The AZ Corporation Commission & Public Health (Part II): Clean Energy

At first glance, the Arizona Corporation Commission might seem like it has pretty much nothing to do with public health. But when you scratch the surface just a little, you’ll discover that the Commission does in fact influence public health in important ways.

Last week we covered how the Commissioners have been using their authority to regulate electricity monopolies and how those decisions affect the social determinants of health.  This week we’ll cover how Commissioners decisions impact Arizona’s ability to limit carbon emissions.

Commissioners Set Stage Slash Rooftop Solar Buyback Rates

The “Value of Solar” rates set by the Corp Comm back in 2017 determine how much APS needs to pay home-based rooftop solar generators for their extra electricity. Those criteria were carefully set in 2017 after a multi-year evaluation by commissioners and staff.

Since then, folks have been using that formula to figure out what the return on their investment for the power they generate on their house.

That is all up in the air now that the Commission is reevaluating those rates – most likely to reduce them.

Back in October 2023 the Corp Comm voted (3-2) to open a new legal case to re-evaluate rooftop solar export rates – setting the stage for a future reduction in buyback rates. 

Commissioners Nick Myers, Jim O’Connor and Kevin Thompson voted to open the Value of Solar docket. Lea Márquez Peterson and Anna Tovar against the move.

Central to the issue is the 10% annual reduction in how much utility companies must pay residential solar panel owners for extra energy produced by their home system that is then returned to the grid and sold to other customers.

The decision also reopens discussions about the 10-year export rate effective period and a grandfathering policy for net metering customers.’  Corporation Commission reopens debate over rooftop solar buyback rates

The Commissioners haven’t yet cut the export rates for current and future solar producing customers, but the stage is now set for the newly elected commission in 2025 to decide whether to slash existing and future solar customer export rates.

Note: the Value of Solar agreement in 2017 included very bad provisions like the elimination of ‘net metering’ of APS customers.

Rate Increases for Solar Power Generating Homeowners

Back in February, the Commission rubber stamped APS’ request to add a monthly charge of $2.50 to $3 for residential customers with rooftop solar systems, reducing the incentives for folks to install rooftop solar systems on their houses.

After pushback from consumers and rooftop solar advocates the Corp Comm recently granted a rehearing on whether an APS rate hike that included an added fee for solar customers is “just and reasonable”.

Attorney General Mayes also stepped in and argued the added charge on solar customers was “discriminatory” given both solar and non-solar customers receive power uniformly, and the decision generally violated customers’ due process rights.

“In this rate case, APS did not request an additional charge for residential solar customers at any point, nor did any party propose one,. No party had any reason to introduce evidence to refute the factual basis for the surcharge because no party had requested, briefed, or discussed the possibility of such a charge at any time prior to the close of the administrative record.”

The Corp Comm says the upcoming rehearing would be limited to “whether the rate should be higher or lower; whether the GAC rate constitutes an alleged discriminatory fee to solar customers and whether omission of the GAC is discriminatory to non-solar customers.”

Grid Access Charge Rate Schedules: Fixing a Just and Reasonable Rate of Return

Commissioners Scrap Clean Energy Standards

The Arizona Corporation Commission also killed carbon-free energy rules that were under consideration for years after watering down the plan which would have incentivized solar, energy efficiency and other clean power sources.

The changes that weakened what had been the requirements for electric companies to meet clean energy standards – turning them into “goals” rather than mandates.

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After you scratch the surface, it’s easy to see that who you vote for in the upcoming Corporation Commission race can have a big impact on policies to encourage more solar investment in Arizona… with the stage now set for an even more hostile policy environment.

Note: Three of the five Arizona Corporation Commission seats are up for election in November — those of Republicans Jim O’Connor and Lea Marquez Peterson and Democrat Tovar, who has announced she will not run again.

Last week we saw how the Corporation Commission impacts the social determinants of health by how they use their authority to scrutinize monopoly utilities electricity rate increases: Corporation Commission reopens debate over rooftop solar buyback rates

This week we covered how they can use their authority to either encourage or discourage carbon emission reductions (discourage mostly).

Next week we’ll look at the way the Corporation Commission has been rubber-stamping rate increases for another monopoly utility (and harming the social determinants of health): Southwest Gas.