The Weekender (update) | AZ Commission: “Yes” to solar for schools

Scottsdale's Desert Mountain High School

Desert Mountain High School (Scottsdale, AZ)

“Let schools take solar energy lead”

Almost exactly a year after the Scottsdale Republic newspaper ran an editorial with the above headline,  the Arizona Corporation Commission gave two Scottsdale high schools permission to do just that.

For a project that seems so straightforward (and whose benefits are so obvious, here in the Valley of the Sun)  proponents faced a bewildering series of regulatory and legal hurdles.

It was, according to ACC chair, Kris Mayes, “perhaps the most complicated case…in the history of Arizona.”

The complexity is less about the particular case involved, and more about the national transformation to a renewable energy economy, worked out one state at a time. Our network of energy laws and rules were created around one basic model: a utility generates electricity at point A and sells it to consumers at points B through Z.

If they operate “on the grid,” residential solar panels mix electricity from point A with power produced and consumed at points B through Z.

Our regulatory and legal system has to catch up to these technological advances.

First, the state had to pass a law allowing schools to purchase power from an entity other than a utility. That was done this summer.

Next, rules had to be changed to allow non-utilities to enter into solar service agreements (SSA) with schools. While the ACC was working on this, the Phoenix-based Goldwater Institute sued to stop the plan, arguing that the ACC was constitutionally prohibited from doing anything more than setting electrical rates. A Superior County court judge rejected that argument on September 2. (The Goldwater Institute announced on Tuesday that it would appeal.)

The final two hurdles (for now), were cleared on Wednesday. The ACC ruled that the two high schools could enter into an agreement to allow SolarCity to install panels on the roof. The schools would then purchase electricity from the company at an agreed upon rate.

Finally, APS, the utility that supplies the schools’ non-solar electricity, was granted what it wanted.

Woodside school, Portola Valley, CA

Woodside school, Portola Valley, CA. Installed by SolarCity in November 2008.

In order to establish a renewable energy economy, utilities must pay consumers who install solar panels an amount based on the size of the system. A certain percentage must come from residential customers as opposed to commercial ones. APS argued that it should be allowed to count money paid to schools as “residential” and not commercial.

Because of “extraordinary circumstances,” opined the ACC, it would allow APS to count school payments as fulfilling its residential requirement. But the ruling came with a warning: “Notwithstanding this singular shift of funding,” the ACC cautioned, “APS should not view this as an opportunity for further expansion of the definition of ‘residential’ … or to ask for future waivers for that purpose.”

According to the Phoenix Business Journal, panels to generate 967 kW should be going up on Desert Mountain High School soon. The second high school, which will have a 339 kW system, is aptly named to receive the solar panels: Coronado, a Spanish verb meaning “to crown.”

Turning, small

These two schools have been given the go ahead. Many other school districts throughout the state have similar projects lined up, but they can’t begin until the ACC rules on another question: are companies like SolarCity “utilities” that require ACC regulation? If so, what rules are appropriate to regulate this new model? The ACC is still deliberating on this question.

It’s important, so it’s important to get it right. But we’d be surprised to see a ruling out of this Commission that creates any real impediments to making schools solar-powered. Under chairwoman Kris Mays, the ACC has earned a national reputation as a leader in creating renewable- and consumer-friendly regulations.

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2 thoughts on “The Weekender (update) | AZ Commission: “Yes” to solar for schools

  1. Osha,

    First, thanks for this update. I have to keep track of a lot of legislation and rebates for my site, so I missed this, and thanks for tracking and all of your *excellent* solar reporting efforts.

    As to this PPA (or SSA), it’s a step in the right direction, but even by your own reporting, it ain’t settled yet. My beef with AZ and solar has always been this issue of it requiring PPA companies (which are essentially glorified banks, not installers) to become utilities. Nobody wants to be regulated like a utility. Even the utilities don’t want to be regulated like a utility. If the PPA companies become utilities, it means that the solar rates that they negotiate and charge are going to be a) filled with red tape, and b) have its rates set by a commission, and c) knowing politics, will have a bunch of other provisions in there that really have nothing to do with solar, but protecting somebody’s financial interests.

    Of course, the greatest financial interest that is under fire is the utility. They feel that they’re not going to be playing on a level playing field if a PPA company gives away solar panels AND undercuts their own rates. That’s a concern, but they can and they are creating their own solar farms. Those solar farm costs will be paid in, like, 5 years or less. Then, it’s free electricity for the next 20 years that they sell at higher rates to customers during peak (expensive) times. You think the UTEs are going to lower their rates for customers in 6 years even though they don’t have to pay a dime for the offset equivalent of coal anymore? Sunshine remains free and PV maintenance is basically a dude with a squirt bottle and a squeegee once a month.

    Secondly, the other problem I have is with this rule exception that makes these schools meet their Residential RPS (Renewable Portfolio Standard) requirements. That takes large chunks of solar rebate and perhaps net metering money from residents.

    So, all in all, until the dust settles with unanswered questions above, plus my concerns outlined here about PPA utility status, I’m going to have to keep the Sun rating for Arizona at 4 Suns. PPAs are so important to solar growth everywhere, and as you know from my other writings in @REWorld, I’m a big fan of distributed own your own solar.

    Once again, thanks for this update and ALL of your reporting on solar. 🙂

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