Rooftop Solar Airzona Lobbying

Arizona Public Service (APS), the state’s largest utility, claims neutrality again and again in debates about solar power. But the utility is not convincing solar advocates. And its continued attacks on rooftop solar have strained relationships in Arizona -- so much so that Bank of America has downgraded Pinnacle West Corp, APS’s parent corporation, from buy to neutral. 

APS and Arizona solar

What’s going on with APS in Arizona? Let’s take a look at the utility’s recent history with solar.

Last year, APS fought to lower the amount it pays its solar customers under the state’s net metering policy. Like other large utilities, APS claimed to be motivated by concern for its non-solar customers, which it said would bear the burden of paying for increased costs of maintaining the grid. However, a Crossborder Energy study showed that every $1 invested by APS in its net metering program actually earns it $1.54. These results were in line with those of studies in other states.

Still, APS asked for a huge fee to be imposed on its net metering customers. While it didn’t get the $50 - $100 a month it wanted, the Arizona Corporation Commission (ACC) did impose what amounts to a $5 a month fee, which some say has already slowed down solar adoption in the state.

Not content with that, APS went on to propose elimination of its rooftop solar requirement. The utility is required to get 15% of its power from renewable energy by 2025, with 4.5% of that 15% coming from rooftop solar. APS has asked the ACC to change this.

It didn’t stop there. According to Tell Utilities Solar won’t be Killed (TUSK), APS also wants to tax customers who lease their solar systems. Because leasing has been such a big part of solar adoption -- accounting for about 80% of installations in Arizona -- this would be a huge blow to solar in the state. Even the threat of a tax like this introduces enough uncertainty into the market to stall solar development.

APS’s real motivation

It’s not surprising that APS and other large utilities are fighting solar. While still a small percentage of power generation, solar is growing rapidly and threatens utilities’ profits and their monopoly. But rooftop solar enjoys widespread popularity. So the utilities can’t come out and say they’re against it.

That’s at the heart of the battles in Arizona and around the country. The utilities are entitled to voice their opinion. But instead of doing that directly and being honest about their motivations, they’re either making disingenuous arguments or denying their interest in the matter. APS is even going so far as to say it has no stake in whether leased solar equipment should be taxed.

But the utility has lost a lot of credibility. Last year, APS was forced to admit it provided funding for negative and misleading anti-net-metering ads to two nonprofits that came on the scene soon after TUSK was launched. The nonprofits tried to manufacture an elaborate controversy about solar in Arizona.

APS has hired lobbyists and consultants from a firm that suggested tactics to them as extreme as generating fake controversies about the ACC. A public relations firm working for Edison Electric Institute, the utilities' trade association, tried to secretly spread stories to the media to smear a local solar worker who had been negative about APS in an email to his customers.

More recently, APS contributed an unprecedented large amount to a candidate for the board of Salt River Project (SRP), a non-regulated Arizona utility. An SRP board member was quoted by the Yellow Sheet Report (paywall link) as saying he was "stunned" to see APS playing in another utility's leadership elections. Whether or not APS had sinister intentions, a source noted that there are unwelcome consequences to an investor-owned utility getting involved like this in elections for a government-owned utility, including hard feelings and a negative perception by the media and the public.

APS tends to deny involvement in these efforts. Though it’s been caught obscuring the truth in the past, for now the utility is maintaining that it’s impartial on the solar taxation issue. According to the Arizona Capitol Times (paywall link), “Arizona Public Service insists it is not involved in the dispute over the taxation of leased residential solar panels, but that’s not what a Republican legislative leader says.” Although reports have surfaced that APS lobbyists are promoting the tax, APS claims those lobbyists are expressing their own opinions. Because of course that’s what lobbyists do.

HB 2595, the bill to remove the tax exemption for leased solar panels, was backed by Arizona Prosperity Alliance, a nonprofit that is not required to disclose who provides its funding. According to the Arizona Capitol times, the group is run by a political consultant who is also a paid consultant for APS.

Rooftop solar still winning in Arizona

Although APS continues insisting that it’s not trying to undermine rooftop solar in Arizona, it isn’t convincing anyone. And its efforts have not been very effective. Yes, the $5 a month charge on net metering customers could be a setback, but it’s far less than the $50 - $100 APS wanted, which would have effectively killed rooftop solar in the state. APS’s large campaign donations failed to influence the SRP board election. The bill supporting taxation of leased panels has so far stalled in the legislature (as has a competing bill to maintain the tax exemption).

How APS will fare in continuing battles over solar remains to be seen. But one thing is clear: the utility is facing stiff opposition, and not just from expected quarters. The fight to keep solar alive in Arizona is not restricted to liberal solar advocates. As in other parts of the country, solar is enjoying widespread bipartisan support. With solar proponents like TUSK, and increasing public support for solar, APS is facing a tough fight. Using dark money and subterfuge doesn’t seem to be helping it in that fight.

Originally published on PV Solar Report

Photo Credit: Arizona Rooftop Solar/shutterstock