Dive Brief:
- Salt River Project, the publicly owned utility for the Tempe, AZ, region, revised its proposed demand charge of approximately $50 per month for new solar owners. The controversial demand charge brought 500 protestors to the initial regulatory hearing who provoked the directors' request for alternatives ahead of their Feb. 26 decision.
- SRP suggested that instead of all 15,000 SRP customers who own solar being moved to the new rates after 10 years, the 4,300 SRP owners of solar keep their current rate and incentives for either 10 years or 20 years from installation while the 7,300 SRP customers who lease solar and the 3,800 who bought solar after incentives expired in 2014 stay at the 10 year limit.
- SRP still wants a 3.9% across the board rate increase, in addition to the revised solar charges. SolarCity, Arizona’s leading rooftop installer, threatened to sue SRP if the new rates are approved. CEO Lyndon Rive wrote that the proposal violates antitrust laws.
Dive Insight:
SRP testified it wants to add the extra charge for solar owners to recover costs for grid maintenance lost when solar owners purchase less electricity from the utility and their infrastructure charges are proportionately reduced. Utilities say this shifts the burden to non-solar-owning customers.
SolarCity sued the Arizona Department of Revenue last year over its decision to charge property tax for leased but not owned rooftop solar. The case is still pending.
Solar advocates said the demand charge would ruin the solar value proposition and potentially threaten the resale value of homes with rooftop solar.
The SRP furor recalls the 2013 fight when Arizona Public Service (APS), the state’s dominant electric utility, asked the Arizona Corporation Commission for a similar $50 charge for solar owners. Following bitter debate, the ACC allowed an approximately $7 per month charge.
The SRP board is scheduled to vote on the proposed rate changes Feb. 26.
