Net Metering Tax Credits Discriminate

Recent legislation providing solar tax credits for residential homeowners has allowed billionaires, corporations, and Wall Street financiers to profit at the expense of working class Americans.  Solar corporations leasing panels to home owners, rather than selling, have reaped the financial benefit of solar tax credits intended for home owners to the tune of hundreds of millions.  These tax credits to solar companies have boosted dividends for their shareholders at taxpayers’ expense, while panel-leasing home owners get no immediate financial benefit.

meterWorse.  Solar tax credits discriminate against lower income communities.  Group housing, where many lower income families reside, cannot install residential solar panels, and are therefore not eligible from the get-go for these special tax credits.

Arizona is subsidizing the solar industry with $1.2 billion on residential solar, and not a dime goes to the state’s lowest income sectors – yet, another reason not to have discriminatory solar tax credits.

Further, after residential panels are installed at huge costs to taxpayers, the system of net metering goes to work, also discriminating against the working class.  Owners of solar panels can buy power from the grid as needed, or ship surplus power back to the grid when they produce more than they use.  Under net metering, solar panel owners, however, avoid paying for the service and repairs to maintain the grid.  These costs to maintain the grid are then shifted to non-solar users, placing a higher financial burden on this group, resulting in a disproportionate share of the burden falling on the aforementioned lower income sectors.

In Arizona, taxpayer subsidized solar panel ownership has led to the adding of “environmental programs cost adjustment factor” and renewable energy fees on utility bills, raising financial burdens for all non-solar users, lower income families included.  For example, the city of Scottsdale has a median family income of over $92,000.  Just in the past 5 years, they have had over 1,200 solar installations, which are eligible for state and federal subsidies.  In contrast, an area in south Phoenix with 29,000 residents and an average income of $41,000 has only 45 residential solar installations.  This is just an example, but the statistics are undeniable:  Taxpayer subsidies go to wealthier communities by a factor of 26 times more than lower income communities.

Regressive solar tax credits should end immediately.  Why have we chosen one industry over another?  And worse, we’ve chosen a discriminatory industry that keeps lower income communities down by unfairly forcing them to pay for others solar installation and operation.  Under any sun, these policies are just plain wrong.

Joe Galli

Former Executive Director – North Scottsdale Chamber of Commerce

Arizona: a Champion in Education Choice, should also be a Champion in Energy Choice

Ask any conservative if they support school choice and the answer is most likely a resounding, “Yes!” School choice empowers parents, families, communities and it reasserts parental control and autonomy back into the issue of education.

While some parents choose to send their child to public school, others may choose private schools, charter schools or even home school their children themselves. Choice in education makes sense and it should make the same sense when it comes to energy choice.

Here in Arizona, conservative lawmakers have pushed and enacted legislation promoting and protecting choice in education while reducing or offsetting the cost to parents who opt out of the public education system. These creative ways to reduce the burden of public education have been in the form of donations that reduce a family’s or business tax liability. It has led to Arizona becoming one of the most prolific school choice states in the country.

Now imagine if the powerful teachers unions were able to capture control of the Arizona Legislature and Executive and began to repeal every law protecting your choice in education. Gone would be scholarship tax credits for families and business. Imagine if the public education monopoly were to control Arizona’s education system to the point where it was almost impossible for charter, private and even homeschooling families to exercise their choice in education. That’s what is about to happen right here in Arizona’s energy market.

It’s about to become very difficult for anyone using residential rooftop solar to continue using this technology to generate their own power – if APS has their way.

In recent years, improvements in technology have allowed energy consumers to afford residential-based power generation technology such as wind and solar units. Consumers have had the choice to generate their own electricity for their own personal needs and even supply excess power back to the main grid. It’s energy choice in action.

Unfortunately, big utility companies like APS see your choice as a threat to their bottom line and have started pressuring rule makers at the Arizona Corporation Commission to change the rules. Specifically, APS would like to see the ACC eliminate the policy net metering which allows energy consumers to provide any excess electricity back to the main power grid and thus reduce their overall energy consumption and cost. APS would essentially regain its monopoly power by erecting a barrier to entry to your ability to supply the grid. Overall, our main grid would lose out by not having thousands of consumers contributing clean power back to the grid.

