Commissioner Bob Stump – Super Hero Fighting For Truth, Justice & Ratepayers

Gotta love Arizona Corporation Commissioner Bob Stump!

He’s been through hell and back battling against the leftist faux watchdog group, Checks & Balances. The left-wing villains in this group have launched attack after attack against Stump only to be rejected over and over again by a Superior Court Judge.

The same group has attacked the Arizona Attorney General, a former Solicitor General and every other elected, appointed or law enforcement official who has investigated the false allegations imagined against Bob Stump.

He’s even taken hits by a so-called fellow Republican who may have been infected by the Checks & Balances virus.

But still Commissioner Stump holds his ground for truth, justice and the ratepayer way.

You may laugh at my exaggerated description of what’s been taking place over the last year with the Arizona Corporation Commission but sometimes truth is stranger than fiction.

The fact is, a battle has been taking place for sometime over who sits on the Arizona Corporation Commission. There are only five seats on the commission which means the left has to capture three in order to seize power and push its green energy agenda.

The Checks & Balances Project has been a key player in this battle putting its weight into frivolous legal challenges and conjuring negative media attention against the Republicans on the Commission. They may have assimilated one already.

This group is part of a vast left-wing network of subsidy-thirsty corporatists disguised as green energy advocates. They’re largely funded by left-wing philanthropists and dark money donors like billionaire Tom Steyer. Their mission is to fundamentally transform US energy policy and that means getting their puppets into key power positions like the Arizona Corporation Commission. Sound familiar?

You can bet candidates like Tom Chabin and Bill Mundell are just who they want to fill two seats on the Arizona Corporation Commission. Both Chabin and Mundell have cloned Big Solar and green corporatists messaging in their campaign themes.

We’re not buying it and neither is Bob Stump. That’s why he’s a super hero to us.

Every time we flip a switch, turn on a light or adjust the thermostat, we’re reminded that common sense commissioners like Bob Stump are holding back the enemies of cheap and efficient energy policy from waging war on ratepayers.

Get that commissioner a cape!

SuperMan Bob Stump

 

Tom Chabin & Bill Mundell – The Clone Candidates

Tom Chabin & Bill Mundell - The Clone Candidates

If you look at the websites of liberal Democrat candidates Tom Chabin and Bill Mundell you’ll see they’re practically clones. They both use header photos from Roosevelt Lake, including a photo of Roosevelt Dam; the language is identical with the exception of their names and the layouts are inverse. Not much creativity and not much diversity.

(Incidentally, Roosevelt Dam is operated by the Salt River Project (SRP) and is not under the jurisdiction of the Arizona Corporation Commission. Read why here.)

That’s what you’d end up getting on the Arizona Corporation Commission if these two green corporatists get elected in November.

Both campaigns are running exclusively on the message that Arizona Public Service is evil and bazillion dollar deals are taking place in smoky backrooms.

What they won’t tell you is that the leftist-controlled “green” corporations will be working behind the scenes to make these two Democrats carry their agenda.

And what is the agenda of these big green corporations? To keep the flow of ratepayer and taxpayer dollars to the solar industry and other heavily-subsidized green corporations.

These are the companies that have imploded or gone bankrupt like Solyndra, Abengoa and SunEdison.

Don’t be fooled by all the hyperbole rhetoric by Bill Mundell and Tom Chabin over “dark money.” They themselves will be the beneficiaries of dark money as Big Solar dumps millions of dollars into the Arizona Corporation Commission race to get them elected.

For Big Solar and the other green corporatists, it’s about getting votes on the Commission so they can ramrod policies through that hurt taxpayers, ratepayers and cost thousands of jobs.

This election, beware the clone candidates who will open the door wide to disastrous Obama green energy policies right here in Arizona.

 

 

Democrats File Dark Signatures for Arizona Corporation Commission

Tom Chabin Bill Mundell

Yellow Sheets posted the press release of Democrat candidates for Arizona Corporation Commission, Bill Mundell and Tom Chabin.

The subheader for their press release proudly proclaimed, “Tom Chabin and Bill Mundell each file approximately 9,000 signatures.” The 9,000 claim was also posted on Mundell’s FaceBook page. There’s only one problem. That number isn’t correct.

