The discussion on Net Energy Metering (NEM) -- an arrangement that pays solar customers for the surplus electricity their solar systems send back to the grid -- is hot in Arizona. For most of this year, Arizona Public Service (APS), the state’s largest utility, has battled with solar advocates to lower the amount it pays its solar customers for surplus electricity.
According to APS, solar customers receive too much credit for their electricity surplus, which they say results in higher grid maintenance costs for non-solar customers. This claim is in stark contrast to a recent study that says every $1 invested by APS in its net metering program actually earns it $1.54.
The Arizona Corporation Commission (ACC), which regulates rates for most of the state’s utilities, including APS, will consider APS’s request in its November meeting.
The Edison Electric Institute, an association of investor-owned electric companies in the U.S., recently identified distributed energy resources (eg., rooftop solar) as “the largest near-term threat to the utility model.” In light of this, APS’s insecurity is not surprising.
The latest battle battle between APS and solar advocates on NEM has become a full-blown campaign that includes a manufactured "grassroots campaign," expensive TV ads, and some of the best lobbyists, researchers, and consultants money can buy.
To get a comprehensive understanding of what is actually going on, we need to dig a little bit into history.
According to a recent article on AZ Central, Lincoln Strategy, a Tempe-based political-consulting firm, pitched a plan to APS in 2009 outlining how the utility could work behind the scenes to alter the ACC’s opinion. The plan included a suggestion that APS launch two independent, out-of-state nonprofit organizations that could go on to mobilize grassroots efforts and generate fake controversies concerning the ACC. Some tactics described in the "Institute for Energy Policy" plan seem to match those that APS is using in its current media campaign against rooftop solar.
Although APS claims they did not solicit this plan, they hired one of the two representatives that pitched the plan as their top lobbyist. And they paid the other representative as an outside consultant.
In March this year, SolarCity, Sunrun, and other solar advocates formed "Tell Utilities Solar won’t be Killed" (TUSK) and began an online campaign to inform and clarify public conversations about APS’s smear campaign. Shortly after TUSK was launched, two nonprofits, 60 Plus and Prosper, emerged as an opposing voice. As it turns out, APS admitted that it sent cash to both these nonprofits to help pay for advertisements and websites that helped set the negative tone. One ad calls SolarCity and Sunrun the "New Solyndras" and another ad claims that solar customers get paid "Over 5X what they send to the grid."
In a separate story, the AZ Capitol Times reports that “Global Strategy Group, a D.C.-based crisis management public relations firm working on behalf of Edison Electric Institute, APS’s trade association, tried to secretly shop stories to local media outlets aimed at smearing a local solar panel company’s employee, who lashed out at APS in an email to his customers. The email, which included accusations against APS, was later deemed inaccurate.” (paywall link)
APS claims there is no connection between the 2009 plan and the tactics they are currently using in their effort to kill rooftop solar, and that any similarities are "purely coincidental."
Barry Goldwater Junior, son of the Arizona icon and a former U.S. representative from California, is the chairman of TUSK. Goldwater said the way APS has been using non-profits to send out its political message is suspect, and that the utility was using unsavory political tactics and should be investigated by state and federal authorities.
"As a son of Arizona, I know we have no greater resource than our sun. Republicans want the freedom to make the best choice and the competition to drive down rates.That choice may mean they save money, and with solar that is the case. Solar companies have a track record of aggressively reducing costs in Arizona. We can't let solar energy - and all its advantages and benefits it provides us - be pushed aside by monopolies wanting to limit energy choice. That's not the conservative way and it's not the American way," Goldwater commented.
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