I started out this editorial by describing how choice in education benefits everyone in Arizona by improving options and reducing the cost and burden on families and corporations. In several ways, energy choice is very much like school choice because everyone benefits, especially here in sun-rich Arizona.

When big utility companies like APS make an effort to take our choice and incentives away in order to protect their bottom line, let’s remind our elected officials whose best interest they’re supposed to serve. Siding with APS on the issue of energy choice would be akin to siding with teachers unions on education choice. Energy choice is as important as choice in education is and Arizona can demonstrate leadership in this arena. After all, that’s what Republican values are all about.

Shane Wikfors is the creator and editor of Sonoran Alliance and a longtime Arizona conservative Republican activist. He is also owner of Red Mountain Consulting & Development and has been an advocate of non-subsidized, consumer-based, taxpayer-friendly energy diversity and sustainability.

APS’ First Solar, Erecting a Barrier to Solar Energy Choice in Arizona

APS knows that Arizonans love solar, but it doesn’t want its customers to have the choice to produce their own electricity and lower their electricity bills.

That’s why APS has chosen First Solar – the one solar company that could never give consumers choice — as its wolf in sheep’s clothing, deploying the company to make APS’s monopoly arguments for them.

Let’s take a look at where First Solar is coming from when it attacks rooftop solar. Unlike rooftop solar companies, which provide solar electricity to individual homeowners, First Solar does utility-scale projects for utilities like APS, whose former CEO William J. Post sits on First Solar’s board of directors.

In its 2012 Annual Report, First Solar lays out in black and white that the success of rooftop solar could compromise First Solar’s ability to execute on their own long term strategic plans:

“We face numerous difficulties…including the following…Difficulty in competing against competitors who may gain in profitability and financial strength over time by successfully participating in the global rooftop PV solar market…”(p. 19). 

And that rooftop PV solar market is driven by consumer demand. The more homeowners are empowered to go solar, the stiffer the competition First Solar and APS face.

First Solar may face another difficulty: it has set aside a whopping $271.2 million to cover the costs of replacing defective modules it made in 2008 and 2009, according to public filings. But APS doesn’t need to be concerned about First Solar’s technology failing because the utility can just pass that cost on to the ratepayers as well. In fact, the more money ratepayers spend to build and fix APS infrastructure, the more money APS makes since it earns a guaranteed rate of return on all its expenditures—whether they promote what consumers want, or not. It’s good to be a monopoly.

It’s no surprise that First Solar CEO Jim Hughes, a 10-year veteran of Enron who led the infamous company’s global assets division during the height of the its accounting scandal but who reportedly escaped as an “unindicted co-conspirator”, opines that net energy metering, the policy that gives customers fair credit for the solar electricity they provide to the grid, and ultimately, to their nearest neighbors, is unfair.

Neither APS nor First Solar want Arizonans to be able to build their own solar projects, because if customers don’t have any choice among competitive solar companies, it makes it easier for utilities to build solar farms and pass on the entire expense to ratepayers. It’s not difficult to imagine APS putting heavy pressure on First Solar to step up to the mic. But that’s just another reason not to believe either of them.

Arizona’s APS could take a lesson from Hawaii’s HECO

I couldn’t help but notice a recent article in the HonoluluStar Advertiser recognizing shifting plates in the energy marketplace, in particular, how the Hawaiian Electric Co. is addressing technological and the consumer-based changes in energy production. How the politics of what’s happening in a blue state like Hawaii relates to the politics in a red state like Arizona is anyone’s guess but some marketplace factors are universal regardless of the political climate.

Here are a few observations on the potentially tectonic plate-shifting changes taking place in the Hawaiian Islands. Keep in mind, Hawaii is unique in that it is isolated from the broader US electric grid and therefore all electrical production, transmission and distribution is self-contained. (It’s not as if they can tap into the grid of adjacent states.)