According to the Arizona Secretary of State website, both candidates filed hundreds below the 9,000 number they claimed on their joint press release. (By the way, are Mundell and Chabin running as a team with shared expenditures?) Bill Mundell filed a total of 8,345 while Tom Chabin filed 8,483 signatures – not quite the 9,000 boldly professed.

Hmmmm… For two Democrat candidates running solely on a theme against “dark money,” we have to wonder if their nominating petitions contained hundreds of dark signatures?

Tom Chabin’s Dark Money Past

In the race for Arizona Corporation Commission, there are several candidates who aren’t who they say they are.

One candidate in particular, has made a major part of his campaign platform about running against “dark money.” You see it on his website, social media and in the media.

Tom Chabin Dark Money

Tom Chabin rails about dark money being spent by big power companies. We assume he’s referring to APS and their First Amendment participation in the election process.

What Tom Chabin doesn’t want you to know is that he was the direct beneficiary of  “dark money” during his failed state senate campaign in 2012.

According to the Arizona Secretary of State’s website, Chapin was the direct beneficiary of $204,531 from four independent expenditure groups.

Tom Chabin IE Money

America Votes is listed as a labor union organization based out of Washington, DC. On their website, they tout “building progressive power” and partnering with every radical leftist organization in America. During the 2012 election cycle, they spent $127,077 in Arizona to elect Democrat candidates. Chabin was one of those Democrats they attempted to elect. Fortunately, they failed.

Another organization that spent $145,774 to keep Tom Chabin in his $24,000/year legislative seat was the Arizona Accountability Project. On their campaign finance reports, they reported $475,000 funneled from an outside dark money group called Revive Arizona Now. They ended up spending $561,047 on Democrat candidates in 2012.

Chabin also was aided and abetted by two other independent expenditure committees. Citizens for Public Education spent $315 but Revitalize Arizona kicked in $44,318 in an effort to save his re-election. According to the Secretary of State’s website, Revitalize Arizona took in $744,328.47 from another group called Residents for Accountability which Tucson media reported, “that group’s finances are a bit of a Russian nesting doll.” Revitalize Arizona spent $44,318 to re-elect Tom Chabin in 2012.

Revitalize Arizona – “that group’s finances are a bit of a Russian nesting doll”

Tom Chabin lost his bid for the Arizona State Senate in 2012.

Now Chabin is running for a seat on the Arizona Corporation Commission as part of a Democrat team with Bill Mundell.

Chabin and Mundell are running as “Clean Elections” candidates so they won’t be asking for private donations in their race. PAC’s and individuals will still donate and participate in the election under Arizona campaign finance limits. Independent expenditure committees will still attempt to affect the outcome of the race through express advocacy. And we expect non-profit organizations to air issue-ads to “educate” citizens about the issues.

Both Democrats have made it their mission to attack their opponents by alleging Republicans are part of a vast right-wing conspiracy with APS. (They’re not.)

Both Chabin and Mundell are pushing for Big Solar’s agenda. These solar companies, backed by big environmental leftists, want to retain and expand on their taxpayer subsidies. If elected, Chabin and Mundell will work to keep the taxpayer dollars flowing to these solar corporations.

Given the dismal history of bankruptcies and bailouts of big solar corporations like Solyndra, SunEdison and Abengoa, handing authority to Democrats like Tom Chabin and Bill Mundell would be a financial disaster to ratepayers and the energy market.

Tom Chabin

Expect Big Solar to strong-arm this race and spend big money to put their corporate cronies in place. Just don’t expect leftist-friendly media to shine any light on their dark spending or on Chabin’s dark money past.

 

Big Solar launches ballot initiative to keep corporate crony deal in place

Interesting political developments taking place over the last 10 days in Arizona regarding energy policy.

Big solar has decided to go on offense by exercising the “nuclear option” and launching an initiative in an attempt to lock in ratepayer-funded subsidies in the Arizona Constitution.

Last Tuesday, a group called “Energy Choice for America” registered as an independent expenditure committee with the Arizona Secretary of State. In its filing it stated that it would be supporting a ballot measure but did not list the name of ballot measure. The group’s chairman is listed as Kris Mayes – a former Arizona Corporation Commissioner.

