In November, 2013, the Arizona Corporation Commission (ACC), which regulates the state’s utilities, voted by a 3-2 margin to allow Arizona Public Service (APS) power company to add about $5 to the monthly bills for its customers who install rooftop solar panels.
APS had asked the ACC to be able to charge solar customers an additional $50 to $100. They argued that homeowners with solar panels were benefiting from their access to the power grid while avoiding the costs of maintaining it. The problem, APS claimed, was the practice of net metering, wherein APS must pay pay its solar customers a retail price for the excess power they generate. APS warned that as more homeowners install solar panels, the effect will be to “unfairly” shift more of the cost of their electric grid maintenance to non-solar customers. The Commission’s widely-watched decision to impose a fee of just $5 was seen as a win by most solar energy proponents, especially since APS was reported to have spent about $3.7 million on advertising to promote the higher fee.
The two ACC Commissioners who voted against the fee, Gary Pierce and Brenda Burns, said they did so because they thought $5 was too little. Pierce said he didn’t think it did enough to protect non-solar ratepayers.
But Pierce apparently wasn’t worried about protecting other ratepayers when he became ACC chairman in January, 2011, after Republicans took control of the Commission in the 2010 election. One of the first things Pierce did was to try and eliminate the fees charged for power line extensions.
A few years earlier, when the ACC was controlled by Democrats, it had voted to stop Arizona power companies from providing free power line extensions. ACC Commissioner Kristin Mayes explained that all ratepayers shouldn’t have to bear the cost of line extensions, and growth should pay for itself. The free line extensions were also blamed for promoting urban sprawl and wildcat subdivisions.
But real estate interests complained loudly that the end of free power line extensions had devastated the market value and saleability of rural parcels located off the grid. (In other words, they’d lost their subsidy.)
So Pierce said he believed that reinstating free line extensions would help the economy and improve real estate prices. In February, 2011, he succeeded in getting the ACC to make it free for UniSource power company of northwestern Arizona to install power line extensions of 400 feet or less (more than the length of a football field). Then in July, 2011, the ACC voted to reinstate free power-line extensions to new customers within 500 feet of Tucson Electric Power (TEP) company’s distribution system.
According to UniSource, the price of a power line extension of this length in 2011 was about $4,000 to $7,000. The existing ratepayers served by UniSource and TEP are now having to help pay for these extensions to new customers. (APS has so far succeeded in maintaining the fees it charges for power line extensions.)
It’s difficult to understand how Commissioner Pierce could be so worried about the costs to non-solar ratepayers supposedly caused by net metering, when he was so eager to have power line extensions paid for by existing ratepayers. Maybe it’s because the APS scheme to impose a new fee on solar customers was never really about unfair electric grid maintenance costs.
On May 23, 2017, former Arizona Corporation Commissioner Gary Pierce was indicted in federal court for conspiring to accept bribes from Johnson Utilities owner George Johnson in exchange for Johnson receiving favorable treatment from the Commission.
Liked this post? Follow this blog to get more.