The Arizona Republic reported this past Sunday that four years ago, lobbyists approached utility Arizona Public Service (APS) about funding an out-of-state nonprofit for the sole purpose of creating fake controversy about the state’s utility regulator in an effort to change its composition.
While utility officials are adamant that they did not take the plan seriously and never acted upon it, it does bear similarities to the utility’s current attack on net metering policies for solar energy in the state.
The article contends that Lincoln Strategy Group pitched the plan after two Democrats were elected to the historically Republican-run five-member Arizona Corporation Commission in 2008. The plan called for APS to spend $4.3 million to create a Washington, D.C.-based nonprofit that would generate studies stating that the commission was making decisions that cost Arizona ratepayers. The goal of such studies was to shift public opinion against the commission and ultimately give final word on utility matters to the State Legislature or at the very minimum, alter the commission to allow appointed members, including at least one whom would come directly from industry.
The nonprofit, which would be designed to look like a grass roots operation started by concerned voters rather than well-funded industry, would also conduct studies in other states in an attempt to deflect attention from its Arizona ties.
Don Brandt, APS CEO, told the Republic that he and APS staff dismissed the unsolicited proposal as “absurd” at the time and never acted on it. He went on to say that this was amongst dozens of other unsolicited proposals for service that the utility received. He believes someone from the solar industry unearthed it to discredit the utility just before the commission makes a decision regarding net metering policy in the state.
While there is no evidence that the utility ever acted on the plan, the company did hire the two consultants that presented it, something Brandt stated had nothing to do with the proposal.
He told the Republic any similarities between the proposal and what has recently come to light regarding the utility’s campaign against the solar industry is purely coincidence.
APS admitted in September to funding an out-of-state nonprofit to advertise that distributed solar generation is costing Arizona ratepayers in an attempt to shift public sentiment against solar energy. The utility argues that customers who receive full retail credit for the solar energy they pour back onto the grid are not paying their share for grid maintenance, which will force the utility to raise rates for non-solar customers.
Solar advocacy groups, like The Alliance for Solar Choice, argue the effort to undermine net metering is not about protecting ratepayers, but rather about preserving market dominance and demand for a product that most regional utilities have a monopoly on.
The campaign to stop the growth of distributed solar systems stems from a widespread utility fear documented in a recent publication from utility industry group Edison Electric Institute titled “Disruptive Challenges,” TASC said in an email it sent to supporters this week. The report argues that distributed solar generation is a threat to the current utility model because, as more people install solar and as grid storage becomes more pervasive, fewer people will need to buy electricity from utilities, threatening their business model.