SRP: We’re Lowering Our Prices

This just in from SRP. Their customers are receiving this email Monday morning:

We’re pleased to announce that SRP is temporarily lowering prices for the second time in less than a year. The 10-month reduction will be in effect for the January through October 2017 billing cycles.

The decrease will save the typical residential customer just under a dollar per month during the winter billing months and approximately $2.50 to $3.50 per month during the summer billing months. Prices will return to the original winter season prices with the November 2017 billing cycle.

We are able to lower prices for these reasons:

  • The continued low price of natural gas, which is a primary fuel in many power plants
  • Careful management, which is enabling us to meet our environmental program goals at lower-than-expected costs
  • Greater-than-anticipated energy sales

Sincerely,
SRP

Customers can then click on a link in the SRP email that takes them to the SRP newsroom where they can read details about the rate reduction:

SRP Board OKs $40 Million Price Decrease
Temporary Measure will Reduce Prices by an Average 1.6 % for next 10 Months

For the second time in less than a year, SRP’s Board of Directors has approved a decrease in electricity prices for its more than 1 million customers. The 10–month temporary decrease, effective with the January 2017 billing cycle, averages an overall 1.6 percent.

The decrease will save the typical residential customer just under a dollar per month during the winter billing months and around $2.50 to $3.50 per month when the summer billing season begins in May. Prices will return to original winter season prices approved in 2015 with the November 2017 billing cycle.

“Utility customers are generally more used to seeing price increases than decreases, so we are very happy to be able to lower our prices,” said SRP General Manager and Chief Executive Officer Mark Bonsall. “At SRP, our team works hard to identify market opportunities and cut costs where possible to keep our prices low, and this temporary decrease is reflective of our success in these areas.”

The temporary decrease is possible because SRP has been able to reduce expenses in two components of its electric prices.

One of the price components – the Environmental Programs Cost Adjustment Factor, or EPCAF – tracks costs and revenues related to SRP’s renewable energy and energy-efficiency programs adopted to comply with SRP’s sustainable portfolio standard. The temporary reduction reflects SRP’s ability to meet its sustainable goals at a lower cost to customers.

SRP’s Board has set a goal to meet 20 percent of SRP’s retail electricity requirements through sustainable resources by the year 2020. Currently, SRP is ahead of schedule –providing more than 14 percent of retail energy needs with sustainable resources, which include solar, wind and geothermal energy, hydro power and energy-efficiency programs. SRP currently has 746 megawatts of renewable energy owned or under contract in its system.

The second component – the Fuel and Purchased Power Adjustment Mechanism, or FPPAM – recovers fuel costs incurred to generate electricity as well as power purchases to serve customer needs. Savings in this area are primarily because of lower-than-anticipated natural gas costs.

The costs of these two components to SRP are directly passed through to customers without any markup. SRP previously instituted a temporary reduction of 3.7 percent in the EPCAF and FPPAM for the 2016 July and August billing cycles.

The latest temporary reduction will decrease EPCAF and FPPAM revenue collection by about $40 million.

SRP is a community–based, not–for–profit public power utility and the largest provider of electricity in the greater Phoenix metropolitan area, serving more than 1 million customers. SRP also is the metropolitan area’s largest supplier of water, delivering about 800,000 acre–feet annually to municipal, urban and agricultural water users.

Solar Money Buying the Election for Bob Burns?

The past few years have seen an explosion of outside money to aid campaigns. Outside money is not new to politics and has been around since the dawn of democracy. What is new, however, is that much of it can be spent without knowing who is funding it. In the fights over election spending in Arizona, a lot has been made of outside money that the utilities may have given to aid Corporation Commission candidates. The Commission regulates utilities, so it seems to be a fair question. In the newspapers’ zeal to find out everybody’s sources except their own, (which they conveniently feel a 1st amendment right to do) they have launched some serious charges against local utility companies. What they haven’t done is given the same level of scrutiny to solar companies who have used outside money to aid pro-solar commission candidates.

Recently, Chris Mayes, Janet Napolitano’s spokeswoman and a Napolitano appointee to the Corporation Commission, has been leading efforts by solar companies to spend millions of dollars to aid the already largely subsidized solar industry. Voters should be wary when they see mail and hear calls from Mayes and solar dark money so that they don’t fall for the attacks on the current commission or commissioners. The current commission supports Arizona’s renewable energy mandate, which requires the utilities to use a mix of renewable energy already for distribution to Arizona homes. However that does not seem to be enough for the solar industry that wants to make profits off of government tax credits and federal dollars. Conservatives shouldn’t be deceived by claims made by solar alleging that those who want the market to decide the best energy sources are somehow anti-solar. Solar is already a part of the energy mix and will continue to be prevalent for quite some time. How much it should be subsidized by other rate payers is the real question before voters this November. Should a small percentage of solar users get tax credits and raise the cost for other energy users? Voters will weigh in August and November on these critical issues.

‘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.

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.

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.

Arizona Republican Icon Barry Goldwater, Jr. Gives Voice to Efforts to Save Arizona Solar Choice

Tell Utilities Solar Won't Be Killed

Effort To Stop APS From Killing Independent Solar In AZ Takes To Radio

(SCOTTSDALE, Ariz.) Following in his father’s footsteps as a conservative trailblazer in Arizona, Barry Goldwater Jr. is standing up to utility monopolies to preserve Arizona’s rooftop solar industry.

The voice of T.U.S.K (Tell Utilities Solar won’t be Killed), Goldwater can now be heard valley-wide in a new radio commercial that urges energy consumers to stand up to Arizona Public Service (APS). Goldwater and T.U.S.K oppose efforts by APS to extinguish rooftop solar in Arizona by trying to eliminate a cornerstone policy called net metering.

To listen to the commercial click here. To learn more about T.U.S.K. visit www.dontkillsolar.com

Net metering ensures that customers with rooftop solar get fair market credit from APS for any extra power they return to the grid. Conservatives in Arizona have stood up for school choice and healthcare choice, and now they are standing up for energy choice.

If APS pulls the plug on net metering, thousands of jobs would be lost. Businesses would suffer. Schools that utilize net metering will be sending more tax dollars to APS. Consumers would pay more.

“Energy choice is the American way. It’s the Republican way. And it’s the way to energy independence,” said Goldwater. We can’t allow monopolies to end consumer choice by changing the rules at the Arizona Corporation Commission.”

Barry Goldwater Jr. served 14 years in Washington and amassed expertise in energy, the space program, aviation and defense and government procurement. Goldwater was particularly instrumental in all facets of energy policy and research and development, including authoring the Solar Photovoltaic Act.

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 solar.

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