utility company relationship

Our relationship with our power utilities

There is no disputing the fact that solar is a direct threat to an electric utility company.

Utility companies buy wholesale power, mark it up, and sell it to their customers for a profit following a model parallel to that of the majority of businesses around the world.

Likewise, customers enjoy competition because it allows us to do what customers do best: fight to get the best value for the best price. That is simple human nature.

However, when it comes to a utility monopoly like those that dominate power sales in Arizona, customers have little choice in fighting for the best price. (Click here to read another post about how an electric utility monopoly works in Arizona. Coming soon)

Allowing a customer to install solar panels atop their home, building, or parking lot is like allowing a power plant owned by someone else to start selling to your customers. Any business owner would spar with their competition in an attempt to capture or retain the largest market share and thus make the most money. This is the nature of the free market and one would be hard pressed to find a noteworthy group against this universal (at least in the USA) model.

But power companies in Arizona do not have formal competitors which means competition for them is anything that results in the sale of less power. Such competition includes energy efficiency or solar panels which save power and produce power for their adopters respectively. (Utilities actually benefit from energy efficiency and solar to some extent because it reduces the stress on their grid and the need for additional peak power, but that is a topic for another discussion. Coming soon)

So how do utilities retain their market share? These monopolies cannot just go about their business behaving like monsters fighting solar and energy efficiency. We humans understand the more dirty fuels we burn to produce power the dirtier the air and the emptier our pockets become as customers. So we behave like consumers behave and demand ways to save money and clean the air.

Utilities understand this paradigm, but they have a business model that works extremely well and has allowed them to grow into multi billion dollar companies employing thousands of people and pumping a lot of money into the economy.

But humans are known for their innate ability to see and plan for the future, though it is without doubt a skill that could be refined among many. Lots of us have taken advantage of energy efficiency techniques and solar for their immediate returns, but the majority of us do it because we know we will reap the benefits for decades to come.

Many of us have realized that burning fossil fuels and other hazardous materials carries with it a destructive consequence, one which dirties the air and diminishes the health of our people. A lack of advance action results in reactionary policies which are costly to everyone including those who have fought to protect our futures to no avail. And even if burning fossil fuels was somehow clean, we all agree that these fuels are finite and will one day run out. It would be negligent to ignore the fact that we all today have a responsibility to leave the earth in a better state than when we arrived so that generations to come may enjoy it as we have.

So we humans are following our intuition, joining together to tell Arizona what we feel is best for our futures. And thankfully in the case of our utility monopoly we have the ear of the Arizona Corporation Commission (ACC) which interprets the voice of the masses and decides the lay of the land. At least I think that is what they are there for…

So utilities are now being told by our elected policy makers that they need to start making some changes to their outdated business model, that they need to clean the air by integrating solar into Arizona’s overall energy portfolio. For that past few years, the ACC has forced utilities like APS to act as the prime avenue for customer-owned rooftop solar systems. These utilities have assessed all rate payers a surcharge that has paid an incentive to motivate utility customers to add solar power to their homes and businesses. Each year these subsidies have been reduced dramatically exactly as planned. In fact, the increased demand, and therefore the reduced cost of installing solar, has allowed us to erase the need for utility-assessed solar rebates.

We, the people, have demanded this and it has allowed Arizona to just barely begin to tap into the most efficient natural resource we have available to us. The potential from here is astonishing.

But our utilities are beginning to feel the effects of solar, and they, like us, can see the future and what this means to their archaic business model. Technology advances, and one day every home and building in Arizona will likely be able to produce 100% of their own power, virtually erasing the need for a power utility at all. Remember when computers took up the square footage of entire rooms and buildings just to add 1+1? I don’t, and my kids are never going to remember the day when we had to cover every last square foot of exposed rooftop in order to offset as large a percentage as possible of our energy needs.

Technology is not going to stop advancing; our massive utility companies have been handed an unparalleled opportunity. Instead of claiming to have pioneered solar, utilities have the manpower and resources necessary to effect real change almost overnight so that they may capitalize on a new business model, one which will change the way we power the world forever. We can all agree on this bipartisan issue and continue to employ our people and fuel our local and national economies as we do today.

Proposing to change successful solar policies such as net metering by spreading propaganda and false information in an effort to preserve revenue for just a little bit longer is not what Arizona needs right now. Win the hearts and minds of your customers by empowering them to see and live out a future in which we all prosper together on a cooler, cleaner, more sustainable planet.

We, the true green-minded advocates, are all here to work together with you to find the best solution, but we will never get anywhere until we open the door to collaboration and conversation between utilities, industry experts, and the every day consumers that we all are.

Seize the opportunity. Lead the way. Change the world.