First, Hawaiian Electric Co. (HECO) presumed it would remain the sole producer of electric power on the Islands. HECO has underestimated customer demand for newer self-sustainable technologies and lessening reliance on its big utility production. During a recent announcement by the Hawaiian Public Utilities Commission (PUC) it chastised the utility monopoly for failing to prepare for renewable energy changes. “Most startling was the assertion that “HECO companies lack a strategic and sustainable business model to address technological changes and increasing customer expectations,’” noted the Star Advertiser.

Here in Arizona, APS seems to be experiencing the same identity crisis as HECO as energy consumers take self-sustainable energy matters into their own hands through independent solar energy production. Realizing the diversification of energy production into the hands of consumers can’t help but force a paradigm shift of APS’ big monopoly mindset away from sole producer to more of an energy distributor.

As the Star Advertiser describes HECO: “Going forward, the hope is for a collaborative, open discussion on how to make the “decoupling tariff” program less onerous for consumers, and on how the utility should transition to become primarily an energy distributor rather than a producer.” The decoupling tariff relates to fees and rates consumers pay as Hawaii transitions to renewable energy technologies – technologies that consumers themselves are pursuing independent of HECO.

Finally, much like our own Arizona Corporation Commission, the Hawaiian PUC is standing up for customers by insisting that utilities and utility shareholders should have to earn profits through a sound performance and an emphasis on customer service. As Commissioner Michael Champley stated in the PUC statement, “Attractive financial returns are not a utility entitlement. Instead, excellent utility performance with affordable rates and superior customer service should drive utility financial performance.” It would behoove APS’ corporate leadership to take this same advice when approaching the Arizona Corporation Commission over rate and policy changes.

Like Hawaii, Arizona’s energy marketplace is also changing to one that is driven by innovative consumer choices, independent production and self-sustainable technology. It’s time big utility monopolies like APS realize the ground is shifting and they are no longer the only major player in Arizona’s changing energy market.

What’s Good for APS Is Not Necessarily Good for Arizona (or Solar)

The typewriter, the phone book and the payphone had their day, and the businesses that relied on them either got busy changing or got busy dying.

Despite claims made by Arizona Public Service, the utility thus far has not been open to options on net metering. APS has been trying to kill rooftop solar in Arizona, or at least change the rules to have this effect.

photo by Gage Skidmore

photo by Gage Skidmore

Rather than innovate or find ways to profit from solar power, APS decries the solar industry and opines that its revenue is heading downward. That’s not the solar industry’s problem. That’s not the ratepayers’ problem. That’s a problem for APS shareholders, and that must not be our state’s concern.

Instead of trying to fix the problem, APS is trying to fix the game. It’s looking to rig the system so the utility doesn’t have to pay fair market value for the excess electricity that rooftop solar customers send back to the grid. That’s the essence of “net metering.”

The bottom line is that this will impact APS’ bottom line. And what APS is saying is that it doesn’t want to make less money.

Rather than try to outlaw smartphones, Bill Gates developed the Windows phone. Phone companies provide cable TV service. Cable TV companies provide internet service. Internet-based companies are carrying television programs and movies. In the private sector, you either innovate or evaporate.

APS executives should have embraced net metering and seen the potential for profits. Now that they have missed the boat, they want to sink it. They have been around for so long and are so set in their ways that they don’t understand that what’s good for APS isn’t necessarily good for Arizona.

APS enjoys a healthy profit margin. Its profits have increased by more than 50 percent since 2008. Its long-term financial forecasts cite solar energy as competition that could impact profits. But instead of trying to figure out a long-term solution, APS is trying to convince the Arizona Corporation Commission to change the rules so its shareholders will continue to see generous dividends. That’s not capitalism; that’s cronyism, and I firmly believe those serving on the ACC will side with energy choice and ratepayers and stand against a utility that would rather change the rules than change its ways.

Indeed, APS’ efforts to crash the future of solar power in this state are the very reason I applauded the ACC for taking the first steps toward more utility competition in this state.