Three days later on April 15, a group called “Yes on AZ Solar, In Support of C-09-2016” filed registration papers with the Secretary of State’s office. This committee registered in support of a ballot measure but listed the ballot measure as “None exists yet.” Kristin Mayes was listed as the group’s chairman.

On Monday (18th), another group called “Energy Choice for America in Support of C-09-2016” registered as a committee in support of a ballot measure – obviously, C-09-2016. Again, the chairman was listed as Kristin Mayes.

Finally, on Tuesday (19th), another independent expenditure committee called “Save Our AZ Solar” filed papers in support of an unnamed ballot measure. The chairman? You guessed it – Kris Mayes.

So why these committees and why is Kris Mayes at the center of all these committees?

First, a brief background on the current dismal state of rooftop solar companies. Anyone following the industry knows that these corporations have been on a major energy bubble waiting to burst. Fueled by political agendas and taxpayer subsidies, public policy has attracted companies attempting to take advantage of a solar-friendly political climate and of course, those big green profits. Companies like SunEdison have over promised and under delivered while they’ve taken on tremendous debt to lease their products to customers.

Thursday, SunEdison announced it was going into Chapter 11 bankruptcy.

We saw a similar situation with Spain-based Abengoa Solar which was working on a project near Gila Bend.

The industry in many ways has become so big, it is failing and it’s failing miserably on its own accord.

Bringing this back to Arizona politics, news of these collapses couldn’t happen at a worse time for politicos seeking to make it a ballot issue for voters.

The formation of these political committees is all part of a last ditch effort by the imploding rooftop solar corporations to cement into Arizona’s Constitution their right to your ratepayer subsidies. Big solar corporations are asking voters to demand that government pick big solar companies as the winner and recipient of utility profits. And don’t be surprised if they use all kinds of fear and loathing messaging to persuade voters to vote for their “free” government money.

It is a horribly inflexible way to make public policy by allowing special interests to seek a corporate crony deal in an ever-changing energy market that requires flexibility.

This is what happens when government creates an incentive for so-called green corporations – they pursue green paper instead of pursuing green energy.

So why did Big Solar choose Kris Mayes to chair their political committees? She lends credibility to their agenda and effort. Mayes served on the Arizona Corporation Commission from 2003-2010 and helped write the Arizona Renewable Energy Standard and Tariff (REST) which forces Arizona utilities to produce and deliver a 15% of energy from renewable sources such as solar, wind, biomass, geothermal, etc. by 2025. Until the initiative announced, Mayes served as a senior sustainability scholar with the Julie Ann Wrigley Global Institute of Sustainability.

While I have a tremendous respect for Kris Mayes and ASU’s Schools of Sustainability, as a conservative/libertarian, I do have to disagree with those policy objectives that  increase the size and role of government – especially when the consequences are a disruption to free market economies and a reduction of freedom and the well-being of individuals. There is nothing sustainable about government subsidies and dependency. (Conservatives should actually “own” the word “sustainability!”)

With Big Solar behind this initiative and Kris Mayes as their spokesperson, we can expect millions of dollars to pour into the campaign. In a recent Arizona Republic article, Mayes revealed that “‘significant’ resources will be put in the campaign.”

Thursday it was reported that SolarCity Inc. has already donated $3 million to the campaign. And in a tweet by reporter Rachel Leingang on Wednesday, the committee was already hiring petition circulators off Craigs List at $5 a signature.

A minimum of 225,963 signatures is needed to qualify for the ballot. Doing the math on those numbers shows that it will cost the committee $1,129,815 just to pay for the minimum number of signatures. Most committees try to build a buffer of 15-20% over minimum. Most committees running a “popular” initiative, don’t have to pay for signatures.

That means Big Solar is willing to pay big bucks to keep the subsidies flowing to their business. For them, its the cost of doing business even if it means carving out a special place in the Arizona Constitution.

One of my primary motives for writing columns like this is I’m angered by the injustice of what the rooftop solar is attempting to do to unaware people. These companies will tell a prospective customer that they can generate all their own electricity and that any extra electricity can be sold back to the grid. These companies will sign up customers for a long term lease and install the equipment on their rooftops (free rent to park their units.) The customer will be told they’re helping the environment and saving money on their utility bill (relatively true statements).

