Ryan Randazzo, and Mary Jo Pitzl

The Republic | azcentral.com

The solar industry and lawmakers agreed to stand down Thursday

Both sides were seeking to amend state laws regarding solar

Solar companies wanted to preserve net metering while lawmakers proposed the opposite

The rooftop-solar industry and lawmakers negotiated a cease-fire of sorts on Thursday, dropping their competing ballot efforts to change the state laws on solar subsidies.

They also agreed to work on a compromise between utilities and solar-leasing companies.

Solar-leasing companies were seeking to change the state Constitution to benefit their business model, and in response, lawmakers were seeking changes that would have harmed the solar companies.

Both efforts would have taken away the authority of the Arizona Corporation Commission to decide on such matters. The five elected commissioners regulate utility rates and policies such as rooftop solar.

"It would have been a pretty ugly dispute between the ballot measures over the summer," Commission Chairman Doug Little said, adding he was relieved to hear of a deal.

"It's a good night for Arizona," she said. Sen. Debbie Lesko, R-Peoria, called an early-evening news conference announcing the end of the looming solar war at the ballot. She read a joint statement that reflects the agreement hammered out in afternoon negotiations among lawmakers, backers of the citizen initiative and Gov. Doug Ducey's office.

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She and Sen. Don Shooter, R-Yuma, agreed to withdraw their bills, which had received preliminary Senate approval just hours before. The bills were designed to counter the Arizona Solar Energy Freedom Act, whose supporters were circulating petitions to get on the November ballot.

At the same time, Arizona Solar Energy Freedom Act Chairwoman Kris Mayes signed paperwork that withdraws the initiative she filed two weeks ago.

Mayes said the agreement creates an opportunity for mediated settlement talks to preserve solar with buy-in from Arizona Public Service Co. and, hopefully, other energy companies.

"This can be a model for the rest of the country," she said. "This is a big deal."

Lesko was pushing a referendum that would have let voters decide if utilities should pay less than retail rates for the electricity they take from rooftop-solar panels. Today utilities credit customers retail rates for that energy in a system called net metering, allowing them to significantly reduce their monthly bills.

Her referendum was House Concurrent Resolution 2041.

Shooter's ballot referral, HCR 2039, proposed regulating solar-leasing companies as public utilities, which have rates approved by the Arizona Corporation Commission. That effort also will end.

Those two resolutions were a response to Mayes' ballot initiative, which had been funded by rooftop solar-leasing company SolarCity. It would have changed the state Constitution to preserve net metering, guaranteeing rooftop-solar customers continue to get retail-value credits for power they send to the grid.

Mayes said that campaign had gathered close to 40,000 signatures.

Several utilities, including APS, are before the Corporation Commission seeking to amend net metering to either pay less than retail credit or otherwise raise solar customers' bills. The utility praised the compromise.

"Senator Lesko's leadership, in partnership with the Governor's Office and legislative leadership, created the environment in which this could happen, because they were focused on doing the right thing for Arizona," said Jessica Pacheco, vice president of state and local affairs for APS.

Pacheco said dropping all three efforts makes it easier to reach a compromise.

"SolarCity and the public service corporations will enter into a dialogue," Pacheco said.

Mayes said the parties have agreed to hire a mediator, and settlement talks could begin as soon as Friday. She said she is hoping for a 10-day window to come up with an agreement that both sides could present to the Corporation Commission.

Thursday's developments, negotiated by representatives of Ducey's office, end the possibility of three confusing and conflicting solar decisions on the November ballot.

“The Governor’s Office is convening a negotiation process between both sides in hopes of reaching an agreement that takes Arizona in a positive energy direction and ends the controversy of recent years," said a statement from Ducey's office.

The deal also keeps utility regulation with the Corporation Commission, for now.

"I'm encouraged by what I'm hearing and I encourage all parties to work towards solutions that work for solar companies, utilities and the ratepayer," Commissioner Tom Forese said after the deal was announced.

APS will file for a rate increase with the commission in June that will seek to change the way solar customers pay for electricity, and before that case concludes, the regulators will have to decide on a similar case for UniSource Energy Services, which serves customers in Mohave and Santa Cruz counties.

Little said dropping the voter initiatives will make that job easier.

"I'm happy that we as a commission are going to be able to do the job we've been given the constitutional responsibility to do, and that we will have all the tools available to us to do that job as effectively as we possibly can," he said. "In my experience there has got to be a way to work this out."

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