***

Former U.S. Rep. Barry Goldwater Jr. is chairman of the group Tell Utilities Solar Won’t Be Killed. He can be reached at dontkillsolar@gmail.com.

Key Sun City Group Opposes APS Solar Kill Efforts

Tell Utilities Solar Won't Be Killed

The Recreation Centers of Sun City Have Written The Arizona Corporation Commission Supporting Net Metering

(SUN CITY, Ariz.) There’s a reason they call it “Sun City.”  The Recreation Centers of Sun City have written to the Arizona Corporation Commission  expressing opposition to any plans to alter net metering, pointing out that the Centers utilize solar energy and net metering as do many of the residents of Sun City, who live on fixed incomes.

The letter read in part:

The Recreation Centers of Sun City, Inc. (RCSC) would like to express our concerns over the recent discussions regarding changing the policies surrounding net metering.  RCSC has fourteen solar projects that will be completed and online in the very near future and many of our residents in Sun City have invested in rooftop solar, because of the net metering policies that the Commission adopted.  Net metering allows RCSC and our residents the choice of solar, while also providing those on a fixed income the ability to manage their energy costs and needs.

TUSK (Tell Utilities Solar won’t be Killed) is  grateful  that entities such as RCSC embrace solar energy and net metering, which requires  Arizona Public Service (APS) to pay fair market value for any excess electricity rooftop solar customers send back to the grid. APS is seeking to kill solar energy in Arizona by attempting to end net metering as we know it. The net metering policy in place in Arizona is being used in 43 states.

TUSK Chairman Barry Goldwater Jr. said, “They say with age comes a little wisdom. That’s evident by the support expressed by our friends in Sun City. They are among the many seniors Valley wide who save money with solar.”

To learn more about T.U.S.K. visit www.dontkillsolar.com

T.U.S.K. believes that rooftop solar is similar to a charter school—it provides a competitive alternative to the monopoly. Monopoly utilities aren’t known for reducing costs or for driving business innovation, but the Arizona solar industry is. Solar companies have a track record of aggressive cost reduction in Arizona. The more people use rooftop solar, the less power they need to buy from the utilities. Energy independence for Arizonans means smaller profits for the utilities, so APS is doing everything it can to stop the spread of independent solar.

TUSK Launches New Ad Against 800 Lb Utility Monopoly

TUSK (Tell Utilities Solar Won’t Be Killed) released a new ad Thursday against the APS monopoly by placing ads across the banner of the Drudge Report – one of the internet’s most visited political news sites.

Here’s a screenshot of the ad across Drudge:

TuskDrudge

In the latest ad, TUSK portrays APS as the “800 Lb. utility gorilla” beating up on independent solar businesses in Arizona. Former congressman, Barry Goldwater, Jr. then explains why conservative Republicans should be leading the charge for energy choice in Arizona.

Here is a copy of the ad:

The message: Don’t let APS monopolize Solar Energy in Arizona. To learn more about TUSK visit www.DontKillSolar.com.

APS Stock Price, Profits Should Be Secondary to Arizona Solar Energy Consumer Choice

During their last earnings call, as reported in the Arizona Republic, Arizona Public Service (APS) CEO Don Brandt was asked about the financial impact rooftop solar could have on APS if solar’s popularity continued to soar.

RooftopSolarJust like the public education monopoly, the APS utility monopoly is concerned that more energy efficiency and choice, specifically more rooftop solar, is starting to eat into its profits and revenue growth.  APS clearly disclosed this to its investors when it revealed that between now and 2015, it expects its electricity sales to grow by less than 1% even though its customer base will grow 2% annually. The reason? APS customers are investing in more energy efficiency with rooftop solar being the primary technology of choice.

Frankly, how APS addresses this with investors is no concern of mine. And neither should it concern the Arizona Corporation Commission.  A more innovative future with more energy choices for Arizona consumers should not and must not be dictated by the utility’s bottom line. By that same logic, we would have harnessed the Internet because of the challenge it posed to newspapers and many other technologies.

