Longform

An Epic Battle Between Solar Firms and Power Utilities Could Leave One Side Unplugged

Solar's a no-brainer to Joelyn Higgins, spokeswoman and marketing director for Recreation Centers of Sun City Incorporated.

The nonprofit company, which manages bowling alleys and seven recreation centers in the politically powerful Phoenix-area retirement community, has a large solar-panel project going up at its facilities. In the Lakeview Recreation Center parking lot on a recent summer day, workers on lifts finish connections beneath the panels, which double as shade for covered parking. Solar arrays at two of the company's centers already are finished and producing power.

"The anticipated savings is about $15 million," Higgins says from the lobby of RSCS' corporate office at Lakeview. She adds that the electricity generated from the photovoltaic panels could power an estimated 347 homes.

Her dollar figure is averaged over more than 30 years, according to numbers the company posted on its website. The savings come partly from $185,000 per year in direct incentives from Arizona Public Service Company, to be funded over the next 20 years by APS customers. Most of the savings come in the form of a power bill that's been slashed by more than half. But this bonanza doesn't happen as simply as you might think.

As with a residential solar setup, APS pays for power fed back to the grid in the form of credits on the power bill. The scheme is called net metering: Customers pay only for the net amount of electricity used after what they generate is subtracted. Besides billing and receiving, the utility continues to provide all energy needs that solar — a part-time power source — can't handle.

Another example of benefits to solar customers can be seen in the popular lease schemes that some solar companies, such as SolarCity and Sunrun, offer. In these purchases, homeowners avoid upfront costs of thousands of dollars but don't own the equipment on their roofs. As Bryan Miller, former campaign staffer for the 1996 Clinton/Gore campaign and a Sunrun vice president of public policy, explains, "The homeowner enters into a lease with Sunrun. The lease has a payment in it. That payment is less than what the customer will save on their utility bill."

Rooftop solar is a no-brainer to power utilities like APS, too.

They say they're getting screwed in deals like these.

To which you might think, "Where do I sign up to help screw them?"

After all, power utilities are monopolies whose service you can't do without. They tell you what to pay, and you pay it. You change companies only by moving. The utilities benefit from government subsidies both directly, as in tax loopholes, and indirectly, as in healthcare costs of people who become sick from pollution that traditional power-generation methods cause. They're mostly operated like any other corporation: money first, people second.

But what's bad for a utility company has a way of becoming bad for its customers.

Such as last year's rate increase by APS, brought on by the success of energy-efficiency programs. Less electricity was sold because of the programs, leaving APS' parent company, Pinnacle West Capital Corporation, with less revenue to pay bills. Because APS is allowed by the Arizona Corporation Commission to make a predetermined profit to promote stability for such a vital service, the company is allowed to boost its rates to make up losses.

APS and other utilities nationwide are worried that they're paying too much to people and businesses with solar panels. Much worse, they say, the spectacular growth in rooftop-solar panels will have a major effect on their bottom lines — and, in turn, their customers' bills.

The power APS buys from solar customers is up to five times more expensive than what it could buy elsewhere, argued Don Brandt, the utility's chief executive officer, in an April op-ed on www.azcentral.com.

"The result is higher rates for customers who do not have rooftop solar," Brandt wrote. "As more customers install solar . . . the burden on non-solar customers becomes greater and greater. Eventually, you run out of your neighbor's money."

Asked if it were possible that the Sun City company's solar project could be a burden on other utility customers, Higgins referred to studies showing that rooftop solar actually benefits non-solar-using ratepayers.

Does this mean APS is wrong?

"Yes," she says. She stands up, cutting off another question. "That's it!"

Higgins had agreed to meet with a New Times reporter who surprised her at her office after she'd failed to return voice messages. The meeting was now over.

Clearly, the subject of net metering is not the typically sunny solar-power story that interested parties like Higgins tell.


APS is expected to submit an application by Friday, July 12, to the Corporation Commission asking for approval to lower the amount paid to solar users for their power — with the stated goal of protecting its non-solar customers.