EEI sucked into APS scandal

November 11, 2013 | By

As part of the fallout from Arizona Public Service's (APS) scandal surrounding lying about funding dark money organizations to attack rooftop solar and in response to Edison Electric Institute's (EEI) series of television and radio ads against rooftop solar in Arizona, the Alliance for Solar Choice (TASC) wants EEI to disavow what TASC calls "APS's underhanded behavior" and state whether or not EEI has used dark money. 

Tucson, Arizona. Credit: Daquella Manera/Wikimedia Commons

"APS lied to regulators and the public for months," said Bryan Miller, co-Chair of TASC. "EEI should give a firm 'yes' or 'no' on their own use of dark money, and whether or not they endorse APS's tactics." TASC advocates for maintaining distributed solar energy policies, such as retail net metering. Public policies to encourage net metering are in effect in 43 states and the District of Columbia. Three additional states have utilities with voluntary net metering programs.

The Arizona Republic recently revealed that APS lied about funneling money to anti-solar public relations, advertising, and fake grassroots efforts via dark money channels. The utility pushed money to Washington DC-based front groups 60 Plus and Prosper HQ through political consultant Sean Noble, named a "dark money maestro" in a Republic column.  Further, Arizona Corporation Commissioner Robert Burns has requested an investigation of whether APS used ratepayer funds for the campaigns.  A Q3 earnings call reported that APS spent $9 million on anti-solar and anti-retail competition campaigns.

The Arizona Capitol Times reported that the EEI was secretly shopping stories to local media that would benefit APS's anti-net metering views.

EEI, who represents investor-owned utilities, has put its thoughts about distributed renewable energy in writing in its report titled, "Disruptive Challenges: Financial Implications and Strategic Responses to a Changing Retail Electric Business," which states that solar PV is one of the biggest external threats the $840 billion a year utility business.

The report states: "One example of a significant potential adverse impact to utility investors stems from net metering. Utilities have witnessed the implementation of net metering rules in all but a handful of states. Lost revenues from DER (distributed energy resources) are being recovered from non-DER customers in order to encourage distributed generation implementation. This type of lost revenue recovery drives up the prices of those non-participating customers and creates the environment for ongoing loss of additional customers as the system cost is transferred to a smaller and smaller base of remaining customers."

Further, "utility investors are not being compensated for the risks associated with customer losses resulting from increasing DER. It is difficult to identify a rate case in which the cost-of-capital implications of net metering were considered. At the point when utility investors become focused on these new risks and start to witness significant customer and earnings erosion trends, they will respond to these challenges. But, by then, it may be too late to repair the utility business model."

EEI, in its report, recommends the following immediate actions:

  • Institute a monthly customer service charge to all tariffs in all states in order to recover fixed costs and eliminate the cross-subsidy biases that are created by distributed resources and net metering, energy efficiency, and demand-side resources.
  • Develop a tariff structure to reflect the cost of service and value provided to DER customers, being off-peak service, back-up interruptible service, and the pathway to sell DER to the utility or other energy supply providers.
  • Analyze revision of net metering programs in all states so that self-generated DER sales to utilities are treated as supply-side purchases at a market-derived price. From a load provider's perspective, this would support the adoption of distributed resources on economically driven bases, as opposed to being incentivized by cross subsidies.

For more:
- see this EEI report
- see this article

Related Article:
Solar organizations call for APS investigation

 

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