But what Big Solar doesn’t really focus on with the customer is who owns the the equipment and that there is a margin between the retail rate and the wholesale rate at which the customer “sells back” their electricity. That margin adds up to big profits for rooftop solar companies.

At the same time, solar rooftop customers do not pay for the cost to maintain and upgrade the main grid. That cost is shifted to non-solar customers to pay. If you’re someone concerned about equity, it’s anything but fair as those folks who are more likely to qualify for a long-term solar lease shift the cost of maintaining the grid to those who cannot afford or qualify for solar leases.

It’s a big racket for Big Solar and they’re willing to spend big money to keep their big profits in place – by enshrining it into our state constitution.

When Arizona utility companies revealed these disparities to the Arizona Corporation Commission and suggested more equitable policy changes like elimination of net metering or demand charges, Big Solar went on the warpath. It’s why they’ve launched their initiative “The Arizona Solar Energy Freedom Act.”

If you are a rooftop solar customer, don’t be surprised to see a signature gatherer show up at your doorstep carrying a petition. Big Solar has your name and address and they’re not worried about sharing your private information with the super PAC’s hiring people off Craig’s List to knock on your door and warn you that the sky is falling.

Watch for Big Solar’s “Arizona Solar Energy Freedom Act” and remember, it’s anything but free.

‘Stormy Days’ Ahead for Rooftop Solar in Arizona?

Stormy Solar Panels

Arizona consumers of rooftop solar best prepare for cloudy financial times ahead if recent stormy news in the solar panel industry is any indication.

Missouri-based SunEdison is on the verge of financial collapse as it heads toward bankruptcy with $11 Billion of debt, a lawsuit by a subsidiary and an investigation by the fed.

SunRun and SolarCity are also sitting on the same bubble as they find their values halved since late last year and nervous investors losing confidence in the industry’s 20-year leasing approach for consumers.

Also adding to the volatility of the industry is a realization by local and state governments that subsidizing the industry is simply unsustainable bad public policy.

The rooftop solar industry should blame itself for its financial woes. It took on far too much rapid expansion and despite tremendous revenues, it is still facing losses. SunCity lost $769 million while Sunrun reported $28.2 million in losses. And 2016 is certain to continue that trend.

Now the industry is making efforts to cut costs in overhead, labor, advertising, etc. even as the cost of panels had dropped considerably. To come close to making a profit, these companies must continue to lock in new customers. And they must also continue to find favor with state and local governments by continuing subsidies, favorable rate policies and special construction/installation projects.

As traditional utility companies follow a more steady and stable growth model into renewable energy platforms, government regulators are becoming more wise and reluctant to choose winners and losers through policies like net metering. Instead, regulators are attempting to allow the market to adjust to normal conditions with the least negative impact to consumer pocketbooks.

With these policy changes and market adjustments, rooftop solar companies are finding that a good deal [for them] won’t last forever. Even as energy regulators make adjustments to allow the market to benefit all consumers, the rooftop solar industry has turned it into a political battle to keep their special arrangements in place.

This is the vicious cycle for rooftop solar: Cut costs while expanding the number of consumers in order to come close in making a profit – a strategy that is highly dependent on government favors and taxpayers and essentially a form of corporate welfare. As the late Prime Minister Margaret Thatcher once said, “The problem with socialism is that eventually you run out of other people’s money [to spend].”

This brings us back to Arizona consumers of solar energy who will be the negatively affected if the rooftop solar bubble bursts. Who will maintain and warranty rooftop units if the company reneges on its contracts or worse, goes under?

That’s where the market appears to be headed and consumers better prepare for a rainy day.

Orchestrated Confusion Over UniSource Proposal at Lake Havasu Corporation Commission Hearing

Reading the latest news story in the Lake Havasu News Herald, it would appear that operative from the rooftop solar industry have caused just enough confusion among ratepayers that the latest proposal to bring economic sense and equity to the energy market will require yet another hearing.

Thursday, in accordance with Arizona law, the Arizona Corporation Commission conducted a hearing in Lake Havasu to hear from ratepayers over a request by UniSource to modify its rate structure in order to iron out inequities in the way customers purchase electricity from the UniSource portion of the grid.

