APS pulls rate hike request for solar customers

Posted at 6:28 PM, Sep 25, 2015
and last updated 2015-09-25 21:28:35-04

Arizona's largest electricity utility on Friday offered to withdraw a proposed fee increase for solar customers, saying its request had been "turned into political theater" by opponents.

Arizona Public Service Co. said it instead wants regulators to hold a hearing to determine the actual costs of providing power and let that be used to help decide how much of a rate increase it imposes on customers.

The utility says non-solar customers are being increasingly forced to pay more than their share to support the power grid because of solar customers who are growing in number each year. APS wanted the monthly solar fee boosted from the $5 a month approved in 2013 to $21 per month, which critics said would harm the solar industry by reducing the incentive for installing rooftop panels.

The proposals have set off a political fight on the Arizona Corporation Commission, which regulates the utility. The utility is widely believed to have spent as much as $3.2 million in last year's Corporation Commission election to back its favored candidates, who easily won.

By pulling back on the rate increase, APS will let the commission decide what a reasonable rate increase is next year after analyzing all the necessary costs associated with solar and other innovations.

"We hope our proposal will provide an alternative for the ACC to move forward with a much-needed discussion about how to update electricity pricing to reflect energy innovations like rooftop solar, battery storage and home energy management systems," the utility said in a statement.

Commissioners who must decide the case have been bombarded with conflict-of-interest complaints since August's decision to consider the utility's requested "grid access charge" increase.

The three commissioners who voted in August to consider boosting APS solar fees have been asked to recuse themselves by groups believed to be backed by the solar industry. One of them is being accused of bias in favor of the utility, and two because of the utility's spending in last year's election.

A fourth commissioner, Chairwoman Susan Bitter Smith, is under attack because she moonlighted as a lobbyist for a cable company while working on the commission. The fifth commissioner, Bob Burns, is considering whether to subpoena APS records to see if they had actually spent money backing commissioners Doug Little and Tom Forese.

APS is a subsidiary of Pinnacle West Capital Corporation and serves more than 1.2 million homes and businesses in 11 Arizona counties.