Commissioner balks at ACC renewable energy decision

KINGMAN - The Miner reported Friday the state corporation commission's decision to increase renewable energy requirements for utility companies over the next 20 years.

Recently, the only dissident voting member of the Arizona Corporation Commission, Mike Gleason, posted an 11-page letter on the commission's Web site outlining 14 reasons why he does not agree with the board's decision.

The 4-1 vote made rules requiring that a minimum percentage of total megawatts used be generated from renewable energy sources. For example, by 2025, utility companies must generate 15 percent of energy through renewable sources.

The decision implemented what commissioners touted and newspapers published as a $1.05 surcharge for Arizona utility customers.

This additional fee will subsidize alternative energy sources such as solar panels.

Customers using the grant to purchase solar, thermal, biogas or other alternatives to conventional sources will then give their renewable energy credits to their utility company, which will use the credits to prove it is meeting the year's required minimum set by the commission.

But according to Kenneth Rozen, Gleason's advisor, the $1.05 customer surcharge was established only as a sample tariff.

Commissioners, utility companies and the judge understood this, Rozen said.

"There's an economic impact statement, it actually says, buried way in the back, that for companies performing very well, it's going to be $1.40, and for those not performing well, it's going to be at least $2. And that's just the tip of the iceberg," Rozen said.

In his letter, Gleason said the monthly surcharge caps are unfair because they benefit customers who use large amounts of energy, "while disadvantaging more conservative, often low-income, customers whose electricity expenses account for a greater portion of their budget."

Instead of the caps, he suggested the commission should have considered a per kilowatt hour surcharge or an inverted block rate in which conservative energy users "would be rewarded by paying a lower per kilowatt hour surcharge than customers who use excessive amounts of power."

The energy requirements are unfair, Gleason continued, "because millions of customers will pay a premium for electricity so that the few hundred of them who want rooftop units, and who are affluent enough to upfront the cost, can enjoy a rebate to offset the otherwise exorbitant price of this most inefficient technology," Gleason wrote.

Another main point of the letter addresses the way in which utility companies meet the year's required percentage by collecting energy credits.

The commission decided that the renewable energy distribution process - where customers receive subsidies - need not require customers to be a part of the utility company's grid, Rozen said.

So for example, someone can buy solar panels at a subsidized price who isn't inside the grid and who hasn't paid the surcharge. Then the utility company earns credit for its yearly renewable energy requirements.

"The point of the commissioner's letter is that from a policy perspective, people who are connected to the grid, paying the surcharge to the utility, that those moneys actually stay in Arizona instead of being used to subsidize off-grid solar panels, if you will," Rozen said.

"This problem could have been easily addressed with a simple addition to the distributed rule specifying the distribution renewal facilities need to be in the company's service (area)," he said.

Full text of the letter can be found at www.cc.state.az.us. Under "Hot Topics," click the first option, "Letters from the Commissioners," and scroll down to Gleason's letters.