One of those changes would be the implementation of “demand charges” – a concept that charges a customer based on the highest demand placed by that customer during a given unit of time. Most demand is placed on the entire grid during early morning hours and early evening hours when users turn on more electrical loads in their households. It is at that time that the grid experiences its heaviest loads that ultimately costs in maintenance, repairs and even brownouts. (Read my earlier post on this concept.)

The UniSource request would allow the utility company to recover the costs of this demand while reducing costs during non-peak demand times.

Additionally, the request would also allow UniSource to adjust the price it purchases (credits) energy from rooftop solar users through net metering. Currently, that rate is sold back to utility companies at an inflated rate. That inflated rate is shifted to non-solar users who pay the difference causing an economic inequity. There are far fewer rooftop solar users than non-solar users so non-solar users are burdened by this rate inequity.

If approved by the Arizona Corporation Commission, UniSource’s request would not take effect until 2017 and rooftop solar users who purchased or began their leases before June 1, 2015 would be grandfathered into the proposal.

The political takeaway of this is that the rooftop solar industry has partaken of this form of corporate cronyism for too long. Because of a nationwide agenda to pick winners and losers in the energy sector, the solar energy industry has been heavily subsidized and given special breaks through policies like net metering. The industry cannot survive without some form of government intervention and when government pulls out and allows the market to adjust, these companies oftentimes go bankrupt leaving consumers on the hook and employees without jobs.

Here in Arizona, the battle to keep net metering in place is being waged at town hall meetings like we see in Lake Havasu.

NonSolarCustomers

When a utility company like UniSource proposes a innovative compromise to allow the free market to adjust properly to the benefit of all consumers, they are met with chaos and confusion orchestrated by the rooftop solar industry. These companies pay their lobbyists to circulate among a community to stoke the fears of ratepayers and senior citizens on fixed incomes.

What they won’t tell you is that they want a bigger bite at the apple of government subsidies and special deals. Meanwhile, its the ratepayers who bear the burden – those who cannot afford $40,000 systems and those who were told sunny days were ahead when they leased one.

Corporation Commissioners will conduct another hearing in Lake Havasu sometime in the next two weeks.

There’s Nothing Conservative or Independent About the Current Rooftop Solar Industry

Rooftop solar is one of the greatest technologies one can invest in these days. The cost of the rooftop units are coming down; it allows individuals to move toward self-sustainability; It reduces our dependence on foreign oil; and it even allows individuals to go entirely off grid and operate independent of utility companies.

So why would I make a statement about rooftop solar not being conservative?

Don’t get me wrong. If I had the means, I’d take my entire home and business off the grid for the reasons I listed above.

It comes down to one word – Independence.

A few years ago, I jumped on the anti-utility bandwagon over net metering and the push to reduce the retail rate. I had to suspend common sense and all those years of economic education to make the argument. I didn’t have the whole picture and the mountains of research to back up that claim.

315344_AZHomesSolarPanelsThe rooftop solar industry is dependent on taxpayers – especially taxpayers who don’t have rooftop solar units installed on their rooftops. That’s consumers like me who cannot afford to lease a product and service that relies on subsidies from consumers like me. To clarify, rooftop solar is still too expensive that average consumers have to sign a lease over a long-term period in order to make it affordable.

[If you’re gonna invest in technology that gives you independence, pay cash. It really is a liberating experience not owing anyone money – including rooftop solar companies!]

The rooftop solar industry is also part of broader political agenda by those typically on the left and in environmental movement who seek to eliminate all non-renewable forms of energy production. This comes at a tremendous cost – especially to consumers.

Integral to this political agenda, policy makers and rooftop solar executives have created a climate in order to make an expensive industry appeal to average consumers. It comes down to manipulating the market and creating artificial incentives in order to attract more consumers to its product.

Imagine if the top executives of Mercedes, Jaguar and Rolls Royce sent their lobbyists to Washington to obtain taxpayer subsidies so they could attract you into a lease of one of their vehicles? You sign a lease to get into their car. They get a break through some tax loophole and the cost of taking care of our roadways is passed on to the individual who can only afford to drive a 10-year-old used car.

The reality is that many solar companies cannot even operate as a viable business without some form of government subsidy. It’s a clear example of corporate cronyism that puts taxpayers at risk or worse, leaves them footing the bill when the company goes bankrupt – as we’ve already seen several times.

