Solar Energy

Solar Settlement Talks Brokered by Governor Ducey Have Been 'Suspended'

Settlement talks brokered by Arizona Governor Doug Ducey between a pro-solar group, lawmakers, and the state's largest utility have been halted for now.

"They've been suspended," Kris Mayes, spokeswoman for the SolarCity-backed group, told New Times on Thursday.

Mayes added that the suspension is effective immediately. "Unfortunately, that's all I can say."

It's too late for the group to resurrect its plan for a pro-solar ballot measure, because the deadline for submitting signed petitions is July 7. In any case, whatever hope there once was for the talks seems to have been overshadowed by protests and criticism of a planned Arizona Public Service rate hike that stands to devastate the state's rooftop-solar industry.

Jim McDonald, spokesman for Arizona Public Service (APS), confirmed Mayes' statement, also declining to say more, explaining that "we agreed to keep it confidential."

In late April, Ducey got the various sides to cool down, averting what was shaping up to be a nasty political fight. Earlier that month, the solar industry — mainly SolarCity — launched a $3 million signature drive to put an initiative on November's ballot that would lock in higher payments to rooftop-solar owners. The payments are derived from Arizona's net-metering plan, similar to that in other states, in which rooftop-solar owners are paid for the excess electricity they generate during daylight hours.

APS pays solar users the same retail price it charges customers for electricity, but the utility has been angling for years to whittle that cost down. The company argues that a "cost shift" occurs every time someone plugs into the grid and takes net-metering payments. Non-solar users have to pay more in order to keep up with grid maintenance and ensure consistent power delivery, the utility argues. APS estimates that at the rate solar installations are growing, within 20 years about $1 billion will have been shifted to its non-solar customers.

The SolarCity-backed initiative would have locked in current net-metering prices for six years. In response to the plan, state lawmakers took steps to use the referendum process to put two additional measures on the ballot that aimed to keep control of the net-metering decisions. Solar advocates accused the lawmakers of not playing fair, given that they don't have to spend millions of dollars to place an initiative on the ballot.

Having three propositions on the same ballot related to solar energy also would have confused voters, possibly leading to the defeat of all three — which would have been fine with the lawmakers, who were led by State Senator Debbie Lesko, a Peoria Republican.

Ducey came to the rescue, along with chief of staff Kirk Adams. After their intervention, Mayes announced that SolarCity was dropping its bid for a ballot initiative, and Lesko and her supporters in the legislature backed off their referendums.

"The Governor’s Office is convening a negotiation process between both sides in hopes of reaching an agreement that takes Arizona in a positive energy direction and ends the controversy of recent years," Ducey's office said in a public statement at the time.

News reports covered the various statements of relief and hope by the involved parties. A professional mediator was to preside over the talks, which at one point some believed would last just 10 days.

"Senator Lesko's leadership, in partnership with the Governor's Office and legislative leadership, created the environment in which this could happen, because they were focused on doing the right thing for Arizona," Jessica Pacheco, vice president of state and local affairs for APS, told the Arizona Republic's Ryan Randazzo in April.

Daniel Scarpinato, a spokesman for Governor Ducey's office, says a meeting occurred between APS and SolarCity as recently as June 1 at an office at the law firm Fennemore Craig.

"Governor’s office staff was there to listen and observe, only providing an introduction," Scarpinato said, adding that the meeting lasted "all day," from 9 a.m. to 5:30 p.m.

He referred questions about what was discussed in the meeting to the to parties — whom, as mentioned, aren't ready to elaborate publicly about the talks.

Mayes says the solar industry will continue to focus on fighting APS's latest proposal, which calls for a significant cut to net-metering payments.

A former Republican Arizona Corporation Commission member, aide to Democratic former Governor Janet Napolitano, and ex-Arizona Republic reporter, Mayes has taken a leave from her teaching job at Arizona State University to promote solar energy on behalf of the Energy Freedom Coalition of America and SolarCity. 
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Ray Stern has worked as a newspaper reporter in Arizona for more than two decades. He's won numerous awards for his reporting, including the Arizona Press Club's Don Bolles Award for Investigative Journalism.
Contact: Ray Stern