APS seeking rate hike and changes to plans.
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Ryan Randazzo, The Republic/ AZ Central.com June 6, 2016
Arizona Public Service Co. is seeking an $11 monthly rate hike on residential customers and a new billing structure in a rate case filed Wednesday with state regulators. The hike would bring the utility $166 million more in annual revenue. Customers using 1,160 kilowatt-hours of electricity pay an average of $139 a month now, and that would increase to $150. The $11 increase is an average for all homes across all seasons, and would be higher in summer and lower in winter. The state's largest utility, with 1.1 million customers, is asking the five elected officials at the Arizona Corporation Commission to approve "demand charges" on all but about 200,000 residential customers who use the least electricity each month. The demand rates that APS is seeking would charge less for each kilowatt-hour of electricity a customer uses during the month. But APS would single out the highest one-hour use of electricity during peak hours in a month and assess a fee based on how high that hourly demand reaches. MORE: What demand rates could mean for thousands of utility customers The utility also is seeking to change the peak hours for customers on time-of-use rates from noon to 7 p.m. in summer to 3 p.m. to 8 p.m. Electricity is priced higher on those rate plans during those hours. For customers who don't want to actively manage their electricity use and be mindful of their peak demand, APS is proposing a flat rate plan. The utility will average out the last year of electricity use from a customer and bill them the same amount regardless of how much electricity they use, similar to an unlimited data plan for a cellphone. The rate hike is needed, officials said, to help pay for the additional gas generators being built at the Tempe Ocotillo Power Plant, environmental controls on the Four Corners Power Plant in New Mexico, and other grid upgrades. ROBERTS: APS petitions its puppets for rate hike Rooftop solar industry among opposition Besides opposition from consumer groups such as AARP, the demand-rate proposal will generate strong opposition from rooftop solar companies. Demand rates reduce the incentive to install rooftop solar unless it is coupled with batteries, load controllers or other technology to reduce peak demand. The lower cost per kilowatt-hour of electricity on demand rates means rooftop solar customers get less benefit from the power they generate. And rooftop solar customers still tend to set high peak demand during the month when they run appliances and their panels are not making power, so they would pay higher bills on demand rates. Demand rates, however, create an incentive for technologies such as household batteries, which can store energy and use it to power appliances and keep peak demand below a predetermined threshold. At least two solar companies are offering household battery systems in Arizona, though SolarCity Corp. of California isn't offering them here at this time. RELATED: Rural utility's case could have big impact on demand rates APS officials said the demand rates are a fair way to address the fact that non-solar customers pay a greater proportion of utility grid investments despite solar customers relying on that grid at night and when their panels don't meet household energy needs. Solar customers also would be given a credit of about 3 cents per kilowatt-hour of electricity for power they send to the grid, when their homes are not using all the power from their rooftop panels. Today, solar customers are paid full retail credit for that electricity for 11 months of the year, and a lower rate at the year's end for any unused energy. The approximately 40,000 APS customers who already have solar would be "grandfathered" in with their current rate plans, as would anyone installing solar before July 1, 2017, according to the APS proposal. "We want to continue Arizona’s solar leadership the right way — with more solar, for more customers, without driving up the energy bills paid by non-solar customers,” said APS President/CEO Don Brandt in a prepared statement. “It’s time for our industry to adapt its pricing model to reflect new energy technologies and the changing way customers are using electricity. There will be the usual naysayers who want to protect the status quo for their short-term financial gain, but Arizona has delayed too long already.” Solar representatives said the APS proposal is designed to stifle competition from the rooftop solar industry. "The APS demand charge plan will make it almost impossible for Arizonans to affordably go solar when so many are looking for ways to save on our electric bills," said Kris Mayes, a former chairwoman of the Corporation Commission, now representing the Energy Freedom Coalition of America, which includes solar companies such as SolarCity. She said demand charges are "fundamentally" unfair because there is no way for customers to track their power demand and know when they are setting a high demand. "It is fair to ask, do we really want to subject Arizonans to unpredictable and untested experiment with their family budgets?" she said. The $166 million annual rate hike would average 5.74 percent across all customers. It would be greater on residential customers than business customers, who already pay a greater share of grid maintenance than residential customers, officials said. The Corporation Commissioners are expected to spend a year considering testimony in the case before voting on the matter. |
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