The city of Sedona is now on the clock to decide whether it will intervene on behalf of its residents regarding demand charges and net metering as proposed by Arizona Public Services.
The Sedona City Council spent about 90 minutes discussing the issue on Tuesday, Sept. 13, with at least one additional meeting proposed with representatives from APS. Both Mayor Sandy Moriarty and City Manager Justin Clifton asked the audience and guest speakers to keep the discussion polite and professional, since it had the potential to become a heated discussion. As a precautionary measure, there were three Sedona police officers assigned to the majority of the meeting.
The purpose of the agenda item was to garner direction from council on what, if any, role the city may take in the rate case, either directly or indirectly. Any decision on further intervention needs to be made in early October at the latest as the deadline to file an amended intervention regarding the demand rates and net metering issues is Nov. 16.
What the council needs to decide is whether to further intervene on the two new issues, to participate in a less formal manner, or if it should simply let the process play out and watch from the sidelines, City Attorney Robert Pickels said after the meeting.
According to a city report, on June 1, APS has filed a rate case with the Arizona Corporation Commission that addresses both demand charges for residential customers and the net metering program for rooftop solar customers. They’re proposing an overall monthly billing increase of 5.74 percent. That is the first rate increase request by APS in five years.
APS is requesting that the ACC approve a new rate structure with three demand charge rates. The new rates would include the higher fixed charges, lower volumetric rates and the demand charge.
Under the rate plan, net metering credits for rooftop solar would fall from the retail rate — currently $0.128 per kilowatt hour — to $0.0299 per kilowatt hour. Customers who have already installed rooftop solar and those who install before July 1, 2017, would be grandfathered in and allowed to keep the retail rate credit for the full life of their solar arrays, the report states.
The city had previously intervened in regard to the potential opt-out plan for the implementation of the APS smart metering program. In that intervention, several groups of APS customers, including the city of Sedona, raised concerns about the health effects of smart meters, the city report states. An opt-out tariff was approved by the ACC on Dec. 18, 2014. However, following applications for rehearing, the ACC rescinded its previous decision and deferred any final decision on the opt-out tariff until “the full spectrum of information that is included in a general rate case” could be considered.
City consultant Rick Romain, of Technology Coordinators, said one of APS’ proposed changes for residential customers pertains to the peak delivery of energy during a billing cycle. Like many commercial operations, this rate would be based on the 15-minute period of time when the most amount of power is used.
“As it currently works in commercial, whatever your worst 15-minute period was during the entire billing cycle in an average month, is what sets this line item,” he said. “You could literally go in and turn everything on for 15 minutes and then shut everything off and never turn anything on for the rest of that entire billing cycle and that line item is going to remain the same.”
Kris Mayes, the former chairman of the ACC and now chairwoman of Solar Strong America, focused most of her discussion on solar power and what she feels the impact would be on homeowners and the industry if APS net metering is approved. She said that at least 337 homeowners within Sedona city limits have rooftop solar and nearly 65,000 statewide. Per capita, Arizona trails only California and Hawaii in residential rooftop solar customers. She said if APS proposals are approved, it would “end solar in our state and would certainly end rooftop solar in our state.”
“Just as we’re knocking on the door of first place, our utility company wants to throw it all away,” she said. “That’s unfortunate. What I’m suggesting to you is, you can intervene and voice opposition to these specific proposals. Not in opposition to APS as a utility because they do a lot of good things. As a commission member I supported a lot of the things they did but they have made lousy proposals in regard to this rate case that would hurt our state and hurt the people of Sedona.”
Mayes said if approved by the ACC, APS would become the first major utility company to impose the 15-minute rate design onto residential customers in the country. And citing an Arizona Republic article, she said customers could see upward of an additional $175 fee on top of what they are already paying under the APS billing formula. And, she feels that if all the requests are granted to APS, this will greatly impact the solar industry and installers while impacting the poor and working poor.
APS had three representatives at the meeting to observe in preparation of possibly coming before the council at a later date. However, during the public forum, representative Stefanie Layton addressed some of the comments made by Mayes.
“The demand rates for residential customers — they will be averaged over an hour,” she said. “Fifteen-minute increments are for business customers. That component of the bill would only be measured during the peak window — 3 p.m. to 8 p.m., Monday through Friday. So no weekends. No off-peak or holidays.
“It’s also important to know it’s not in addition to what you already pay now. The bill is the bill. Right now it’s typically carved up into two parts. This would take the same-sized pie and divide it up three ways. If you have a rate that has a demand component on it, you will pay less for your energy component. The higher the demand component, the lower the energy component. There’s a balancing that goes there. It’s not an addition to what you’re already pay now. If it was, it would be crazy for 120,000 customers [10 percent of their total customers] who are voluntarily on it. That wouldn’t make any sense at all.”
