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Arizona Public Service Co. puts hard number on costs it says solar customers aren't paying


PHOENIX — Arizona's largest electricity utility on Thursday put hard numbers on the costs it contends solar customers aren't paying to maintain the power grid.

Arizona Public Service Co. said in a filing with the state Corporation Commission that it costs $118 a month to provide service to a typical rooftop solar customer, but those customers only pay $51 of that cost.

It also contends other customers are forced to pick up the remaining $67 of the fixed costs of the solar customer's service.

The company used data it normally collects for filings with federal energy regulators to assess the costs, said Jeff Guldner, an APS senior vice president.

The study gave credit for actual savings that APS achieves by not having to buy fuel for power plants and for reduced loads on its system but did not look at other benefits of rooftop solar panels, such as the value of cuts in pollution. Those potential values are rightly part of a policy discussion, he said.

"This is just a step in the discussion that we expect will then get paired up with the solar valuation discussion that says let's look at the non-cost aspects," Guldner said. "And then ultimately in a rate case the regulator's going to say 'now what do I do with all this.'"

Solar industry advocates say the APS information is misleading because it leaves out the benefits of solar.

"They are calculating only the costs of solar and asking that the commission completely ignore the benefits of solar, and that just doesn't make any sense," said Court Rich, an attorney for the solar industry group The Alliance for Solar Choice. "It makes sense if you're trying to win a (public relations) war or score some sort of PR victory, but for making a smart planning decision you need to look at the costs and benefits of rooftop solar."

The filing came as APS is asking the commission to withdraw a fee increase it wants to charge solar customers and instead asks for a review of the actual costs for it to serve solar customers in advance of a full rate case it expects to file next year. A previous company filing said its fee request had been "turned into political theater" by attacks from solar leasing companies.

Commission staff has recommended either putting off all discussion of the issue until APS files a full rate case next year or to launch a formal hearing that looks at the costs and benefits of solar.

The utility says non-solar customers are being increasingly forced to pay more than their share to support the power grid because of solar customers who are growing in number each year. APS wanted the monthly solar fee boosted from the $5 a month approved in 2013 to $21 per month, which critics said would harm the solar industry by reducing the incentive for installing rooftop panels.

"This is all about them identifying rooftop solar as a threat to their industry," Rich said. "They want to build that next billion-dollar power plant."

Guldner denied that, saying APS wants to address the issue fairly.

"What's frustrating is their strategy is basically delay, distract and confuse," Guldner said of the solar firms.

The proposals have set off a political fight on the Arizona Corporation Commission, which regulates the utility. The utility is widely believed to have spent as much as $3.2 million in last year's Corporation Commission election to back its favored candidates, who easily won.

APS is a subsidiary of Pinnacle West Capital Corp. and serves more than 1.2 million homes and businesses in 11 Arizona counties.

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