The reality is that many solar companies cannot even operate as a viable business without some form of government subsidy.

The rooftop solar has been benefiting from these market manipulations through the policy of net metering. They tell you that you can sell your solar-generated electricity back to the utility companies and pay less for your overall electricity. On a self-interest level, that’s great. But what they don’t tell you is that you’re selling back that electricity (actually, you’re receiving a credit) at an inflated rate and someone else is paying for it – a redistribution of utility costs.

Rooftop solar companies don’t own the grid and they don’t pay for the cost and maintenance of the grid. And because utility companies are paying above-market inflated rates, the cost of maintaining the grid is being shifted over to those without solar technology.

In effect, the rooftop solar industry has created a whole new level of dependency. They’ve made leasing consumers dependent on them. They’ve become dependent on net metering policy and utility companies have become dependent on non-solar customers. And when a solar company pulls its plant out of a state like what recently happened in Nevada, they leave a whole lot of people without jobs. There’s nothing sustainable about the overall climate and policy in which the rooftop solar industry operates.

In a perfect world, everyone would be able to afford solar technology without signing a long-term lease contract with the rooftop solar industry. We wouldn’t have to rely entirely on the grid and utility companies wouldn’t have to worry about covering the cost of maintenance in order to provide a reliable source of electricity.

To move toward that perfect world, we can start by eliminating the policies that pick and choose winners and losers through subsidizing and manipulating the energy marketplace.

That’s where real independence can begin and energy independence can thrive.

Guest Opinion: Demand-based rate strategy makes sense

Media coverage of the electricity rate case filed by UniSource Energy Services (UES) has promoted dire predictions from California-based rooftop solar leasing companies that oppose the proposal. We encourage every utility customer to consider the facts of the UES case.

UES has proposed residential rates that reflect both total energy use and peak energy use, or “demand.” This makes sense because utility costs are driven by the need to satisfy customers’ energy demands during peak periods. Arizona business owners have been paying demand-based rates for years and have found them to be fair, simple and easy to use. They include a basic service fee, a relatively low usage-based charge and a demand charge that’s based on their highest monthly power use.

Critics claim demand rates are “too confusing.” As smart thermostats and app technology grow ever smarter, this claim falls short. Demand rates give consumers a new way to save money by managing their use of electric appliances during peak usage periods. Smart technology can help customers take advantage of demand rates to lower their bills significantly. At the same time, reducing energy usage during peak times helps ensure the stability of the power grid statewide.

Because demand charges would be offset by lower energy use charges, most residential customers would see little impact from the proposed change. In fact, the UES proposal protects customers by reducing the generous subsidies handed to rooftop leasing companies at the expense of the 98 percent of consumers who don’t have solar. That’s why we’re hearing the loud voice of protest from the solar industry’s PR machine. UES’s proposal will create a sustainable free market for clean energy and send the right price signals to encourage future energy innovation. That’s important to every Arizona business. All of us want our state to stay at the forefront of the clean energy movement and to continue to create jobs in that growing sector.

Unfortunately, jobs have become a political pawn for the rooftop leasing companies. In Nevada, these companies fired their own workers and fled the state as punishment after policy changes took the brunt of subsidy payments off the backs of non-solar customers. They’ve threatened the same punitive behavior in our state. This “take our toys and go home” approach will hurt Arizona families and our economy. As reputable case studies and testimony explain in detail, rooftop leasing companies can continue to make ample profit under a demand rate structure should they elect to compromise, rather than litigate and flee to other states where generous profits are still to be had on the backs of non-solar customers.

Using employees’ paychecks as a bargaining chip is wrong. So is intentionally disrupting the businesses of local installers – the very people the California-based national giants once claimed they wanted to help.

Arizona needs an energy policy that encourages a broad array of technologies and the highest degree of freedom and fairness for all power users. The more control consumers have – absent subsidies paid by the vast majority of power users to fund technology for the few – the better off our state will be. To hear the rooftop solar leasing companies tell it, you would think the goal of energy policy should be whatever helps them sell the most systems at the largest profit.

We take a broader view. We sincerely hope the Arizona Corporation Commission will take that broader view as well.

Glenn Hamer is the president and CEO of the Arizona Chamber of Commerce and Industry. Lea Marquez Peterson is the president and CEO of the Tucson Hispanic Chamber of Commerce.

