Trico’s Proposed Net Metering Tariff Change
(The Arizona Corporation Commission will consider this proposed tariff in Trico’s rate case proceeding referenced below. Neither this proposed tariff nor the February 28, 2015, implementation date has been approved by the Arizona Corporation Commission at this time.) In the rate case, the Commission’s Utilities Division Staff and/or intervenors may propose different modifications to the net metering tariff which may affect your bill in other ways. The Commission is not bound by any party’s proposal, and may accept, reject, or modify any proposed rate, charge or term of service.
One of Trico’s key responsibilities as a Member-owned electric cooperative, in addition to providing safe, reliable power, is to provide sound fiscal management of the Cooperative. And we need to do this in a way that provides fair and equitable service to all of our 38,000 Members.
Your Trico Board of Directors has approved, subject to regulatory approval, a new net metering tariff that will pay for energy generated by a Member’s renewable energy system above that which is needed to supply the Member’s own needs at the avoided cost rate, or the same rate Trico pays to other energy suppliers. Members with renewable energy systems will still be able to offset their own needs and avoid paying the retail rate for that energy. This change only applies to Members who plan to install renewable generation after February 28, 2015. If you already have renewable generation and began taking service under the net metering tariff prior to March 1, 2015, you will continue to be credited in the way you are now.
Why are we making this change?
- When Members pay Trico’s retail energy rate, that rate includes not just the cost of the energy, but the fixed costs of building and maintaining the electric grid as well. But when Members generate their own power, they don’t pay an equal share of those fixed costs, even though they use the grid to both buy and sell electricity. Those costs must eventually be passed on to other Members.
- Trico has recently experienced a nearly threefold increase in the volume of applications for renewable energy interconnections, mainly because of aggressive marketing of leased rooftop solar systems by large solar providers. The continued growth in renewable energy interconnections has resulted in an increasingly large amount of unrecovered fixed costs that must be borne by other Members. This trend threatens Trico’s financial viability and will ultimately result in higher rates for the Cooperative’s Members.
- The bottom line is that Trico currently is paying significantly more for energy that our net metered Members put back into the grid than the energy we buy from other sources. Trico believes that paying for power generated by a Member’s renewable energy system at the rate we pay for other energy, while allowing Members to offset their own energy usage at the retail rate, provides an appropriate incentive for Members to invest in renewable energy, balanced against the cost of those incentives to other Members.
At Trico we remain strongly committed to all forms of renewable energy generation, particularly solar. We value you as a Trico Member and look forward to continuing to provide you with safe, reliable power well into the future.
Trico Plans a Rate Case Filing
On February 26, 2015, Trico filed with the Arizona Corporation Commission (ACC) an Application for a Net Metering Tariff change in an effort to proactively mitigate the rapidly increasing cost shift resulting from accelerating deployment of distributed generation (DG) systems in its service territory (See below the links to the Trico Arizona Corporate Commission (ACC) filing regarding the Proposed Net Metering change). Trico proposed to revise its net metering tariff in a manner that would effectively reduce the credit paid for excess solar energy it receives from rooftop DG systems. The lower credit would reduce (but not eliminate) the subsidy provided to DG customers through net metering.
On July 6, 2015, Trico withdrew the portion of the Net Metering Application seeking to modify its net metering tariff and will now file a general rate case before the end of 2015. The withdrawal of the application was in response to comments from the ACC Staff and others that a rate case proceeding would provide additional ratemaking tools to address cost shifts. The withdrawal of the application will also allow Trico to devote its resources to a single ACC proceeding in an effort to save time and money. Trico’s rate filing will request the same modifications to its net metering tariff as requested in the Net Metering Application, including the same proposed grandfathering date of March 1, 2015 for that tariff.