More than 1 million customers in Arizona are seeing an increase in their rooftop solar fees

PHOENIX (AP) — About 1.4 million customers in Arizona will pay more for electricity now that regulators have agreed to a rate hike proposed by the state's largest utilities, and additional fees for customers with rooftop solar systems are drawing more criticism.

The average monthly bill for Arizona Public Service Co. residential customers will increase. By about $10 to $12 starting in March, those with solar panels will be on the hook for an additional $2.50 to $3 per month under changes adopted by the Arizona Corporation Commission. After a hearing that lasted hours on Thursday.

A few dozen people spoke during the meeting and more than 2,000 people provided written comments during the months leading up to the decision.

Committee Chairman Jim O'Connor told reporters Friday that he and three of his Republican colleagues approved the new pricing plan without knowing the exact impact it would have on customers since it was expected to be “in the ballpark” of about 8%. O'Connor felt that the margin of error was too small to delay the vote another day.

The Arizona Public Interest Research Group Education Fund is asking the commission to reconsider the approval and is requiring utility executives to appear before the commission and declare under oath the exact expected impact of the rate hike for all classes of customers.

“Comprehensive data must be on the agenda, and APS executives must take an oath before they speak,” Diane Brown wrote in her plea to the nonprofit group. “The committee failed to ask the necessary questions to ensure it had sufficient and complete data before voting on the entire rate plan.”

Parties in the rate case — which began nearly two years ago — included labor unions, citizen groups, renewable energy advocates, and public schools.

Utility officials said the rate increase is necessary to ensure reliable and flexible service for customers living in 11 of the state's 15 counties. The increase is intended to help utilities recover expenses incurred in previous years to expand infrastructure.

The increase provides the utility with a return on equity of 9.55%, the Arizona Republic reported. APS President Ted Geisler argued that at least that much would be needed to return to reassure creditors and lenders that APS relies on, as the utilities' credit ratings and profitability have faltered.

“We need immediate and sufficient interest rate easing,” Geisler said. “We must continue to rely on lenders to finance the necessary network investments.”

Democratic Commissioner Ana Tovar cast the lone dissenting vote. She said she couldn't “support something that costs customers more.”

Commissioner Leah Marquez Peterson also expressed hesitation but voted in favor of the rate plan, saying it was critical for APS to be able to make infrastructure investments.

Michael O'Donnell, vice president of Sunsolar Solutions in Peoria, wrote in a memo to The Republic that it is “truly outrageous” that the commission came up with new fees targeting only solar customers, and not the utility nor any other party. In case of request.

Customers with solar panels pay about $80 a month on average to connect them to the grid, he said. He estimated that the same customer might pay $120 a month for the same service after the price increase.

The company said that solar customers do not pay the full cost of the service provided to them, as these costs focus largely on transmission lines, generating stations and other infrastructure, and not on the actual energy produced. A larger solar surcharge was approved less than a decade ago by a previous commission but was repealed in 2021.

The pricing structure approved this week will have different impacts on different categories of customers, such as schools and small businesses. The Commission has asked utilities to provide an updated written analysis, and Commission staff is working to finalize the data.