Dive Brief:
- Municipal utility Salt River Project (SRP) has proposed a new per-month demand charge for its solar-owning residential customers that would average about $50 and a new $5 per-month bill charge for non-solar-owners. SRP would also reduce its average per-kilowatt-hour charge to solar owners from $0.10 to $0.04, which would sharply cut into their net metering remuneration.
- SRP claims a $1 billion natural-gas plant and grid upgrades necessitate the rate increases. It calculates that solar owners, who reduce their energy costs and pay proportionally reduced system charges, now get $51 per month in services they don’t pay for.
- With applications for solar in October 2014 at 677, over three times the applications in October 2013, SRP is concerned the $51 could turn into an untenable cost burden for others of its 1 million customers.
Dive Insight:
The monthly charge to solar owners is similar to one proposed in 2013 by Arizona Public Service (APS), the state’s dominant electricity provider. It was reduced to an average $7 per month charge by the Arizona Corporation Commission. As a muni, SRP does not answer to state regulators but must win approval from its Board next February.
Solar advocates expressed some surprise at SRP’s move because customers in its service territory are thought to be more pro-solar than customers in Phoenix who protested vigorously enough at the APS proposal to convince regulators to sharply cut it.
Solar advocates say this charge is likely to stop solar growth in SRP’s territory. SRP said the solar value proposition would not be eliminated but reduced by the rate changes.
The 12,000 SRP solar owners and those that complete contracts for new solar by Dec. 8 would not be subject to the demand charge. The near-term deadline was set to prevent a rush.
