Existing Arizona Policies

Extended Natural Gas Moratorium

Posted on April 10, 2019 by jehollow

The essentials

  • The Arizona Corporation Commission recently amended its 2018 decision to institute a moratorium on the procurement of natural gas power plants.
  • The moratorium has now been extended to last until August 2019.
  • The extension increases the likelihood that regulated utilities will need to invest in energy sources other than natural gas, including renewables.

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APS’s Track and Record Proposal Part III

Posted on January 25, 2016 by brbarker

Published January 2016

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The essentials

  • See our previous brief sheets for background on What a Renewable Energy Credit (REC) is and the background on why the Arizona Corporation Commission is addressing how utilities obtain the Renewable Energy Credits needed to comply with the Arizona Renewable Energy Tariff and Standard (REST).
  • Arizona’s Renewable Energy Standard & Tariff (REST) requires that 4.5% of electricity comes from distributed generation (DG) systems such as rooftop solar.
  • Regulated utilities demonstrate compliance with the REST by purchasing Renewable Energy Credits (RECs) from their customers who have installed DG systems, typically with upfront cash incentives meant to help customers finance the installation of the DG system.
  • With the rising demand for DG installations since the start of the REST, the Arizona Corporation Commission agreed to significantly reduce upfront incentives. As a result, the regulated electric utilities lost their guaranteed source of RECs that are needed to demonstrate compliance.
  • In June 2012, utilities proposed a Track and Record option that would allow utilities to demonstrate compliance by tracking and counting towards compliance any new DG connection added within each service territory, independent of REC ownership.
  • The REST rules had not been updated since they were approved in 2006.
  • The Utilities Division Staff (“Staff”) of the ACC proposed seven options to modify the REST rules. Ultimately, the ACC adopted a modified version of APS’s Track and Record option.
  • The adopted modifications require a utility to include in its compliance reports the actual kWhs of energy produced within its service territory from DG. A utility must differentiate between kWhs for which it owns the REC, and kWhs produced in the service territory for which it does not own the REC. Those kWhs for which a utility does not own the REC will not count towards compliance, but will be “acknowledged” by the ACC for informational purposes only. The REC remains with the producer of DG energy, unless purchased by a utility.

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A brief on SolarCity v. AZ Dept of Revenue

Posted on January 19, 2016 by brbarker

Published January 2016

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The essentials

 

  • A recent court decision found that leased rooftop solar equipment is subject to valuation by county assessors.
  • Residential and commercial owners of rooftop solar could be assessed and taxed for the real added value of their leased rooftop solar.
  • The lawsuit is expected to go to the appellate court, although neither party has filed an appeal yet.

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Arizona’s Prohibition on Requirement of Energy Measuring and Reporting

Posted on July 7, 2015 by brbarker

published July 2015

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The Essentials

  • Energy measuring and reporting, also known as energy benchmarking, provides building owners, tenants and property managers with information about energy consumption in their building
  • Arizona Senate Bill 1241 passed through the Arizona legislature in April 2015, preventing local governments from mandating energy usage reporting for commercial buildings.
  • Supporters of the bill, including the Commercial Real Estate Development Association, rallied around the perceived risk that energy benchmarking poses for small businesses, citing concerns that regulations raise costs and create a regulatory nuisance for businesses.
  • Opposition groups to S.B. 1241, including the Sierra Club and ASHRAE, cited the benefits of energy benchmarking to consumers and the environment.
  • In April 2015, Arizona Governor Doug Ducey signed S.B. 1241 into law.

Brief sheet on the Arizona Department of Revenue’s reinterpretation of tax law on third-party owned solar installations

Posted on June 16, 2014 by brbarker

published June 2014

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the essentials

 

  • In 2013 the Arizona Department of Revenue reinterpreted A.R.S §42-11054(C)(2) and A.R.S. §§ 42-14155(B)(C) to require third-party financed solar installations to be assessed a property tax. Homeowners, governments, businesses, and other entities that own their rooftop systems would continue to be exempt from property tax assessments.
  • Taxing leased systems would add roughly $150/year to system costs. The added cost is expected to be passed onto the solar equipment lessees.
  • During the most recent legislative session, some legislators proposed a bill codifying the DOR’s reinterpretation while others worked to exempt all solar panels from property taxation, regardless of how they are financed. However, neither position was codified.
  • Preliminary tax assessments will begin June 2015.

An Introduction to Restructuring of Electricity Markets

Posted on October 12, 2013 by brbarker

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The essentials

  • The electric utility industry has in the past typically been a monopoly with a few utilities in a particular geographical area that generate, transmit and distribute electricity.
  • Recently, the Arizona Corporation Commission (ACC) had opened up discussions to decide if Arizona should restructure the electricity market and allow competition (also referred to as retail competition or deregulation) or maintain its current regulated structure.
  • Restructuring the Arizona electricity market would have allowed consumers to choose among a variety of energy suppliers in a competitive market based on prices and services.
  • The stages of generation of power, transmission and distribution would be independently operated by competing power companies.
  • On September 11, 2013, the ACC voted 4-1 to end the discussion on retail electric competition in Arizona, reasoning that there were several constitutional hurdles.
  • However, the ACC kept open the potential for discussion about other changes to Arizona electricity markets.
  • Note: this brief uses the terms restructuring and deregulating interchangeably.

Renewable Energy Credits in Arizona

Posted on July 24, 2013 by brbarker

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The essentials

  • In the U.S., when electricity is generated by a renewable energy source, two products are created: electricity and a Renewable Energy Credit (REC).
  • In Arizona, a Renewable Energy Credit (REC) represents the non-power attributes of a kilowatt hour of electricity from renewable energy. These attributes include renewable benefits (such as hedging against fossil fuel price increases) and environmental benefits (such as avoided pollutants).
  • The Arizona Corporation Commission requires regulated utilities to demonstrate their compliance with the Renewable Energy Standard and Tariff (REST) by obtaining RECs.
  • RECs can be bundled or unbundled, and traded, bought or sold in markets such as the Western Renewable Energy Generation Information System (WREGIS).

 

 

 

Arizona’s Solar Rights Law

Posted on July 16, 2013 by brbarker

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The essentials

  • Arizona law bars Homeowners’ Associations (HOAs) from “effectively prohibiting” the installation or use of a solar energy device (SED) within their jurisdiction.
  • Some “reasonable” restrictions on the placement of solar energy devices are allowed, but they must not “adversely affect” cost and efficiency. Whether a restriction or reasonable or adversely affects cost and efficiency is decided on a case-by-case in the courts.
  • Arizona is one of 22 states with solar rights laws. Arizona has a relatively stringent policy supporting homeowner’s solar rights, although some states are more stringent and much more explicit about the types of restrictions HOAs can impose on homeowners.

Solar Phoenix 1 & 2: Solar Rooftop Financing

Posted on May 24, 2013 by brbarker

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The essentials

  • Solar Phoenix 1 & 2 are a series of city-sponsored residential solar financing programs.
  • The Solar Phoenix program is a federally-recognized public-private partnership that allows Phoenix home owners to finance solar panels through leasing at low or no upfront costs.
  • The National Bank of Arizona funded both Solar Phoenix 1 & 2 with $25 million to initiate the program. The City of Phoenix partnered with Solar City for the first iteration and currently partners with Paramount Solar to provide panels, installation services, and maintenance.
  • The leased solar panels are expected to generate sixty to eighty percent of a residence’s power demand.