Utility ‘Demand Charges’ Offers Best Solution to Utility Costs Problem

In a prior post I provided a primer on the economics and politics of the rooftop solar industry in Arizona. Net metering was essentially a solution to the initial introduction of rooftop solar into the residential consumer market. The rooftop solar industry took advantage of the political process by carving out a government-sanctioned incentive in the market that allowed them to operate and profit despite harsh economic realities in the renewable energy market.

Rooftop solar companies lease their solar panel system to consumers because the vast majority of consumers cannot afford a system that costs tens of thousands of dollars.  They needed an effective marketing message to “sell consumers” on leasing their product – an incentive to overcome the objection of cost. Thus net metering was offered as an incentive.

Here’s how it works. Most consumers do not use all the electricity generated by their rooftop system throughout the day. Net metering allows any excess electricity to be “sold” back to the main electrical grid. Consumers effectively build up a credit for the excess power they provide back to the grid. The amount of that credit is based on a retail rate that is higher than the wholesale market rate offered on the grid.

That difference between retail and wholesale electric rates is what has become the center of dispute between the rooftop solar industry and utility companies. It adds up to millions of dollars.

Utility companies argue that the cost to repair, maintain and upgrade the main power grid has not been taken into account as the market for rooftop solar has expanded. As utility companies continue the practice of net metering and purchasing back electricity at a rate higher than market value, it is negatively impacting the cost to maintain our electrical infrastructure. These costs ultimately get passed on to ratepayers, especially those who cannot afford to install and lease expensive rooftop solar systems. The result is that rooftop solar customers are paying less than non rooftop solar customers for the maintenance and improvement of our power grid.

This is where the idea of a “demand charges” becomes an economic and equitable solution for all users of the grid.

Rather than continuing an unfair solar net metering policy that gives wealthier ratepayers an advantage over lower income ratepayers when it comes to maintaining the grid, why not charge individuals for the demand that they actually place on the grid?

Most electricity consumers put most of their demand on the system during the early morning and early evening. It’s part of our daily routine: wake up, eat, prepare for work and head off to work. In the early evening, we come home, cook, clean and entertain ourselves before repeating the same routine the next day. Now aggregate that across millions of households and its easy to see how residential demand on the grid spikes twice a day.

Demand charges are determined by the maximum amount of electricity demanded by a consumer during a specific measure of time such as a day, week or billing period. This is the cost or strain placed on the grid when turning on appliances, air conditioning, etc. and is especially prevalent here in Arizona during summer months. Consumers who run all their appliances at the same time every day place a higher demand on the grid than those who spread their use of their appliances out over the same 24 hour period.

Here is a video put out by a South African utility company explaining the concept of energy demand charges:

Here in Arizona, the Arizona Corporation Commission is hearing a request from Tucson’s Unisource Energy Services – the utility that provides power to rural and southern Arizona. In its request it is seeking a rate increase and structure for ratepayers in Mohave and Santa Cruz County in order to alleviate the burden on the power grid and non-rooftop solar ratepayers. The request includes adjusting the net metering rates to current market values and implementing “demand charges” that allow it to compensate for the demand on the grid.

California-based rooftop solar companies are lined up in opposition to the changes and have even threatened to pull out of Arizona cutting hundreds of local jobs. These are the same companies who are profiting off the artificially-priced subsidy set in net metering. If UNS wins approval of the market rate adjustment in its net metering rate request, only new solar installations will receive the market-adjusted subsidy.

The UNS request also includes approval for a “demand charge” meant to cover the costs associated with peak demand. This charge would be optional for residents and small businesses but would be mandatory for any new rooftop solar installations which “create new cost burdens and reliability concerns for utilities and their customers.”

If approved, such changes will begin the process of correcting manipulations in the market and reducing special subsidies for residential rooftop solar industry.

As someone who opposes government sanctioned subsidies, it’s time that solar users finally help cover the cost of the grid that non-solar users have been paying for without receiving any benefit. Implementing “demand charges” and adjusting the net metering rate are necessary decisions to restore a free market solution to a corporate cronyism problem. It’s the fair and economically sound thing to do and maintain the reliability of our power grid to the benefit of all consumers.