Utility Providing Renewable Energy To Super Bowl Wants To Charge Its Solar Users A Lot More

CREDIT: Wikimedia Commons/McPHX

The University of Phoenix Stadium in Glendale, Arizona.

One final outcome of Super Bowl XLIX in Arizona is for certain: it will be powered by renewable energy. This week the Salt River Project, one of the nation’s largest public power utilities, announced that it would provide 100 percent renewable energy to power the February 1st game at the University of Phoenix Stadium in Glendale.

“Providing green energy to the game is the perfect opportunity to showcase SRP’s commitment to renewable energy,” Patty Garcia-Likens, an SRP Spokesperson, told ThinkProgress. “It also helps raise awareness of the role renewable energy plays in a balanced portfolio designed to deliver affordable, reliable power to our customers.”

However, a utility’s idea of commitment to renewable energy often differs from a consumer’s. The case with SRP is no different. The company, which provides electricity to nearly one million customers, is currently trying to raise solar customers’ rates $50 or more a month. The SPR rationale for this additional fixed charge to solar installers is similar to justifications by other large utilities trying to convert their old business models to the new energy paradigm: that solar users aren’t paying their fair share to maintain the grid.

Next door in New Mexico, PNM, the state’s largest utility, is pursuing a similar track. The company recently proposed a distributed solar generation fee that could cost new solar installers $30 a month to connect to the grid.

SRP and PNM are two of many utilities seemingly stifling the proliferation of distributed solar power due to concerns over business-model disruption and long-term revenue impacts. Distributed solar advocates argue that solar can generate energy for the grid during peak demand hours when costs are highest, thus reducing strain on utilities and conventional power sources like coal, gas, and nuclear. In helping reduce the amount utilities rely on fossil fuel generation, renewables likes solar and wind also reduce emissions that may otherwise prove costly under new regulations such as the Clean Power Plan that aims to cut back on GHG pollution. A recent study found that rooftop solar systems can add add $15,000 to the value of a home, as well.

Both SPR and PNM are eager to promote their large-scale renewable projects that allow them to maintain the traditional relationship as power providers, not receivers, to consumers. SPR staff have argued that it is more cost effective to build large solar plants from which customers can purchase blocks of power.

SRP is not proposing the changes for its existing 15,000 solar customers, who will keep the same structure for the next decade. But they will apply to the 500 or so contingent“> monthly applicants for solar hookups — a rate that is likely to increase as solar becomes more convenient and affordable in sun-drenched Arizona. In 2013, Arizona installed 701 megawatts of solar electric capacity, placing it second in the country.

On top of the fixed fee, these new residential solar customers would also face a mandatory demand charge, a tactic more commonly instituted for commercial and industrial clients. SRP is also proposing to reduce the cost solar users pay for feeding into the grid, from about 10 cents to about 4 cents per kilowatt-hour.

“When customers generate some of their own power, they don’t pay an appropriate share of the fixed costs of enhancing and maintaining the grid, even though they use the grid to both buy and sell electricity,” said Garcia-Likens. “Because of when solar production peaks around noon and when the power system peaks in the late afternoon or evening, on average, solar customers are still using significant power from SRP during peak times, even if they end up having low net usage.”

Garcia-Likens said that because of this discrepancy solar customers are not paying the full amount of the fixed costs that the utility incurs.

“This issue needs to be addressed at this time because of the rapid growth in residential solar installations and the fact that solar customers are making a long-term commitment based on assumptions related to current utility price structures,” she said. “Delaying action on this issue will ultimately result in greater expenses for all customers.”

SRP’s proposal is also only the latest setback for solar users in Arizona. In 2013, Arizona Public Service Co., the state’s largest utility, proposed a similar fee that was cut back drastically by state regulators. The utility wanted to charge customers between $50 and $100 per month to use solar, but the Arizona Corporation Commission (ACC) voted to charge a far-reduced 70 cents per kilowatt, meaning homeowners will pay about $5 a month. The SRP proposal will not be subject to such oversight.

APS has since decided to get into the residential solar business itself, having recently received approval from the ACC to own 10 megawatts of residential solar systems that customers can rent for their rooftops and receive a $30 credit monthly for up to twenty years.

The SRP Board has set a goal to meet 20 percent of SRP’s retail electricity demands with sustainable resources by 2020. The additional electricity demand over Super Bowl weekend in Arizona is expected to increase electricity sales for SRP by about $300,000, offsetting much of the sponsorship costs SRP has agreed to pay. SRP previously provided green energy to Super Bowl XLII in Glendale in 2008.