A couple months ago, the Arizona Republic published an Op-Ed from APS CEO Don Brandt , an attempt to calm the masses before the impending announcement from our state’s largest utility that they will severely slash the benefits of the solar net metering program that has helped place Arizona on the map as a solar capital.
Mr. Brandt begins his write-up by portraying APS as a national hero responsible for much of our nation’s commitment to solar research and the success of solar since the wild west era of the 1950s when APS first rounded up the country’s solar pioneers and insisted they get to work. “Nearly 60 years later, solar power is a reality,” proclaims Mr. Brandt.
“The amount of [solar] electricity APS generates has gone up to nearly 700 megawatts by the end of 2013,” announces Mr. Brandt, ignoring the fact that APS is not the entity generating the majority of this power, but rather APS customers who have themselves, along with the help of state and federal subsidies, invested in the future of our state’s economic growth and clean energy future.
APS’s role in all of this is simply to buy wholesale power as cheaply as possible and sell it to customers at retail rates while following all of the rules mandated by the Arizona Corporation Commission (ACC), a perfectly legitimate, though outdated, business model and one that has worked for decades.
But let’s not paint APS as a clean energy champion. Sheath your sword and come down from that horse, Sir Brandt. There are more important issues for Arizona than how your customers perceive their for-profit monopoly exempt from the rules of competition by which all others must play.
Now that he has claimed APS’s programs responsible for Arizona’s solar growth, Mr. Brandt goes on to explain the big picture problem that has led to this success. “APS is currently required to pay [solar] customers…25 cents per kilowatt hour for the excess energy they generate.” Mr. Brandt cries on, explaining that APS purchases power for just one fifth of that cost.
The disconnect is that APS does not pay solar customers 25 cents per kilowatt hour, but rather allows solar customers to net out the power they send back to the grid and the power they consume from the grid, thus only paying for the total amount they have actually purchased from APS. The utility’s loss comes simply in the form of less power sold to those customers that produce it for themselves.
Mr. Brandt claims “the average rooftop solar system on an Arizona home adds $20,000 in costs for non-solar customers over its lifetime,” but no one outside of APS can crack this complex (magical) mathematical equation.
Every rooftop solar panel is equivalent to a solar customer switching out several old-fashioned incandescent light bulbs. APS loses money in the form of lost revenue in this situation just as they do with rooftop solar panels. The energy efficient customer is not shifting his fair share of grid expenses to other less efficient customers. He is just hurting APS revenues, and that is bad for business.
We all encourage our own families and our neighbors to be energy efficient at the expense of APS who is selling less power because it saves us money and cleans the air, but energy efficient customers need the grid just as solar customers do. If you play by APS’s rules, this will result in lost fixed costs for grid upkeep and will lead to rate hikes just the same. Solar customers have simply made themselves too energy efficient, and that is where it crosses the line for Mr. Brandt.
But Mr. Brandt’s final thoughts anyone would agree with.
“…if everyone works together in good faith, we can find a solution that preserves rooftop solar as a cost-effective option for customers who want it; protects the interests of customers who do not or cannot install solar; and preserves a fair profit for rooftop solar installers who run their businesses well.”
If only that was more than a well-crafted grouping of words cleverly omitting the revenue effects on APS which have brought this whole conversation to the forefront to begin with.