Dive Brief:

Arizona Public Service (APS) sent a cost of service summary to the Arizona Corporation Commission (ACC) detailing for the first time how much cost it believes customers with rooftop solar shift to the rest of the consumer base, the Arizona Republic reports.

APS said its analysis found it saves around $36 per month thanks solar panels reducing its fuel generation. Even so, the utility says monthly costs to serve a customer are around $118, and solar customers only pay back $51, leaving a $67 balance to be paid by non-solar customers.

Solar advocates argue the APS analysis is inadequate because it does not include an assessment the benefits of solar. The utility made its filing ahead of the formal cost of service proceeding that it requested regulators undertake before it files its next rate case in early 2016.

Dive Insight:

Arizona's major power producer produced a cost-of-service study that said rooftop solar users don't pay their fair share of the grid ahead of its formal cost-of-service proceeding, leaving rooftop solar advocates upset and distrustful of the analysis.

“APS says it wants to look at the costs of solar only,” said attorney Court Rich on behalf of The Alliance for Solar Choice. “That is just as absurd as a solar industry proposal to only study the benefits of solar without consideration of the costs.”

APS withdrew its request for a $21 grid access fee, or $3/kW, last month in exchange for a full cost-of-service proceeding before its upcoming rate case. The request came along the heels of allegations of bias against rooftop solar leveled at three ACC commissioners, who have since said they will not recuse themselves from APS's controversial case.

The APS call for a cost of service proceeding is only half the utility’s intent, senior vice president Jeff Guldner explained to Utility Dive. It also wants the commission to undertake a formal integrated resource planning proceeding in which a full valuation of solar can be made. A resource planning proceeding involving all Arizona utilities is the more proper forum, he said.

ACC staff recommended either a full solar cost-benefit analysis during the next APS rate case or a single proceeding to consider a full solar valuation. In an August hearing, the commission decided to have a hearing on the proposed fee hike, but with a full cost-benefit analysis of solar, the Arizona Republic reported.

Former policymakers and solar advocates have condemned APS's move to push forward with a cost-of-service proceeding, saying it excludes examining potential benefits.

“As a matter of regulatory efficiency and of fairness, consider all the issues in one proceeding,” said Karl Rabago, a former Texas utility commissioner and current executive director of Pace Energy and Climate Center. “The Commission should abate piece-meal proceedings in favor of a comprehensive examination of the benefits and costs.”