This commentary originally appeared on EDF Voices blog.
Rooftop solar owners in Arizona will pay higher costs for utility service under a new decision by state regulators, but the increase was much lower than the amount sought by Arizona Public Service, the state’s largest utility company. Both sides claimed victory. The case is part of a growing trend of more states reviewing these charges.
What is net metering?
The case involves a practice known as “net metering” where the utility pays rooftop solar owners for the excess energy the rooftop solar panels send back to the grid. Most states allow net metering. In many states, the utility company pays rooftop solar owners the full price the utility charges for power it delivers to customers. Utility companies claim this price is higher than their actual cost to produce electricity. The rooftop solar industry claims that raising costs would crush a new industry that provides cheap, clean energy and fails to recognize the benefits provided by rooftop solar.
Regulators must find the right balance between utilities and the rooftop solar industry by allowing utilities the opportunity to recover all their costs while ensuring that rooftop solar owners receive full credit for the benefits they provide to the electric distribution system.
Over the past few weeks, I’ve written a number of posts to help shed light on the fundamental connection between energy and water. Because many of our energy sources gulp down huge volumes of water, it’s imperative that we break down the long-standing division between energy and water planning — especially in drought-prone states like Texas. I’d like to take a step back and look at how Texas’ neighbors are addressing energy and water co-management. While Texas may be an extreme example, looking toward its immediate neighbors could provide ideas and best practices to improve the state’s situation.
A number of western states are facing many of the same challenges as Texas. Electricity production is a major drain on the region’s water supply. A study co-authored by Western Resource Advocates and EDF showed that thermoelectric power plants, such as coal, natural gas and nuclear, in Arizona, Colorado, New Mexico, Nevada and Utah consumed an estimated 292 million gallons of water each day in 2005 — roughly equal to the amount of water consumed by Denver, Phoenix and Albuquerque combined (and we’re talking water consumption, not just withdrawals). Like Texas, the western states face a future of prolonged drought. Scientific models predict climate change will increase drought throughout the Southwest, placing greater stress on the region’s delicate water supply.
Additionally, electricity production, numerous thirsty cities and widespread agricultural activity all strain the water system, too. Because so many flock to western states for fishing, kayaking, rafting and other recreational water activities, setting the region’s water system on a sustainable path is a critical economic issue. The exceptional challenges facing western states have already prompted some states to consider the energy-water nexus when planning to meet future water and electricity needs. Read More
Back in November, I wrote about how the American Legislative Exchange Council (ALEC) was partnering up with the Heartland Institute to attack renewable energy standards across 29 states. As an organization propped up by the fossil fuel industry, this behavior comes as no surprise. But the sneaky way they are trying to undue laws that encourage solar, wind and other renewable energy sources needs to be exposed and citizens of these states must stand up to the corporate interests desperately holding onto their power to pollute. Across the country, we are watching ALEC and industry allies try to unravel decades of progressive energy legislation.
In the sunny southwest, the Arizona Corporation Commission (ACC) has eliminated the performance-based incentives (PBIs) provided to commercial solar energy customers by the state’s two investor-owned utilities (IOUs). It also drastically reduced the upfront incentives (UFIs) provided by the IOUs to residential solar energy customers. SolarCity Governmental Affairs Director Meghan Nutting explained that “as the Arizona incentives have been slowly reduced, the industry has kept up. Ratepayers have invested in the industry to a point where we are almost without a need for incentives. But a sudden and complete elimination of all incentives that cuts the commercial solar industry off at the knees means we will have to start over.” The ACC decision, she added, means “people are going to lose their jobs in the sunniest state in the country in an industry that Arizona has depended on through the recession and should dominate.” The ACC commissioners’ rationale for the cuts was that they will reduce the Renewable Energy Standard and Tariff (REST) premium added to Arizona ratepayers’ utility bills to fund solar. The REST premium was established by the ACC in 2007 and is capped at $4.00 per month. Calculations by Arizona solar advocates concluded that the PBI cuts will save APS ratepayers no more than $0.02 to $0.06 per month.