APS Rate Case Vote in June: 5 Things You Need to Know

Is the sun about to set on residential solar in Arizona? Not, but it will be very different for new APS solar customers shortly. Fortunately, APS is offering a very good grandfathering option, so if you've been considering solar and want to reap maximum savings, jump to the end and sign up for a free quote today! Please read on if you want more detail about what will happen to solar in APS territory.

Between now and July 1, 2017, the Arizona Corporation Commission (ACC) is expected to vote on a proposed APS rate change that--if passed--will dramatically change how solar customers will be charged and reimbursed. Commonly referred to as a “Rate Case,” APS filed the request with the (ACC) in the summer of 2016, so the details of their request have been a matter of public record for some time. However, legal language can be tricky, and it’s not always easy to decipher what APS is seeking or how their requested changes will impact current and future residential solar customers.

Adding to the confusion, in late 2016, the ACC voted to establish key guidelines for how Arizona’s current net metering and rate grandfathering programs will be evaluated as part of all upcoming utility rate cases.

To help clarify all this, we’ve broken the top four issues into two buckets: those already voted into effect and those still on the table for the June rate case vote. Below is a summary of the top four things about recent Arizona solar developments and the upcoming APS rate case.

ALREADY VOTED IN:

1. Net Metering will be dramatically diminished after June 2017: On December 20th, 2016, the ACC voted to change Arizona’s current retail-rate net metering policy*. Future net metering pricing will be based on a five-year average of utility-scale solar PPA pricing. The "Resource Comparison Proxy" (RCP) method will calculate the net metering rates in all utility rate cases before the ACC, including the APS rate case in June. In short, new APS solar customers will receive far fewer credits for any excess energy they send back to the utility grid after June.
   
   
2. Future rate grandfathering will be limited to ten years: As part of the December 2016 vote, regulators approved limiting future solar customers to a 10-year grandfathering period*. This measure also reaffirmed that current solar customers and those who sign up before July 1, 2017, will remain on their existing rate plans for 20 years from their interconnection date. This also aligns with the APS commitment to offer 20-year grandfathering for current solar customers and those who submit reservations before July 1, 2017. In short, if you want to go solar and enjoy today's more lucrative solar rates for 20 years, lock in your reservation now. 
   
   Here are the actual APS letters ensuring 20-year grandfathering for those who already have solar and those who sign up before July 1, 2017:
   
   Current Solar Customer Letter
   
   Future Solar Customer Letter
   
   
3. System additions will void 20-year grandfathering: The way the current documentation is worded, grandfathering will stay with your current system at its current location and size. The system can be repaired with new panels or a new inverter without voiding the 20-year grandfathering terms, but the system must remain at its current size and output. System additions (adding panels to increase output) will void the 20-year grandfathering terms and default you to whatever plans are available after the ACC vote. So, if you've been considering an upgrade, now is the time to lock those additional panels into the 20-year grandfathering clause before it’s gone.

YET TO BE VOTED:

1. Demand-based pricing for everyone: APS wants to introduce new demand fees into their monthly billing cycle. Demand-based pricing adds a new charge assessed from your highest 60-minute window of energy use every month. This is similar to what SRP did with their E27 solar plan in 2015.
   
   Even with the added demand fees, the right combination of solar and other technologies has proven greatly effective against the SRP model. Still, we must know what APS will introduce to guarantee a specific return. In short, if you’re an APS considering solar, take advantage of their 20-year grandfathering and lock in maximum savings before July 1, 2017. 
   
   
2. On and Off-Peak hours will change: APS wants people to shift their energy use to off-peak hours. To help, they want to change on-peak hours to 3 - 8 PM weekdays (from the current Noon – 7 PM weekdays). While this shift decreases the total number of daily on-peak hours by two, it also shifts those costlier hours to later. As a result, the new plan may be less compelling to solar customers who want to offset the maximum number of on-peak hours while the sun is out. This is a great reason to lock in today’s more solar-friendly plan and take advantage of the 20-year grandfathering clause. 

The ACC is expected to vote on the APS rate case between now and July 1, 2017. If approved, the plans are expected to be effective shortly after that. If you’ve been considering solar, now is the time to act to ensure maximum savings from today’s more solar-favorable plans.

If you're interested, request a free custom solar quote from one of our solar experts today.