Friday, March 27, 2015

Sierra Club Isn't Happy with TEP's Proposal to Reduce Solar Buy-Back Incentive

Posted By on Fri, Mar 27, 2015 at 9:00 AM

The Sierra Club isn't a fan of Tucson Electric Power's proposal to do away with the state's metering rules for solar energy—something that tells TEP to buy back, at full retail price, any excess energy that a solar customer did not use.

The utility company filed a request with the Arizona Corporation Commission a couple of days ago, arguing the changes would make monthly rates more equal for all residential customers—most solar rooftops are connected to the communal electrical grid, and TEP says the rooftop solar customers are not paying their share for maintaining the grid and other services.

TEP wants to reduce that buy-back rate by about half, according to Tucson Sierra Club organizer Dan Millis.

What TEP said about the proposal on Wednesday:

Users of rooftop solar power systems rely just as heavily on TEP's electrical system as other customers — more heavily, even, since TEP must manage their systems' intermittent output. But they pay far less for TEP service under current rates, due in part to net metering rules that allow them to exchange excess solar energy for free, on-demand utility power.

TEP is proposing instead to purchase excess solar output from new rooftop systems at the same price it pays for energy from large local solar arrays. The resulting bill credits would allow customers to reduce their electric bills by going solar, even as they pay the same price as other customers for the energy they use from TEP. 

However, Millis said the solar industry's approximately $34 million in net benefit to Arizona Public Service electricity customers alone outweighs the difference in rates. Also, he pointed out to a new report by The Solar Foundation that says Arizona created more than 600 new jobs in the solar energy realm. The state is third in the country in total number of solar jobs. A good thing. So, changing the net metering rules means one of the main incentives that push people to go solar would disappear. Millis calls it the backbone of rooftop solar, without the metering, "you don't get credit for the surplus energy you produced." If the proposal to lower that buy-back rate solidifies, getting panels will not be as good a deal in people's minds.

What TEP had to say about that:

The impact of this solar subsidy was minimal in 2008, when the ACC approved current net metering rules. At that time, fewer than 600 TEP residential customers had rooftop solar systems and large subsidies were necessary to help customers justify the purchase of photovoltaic (PV) arrays that cost more than $8 per watt of system capacity.

PV system prices have fallen steadily since then to less than $3 per watt, driving annual increases in the installation of both customer-owned and leased PV systems. About 7,900 of TEP's residential customers now have solar power systems, and more than 600 customers have applied already this year to connect new PV arrays to TEP's grid.

Without changes to TEP's rates or net metering plan, the continuation of such growth would force significant rate increases to offset increasing subsidies to users of rooftop solar systems.

"We're exceeding our renewable energy goals, but that won't mean much if we're forced to compromise the affordability of our community's electric service," David G. Hutchens, TEP's president and chief executive officer, said. "Our proposed net metering plan would promote both sustainable power and a sustainable electric grid."

When the current net metering rates were established by the Corporation Commission in 2008, solar was less common, and the technology was new and needed to be developed. Now that it is more popular and affordable, "we can achieve our renewable energy goals and preserve significant bill savings for solar power users without creating unmanageable cost burdens for our other customers," Hutchens said in a press release.

From a Sierra Club press release:

TEP’s proposal would do away with net metering for new solar customers, pulling the rug out from under the solar industry and stifling local clean energy job growth while the utility maintains a stake in out-of-state coal-fired power plants like the San Juan Generating Station.
And Millis issued this statement:
“We need TEP to put Tucson first. Rooftop solar is creating thousands of local jobs here in Arizona, saving Tucson residents and homeowners money, and providing enormous benefits to ratepayers throughout Tucson and the state. With enormous clean energy potential, we should be doing all we can to protect energy freedom and choice for Arizonans. Instead, utilities like Tucson Electric Power are holding us back by fighting local clean energy and locking our community into dirty, out-of-state coal plants like the San Juan Generating Station. TEP should invest in clean energy here at home, not fight affordable energy solutions and send more of our money out of state to fund its dirty, expensive coal plant. Our community deserves better."
Right now, a residential solar customer saves a little more than $100 a month, if the proposals are approved, that figure would go down to $80, according to TEP.

If the Corporation Commission agrees with the changes, customers who already have solar, or get solar arrays before June 1, would not be affected. 

The two are in another bid right now, involving several business and environmental groups urging TEP to pull support for the San Juan Generating Station in New Mexico. 

An update from the Sierra Club:
Regulators in New Mexico will soon decide on a plan brought forth by Public Service Company of New Mexico (PNM) to extend the utility’s commitment to the San Juan Generating Station and continue burning coal for years to come. TEP owns half of one of the units of the coal-fired power plant outside Farmington, New Mexico - a unit that still requires the installation of pollution controls. TEP remains invested in San Juan, despite unforeseen cost increases and questions around plant reliability that put TEP customers at serious financial risk.

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