Consumer, energy interests protest APS' proposed rate hike

Dive Brief:

Several consumer groups are still opposed to a rate increase proposed by Arizona Public Service Co., despite a settlement reached last month with solar advocates and support from the state consumer advocate.
According to the Arizona Republic, AARP, industrial customers and some energy advocates remain opposed. But the Republic's article also revealed interesting numbers about the adoption of the utility's rate plans.
According to the newspaper, APS has about 1.1 million customers and less than 500,000 of them are using a basic, flat-rate plan. While that is the most popular option, the bulk of APS customers split between a time-of-use plan and a demand rate plan.

Dive Insight:

After staff recommended against APS' proposed $166 million rate hike, negotiations led to a settlement that included $95 million in additional revenue. Not everyone is on board, and it appears to be the utility's attempts to get more people off fixed-rate plans that is slowing the process.

According to the Republic, the settlement would require new customers to choose either a demand rate or time-of-use rate, at least for the first three months, before allowing a switch to a standard fixed-rate plan. Fees on those plans are also set to rise from $8 to $15 per month.

The rollout of smart meters has helped utilities harness more information to develop alternative rate plans, and customer interest in the rates is growing as well. Along with demand charges and time-of-use rates, there has been interest in pre-pay options as well.

An agreement with solar advocates was crucial to moving the rate case forward. The two sides agreed that new rooftop solar customers would be paid $0.129/kWh for excess energy exported to the grid, and that the export rate would decline up to 10% annually for new rooftop solar systems—but customers would lock in their rates for 10 years when they sign up.

The settlement also establishes a 20-year grandfathering period for customers who file an interconnection application before a decision is issued in the rate case.