioner Gary Pierce floated and withdrew last week that would have effectively reduced the renewable-energy procurement requirement for Arizona Public Service Co. by excluding more large customers from the formula used to calculate total retail sales, in which the standard is based.