I would think by now that any astute energy consumer would recognize that APS’s sudden concern about the proliferation of rooftop solar in Arizona has nothing to do with empathy for Arizona ratepayers.  It has everything to do with curbing a disruptive technology growing quickly in their existing marketplace. As one pollster has opined, allowing APS to do this would be “political malpractice.”

But there appears to be a far greater threat to APS’ stock price (PNW) on the horizon and that, fortunately for consumers, is a healthy competitive change.  Because of their blatantly naked attempts to kill independent solar in Arizona, along with other reasons, the Arizona Corporation Commission is rightfully looking at opening up more utility competition in Arizona.  In fact, they took the first step down this path last week. Kudos to Chairman Bob Stump and Commissioners Gary Pierce, Brenda Burns, Susan Bitter Smith and Bob Burns for their actions. Clearly, APS’ effort to thwart more solar choice in Arizona is exactly why we need more competition in Arizona.

Choice and competition – these are concepts all conservatives can rally behind.  And it is one all Wall Street stock investors will surely be watching.  The bottom line for consumers is we simply cannot have a better energy future in Arizona if the primary focus is on APS profits rather than innovation and competition that always best serves the marketplace.

APS Wrong. Solar Saves Ratepayers, New Study Shows

Tell Utilities Solar Won't Be Killed

Rooftop Solar Generates $34 Million A Year for APS. APS’ Customers – Not Shareholders – Should Reap This Benefit

(SCOTTSDALE, Ariz.) A new study shows that rooftop solar and net metering generate a windfall for Arizona Public Service (APS). Rooftop solar generation provides APS with $34 million in benefits each year.

TUSK (Tell Utilities Solar won’t be Killed) is calling on APS to give back the windfall it has made from rooftop solar energy.  $34 million a year should be returned to APS customers in the form of lower rates, not put into the pockets of a giant monopoly and its shareholders.

TUSK Chairman Barry Goldwater Jr. said, “In free enterprise, those who make the investment should reap the rewards. APS has not invested in private rooftop solar. Rather, the utility has been trying to kill the industry to limit competition. And for that, they deserve no reward.”

Net metering allows people who invest in rooftop solar to receive fair credit for the power they send back to the grid. It is a simple policy – used in 43 states today – that works very much like rollover minutes on a cell phone bill.  Solar is far and away the most popular source of energy in the eyes of Arizonans, but to APS, rooftop solar has become a competitive threat to its monopoly.  By working to get the Corporation Commission to change net metering rules, APS is attempting to kill the thriving independent rooftop solar market in Arizona in order to protect its monopoly interests and overwhelming profits.

Rooftop solar is a free market enterprise built by the private investments of homeowners and businesses that install solar panels on their roofs. School districts have also invested in rooftop solar.  Through these investments, schools are saving taxpayers millions of dollars while home and business owners are saving money on their electricity bills.

The study showing that solar provides a $34 million benefit to non-solar customers was commissioned by the Solar Energy Industries Association (SEIA) and authored by Crossborder Energy. Using APS and energy market data, the study found that in addition to providing benefits to solar adopters, like control and savings, rooftop solar provides benefits all APS customers.  For each dollar of cost, rooftop solar generates $1.54 in benefits to all APS customers.

There are several ways that rooftop solar benefits all APS customers.  First, rooftop solar enables APS to spend less money on purchasing power and building expensive conventional power plants. Second, APS can also avoid or delay investments in transmission and distribution infrastructure, because electricity is being generated at the same place it is consumed.  In addition, rooftop solar saves APS money on ancillary service costs, capacity reserve costs, avoided renewables costs, and by providing environmental benefits, like lower air pollution emissions and less water use.  To learn more about the study and see the full results, click here.

