Reporters Rebekah Sanders and Ryan Randazzo sit down and discuss the advantages and disadvantages of installing solar panels on your home.
Noah Lau, Arizona Republic
Salt River Project officials — facing criticism for the rates they charge solar customers — proposed a slightly more generous plan for those customers on Monday.
It failed to win over the critics.
The proposal kicked off a fresh round of debate among the 14 board members who set policies for the public utility, with some questioning why solar policies garner so much attention from the directors.
Four other board members, who ran for their seats in hopes of changing SRP’s solar policies, expressed frustration that the company’s managers don’t see eye-to-eye with them on the benefits of rooftop solar.
“This is really disturbing to me,” director Nick Brown said. “It is curious that New Mexico, Utah, Colorado, California, all seem to be able to figure out ways to compensate solar rooftop owners at rates that make sense for the owners and for the markets, and that can’t be done here.”
The new proposal SRP managers made Monday would compensate solar customers more for the excess power they send to the grid for four years compared with a proposal they made in December to offer 2.8 cents per kilowatt-hour for that electricity.
The new proposal would pay them 5.6 cents per kilowatt-hour for two years, then 4.2 cents per kilowatt-hour for two years, and then go down to 2.8 cents as SRP managers had suggested in December.
But after hearing the latest idea from SRP managers, Brown asked them to try again.
“I would request to management you go back and sharpen your pencil and provide a bit more equity to solar rooftop owners.”
Longtime board member Jack White, an SRP retiree, said it was not the utility’s job to ensure solar companies can run a profitable business in the company’s territory.
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White questioned whether more generous solar policies would affect the utility’s finances, and said the absence of large protests like SRP saw in 2015 when it last changed solar rates was a positive sign for the current plan.
“We have not really heard from a whole lot of residential customers,” White said. “Their absence here would tell me they are comfortable with what the proposal is.”
Introducing the ‘Sandstone’ plan
SRP’s solar customers must use a demand rate plan, called E-27, that charges a demand fee based on the single 30-minute time period in the month when the house draws the most power from the grid.
One half hour of energy use during certain times can significantly boost the monthly bill, regardless of how much customers conserve power the rest of the month.
SRP announced rate changes in December for all 1 million customers, including some alternatives to E-27 for people who install solar.
Those alternatives failed to win over solar companies, who saw their business drop off in SRP territory after E-27 was approved in 2015.
So on Monday SRP managers gave the board of directors another proposal to consider.
The new plan is called the “Sandstone Transition” because it is based on the Sandstone Solar power plant that contracted to sell SRP electricity for 5.6 cents per kilowatt-hour.
SRP would offer that same amount, 5.6 cents per kilowatt-hour, to solar customers for two years for the power they send to the grid.
Then the rate would decrease to 4.2 cents per kilowatt-hour for two years, and then go down to 2.8 cents as SRP managers initially proposed in December.
SRP Chief Financial Executive Aidan McSheffrey said compared with the December proposal, the Sandstone Transition plan would save solar customers about $10 a month for the first two years and then $5 a month for the next two years.
The more generous compensation for solar in the plan would cost SRP about $4 million over four years, he said.
“We think it comes at a higher cost but the exposure to those higher costs are for a limited time,” McSheffrey told the board of directors.
The board will vote on the rates and solar policies March 26 at 9:30 a.m.
California customers should save about $80 a month in heating, cooling and lighting, or about $19,000 over the usual 20-year life of solar panels.
Isabel Greenblatt, The Republic | azcentral.com
Board debate gets testy
The four board members who were elected on a platform to increase solar use at the utility were not impressed, and other board members were concerned the public utility is offering too much to solar customers.
“I appreciate Nick (Brown) that your concern is trying to get solar expanded and stuff, but we are only dealing with 1 percent of customers (who have solar),” board member Leslie Williams said. “The 1 percent has a voice, as you are, but we have to look at the whole thing. … The 1 percent shouldn’t control the whole utility.”
Other SRP officials echoed Williams’ concerns that any extra credit paid to solar customers must come from non-solar customers at the utility, and the directors have a duty to hold rates steady for all customers.
“I’m concerned about the hypothetical single mother in south Phoenix,” Vice President John Hoopes said. “That is the person I’m concerned about. That’s the person who for me brings into focus the balance we have to meet.”
A representative from one major solar-leasing company that has participated in the SRP rate hearings was disappointed with the new proposal.
“SRP’s management’s latest cynical rooftop solar proposal continues to punish rooftop solar customers, will not make SRP any more hospitable to rooftop solar than it is today, and still leaves SRP as an extreme outlier when compared to utilities in Arizona and around the country,” said Court Rich, an attorney with the Rose Law Group representing solar-leasing company Sunrun Inc.
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Managers prefer December plan
McSheffrey said the managers would prefer to stick with the plans offered in December, but wanted to offer an alternative for the board members who want better terms for solar customers.
One of those proposals would average maximum demand across the month rather than base the demand fee on the highest half-hour of use.
This way, customers would be billed on the average demand they draw from SRP during on-peak hours, rather than the highest use, which can be skewed by things like dinner parties when customers run multiple appliances.
Two other plans would not have demand fees. But they would pay customers just 2.8 cents per kilowatt-hour of electricity they send to the grid with their solar panels.
Customers on the E-27 plan get a 1-1 credit on their bill for kilowatt hours their solar panels send to the grid. That’s about 4 to 6 cents per kilowatt-hour, because that is what they pay SRP for that electricity.
SRP officials said they based the 2.8 cent rate on the lowest cost deal they have signed to buy power from a large solar power plant. They contend the value of electricity from rooftop solar panels is commensurate with the value of power from a power plant.
Reach reporter Ryan Randazzo at email@example.com or 602-444-4331. Follow him on Twitter @UtilityReporter.
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