Dive Brief:

• Staff of the Arizona Corporation Commission have recommended that changes to utility net metering rates for rooftop solar should be considered within a full rate proceeding, and not separate dockets to consider altering how distributed generation is valued, Arizona Public Media reports.
• Both Tucson Electric Power (TEP) and Arizona Public Service (APS) have proposed new ways to reimburse net metered customers, which would see them collect more in fees from rooftop solar owners to compensate for grid expenses. The utilities want to implement the changes without going through a full rate review. 
• Staff said there are no legal reasons the commission cannot consider the net metering changes outside of a full rate case, but recommended waiting for a fuller review and more efficient process. The staff recommendation is not final and the commission may still decide to hear either utility's request.

Dive Insight:

While the recommendations are not binding, staff of the ACC told regulators they think waiting for a full rate case to adjust net metering policies at TEP and APS is the better way to go.

"Although there is no legal requirement that the issues TEP has raised be addressed in a rate case,
a rate case will provide the Commission with more tools to address those issues," staff said in testimony filed in May. 

In APS' case, ACC staff made a similar recommendation earlier this month, telling regulators that "no party has presented any compelling reasons, in Staff's opinion, for addressing this issue now."

"Another LFCR reset will have minimal impact on any cost shift that APS may be experiencing, and processing the application outside a rate case will do little to resolve the larger issue which APS itself acknowledges is one which is in need of a much broader remedy," the ACC staff wrote.

APS requested that the commission allow it to collect more money from rooftop solar customers, specifically resetting its lost fixed cost recovery adjustment (LFCR) — the money recovered from customers generating their own power. TEP believes the reimbursement rate should be changed to the rate the utility pays for wholesale solar generation from utility-scale projects.

Solar advocates oppose the proposals, saying they amount to utility attacks on customer distributed generation. The Alliance for Solar Choice has pressed to leave net metering at the retail rate, arguing it is fair and possibly even undervalued.