To learn more about T.U.S.K. visit www.dontkillsolar.com

T.U.S.K. believes that rooftop solar is similar to a charter school—it provides a competitive alternative to the monopoly. Monopoly utilities aren’t known for reducing costs or for driving business innovation, but the Arizona solar industry is. Solar companies have a track record of aggressive cost reduction in Arizona. The more people use rooftop solar, the less power they need to buy from the utilities. Energy independence for Arizonans means smaller profits for the utilities, so APS is doing everything it can to stop the spread of independent solar.

New Study: Distributed Solar Energy Provides $34 Million in Benefits to Arizona Ratepayers

More information on the debate taking place to eliminate net metering and energy choice in Arizona. This is reposted from The Solar Energy Industry Association:

WASHINGTON, DC – A study released today shows that distributed solar generation (DG) and net energy metering will provide Arizona Public Service (APS) customers with $34 million in annual benefits.

The study was commissioned by the Solar Energy Industries Association (SEIA) and was authored by Tom Beach of Crossborder Energy. Using data from APS’ 2012 Integrated Resource Plan and other APS data, the study examines the costs incurred and the benefits generated by distributed solar over the useful life of a distributed solar system — 20 years. This is consistent with how APS approaches long-term resource planning.

The study found that for each dollar of cost, DG provides $1.54 worth of benefits to APS customers. The net benefits for APS customers will amount to $34 million per year beginning in 2015. Benefits include savings on expensive and polluting conventional power and power plants; reduced investments in transmission and distribution infrastructure; reduced electricity lost during transportation over power lines, as distributed solar power is generated and consumer locally; and savings on the cost of meeting renewable energy requirements.

“This study clearly shows that solar offers concrete net benefits to all APS ratepayers, regardless of whether or not they have installed solar” said Carrie Cullen Hitt, senior vice president of state affairs at the Solar Energy Industries Association (SEIA). “It’s essential that we keep smart policies like net metering in place so that Arizona can continue to benefit from its abundant solar resources.”

Net metering is a popular consumer policy in place in 43 states that empowers homes, businesses, schools, and public agencies to install solar while helping the economy and other ratepayers. As a result of thousands of Arizonans’ choice to adopt rooftop solar, a competitive solar energy industry employs 9,800 Arizonans today.  Arizona boasts the most solar per capita of any state in the nation with 1,097 megawatts (MW) of solar capacity. Beyond making a smart energy choice, this study shows that these customers’ investments provide financial benefits to all APS customers. Overall, Arizona ranks 2nd in the country for most installed solar, with enough capacity to power 139,000 homes. In 2012 alone, $590 million was invested in Arizona to install solar on homes and businesses.

“Arizona has become a national leader in the use of distributed solar energy.  This is due to net metering and other policies put into place by the Arizona Corporation Commission and Legislature. In order to maintain this leadership role, it is imperative that these consumer-friendly policies remain in place,” says Michael Neary, former executive director of AriSEIA, the Arizona SEIA chapter.

The full Crossborder Energy Study is available here.

About Crossborder Energy:
Crossborder Energy has deep analytical experience in the energy field, and has participated actively in many of the major energy policy debates over the last 30 years, including the addition of new natural gas pipeline capacity to serve California and the restructuring of the state’s gas and electric industries. Crossborder Energy provides expert testimony, strategic advice, market intelligence, and economic consulting services on market and regulatory issues in the natural gas and electric industries in California, the western U.S., Canada, and Baja California, Mexico.

About SEIA®:

Established in 1974, the Solar Energy Industries Association® is the national trade association of the U.S. solar energy industry. Through advocacy and education, SEIA and its 1,000 member companies are building a strong solar industry to power America. As the voice of the industry, SEIA works to make solar a mainstream and significant energy source by expanding markets, removing market barriers, strengthening the industry and educating the public on the benefits of solar energy. www.seia.org

Background Materials:
– The Costs and Benefits of Solar Distributed Generation for Arizona Public Service, May 10, 2013: http://www.seia.org/research-resources/benefits-costs-solar-distributed-…
– U.S. Solar Market Insight: 2012 Year in Reviewwww.seia.org/smi
– The Solar Foundation’s State Solar Jobs Map: www.solarstates.org